Corporate Japan at its worst

In the good old days when I was in business school, Japan could do no wrong. A million books were written on the Japanese style of management. America was bust, Japan was everything. Case after case taught at business school was on how gloriously managed Japanese businesses were. At that time the two words we were thoroughly sick of was Japan and Walmart ! Time has since proved that there is a fair bit to admire about Japanese management, but a lot that is thoroughly rotten.

A great example is what happened at Olympus last week. This is the company that makes cameras.They just fired Michael Woodford, their CEO, and a 30 year company veteran, two weeks after elevating him. They were brave enough to appoint a non Japanese as their CEO, one of a handful of Japanese companies to do so and foolish enough to sack him immediately. His crime - he didn't listen to the Chairman Kikukawa san and started probing into the financial skulduggery that seems to have gone on.

The skulduggery relates to the acquisition of Gyrus, made in 2008. The acquisition was for $2 bn. Olympus then made payments for advisory fees of $687 m to two virtually unknown firms. Nobody can trace who the owners of these two companies are. One of them, registered in the Cayman islands has since disappeared off the registry 3 months after receiving the last payment from Olympus. These payments were not disclosed to shareholders - instead they were hidden in goodwill by adding to the acquisition price. Now, who on earth pays advisers fees of $687 million for a $2 bn acquisition ?? Not even Wall Street is that greedy.

KPMG, their auditors disagreed with all this accounting wizardy and were promptly sacked for their endeavours.

Woodford started to enquire into this and was told to shut up and look elsewhere. His crime was that he did not listen.

Woodford was summoned to a Board meeting were he was told to zip his mouth and not speak. The solemn directors then proceeded to fire him. The function of the board, alas all too often in Japan, is to bow one inch lower than the Chairman. So much for corporate governance.

The rigidity of hierarchy in Japanese corporate life survives to this day, Grovel and obey without question. I am still amazed how they managed innovation with that culture. I am sometimes inclined to credit some divine providence for all the wonderful innovation in product and quality systems that came out of Japan. How else can you explain  that coming out of a Stalinist corporate culture.

The only lot who are thoroughly unimpressed by all this is the Japanese investor. He has cheerily driven down Olympus' share price by 24%. Kikukawa san and his deputy Mori san may still have to fall on their sword soon.

I'll Never Do It Again

Does INDIA stand for I'll Never Do It Again ?? I cringed and held my head in shame as I listened to this podcast - this series is one of my personal favourites and represents some of the best of the BBC. It ends with a quote from a guy who did something Indians were very proud about - run the opening ceremony of the Commonwealth Games . But he says,  "I'll be very happy to ignore India. There are plenty of other places where they pay their bills ". Listen to the podcast if you can - it is only some 5 minutes or so.

Is India one of the most difficult places in the world to do business ? In a recent World Bank survey, India came in at a staggering 134th out of 183 countries in the ranking of the places easiest to do business in. It is easy to dismiss such rankings, as indeed the podcast, as biased and taken out of context. For after all, doesn't  India have a vibrant and surging economy. Surely it can't be a bad place to do business and still be growing like it is. Alas the sad fact is that it is growing like it is despite the fact that it is one of the difficult places to do business in.

Take the instance of the Commonwealth Games contractors which is the subject mater of the above podcast. There has been allegations of corruption over the Games. So what do we do - jail the head of the organising committee without a trial and stop all payments to all contractors associated with the games. And let this meander along for years. It is appalling conduct. Every contractor is not corrupt. Just freezing all payments is no different from piracy. And we are supposed to be a country where there is rule of law. Try taking the government to court. You may get a judgement after you are dead. India ranks second last in the list of countries where you can enforce a contract - bested only by East Timor. 

For a start, we have to abolish the Indian Standard Time. Every decision cannot take years. Government cannot take years to allow an investment or set a policy. Courts cannot grant a stay for years to some aggrieved party. They cannot take years to enforce a contract. Contractors cannot take years to finish a job. We cannot accept being late in completing anything as a national characteristic. 

Unfortunately, given the spate of corruption scandals that have infected the country, all decision making has come to a standstill. Nobody is deciding anything for fear of being labelled as corrupt . You see, you cannot be accused of corruption if you never decide anything. There are no penalties for absolute inaction.

This is an awful state of affairs crying out for leadership, with a capital L. A leader who can stand tall and do the right thing.A leader with a clean conscience, who can motor ahead and act without fear. Being terrified and standing still is downright cowardice. But alas, such a leader is not visible even on the distant horizon.

I cringe and cringe when I see "I'll Never Do it Again" as an acronym for India. But I am afraid, there is an element of truth in it.

The curious case of Ben & Jerry's

Do you like Ben & Jerry's ice cream? Most probably a resounding yes.  But this post is not about its ice cream. Its about what it has done on Tuesday.

What it did on Tuesday was to go to New York's Zuccotti Park where the Occupy Wall Street protesters are camped and dole out free ice cream to all of them. Nothing spectacular about that, except that it went on to publicly declare its support for the protesters. It also published a statement from its Board of Directors that the company has the deepest admiration for the protesters and is standing with them. You can read what the Board said here.

Ben & Jerry's has long been a left leaning company promoting a variety of causes. Its founders Ben Cohen and Jerry Greenfield started the company with a clear social and sometimes political agenda. So should this latest action be surprising. Yes, because, Ben & Jerry's is no longer an independent company. It's a subsidiary of Unilever, a global multinational company, perhaps the very sort that the Occupy Wall Street protesters are agitated against (that is, if somebody can decipher what exactly they are protesting about).

Was Unilever ambushed by the act of Ben & Jerry's ? Tough to believe so - for the Board of Ben & Jerry's has Unilever representatives, including an ex Director of Unilever itself. Unilever has issued a statement that it is neutral to social campaigns and has no comment to make, but that is a blithe remark considering that  its subsidiary is indeed making a very loud statement.

How far do you let your subsidiary act on its own ? Usually subsidairies are simply legal shells and the parent runs them as one corporate whole, unless there are external shareholders. But Ben & Jerry's is different. Perhaps because of its historical brand image. Perhaps because of covenants agreed with the founders at the time of acquisition to allow the company to have a social agenda. But still, the latest action seems a step too far. I won't be surprised if the upstart is reined in.

What of the protestors ? They are objecting to evil corporations; right ? Do they want the support of one ? Some of them expressed mixed feelings. They said they were uneasy about corporations muscling in on their patch. But they also said, they could not turn down a free ice cream !

Very curious.

The Business October 12th 2001, "Witty Redux Edition"

This week at the Business we swap out our ever-changing parts for some familiar local faces and a few charming visitors. Chris and Alex are once again cheating on the Business with some dirty fling somewhere, but Bucky and Sean will be on hand to welcome Business favorites Caitlin Gill and Chris Thayer. Plus, after one previous false start, we are happy to have Isaac Witty here at the Dark Room. Also, secret special guests in the works!

As always the Business is just $5 and starts at 8pm. And as always we are close to many burrito and drink options (although few burrito drink options)

Friday October 21st: The Business LA @ Meltdown - LAST BIZ LA OF 2011!

Hey LA!  We've had fun playing in your sandbox this year. However with Santa and the Great Pumpkin and some turkeys coming our wayin the next few months, we won't see you guys again for a while. So our October Business LA show is going to be a big send off for 2011! Bring all your friends and relatives and let's celebrate every holiday at once!

All the regular Businessmen will be in attendance this time around: Bucky and Sean and Chris and Alex will all be on hand, as well as our special guests Brendon Walsh and Beth Stelling! We'll have some special surprises and as always the Medically Transported Mission Style Burrito Raffle will reward some lucky audience member with sketchy goodness.

Tickets are $8 online (no service charge!) and $10 at the door. I think you know what to do.

BUY TICKETS ONLINE!

http://www.nerdmeltla.com/tickets/index.php?event_id=75

The Business, October 5th 2011 - "Monday Night Foreplays & Natasha Muse" Edition

The Business opens its doors to the fairer sex this week as we welcome two of our favorite acts: Monday Night ForePlays, and comedian Natasha Muse. The feeling's right, oh what a night!

Monday Night ForePlays is Piano Fight's acclaimed night of female-driven sketch comedy. This month, they're presenting “Don’t Tell Mom the Weekend’s Dead!”, a show that promises to help keep the Saturday spirit alive! How? Through the showcasing of common Saturday night motifs and scenarios; you’ll see bison pan-sexuality, a vinyl-brassiered pop group giving financial advice, gamete on gamete romance in fertilization, and a special appearance from 90’s teen book club favorite, The Babysitter’s Club. If that’s not a recipe for weekend sustainability, we don’t know what is! This Wednesday, enjoy sketches entitled "Dr. Poonberg's Button Glove" and "Say Hello To Your Friends". 

 

Natasha Muse promises that she is at least the second-funniest transsexual you know, and she's definitely the funniest we know. She has wowed crowds all over the Bay Area, from Cobb's Comedy Club to the world-famous Punch Line, Her sparkling wit and charming stage demeanor made her the 2010 champion of the “Battle of the Bay Comedy Competition." Her podcast is called "Too Soon?" and her talk show is called "A Funny Night For Comedy." She delights her countless Twitter followers as @NatashaMuse, but as you'll learn Wednesday, she's even more delightful in person.

Representing the unfair sex, we've got regular Businessmen Alex, Bucky, Chris, and Sean. Regardless of your gender, admission is just five dollars.

Advance tickets are available at: http://www.brownpapertickets.com/event/204562

Improve your gluteus maximus

Do you wish to improve your gluteus maximus muscle. If so , please buy Reebok Easy Tone shoes. Alas, you should have done it before Sep 30. Because on that date, the Federal Trade Commission poured cold water on gluteus maximus fans by ruling that the shoes didn't do much for that famous muscle. 

If you are flummoxed by the Latin, don't run away. The rest of this post is in plain English. Reebok has been advertising for two years that Easy Tone shoes helped you get a firmer butt. Apparently this was endorsed by no less a person than Kim Kardashian, who is reputed to be having  that redeeming virtue. I wouldn't have known who this worthy was, until she got married to Kris Humphries, a NBA wannabe, who I certainly know about. Kris could have confirmed or denied the anatomical virtue of the said lady, but he has so far chosen to remain silent, so we shall let that pass.

Reebok has reached a $25m settlement with the FTC for misleading advertising, which Reebok has decided to pay without admitting any guilt. Presumably the ladies in the FTC did not manage to firm up their butts despite wearing Easy Tone, but the ladies in Reebok did. No evidence has been presented to attest to either claim.

I would have thought that any connection between a running shoe and a shapely butt, could be tenuous at best, and that there might be far more important factors that determine the contours of your posterior. But then , it appears that a lot of women bought the idea that they could wolf down five Big Macs, wash it down with 4 cans of Coke and still be tops in the butt department by wearing Easy Tone. Now they will reportedly be compensated by Reebok for having been misled. 

What intrigued me by this story, was that Harbans Kaur in Delhi has also been captivated by this Western phenomenon of obsession with  butts. Apparently Easy Tone shoes were being sold in the Connaught Place outlet of Reebok in Delhi and some 80 women have bought these shoes at some Rs 5000 a piece. Now, anybody with knowledge of India, would readily agree that firmness is a minor quality compared with massiveness. Athleticism is not a redeeming virtue in Harbans Kaur's eyes and  a ponderous gait is more common than a sprightly step. So Reebok's success of selling a massive two pairs of Easy Tones a day in Connaught Place is surprising indeed. Alas, the 80 worthy ladies have no recourse as yet with Reebok. The FTC ruling was only for the US. That eminent organisation has presumably decided that  Easy Tone shoes did nothing for American butts but were perfectly acceptable for non American ones.

Kim Kardashian's Indian equivalent, I have learnt, is one Shazahn Padamsee, whose claim to fame I believe is that she acted in Dil to Bachcha Hai Ji. Needless to say, I am equally clueless about her as I am with her American counterpart. To feature in the Easy Tone campaign, Ms Padamsee must also be blessed with an extremely strong gluteus maximus. Perhaps some reader can comment on the truth, or otherwise, of this.

You have to give the last word to Harbans Kaur. One member of this clan apparently said  "I use it daily for morning walk. I don't have much idea as to whether it has led to toning or not but it is very comfortable to wear."  

Nobody can accuse Madam Kaur of lack of common sense.