January 02, 2008
Liz Glazer has a great post on a self-help gambit - the sort of thing that is always popular in January - and inquires: is there anything in it for us? I'm new to "Getting Things Done," but I've been consuming some of the businessey "you can do it - but only if you move that cheese!" literature, and I have to say, the life of an academic is nothing like the life I remember as a government lawyer, where I could thrill to the satisfaction of knocking out two motions (for extensions of time, probably) and three nasty letters in the course of a day. Now my projects have months-long timelines, but lots of discrete pieces. Am I supposed to approach this sort of work in the tortured genius novelist mode and, I don't know, stop bathing or remove myself to an unheated cabin in the Berkshires or something? Or should I be GTD, lifehacking, and practicing inbox-zero at a seven footnotes a day clip?
I'll look forward from hearing from you when you've solved your own productivity dilemmas. But in the meantime, read the Glazer.
May 15, 2007
The House Financial Services Committee is holding a hearing tomorrow morning (10 am Eastern) on "Private Equity's Effects on Workers and Firms." You can view the live webcast here. Speakers include:
- Andy Stern, President, Service Employees International Union
- Douglas Lowenstein, President, Private Equity Council
- Robert H. Frank, Professor, Johnson Graduate School of Management, Cornell University
- Jon L. Luther, Chairman and CEO, Dunkin’ Brands Inc.
On the agenda:
1. Given the typically high degrees of leverage in many of these transactions are the restructured firms able to make the investments in technology, capital equipment, and research essential to long run productivity growth?
2. Do workers – either through layoffs and/or pay and benefit cuts – find themselves disadvantaged through financial – or other – restructuring?
3. What are the implications of the very high degrees of profitability in many of these transactions on the growth of income inequality?
I'm not sure about question 1 (long term R&D); my best guess is that managerial slack in public companies is a bigger problem for the economy than inadequate R&D funding.
As for Question 2 - many workers are worse off, especially in the short run. I suspect the way to handle this is some sort of private or public wage insurance rather than discouraging buyouts.
As for Question 3 - I don't think income inequality is necessarily bad in and of itself. But if there are distributional concerns, I'd rather see them dealt with through the tax system than through corporate or banking law. Corporate law has never struck me as a good method of redistributing income.
Should be an interesting hearing.
March 11, 2007
The much anticipated day is here. Contracts as Organizations -- my paper with Brayden King -- is now available on SSRN. We have submitted the paper to law reviews, but we welcome further comments. Here is the abstract:
Empirical studies of contracts have become more common over the past decade, but the range of questions addressed by these studies is narrow, inspired primarily by economic theories that focus on the role of contracts in mitigating ex post opportunism. We contend that these economic theories do not adequately explain many commonly observed features of contracts, and we offer four organizational theories to supplement – and in some instances, perhaps, challenge – the dominant economic accounts. The purpose of this Article is threefold: first, to describe how theoretical perspectives on contracting have motivated empirical work on contracts; second, to highlight the dominant role of economic theories in framing empirical work on contracts; and third, to enrich the empirical study of contracts through application of four organizational theories: resource theory, learning theory, identity theory, and institutional theory.
Outside the economics literature, empirical studies of contracts are rare. Even management scholars and sociologists, who generated the four organizational theories just mentioned, largely ignore contracts, both in theoretical and empirical analysis. Nevertheless, we assert that these organizational theories provide new lenses through which to view contracts. While economic theories of contracting focus primarily on one purpose of contracts – mitigating ex post opportunism – the four organizational theories help us understand the multiple purposes of contracts.
Permalink | Contracts| Economics| Law & Economics| Management| Organizational Theory| Sociology | Comments (0) | TrackBack (0)
December 19, 2006
. . . ain't the hazard it used to be, at least not if you want to run Coca-Cola. Coke just appointed Muhtar Kent as its president and COO, making him the No. 2 behind CEO Neville Isdell, as well as Isdell's likely successor. Almost ten years have passed since Kent was fired from a senior position with Coca-Cola Amatil--a regional bottler based in Sydney--for shorting 100,000 of his own company's shares just hours before the company issued a serious profit warning that caused a drop of $2.5BB in the company's market cap, almost a 30% loss. Kent had been managing director of the bottler's European division. He apparently made about $324,000 from the sale. After an investigation by the Austrialian Securities Commission, Kent coughed up the profits and another $30,000 to cover the costs of the investigation.
This past October, Kent denied prior knowledge of the impending profit warning, calling it all a "bad coincidence." The current official story from Coke is of the "dog ate my homework" variety:
Mr Kent was advised by his financial adviser to diversify his financial portfolio, which at the time consisted solely of KO stock and CCA stock options. . . . He accepted the proposal and left it to the financial adviser to execute. In doing so, he did not fully understand that it would involve a short sale or the elements of a short sale. As a result, he also did not know the specific timing of the transaction.
So he didn't know about the impending profit warning. And he didn't know about the impending short. Hmmm . . . Sorta sounds like Martha Stewart's oral stop loss order. I'm also not sure how short-selling diversifies his portfolio. And why was he shorting his own company anyway?? When Kent was made president of Coca-Cola international in January, less than a year after rejoining Coca-Cola, it made Colin Barr's The Five Dumbest Things on Wall Street This Week at TheStreet.com. Or you can watch the video.
In any event, CEO Isdell (declining to be interviewed) recently
issued a written statement: "Without doubt, Muhtar is a man of the
highest integrity and deepest skills."
When Coke sneezes, Emory catches a cold. So we tend to follow our local benefactor quite closely.
Permalink | Business Ethics| Businesses of Note| Management| Securities Trading & Regulation| White Collar Crime | Comments (0) | TrackBack (0)
July 15, 2006
Why are executives so enamored of quoting Chinese proverbs? Daniel Gross over at Slate has the answer. In a nutshell:
[E]xecutives quote Sun Tzu and Lao Tzu for the same reason they started exchanging their bespoke suits for business-casual khakis: They have to show that they're with it. China represents the future and is the locus of immense growth. Casually tossing Chinese proverbs into conversation shows that you're down with the latest trends, even if you haven't (yet) relocated your manufacturing capacity to Shenzhen.
Read the full story for some amusing uses and misuses.
Permalink | China| Management| Marketing| Popular Culture | Comments (1) | TrackBack (0)
May 12, 2006
This month's management reading from the Economist includes blurbs on managers' escalation bias and Gary Becker's latest views on organ markets (the live kind). Escalation bias refers to the social psychological phenomenon whereby a decision maker, once committed to an idea or course of action, will persist with it even in the face of information that tends to call into question the wisdom of the prior decision. Check it out.
April 27, 2006
I just found this interesting resource in the Economist: a regular feature called "What's in the Journals." It's a monthly summary of articles in business journals, sort of a quick fix on management and business articles. Among the snippets for April: the growing popularity of business podcasting; a summary of an academic paper entititled "Does CEO Charisma Matter?"; and a blurb on a McKinsey paper applying behavioral economics (specifically overoptimism) to strategic decisionmaking in business. A quote from this latter: "Almost all of us believe ourselves to be in the top 20% of the population when it comes to driving, pleasing a partner, or managing a business." Uh, you mean, I'm not . . .?
May 09, 2005
Don Watson of Australia has written a gem of a book with the clever title Death Sentences. The purpose of the book is revealed in the subtitle: "How Cliches, Weasel Words, and Management-Speak Are Strangling the Public Language." Although sympathetic to the premise of the book before having read a word of the text, I was completely won over in the Preface to the U.S. Edition. Referring to management jargon, Watson writes:
In this language the only thing left to a writer is to shuffle the phrases and experiment with verbs.... In time, I learned that this was the beauty of management jargon, the unbreakable code. Anyone could write it and, with a little practice, speak it, and just to write or speak the stuff was to prove you were professional: so professional that every underling who could not crack the code much imitate you. The miracle was that once you knew a dozen or so "key" or "core" terms, once you were "focused" on them, thought was scarcely necessary. In fact, writing like this was best done, and perhaps could only be done, without thinking at all.
Watson's disdain for management jargon may carry him away just a bit, as he offers this comparison to the language of law:
Law used to be the foundation of public language, but now management is. Legal language can be arcane, obscure, and pompous, but management language is much worse. There is a provenance to law that management lacks, and it is capable of elegance and force. The lawyer Abraham Lincoln will do for evidence of this. Legal language at least has its roots in the same ground as the language the rest of us speak. But management language is newfangled in root and branch and rarely sounds like anything but hokum.
Thank goodness for Lincoln! Though the need to reach back 150 years is not a strong endorsement of legal language, Watson is right about management jargon. I suppose he is just shooting fish in a barrel, but it needs to be said, and he says it well.
February 09, 2005
My oldest son has recently become passionate about sports, both playing and watching. When he invited me to share the Duke-North Carolina basketball game tonight, I thought I would make a brash display of my vast knowledge of the college game.
"I can already tell you who will win that game."
"Who?"
"Duke. They have the better coach."
I had seen both teams in action, and the players seemed pretty evenly matched. I didn't realize that Duke had the home court advantage, though that might have influenced me if I had known. I was banking on Coack K, and I could not have been more prescient.
With about 20 seconds remaining in the game, North Carolina took possession of the ball, trailing by one point. They ran a play that they had run last year to win a game against Connecticut, and Duke defended it perfectly. The clock expired before North Carolina had even attempted a shot.
In the post-game press conference, Carolina coach Roy Williams looked frustrated. He noted that they had been successful with that play before ...
Meanwhile, Duke star J.J. Redick was telling an ESPN reporter that Duke knew which play Carolina was going to run because they had run it the year before against Connecticut! If you watch the replay, notice that Redick overplays his man and completely throws a wrench in the play. Who told Redick about this play? Coach K, of course, and that's why he writes books on management. I hope Roy Williams gets his national championship someday, but he won't get there making calls like that.
December 23, 2004
Martin Tobias needed two seasons of The Apprentice before swearing not to watch it again. I joined the first season halfway, then opted out before the finale. Anyway, I enjoyed Martin's thoughts about The Donald as a startup CEO:
I would NEVER want to work for The Donald. And moreover, I would NEVER hire anyone he thought was great. The Donald is an anachronism. His management style is straight out of the 50s. I mean the guy still wears suits every time you see him. Have you seen his penthouse? Did anyone bother to tell him that goldtone fixtures went out with the French Revolution? The Donald is straight from the "my way or the highway" management style. Which, by the way I like VERY MUCH in an early stage start-up CEO.... And he makes quick decisions and doesn't look back. That is all good in a fast changing environment.... But I would never want to work for the guy. And his style would not work in a tech start-up because unlike the real-estate business, in tech the CEO has to hire people who are intellectually superior to himself (they are called developers). The CEO is usually not the most technically proficient person in a tech start-up. But he has to know how to recruit and motivate them. For all his bluster, Larry Ellison knows how to do this. So does Bill Gates. The both have very abrasive in your face management styles, but also have a culture of meritocracy. Challenge everyone and let the smartest win. The Donald may be like this, but I doubt it. He has too much of an ego.... The Donald asks people for their opinion, but I don't really think he wants it. All of the truly smart people I know are innately curious. I don't get the feeling that the Donald is innately curious or interested in much other than what he thinks he already knows.
The Donald is easy to dislike, but I disagree with Martin's assessment. Ego? The Donald has it, and so do many startup CEOs. Meritocracy? My sense is that The Donald has that in his organization, too. My way or the highway? As Martin observes, this is probably a good thing in a startup. After all, it has to be someone's way! Suits? Who cares about suits?
In my view, a Donald-clone would make a good startup CEO. The Donald is way too distracted with his current ventures, but create someone more focused with the same personality and style, and he could be dynamite. Not that I would want to work for him, but that is a completely different matter.
December 10, 2004
Through my B-School colleague Anne Miner, I am being introduced to the work of Jim March. This passage appears in the introduction of his book, The Pursuit of Organizational Intelligence:
A sacred principle of organizational studies is the commandment: Thou shalt not confuse behavioral (or descriptive) assertions with normative (or prescriptive) statements. Yet, many writers on organizations straddle this chasm without notable strain. They describe and they advise. Their descriptions slide into their advice (or vice versa) with the ready lubrication of a common terminology, a mixed audience, and a vigorous market for relevance. If the habit of slipping from the language of observers to the language of reformers without changing the words is an academic sin, then academic hell is crowded with students of organization.
Substitute "legal" for "organizational" and "law" for "organizations" and "organization," and the statement is equally true. I don't mean this to sound too harsh. Just as March admits that many of the chapters in his book are "in the spirit of straddling the chasm," I have been overcome by this temptation from time to time.
August 13, 2004
My session at the Academy of Management Annual Meeting was constructed to explore the possible synergies of law and management scholarship. This is an interesting idea, and I think it has some potential. Legal scholars frequently call on other disciplines, including economics and finance, sociology, psychology, and history. But management scholarship is largely absent from interdisciplinary work on law. Organization theory seems particularly ripe for harvesting, though I suspect that my inclinations will naturally remain in entrepreneurship and strategy.
