All the contents
A budget plan we can't live without.
Federal budget - Above the Beltway The US needs to have a budget plan that supports both the economy and the family if it is to recover from the current economic crisis. The Washington, DC-based public policy research institute The Heritage Foundation proposes such a plan. One of the most important elements of the plan is the provision of tax relief to families since the present 24% tax rate is much too burdensome for most. A second recommendation is the reduction of the 28% tax rate imposed...
Bankcruptcy Amdura Corp's succesful restructuring of its debts illustrate how companies can use the Chapter 11 mechanism to fight their way out of bankruptcy. The performance of the old-line machinery and specialty manufacturing company began to deteriorate after a disagreement between management and a major investor group led to a proxy fight in 1989. Amdura eventually filed for Chapter 11 protection in Apr 1990. The company's reorganization strategy involved filing a joint reorganization p...
A CEO rethinks the role of board director.
IMCERA Group Chairman and CEO George D. Kennedy - Governance George D. Kennedy's unpleasant experience as a member of the board of a Fortune 500 company has helped him redefine the of role the board director when he became chairman and CEO of another firm, IMCERA Group Inc. Kennedy has learned from the mistakes of his previous company, where directors had no idea of their responsibilities and were under the thumb of the CEO, particulary in regard to the determination of executive pay. The bo...
Possible regulation of a new form of brokerage rebate - Wisdom from Wharton There is a growing call from US and British regulators for the imposition of new restrictions on money managers regarding the acceptance of a form of brokerage rebate called soft dollars. Prompting the regulators to propose new restrictions is the notion that soft dollars induce in money managers a tendency to compromise judgement on investment decisions as a result of the 'bundling' of portfolio research costs into ...
A healthy choice for transition.
Phil Fletcher appointed new CEO of food company ConAgra Inc. - Cover Story Phil Fletcher was recently appointed CEO of food giant ConAgra Inc after the retirement of Mike Harper. Replacing the much-admired Harper poses a big challenge for the new CEO. It was the former ConAgra executive who transformed the near bankrupt Omaha, NB-based company to a $20 billion industry leader. Harper was able to propel ConAgra toward the number two position in the business, next only to the $30 billion Gener...
Mutual fund manager Robert Appleton - Comment Robert Appleton owes his success as a mutual fund manager to an investment philosophy that calls for the purchase of stocks from the principal lines of companies with names characterized by acronyms. In spite of the archaic tendencies of his technique, it is clearly based on elementary investment principles. Appleton is best known for his successful 23-year management of the XYZ Fund, wherein he is credited with generating yearly average returns ...
Biotechnology pioneer Genentech Inc. - Cover Story Biotechnology pioneer Genentech Inc has demonstrated a stability and innovativeness that has made it a leader in the industry for the past 16 years. Genentech's past success is expected to continue in the future as a result of its 1990 decision to sell 60% of the company to Roche Holding's US division for $2.1 billion. The deal brings several benefits to Genentech. For one, it eases the multimillion burden of funding the marketing of its gen...
A short guide to Euromarketing.
American firms intent on making a successful entry into the European market should dsicard all American notions of marketing and apply marketing strategies attuned to a European cultural orientation. These firms should be aware of the the prevailing competitive environment in the western European market in the light of the 1992 economic union of the 12 European Community members. A successful European marketing strategy would require US firms to establish operations in Europe either through l...
A systematic approach to technology transfer.
Technology Technology transfer is more efficient when technology efforts and marketing efforts are integrated. A model of this approach to technology transfer is developed. At the early stages of this 15-process, a product need is reported, market research study is conducted, a product need is identified, technical assessment is undertaken and then a tentative business plan is developed. Efforts then turn to technical development, laboratory sample preparation, internal testing, pilot plant ...
Afterthoughts on General Motors.
Shakeup of General Motors Corp.'s management - Speaking Out The reorganization of the board of directors at General Motors Corp (GM) is hoped to pave the way for enhancing corporate governance within the organization. The GM shakeup resulted in the replacement of Robert Stempel by John G. Smale as chairman of the executive committee and the election of John F. Smith Jr as president and chief operating officer. What has left many observers perplexed, however, is the decision to allow Stempel ...
Chairman of Ciba-Geigy Corp. - N.B. Alex Krauer's analytical approach to managing the diversified Swiss pharmaceutical, agricultural and industrial chemical manufacturer Ciba-Geigy Corp has resulted in healthy 1991 profits. Krauer is responsible for the $879.1 million profits, equal to a 24.3% increase in revenues, generated in 1991. As chairman of Ciba-Geigy, Krauer is the first person in to point out problems within the organization that need to be addressed to enhance its competitive adva...
Artists books as collectibles - CEO at Leisure The advent of electronic information has put the use of books as traditional information sources to the backdrop but has resulted in the emergence of books as a collectible art form. The artists book has become a favorite collectible of individual and corporate patrons. Patronage for artists books stems from the books' ability to mix fine art and fine printing through the use of original stencils, lithographs and other forms of graphic art by no...
CEOs preferred candidates for US presidency - View from the Top A survey conducted by Chief Executive magazine among 2,722 CEOs showed a strong preference for a George Bush turnout in the 1992 presidential elections. Fifty-two percent of participating CEOs expressed a desire to see Bush as the president-elect, 32% preferred Ross Perot, while only three percent expressed support for Bill Clinton. An overwhelming 75% expect Bush to come out the winner in the November elections with only 18% pr...
World-class manufacturing - Manufacturing World-class manufacturing (WCM) techniques provide companies with the opportunity to update old or outdated production processes, raise productivity levels, and enhance competitive advantage. The implementation of WCM would result in the restructuring of R&D, purchasing, inventory control and distribution processes and strategies. Characteristic WCM techniques are just-in-time (JIT) inventory control, rapid-cycle manufacturing (RCM), product teams, v...
1996 Olympic Games - Native Know-How The selection of the city of Atlanta, GA, as the official site of the 1996 Olympic Games brings to the Southern state a wealth of economic opportunities. The sporting event is expected to generate $3.5 billion in new capital, 85,000 new jobs, and transform the city into an international commercial and business hub. William Porter Payne, the appointed chairman of the Atalntic Committee for the Olympic Games, is tasked with preparations for the Olympic eve...
Alcoholic beverage company Guinness PLC - Cover Story Guinness PLC is ranked as the most profitable manufacturer of alcoholic beverages in the world market. The UK-based brewer's pretax profits for 1990 totalled 847 million pounds sterling, with 1991 figures expected to reach 945 million pounds sterling. Guiness PLC CEO Anthony A. Greener states that the company continues to uphold its policy of building existing brands. The company is also in the process of implementing a branch profit syst...
Compensation of chief executive officers Many corporate boards are adopting creative performance-linked CEO compensation strategies that reward CEOs for sound management while safeguarding shareholder interests. These innovative compensation packages include mega-grants to CEOs and CEO-owners, exchangeable annual incentives that can be swapped for stock options, leveraged and safety net options, and fixed-price variable-reward performance options. These compensation packages have one common ...
Building a kinder, gentler Reich.
Economic development of Germany - Cover Story Germany's efforts to encourage foreign investment through the privatization of the former state-run firms in the eastern states brings mixed reactions. Some Western companies have already invested in eastern Germany. However, themajority of Western investors have chosen to wait it out for safer and more positive signs of growth in the region before taking any steps towards actual investment. Among the factors that go against Germany's planned eco...
Brand asset management - Marketing The brand is being given increasing value by more and more companies. The brand differentiates products and services and keeps its owner legally protected from product or service duplication. The value of the brand is difficult to estimate because it is not based on the price of the products or services, but is based on brand worth. Effective brand asset management will initially require an understanding of the concept of the brand and the different brand i...
Business and the green theology.
CEOs call for more reasonable environmental regulations - CE Roundtable More and more CEOS are expressing a need for a more reasonable government policy on environmental protection. CEOs are faced with the problem of reaching an acceptable compromise between heeding the environmental concerns of consumers and the demands of green theologians who call for deindustrialization in order to provide customers with environment-friendly products and services. Posing as the main problem to CEOs is th...
CEOs and nouveau riche as target clients of private banks - CEO Finance Private American banks are focusing their marketing efforts on CEOs and the nouveau riche of the 1980s. Banks intend to tap into the wealth of these affluent groups by packaging bank products and services into an all-in-one financial services package. This would mean the bundling of cash management, credit, trust and investment advisory services to attain higher investments from a limited number of clients. Executives se...
Small capitalization stocks - Includes related article - CEO Finance The term small caps refers to the stock of companies whose total capitalization does not exceed $500 million. Small cap stocks are popular among investors, partly because their affordable prices allow investors to diversify their investment at a mimimum expense. The other benefits of investing in small caps include the rapid growth of earnings per share and the tendency of favorable small-cap performance to persist for seve...
CEOs can resolve the row over CEO pay.
Chief executive officer - CE Roundtable - Panel Discussion The question of how to structure CEO compensation in a manner that links it to both performance and shareholder's interests is tackled by a panel composed of CEOs, corporate directors, investment analysts and compensation experts. The panel participants who shared their views on the issue were California Public Employees Retirement System CEO Dale M. Hanson, Alan B. Miller of Universal Health Services Inc, Richard Miller of Willis Co...
A listing of the top 100 chief executive officers to expand stock-price gains - CEO Finance The performance of CEOs can serve as a useful gauge for investors in determining a company's investment potential. A study of the stock performance of 800 major corporations within the period 1989 to 1991 for companies with only one person holding the CEO position during the period has resulted in a listing of CEOS from 100 companies with the greatest stock-price gains during the said period. Heading ...
Strategic alliances - Above the Beltway Strategic alliances could be the most effective weapons available in the corporate armory of the 1990s. The value of these partnerships lies in their ability to enhance the competitive position of two companies as a single entity. These joint ventures benefit both organizations by facilitating a transfer of technology, entry into foreign markets, and increasing R&D funding. American corporations intent on enhancing their waning competitiveness in the w...
Strategic technology alliances - CE Roundtable - Panel Discussion The practice of forming strategic technology alliances (STAs) in industry to achieve maximum competitive advantage is explored in a panel discussion sponsored by the Chief Executive magazine. The panelists represented the most common types of STAs: R&D consortia, cross border alliances among competitors, and partnerships between small innovative companies and large technology firms. Majority of the discussants agreed that the ...
U.S. Department of Commerce Secretary Barbara H. Franklin - Cover Story Barbara H. Franklin considers the promotion of free trade, the increase of exports, and the encouragement of entrepreneurship as her main priorities as US Department of Commerce Secretary. Franklin sees tremendous commercial opportunity on a global scale stemming from the Uruguay Round of talks on the General Agreement on Tariffs and Trade as well as the North American Free Trade Agreement. The Department of Commerce is ...
Corporate alignment in an era of shareholder power.
Ownership challenges by companies' shareholders - Wisdom from Wharton Shareholders are posing greater challenges to management as induced by various forms of corporate turbulence. The ownership challenges represents a shift from the acquiescence displayed by shareholders during the 1900s till the 1970s to the managerial revolution they have led in the 1980s and 1990s. These institutional investors have created a new logic of assessment that calls on companies to restructure operations so as ...
Dead horses on the company lawn.
Fast decision making by avoiding a tendency to overrely on a participative or self-empowered approach to management - Speaking Out American companies must guard against the tendency to overrely on strategic management techniques based on participative and self-empowered orientations to facilitate organizational change. It goes without saying that these techniques still form a vital aspect of organizational decision-making. However, the swiftness by which decisions regarding the different pha...
Speaking Out The widespread belief that CEOs are grossly overpaid is erroneous. In reality, most chief executives receive salaries commensurate to their performance while some are even underpaid. The Chief Executive magazine's sixth annual compensation survey of 229 firms showed that 59% of these organizations offer pay in proportion to performance. Only 17% reported paying high for low CEO performance. In view of the increasing charges of executive over-compensation, companies should be abl...
Delighting customers by eliminating demand instability Companies that are intent on gaining a competitive advantage need to go beyond organizational objectives that aim to satisfy customers by seeking to delight customers. The switch in company orientation from customer satisfaction to customer delight can involve either a flexible factory structure, which facilitates on-time product distribution and delivery, or the elimination of demand instability. The flexible factory approach calls for ...
Did the rich get richer under Reagan?
Arguments against the Economic Recovery Tax Act of 1981 debunked - Excerpted from Lawrence B. Lindsey's 'The Growth Experiment: How the New Tax Policy is Transforming the U.S. Economy' The popular perception that the 'rich got richer and the poor got poorer' under the administration of President Ronald Reagan is erroneous. Contrary to common belief, Reagan's Economic Recovery Tax Act (ERTA) of 1981 did not cause the wealthy to gain wealth. If the rich did get richer, it was because of the ex...
Telecommunications in the European Community The implementation of a telecommunications network for the pan-European community rests on the balancing of several factors associated with the union of the 12 European Community (EC) economies into a single market in 1992. Among the factors weighing heavily in the development of a telecommunication program for Europe is the 1987 EC Green Paper which calls for the reorganization of existing networks. The paper proposes an open network designed to ...
Island hideaways of CEOs - CEO at Leisure The purchase of a private island as a vacation hideaway has become a trend among CEOs and board chairmen. For as low as $65,000 executives can purchase an island off Scotland's coast while for a hefty $20 million dollars CEOs can purchase a Caribbean paradise called Guana Island. Preferences are distinct for CEOs based on nationality. Japanese show a preference for Polynesia, Hawaii, or New Zealand; the French tend to favor islands in the Indian Ocea...
Includes methodology and terms - CEO Compensation Chief Executive magazine's sixth annual compensation survey refutes seven popular myths concerning CEO compensation. The survey demonstrates that CEOs are receiving just compensation in comparison to other employees, that a strong link exists between CEO pay and company performance, and that the labor market for CEOs is thriving and exposed to the same level of risk as other labor markets. The seven myths that are given focus concern notions ...
Employees' family concerns as company concerns Companies that are intent on maintaining a high level of productivity and keeping employee morale strong should provide programs that help address employees' family concerns. Maintaining a precarious balance between work and family can cause a tremendous amount of stress on employees, and consequently affect their work efficiency. Family-friendly work programs can help alleviate this stress. Some of these programs include compressed workweeks, w...
Services for business executives afraid of air travel - Amenities Business travelers who fear flying can seek the assistance of American Airlines and USAir. These two airlines offer comprehensive program packages designed to help people who are afraid of air travel, estimated to number over 25 million in the US. Both programs are conducted by trained counselors who employ various behavior modification, relaxation and anxiety-reduction techniques. American Airlines's AAirBorn program consists...
Forging a market-based environmental policy.
Above the Beltway Businessmen are calling on the government to effect a more sound environmental policy that is rooted in market-based principles. Legislators are encouraged to take into consideration the following as key factors in the formulation of environmental policy. These include the fact that government-controlled economies comprise the majority of the heaviest contributors of pollution, the fact that environmental conservation is greatly assisted by private property ownership, and t...
Former mayor Ed Koch: fight makes right.
New York City mayor Edward I. Koch - Interview The former mayor of New York Edward I. Koch feels that New York's economic recovery from the effects of the recession will rely mainly on a state policy that will be a reversal of the economic and labor policy of present mayor David N. Dinkins. Koch believes that this policy of economic recovery will call for a more receptive and positive government attitude towards business, the curbing of social services spending, the temporary cessation of ne...
Empowerment of employees - CE Roundtable The CEOs of the 1990s are realizing the urgency for increasing the team concept in their organizational frameworks. The full utilization of the work force rests on a management approach that is team-oriented. This approach takes on different names, such as participatory management and worker empowerment, all of which are geared toward the common goal of increasing employee motivation, reducing costs, and upgrading product or service quality. Participa...
Charitable remainder trusts - CEO Finance Charitable remainder trusts (CRTs) serve as an extremely useful tax strategy for CEOs who want to minimize their tax obligations. Aside from providing tax deductions, CRTs ensure that CEOs receive a retirement income, eliminate capital gains liabilities, and serve as a means for CEOs to make contributions to their favorite charity. A key advantage offered by CRTs is flexibility in terms of the option to sell CRT fund assets that have appreciated whil...
Corporate donations - Above the Beltway US corporations are slowly learning the more beneficial and serious aspects of corporate philanthropy. Published reports show that US companies have always had the tendency to misdirect donations as goals were confined to enhancing public relations. However, more and more CEOs are realizing the potential and value of the funds that go to nonprofit organizations as donations. A few companies are setting an example by treating donations as targeted inves...
Changing nature of business management - Speaking Out The nature of business management is changing radically, leaving organizations with old business-management ways vulnerable to losses. Such was the case for IBM and GM, both of which lost their extreme stability and security after facing problems caused by the change in business-management. The new order in business can be attributed to five key factors, namely global operations, restructuring, fading organizational hierarchy, faster oper...
Going to the mat with the I.R.S.
Internal Revenue Service as the most expensive government program - Above the Beltway American taxpayers are growing increasingly discontent with government spending policy. There is a general consensus that Washington is wasting public funds and carrying on with an air of arrogance. Grassroots America is particularly displeased with the huge costs of the IRS. The tax system has accumulated more than $600 billion in annual system costs, equivalent to more than two times total defense costs a...
Economic dynamics Corporations took on a streamlined approach to operations in the 1980s. The decade saw the rise of global competition, the departure from corporate headquarters based in traditional urban areas, the application of state-of-the-art telecommunications and information technology, and the forming of strategic alliances to facilitate shared R&D funding, diversified product lines, and the enhancement of overall organizational effectiveness. Teleconferencing, cellular phones and o...
Strategic planning of corporate hierarchy - The soft machine A humorous treatment of the strategic planning of organizational hierarchy is presented. A company called Intergroup Holdings Unlimited is used to illustrate how a highly structured corporate framework results from management's call for all executives to assume direct responsibility for tasks and developments, pertaining to all aspects of the business, in their assigned regions. This means the designation of responsibility in the a...
Energy risk management - Cover Story Risk managers are using derivatives as a new means of reducing energy costs. The growing importance of energy risk management comes as a result of the increasing instability of oil production, distribution and pricing. Financial instruments provide risk managers with options for cost containment, strategic market positioning, revenue protection, cash flow management, and corporate planning. The selection of a derivatives instrument, whether it be a swap, ...
Executives' use of computers Many CEOs remain skeptical about the actual usefulness of information technology to their own functions and responsibilities within organizations. This is evident in the substantial number of CEOs who learn about the wide range of functionality of computers and other technology systems under unexpected circumstances. High technology information systems provide executives with direct access to data, as well as providing feedback structures that facilitate swift in...
Management reviews as sources of corporate financial information - The Soft Machine A scenario for the presentation of financial data in a corporate board meeting is used to illustrate the need for documents such as management reviews as additional sources of up-to-date financial figures, financial trends and forecasts, and information on competitors. The limitations of company financial reports as sources of financial information vital to corporate analysis and decision making serve to demo...
How to be clean and cost-effective.
Includes related article - Environmental Regulation Businesses are in agreement with environmentalists on the need for greater action in order to protect the environment, but assert that there is a pressing need for a reassessment of the potential benefits of such actions on the basis of cost efficiency. A review of current environmental efforts shows diminishing returns due to cost-inefficient regulation. The ongoing policy debate on the proposed adoption of 'California Standards' to compli...
Human integrated manufacturing.
CE Roundtable There is a growing awareness among the senior executives of US manufacturing companies for the need to embrace integrated manufacturing techniques that place special emphasis on the power of human resources. The implementation of human integrated manufacturing processes will require the empowerment of workers; greater focus on training; and the concerted effort of manufacturers, suppliers, customers, stockholders, investors and unions to achieve integration. The move towards hu...
Journalists criticized - Comment A journalist humorously points out the problems with the members of his profession. Jouralists are criticized for being too unconcerned about their appearances. Most of them dress badly and often look unkempt. More irritating than their looks, however, is the fondness of journalists for overestimating the knowledge of the public about issues they are covering. It often escapes journalists that the public is much too busy trying to earn a living to pay much at...
View from the Top A survey conducted by the Chief Executive magazine revealed that a substantial number of the 475 CEOs polled support the integration of technology and human resources. It was found that companies are allocating more financial resources to people-oriented programs, including team development, employee/peer recognition and process improvement teams. Most of the CEOs who participated in the survey rated their efforts to integrate people with processes favorably, with about 33%...
Is there a doctor in the White House?
Criticism of William Safire's suggestion that a nonpartisan Candidate's Medical Review Board be established to evaluate the health of presidential candidates - Comment New York Times columnist William Safire's suggestion of establishing a nonpartisan Candidate's Medical Review Board to assess the suitability to hold office of presidential candidates based on health aspects is criticized. Safire's suggestion is regarded as impractical and pointless due to a number of reasons. These include th...
Emergence of the men's movement - Comment The First International Men's Conference gave members of the emerging men's movement an opportunity to engage in activities in keeping with the movement's weepy, self-emasculating philosophy. The gathering provided an excuse for grown men to do such seemingly preposterous things as paint their faces, chant incantations to some strange god, bang on drums and weep over the way they were raised by their fathers. It would be disastrous should the men's m...
President and CEO of Mattel Inc. - N.B. Newly appointed Pres and CEO Jill Elikann Barad is behind the recent successes of the international toymaker Mattel Inc. Barad has been steadily climbing her way to the top since 1982 when she was appointed marketing director for Mattel's Barbie Doll. She was made vice president in 1984, president of the girls and activity toys in 1989, and co-president of Mattel-USA in 1990. As the corporation's head, Barad was able to push the sale of Barbie dolls to...
Effect on the local business sector of 1992 burning and looting in Los Angeles, California - Includes related article - Native Know-How The burning and looting that characterized the aftermath of the Rodney King verdict has made what was a traditionally divided and passive local business and industrial sector take a more active part in the economic redevelopment of Los Angeles, CA. Prior to the eruption of rioting, Los Angeles was already faced with several problems, chief among which was th...
'Madmen in authority.' (impact of information technology) (The Soft Machine)
Business expert Norman Conquest, economist John Maynard Keynes and Karl Marx are featured in a hypothetical panel discussion that tackles the impact of information technology on corporate organizational structures. The discussion, though presented in a humorous manner, emphasizes the growing inability of many CEOs to keep in touch with the potential of computers to bring about a significant change in the operation of large companies.
Marketing U.S. cosmetics in the CIS.
Commonwealth of Independent States - Russia & Ukraine Efforts to market foreign products in the newly established Commonwealth of Independent States (CIS) are being impeded by the lack of effective distribution systems, inadequate commercial technology, inferior management skills, and a currency that is practically without value. Ukraine-based Effect, together with its Swedish and American partners, seems to be succeeding in this difficult venture. The perfume and cosmetics manufacturer is c...
Concept of a corporate virtual reality clinic - The Soft Machine The concept of a corporate virtual reality clinic (CVRC) extends the capacity for creative thinking and strategic planning of corporate directors and executives beyond the limits of the present realm. The CVRC concept is used tohumorously illustrate the shape of corporate planning in the future. The hypothetical CVRC is linked to interactive computers equipped with three-dimensional screens that allow all forms of expression of...
Mr. Lindsey goes to Washington.
Former Harvard University economics professor Lawrence Lindsey appointed as governor at the Federal Reserve - Interview Former Harvard University economics professor Lawrence B. Lindsey was appointed governor of the Federal Reserve's Richmond, VA, district in Nov 1991. Lindsey explains that the current recession in the US resulted from the simultaneous occurence of such economic bottlenecks as the changes in international banking regulations and the Federal Reserve's move to slow down the mo...
Digital compression technology Digital compression technology promises to revolutionize the cable television industry by allowing cable operators to transmit several channels in the same space it now takes to hold just a single channel. The development of digital compression technology is viewed by cable operators as a crucial technological advance that should result in an explosive growth in programming that could permit a fascinating array of potentially profitable new services. Two compan...
Business schools urged to upgrade curricula The inability of US business schools to equip their graduates with the skills they need to perform well in the business world is drawing widespread criticism from Corporate America. As a result, business schools are beginning to rethink their curricula. At the New York University's Stern School of Business, for example, superior teaching performance will be adopted as one of the determinants of rewards and penalties for faculty. Northwestern Univer...
New York City - fight or flight?
Economic revitalization - CE Roundtable New York City's climb out of the recession will call for the revision of existing economic and social policies of the city. Chief among the policies which have to be restructured is Mayor David N. Dinkins' social welfare and employment policy which, in an attempt to appeal to and gain the support of labor unions and the minorities, has created a welfare state mentality among its residents. The financial difficulties being experienced by New York City a...
CEO of W.R. Grace and Co. - N.B. J. Peter Grace divides his time between being CEO of W.R. Grace and Co and co-chairman of the non-profit group Citizens Against Government Waste (CAGW). The head of the successful specialty chemicals company began his campaign against wasteful government spending when he was appointed by President Reagan to chair the President's Private Sector Survey on Cost Control in 1982. Grace was able to recommend 2,478 dollar-saving measures that were expected to reduce...
Fantasy Corporate Raider Weekends concept - Comment Retired futures trader John Abercombie has introduced a new twist to the highly successful 'fantasy' weekends concept. Abercombie, capitalizing on nostalgia for the heyday of corporate takeovers in the 1980s, has begun organizing 'Fantasy Corporate Raider Weekends' for nostalgic investment bankers wishing to relive the glory days of the 1980s when junk bonds were respectable and leveraged buyouts were the toast of Wall Street.
Corporate Sports Battle - CEO at Leisure The annual Corporate Sports Battle is a competition that allows teams from various companies to compete in a series of swimming and track events. The event is first held at a local level, after which representative companies from each local area go on to compete at a national finals competition. The event attracts many companies, most of whom are attracted to the idea of participating in a corporate sports event that also helps to raise funds for loca...
Commonwealth of Independent States Investment opportunities abound in the Commonwealth of Independent States (CIS) as the newly democratized republics embarked on large-scale privatization programs. Enterprises in several industrial sectors, including telecommunications, mining and natural resources, financial services and cargo air transportation, are up for grabs even at prices lower than their true value in many instances. Despite these opportunities, interest among American investors rem...
R&D as investment in learning.
Wisdom from Wharton The learning abilities of many organizations cannot keep up with the rapid evolution of technology. This widening gap necessitates a closer examination of industrial research and development. Technical knowledge can be obtained from both external and internal sources. External learning can come to organizations that have access to the most sophisticated 'information networks' or those that form strategic alliances. Internal learning involves the diffusion of technical kno...
Relaunching a conservative ship of state.
American government based on conservative policies - Above the Beltway The US needs to adopt a more conservative state policy if it expects to revitalize its increasingly ailing economy in the 1990s. The US government, with the support of the private sector, is being called upon to reintroduce conservative economic policies that advocate tax cuts for middle-income Americans, a cap on domestic spending, a reaffirment of deregulation policies, the enforcement of free trade policies, and the im...
Panel discussian with economist Leonid Abalkin; includes related article - Forum - Panel Discussion The influential Russian economist Leonard Abalkin, in a forum with several American CEOs, discusses the implications of the abortive coup of Aug 1991 and elaborates on the goals of Russia's economic reform program. Abalkin notes that the coup's failure demonstrates the tremendous amount of public support for the economic and political changes that have taken place in Russia since 1985. He stre...
Dealing with the problem of rising health-care costs - Above the Beltway The problem of providing Americans with cost-efficient health care plans may not be solved by patterning US health care after the Canadian model or by implementing the proposed 'pay or play' medical program. Canada's medical care system is not likely to work in the US because offering free health care on a limited budget would only lower the quality and quantity of available health services. The 'play or pay' program, w...
Environmental awareness - Comment Individuals who have come to grips with the importance of preserving the ecological balance of the environment are finding it more and more difficult to reconcile environmental convictions with the continued purchase and use of products that serve as the very sources of environmental destruction. Burgers are packed in non-biodegradable styrofoam containers while disposable diapers, and a number of glass bottles are non-recyclable and serve to add to the amou...
Seven deadly sins of energy waste.
Common mistakes in energy consumption Companies can effectively reduce energy expenses by correcting certain common mistakes in energy consumption. Basic to the management of these mistakes is the application of an energy conservation philosophy which states, 'Know thy utility, know thyself.' Seven often-overlooked practices that lead to energy waste are discussed. These include the lack of contact people who can serve as the companies' link to their utilities, the lack of communication betw...
Use of connectivity-based databases - Soft Machine Replicated data bases are proving to be more functional to continually evolving and expanding corporate needs than connectivity-based systems. Most data bases, however, are structured using the connectivity approach, particularly in the reservation systems of airlines. The usefulness of the connectivity-based system to airline reservations and subsequent ponderings over the setting up of a replicated system are illustrated in a board meeting...
Should you list on a foreign exchange?
Foreign equity listings provide businesses with greater access to capital as well as an enhanced visibility in the world market. Determining the advantages to companies of listing on a foreign market should be based on the companies' long-range objectives and target capital. Among the things to be considered in making the decision to list are the listing's ability to enhance business profiles, provide increased access to capital, diversify shareholder base to enhance share liquidity, and assi...
Inaccurate government statistics - Above the Beltway The federal government's inability to produce reliable economic statistics is a glaring example of the self-perpetuating inefficiency of governmental bureaucracy. That politicians in Congress use this highly questionable data to justify their misguided economic policies is a troubling indication of how twisted policy-making has become in Washington DC. Equally lamentable is the fact that leading business executives are silently acceding to...
Royal Bank of Canada's plan to expand operations in the US - Cover Story Royal Bank of Canada (RBC) CEO Allan Taylor is enthusiastic about the North American Free Trade Agreement (NAFTA). He believes that free trade among Canada, the US and Mexico will enable the three countries to compete better against the EC, the Pacific Rim and other regional markets. NAFTA would also give Canadian banks the same opportunities as American banks to compete in the US market. RBC has long been targeting thi...
Strategic alliances: overcoming barriers to success.
Includes related article - Technology A growing number of US companies are forming strategic technology alliances (STAs) with other organizations to explore new technologies, lessen development spending and enhance their competitiveness. Successful alliances can increase profitability, decrease costs, form synergies and stregthen corporate performance. The types of STAs vary from simple licensing and cross-marketing agreements to very complicated joint ventures. Such alliances need to be man...
Business opportunities in China - Speaking Out American companies need to reexamine their prevailing negative view of the economic potential of the Chinese economy. Since the early 1980s, the once backward Chinese economy has been undergoing a fundamental transformation as investors from Hong Kong, Taiwan, Japan and South Korea have flocked to such progressive provinces as Guangdong and Fujian to set up manufacturing and marketing operations. This wave of investment has helped to accelerate ...
Dan Rostenkowski, chairman of the House Ways and Means Committee - Cover Story House Ways and Means Committee Chmn Dan Rostenkowski monitors US tax policy and is considered one of the most powerful legislators in Congress. The many revenue measures Rostenkowski has introduced include the 1983 Social Security rescue measure and the setting of a limit to President Reagan's tax reductions in 1984. He also supported the tax reform measure originally proposed by Senators Bill Bradley and Richard ...
CE Roundtable - Panel Discussion Business leaders and government officials agree that the tax system is partially responsible for the economy's inability to recover quickly from the current recession. In the Jun 1992 roundable discussion sponsored by Chief Executive Magazine, business and political leaders expressed their belief that the growth and competitiveness of US companies are being inhibited by the degree and method of taxation. Baekert CEO James Q. Riordan complained of the heavy bu...
The all-weather bond portfolio.
CEO Finance An investment portfolio consisting of a mixture of municipal (munis), high-yielding corporate and government bonds should perform well under any condition. If the economy recovers quickly, losses in the municipal and government bond portfolio will be offset by gains in the high-yield corporate bonds. On the other hand, if the economy continues to be sluggish, erosion in the high yield portfolio can be compensated by the strong performance of the municipal and government bonds. On...
Use of information technology - Technology There is a widening gap between corporate investment in information technology and the ability of business leaders to use this technology to achieve some competitive advantage. It appears that as technology makes more advancements, the further the business community's ability to harness its power is left behind. This paradox stems from three factors associated with weak corporate leadership: the absence of well-organized work flows, the lack of unde...
Merck and Company Inc. CEO P. Roy Vagelos - Chief Executive of the Year - Chief Executive of the Year - Cover Story Roy Vagelos is credited with Merck and Company Inc's remarkable performance and consistent growth in the 1980s and into the 1990s. Merck's five percent share of the international prescription drug market makes it the dominating force in that market. Using a collegial approach to management, Vagelos has developed a highly competent team of key executives who have assisted him in...
Distribution of products and services in the 1990s - Wisdom from Wharton The 1990s is expected to be marked by a greater emphasis on the distribution channels and processes of both small businesses and large corporations. Companies will be focusing on their ability to increase, maintain, and safeguard access to customer bases. Among the challenges to be faced by both public and private companies in the area of distribution are the increasing product awareness of consumers, a growing consumer...
Innovation in business Large companies tend to develop bureaucratic layers of management that often stunt the spirit of innovation needed to remain competitive in rapidly changing markets. As a result, many mature, established companies suffer a steady decline of market share as smaller, more innovative rivals reap the rewards of quickly reacting to new market trends. A key lesson that can be learnt from the decline of such once mighty US industries as consumer electronics and steel is that ...
Growth of the videotape industry - Comment The videotape industry will experience accelerated growth due to increased use of video cameras. Stock market analysts claim that by the year 2000, annual sales of blank video tapes in the US will reach $650 billion. Two major factors responsible for this projected sales growth are the 'ordinary' use of video cameras by consumers and video-tape documentation of most business transactions. Subjects of 'ordinary' video recordings will include the acti...
Organizational management during slow growth times - Speaking Out Tough economic times are placing many organizations in financially dire straits and as such are forcing CEOs to exert a different style of management that is attuned to the current financial environment. CEOs who effectively led their organizations during economically prosperous times should be able to exert the same effective leadership during lean times. A checklist for 'hard times' CEOs would include positive thinking, the ...
Finding attractive bank stocks - CEO Finance Investors can differentiate bank stock with true and sustainable value by examining the cost structures, earnings profiles, and the interrelationship between expertise and capital of the banks under scrutiny. The value of a bank rests on its ability to facilitate a restructuring of operations to attain a favorable financial position. Although valuation of bank stock will prove to be difficult owing to the undiscernible nature of the banking indust...
The impact of managerial layoffs.
Wisdom from Wharton Managers are losing their jobs due to plant closings and the implementation of new technology, cost-reduction strategies and/or employee empowerment schemes in many companies. While scrapping non-essential management positions may help employers reduce their expenses, the laying off of managers may also harm their organizations. The dangers that go with downsizing include the risk of too much work force reduction which may weaken the company's performance. Another disadva...
Comment Mavericks emerging in different sectors of American society and aremaking their presence felt at various levels of several professional fields. This seemingly omnipresent group of unconventional, attention-seeking, and highly self-absorbed people are sometimes accused of creating most of the problems of the US. The presence of mavericks is most strongly felt in the political arena. Mavericks also exert a strong influence in the business arena, and in the arts and sciences sectors.
The new financial world order.
CE Roundtable - Panel Discussion The international financial community is witnessing the emergence of new trends. One of the most significant of these trends is the greater mobility of capital across national boundaries. It is estimated that capital flows exceed world trade by about 30 to 50 times. Another noticeable trend is the impact of technology on the financial industry. There are markets that can trade around the clock because of their online computer systems. Nine CEOs reprensenting ...
Privatization in the eastern states of Germany - CE Roundtable The efforts of the German government towards the privatization of firms in its eastern states has elicited a mixed reaction from potential investors. The financial prospects of the privatization scheme in Germany are discussed by German government and industry officials together with American CEOs at a forum sponsored by the Dresdner Bank AG and the Chief Executive magazine. A number of investors have conveyed optimism in the con...
Evolution of business - View from the Top A survey of 390 CEOs from the fabricated products, financial services, consulting and agribusiness industries indicated that business organizations in the 21st century will be characterized by a greater focus on quality and the customer, a flatter management structure and a keener sense of vision. Of the 12 criteria identified as critical to the restructuring of corporations to suit the changing nature of business, customer orientation was cited by 7...
Dispute over factors that constitute performance measurement - Wisdom from Wharton A dispute regarding what constitutes performance measurement continues among business executives. A number of CEOs assert that shareholder value is the chief determinant of performance measures. Other executives contest this notion saying that stock market performance, although producing favorable returns for shareholders, does not necessarily equate to positive or favorable performance. Characteristic to the ...
The small company advisory board.
Speaking Out Small businesses can avail of the counsel and expert advice of outside directors by establishing advisory boards. Struggling, privately owned small companies, whose board of directors consist primarily of the owner, the spouse and their lawyer, are the organizations which most need the expert advice required to enhance competitiveness. The directors who can form a small company advisory board may be a blend of retired business executives and business school professors. The funct...
The stake in the economy's heart.
Government regulation of business - Above the Beltway Excessive government regulation of industry is acting as the stake piercing the heart of the American economy. By the end of the 1991, the laws and regulations issued by the federal government have already amounted to 67,716 pages. As of the middle of 1992, the government has nearly 125,000 people working on the development and implementation of more federal regulations. Such heavy regulation of business entails both direct and indirect c...
Former CEO Mike Harper - Interview ConAgra Inc's former CEO Mike Harper is a firm believer in the power of information technology (IT). During his term as the food conglomerate's head, Harper introduced IT, including a company-wide executive information system (EIS), that gave ConAgra's executives access to important information on personnel, performance, plants, the competition and the latest trends in finance. Terminals connected to the firm's global EIS system were installed in many offic...
The 10 best annual reports of 1991 ...and the 10 worst.
Includes related article - Best Annual Reports The Chief Executive magazine's ranking of the 10 best annual reports for 1991 selected from 662 companies in the US and abroad is presented. The corporate reports were evaluated based on 15 criteria, including interest quotient, readability, information, CEO photograph, responsibility, biographies, focus, financial disclosure, honesty and articulation. The annual report of property-liability insurance firm The St Paul Companies emerged as the be...
Pareto approach to the reduction of corporate health care costs Pareto distribution analysis of corporate health care claims shows that only about 10% of claimants spend 66 to 75 cents of every dollar of health care costs. This 10% group of high utilizers accounts for the inflation of medical costs, and consequently leaves the remaining 90% with approximately a quarter of every dollar apportioned for medical care. This means that the 10% group avails of health care benefits that are two time...
Evaluation of corporate performance - The Soft Machine The evaluation of corporate performance should focus on seven issues: structure, capital, people, projects, communication, information and controls. Structure should be based on such principles as compatibility of goals and balance of size rather than on the personalities of senior officers. Capital should create real value, people should be developed, while projects should exist to effect change. Advancements in communications should be...
President of Cable News Network - N.B. Tom Johnson has steered Cable News Network (CNN) towards healthy profits and a dominant share of the cable television market. As the president of CNN, Johnson also manages CNN International and CNN Headline News using a management style wherein substantial authority is given to senior editors to facilitate quick response times and eliminate bureaucratic processes. Johnson's management style takes after the approach used by Ted Turner, the owner of CNN'...
Wisdom from Wharton Assertions in popular and business press that CEO compensation is more strongly related to company size rather than to firm performance are erroneous because they are based on skewed data and flawed research methods. Most studies that conclude that CEOs are paid merely to enlarge their organizations use the method of cross-sectional analysis. This approach is bound to provide distorted results since it is based on the wrong assumption that the pay-performance relationship...
How CEOs can enhance the value of their organizations - Speaking Out CEOs should consider it their primary mission to enhance the value of their organizations. Value, in this instance, comprises of return on investment, shareholder perception and sustained positive performance, and is manifested in the price of the company's stock. It develops from the measures that the CEO and other members of the management team implement to strengthen the business base. CEOs who want to boost their compan...
Part two Four leading figures drawn from business, law and academia share their views on the important issues faced by the US and specify ways by which the US could address these problems in the future. Intel CEO Andrew S. Grove cites the need for the reindustrialization of the economy, while US Court of Appeals Judge Edith H. Jones cites the containment of crime, the improvement of the educational system and the strengthening of the social security net. California Institute of Technology co...
Executive information systems - Technology An increasing number of CEOs are realizing the benefits of enterprise intelligence systems (EIS II). Described as the new generation of executive information systems (EIS), EIS II implementations are helping CEOs accomplish informed decision-making and integrate their organizations, personnel, and functions. Thus, more and more CEOs are starting to view EIS II as a strategic success factor and have set out to implement such systems within their orga...
Who should be chairman of the board - Speaking Out Determining who should be the chairman of the board of directors depends on the company's circumstances. Ideally, CEOs should also act as board chairmen because their functions sometimes overlap. However, there are instances when the CEO is not the suitable candidate for chairmanship, such as when the CEO is still new to the job, when special reasons demand that the chairmanship be given to a person other than the CEO, when dominant sharehol...
Why I'm cautious about customer service.
Satisfying customer demands while maintaining the company's profitability - Operations Offering superior customer service only makes business sense if it can be achieved without sacrificing the firm's profitability. Although pursuing quality customer service can enhance profits, it can also drain a company's resources because of the costs it entails. For example, it cost American Airlines more than $250,000 to come up with tool for measuring customer service quality. Small companies, such as...
1992 US presidential election - Comment Businessman Ross Perot's decision to drop out of the 1992 US presidential race should ease the minds of those Americans who believe that businessmen should concentrate on business and politicians should stick to politics. The cause for concern is not really Perot's ability or inability to lead the nation. What is more alarming is the thought that his successful transition to politics would inspire politicians to cross over into the business sector. Aft...
Apple Computer Inc.'s alliance with IBM Corp. - Cover Story Apple Computer Inc has entered into a joint venture with arch-rival IBM to create object-oriented software that would enable networks operating on different formats to interact. The venture should also allow the two computer companies to achieve other key objectives such as allowing their PCs to use common software and jointly developing multimedia systems to transmit audio and video programs. The alliance with IBM is Apple Computer...
Includes related articles - Best Annual Reports The Chief Executive magazine has identified the 10 worst annual corporate reports of 1991. Topping this list for the third consecutive year is the Time Warner report. In addition to poor graphics, the report tried to draw attention away from the $99 million net loss it sustained for the year by heavily emphasizing that the company is 'in the business of ideas.' Second to Time Warner is Amerada Hess whose report employed a number of diversionary...
1992 Chief Executive of the Year.
Merck and Company Inc.'s CEO P. Roy Vagelos - Includes photos from the awards reception - Awards Dinner Merck and Company CEO P. Roy Vagelos is the recipient of the 1992 Executive of the Year award given by Chief Executive magazine. About 240 CEOs, along with their spouses and guests, honored Vagelos' achievements in a gala celebration at the Metropolitan Club in New York in July. As the seventh recipient of the award, Vagelos bested nine other finalist CEOs for his spearheading Merck and Co...
Defining a corporate strategy - The Soft Machine The development of a corporate strategy is made difficult by the unpredictability of the future and how forces in this vast realm of the unknown may affect the achievement of established objectives and the overall corporate mission. The corporate mission statement will inevitably be pitted against undetermined and unforseeable factors that lie in the organization's future, hence encouraging indecision among key people in the organization taske...
