August 2007
You are currently browsing the articles from written in the month of August 2007.
Corruption in business and government is legendary. Dont become a legend. You could end up disgraced and in the slammer.
When I was a kid, my friends father piled me in the family car along with my friend and his sister. We took a long drive around the city and we were treated to ice cream and candy. It was a big day for us kids. It was the last day for my friends father.
My father was the auditor of a large city in the mountain west. Sometimes his accountants would find discrepancies in certain accounts. My father was aware of what could happen to a person caught in embezzlement. He wanted no more suicides like the one that had taken his friend and my friends father. Sometimes he was able to prevent a suicide. Other times he could not. Some folks are so embarrassed that no retribution seems sufficient. They take their own lives.
Unfortunately, too many still take the suicide way out. Most others face the court.
Even here in Idaho we read in the newspapers of individuals taking funds that are not theirs from government and business coffers. Some get a tap on the wrist; others are sent to jail. Each case is an individual and family tragedy.
Most people are not intentional thieves. A clerk with access to funds decides that she must get some money to buy her kid a birthday present. She borrows ten bucks from the cash box. She puts it back the next Monday after she has cashed her paycheck. She does that over again and again.
Then one day, she doesnt replace the stolen money (loan to her).
Pretty soon she looks at the money box as a cash cow. She starts juggling the books to cover her pillage.
Then she gets caught.
The accountants say that she has embezzled twelve grand.
She didnt imagine it was that much.
She promises to pay it all back out of her paycheck. She is terminated and prosecuted. She is fined and she spends three years cooling her heals in the state prison for women.
At least she doesnt kill herself.
With some of our noble congressmenwho are supposed to be icons of truth and justicethey take a little gift from a lobbyist. Then they go to Canada with him on a fishing trip. Next, the lobbyist is throwing money into the congressmans charity trust or campaign fund. When the congressman leaves office, he has a ton of money he can spend on himself. Charity begins at home.
Some business meneducated in our noblest institutionshave no morals after graduation. They want power and money. They obtain exorbitant salaries, stock options, and quirks. They suck money out of the corporation denying the ownersstock holdersa decent return on their investment. They cut the benefits to employees and they rifle the company pension funds. These men are called crooks.
To rifle the corporation, they get fancy with the accounting. They claim false profits to drive up the stock so that they can exercise their stock options. They spend company money on personal travel. Some purchase personal items with company money. They accept gifts from suppliers.
They have no shame.
I dont know what to do about these lowlifes that have no respect for themselves. We have to wait until they get caught so that the courts can handle them.
Im interested in helping those who have a basis for proper conduct. The ones who had parents that were able to teach them proper conduct. Those who would like to stay honest in all of their dealings.
Here are some suggestions:
1. If your associates are doing wrong that does not justify you in doing the same things. (Are you listening Congress?) If they try to get you in bed with them, tell them that you are not interested. When you get promoted and they dont, you can straighten them out as to what is proper conduct. If you are kept from advancement because of honest conduct, find another job. Tell your attorney why you left the company.
2. If you were a Boy Scout, recite the Scout Oath occasionally to remind you to stay away from corrupting influences. If you were not a Boy Scout, remember what your mother taught you. (You Girl Scouts figure this out for yourselves.) Try to remember what you were taught in school and at church. Recite the Ten Commandments. Well, do something of this order that doesnt sound silly to you.
3. Teach your children to be honest. Be an example of honesty to them. Dont redefine honesty to suit your interest. Dont let greed (yours or your wifes) dictate your actions. When you pick up your child ask yourself if you are a good example to your child.
4. We had instructions at one company where I worked to always pay for samples and never to tell the supplier what we were doing with the samples. Another company asked that we take suppliers to lunch part of the time rather than have the supplier always pay the bill. The deeper suppliers get into your business, the more leverage they have. Keep your distance to avoid gifts and overindulgence.
5. Find a picture or a motto that you can hang in your office. A friend of mine had a motto in his office that read: Integrity is being good when nobody is looking. If you have a picture, when you hang it up, say to yourself, Im hanging this picture here to remind me to be honest in all that I do.
6. If you are CEO of a company and the Board offers you and other company officers exorbitant wages, stock options, insurance, and other quirks, suggest that they could be more prudent and that they place the stockholders first. If you want a huge estate like the other CEOs that are ripping off the workers and stockholders, ask yourself this question: Would that really make my family happy or do we have more than what we need now?
7. Give your excess assets to charity or return them to the company when you retire. Dont spoil your kids with excess. Leave them what they need, not what they want.
8. When you look in the mirror ask yourself: Am I truly being honest?
The End
John T. Jones, Ph.D. (tjbooks@hotmail.com, a retired VP of R&D for Lenox China, is author of detective & western novels, nonfiction (business, scientific, engineering, humor), poetry, etc. Former editor of Ceramic Industry Magazine. He calls himself “Taylor Jones, the hack writer.”
More info: http://www.tjbooks.com
Business web site: http://www.dumbincome.com
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 24th, 2007 with comments disabled.
Read more articles on ethics.
According to the Association of Certified Fraud Examiners “Report To The Nation On Occupational Fraud And Abuse” (Report), participants in the study estimate U.S. organizations lose 5% of their annual revenues to fraud. Applied to the estimated 2006 United States Gross Domestic Product, this 5% figure would translate to approximately $652 billion in fraud losses. Of course these organizations must pass on this cost to consumers. This translates into each of us paying approximately 5% extra for fraud when we purchase a good or service. If the average household spends $40,000 for goods and services each year, their annual cost of fraud is $2,000.
Part of stopping occupation fraud is understanding it. The Report defines occupational fraud as, The use of ones occupation for personal enrichment through the deliberate misuse or misappropriation of the employing organizations resources or assets. We all know that people steal from their employers, even in very small amounts. Most of us at some time in our lives have taken home a few pencils, pads of paper, or perhaps some of the product sold by our employer. We also have heard about overstating of expense reports or the number of hours worked. These types of small frauds happen every day and cost us all billions of dollars each year. The Report breaks occupational fraud into three categories: asset misappropriation, corruption and fraudulent statements.
Asset misappropriation is the type of fraud we are most familiar with and includes the ones listed above. It is the largest type of occupational fraud in number, but not total amount. Corruption includes frauds such as bribery or conflicts of interest. Fraudulent statements generally include frauds relating to the organizations accounting system and financial statements and are the largest type of occupational fraud by amount. Recent examples of fraudulent statements are Enron, Health South, World Com and other sensational frauds, which have been well publicized.
Occupational frauds are very hard to detect and most of them go undetected. According to the Report, the main detection tools are tips, accident, internal audit, external audit and notification by police. The Report points out that tips though anonymous hotlines is the most effective way of detecting occupational frauds. This means you are the one we count on to detect these frauds. When you are suspicious that a fraud may be happening in your workplace, do something about it. If your employer has a hotline, use it. If not, you can still provide an anonymous tip. Type out your suspicions and give it to a manager, who you do not believe is involved. You can mail it, put it in his in-box or use some other method, which will not identify you as the tipster.
What can you do to stop these frauds? Make sure you dont commit them. This means the next time you need a few pencils at home, dont take them from the office. You can buy them at the store and feel good about it when you do. This type of thinking, Im not hurting anyone, only leads to encouraging others to do the same or it lets you rationalize that taking something more expensive is ok. You did not get caught taking the pencils, so take something more expensive next time. Secondly, when you are suspicious that a fraud may be happening, use the hotline. You dont have to be sure. Someone skilled in investigating fraud will investigate and you wont get your fellow employee in trouble, unless they deserve it. Thirdly, learn more about this type of fraud so you will know it when you see it. You are the main defense against occupational fraud.
Mr. Cuthill’s practice is limited to court-appointed positions in large fraud cases. His work has produced the return of millions of dollars of investors’ funds. For more information about him go to http://trusteeandexaminerCuthill.com.
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 23rd, 2007 with comments disabled.
Read more articles on ethics.
I was reading through a magazine and read an interesting article on how the SBA organization praises how it is out to help smaller businesses and entrepreneurs finance their start ups. They talked about what they say they do and what they really do. Also at the end they ask the question about do they still matter? Like do they still matter to the small business men and women who need help or are they just out for themselves.
Well let me give you the rundown of some of the points they touched on in the article. First off if you remember the post I wrote about the SBA on micro loans and the later one on free help with your business plans. Mostly that is what the SBA does according to the article. They hire retired professionals who volunteer their time and services to entrepreneurs starting out in the business world and offer loans that are guaranteed up to a certain percentage. Now where everything gets fuzzy is how they are suppose to be a substitute for new or start up businesses who can not receive traditional financing from a bank (Due to credit or lack of experience), but they got rid of the LowDoc loan that most start up businesses applied for and were approved. Main reason for the termination of the loan is because they say they were losing too much money with the program (Not profiting maybe?). The lowdoc loan was pretty much a fast application (Low Documents) to get money to fund your business, which was backed by the SBA up to a certain percent to make the bank feel safer with the transaction. Once they terminated the loan package they replaced it with the SBA Express loan, which was suppose to be the new alternative to financing small businesses.
Only thing wrong with that picture is that the requirements for the loan were stricter and really worked for companies that could demonstrate cash flow, but lacked in collateral department (Not for riskier borrowers). In order to show proof they expect two years of business operation and if your business is a start-uphow can you demonstrate cash flow and most likely it is your first year in businessmaybe even your first month! The article stated that after research how most of the Express loans were going out to businesses that should already have sufficient cash flow. I know I experienced similar problems when I applied for a loan while I was still in college and had no real credit, plus no longstanding business. Everywhere I turned they pointed me in the direction of the SBA offices for financingso I went and was declined, Mostly because my lack of a sustainable business (Plus no credit, but that is what they are suppose to be there for!) that demonstrated a path to success. I was less than a few months in at the time.
So what is your out take on this situation? Is the SBA really there to help or the publicity of helping out and making our government look good in the process?
I am the creator and author of How to start a clothing line from scratch. An entrepreneur weblog for fashion industry professionals who want to start and run a successful clothing line http://www.dobizo.com
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 23rd, 2007 with comments disabled.
Read more articles on ethics.
Many times we see lot of people leaving their jobs because they found the work place politics affecting their life. Internal politics involving the people at work place are some times bad and avoidable. These politics not only affect the normal working of job, but also may some time cause people to quite their jobs. This results in lose of human resource of a company. To get the good people for working in the organization is a difficult task. However by ignoring the internal politics at work place can cost the companies dearly.
People usually want to be remaining in group; they do not like others to enter their group. This tendency sometimes made lot of subgroups in the office. For every group the agenda of their group is more important than what is required. They try to promote the people in their group more over the others. They sometimes also try to let down the people of other group. This creates inter group rivalries. One group try to hinder the work of other group, in this they even forget the goals of organization. Group rivalries are most common and can be seen in big offices where lot of people work. These group politics are one of reason for collapse of work due to the non corporation and are of great cause of low performance.
Second politics is seen in individual basis. Many people try to be smart and play with the emotions of other. They are not associated to any other, still they are in all group. They pretend to be the friends of many, but actually they are with nobody. There main purpose is to achieve own results. They create misunderstanding between the people. They remove their enemy by creating a bad image for them in others eye. They never fight their enemies directly, but provoke others to take revenge for them. They try to make their enemy alone by creating misunderstanding with his friends. They make the person alone and then become friend of it. Now they know the secret about him and upon feasible time use them against him. In this way they are able to remove their enemy without fighting him directly. These kinds of politics are most dangerous and to know that some one is doing it against us is a difficult task. This kind of politics is main reason behind the many, who leave their jobs?
So we should be alert of politics on the work place and try to avoid indulging in them. Indulging in them may unnecessary cause use lot of difficulties and simultaneously should aware about the others politics about us.
http://www.geocities.com/arvindkatoch1
http://www.geocities.com/katochhelp
http://thoughts-of-a-ordinary-man.blogspot.com
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 23rd, 2007 with comments disabled.
Read more articles on ethics.
From the middle of last century until today we have become the “throw away society”. Buzz words like “disposable” and “one-use” have been commonplace. Where we used to “make do and mend” in the war years we now simply replace items that are no longer functioning or are no longer wanted. Now this is great if we have an everlasting supply of clean energy to make replacement goods and bottomless land fill sites. But we have neither.
In poorer countries this problem is negligible as most spending goes on food and essential items, leaving very little to be thrown away. More affluent societies, however, are at last beginning to wake up to the fact that the throw away lifestyle is not sustainable.
How did we get here? Several factors have conspired to bring about our disposable disposition. The main one is affluence. As western societies became richer, the demand for goods rose. Also, our salaries rose. Manufacturing needed to be faster at pumping out goods. Product design and work practices needed to be changed to accommodate increased volumes and in an affluent society it is hard to recruit and maintain the staff needed to keep these places going. As a result, the factories were located in poorer states at increasing distances from the end user. Electrical and mechanical goods were made with ever fewer serviceable parts to the point where some goods these days are totally sealed and repair is just not possible.
In days gone by a factory would produce finish goods and do a good side business in supplying parts to customers or repair shops. In affluent countries those days are gone taking with them the watch repairer, the radio (and tv) repair man, the cobbler etc etc. Even replacing the battery in an electric wrist watch is often virtually impossible.
Many authorities around the world are now trying to put the brakes on this trend and even trying to reverse it. They are asking for products to be designed to allow repair and parts replacement. In some areas - take Europe for example - they are introducing legislation that will force companies to take back (or at least take responsibility for) goods at the end of their life.
I am firmly of the opinion that, as this sentiment takes hold - and surely it will, we will be slowly warped back to the old days of repair shops and an increasing trade in spare parts. I am also convinced that this mini revolution is nearly upon us.
So have a walk down your local high street or shopping centre because it may look a little different in coming years with cobblers, watch menders and tv repair shops making a come back.
Of course, there have been some companies that bucked the throw away trend. Insect-o-Cutor have always provided spare parts for their fly killer machines. An Insectocutor fly killer can often go many years without needing any special servicing (they are guaranteed for 5 years in any case). If, however, they do need a spare part, then these are readily available from Arkay Hygiene at www.eeeee.co.uk. This availability is partly explains why it is common to see Insect-o-Cutor products working after 20 or even 30 years. In fact some Insect-o-Cutor fly killers from the 1960’s are still around and doing and excellent job.
Replacement
parts for Insectocutor fly killers - such as the lamp
cover for the F1 Fly Killer Model - can be purchased at http://www.eeeee.co.uk
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 22nd, 2007 with comments disabled.
Read more articles on ethics.
Competent, educated and in prison I would never have considered that this is where I would be some 11 years ago. But, there are consequences to every choice we make and though one might think that we can avoid the consequences we cant. They are unavoidable and certain. We just dont know how or when we will face the inevitable.
As a former CPA who, through a series of choices, became a white-collar criminal, I now take the time to review my time in prison and write about that experience so that others may gain benefit from my experience. Some of us learn lessons the hard way. Yet, through sharing the experience of my incarceration, others have stated that theyve been able to look at their choices in a different and more productive way.
While the prison experience was painful, as the following excerpt from my memoirs shows, it provided a foundation for an incredible opportunity for growth. Likewise, through the prison experience I found numerous ways to help others.
My journal dated - October 6, 1995 reads as follows:
8:37 a.m. — Reading this morning brought up feelings of sadness, once again. I understand I’m here to be punished, and being away from my children and the things I hold dear is punishment.
4:00 p.m. — Its time for mail call and stand up count time. I live for this time. Being cut off from society is difficult. I hope each day that someone cares enough to send me a letter.
9:40 p.m. — At dinner tonight I had a revelation, I need to talk to high school children and college kids, about the effects of the choices they make. 70% or more of the people here are here for drug-related crimes. It’s sad to see the educational level of most of the inmates. How can anyone expect to ever break the cycle of poverty and crime, if they don’t have the education to do so? I don’t know my role now, but hopefully someday I can make a difference.
Now, some eleven years later, I find that the personal growth from the prison experience provided a foundation for help to others. The revelation to speak to high school and college students has manifested through the establishment of the Choices Foundation, which provides a forum to educate young people on the effects of the choices they make.
Its extremely powerful to see and hear how young people react to the message of choice and consequence. All too often they dont experience the direct consequence of the choices they make. The detriment of youth is you havent lived long enough to see the link between choice and outcome. Likewise, many youth, other than perhaps those extremely disadvantaged, have no connection with anyone who has been incarcerated for their actions. Therefore, being exposed, in a direct way, to someone who has made unethical choices and faced the consequences, to some is profound.
All too often we find that ethics and ethical choices dominate our media through new events of what has been done wrong. In order to change our focus, we must create an awareness of what should be done right. Ethics and ethical thoughts must begin with an understanding that one cannot escape the consequences of their personal choices.
For a free report on the five most common corporate ethics violations, go to www.chuckgallagher.com.
Chuck Gallagher is a successful sales executive, business entrepreneur, and professional speaker with humble beginnings: he was raised by a single parent in the projects. He has led a $25 million sales region with 100 sales representatives and started his own training business with projects in 30 states. Gallagher currently helps corporate employees realize the ramifications of their ethical choices. Through his own choices, Chuck learned this lesson the hard way.
In the middle of a rising career, Gallagher lost everything because he made some bad choices. He has since rebuilt his career and his life back to immense success. With more vulnerability than the average keynoter, Gallagher shares with his audiences his life journey, the consequences of his bad choices, and how life gives you second chances when you make the right choices.
For information on this article and more or to book Chuck as a speaker for your meeting go to http://www.chuckgallagher.com
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 20th, 2007 with comments disabled.
Read more articles on ethics.
There has been a death in our society that has yet to be noticed; the death of common sense. I discovered that common sense is kind of hard to define because everyone seems to have a different idea of what it is and what isnt. Heres my take on it: Common sense is native good judgment derived from experience based on the reasonable person standard. What would the average, reasonable person do in a situation?
Common sense is a funny thing. We admire people who have a strategic mind, a flair for style, or vast creativity. We rarely admire someone for his or her common sense. Its the unsung hero of attributes. We seem to assume that everyone has it and is actively using it in the foundation of their actions, decisions and behaviors.
And so we take it for granted. We downplay it as being simple-minded thinking. It sure isnt in the same league as strategic thinking, is it? It is SO simple, elementary and basic that we dont get trained in using common sense. It isnt evaluated on our performance reviews. No one talks about it.
Ironically, it seems to me that the easiest way to impress someone with your brilliance is by demonstrating common sense. State the obvious and people will be blown away by your insight.
After joining a company, I was handed a 16 page process document that detailed the steps managers had to take when recruiting and hiring a new employee. I looked at that packet of professionally written fluff and laughed to myself. No one would ever take the time to read this! Common sense (and experience) told me that managers wont read anything longer than a bullet-point that is direct and to the point. I proposed rewriting the process into a one page checklist and an accompanying one page flowchart. My new manager was floored! Upon completion, I was greeted with gratitude and raving kudos. And people actually used it.
To me, that was using common sense. In todays workplace, common sense told me that people are busy and need fast, efficient ways of doing their work. A formally written process document the length of a short novel was destined to be ignored.
While Id like to see common sense guiding more business activity such as processes and strategy, Im stunned to see the areas where common sense seems to have been shot to death for monetary gain.
As a kid, I learned to use good judgment (common sense) and to not harm others (ethics). Then I grew up and I had to incorporate those same values into each environment I entered so I could survive and hold my head up high and with pride. When I started working, I figured that common sense told me:
1) not to steal from my employer, coworkers or the customers
2) not to lie to my manager, coworkers or the company
3) not to alter company documents, forge signatures or engage in any other illegal activity
As I write this, I realize that common sense embodies a lot of things. It holds an umbrella over ethics, good manners, sound judgment, morals and cultural norms. I think common sense tells you to act appropriately in the environment you find yourself in. When in church, you conduct yourself a certain way because common sense tells you that singing out loud along with your iPod would be frowned upon. When at work, common sense tells you to act professionally, which affects how you converse with a VP in the elevator.
If you know that stealing, lying or doing something illegal would get you fired if you were caught, wouldnt common sense nip temptation in the bud? For the average, reasonable person, I believe that it would. Common sense would jump in and redirect you back on the right path, right?
And yet, every company I know has a handbook filled with policies to remind employees that lying on timecards, stealing company property and harassing coworkers is cause for disciplinary action, up to and including termination. Outside of the legal reasons for doing so, we actually need to put this in writing and remind employees of this in annual training sessions?
I dont need a policy to tell me not to harass other employees, because common sense tells me to treat others with courtesy and respect. I dont need a policy telling me not to alter company documents because common sense tells me I could serve jail time if caught.
Maybe that is because I have common sense. I value my common sense because it is the one thing that will keep me out of trouble. Common sense tells me not to go into a bad neighborhood at night alone. It tells me not to lie, cheat, steal or do things with malicious intent. Fundamentally, it helps me protect my body, mind, heart, spirit and soul - and my assets.
Think of how much easier life would be if people used common sense to guide their decisions and actions. We dont need more strategy and innovative solutions to make business run more effectively. We need more common sense. Assessing people for their common sense when interviewing them will help you weed out people who need a policy book reminding them that fraud and theft are wrong. Using common sense when building a process or procedure can help you get the results you want. Using common sense in the way you treat people can derail issues with morale, undermining and unforeseen resignations.
Common sense may be the unsung hero but it is essential for the game plan. Let common sense be the spine and foundation of every action, decision and behavior. You’ll be amazed at how much easier business - and your life - suddenly becomes.
For more articles by this author, please go to: http://healthefield.blogspot.com
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 19th, 2007 with comments disabled.
Read more articles on ethics.
You know that one. Hes the one in the office who puts out all the great ideas then steps out of the way while you do the work, but comes back just in time to tell you how you did it all wrong. His interest gravitates only to Power and Recognition. He isnt interested in doing the work, actually participating in the project, or actively becoming involved in the accomplishment. He only wants the glory of suggestion and the recognition of completion.
Over the past several years one particular person has instigated several projects in a group I actively participate in. This person shows up suggests a project and disappears for the next several meetings, appearing often enough to rip apart most anything thats been accomplished toward the completion of any article, find fault with any work done on the project, and disappear again until the next round of complaints and judgmental condemnations are ready.
Unfortunately, there are those members of the group who desire accomplishment enough to go the extra mile and attempt to complete the projects in the face of this sorry individual who desires only the glory. Those members willingly commit their time and effort to the project and work hard to gain acceptable results, while inadvertently complying with the demanding coworker with the bad attitude.
There is a solution.
When the power hungry recognition monster rears its head on that occasional appearance, if the rest of the members suggest that person get started on the project and agree to jump in and do their part after the original project is well started, the power disappears. That person looses the control factor and becomes just another peon in the group. The project in question is either activated by the instigator, or dies on the table. The power monger must either get into the project or let it die the unnatural death of neglect.
So, the next time someone in your office or group comes up with an incredible opportunity to accomplish something and you know for a fact they arent going to actively participate in the completion of the project, bow out gracefully by suggesting they get it started and offer to jump in with your part when the project is actively ongoing. Otherwise let their own neglect of their project kill it.
Impact your market as never before. Be seen. Be alive. Be creative in your endeavors to brand your business and consume your market. Let eBiz Blitz empower your dreams by infusing your business publications with Dynamic Content. Visit Dynamic Content Creator, Jan Verhoeff, at http://www.freewebs.com/ebizblitz
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 19th, 2007 with comments disabled.
Read more articles on ethics.
When people from my grandfathers generation retired after being with a company for decades they got gold watches. Gold watches no longer exist as far as companies are concerned. Now companies give out pink slips (a.k.a. their walking papers) after 25 years of service. We are living in a different world but it is humorous to me in a way.
Companies no longer have loyalty to those employees that have been loyal to them for years and years of service. When it is clear that companies no longer care about their employees in most cases, it is funny to me when the management of a company gets upset when the employees are no longer loyal to them either. They still expect the employees to be loyal without giving it in return. The same applies for customers. They get upset when a customer of 25 years leaves for a company just because of a cheaper price.
I have said in a previous article that I work for Liberty Mutual Insurance. Since I have gotten in the department I am in now, which is Personal Sales, I have seen some very good employees either forced out the door or forced into taking demotions. The new management comes in and decides they want their own people in place. They either eliminate positions to get some people out the door or they just performance manage them out the door.
I am not singling out Liberty Mutual by any means. In fact, I suspect other companies are even worse because Liberty has historically been a very conservative company. Other more aggressive companies are probably laying even more people off, or pushing more people out the doors so they can replace them with their people who are younger and cheaper.
I am also not saying that some of the older people do not deserve to move on. Some people I have managed over the last year and a half in this department just do not want to be here and they make it obvious. They continue to do things the way they have always done it. They make little effort to learn new technologies and procedures to keep up with the changing business world and customers demands. These people are not the ones I am referring to in this article. I am referring to the people who are on top of their game, still making a significant contribution to the company and they are just forced out because management does not like them.
I think Liberty Mutual is one of the last companies that still has a large population of employees who have worked their whole career for the company. I also think this is not going to be the case five or ten years down the road. It is a shame that business has become so ruthless and does not care about the employees any longer.
Scott Bianchi operates http://www.best-internet-bargains.com. He writes on a variety of topics. If you would like to be added to his distribution list for his new articles when they are published just send an email to articles@bestinternetbargains.com.
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 19th, 2007 with comments disabled.
Read more articles on ethics.
Wallace Malone is retiring as vice chairman from Wachovia Corporation with a sweet and juicy departure package worth at least $135 million. This amount probably will be increased (grossed up) so the poor fellow will not have to fret over paying any income tax on the $135. Incredible, even for doing a good job, though one arguably could make a moral case for such a payment. But what about those who fail?
What about the story from Walt Disney’s Magic Kingdom and Michael Eisner, the former CEO who once encouraged the potential payment of a $140 million golden parachute for Michael Ovitz, his friend who lasted just 14 months as his deputy? Eisner himself was forced out left last year with a package worth nearly $24 million excluding a $300,000 annuity for life. In fact, most severance packages of this nature also contain a dazzling array of other sweet benefits–everything from use of private corporate jets to lucrative consulting contracts, use of secretaries to office space for life, country club memberships to financial planning help. There are limitless goodies executives seem to enjoy in “forced retirement” at the expense of shareholders.
Ever-increasing severance packages granted to terminated or otherwise departing executives (which are negotiated into employment contracts upfront) are a part of the growing perception that total compensatory reward is out of sync with performance, or lack thereof. After all, if it is immoral to punish large corporations (like Wal-Mart) for their financial success, it should be equally immoral to unduly reward the top executives of such corporations when they are terminated for poor performance.
What about Stephen C. Hilbert, the former CEO of Conseco, who almost drove that company into bankruptcy but was given $47.1 million in severance for his efforts? Pity Carly Fiorina who left Hewlett-Packard with a tarnished reputation. Fortunately her exit package eased her pain; it was worth about $21 million. “This is nothing beyond the normal severance we give to senior executives,” says HP company spokesman Mike Moeller. How sweet is that? Doug Ivester, former chairman of Coca-Cola, left under a similar dark cloud, but to bring in a some sunshine, his severance approached a sweet $120 million. Poor Jill Barad, former CEO of Mattel, departed with $55 million after being fired for her poor performance. Robert Annunziata left the CEO post of Global Crossing in just one year with $15.9 million. L. Dennis Kozlowski of Tyco and New Hampshire infamy was on schedule to get as much as $117 million before he was indicted and convicted for corporate wrongdoing. Incredibly, Tyco agreed to pay a severance package of $44.8 million to Mark Swartz, its former chief financial officer, even while he was under investigation by a grand jury in New York that later indicted him on criminal charges (Drury, Jim, “It Pays to Fail,” Sept. 16, 2002, www.chiefexecutive.net). The agreement, by the way, was signed by two members of Tyco’s compensation committee, one of whom was Stephen W. Foss, former chairman of the N.H. Port Authority, who later ran into his own serious problems of wrongdoing (Feingold, Jeff, “In the Wrong Place at the Wrong Time,” N.H. Business Review, Oct. 17, 2002, 14b).
Franklin Raines was forced out as Fannie Mae’s chief executive after only five years but will receive a pension of $1.3 million a year for life for his poor performance, though the payment is being disputed. Nice pension for just five years of work. N.Y. Stock Exchange chairman Richard Grasso “resigned” on Sept. 17, 2005, at an emergency meeting of the NYSE Board, which voted for his ouster. The forced resignation came only three weeks after the same board disclosed their earlier pay out of $140 million in deferred compensation and retirement benefits to Grasso, at that time praising him for his outstanding leadership.
And the beat goes on, with other examples of corporate scoundrels slurping at the trough, examples too numerous to cite in this column. These episodes seem to be classic examples of how powerful people can bend or rewrite the rules to fit the games they play and somehow rationalize it.
No one is arguing that traditional and competitive severance packages are not important or necessary, but many of the excessive ones are incomprehensibly and ironically triggered when executives are getting fired for poor performance. These kinds of payments reflect a callous disregard for those in the office cubicles or on the factory floors, most of whom are simply shown the door when they get fired. That others get fired and get enormous payoffs has become a hot topic of examination, particularly during the past few years which some have called the period of “Corporate Greed.” Indeed, such juicy packages often indicate that a particular board of directors is not overseeing the corporate cash register or company management close enough, nor looking out for the shareholders, notwithstanding the Sarbanes-Oxley Act, which emerged in 2002 as a result of the public’s outcry over corporate scandals.
Now, if executives are paid more for high performance because their compensation is supposedly tied to performance, then logic dictates they should get less in the way of severance for poor performance. Why should a top executive knock himself out to perform well when he or she may end up with more money by simply working toward failure? Why not manipulate circumstances so you can be rewarded for failure? It is not at all unusual for some executives to move from company to company, leaving each “to pursue personal interests,” but with generous severance for their serial failure. Eventually, if they fail enough times, they can end up with a nice chunk of cash which then can be annuitized for a comfortable retirement in Sedona, Palm Beach or Telluride–or perhaps all three.
Excess severance payments were just one of the many symptoms of the corporate accounting scandals that occurred between 2001 and 2003. Many view Enron as the poster child for this period, though technically the jury is still out (pardon the pun). If so, it is noteworthy that only three people, James Chanos, Jonathon Weil and Bethany Mclean, spoke up against Enron early on. Perhaps the real question to ponder is, where were the others? And where are they now with respect to execessive severance payments–for rarely have so few been so highly paid for doing so little for their companies, shareholders and employees.
“If ethics are poor at the top, that behavior is copied down through the organization.” –Robert Noyce, inventor of the silicon chip
Ted Sares, PhD, is a private investor who lives and writes in the White Mountain area of Northern New Hampshire with his wife Holly and Min Pin Jackdog. He writes a bi-weekly column for a local newspaper and many of his other pieces are widely published.
To Blame or Not To BlameA man can fall many times, but he isnt a failure until he begins to blame somebody else. (John Burroughs)Fire her, she set me up! John yelled quite loudly. He was incredibly angry and for good reason. However, he was really angry at the wrong person. What he was really saying was […]
Written by info on August 18th, 2007 with comments disabled.
Read more articles on ethics.
« Older articles
No newer articles