Bottger, P. & Barsoux, J. (2009). Do you really want to be a leader? First ask yourself these three question. Retrieved April 27, 2010 from: http://sloanreview.mit.edu/business-insight/articles/2009/5/5158/do-you-really-want-to-be-a-leader/
This article is published on the MIT Sloan Management Review Web site and challenges future leaders to examine themselves to determine whether or not they actually want to be a business leader and to what level of leadership do they aspire to. The authors state that most senior positions present tasks that are massive, complex and full of conflict and that the playing field and rules become less certain. “Also, the further an executive rises, the more he or she must deal with high-caliber people who know how to get what they want, are difficult, strong-willed and have a sharp appetite for power”. The authors state that aspiring leaders should ask themselves the following three questions so they can assess their own leadership potential: How far do I want to go? The higher an executive climbs the more tough decisions he or she has to make. What am I willing to invest? In other words, how much time and effort are you willing to put into your development and growth and give up other aspects of your life? How will I keep it up? You have to be willing to put up with times of criticism, resistance, and setbacks to succeed in the long run. I am including this annotation not to be a negative to aspiring leaders, but as a challenge to those that are serious because the higher you want to go, the harder you need to be willing work and the more you need to learn through formal education and through experiences. All aspiring managers, students, and workers in general should consider these questions so they can decide the best direction for their career path.
Tuesday, April 27, 2010
Monday, April 26, 2010
Creating a Performance Incentive System: Can Risk, Distortion, and Manipulation Be Successfully Balanced?
Weyhrauch, W. & Culbertson, S. (2009). Creating a performance incentive system: Can risk, distortion, and manipulation be successfully balanced? Academy of Management Perspectives, Aug2009, Vol. 23 Issue 3, p98-100, 3p. Retrieved April 23, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/results?vid=2&hid=7&sid=9f186529-d742-4db5-8118-b0bb6bbc0d40%40sessionmgr4&bquery=(JN+%22Academy+of+Management+Perspectives%22+and+DT+20090801)&bdata=JmRiPWJ1aCZsb2dpbnBhZ2U9TG9naW4uYXNwJnR5cGU9MSZzaXRlPWVob3N0LWxpdmU%3d
This research brief was published in the Academy of Management Perspective, and discusses the creation and control of a performance incentive system. Employee’s job performances are measured using both objective and subjective indicators and both methods have shortfalls. Subjective indicators are based upon one individual’s perception of another and are subject to biases. Objective indicators can be flawed and not get a true measure of the employee’s value. In a study conducted by Michael Gibbs, et al, which is summarized in this research brief, states that “a network of diverse performance indicators highlighting strengths and balancing weaknesses may the way to create a fair and accurate system of performance incentives”. Using survey data from approximately 1,000 managers and owners of 326 automobile dealerships, the research team focused on the role of three performance measure properties: risk, distortion, and manipulation. Risk includes both controllable risk as well as risk the employee has no control over. Distortion refers to the extent a performance indicator incorrectly emphasizes certain aspects of performance. Manipulation refers to the degree a performance indicator could be manipulated by an employee to make their performance appear better than it actually is. This brief and study bring to light an interesting subject because in many business settings, an incentive program is an important motivator for employees and an important tool for managers. Finding ways to make these programs more effective and efficient is a very important task for a manager.
This research brief was published in the Academy of Management Perspective, and discusses the creation and control of a performance incentive system. Employee’s job performances are measured using both objective and subjective indicators and both methods have shortfalls. Subjective indicators are based upon one individual’s perception of another and are subject to biases. Objective indicators can be flawed and not get a true measure of the employee’s value. In a study conducted by Michael Gibbs, et al, which is summarized in this research brief, states that “a network of diverse performance indicators highlighting strengths and balancing weaknesses may the way to create a fair and accurate system of performance incentives”. Using survey data from approximately 1,000 managers and owners of 326 automobile dealerships, the research team focused on the role of three performance measure properties: risk, distortion, and manipulation. Risk includes both controllable risk as well as risk the employee has no control over. Distortion refers to the extent a performance indicator incorrectly emphasizes certain aspects of performance. Manipulation refers to the degree a performance indicator could be manipulated by an employee to make their performance appear better than it actually is. This brief and study bring to light an interesting subject because in many business settings, an incentive program is an important motivator for employees and an important tool for managers. Finding ways to make these programs more effective and efficient is a very important task for a manager.
Sunday, April 25, 2010
How to Compete and Grow: A Sector Guide to Policy
Manyika, J. et al. (2010) How to compete and grow: A sector guide to policy. McKinsey & Company. Retrieved April 24, 2010 from: http://www.mckinsey.com/mgi/reports/freepass_pdfs/competitiveness/Full_Report_Competitiveness.pdf
This report, conducted and published by McKinsey & Company, summarizes extensive research done in the field of policy making supposedly designed to make companies and countries more competitive. As the economies of the world improve, many governments are taking measures to help firms in their respective countries become more competitive. The authors state that many governments fail in the task because they look through an “economy-wide lens” instead of looking at the different sectors within their economy. They state that this form of policy making fails to take into consideration that each sector is affected differently and “that the conditions that promote competitiveness differ significantly from sector to sector”. Additionally, many governments look at the mix of their economies and the research shows that they should be more concerned with the competitiveness of the individual sectors instead. The most successful countries do not have the best industry mix; “their individual sectors are more competitive”. They also state that there is too much focus on trying to capture big manufacturing companies but that the best way to produce jobs is to become competitive in the service-sector. Additionally, they explain that competitiveness in new innovative sectors does not produce enough jobs to boost economy-wide employment and growth. McKinsey has categorized six sector groups that companies within them share characteristics and respond to similar approaches to enhancing competitiveness: infrastructure services, local services, business services, research and development-intensive manufacturing, manufacturing, and resource-intensive industries. The report concludes that governments should tailor policies to suit each sector group and how regulatory policy affects the sectors. This report gives a lot of insight into how governments control the economy and ways the researchers believe would be better. This is an important subject that managers should understand and should play and active role in making sure that their elected policy makers are representing their interest the way they should or be accountable if they are not.
This report, conducted and published by McKinsey & Company, summarizes extensive research done in the field of policy making supposedly designed to make companies and countries more competitive. As the economies of the world improve, many governments are taking measures to help firms in their respective countries become more competitive. The authors state that many governments fail in the task because they look through an “economy-wide lens” instead of looking at the different sectors within their economy. They state that this form of policy making fails to take into consideration that each sector is affected differently and “that the conditions that promote competitiveness differ significantly from sector to sector”. Additionally, many governments look at the mix of their economies and the research shows that they should be more concerned with the competitiveness of the individual sectors instead. The most successful countries do not have the best industry mix; “their individual sectors are more competitive”. They also state that there is too much focus on trying to capture big manufacturing companies but that the best way to produce jobs is to become competitive in the service-sector. Additionally, they explain that competitiveness in new innovative sectors does not produce enough jobs to boost economy-wide employment and growth. McKinsey has categorized six sector groups that companies within them share characteristics and respond to similar approaches to enhancing competitiveness: infrastructure services, local services, business services, research and development-intensive manufacturing, manufacturing, and resource-intensive industries. The report concludes that governments should tailor policies to suit each sector group and how regulatory policy affects the sectors. This report gives a lot of insight into how governments control the economy and ways the researchers believe would be better. This is an important subject that managers should understand and should play and active role in making sure that their elected policy makers are representing their interest the way they should or be accountable if they are not.
Saturday, April 24, 2010
Corporate Ethics, Personal Ethics: One in the Same?
Madden-Hallett, Helen, (2009). Corporate ethics, personal ethics: One in the same? Identifying ethical captains of industry. Journal of Business Systems, Governance and Ethics, Vol. 4, No. 3, Oct. 2009. Retrieved April 23, 2010 from: http://www.jbsge.vu.edu.au/issues/current.html
This article was written by Helen Madden-Hallett from Victoria University in Melbourne, Australia. It explores the relationship between the ethical standing of a corporation and that of its employees within the framework of eight dynamics. These dynamics are listed as: one’s self, family, groups of individuals, Mankind, all living things, the physical universe, energy, space and time, the spiritual realm, and the Supreme Being. Ethics in this paper is defined as “behavior which seeks the best level of survival, or the greatest benefits to the greatest number of dynamics and conversely, unethical behavior is that which offers the poorest solution and bring the greatest harm to the most number of dynamics”. As quoted in the paper, consumers are no longer satisfied with corporations believing they have fulfilled their fiduciary duty by doing no harm; consumers’ expectations are that corporations should proactively seek to do good deeds and to contribute to society. There is a positive side of ethical behavior for the business also. The author quotes a study that shows a correlation between adherence to ethical principles and increased profits. Employee’s ethical behavior is highly influenced by that of their superior’s. The author states that ethical philosophies come to naught if managers do not exhibit ethical behavior in the workplace. This article discusses a very important subject that managers should spend a lot of time on. Not only is ethical behavior the right thing to do, but there are many studies that show that companies that practice good ethical behavior are more successful also.
This article was written by Helen Madden-Hallett from Victoria University in Melbourne, Australia. It explores the relationship between the ethical standing of a corporation and that of its employees within the framework of eight dynamics. These dynamics are listed as: one’s self, family, groups of individuals, Mankind, all living things, the physical universe, energy, space and time, the spiritual realm, and the Supreme Being. Ethics in this paper is defined as “behavior which seeks the best level of survival, or the greatest benefits to the greatest number of dynamics and conversely, unethical behavior is that which offers the poorest solution and bring the greatest harm to the most number of dynamics”. As quoted in the paper, consumers are no longer satisfied with corporations believing they have fulfilled their fiduciary duty by doing no harm; consumers’ expectations are that corporations should proactively seek to do good deeds and to contribute to society. There is a positive side of ethical behavior for the business also. The author quotes a study that shows a correlation between adherence to ethical principles and increased profits. Employee’s ethical behavior is highly influenced by that of their superior’s. The author states that ethical philosophies come to naught if managers do not exhibit ethical behavior in the workplace. This article discusses a very important subject that managers should spend a lot of time on. Not only is ethical behavior the right thing to do, but there are many studies that show that companies that practice good ethical behavior are more successful also.
Empowering Your Employees to Empower Themselves
Goldsmith, M. (2010). Empowering your employees to empower themselves. Retrieved April 24, 2010 from: http://blogs.hbr.org/goldsmith/2010/04/empowering_your_employees_to_e.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article is published on Harvard Business Review’s Web site and discusses ways and benefits of empowering employees. Goldsmith states that employees want to be treated as partners rather than employees and they want information to also flow upward and not just down to them. However, many managers are just not willing to give up enough of their control to allow the empowerment of their employees. He states that it is time for managers to let their employees do what they need to do to get the job done. But he also states that the manager cannot empower the employee, they have to empower themselves. The manager’s role is to encourage and support the decision-making environment and to give the employees the tools and knowledge they need to make and act upon their own decisions, which helps them reach an empowered state. The author list four things leaders should do to build an environment that encourages empowerment: 1. Give power to those who have demonstrated they can handle the responsibility. 2. Create a favorable environment in which employees are encouraged to grow their skill level. 3. Don’t second guess others’ decisions and ideas unless it’s absolutely necessary. 4. Give the employee discretion and autonomy over their task and resources. This is an important subject that managers should understand. Empowered employees are the future leaders and they not only become more satisfied employees but the company they work for can receive a lot of benefit from the empowered employee as well.
This article is published on Harvard Business Review’s Web site and discusses ways and benefits of empowering employees. Goldsmith states that employees want to be treated as partners rather than employees and they want information to also flow upward and not just down to them. However, many managers are just not willing to give up enough of their control to allow the empowerment of their employees. He states that it is time for managers to let their employees do what they need to do to get the job done. But he also states that the manager cannot empower the employee, they have to empower themselves. The manager’s role is to encourage and support the decision-making environment and to give the employees the tools and knowledge they need to make and act upon their own decisions, which helps them reach an empowered state. The author list four things leaders should do to build an environment that encourages empowerment: 1. Give power to those who have demonstrated they can handle the responsibility. 2. Create a favorable environment in which employees are encouraged to grow their skill level. 3. Don’t second guess others’ decisions and ideas unless it’s absolutely necessary. 4. Give the employee discretion and autonomy over their task and resources. This is an important subject that managers should understand. Empowered employees are the future leaders and they not only become more satisfied employees but the company they work for can receive a lot of benefit from the empowered employee as well.
U. S. Capitalism: A Tarnished Model?
Whitley, Richard. U.S. capitalism: A tarnished model? Academy of Management Perspectives, May 2009, Vol. 23 Issue 2, p 11 – 22, 12p. Retrieved April 24, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=5&hid=15&sid=5bf6b5d6-7f83-4277-94bb-9ca09fbf232e%40sessionmgr10
This article discusses the viability of capitalism as it is practiced in the United States and whether it is now a tarnished model after the financial collapse and ensuing recession that followed. The essay takes the reader through some of the history that leads to today’s capitalistic economy, starting with the WWII postwar era. In the 1950s and 1960s the American model, at least in manufacturing, consisted of a lot of large diversified companies that made use of mass production of standardized goods and distributed those goods largely through mass marketing. The companies were operated by a managerial hierarchy that specified and controlled the routine operations with mostly semiskilled workers. This is referred to as a Fordist strategy and its focus is on achieving high levels of labor productivity. By increasing productivity and keeping costs low, firms were able to compete primarily on price in large consumer markets for standard goods. The next era discussed starts after the recession of the early 1990s, which is largely driven by the Internet and dotcom companies. The so called “Silicon Valley” pattern of economic organization became very appealing during this period. One of the major shifts in this model is concerning “the flexibility of firms and the ability to reconfigure the nature and organization of core activities and skills to respond to rapid and radical changes in markets and technologies”. The labor force in this model is different also; instead of semiskilled workers, these firms need technical workers whose knowledge and contributions are crucial to the firms’ success, “but whose knowledge and skills are vulnerable to environmental changes”. The author makes five points regarding the likely effects of the financial crisis and recession on the influence of the U.S. capitalism model on forms of economic organization elsewhere in the world. First, there is little doubt that the expanded role of the financial services sector in the U.S. and U.K. will decline. The deregulation of the past has enabled lenders to avoid responsibility for their decisions and to exit quickly from commitments. Secondly, “the expansion of such transaction-based banking business models and rapid exits from financial commitments seem likely to reinforce more general doubts about the viability of ultraliberal market economies in which ownership rights can be traded very easily with few constraints on short-term economic opportunism”. Third, there is growing interest in different business systems, which highlights the variety of effective forms of economic organization to be found in the U.S. and other capitalistic societies. Fourth, despite the reaction against ultraliberal market contracting, the Silicon Valley model will probably remain popular to some because it offers hope economic growth. Lastly, more government control and regulations, due to the current financial crisis is likely to follow. This article is very informative in the subject of how a capitalistic economy works and where its future is likely heading. This subject is important for managers to understand because it affects their firms and their competitor’s as well. It is also an important political subject because if a manager is interested in which way the U.S. economy is going to be regulated and steered, he or she must know the point of view of the candidates for public office they are voting for.
This article discusses the viability of capitalism as it is practiced in the United States and whether it is now a tarnished model after the financial collapse and ensuing recession that followed. The essay takes the reader through some of the history that leads to today’s capitalistic economy, starting with the WWII postwar era. In the 1950s and 1960s the American model, at least in manufacturing, consisted of a lot of large diversified companies that made use of mass production of standardized goods and distributed those goods largely through mass marketing. The companies were operated by a managerial hierarchy that specified and controlled the routine operations with mostly semiskilled workers. This is referred to as a Fordist strategy and its focus is on achieving high levels of labor productivity. By increasing productivity and keeping costs low, firms were able to compete primarily on price in large consumer markets for standard goods. The next era discussed starts after the recession of the early 1990s, which is largely driven by the Internet and dotcom companies. The so called “Silicon Valley” pattern of economic organization became very appealing during this period. One of the major shifts in this model is concerning “the flexibility of firms and the ability to reconfigure the nature and organization of core activities and skills to respond to rapid and radical changes in markets and technologies”. The labor force in this model is different also; instead of semiskilled workers, these firms need technical workers whose knowledge and contributions are crucial to the firms’ success, “but whose knowledge and skills are vulnerable to environmental changes”. The author makes five points regarding the likely effects of the financial crisis and recession on the influence of the U.S. capitalism model on forms of economic organization elsewhere in the world. First, there is little doubt that the expanded role of the financial services sector in the U.S. and U.K. will decline. The deregulation of the past has enabled lenders to avoid responsibility for their decisions and to exit quickly from commitments. Secondly, “the expansion of such transaction-based banking business models and rapid exits from financial commitments seem likely to reinforce more general doubts about the viability of ultraliberal market economies in which ownership rights can be traded very easily with few constraints on short-term economic opportunism”. Third, there is growing interest in different business systems, which highlights the variety of effective forms of economic organization to be found in the U.S. and other capitalistic societies. Fourth, despite the reaction against ultraliberal market contracting, the Silicon Valley model will probably remain popular to some because it offers hope economic growth. Lastly, more government control and regulations, due to the current financial crisis is likely to follow. This article is very informative in the subject of how a capitalistic economy works and where its future is likely heading. This subject is important for managers to understand because it affects their firms and their competitor’s as well. It is also an important political subject because if a manager is interested in which way the U.S. economy is going to be regulated and steered, he or she must know the point of view of the candidates for public office they are voting for.
Friday, April 23, 2010
Poor Pricing Power Poses Problems for the U.S.
Bogoslaw, D. (2010). Poor pricing power poses problems for the U.S. Retrieved April 21, 2010 from: http://www.businessweek.com/investor/content/apr2010/pi20100420_625166.htm
This article is published on the BusinessWeek.com Web site and discusses some of the problems that U.S. businesses could encounter, including deflation concerns, especially if the economy falters again. Normally when the Fed pumps a lot of liquidly into the economy and keeps interest rates low, economist worry more about inflation. However, right now, many are concerned about the opposite problem, deflation. This could occur if companies start lowering prices to lure customers into buying again, but if deflation sets in, it will likely lead to companies needing to cut costs and employees as a result, further driving consumers away. Deflation feeds upon itself because when consumers believe that prices will be going down in the future, that put off today’s purchases so they can save on the same purchase later. When businesses are forced to lower prices, they have to cut costs elsewhere and the vicious cycle continues and can devastate an already weak economy. Additionally, as stated by the author, deflation is most dangerous because it boost the value of the dollar, increasing the cost of repaying debt. He says right now we are in a period of disinflation, which is a decline in the rate of inflation and increases the possibility of actual deflation occurring. While there is some optimism for growth in the economy, the author states that because of the continuing unemployment situation, which many believe will not improve greatly for some time to come; there is plenty of skepticism about the economy as well. This is an important subject for manager to understand because deflation and inflation can throw the economy into chaos and it is important for managers to monitor the economy so can be aware of what is going on and how it can affect them.
This article is published on the BusinessWeek.com Web site and discusses some of the problems that U.S. businesses could encounter, including deflation concerns, especially if the economy falters again. Normally when the Fed pumps a lot of liquidly into the economy and keeps interest rates low, economist worry more about inflation. However, right now, many are concerned about the opposite problem, deflation. This could occur if companies start lowering prices to lure customers into buying again, but if deflation sets in, it will likely lead to companies needing to cut costs and employees as a result, further driving consumers away. Deflation feeds upon itself because when consumers believe that prices will be going down in the future, that put off today’s purchases so they can save on the same purchase later. When businesses are forced to lower prices, they have to cut costs elsewhere and the vicious cycle continues and can devastate an already weak economy. Additionally, as stated by the author, deflation is most dangerous because it boost the value of the dollar, increasing the cost of repaying debt. He says right now we are in a period of disinflation, which is a decline in the rate of inflation and increases the possibility of actual deflation occurring. While there is some optimism for growth in the economy, the author states that because of the continuing unemployment situation, which many believe will not improve greatly for some time to come; there is plenty of skepticism about the economy as well. This is an important subject for manager to understand because deflation and inflation can throw the economy into chaos and it is important for managers to monitor the economy so can be aware of what is going on and how it can affect them.
Thursday, April 22, 2010
Mindfulness Based Stress Reduction
Fries, M. Mindfulness based stress reduction for the changing work environment. Journal of Academic and Business Ethics, Vol. 2. Retrieved April 22, 2010 from: http://www.aabri.com/jabe.html
This study describes how stress affects people in their work and personal lives and discusses ways that employers and employees should deal with this stress. Workers today have more things to keep up with than in the past and this fact contributes to the excessive stress seen in many work environments. Stress, as defined by Selye and as quoted in the study, is “the nonspecific response of the body to any demand made upon it”. The author states that “mindfulness is the awareness that emerges through paying attention on purpose, in the present moment, and non-judgmentally to things as they are”. “It can be used to help alleviate stress, improve work satisfaction, productivity, and the quality of one’s live”. It is also stated that stress is not to be avoided altogether; it is a normal part of life. It is chronic, long-term stress that must be dealt with to avoid physical and mental problems that can arise as a result of prolonged stress. Citing recent survey data from the American Psychological Association, the author states the level of stress in the US is out of control. Seventy-seven percent of respondents have experienced some physical symptoms of stress in the last month and seventy-three percent have experienced some psychological symptoms. Further reported in the data were the leading causes of work-related stress: low salaries (44%), heavy work load (41%), lack of opportunity (40%), uncertain job expectations (40%), and long hours (39%). To deal with stress, the author states that one of two approaches can be applied: either alter the “stressor” (external focus) or alter one’s perception of the stressful situation (internal focus). He states that traditionally, management has focused on the external factors to try to lesson stress in the workplace. Many firms today are moving toward a more internal focus by being more cognizant of their employee’s needs and “making strides to be more aware of personality characteristics and dynamics of work interactions”. And some managers understand that if they want their employees to be more productive and satisfied, the employee need to feel that their work is worthwhile, they are in control of achieving their goals, and that they are receiving ongoing recognition for their work. The study goes on to discuss the methods and usefulness of using mindfulness, defined earlier. This study discusses a very important subject and goes into quite a bit more detail than what is outlined in this annotation. I believe that all managers should learn more about this subject because, even if they are not interested in the mindfulness techniques, it is certainly worthwhile to have an understanding of how stress is created and how it affects the employees and the business, so that they can create a work atmosphere that reduces stress for the entire workforce and therefore increases overall productivity.
This study describes how stress affects people in their work and personal lives and discusses ways that employers and employees should deal with this stress. Workers today have more things to keep up with than in the past and this fact contributes to the excessive stress seen in many work environments. Stress, as defined by Selye and as quoted in the study, is “the nonspecific response of the body to any demand made upon it”. The author states that “mindfulness is the awareness that emerges through paying attention on purpose, in the present moment, and non-judgmentally to things as they are”. “It can be used to help alleviate stress, improve work satisfaction, productivity, and the quality of one’s live”. It is also stated that stress is not to be avoided altogether; it is a normal part of life. It is chronic, long-term stress that must be dealt with to avoid physical and mental problems that can arise as a result of prolonged stress. Citing recent survey data from the American Psychological Association, the author states the level of stress in the US is out of control. Seventy-seven percent of respondents have experienced some physical symptoms of stress in the last month and seventy-three percent have experienced some psychological symptoms. Further reported in the data were the leading causes of work-related stress: low salaries (44%), heavy work load (41%), lack of opportunity (40%), uncertain job expectations (40%), and long hours (39%). To deal with stress, the author states that one of two approaches can be applied: either alter the “stressor” (external focus) or alter one’s perception of the stressful situation (internal focus). He states that traditionally, management has focused on the external factors to try to lesson stress in the workplace. Many firms today are moving toward a more internal focus by being more cognizant of their employee’s needs and “making strides to be more aware of personality characteristics and dynamics of work interactions”. And some managers understand that if they want their employees to be more productive and satisfied, the employee need to feel that their work is worthwhile, they are in control of achieving their goals, and that they are receiving ongoing recognition for their work. The study goes on to discuss the methods and usefulness of using mindfulness, defined earlier. This study discusses a very important subject and goes into quite a bit more detail than what is outlined in this annotation. I believe that all managers should learn more about this subject because, even if they are not interested in the mindfulness techniques, it is certainly worthwhile to have an understanding of how stress is created and how it affects the employees and the business, so that they can create a work atmosphere that reduces stress for the entire workforce and therefore increases overall productivity.
Wednesday, April 21, 2010
Economic Conditions Snapshot, April 2010
McKinsey & Company (2010). McKinsey global survey results: economic conditions snapshot, April 2010. Retrieved April 20, 2010 from: https://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2569
This survey was conducted and published by McKinsey and Company and summarizes the responses, to questions covering several business-related subjects, from 2,059 executives representing a full range of industries, regions, functional specialties, and tenures. It gives the reader a feel for the pulse of the business world and what executives are thinking. The first subject covered is how executives view US health care reform. 63% of executives in the US or those that work for US-headquartered companies believe that health care reform is good. However, a large number of them do not know how the new law will affect their companies’ finances or affect their employee’s benefits. The next subject covered in the survey is the executives’ outlook on the economy and their company’s prospects for growth. The number one priority for the CEOs in 2010 is to first stabilize the firm’s finances, then to find growth opportunities through geographic expansion and development of new products and services. 42% of executives expect to hire in 2010, which is up from 29% two months ago. However, many are remaining cautious and a smaller 31% expect to hire in the first half of 2010. Two-thirds of the respondents rate economic conditions in their countries as better than they were six months ago and expect more improvement by the end of the year. This survey summary has many more details and results posted than what is discussed in this annotation and it is worthwhile to take a look at. If accurate, it does give a lot of information as to what is happening in the business world and gives the reader a good idea where things may be headed. What is not disclosed in the summary, are the measures taken by the McKinsey and Company to insure the results are accurate.
This survey was conducted and published by McKinsey and Company and summarizes the responses, to questions covering several business-related subjects, from 2,059 executives representing a full range of industries, regions, functional specialties, and tenures. It gives the reader a feel for the pulse of the business world and what executives are thinking. The first subject covered is how executives view US health care reform. 63% of executives in the US or those that work for US-headquartered companies believe that health care reform is good. However, a large number of them do not know how the new law will affect their companies’ finances or affect their employee’s benefits. The next subject covered in the survey is the executives’ outlook on the economy and their company’s prospects for growth. The number one priority for the CEOs in 2010 is to first stabilize the firm’s finances, then to find growth opportunities through geographic expansion and development of new products and services. 42% of executives expect to hire in 2010, which is up from 29% two months ago. However, many are remaining cautious and a smaller 31% expect to hire in the first half of 2010. Two-thirds of the respondents rate economic conditions in their countries as better than they were six months ago and expect more improvement by the end of the year. This survey summary has many more details and results posted than what is discussed in this annotation and it is worthwhile to take a look at. If accurate, it does give a lot of information as to what is happening in the business world and gives the reader a good idea where things may be headed. What is not disclosed in the summary, are the measures taken by the McKinsey and Company to insure the results are accurate.
Surprise! Four Strategies for Coping with Disruptions
Kanter, R. M. (2010). Surprise! Four strategies for coping with disruptions. Retrieved April 19, 2010 from: http://blogs.hbr.org/kanter/2010/04/surprise-four-strategies-for-c.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article is published on the Harvard Business Review Web site and discusses strategies that businesses need to consider in order to be able to deal with major business disruptions. This article comes on the heels of the recent volcanic eruption that have more or less shut down the commercial airline business in some areas of Europe. The author states that a company’s ability to cope with the unexpected is a leadership imperative and that the ability to recover quickly separates the winners from the losers. She lists four strategies that should be used to speed the response to and to minimize the impact of disruptions. Backup – “Leaders should know the benefit of alternatives…great innovators often pursue parallel development paths. Great companies stress efficiency but build in slack and cross-train their people…” Communication – Information must flow quickly and there should be a plan in place to make sure there are means of communication and procedures in this regard. Collaboration – Human relationships, commitment, and resiliency help companies recover quickly. Values and principles – Having clearly established standards and values can serve as a guideline to direct decisions without sluggish bureaucracy. This article is brief and is very limited in detail but it does bring up an important subject. Just over a year ago a huge ice storm hit Western Kentucky and surrounding areas and it caused a lot of chaos for many people and businesses because it was unexpected and most were unprepared. It is important for all businesses to be prepared for the unexpected as much as they can be and these strategies can certainly help.
This article is published on the Harvard Business Review Web site and discusses strategies that businesses need to consider in order to be able to deal with major business disruptions. This article comes on the heels of the recent volcanic eruption that have more or less shut down the commercial airline business in some areas of Europe. The author states that a company’s ability to cope with the unexpected is a leadership imperative and that the ability to recover quickly separates the winners from the losers. She lists four strategies that should be used to speed the response to and to minimize the impact of disruptions. Backup – “Leaders should know the benefit of alternatives…great innovators often pursue parallel development paths. Great companies stress efficiency but build in slack and cross-train their people…” Communication – Information must flow quickly and there should be a plan in place to make sure there are means of communication and procedures in this regard. Collaboration – Human relationships, commitment, and resiliency help companies recover quickly. Values and principles – Having clearly established standards and values can serve as a guideline to direct decisions without sluggish bureaucracy. This article is brief and is very limited in detail but it does bring up an important subject. Just over a year ago a huge ice storm hit Western Kentucky and surrounding areas and it caused a lot of chaos for many people and businesses because it was unexpected and most were unprepared. It is important for all businesses to be prepared for the unexpected as much as they can be and these strategies can certainly help.
Tuesday, April 20, 2010
Five Myths About How to Create Jobs
Manyika, J. & Auguste, B. (2010). Five myths about how to create jobs. The Washington Post, Feb. 7, 2010. Retrieved April 20, 2010 from: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/05/AR2010020501445.html
This article was originally published in the Washington Post and reprinted on McKinsey Global Institute’s Web site. The authors discuss the current unemployment situation the country is in and the myths that surround this subject regarding job creation. President Obama has recently announced that job creation will be the number one focus of 2010 and has earmarked $30 billion of repaid bank bailout money to go toward a small-business lending fund. Additionally, the government has taken other measures, including tax incentives, infrastructure projects, and efforts to increase exports to help create more jobs. The authors list and describe five common myths about job creation that employers and employees should understand. 1. Surely there is a quick fix. The authors state that quick action is important but with the US economy losing 7 million jobs in the past two years, it will take several years to get back to where we were. 2. The key to boosting employment quickly is to help small businesses. They state that new and existing jobs come from both large and small companies, almost equally. 3. High-tech jobs will solve the problem. They state that this sector is an important part of the solution, but it is too small to create the millions of job needed in this economy. It will take the bigger sectors like retail, wholesale, business service, and health care to make a big dent in the unemployment. 4. Higher productivity per worker kills jobs. This is not true on the macro-level; higher productivity can eliminate jobs in a certain business environment in the short term but spurs long-term gains in the economy as a whole. 5. Increasing exports will revive manufacturing employment. This is only true in some industries, but not a net benefit to the economy as a whole. The authors state that reducing unemployment is not mainly done with regaining lost jobs but it is more about creating jobs in other sectors. They also state that net growth in new jobs does not come from manufacturing, but from the service industries. This article discusses an important subject that managers, students, and politicians should all understand
This article was originally published in the Washington Post and reprinted on McKinsey Global Institute’s Web site. The authors discuss the current unemployment situation the country is in and the myths that surround this subject regarding job creation. President Obama has recently announced that job creation will be the number one focus of 2010 and has earmarked $30 billion of repaid bank bailout money to go toward a small-business lending fund. Additionally, the government has taken other measures, including tax incentives, infrastructure projects, and efforts to increase exports to help create more jobs. The authors list and describe five common myths about job creation that employers and employees should understand. 1. Surely there is a quick fix. The authors state that quick action is important but with the US economy losing 7 million jobs in the past two years, it will take several years to get back to where we were. 2. The key to boosting employment quickly is to help small businesses. They state that new and existing jobs come from both large and small companies, almost equally. 3. High-tech jobs will solve the problem. They state that this sector is an important part of the solution, but it is too small to create the millions of job needed in this economy. It will take the bigger sectors like retail, wholesale, business service, and health care to make a big dent in the unemployment. 4. Higher productivity per worker kills jobs. This is not true on the macro-level; higher productivity can eliminate jobs in a certain business environment in the short term but spurs long-term gains in the economy as a whole. 5. Increasing exports will revive manufacturing employment. This is only true in some industries, but not a net benefit to the economy as a whole. The authors state that reducing unemployment is not mainly done with regaining lost jobs but it is more about creating jobs in other sectors. They also state that net growth in new jobs does not come from manufacturing, but from the service industries. This article discusses an important subject that managers, students, and politicians should all understand
Monday, April 19, 2010
High-Involvement Work Practices: Are They Really Worth It?
Mills, M. J. (2009) High-involvement practices: Are they really worth it? Academy of Management Perspectives, Aug2009, Vol. 23 Issue 3, p93-95, 3p. Retrieved April 19, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=1&hid=13&sid=04b8f0fc-ce86-4ab6-a239-f8fac637eaef%40sessionmgr13
This research brief was written by doctoral candidate, Maura Mills and KSU assistant professor, Satoris Culbertson, and summarizes a recent study done by Marcus Butts et al. from the University of Georgia. Their study focused on the results realized by firms that practice increased employee participation in decision making and other high-involvement work practices. These practices consist of four elements: giving employees more control over decision making, increasing employee access to information, rewarding high-performing employees, and supporting development opportunities for employees. The purpose of the study was to examine the notion that high-involvement work practices produce feelings of empowerment, which leads to greater job satisfaction, greater organizational commitment, lower stress, and improved job performance. They concluded that high-involvement work practices do heighten an employee’s autonomy, which results in increased feelings of empowerment. They also concluded that empowered employees are more likely to be satisfied with their jobs, be more committed to the company, and have better job performance, all of which leads to improved overall results for the firm as well. So high-involvement practices are seen as a good practice for firms to employ. This study is important for managers to understand because having employees with a high amount of job satisfaction is important to firms that are interested in recruiting and retaining the best employees.
This research brief was written by doctoral candidate, Maura Mills and KSU assistant professor, Satoris Culbertson, and summarizes a recent study done by Marcus Butts et al. from the University of Georgia. Their study focused on the results realized by firms that practice increased employee participation in decision making and other high-involvement work practices. These practices consist of four elements: giving employees more control over decision making, increasing employee access to information, rewarding high-performing employees, and supporting development opportunities for employees. The purpose of the study was to examine the notion that high-involvement work practices produce feelings of empowerment, which leads to greater job satisfaction, greater organizational commitment, lower stress, and improved job performance. They concluded that high-involvement work practices do heighten an employee’s autonomy, which results in increased feelings of empowerment. They also concluded that empowered employees are more likely to be satisfied with their jobs, be more committed to the company, and have better job performance, all of which leads to improved overall results for the firm as well. So high-involvement practices are seen as a good practice for firms to employ. This study is important for managers to understand because having employees with a high amount of job satisfaction is important to firms that are interested in recruiting and retaining the best employees.
Retailers Try on New Sales Tactics
Dodes, R. & Mattioli, D. (2010). Retailers try on new sales tactics. Retrieved April 19, 2010 from: http://online.wsj.com/article/SB10001424052702304180804575188432445576288.html?mod=rss_whats_news_us_business
This article is published on the Wall Street Journal’s Web site and discusses tactics that some of the nation’s major retailers are taking to increase their top line. During the past couple of years of recession, retailers have had to cut costs in order to make money or even just to survive. Now that the economy is starting to recover, consumers are starting to spend a little bit of their money and these retailers are making strides to try to capture some of this revenue. J. C. Penney, Macy’s, and Home Depot are putting a lot of resources into sales training, strong customer service initiatives, and incentives to help bolster their top line with less emphasis on the costs cutting they have been practicing lately. This article discusses an important subject that all managers, especially those involved in retail, should understand because the competition for business will be hard fought and as the economy continues to recover, retail outlets need to make the right moves now to be able to capture their share of this business and as stated by Home Depo’s VP of learning, “it’s about building strong relationship, so you come back…”, so it also about earning repeat business as well.
This article is published on the Wall Street Journal’s Web site and discusses tactics that some of the nation’s major retailers are taking to increase their top line. During the past couple of years of recession, retailers have had to cut costs in order to make money or even just to survive. Now that the economy is starting to recover, consumers are starting to spend a little bit of their money and these retailers are making strides to try to capture some of this revenue. J. C. Penney, Macy’s, and Home Depot are putting a lot of resources into sales training, strong customer service initiatives, and incentives to help bolster their top line with less emphasis on the costs cutting they have been practicing lately. This article discusses an important subject that all managers, especially those involved in retail, should understand because the competition for business will be hard fought and as the economy continues to recover, retail outlets need to make the right moves now to be able to capture their share of this business and as stated by Home Depo’s VP of learning, “it’s about building strong relationship, so you come back…”, so it also about earning repeat business as well.
Sunday, April 18, 2010
The Weekly Layoff Report
Turchioe, P. (2010). The Weekly Layoff Report: Forbes Tracker Passes 700,000 Jobs Lost. Retrieved April 18, 2010 from: http://www.forbes.com/2010/04/16/layoff-tracker-unemployment-leadership-careers-jobs.html?feed=rss_home
This article, published on Forbes.com Web site, discusses the latest unemployment numbers and gives a reading of the current economic status as far as jobs are concerned. The author states that claims for unemployment increased again, for the second week in a row, adding 24,000 new claimants this past week. This news dampens the optimism felt last month and the belief that the number of new claims will soon be below the 400,000 mark, the level where economists estimate there would be more jobs added than lost. The good news is that this year’s numbers are considerably lower than last year’s 609,000 for the same period. There are currently 11.08 million Americans collecting unemployment benefits at this time. This report highlights some of the important aspects of what is going on in the economy. There are many reports that state we are experiencing economic recovery, but it appears that this recovery is somewhat of a jobless recovery; without an adequate number of jobs being created, the economy will continue to suffer. Though this article is brief in detail, but it does discuss a very important subject managers should be aware of. Until there is a good amount of job creation, the economic recovery will be limited.
This article, published on Forbes.com Web site, discusses the latest unemployment numbers and gives a reading of the current economic status as far as jobs are concerned. The author states that claims for unemployment increased again, for the second week in a row, adding 24,000 new claimants this past week. This news dampens the optimism felt last month and the belief that the number of new claims will soon be below the 400,000 mark, the level where economists estimate there would be more jobs added than lost. The good news is that this year’s numbers are considerably lower than last year’s 609,000 for the same period. There are currently 11.08 million Americans collecting unemployment benefits at this time. This report highlights some of the important aspects of what is going on in the economy. There are many reports that state we are experiencing economic recovery, but it appears that this recovery is somewhat of a jobless recovery; without an adequate number of jobs being created, the economy will continue to suffer. Though this article is brief in detail, but it does discuss a very important subject managers should be aware of. Until there is a good amount of job creation, the economic recovery will be limited.
Saturday, April 17, 2010
The Future of Capitalism: Credit, Lending, and Leverage
McKinsey Quarterly (2010). The future of capitalism: Credit, lending, and leverage. Retrieved April 14, 2010 from: https://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2555
This writing is a summary of a panel discussion between several experts that are opining about various subjects regarding the economy and in particular the subjects of credit, lending, and leverage; the summary is published on the McKinsey Quarterly Web site and is a collaborative effort between McKinsey and Duke University’s Fuqua School of Business. The first subject discussed is the current status of the credit market. Alan Schwartz of Guggenheim Partners states that credit availability has returned to the larger corporations but not to the small-business or to the consumer markets yet. This reality has a serious negative impact on the economy because small businesses are the biggest employers in the economy and the consumer is small business’s customer. The next subject of the discussion is global rebalancing, which is referring to the GDP of developed economies as compared to those of emerging economies. It is stated that by 2014, the GDP of emerging economies will surpass that of developed markets and also, that by 2030 to 2035, the U.S. will no longer be the dominate economy in the world, it will likely be China, followed by India. The last main subject discussed was the economic recovery and preventing the next crisis through regulatory changes. Panelist David Rubenstein, of the Carlyle Group, states that there is not enough wisdom in Washington to figure out how prevent future problems partly because the current administration has so little private-sector experience. Seth Gardner of Duke University’s Center for Financial Excellence states that any regulation that will attempt to eliminate asset bubbles would be silly because bubbles cannot be completely eliminated from a capitalistic economy. Measures should be taken to soften the blow of the next bubble burst. Alan Schwartz states that he is hearing the there may be no significant new regulations coming out of Washington. Rubenstein disagrees and states that congress will do something before the November election. This is a very interesting discussion that is very informative as to the things that affect the economy and how the actions of lenders, businesses, and the government can make a big difference in the direction the economy goes now and in the future.
This writing is a summary of a panel discussion between several experts that are opining about various subjects regarding the economy and in particular the subjects of credit, lending, and leverage; the summary is published on the McKinsey Quarterly Web site and is a collaborative effort between McKinsey and Duke University’s Fuqua School of Business. The first subject discussed is the current status of the credit market. Alan Schwartz of Guggenheim Partners states that credit availability has returned to the larger corporations but not to the small-business or to the consumer markets yet. This reality has a serious negative impact on the economy because small businesses are the biggest employers in the economy and the consumer is small business’s customer. The next subject of the discussion is global rebalancing, which is referring to the GDP of developed economies as compared to those of emerging economies. It is stated that by 2014, the GDP of emerging economies will surpass that of developed markets and also, that by 2030 to 2035, the U.S. will no longer be the dominate economy in the world, it will likely be China, followed by India. The last main subject discussed was the economic recovery and preventing the next crisis through regulatory changes. Panelist David Rubenstein, of the Carlyle Group, states that there is not enough wisdom in Washington to figure out how prevent future problems partly because the current administration has so little private-sector experience. Seth Gardner of Duke University’s Center for Financial Excellence states that any regulation that will attempt to eliminate asset bubbles would be silly because bubbles cannot be completely eliminated from a capitalistic economy. Measures should be taken to soften the blow of the next bubble burst. Alan Schwartz states that he is hearing the there may be no significant new regulations coming out of Washington. Rubenstein disagrees and states that congress will do something before the November election. This is a very interesting discussion that is very informative as to the things that affect the economy and how the actions of lenders, businesses, and the government can make a big difference in the direction the economy goes now and in the future.
Today’s Biggest Talent-Management Challenges
Anders, G (2010). Today’s biggest talent-management challenges. Retrieved April 16, 2010 from: http://blogs.hbr.org/cs/2010/03/todays_biggest_talent_manageme.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article is published on the Harvard Business Review Web site and discusses the challenges that executives have in finding and developing the most talented people. At a recent conference, talent-management consultant Marc Effron presented the following survey statistics: only 18% of companies claim to be winning the war for talent. 72% indicate it is an endless struggle for their company and that they are neither winning nor losing ground. 10% declare they’re losing and admitting defeat in the war for talent. The author states that there are three main issues that need to be addressed by company executives and gives some ideas in how to correct the problem. First, organizations are not sure what they are looking for. It’s important for firms to align their talent recruitment and development with the corporate goals and strategies. Second, talent development is just a slogan, not a way of life for the company. There must be an effective development program in place and utilized for the company to get their talent aligned with the company’s goals. Lastly, we don’t know how to get better. This is because talent development efforts are hard to track so that the firm can know what it takes to get better. Some experts are trying to develop tracking systems to correct this weakness. This article discusses important issues, especially for large corporation that have many managers to keep track of and develop for future succession. However, even managers and HRM employees in smaller companies should have an understanding of this subject because it is important to have development programs that will help the company get the most benefit from their employees and future managers.
This article is published on the Harvard Business Review Web site and discusses the challenges that executives have in finding and developing the most talented people. At a recent conference, talent-management consultant Marc Effron presented the following survey statistics: only 18% of companies claim to be winning the war for talent. 72% indicate it is an endless struggle for their company and that they are neither winning nor losing ground. 10% declare they’re losing and admitting defeat in the war for talent. The author states that there are three main issues that need to be addressed by company executives and gives some ideas in how to correct the problem. First, organizations are not sure what they are looking for. It’s important for firms to align their talent recruitment and development with the corporate goals and strategies. Second, talent development is just a slogan, not a way of life for the company. There must be an effective development program in place and utilized for the company to get their talent aligned with the company’s goals. Lastly, we don’t know how to get better. This is because talent development efforts are hard to track so that the firm can know what it takes to get better. Some experts are trying to develop tracking systems to correct this weakness. This article discusses important issues, especially for large corporation that have many managers to keep track of and develop for future succession. However, even managers and HRM employees in smaller companies should have an understanding of this subject because it is important to have development programs that will help the company get the most benefit from their employees and future managers.
Get Immediate Value from Your New Hire
Gallo, A. (2010). Get immediate value from your new hire. Retrieved April 16, 2010 from: http://blogs.hbr.org/hmu/2010/04/make-your-new-hire-immediately.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article discusses the importance of getting a newly hired employee properly acclimated, or “onboarded”, into the culture of the firm; it is published on Harvard Business Review’s Web site. For a new hire to be successful, it is important that he or she has a connection and understanding of the inner workings and culture of the business they were hired into and not just learn the basics of how things are done. The author quotes another expert that says there are four domains that new hires need to master: business orientation, expectation alignment, political connection, and cultural adaptation. It is stated that the last two are the hardest for manager to convey but they are the most critical for the new hire to understand. According to Katzenbach, as quoted in the article, managers should follow three steps to get their newly hired employees up to speed and more likely to succeed: 1. Start early; always recruit with cultural fit as well as skills and experience in mind. Once hired, be up front about and expose the new hire to the company’s culture right away. 2. Get them in the right network; make sure the new hire understands the importance of the informal or shadow organization is to getting things done. Introduce the new hire to his or her colleagues and how and where they fit into the overall organization. 3. Get them working; get them involved in real work right away. Training is important, but they need to be involved in the actual working environment as soon as possible. The article also has a do and don’t list and a couple of case studies as examples. This article discusses an important subject that managers should understand because not only is it important to recruit the best possible employee, but it is important to make sure that once that employee is hired that everything possible is done to help that employee become successful, which benefits everyone involved.
This article discusses the importance of getting a newly hired employee properly acclimated, or “onboarded”, into the culture of the firm; it is published on Harvard Business Review’s Web site. For a new hire to be successful, it is important that he or she has a connection and understanding of the inner workings and culture of the business they were hired into and not just learn the basics of how things are done. The author quotes another expert that says there are four domains that new hires need to master: business orientation, expectation alignment, political connection, and cultural adaptation. It is stated that the last two are the hardest for manager to convey but they are the most critical for the new hire to understand. According to Katzenbach, as quoted in the article, managers should follow three steps to get their newly hired employees up to speed and more likely to succeed: 1. Start early; always recruit with cultural fit as well as skills and experience in mind. Once hired, be up front about and expose the new hire to the company’s culture right away. 2. Get them in the right network; make sure the new hire understands the importance of the informal or shadow organization is to getting things done. Introduce the new hire to his or her colleagues and how and where they fit into the overall organization. 3. Get them working; get them involved in real work right away. Training is important, but they need to be involved in the actual working environment as soon as possible. The article also has a do and don’t list and a couple of case studies as examples. This article discusses an important subject that managers should understand because not only is it important to recruit the best possible employee, but it is important to make sure that once that employee is hired that everything possible is done to help that employee become successful, which benefits everyone involved.
Wednesday, April 14, 2010
Bernanke Sees Little Inflation Threat
Hilsenrath, J. (2010). Bernanke sees little inflation threat: Fed chief cites broad slowdown in prices, has optimistic but cautious view of economy. Retrieved April 14, 2010 from: http://online.wsj.com/article/SB10001424052702304798204575183801662641626.html?mod=WSJ_article_MoreIn
This article, published on the wall Street Journal’s web site, describes Fed Chairman, Ben Bernanke’s testimony to Congress today, where he indicated there is little threat of inflation in the near term. The Chairman states that there has been a widely dispersed slowdown in inflation in the past few months and he saw little indication that the pace would be picking up soon. This should lead to short-term rates staying where they are for awhile, which will contribute to more growth in the economy. The author states that Bernanke’s assessment of the economy is optimistic but cautious because of the continued housing crisis and the poor fiscal condition of state and local governments. Some economists do not believe inflation is slowing very much and further believe that the housing market is putting downward pressure or rents, skewing the inflation numbers. Most economists do not expect deflation, but if inflation gets even lower, inflation-adjusted rates increase, which could slow or stop the recovery. As stated in the previous annotation, it is important for managers to understate as much about the workings of the economy as possible because each economic indicator can tell a manager a lot about where the economy is heading, and thereby telling the manager what he or she needs to do to prepare their firm for the changes.
This article, published on the wall Street Journal’s web site, describes Fed Chairman, Ben Bernanke’s testimony to Congress today, where he indicated there is little threat of inflation in the near term. The Chairman states that there has been a widely dispersed slowdown in inflation in the past few months and he saw little indication that the pace would be picking up soon. This should lead to short-term rates staying where they are for awhile, which will contribute to more growth in the economy. The author states that Bernanke’s assessment of the economy is optimistic but cautious because of the continued housing crisis and the poor fiscal condition of state and local governments. Some economists do not believe inflation is slowing very much and further believe that the housing market is putting downward pressure or rents, skewing the inflation numbers. Most economists do not expect deflation, but if inflation gets even lower, inflation-adjusted rates increase, which could slow or stop the recovery. As stated in the previous annotation, it is important for managers to understate as much about the workings of the economy as possible because each economic indicator can tell a manager a lot about where the economy is heading, and thereby telling the manager what he or she needs to do to prepare their firm for the changes.
Evidence Mounts of Strong Recovery
Whitehouse, M. (2010). Evidence mounts of strong recovery. Retrieved April 14, 2010 from: http://online.wsj.com/article/SB10001424052702304798204575183683432202678.html?mod=djemalertNEWS
This article, published on the Wall Street Journal’s Web site, describes an optimistic view of a strong recovery that is in the works within our economy. There was a 1.6% increase in retail sales in March from the previous month and 7.6% increase compared to March of last year, causing some optimism that the economy can restore the 8.2 million jobs lost since the recession began. Many economists are saying that their previous growth forecasts were likely underestimated. Investors like this news also; the Dow Jones Industrial Average was up an additional 0.94% today to close at 11,123.11, which is a high that has not been seen in about a year and a half. Economists now predict that consumer spending will increase at an annualized rate of 3% in the first quarter. Another factor that affects retail sales are interest rates, which Fed Chairman Ben Bernanke has recently indicated will remain low for awhile longer to support retail growth. This article describes good news for retailers and service providers if the predictions can hold true. This is important information for managers to understand because they must know the economic indicators that point to where the economy is heading so they can take proactive steps to prepare for and benefit from the impending changes.
This article, published on the Wall Street Journal’s Web site, describes an optimistic view of a strong recovery that is in the works within our economy. There was a 1.6% increase in retail sales in March from the previous month and 7.6% increase compared to March of last year, causing some optimism that the economy can restore the 8.2 million jobs lost since the recession began. Many economists are saying that their previous growth forecasts were likely underestimated. Investors like this news also; the Dow Jones Industrial Average was up an additional 0.94% today to close at 11,123.11, which is a high that has not been seen in about a year and a half. Economists now predict that consumer spending will increase at an annualized rate of 3% in the first quarter. Another factor that affects retail sales are interest rates, which Fed Chairman Ben Bernanke has recently indicated will remain low for awhile longer to support retail growth. This article describes good news for retailers and service providers if the predictions can hold true. This is important information for managers to understand because they must know the economic indicators that point to where the economy is heading so they can take proactive steps to prepare for and benefit from the impending changes.
Tuesday, April 13, 2010
Getting Beyond Money
Dewhurst, M., Guthridge, M., & Mohr, E. (2010). Getting beyond the money. Retrieved April 12, 2010 from: http://www.forbes.com/2010/04/07/motivating-employees-rewards-leadership-dewhurst_2.html
This article, published on the Forbes.com Web site, discusses the benefits some companies could realize by using nonfinancial ways to incentivize their employees. Many companies have gotten away from monetary incentives during the tough times seen in the last couple of years. The authors state that even though financial incentive are still an important part of a compensation package, numerous studies have shown that if an employee is paid a satisfactory wage, some non-financial motivators are more effective. In a recent survey, McKinsey Quarterly found that three noncash motivators are seen as equally or more effective than cash incentives. These are: praise from immediate supervisor, attention from company leadership, and the chance for the employee to lead projects or task forces. The authors claim that now is a good time for employers to implement these types of motivators instead of going back to the old ways of incentivizing their employees. This article discusses an important subject that managers should be informed about. It is important that companies find ways to motivate and retain their top employees, but it is also important to watch the bottom line in the process. With many companies still working their way out of the financial crisis, it is important to keep a close eye on how they are spending their money.
This article, published on the Forbes.com Web site, discusses the benefits some companies could realize by using nonfinancial ways to incentivize their employees. Many companies have gotten away from monetary incentives during the tough times seen in the last couple of years. The authors state that even though financial incentive are still an important part of a compensation package, numerous studies have shown that if an employee is paid a satisfactory wage, some non-financial motivators are more effective. In a recent survey, McKinsey Quarterly found that three noncash motivators are seen as equally or more effective than cash incentives. These are: praise from immediate supervisor, attention from company leadership, and the chance for the employee to lead projects or task forces. The authors claim that now is a good time for employers to implement these types of motivators instead of going back to the old ways of incentivizing their employees. This article discusses an important subject that managers should be informed about. It is important that companies find ways to motivate and retain their top employees, but it is also important to watch the bottom line in the process. With many companies still working their way out of the financial crisis, it is important to keep a close eye on how they are spending their money.
Making Flexible Work Schedules Work
Schmitt, E. (2010). Making flexible work schedules work. Retrieved April 12, 2010 from: http://www.forbes.com/2010/04/07/flexible-scheduling-policies-leadership-careers-balance.html?feed=rss_home
This article, published on the Forbes.com Web site, discusses a program that many companies are implementing to benefit their employees and thereby benefiting the company as well. Flexible work schedules are used in many different forms by various companies and many managers believe that this type of benefit makes their employees more productive. A flexible schedule allows certain employees to adjust the times and, in some cases, the locations that they perform their job duties. Some employees may need to come in later in the morning so they can take their children to school and work later in the day to make up the time. Some are able to work from home at least part of the week or compress their week into four workdays. Employees that have control of their schedule, often have less stress because they are better able to manage their life away from work. The author quotes a recent study done at Georgetown University that found that employee stress from trying to find time for their children correlates with decreased productivity and increased absenteeism, so if a flex schedule can take away some of this stress, they believe they can decrease absenteeism and increase productivity. However, not everyone agrees that flex scheduling is a good practice because it can cause some friction between the employees that are allowed flex scheduling and those that are not allowed the same program. This article discusses an important subject managers should be familiar with because with today’s technology, it is much easier for some workers to perform their job duties from home or other remote locations and many jobs can be done with flexible hours as opposed to nine-to-five every day. If a firm can manage this type of schedule, it makes sense to consider it because if the company can help keep their employees in a less stressful environment, they can get better performance from their employees. Additionally, from a competitive standpoint, some firms will need to offer this benefit in order to retain their best employees.
This article, published on the Forbes.com Web site, discusses a program that many companies are implementing to benefit their employees and thereby benefiting the company as well. Flexible work schedules are used in many different forms by various companies and many managers believe that this type of benefit makes their employees more productive. A flexible schedule allows certain employees to adjust the times and, in some cases, the locations that they perform their job duties. Some employees may need to come in later in the morning so they can take their children to school and work later in the day to make up the time. Some are able to work from home at least part of the week or compress their week into four workdays. Employees that have control of their schedule, often have less stress because they are better able to manage their life away from work. The author quotes a recent study done at Georgetown University that found that employee stress from trying to find time for their children correlates with decreased productivity and increased absenteeism, so if a flex schedule can take away some of this stress, they believe they can decrease absenteeism and increase productivity. However, not everyone agrees that flex scheduling is a good practice because it can cause some friction between the employees that are allowed flex scheduling and those that are not allowed the same program. This article discusses an important subject managers should be familiar with because with today’s technology, it is much easier for some workers to perform their job duties from home or other remote locations and many jobs can be done with flexible hours as opposed to nine-to-five every day. If a firm can manage this type of schedule, it makes sense to consider it because if the company can help keep their employees in a less stressful environment, they can get better performance from their employees. Additionally, from a competitive standpoint, some firms will need to offer this benefit in order to retain their best employees.
Monday, April 12, 2010
Your Job in 2010
Ford, M. (2010). Your job in 2010. Retrieved April 12, 2010 from: http://www.forbes.com/2010/04/08/unemployment-google-2020-technology-data-companies-10-economy.html
This article, published on the Forbes.com Web site, gives the author’s viewpoint on the employment outlook a decade from now. Ford is also the author of a book that discusses similar subjects as well. Many analysts believe that, due to the aging of the workforce and the impending retirement of this same group, that there will be a worker shortage by 2018. Ford, however, disagrees and states that these predictions do not take into account the technological advances that will take place each year, many of which are used to eliminate jobs with more automation. He states that the U.S. employs one-million fewer workers now that it did in 1999 and that to keep up with the population growth, the economy needs to create one to two million jobs per year. Technological advances grow exponentially each year and computing power is expected to increase 32-fold in the next ten years. Additionally, many service companies are turning to self-service using automation or off-shoring to find less expensive service workers. And of course, many manufacturing companies are using more automation to eliminate jobs or in many cases, moving their facilities to foreign countries, where labor is much less expensive. From a management point of view this information is important because managers need to keep up with advancing technologies and use them in ways that will benefit their firms. From a student or worker viewpoint, one must consider these things and make learning a career decisions today that will help them better qualify for the jobs of the future and to keep up with advancing technologies so they can have a competitive edge.
This article, published on the Forbes.com Web site, gives the author’s viewpoint on the employment outlook a decade from now. Ford is also the author of a book that discusses similar subjects as well. Many analysts believe that, due to the aging of the workforce and the impending retirement of this same group, that there will be a worker shortage by 2018. Ford, however, disagrees and states that these predictions do not take into account the technological advances that will take place each year, many of which are used to eliminate jobs with more automation. He states that the U.S. employs one-million fewer workers now that it did in 1999 and that to keep up with the population growth, the economy needs to create one to two million jobs per year. Technological advances grow exponentially each year and computing power is expected to increase 32-fold in the next ten years. Additionally, many service companies are turning to self-service using automation or off-shoring to find less expensive service workers. And of course, many manufacturing companies are using more automation to eliminate jobs or in many cases, moving their facilities to foreign countries, where labor is much less expensive. From a management point of view this information is important because managers need to keep up with advancing technologies and use them in ways that will benefit their firms. From a student or worker viewpoint, one must consider these things and make learning a career decisions today that will help them better qualify for the jobs of the future and to keep up with advancing technologies so they can have a competitive edge.
Sunday, April 11, 2010
Turning Data into Money
Burkitt, L. (2010). Turning data into money. Retrieved April 11, 2010 from: http://www.forbes.com/2010/04/08/citigroup-mastercard-amazon-technology-data-companies-10-bundle.html?feed=rss_home
This article, which is published on the Forbes.com Web site, discusses the use and marketing of anonomized consumer data, which is become more prevalent all the time. With all the e-commerce and electronic transactions that take place in today’s marketplace, there is a tremendous amount of data out there to be harvested and used in business. New York-based startup company Bundles.com is attempting to do just that. They collect financial data from third-party research, government statistics, and other sources, and them anonomize the data so it can be sold to consumers and marketers. This data can be used to pinpoint businesses and marketers down to the zip-codes where their likely customers live and do business. Helping firms make decisions in where they want to place their business and how to market to their targeted customer. Companies like Amazon.com are already using their own data they have from Web shoppers by making suggestions based on present and past searches and purchases. This technology and type of data that is available today is just another example of how the Internet and electronic transactions are changing the way we do our business and the way firms are doing their marketing. It is important that as a manager, that you understand how to use this technology and data to benefit your firm.
This article, which is published on the Forbes.com Web site, discusses the use and marketing of anonomized consumer data, which is become more prevalent all the time. With all the e-commerce and electronic transactions that take place in today’s marketplace, there is a tremendous amount of data out there to be harvested and used in business. New York-based startup company Bundles.com is attempting to do just that. They collect financial data from third-party research, government statistics, and other sources, and them anonomize the data so it can be sold to consumers and marketers. This data can be used to pinpoint businesses and marketers down to the zip-codes where their likely customers live and do business. Helping firms make decisions in where they want to place their business and how to market to their targeted customer. Companies like Amazon.com are already using their own data they have from Web shoppers by making suggestions based on present and past searches and purchases. This technology and type of data that is available today is just another example of how the Internet and electronic transactions are changing the way we do our business and the way firms are doing their marketing. It is important that as a manager, that you understand how to use this technology and data to benefit your firm.
The Promise of E-Commerce
Mitra, S. (2010). The promise of e-commerce. Retrieved April 11, 2010 from: http://www.forbes.com/2010/04/08/retailing-entreprenuers-online-intelligent-technology-ecommerce.html?feed=rss_home
This article was written by Sramana Mitra, technology entrepreneur and strategy consultant in Silicon Valley, and discusses the opportunities that retailer have in the world of e-commerce. E-commerce is growing in leaps and bounds and the author states that online spending grew 18% in March this year compared to last March and has experienced double-digit growth for eight consecutive months; this growth rate has outpaced that of brick-and-mortar stores as well. Entrepreneurs today have to consider the e-commerce market rather than a traditional store or at least have e-commerce in addition to the brick-and-mortar store. However, the author states that to be found on the Internet, the company needs to get connected with the consumer through one or more of the following channels: eBay, search engines, or comparison shopping engines. The author quotes ChannelAdvisor CEO Scott Wingo, who claims that 80% of e-commerce begins through one of these channels. The Internet has changed and continues to change the way the world is doing business. It is important for managers of any type of business to understand that fact and to take proactive steps to utilize this tool to their company’s advantage. Otherwise, they will likely be left behind in no time.
This article was written by Sramana Mitra, technology entrepreneur and strategy consultant in Silicon Valley, and discusses the opportunities that retailer have in the world of e-commerce. E-commerce is growing in leaps and bounds and the author states that online spending grew 18% in March this year compared to last March and has experienced double-digit growth for eight consecutive months; this growth rate has outpaced that of brick-and-mortar stores as well. Entrepreneurs today have to consider the e-commerce market rather than a traditional store or at least have e-commerce in addition to the brick-and-mortar store. However, the author states that to be found on the Internet, the company needs to get connected with the consumer through one or more of the following channels: eBay, search engines, or comparison shopping engines. The author quotes ChannelAdvisor CEO Scott Wingo, who claims that 80% of e-commerce begins through one of these channels. The Internet has changed and continues to change the way the world is doing business. It is important for managers of any type of business to understand that fact and to take proactive steps to utilize this tool to their company’s advantage. Otherwise, they will likely be left behind in no time.
Saturday, April 10, 2010
Envy at Work
Menon, T., Thompson, L. Envy at work. Harvard Business Review, Apr2010, Vol. 88 Issue 4, p74-79, 6p. Retrieved April 10, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/detail?vid=2&hid=3&sid=0075228c-c450-499b-822d-a2cf3fcaffac%40sessionmgr13&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=48736762
This article summarizes a study on the causes and effects of envy in the workplace and the authors give suggestions for what managers can to do to prevent or remedy this problem. Envy is the distress people feel when others are successful and if it persists, it can damage relationships, disrupt teams, and undermine an organization’s overall performance. They found in their research that it is possible to prevent envy from consuming oneself and to even use it as an advantage. When people become obsessed with envy, they start to over think and overreact to everything and can lose their focus on their own performance. Two damaging effects of envy the authors discuss are disparagement and distancing. The envious person starts to belittle the other’s accomplishments and also distance themselves from the ones they envy, creating a less collaborative atmosphere. “The desire to remain at arm’s length from successful colleagues leads to missed opportunities and organizational inefficiency”. The suggestions the authors make to remedy envy in the workplace are: pinpoint what makes you envious, don’t focus on other people; focus on yourself, and affirm yourself. To manage envy in a team they suggest that managers: share power, make what is scarce plentiful, give enviers and their targets different spheres of influence, and beware of linguistic triggers. The authors elaborate more on each of these suggestions. This is important information for managers to understand because envy can, at worst, destroy a business and, at best, make the work atmosphere less productive than it would be otherwise, so manager should learn how to recognize envious behaviors and know how to avoid and remedy it in his or her firm.
This article summarizes a study on the causes and effects of envy in the workplace and the authors give suggestions for what managers can to do to prevent or remedy this problem. Envy is the distress people feel when others are successful and if it persists, it can damage relationships, disrupt teams, and undermine an organization’s overall performance. They found in their research that it is possible to prevent envy from consuming oneself and to even use it as an advantage. When people become obsessed with envy, they start to over think and overreact to everything and can lose their focus on their own performance. Two damaging effects of envy the authors discuss are disparagement and distancing. The envious person starts to belittle the other’s accomplishments and also distance themselves from the ones they envy, creating a less collaborative atmosphere. “The desire to remain at arm’s length from successful colleagues leads to missed opportunities and organizational inefficiency”. The suggestions the authors make to remedy envy in the workplace are: pinpoint what makes you envious, don’t focus on other people; focus on yourself, and affirm yourself. To manage envy in a team they suggest that managers: share power, make what is scarce plentiful, give enviers and their targets different spheres of influence, and beware of linguistic triggers. The authors elaborate more on each of these suggestions. This is important information for managers to understand because envy can, at worst, destroy a business and, at best, make the work atmosphere less productive than it would be otherwise, so manager should learn how to recognize envious behaviors and know how to avoid and remedy it in his or her firm.
Friday, April 9, 2010
Stop Worrying About Higher Interest Rates
Farrell, C. (2010). Stop worrying about higher interest rates. Retrieved April 9, 2010 from: http://www.businessweek.com/investor/content/apr2010/pi2010049_796113.htm
This article is published on the businessweek.com Web site and states that interest rates are on the upswing but this fact is not necessarily a reason for worry. Rising rate could be good or bad news depending of what is driving the increase. Traditionally, two major components were the driver of rates: the expected rate of inflation and the expected real rate return on Treasuries. The author states there is now a third factor and that is the risk of government default. However, default risk in the U.S. is really the same as inflation because the U.S. will just print new money, if needed, to pay the government’s debt, and this leads to higher inflation. The author also states that investors are not generally worried about inflation right now because the core rate of inflation has averaged 1.3% over the past 12 month. Farrell sees the rate increase as a positive sign because the yield is sending an optimistic signal to investors because they see it as a sign that the economy is recovering, which makes them more comfortable in making investments in securities or into a business. Higher rates can be a negative in the long run because they increase the cost of borrowing, which could lead to lower profits for the firm but right now the higher rates are seen as a positive sign that recovery is on the horizon. This article discusses an important subject that manager should understand because if the signs of recovery are true, managers need to have their firm ready for the potential increase in business. Managers should also know the drivers of interest rates so they can decide if the increase should be seen as a positive or negative business force.
This article is published on the businessweek.com Web site and states that interest rates are on the upswing but this fact is not necessarily a reason for worry. Rising rate could be good or bad news depending of what is driving the increase. Traditionally, two major components were the driver of rates: the expected rate of inflation and the expected real rate return on Treasuries. The author states there is now a third factor and that is the risk of government default. However, default risk in the U.S. is really the same as inflation because the U.S. will just print new money, if needed, to pay the government’s debt, and this leads to higher inflation. The author also states that investors are not generally worried about inflation right now because the core rate of inflation has averaged 1.3% over the past 12 month. Farrell sees the rate increase as a positive sign because the yield is sending an optimistic signal to investors because they see it as a sign that the economy is recovering, which makes them more comfortable in making investments in securities or into a business. Higher rates can be a negative in the long run because they increase the cost of borrowing, which could lead to lower profits for the firm but right now the higher rates are seen as a positive sign that recovery is on the horizon. This article discusses an important subject that manager should understand because if the signs of recovery are true, managers need to have their firm ready for the potential increase in business. Managers should also know the drivers of interest rates so they can decide if the increase should be seen as a positive or negative business force.
Thursday, April 8, 2010
Should Entrepreneurs Lie?
Isenberg, D. (2010). Should entrepreneurs lie? Retrieved April 8, 2010 from: http://blogs.hbr.org/cs/2010/04/is_it_ok_for_entrepreneurs_lie.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article was written by professor of management practice at Babson College and in it he ask is it necessary for entrepreneurs to lie in order to succeed. He quotes an acquaintance that said that if a person does not know how to seriously twist the truth from time to time, he or she cannot be an entrepreneur. He further states that some entrepreneurs prefer to refer to it as “stretching the truth” or “marketing” rather than lying. In the article he gives several examples that follow with a question. One entrepreneur had to “withhold” the truth so his investors would not back out at the last minute. Was it acceptable for the entrepreneur to lie (withhold the truth) to save his venture? In another example an entrepreneur misrepresented the company’s product in brochures which did not bother the company’s American customers but did bother their Japanese customers. Should whether and how we lie depend on the culture we are working in? Other questions include: Is stretching the truth okay if the other side is expecting it? “Don’t ask, don’t tell” has been military policy for years: Is it good for startups? Is lying acceptable if you are committed to stopping when you can? The author states he does not have the answers to these questions but that lying is more prevalent than anyone wants to admit and that it’s time for the subject to be discussed in academia and in the real world. Most or all management textbooks on ethics would say that lying in not the right policy and that in the long run will not pay off. All managers and future entrepreneurs should be interested in this subject because they will face this dilemma it at some point in their career and need to understand its importance.
This article was written by professor of management practice at Babson College and in it he ask is it necessary for entrepreneurs to lie in order to succeed. He quotes an acquaintance that said that if a person does not know how to seriously twist the truth from time to time, he or she cannot be an entrepreneur. He further states that some entrepreneurs prefer to refer to it as “stretching the truth” or “marketing” rather than lying. In the article he gives several examples that follow with a question. One entrepreneur had to “withhold” the truth so his investors would not back out at the last minute. Was it acceptable for the entrepreneur to lie (withhold the truth) to save his venture? In another example an entrepreneur misrepresented the company’s product in brochures which did not bother the company’s American customers but did bother their Japanese customers. Should whether and how we lie depend on the culture we are working in? Other questions include: Is stretching the truth okay if the other side is expecting it? “Don’t ask, don’t tell” has been military policy for years: Is it good for startups? Is lying acceptable if you are committed to stopping when you can? The author states he does not have the answers to these questions but that lying is more prevalent than anyone wants to admit and that it’s time for the subject to be discussed in academia and in the real world. Most or all management textbooks on ethics would say that lying in not the right policy and that in the long run will not pay off. All managers and future entrepreneurs should be interested in this subject because they will face this dilemma it at some point in their career and need to understand its importance.
Wednesday, April 7, 2010
Positive Peer Pressure
Katzenbach, J. & Khan, Z. (2010). Positive peer pressure: A powerful ally to change. Retrieved April 7, 2010 from: http://blogs.hbr.org/cs/2010/04/positive_peer_pressure_a_power.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article, published on the Harvard Business Review’s Web site, discusses the positive and negative impacts that peers can have on each other and the ways managers can use this dynamic to benefit their firm. They state that peer to peer interaction may be the single most neglected lever of change and that when properly used; it can be change’s most powerful ally. “Peers in large organizations are invaluable in spreading behavior change across an enterprise”. Peer groups can become a powerful force in an organization that can create positive energy, shape opinions, or create resistance to corporate initiatives. Left unattended, peer interactions may or may not be in support the company’s goals. The authors use Southwest Airlines, Apple, FedEx, and the Marine Corps as examples of organizations that have been successful in using peer groups to create positive energy within the organizations. The article gives a list of questions managers should ask themselves so they can find ways to get positive peer pressure started in their firm. This is an interesting article and subject that managers should be aware of. Even though the authors state the importance of using peer to peer interaction in large companies, it seems that the same effects can be realized in smaller companies as well.
This article, published on the Harvard Business Review’s Web site, discusses the positive and negative impacts that peers can have on each other and the ways managers can use this dynamic to benefit their firm. They state that peer to peer interaction may be the single most neglected lever of change and that when properly used; it can be change’s most powerful ally. “Peers in large organizations are invaluable in spreading behavior change across an enterprise”. Peer groups can become a powerful force in an organization that can create positive energy, shape opinions, or create resistance to corporate initiatives. Left unattended, peer interactions may or may not be in support the company’s goals. The authors use Southwest Airlines, Apple, FedEx, and the Marine Corps as examples of organizations that have been successful in using peer groups to create positive energy within the organizations. The article gives a list of questions managers should ask themselves so they can find ways to get positive peer pressure started in their firm. This is an interesting article and subject that managers should be aware of. Even though the authors state the importance of using peer to peer interaction in large companies, it seems that the same effects can be realized in smaller companies as well.
Tuesday, April 6, 2010
Acquisition Financing
Gillis, W. E. & Combs, J. G. (2009). Acquisition financing: Does how you pay for it have implications for success? Academy of Management Perspectives, Nov2009, Vol. 23 Issue 4, p96-97, 2p. Retrieved April 6, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=1&hid=9&sid=243834a8-0462-4eb8-9f4a-ec93bc196ad2%40sessionmgr10
This research brief, published in the Academy of Management Perspective, discusses the findings of research done to see if there is a correlation between how an acquisition is paid for and its success. The researchers state that sometimes when firms pay for an acquisition with cash on hand, shareholders see that as empire building and if they pay with equity, shareholder may perceive that as the stock being overvalued and therefore driving the stock price down. Roughly 60% of acquisitions fail, which makes shareholders leery anyway, so managers need to find the best way to finance acquisitions that will satisfy their shareholder and ensure at least some measure of success. If the acquiring firm wants to reduce their risk and doesn’t mind sharing their controlling interest, equity is a best way because the acquired company’s owners have a stake in the success or failure also. If the acquiring firm wants full control of the company, they should pay cash for the acquisition. The researcher state that the source of cash is very important also because when a firm is borrowing the money from banks, as opposed to selling more stock or gaining cash from overvalued stock, the banks do extensive checks into the acquisition and will not approve the loan if they feel that it does not have a good chance of succeeding. Further, since management does not have the cash on hand to spend freely in this situation, they are not tempted to look for ways to spend it, which could lead to bad decisions; they instead have to turn to the banks for funding, which will restrict their options. These factor make bank financed acquisitions more likely to succeed. This is important information for managers and investors to understand because as a manager involved in an acquisition, you must ensure as much as possible that the acquisition will work but you must also make sure it is done in a way that will keep shareholders on board also.
This research brief, published in the Academy of Management Perspective, discusses the findings of research done to see if there is a correlation between how an acquisition is paid for and its success. The researchers state that sometimes when firms pay for an acquisition with cash on hand, shareholders see that as empire building and if they pay with equity, shareholder may perceive that as the stock being overvalued and therefore driving the stock price down. Roughly 60% of acquisitions fail, which makes shareholders leery anyway, so managers need to find the best way to finance acquisitions that will satisfy their shareholder and ensure at least some measure of success. If the acquiring firm wants to reduce their risk and doesn’t mind sharing their controlling interest, equity is a best way because the acquired company’s owners have a stake in the success or failure also. If the acquiring firm wants full control of the company, they should pay cash for the acquisition. The researcher state that the source of cash is very important also because when a firm is borrowing the money from banks, as opposed to selling more stock or gaining cash from overvalued stock, the banks do extensive checks into the acquisition and will not approve the loan if they feel that it does not have a good chance of succeeding. Further, since management does not have the cash on hand to spend freely in this situation, they are not tempted to look for ways to spend it, which could lead to bad decisions; they instead have to turn to the banks for funding, which will restrict their options. These factor make bank financed acquisitions more likely to succeed. This is important information for managers and investors to understand because as a manager involved in an acquisition, you must ensure as much as possible that the acquisition will work but you must also make sure it is done in a way that will keep shareholders on board also.
Monday, April 5, 2010
Oil Reality Check: It’s Going Higher
Mills, M. (2010). Oil reality check: It’s going higher. Retrieved April 5, 2010 from: http://www.forbes.com/2010/04/05/transocean-schlumberger-crude-oil-intelligent-investing-mark-mills.html?feed=rss_home
This opinion piece was written by physicist and writer, Mark Mills, and is published on Frobes.com Web site. Mills believes that oil prices will be going back to levels seen in the summer of 2008, which was prior to the “Great Recession” that has helped to hold prices down in the past couple of years. He states that as the world’s economies improve demand will go up and supply cannot increase to meet the demand. Short of another event that causes an economic disaster, prices have to go up substantially. The problem is that there are no quick fixes to a shortage on the supply side and the only way to deal with the problem on the demand side would be for consumers to reduce their demand or for them to find alternatives, neither option is likely in the short term. This is important information for managers to know and understand because higher gasoline prices affect businesses in many ways. First, it increases operating costs for most businesses and causes prices of supplies and services to increase as well. Secondly, consumers get hit hard with high prices and have to make up the difference somewhere else by cutting spending on discretionary items and services. Managers should shield their business from these types of fluctuations as much as possible by taking proactive money-saving steps now that will pay off in the future.
This opinion piece was written by physicist and writer, Mark Mills, and is published on Frobes.com Web site. Mills believes that oil prices will be going back to levels seen in the summer of 2008, which was prior to the “Great Recession” that has helped to hold prices down in the past couple of years. He states that as the world’s economies improve demand will go up and supply cannot increase to meet the demand. Short of another event that causes an economic disaster, prices have to go up substantially. The problem is that there are no quick fixes to a shortage on the supply side and the only way to deal with the problem on the demand side would be for consumers to reduce their demand or for them to find alternatives, neither option is likely in the short term. This is important information for managers to know and understand because higher gasoline prices affect businesses in many ways. First, it increases operating costs for most businesses and causes prices of supplies and services to increase as well. Secondly, consumers get hit hard with high prices and have to make up the difference somewhere else by cutting spending on discretionary items and services. Managers should shield their business from these types of fluctuations as much as possible by taking proactive money-saving steps now that will pay off in the future.
Workplace Incivility
Sidle, S. (2009). Workplace incivility: How should employees and managers respond? Academy of Management Perspectives; Nov2009, Vol. 23 Issue 4, p88-89, 2p. Retrieved April 4, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=2&hid=6&sid=1b8ac4a5-a0a9-47e4-96be-c874f90cbab1%40sessionmgr4
This research brief is published in the Academy of Management Perspective and outlines research done by Lilia Cortina of the University of Michigan and Vicki Magley of the University of Connecticut, regarding the effects on employees that are victimized by uncivil co-workers. Many workers choose to ignore incivility because they may not see it as a serious enough offence to report; however, the research shows that this is not a healthy way to deal with this problem and that there are negative consequences associated with incivility. Targeted employees are likely to experience stress, distraction, negative emotions, lower job satisfaction, and reduced creativity as a result of uncivil acts against them. In a survey done by the researchers, workers that faced incivility were likely to feel frustrated, annoyed, and offended; however, few felt threatened by the actions. They conclude that unless incivility escalates over time to a more serious behavior, it is not likely to be reported to managers. So, managers need to take proactive steps to avoid this type of problem instead of only dealing with it when there is something reported. The researchers recommends that managers have training programs to teach their employees about these types of workplace problems and they should also have and promulgate a formal code of ethics that deals with these and other potential workplace problems. I think this is an interesting subject that managers should be aware of because if incivility is happening in the area the manager is responsible for and he r she is not aware of it, it could escalate into a bigger problem that can erode the workplace atmosphere and cause serious problems that could have been dealt with in a much easier way earlier in the process.
This research brief is published in the Academy of Management Perspective and outlines research done by Lilia Cortina of the University of Michigan and Vicki Magley of the University of Connecticut, regarding the effects on employees that are victimized by uncivil co-workers. Many workers choose to ignore incivility because they may not see it as a serious enough offence to report; however, the research shows that this is not a healthy way to deal with this problem and that there are negative consequences associated with incivility. Targeted employees are likely to experience stress, distraction, negative emotions, lower job satisfaction, and reduced creativity as a result of uncivil acts against them. In a survey done by the researchers, workers that faced incivility were likely to feel frustrated, annoyed, and offended; however, few felt threatened by the actions. They conclude that unless incivility escalates over time to a more serious behavior, it is not likely to be reported to managers. So, managers need to take proactive steps to avoid this type of problem instead of only dealing with it when there is something reported. The researchers recommends that managers have training programs to teach their employees about these types of workplace problems and they should also have and promulgate a formal code of ethics that deals with these and other potential workplace problems. I think this is an interesting subject that managers should be aware of because if incivility is happening in the area the manager is responsible for and he r she is not aware of it, it could escalate into a bigger problem that can erode the workplace atmosphere and cause serious problems that could have been dealt with in a much easier way earlier in the process.
Saturday, April 3, 2010
Is Transparency Critical for Firm and National Competitiveness?
Wyld, R. (2009). Is transparency critical for firm and national competitiveness? Academy of Management Perspectives, Nov2009, Vol. 23 Issue 4, p94-96, 3p. Retrieved April 1, 2010, from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdfviewer/pdfviewer?vid=3&hid=6&sid=e6e23254-07e9-45ce-a924-989e7baff080%40sessionmgr11
This research brief was written by David C. Wyld, Robert Maurin Professor of Management at Southeastern Louisiana University. In it, he discusses corporate transparency or the lack thereof, which had a significant impact on the recent financial crisis that the world economy is still trying to recover from. He quotes a Mark Twain saying that: “figures don’t lie, but liars figure”, which highlights the importance of having independent verifiable financial information for investors. Research has shown that companies that are more transparent have higher growth rates, greater investment efficiency, lower costs of capital, and their stock prices reflect a more accurate gauge of the firm’s performance and value. The author looks deeper into this subject than just looking at the corporate level transparency and asks if country-wide market transparency helps competitiveness on the national level. Wyld quotes a recent study that has shown that lack of transparency creates information friction that slows the strategic movement of capital, which produces lower growth rates in countries where corporate financial information is withheld or is inaccurate. So, he concludes that the quality and transparency of a country’s information environment can contribute to opportunities for firms, and the countries where they reside, to grow in ways they cannot in less transparent environments. This article discusses an important subject that managers should be familiar with. There needs to be some level of transparency in the corporate world and this has to be regulated by the government. However, it is also important for the government to not overstep their role because too much regulation can stifle business as well; therefore, a balance needs to be established.
This research brief was written by David C. Wyld, Robert Maurin Professor of Management at Southeastern Louisiana University. In it, he discusses corporate transparency or the lack thereof, which had a significant impact on the recent financial crisis that the world economy is still trying to recover from. He quotes a Mark Twain saying that: “figures don’t lie, but liars figure”, which highlights the importance of having independent verifiable financial information for investors. Research has shown that companies that are more transparent have higher growth rates, greater investment efficiency, lower costs of capital, and their stock prices reflect a more accurate gauge of the firm’s performance and value. The author looks deeper into this subject than just looking at the corporate level transparency and asks if country-wide market transparency helps competitiveness on the national level. Wyld quotes a recent study that has shown that lack of transparency creates information friction that slows the strategic movement of capital, which produces lower growth rates in countries where corporate financial information is withheld or is inaccurate. So, he concludes that the quality and transparency of a country’s information environment can contribute to opportunities for firms, and the countries where they reside, to grow in ways they cannot in less transparent environments. This article discusses an important subject that managers should be familiar with. There needs to be some level of transparency in the corporate world and this has to be regulated by the government. However, it is also important for the government to not overstep their role because too much regulation can stifle business as well; therefore, a balance needs to be established.
Thursday, April 1, 2010
Is Brand Marketing a bad Investment?
James, G. (2010). Brand marketing = bad investment: More evidence. Retrieved April 1, 2010 from: http://blogs.bnet.com/salesmachine/?p=9250
This article, published on the Bnet.com Web site, was written by business author, Geoffrey James and his view is that brand marketing is no longer a good investment. He states that the point of brand marketing is to create buyer preference that will support a higher retail price but if your product is virtually identical to the generic product, you are wasting your money on brand marketing. With the available information that consumers have with the Internet, brand identification has become less relevant and James states that the only way to create a strong brand preference is to offer a better customer experience. A big name producer came bring some clout to a product in the beginning, but if it does not provide a better customer experience it will not be successful. He also state that in B2B marketing, features and functions by themselves are not enough to create a good customer experience. The B2B experience includes the sales process, the salesperson’s ability to provide good insight and their personality, and the ability to create customized solutions. This is an important subject for managers to understand because in many businesses a lot of resources are spent for advertising and other types of marketing efforts. It is important for managers and marketing personnel to know the best ways to market their products and services and to get the most out of their marketing investments.
This article, published on the Bnet.com Web site, was written by business author, Geoffrey James and his view is that brand marketing is no longer a good investment. He states that the point of brand marketing is to create buyer preference that will support a higher retail price but if your product is virtually identical to the generic product, you are wasting your money on brand marketing. With the available information that consumers have with the Internet, brand identification has become less relevant and James states that the only way to create a strong brand preference is to offer a better customer experience. A big name producer came bring some clout to a product in the beginning, but if it does not provide a better customer experience it will not be successful. He also state that in B2B marketing, features and functions by themselves are not enough to create a good customer experience. The B2B experience includes the sales process, the salesperson’s ability to provide good insight and their personality, and the ability to create customized solutions. This is an important subject for managers to understand because in many businesses a lot of resources are spent for advertising and other types of marketing efforts. It is important for managers and marketing personnel to know the best ways to market their products and services and to get the most out of their marketing investments.
Wednesday, March 31, 2010
Is Your Organization a Great Place for Bullies to Work?
Sidle, S. (2009). Is Your Organization a great place for bullies to work? Academy of Management Perspectives; Nov2009, Vol. 23 Issue 4, p89-91, 3p. Retrieved March 31, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdf?vid=1&hid=9&sid=3487d776-00ec-43e0-954d-7e1820133c96%40sessionmgr10
This research brief was written by University of New Haven Psychology Professor Stuart Sidle, and discusses research done on the subject of supervisorial bullying in the workplace. In it, he states that little has been done to eradicate bullying because firms take a Band-Aid approach by reacting to specific problems instead of addressing the organizational factors that contribute to the problem. Studies show that the most likely targets for workplace bullying are those with less power, which can be affected by both social and positional status differences; therefore, women and minorities that are in personal services roles are targeted more often than others. Another finding is that organizations that operate under chaotic or disorganized circumstances, which reflect poor management practices, are more likely to have supervisorial bullying going on as well. Managers that use bullying practices generally are either trying to get better performance from their employees, or in some cases, they feel the employee is somehow a threat to them, or for some, they actually enjoy being a bully. To avoid bullying from happening in the first place, companies should take proactive steps that can help avert such practices in their firm. They should have a clearly written policy against such practices and they should have a means that employees can report situations and have actions taken when such occurrences do happen. This article is brief in detail but addresses a subject that manager should be familiar with and should take measures to prevent.
This research brief was written by University of New Haven Psychology Professor Stuart Sidle, and discusses research done on the subject of supervisorial bullying in the workplace. In it, he states that little has been done to eradicate bullying because firms take a Band-Aid approach by reacting to specific problems instead of addressing the organizational factors that contribute to the problem. Studies show that the most likely targets for workplace bullying are those with less power, which can be affected by both social and positional status differences; therefore, women and minorities that are in personal services roles are targeted more often than others. Another finding is that organizations that operate under chaotic or disorganized circumstances, which reflect poor management practices, are more likely to have supervisorial bullying going on as well. Managers that use bullying practices generally are either trying to get better performance from their employees, or in some cases, they feel the employee is somehow a threat to them, or for some, they actually enjoy being a bully. To avoid bullying from happening in the first place, companies should take proactive steps that can help avert such practices in their firm. They should have a clearly written policy against such practices and they should have a means that employees can report situations and have actions taken when such occurrences do happen. This article is brief in detail but addresses a subject that manager should be familiar with and should take measures to prevent.
Tuesday, March 30, 2010
Monitoring Employee Email
Smith, W. & Tabak, F. (2009). Monitoring employee e-mails: Is there any room for privacy? Retrieved March 30, 2010 from: http://web.ebscohost.com.ezproxy.waterfield.murraystate.edu/ehost/pdf?vid=2&hid=8&sid=d2acb272-84a7-4e12-95fc-d683b6ed05fa%40sessionmgr14
This is a study published in the Academy of Management Perspectives November, 2009 issue and is a discussion about the trends, legalities, results, and consequences of employers monitoring employee’s e-mails in the workplace. The study cites a 2007 review by the American Management Association that shows that 84% of employers have e-mail-use policies and 43% engage in some type of email monitoring, and 28% have terminated employees for inappropriate use of e-mail. Although the US legal system does not directly address the rights and responsibilities associated with e-mails, the courts have consistently supported the rights of employers to monitor their employees’ e-mail activity. Advocates in support of monitoring state three basic justifications: protecting the firm from liability risks, protecting company assets, and ensuring employee job performance. The authors also discuss the legal implications for the employer and the privacy concerns that need to be considered from the employees’ point of view. Additionally, the employer has to consider the psychological effects on the employee and understand that there could be some unintended consequences of monitoring. E-mail monitoring could lead to employees feeling degraded, stressed, or frustrated, leading to mistrust, job dissatisfaction, and high voluntary turnover rates. This article contains important information that managers should understand because as the world becomes more assessable through e-mail and other electronic means, it is important for managers to know that their employees are using these tools effectively in the workplace, but should try to find a balance that will give the employees some sense of privacy as well. These types of challenges will continue to develop as technologies continue to expand.
This is a study published in the Academy of Management Perspectives November, 2009 issue and is a discussion about the trends, legalities, results, and consequences of employers monitoring employee’s e-mails in the workplace. The study cites a 2007 review by the American Management Association that shows that 84% of employers have e-mail-use policies and 43% engage in some type of email monitoring, and 28% have terminated employees for inappropriate use of e-mail. Although the US legal system does not directly address the rights and responsibilities associated with e-mails, the courts have consistently supported the rights of employers to monitor their employees’ e-mail activity. Advocates in support of monitoring state three basic justifications: protecting the firm from liability risks, protecting company assets, and ensuring employee job performance. The authors also discuss the legal implications for the employer and the privacy concerns that need to be considered from the employees’ point of view. Additionally, the employer has to consider the psychological effects on the employee and understand that there could be some unintended consequences of monitoring. E-mail monitoring could lead to employees feeling degraded, stressed, or frustrated, leading to mistrust, job dissatisfaction, and high voluntary turnover rates. This article contains important information that managers should understand because as the world becomes more assessable through e-mail and other electronic means, it is important for managers to know that their employees are using these tools effectively in the workplace, but should try to find a balance that will give the employees some sense of privacy as well. These types of challenges will continue to develop as technologies continue to expand.
Monday, March 29, 2010
How CEOs Must Overcome Denial
Lagace, M. (2010). Ruthlessly realistic: How CEOs must overcome denial. Retrieved March 29, 2010 from: http://hbswk.hbs.edu/item/6393.html
This article is published on Harvard Business School’s Working Knowledge Web site and is a question and answer session between the author and Richard S. Tedlow, a professor of business administration at Harvard Business School and the author of a book on the subject of denial by company leaders. The interview is based on the subject of CEO denial the lack of ability for CEOs to make appropriate changes due to their denial that changes need to be made or a problem needs to be addressed. He states that denial is not being wrong, it is the unwillingness to acknowledge and deal with reality. He also states that denial is much more costly in today’s business world than in the past because we are living in a less forgiving world than before. An example Tedlow gives for a costly denial are the dot-com bubble of the 90s that busted and cost a lot of people a lot of money. The signs were there but many denied the facts and in hopes that the good fortunes would continue. This article is important to managers because even on a smaller scale bases, it’s important that managers look at, understand, and act upon the facts and the realities of the situation, not what you want it to be. The saying “it is what it is” comes to mind when you are faced with a reality that is not what you wanted but you realize that you have to deal with it head-on anyway.
This article is published on Harvard Business School’s Working Knowledge Web site and is a question and answer session between the author and Richard S. Tedlow, a professor of business administration at Harvard Business School and the author of a book on the subject of denial by company leaders. The interview is based on the subject of CEO denial the lack of ability for CEOs to make appropriate changes due to their denial that changes need to be made or a problem needs to be addressed. He states that denial is not being wrong, it is the unwillingness to acknowledge and deal with reality. He also states that denial is much more costly in today’s business world than in the past because we are living in a less forgiving world than before. An example Tedlow gives for a costly denial are the dot-com bubble of the 90s that busted and cost a lot of people a lot of money. The signs were there but many denied the facts and in hopes that the good fortunes would continue. This article is important to managers because even on a smaller scale bases, it’s important that managers look at, understand, and act upon the facts and the realities of the situation, not what you want it to be. The saying “it is what it is” comes to mind when you are faced with a reality that is not what you wanted but you realize that you have to deal with it head-on anyway.
Sunday, March 28, 2010
Becoming Lean
Steverman, B. (2010). Corporate balance sheets show surprising strength. Retrieved March 24, 2010 from: http://www.businessweek.com/investor/content/mar2010/pi20100322_127641.htm
This article is published on the businessweek.com Web site and reports that many firms are successfully shedding debt and other obligations to put themselves in good position to deal with the economy as it changes. The author states that stronger corporate balance sheets stand out when government and consumer finances remain shaky. At the same time, many companies have taken the opposite stance and had taken on more debt; the S&P 500 companies are split in half as to which direction they have gone. The companies that are shedding debt are positioning themselves to be able to concentrate on becoming more focused on their primary products or services, or could also be putting themselves in position to expand through acquisitions or make other strategic moves when the opportunity arises. Time Warner’s CFO, John Martin, states that their newly improved balance sheet, which gives them financial flexibility, is a “strategic asset”. The importance to managers is that cash flow and cash on hand is a very important asset. It is important for all businesses to use a certain amount of leverage to grow their business but it is also important to have enough cash to make financial moves when the opportunity arises and to also be able to fund the company during the tough times.
This article is published on the businessweek.com Web site and reports that many firms are successfully shedding debt and other obligations to put themselves in good position to deal with the economy as it changes. The author states that stronger corporate balance sheets stand out when government and consumer finances remain shaky. At the same time, many companies have taken the opposite stance and had taken on more debt; the S&P 500 companies are split in half as to which direction they have gone. The companies that are shedding debt are positioning themselves to be able to concentrate on becoming more focused on their primary products or services, or could also be putting themselves in position to expand through acquisitions or make other strategic moves when the opportunity arises. Time Warner’s CFO, John Martin, states that their newly improved balance sheet, which gives them financial flexibility, is a “strategic asset”. The importance to managers is that cash flow and cash on hand is a very important asset. It is important for all businesses to use a certain amount of leverage to grow their business but it is also important to have enough cash to make financial moves when the opportunity arises and to also be able to fund the company during the tough times.
The World’s Most Ethical Companies
Coster, H. (2010). The world’s most ethical companies. Retrieved March 24, 2010 from: http://www.forbes.com/2010/03/22/ethisphere-ethical-companies-leadership-citizenship-100.html?feed=rss_home
This article is published on the forbes.com Web site and is a listing of the 100 US businesses that are considered to be the most ethical. The list was compiled by the Ethisphere Institute, a New York City think tank. The data used to measure the company’s ethical score was mostly in the form of questions that the companies had to answer about themselves and Ethisphere is counting on these firms to be honest and they believe that the information they receive from these companies is accurate. The companies are scored in seven different categories, including “Innovations that contributes to the public well-being” and “Executive leadership and tone from the top”. Eliminated from the list, were companies that had significant legal problems in the past five years. This list is certainly not scientific in how it is put together and there are probably some companies that are on it that do not belong and others that should be on the list but are not. The importance for managers is that ethics is important for all firms and if they lead their company in a way that could get them on such a list, they are probably leading their company in the right direction. Another interesting note in the article is that the companies on this list have delivered a 53% return since 2005 compared the S&P 500, which is down 4% in the same period.
This article is published on the forbes.com Web site and is a listing of the 100 US businesses that are considered to be the most ethical. The list was compiled by the Ethisphere Institute, a New York City think tank. The data used to measure the company’s ethical score was mostly in the form of questions that the companies had to answer about themselves and Ethisphere is counting on these firms to be honest and they believe that the information they receive from these companies is accurate. The companies are scored in seven different categories, including “Innovations that contributes to the public well-being” and “Executive leadership and tone from the top”. Eliminated from the list, were companies that had significant legal problems in the past five years. This list is certainly not scientific in how it is put together and there are probably some companies that are on it that do not belong and others that should be on the list but are not. The importance for managers is that ethics is important for all firms and if they lead their company in a way that could get them on such a list, they are probably leading their company in the right direction. Another interesting note in the article is that the companies on this list have delivered a 53% return since 2005 compared the S&P 500, which is down 4% in the same period.
Wall Street Relieved by Health Reform
Beller, P. (2010). Wall Street relieved by health reform. Retrieved March 24, 2010 from: http://www.forbes.com/2010/03/22/briefing-americas-closer-markets-equities-healthcare-hospitals.html?feed=rss_home
This article, published on forbes.com Web site, reports that Wall Street investors are relieved that the healthcare bill has passed and that health-care related stocks lifted the major indexes on Monday after the passing of the bill. The stock market does not like uncertainty and the passing of this bill took away a lot of uncertainty in the market. Stocks in many health-care related companies jumped suggesting investors believe that the new reform will be good for some healthcare providers. Stocks in major hospital operating firms went up as well as pharmaceutical companies to a lesser extent. This article shows that perception and lack of uncertainty are very important factors in the market because there is a long way to go before people will know how the health-care reform bill will affect the economy. There are many factors that can affect the stock market and the economy as a whole. It is important that managers and investor keep up with what is going on in politics and in the economy so they can be prepared to respond to changes that can affect it.
This article, published on forbes.com Web site, reports that Wall Street investors are relieved that the healthcare bill has passed and that health-care related stocks lifted the major indexes on Monday after the passing of the bill. The stock market does not like uncertainty and the passing of this bill took away a lot of uncertainty in the market. Stocks in many health-care related companies jumped suggesting investors believe that the new reform will be good for some healthcare providers. Stocks in major hospital operating firms went up as well as pharmaceutical companies to a lesser extent. This article shows that perception and lack of uncertainty are very important factors in the market because there is a long way to go before people will know how the health-care reform bill will affect the economy. There are many factors that can affect the stock market and the economy as a whole. It is important that managers and investor keep up with what is going on in politics and in the economy so they can be prepared to respond to changes that can affect it.
Is the World Out of Recession?
Ramnath, N. S. (2010). Is the world out of recession? Retrieved March 24, 2010 from: http://www.forbes.com/2010/03/19/forbes-india-is-the-world-out-of-recession.html?feed=rss_home#
This article appears in Forbes India and on forbes.com Web site and attempts to answer the question: Is the world out of recession? The answer is yes if you go by the textbook definition of recession, which defines recession as two consecutive quarters of economic decline and the U.S. economy grew by 5.7% in the last quarter of 2009. The answer is not so definitive if you look at many of the other economic indicators. One important indicator is the job market. In the US and many other developed economies, payrolls continue to decline; in developing countries, the job market is improving. Consumer confidence is another indicator and in the US, the CCI came down to 46 in February from 56.5 in January. Merger and acquisition activity has been slow in the past two years; however, there is some recent activity picking up in some parts of the world. Gold prices are another indicator, as the economy weakens; gold prices go up and have for the past couple of years. More recently, prices have started declining, possibly indicating more confidence in other investments and an improved economy. Finally, surveys show that executives are seeing improvements in their business and are somewhat optimistic of improvement in the next six months. These indicators are important for managers to understand because it’s important to know what is going on in the economy and what to expect next so they can be ready for and take advantage of the recovery as it unfolds.
This article appears in Forbes India and on forbes.com Web site and attempts to answer the question: Is the world out of recession? The answer is yes if you go by the textbook definition of recession, which defines recession as two consecutive quarters of economic decline and the U.S. economy grew by 5.7% in the last quarter of 2009. The answer is not so definitive if you look at many of the other economic indicators. One important indicator is the job market. In the US and many other developed economies, payrolls continue to decline; in developing countries, the job market is improving. Consumer confidence is another indicator and in the US, the CCI came down to 46 in February from 56.5 in January. Merger and acquisition activity has been slow in the past two years; however, there is some recent activity picking up in some parts of the world. Gold prices are another indicator, as the economy weakens; gold prices go up and have for the past couple of years. More recently, prices have started declining, possibly indicating more confidence in other investments and an improved economy. Finally, surveys show that executives are seeing improvements in their business and are somewhat optimistic of improvement in the next six months. These indicators are important for managers to understand because it’s important to know what is going on in the economy and what to expect next so they can be ready for and take advantage of the recovery as it unfolds.
Taxes on Investment Income
Boles, C. (2010). US democrats defeat repeal of tax on investment income of wealthy. Retrieved March 24, 2010 from: http://www.foxbusiness.com/story/markets/democrats-defeat-repeal-tax-investment-income-wealthy/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+foxbusiness%2Flatest+%28Text+-+Latest+News%29
This article is published on the foxbusiness Web site and reports that the Senate Democrats successfully blocked the Republicans’ attempt to cut out a tax on the investment income of wealthy Americans; the tax revenue is to be used to help pay for the new health-care bill passed last week. Had it been successful, the Republicans’ amendment would have done away with the 3.8% tax on investment income for individuals making more than $200,000 and couples making more than $250,000. The Democrats believe this tax is necessary to help pay for health care and is not harmful to the economy because it only affects a small percent of people, who can afford it. The republicans believe that it is a “job killer” because it affects many of the people that are the job creators. Many see this as another way performing “income redistribution”, which opponents say discourages productivity and entrepreneurship. This subject is important for managers because taxes do affect the economy and business but are a necessary evil and have to be weighed from a cost/benefit standpoint. One thing is for sure, if a firm’s owner pays more taxes, they have to make up for the additional costs from somewhere else and this could be in the area of fewer employees. Is the benefit received from funding the health-care bill worth this cost? That debate will continue but it’s important for managers to be aware on what’s going on in the economy and how it affects them and their firm.
This article is published on the foxbusiness Web site and reports that the Senate Democrats successfully blocked the Republicans’ attempt to cut out a tax on the investment income of wealthy Americans; the tax revenue is to be used to help pay for the new health-care bill passed last week. Had it been successful, the Republicans’ amendment would have done away with the 3.8% tax on investment income for individuals making more than $200,000 and couples making more than $250,000. The Democrats believe this tax is necessary to help pay for health care and is not harmful to the economy because it only affects a small percent of people, who can afford it. The republicans believe that it is a “job killer” because it affects many of the people that are the job creators. Many see this as another way performing “income redistribution”, which opponents say discourages productivity and entrepreneurship. This subject is important for managers because taxes do affect the economy and business but are a necessary evil and have to be weighed from a cost/benefit standpoint. One thing is for sure, if a firm’s owner pays more taxes, they have to make up for the additional costs from somewhere else and this could be in the area of fewer employees. Is the benefit received from funding the health-care bill worth this cost? That debate will continue but it’s important for managers to be aware on what’s going on in the economy and how it affects them and their firm.
Friday, March 26, 2010
Cruises and Recovery
Esterl, M. (2010). Carnival poised to ride a wave of recovery. Retrieved March 24, 2010 from: http://online.wsj.com/article/SB10001424052748704896104575139770082534464.html?mod=rss_whats_news_us_business
This article is published on WSJ.com Web site, and reports that the cruise industry’s move toward higher pricing is an indicator that the economy is recovering. Carnival Corporation, operator of 11 cruise lines, believes they have gained some pricing power because there has been a spike in reservation bookings in the past few months. They say the consumers have a lot of pent-up demand because many of them skipped their vacations last year to save money. Rich Tucker with CruiseDeals.com says that prices for trips between June and August 2010 are up by about 27% compared to the same period last year. This information is important to managers, even if they are not working in the leisure travel industry, because these types of indicators can point toward economic recovery and managers in almost all industries need to be ready to take advantage of the recovery as it happens.
This article is published on WSJ.com Web site, and reports that the cruise industry’s move toward higher pricing is an indicator that the economy is recovering. Carnival Corporation, operator of 11 cruise lines, believes they have gained some pricing power because there has been a spike in reservation bookings in the past few months. They say the consumers have a lot of pent-up demand because many of them skipped their vacations last year to save money. Rich Tucker with CruiseDeals.com says that prices for trips between June and August 2010 are up by about 27% compared to the same period last year. This information is important to managers, even if they are not working in the leisure travel industry, because these types of indicators can point toward economic recovery and managers in almost all industries need to be ready to take advantage of the recovery as it happens.
Thursday, March 25, 2010
Limits on Executive Pay
MarketNewsVideo.com (2010). Further limits on executive pay in 2010, says Kenneth Feinberg. Retrieved March 24, 2010 from: http://www.forbes.com/2010/03/23/further-limits-on-executive-pay-in-2010-says-kenneth-feinberg-marketnewsvideo.html?feed=rss_home
This article appears on the Forbes.com Web site and reports that “Pay Czar” Kenneth Feinberg announced earlier this week that the top 25 earners of five companies that have received bailout money from the government will be forced to earn approximately 15% less than they did in 2009 and that their cash salaries will be capped at $500,000. There are other ways to compensate these executives through equity bonuses, but it does limit the companies’ ability to attract and keep top performing managers. Many people would agree that companies that have received federal aid should limit their executive’s pay; however, it is also important that companies are able to recruit and retain top-notch executives that can lead the company out of their difficult times so they can become self-reliant and no longer dependent on the government. This article points toward an important subject in management. Leaders need to take measures that will keep their company from becoming dependent of government bailouts because once they receive this type of assistance, the government ends up with a lot of control over the firm, which can lead to even further dependence and less ability for the company to work its way out of the predicament they are in.
This article appears on the Forbes.com Web site and reports that “Pay Czar” Kenneth Feinberg announced earlier this week that the top 25 earners of five companies that have received bailout money from the government will be forced to earn approximately 15% less than they did in 2009 and that their cash salaries will be capped at $500,000. There are other ways to compensate these executives through equity bonuses, but it does limit the companies’ ability to attract and keep top performing managers. Many people would agree that companies that have received federal aid should limit their executive’s pay; however, it is also important that companies are able to recruit and retain top-notch executives that can lead the company out of their difficult times so they can become self-reliant and no longer dependent on the government. This article points toward an important subject in management. Leaders need to take measures that will keep their company from becoming dependent of government bailouts because once they receive this type of assistance, the government ends up with a lot of control over the firm, which can lead to even further dependence and less ability for the company to work its way out of the predicament they are in.
Effective Web Sites
Steiner, C. (2010). The 10 essentials of any effective web site. Retrieved March 24, 2010 from: http://www.forbes.com/2010/03/24/web-site-design-entrepreneurs-technology-tips.html
This article, published on Forbes.com Web site, explains the essentials for designing and maintaining an effective website. The author states they the Internet is full of shoddy Web sites and he gives tips on what businesses should do to make sure their site is desirable and effective. The following are the top 10 tips: Who and What; who is the company and what do they do. Front-and-Center Contact Info; make sure contact information is very visible and don’t make the user have to search for it. Speed; make sure your home page loads quickly, rule of thumb is 3 seconds. Clubby Atmosphere; find ways to get people to return to your site, i.e., make free features available to registered users. Tools; have useful applications that help the user. A Clear Path; give the user an easy way to find what they are looking for once they get to the home page. Some Sizzle, More Steak; make the content attractive. The Drum Beat; highlight the company’s two or three main qualities. The Soft Sell; people do not like pushiness. Freshness; fresh content added and updated often. This is good information for all managers because in today’s business world you must have some type of Web site and for many businesses, there needs to be an extensive Web site. Effective Web presence is becoming a very important competitive factor and the lack of a site or presence of an ineffective site can impair a company’s ability to compete in today’s market.
This article, published on Forbes.com Web site, explains the essentials for designing and maintaining an effective website. The author states they the Internet is full of shoddy Web sites and he gives tips on what businesses should do to make sure their site is desirable and effective. The following are the top 10 tips: Who and What; who is the company and what do they do. Front-and-Center Contact Info; make sure contact information is very visible and don’t make the user have to search for it. Speed; make sure your home page loads quickly, rule of thumb is 3 seconds. Clubby Atmosphere; find ways to get people to return to your site, i.e., make free features available to registered users. Tools; have useful applications that help the user. A Clear Path; give the user an easy way to find what they are looking for once they get to the home page. Some Sizzle, More Steak; make the content attractive. The Drum Beat; highlight the company’s two or three main qualities. The Soft Sell; people do not like pushiness. Freshness; fresh content added and updated often. This is good information for all managers because in today’s business world you must have some type of Web site and for many businesses, there needs to be an extensive Web site. Effective Web presence is becoming a very important competitive factor and the lack of a site or presence of an ineffective site can impair a company’s ability to compete in today’s market.
Tuesday, March 23, 2010
Home Affordable Modification Program (HAMP)
Kopecki, D. (2010). Obama loan program may extend foreclosure crisis, watchdog says. Retrieved March 23, 2010 from: http://www.businessweek.com/news/2010-03-23/obama-loan-program-may-extend-foreclosure-crisis-watchdog-says.html
This article, published on BusinessWeek’s online site, makes the case that Obama’s loan program, the Home Affordable Modification Program, which was designed with the intent of helping consumers to stay out of foreclosure, is actually helping few borrowers and making the situation worse by spreading the crisis out over a long period of time. Although the US Department of Treasury states that the program will help 3 to 4 million on a long-term bases, internally, they are saying that only half that number will receive permanent alterations of the mortgage loans. This is important information for managers and investors because more than expected foreclosures will have an effect on the economy. Propping up the economy with temporary fixes could make things worse than they would have been otherwise and managers need to be aware of the things that affect the economy and ultimately their business.
This article, published on BusinessWeek’s online site, makes the case that Obama’s loan program, the Home Affordable Modification Program, which was designed with the intent of helping consumers to stay out of foreclosure, is actually helping few borrowers and making the situation worse by spreading the crisis out over a long period of time. Although the US Department of Treasury states that the program will help 3 to 4 million on a long-term bases, internally, they are saying that only half that number will receive permanent alterations of the mortgage loans. This is important information for managers and investors because more than expected foreclosures will have an effect on the economy. Propping up the economy with temporary fixes could make things worse than they would have been otherwise and managers need to be aware of the things that affect the economy and ultimately their business.
Higher Taxes are Coming
Gross, D. (2010). Higher taxes are coming, but it’s not the end of the world. Retrieve March 23, 2010 from: http://finance.yahoo.com/tech-ticker/higher-taxes-are-coming-but-it's-not-the-end-of-the-world-dan-gross-says-447086.html?tickers=HRB,INTU,JTX,%5EGSPC,%5EDJI,TBT,XRT&sec=topStories&pos=9&asset=&ccode
This article, written by financial journalist and author Dan Gross, tells how and why taxes will be going up soon for some on America’s wealthiest citizens. In order to pay for the expanded health-care bill just passed, President Obama is looking to increase taxes on individuals that make more than $200,000 and couples that make more than $250,000. Also, many believe that there will be higher taxes on unearned income, such as capital gains and other investment income. Gross believes that these higher taxes will not have a large effect on the economy or the stock market; that the people affected will find ways to cut cost and become more efficient. This subject is important to managers because many small businesses are the “wealthy that can pay more in taxes”. Many believe these new taxes do affect the economy and ultimately the stock market because there is less investments in financial markets and in the labor market because of the additional costs of the new taxes. In many cases, taxing the wealthy is the same thing as taxing the employers that create jobs and managers need to be aware of these pending tax changes as they make business decisions regarding expansion and/or contraction.
This article, written by financial journalist and author Dan Gross, tells how and why taxes will be going up soon for some on America’s wealthiest citizens. In order to pay for the expanded health-care bill just passed, President Obama is looking to increase taxes on individuals that make more than $200,000 and couples that make more than $250,000. Also, many believe that there will be higher taxes on unearned income, such as capital gains and other investment income. Gross believes that these higher taxes will not have a large effect on the economy or the stock market; that the people affected will find ways to cut cost and become more efficient. This subject is important to managers because many small businesses are the “wealthy that can pay more in taxes”. Many believe these new taxes do affect the economy and ultimately the stock market because there is less investments in financial markets and in the labor market because of the additional costs of the new taxes. In many cases, taxing the wealthy is the same thing as taxing the employers that create jobs and managers need to be aware of these pending tax changes as they make business decisions regarding expansion and/or contraction.
Monday, March 22, 2010
College is Worth the Cost
Holtom, B. (2010). College is worth the cost. Retrieved March 21, 2010 from: http://www.businessweek.com/debateroom/archives/2010/03/college_is_wort.html
This article is published on the BusinessWeek online website and shows the financial benefits of having a bachelor’s degree and states that the math adds up that the additional earnings of a college graduate far outweighs the costs of obtaining an education. The author states that a college graduate earns an average of $2.1 million in a lifetime compared to $1.2 million lifetime earnings of a high school graduate. Furthermore, college graduates on average are healthier because they smoke less and exercise more than non-graduates. They are also more-rounded because of social networks developed in college and happier because they are more likely to find a job they enjoy. Although some of the information reported in the article is widely known, this is a good article for students to read so they can be encouraged to finish their degree and start their career with a good advantage that will pay off for them in the long run.
This article is published on the BusinessWeek online website and shows the financial benefits of having a bachelor’s degree and states that the math adds up that the additional earnings of a college graduate far outweighs the costs of obtaining an education. The author states that a college graduate earns an average of $2.1 million in a lifetime compared to $1.2 million lifetime earnings of a high school graduate. Furthermore, college graduates on average are healthier because they smoke less and exercise more than non-graduates. They are also more-rounded because of social networks developed in college and happier because they are more likely to find a job they enjoy. Although some of the information reported in the article is widely known, this is a good article for students to read so they can be encouraged to finish their degree and start their career with a good advantage that will pay off for them in the long run.
Jobs Bill
Hulse, C. (2010). Job bill passes in senate with 11 republican votes. Retrieved March 21, 2010 from: http://www.nytimes.com/2010/03/18/us/politics/18cong.html?partner=rss&emc=rss
This is a news story published on the New York Times website and tells the details of a bipartisan vote that approved legislation that is intended to help create jobs. The legislation would give employers incentive via payroll tax exemptions through the end of 2010 for each employee they hire that has been unemployed for at least 60 days. This part of the bill is estimated to costs $13 billion over 10 years because employers are expected to get credited for as many as five million employees; however, most of the employees would have been hired anyway and it is further estimated that only 200,000 new jobs will actually be created. Another aspect of the bill extends the federal highway construction program by shifting $20 billion for road and bridge building. This part is expected to make some positive impact on the jobs market and the economy because it creates a lot of good-paying construction jobs. The bill is being paid for in part by tightening rules of offshore tax havens; however, it is also largely funded with more deficit spending. Democrats are also considering legislation that would extend more than $30 billion in corporate tax breaks and aid to small business. The information in this article should be important to managers because it gives them some additional means to expand their business and take advantage of opportunities that will pass them by if they are not informed.
This is a news story published on the New York Times website and tells the details of a bipartisan vote that approved legislation that is intended to help create jobs. The legislation would give employers incentive via payroll tax exemptions through the end of 2010 for each employee they hire that has been unemployed for at least 60 days. This part of the bill is estimated to costs $13 billion over 10 years because employers are expected to get credited for as many as five million employees; however, most of the employees would have been hired anyway and it is further estimated that only 200,000 new jobs will actually be created. Another aspect of the bill extends the federal highway construction program by shifting $20 billion for road and bridge building. This part is expected to make some positive impact on the jobs market and the economy because it creates a lot of good-paying construction jobs. The bill is being paid for in part by tightening rules of offshore tax havens; however, it is also largely funded with more deficit spending. Democrats are also considering legislation that would extend more than $30 billion in corporate tax breaks and aid to small business. The information in this article should be important to managers because it gives them some additional means to expand their business and take advantage of opportunities that will pass them by if they are not informed.
Sunday, March 21, 2010
User-Centered Innovation Is Not Sustainable
Verganti, R. (2010). User-centered innovation is not sustainable. Retrieved on March 20, 2010 from: http://blogs.hbr.org/cs/2010/03/user-centered_innovation_is_no.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29
This article, published on the Harvard Business Review’s website, was written by Roberto Verganti, professor of the management of innovation at Politecnico di Milano, who is also the author of a book on innovation as well. He states that the user-centered innovation of the pre-recession past will not give the economy a sustainable amount of growth that is needed for strong economic recovery. He states that many experts see user-centered innovation as a panacea but he strongly disagrees. User-centered innovation is basically where firms watch consumer patterns to understand their needs and base their innovative efforts to meet these needs and he believes this approach will not create sustainable growth. He states that successful leaders are forward-looking and they are able to step back from the current needs and behaviors of consumers and are able to envision new scenarios. This is an interesting subject that manager should consider. Most managers and firms seem to concentrate of supplying current consumer wants and needs; however, to be step ahead of the others, it’s important for firms to create wants and needs with innovative products and services the consumer hasn’t even considered yet.
This article, published on the Harvard Business Review’s website, was written by Roberto Verganti, professor of the management of innovation at Politecnico di Milano, who is also the author of a book on innovation as well. He states that the user-centered innovation of the pre-recession past will not give the economy a sustainable amount of growth that is needed for strong economic recovery. He states that many experts see user-centered innovation as a panacea but he strongly disagrees. User-centered innovation is basically where firms watch consumer patterns to understand their needs and base their innovative efforts to meet these needs and he believes this approach will not create sustainable growth. He states that successful leaders are forward-looking and they are able to step back from the current needs and behaviors of consumers and are able to envision new scenarios. This is an interesting subject that manager should consider. Most managers and firms seem to concentrate of supplying current consumer wants and needs; however, to be step ahead of the others, it’s important for firms to create wants and needs with innovative products and services the consumer hasn’t even considered yet.
Recovery in Progress
The Economist (2010). Recovery in progress: World trade is on the mend, but the strength of the rebound remains uncertain. Retrieved March 20, 2010 from: http://www.economist.com/business-finance/displaystory.cfm?story_id=15599453&fsrc=rss
This article is published on The Economist Online website and discussed the possibility of an economic recovery in progress. According to the Netherlands Bureau of Economic Policy Analysis (CPB), which tracks global trade volumes, the last quarter of 2009 showed renewed vigor with a 6% increase. However, with a huge 13.9% reduction in trade volume in 2009, which is only the third drop since they started tracking these numbers in 1961 and a lot bigger drop than the 1.9% and 0.9% in 1975 and 1982, respectively, there is a long way to go before the crisis is over. They also point out that December’s trade volume can skew the numbers some because of holiday spending in many parts of the world. Also concerning is that the World Bank, which tracks trade value instead of volume, states that there was a deceleration in the last quarter of 2009 in that measure, so the recovery is weak at best. This article is important for managers to understand because it is important to know what is going on in the world economy and how it affects your business decisions. As the economy improves, it is important for managers to make the correct business decisions based upon their particular circumstances within the current economic conditions.
This article is published on The Economist Online website and discussed the possibility of an economic recovery in progress. According to the Netherlands Bureau of Economic Policy Analysis (CPB), which tracks global trade volumes, the last quarter of 2009 showed renewed vigor with a 6% increase. However, with a huge 13.9% reduction in trade volume in 2009, which is only the third drop since they started tracking these numbers in 1961 and a lot bigger drop than the 1.9% and 0.9% in 1975 and 1982, respectively, there is a long way to go before the crisis is over. They also point out that December’s trade volume can skew the numbers some because of holiday spending in many parts of the world. Also concerning is that the World Bank, which tracks trade value instead of volume, states that there was a deceleration in the last quarter of 2009 in that measure, so the recovery is weak at best. This article is important for managers to understand because it is important to know what is going on in the world economy and how it affects your business decisions. As the economy improves, it is important for managers to make the correct business decisions based upon their particular circumstances within the current economic conditions.
Saturday, March 20, 2010
Health-Care Reform
The Economist (2010). Presenting the bill: The stage is set for crucial vote on America’s health-care reform bill. Retrieved March 20, 2010 from: http://www.economist.com/world/united-states/displaystory.cfm?story_id=15748396&fsrc=rss
This article, published on The Economist Online website, discusses the upcoming House vote on the health-care reform bill. As of the time of writing this, the vote has not occurred but is scheduled for tomorrow. Based on the recent switches from the ‘no’ column to the ‘yes’ column, it appears that the Democrats will have the 216 votes they need to pass this bill; however, this key number seems to be fluid, so it’s not over until there is a vote. This article does not directly discuss business matters but this bill, if passed, will have a very large impact on the economy and will affect businesses in many ways, though it is hard to tell in what way because you hear two very different scenarios depending on which side of the isle you are listening to. The Democrats say that the bill is “the largest deficit reduction of any bill we have adopted in Congress since 1993”. All of the House Republicans are voting against it for various reason; one being they believe it will costs even more than the proposed $940 billion, over the next ten years, and they also believe that this is an overreaching government takeover of health care and that it will further put the U.S. in debt and will become more a burden than a panacea. This topic is important to managers because they need to be aware and take action when there is legislative action going on that will affect the economy and their business in a direct way. This is a very big piece of legislation, but even the ones that don’t make the daily news are important to be aware of and to take a stand for and against, when needed.
This article, published on The Economist Online website, discusses the upcoming House vote on the health-care reform bill. As of the time of writing this, the vote has not occurred but is scheduled for tomorrow. Based on the recent switches from the ‘no’ column to the ‘yes’ column, it appears that the Democrats will have the 216 votes they need to pass this bill; however, this key number seems to be fluid, so it’s not over until there is a vote. This article does not directly discuss business matters but this bill, if passed, will have a very large impact on the economy and will affect businesses in many ways, though it is hard to tell in what way because you hear two very different scenarios depending on which side of the isle you are listening to. The Democrats say that the bill is “the largest deficit reduction of any bill we have adopted in Congress since 1993”. All of the House Republicans are voting against it for various reason; one being they believe it will costs even more than the proposed $940 billion, over the next ten years, and they also believe that this is an overreaching government takeover of health care and that it will further put the U.S. in debt and will become more a burden than a panacea. This topic is important to managers because they need to be aware and take action when there is legislative action going on that will affect the economy and their business in a direct way. This is a very big piece of legislation, but even the ones that don’t make the daily news are important to be aware of and to take a stand for and against, when needed.
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