Thursday, April 30, 2009
Wednesday, April 29, 2009
Monday, April 27, 2009
I read the news from General Motors yesterday, that they are discontinuing their Pontiac line from next year, with some sadness.
Saturday, April 25, 2009
Company spokesmen say the bonuses make good business sense by rewarding good performance and keeping executives from leaving the companies. Both arguments are hollow. The first rationale rewards performance in running the companies into the ground and the retention rationale assumes other newspaper companies are hiring and would want to hire the tainted executives.
The issue of bonuses has emerged because newspapers filing for bankruptcy are not liquidating, but using Chapter 11 to create reorganization plans that will allow them to change the terms of the debt and union contracts. They have to seek approval from the bankruptcy court for their expenditures.
It is true that most of the papers in these bankrupt companies are making operating profits, but their corporate parents are losing money. The fact that profits exist are one of the reasons the companies have been petitioning the bankruptcy courts to allow them to pay bonuses. Not surprisingly, company debt holders—including states that are owned taxes—are not too happy with the idea and employees who have suffered layoffs and wage concessions are rightfully resentful.
The bonus debacle is yet another indication that the bankruptcies were created in the board rooms and corporate offices, not by the economic downturn. Poor corporate and management decisions are their root problem.
The newspaper business is clearly hurting because of the recession, but it is not a unique phenomenon. About once a decade for the past 50 years, recessions have played havoc with newspaper revenues, but the industry has survived them. Poor economic times, however, push companies whose managers have not paid sufficient attention to their balance sheets into financial crises and bankruptcy.
The last time we saw such wholesale problems was in 1991-1993 recession. Ingersoll fell into insolvency in 1991 and was broken up after its use of junk bonds for financing backfired. The New York Daily News went into bankruptcy that year as part of the collapse of the Robert Maxwell house of cards. United Press International went into bankruptcy in that recession as well. All three were victims to poor managerial choices made earlier and their positions became untenable in the recession.
History is repeating itself.
The bankruptcies today are the result of companies surpassing their financial capabilities and because executives have exceeded their own abilities to manage the firms. Some newspaper executives unwisely loaded their companies with enormous debt to make acquisitions and others are in trouble because the cumulative weight of poor management over a period of time has finally caught up with them.
Most newspapers, however, are surviving the downturn and will be serving their communities for many years. They are responding to the poor advertising climate with responsibility and thrift--NOT by giving executive bonuses that should be used for strengthening their businesses.
You discover something about a key supplier of yours that you didn't know before. He employs child labour.
1) Stop buying from him even though it may affect your business
2) Report his employing child labour to the authorities, but continue to buy from him
3) Ignore this, saying its his business and none of yours
If you work for a global company, you probably have no choice - NGOs will roast your company alive. (Remember Nike in China ?)
But , assume you are in a small local company. What will you do ?
Would your answer be different, if instead of discovering that he employs child labour, you discover one of the following
- He is cheating on VAT (excise, sales tax, whatever) and evading them , or,
- He is discriminating against women
Would your answer be the same ?
Friday, April 24, 2009
You resign from your company and join another company. Your were happy with your previous employer and he treated you well - you are moving just because a better opportunity arose.
In your new job, you need to hire four good lieutenants. You know that if you approached your four buddies in the old company, they would join you (for they loved working with you). But if those four left too, the business in the old company would be seriously affected.
This is one of those cases where in different cultures, you'd get completely different first responses. In some cultures, this is not a dilemma at all - you'd just do it. In other cultures, this would be a complete no no.
But, as I mused before, I believe these are deeply individual decisions based on one's values and beliefs. There is no "right" answer.
Would you place the call to your buddies ?
Thursday, April 23, 2009
Wednesday, April 22, 2009
Consequently, MySpace co-founders Chris DeWolfe (who is CEO) and Tom Anderson (who is President) are being pushed out of their management roles in major shakeup of the company's leadership.
The move is signals News Corp’s concern over the site’s declining market share and poor returns.
In the past three years Facebook has surpassed MySpace in total number of users worldwide, but MySpace has managed to remain the largest site in the U.S. and has 130 million users globally.
In 2008 the company had estimated advertising revues of $585 million, with the bulk coming from its ad-sharing deal with Google. But it will take a long, long time for News Corp. to recoup its investment at that pace. That revenue problem is compounded because Google has been unhappy with its MySpace deal and is unlikely to continue it at present terms when it expires next year.
The shakeup at MySpace underscores the value creation challenges that online media face. Services are typically offered free to generate high numbers of users and then these are used to create audiences for advertising or as a market for up-selling enhanced services. Although the audiences are attractive for some advertisers and some types of advertising, online advertising is not yet as effective as television and print advertising for most brands and retailers.
Although it has a much smaller staff than the print edition did, the site continues to cover local news and sports, provides national and international feeds, and features local bloggers. In many ways it is what many observers have called the future of post-print journalism. It is well recognized that print is an expensive way to convey news, information, and commentary so observers argue that the Internet is the answer for community informational needs because the public is increasingly getting their news there anyway.
It is still early days for forming a definitive view of how dropping print may affect online demand, but the P-I’s situation gives a unique opportunity to observe effects. In February—before the print edition closed—the website had 1.8 million unique visitors. In March, that number dropped to 1.4 million unique visitors. If these initial results hold true over time, it would indicate that print still provides some important reputational and marketing benefits to online activities.
Those interested in the online future of journalism should be watching the Seattle situation with interest in the coming year.
Tuesday, April 21, 2009
He quotes Charles Handy, an Irish philosopher specializing in organizational management who wrote in his book ‘What’s a Business For’ in 2002 this prescient paragraph:
The markets will empty and share prices will collapse, as ordinary people find other places to put their money--into their houses, maybe, or under their beds. The great virtue of capitalism, that it provides a way for the savings of society to be used for the creation of wealth--will have been eroded. So we will be left to rely increasingly on governments for the creation of our wealth, something that they have always been conspicuously bad at doing.....Trust is fragile. Like a piece of china, once cracked it is never quite the same. And people's trust in business, and those who lead it, is today cracking."
Click here to read this superb post.
Special guest for April 15: NATO GREEN!
Nato Green continues the great tradition of smart, biting, Jewish comedians like Lenny Bruce, Mort Sahl, and Joe Lieberman. Nato is the mastermind of Iron Comic, Laugh Out the Vote, Laughing Liberally Local 415, and the New Jew Revue. He's appeared in the Progressive Reading Series and SF Sketchfest 2008.
Monday, April 20, 2009
Any takers for BPO in agriculture ?
Sunday, April 19, 2009
How come ? Surely there's something wrong. You have one billion crazy Indians all wanting to imitate Shahrukh Khan or Aishwarya Rai. Not to speak of the rest of the world where lots want to learn "Bollywood dancing". Terrific talent in singing, dancing, acting amongst the Indians - just go to any college or company function. Fanatic demand. Great talent supply. And yet a tiny industry.
- The size is probably understated as the industry is not all above board. But even at 2 or 3 times the stated number, its still a tiny industry.
- Its highly unprofessional. A lot of financing is by the underworld and professional management just does not exist.
- Marketing is an unknown function. There's no merchandising at all (how many Lagaan cricket bats have you seen ?)
- Its not really sold globally. Whatever is taken global is for the expat Indian audience. Actually the films, with their song and dance, does have universal appeal.
- There's zero market research. Do the producers really understand their customer - what do they want ? What are the market segments - the bhaiyya watches completely different stuff from the aunty.
- Much of the product is garbage. That's why most films lose money - they are trash and deserve to lose money.
The industry has a larger than life image, but in reality its a mouse. There's a lot of noise, but little to shout about.
Corporate India - get on to the movie industry.
Now that's a thought. Won't you want to work in a company where you see Aishwarya on Monday, Kareena on Tuesday, Priyanka on Wednesday ......
Saturday, April 18, 2009
Its Chicken a-la-carte , a moving, award winning video. I guarantee you'll be touched.
Its only 6 mts long.
For some weekend contemplation. Thank you Chandu Nair for sending the link to me.
Click here to watch the video.
Thursday, April 16, 2009
If the leading companies followed classic marketing strategies, they would be offering consumers better arrays of networks and services, better customer service, and/or better prices in efforts to attract more customers.
Instead, many of the largest competitors have been engaging in acts that harm customers and consumers by using illegal and deceptive marketing practices and strategies designed to unwittingly wring greater revenue from their customers. Although the companies apparently think there are benefits in behaving badly, their marketing practices are increasingly getting them into trouble.
Aggressive telemarketing—which has always offended consumers—has landed a number of leading firms in hot water. Comcast and Direct TV have just admitted charges and are paying fines to the Federal Trade Commission for violating telemarketing rules by ignoring the federal do-not-call list. The FTC has also filed a suit against Dish Networks for similar violations.
Companies tend to advertise heavily when competition is high and ads for cable, satellite, and broadband services have helped the revenues of thousands of television stations, newspapers, and magazines across the U.S. Unfortunately, the veracity of advertising claims in cable, satellite, and broadband services has been widely questioned by consumer groups, governments, and other competitors. In recent months Bright House Networks filed a complaint with the Federal Communications Commission about the practices of AT&T, the National Advertising Division of the Council of Better Business Bureau chastised Cablevision for advertising claims after complaints from Verizon, and Verizon itself has been sued for misleading claims by NJ Division of Consumer Affairs.
The industry also sought to market different levels of broadband Internet services to customers and planned to charge different rates for users—a strategy that would allow them to advertise a low price even when many customers would have to pay a higher price based on usage. Plans by Time Warner, Comcast, Frontier Communications and other firms to offer tiered service plans have now been dropped after complaints by customers and legislators.
Cable and satellite firms have traditionally been mavericks and rogues in the media industries and many Internet service firms followed their example. Even though the industries have matured and the number of players has been significantly reduced through mergers and acquisitions, the wild and woolly world they created is still evident in their marketing practices.
We can only hope they will learn to become good corporate citizens—or at least firms concerned about their own reputations.
These days China's numbers matter as much, if not more, than America's numbers. There was therefore more than the usual interest, when China announced its Q1 numbers yesterday.
- Growth is actually good, and forget whether it was dot on with expectations.
- Growth is being led by domestic consumption and investment, making up for poor exports (isn't this what the world has been clamouring for ?)
- Massive infrastructure spending and investment is happening - Will all this be really productive or will they be bridges to nowhere ?
- If you look objectively, China was overheating in the past and is now on a more even keel.
- The worry continues to be the banking sector. Massive lending for investment has happened. How much of this will truly yield returns. I know the published percentage of non performing assets is not high, but I am almost sure this is hugely understated.
- The story that there will be social unrest if 8% growth is not achieved in bunkum. I simply cannot relate to this logic
- Inflation in the medium term is a real real threat. God help if commodity prices around the world (especially oil prices shoot up).
One other thought struck me. Its only Apr 16. How come such numbers come out so early. Many companies cannot meet such a deadline. But a whole nation - and that too as huge as China?
Wednesday, April 15, 2009
- It exploits poor people in developing countries and sometimes deprives them of their traditional livelihood (farming)
- It is harmful to the environment and contributes to adverse climate change
- It deprives people in richer countries of their jobs
- It does not promote human rights and democracy in the countries they operate
Underlying this is the assumption that multi national companies , in their single minded pursuit of profit, will not care about any of these.
Monday, April 13, 2009
- Tax bands are globally agreed. Income tax on companies cannot be lower than x and cannot be greater than y by multilateral agreement
- Double Tax agreements are multilateral (through the WTO) and not bilateral between countries.
This will remove much of the pain global businesses face from the inevitable conflict of national tax laws.
Nobody can do justice to this area without writing a 1500 page PhD thesis. I have absolutely no intention of doing so ! All I am catalysing is a thought.
Tomorrow I'll post on another aspect of globalisation - why it seems to be dirty word in the minds of many.
Saturday, April 11, 2009
Individual engagement and participation in discussion were the norm, with some reliance on leaders and those who held the history and wisdom of the community.
Lifestyle changes in the 19th and 20th century society created mass society and reduced time and opportunities for collective contemplation. It was replaced by a form of representative contemplation and a greater reliance on expert and professional commentators. The effect was primarily to produce communications telling members of communities what to think and do.
Contemporary communication technologies are dramatically altering that situation and supporting a return to collective contemplation. While not producing face-to-face discussion, blogs and technology-assisted social networking have increased opportunities for discussion and interaction. Individuals are gaining greater opportunities to share their opinions and views, to inform each other, and to respond to and engage in conversation that has been impossible for many years.
Concurrently, technologies are beginning to allow effective meta analyses of buzz, blogs and social networking that gather topics and some sense of opinions being expressed. These information technologies allow us to aggregate the views of millions in ways not previously possible.
Where such technologies will take us in unclear, but the contemporary engagement and contemplation by millions of people online is far better for society than the disenfranchisement that mass society previously encouraged.
Media organizations will have to wrestle with how this collective contemplation is altering the roles and functions of editorial writers, op-ed authors, and columnists. They will have to increasingly engage with the public and see their roles as provoking conversation, not merely telling people what to think.