Tuesday, March 14, 2006

Gather 'Round, Children...

...and let me tell you a little story:

Imagine that you want to become the president of the largest and most powerful corporation in the world. You are not really qualified to head this corporation, since your only education consists of a questionable Masters Degree in Business, at a college where you were able to obtain admission only through your family’s influence, and where you were little more than a mediocre student at best, and at worst a drunken frat boy who partied his way through school and only graduated thanks to the same family influence. You have no real practical experience in business—and every company you started after you graduated you ran into the ground. Your only executive experience is a short stint as the director of a small subsidiary of the larger corporation, a position you were again able to obtain through family money and influence. And your record while in that position was spotty at best. You are not qualified to become the president of anything, let alone the most powerful corporation in the world

However, you are a strong candidate for the position, mostly because you are so much different from the previous president, who was a smart and shrewd businessman but who was sadly also a compulsive womanizer who was plagued by scandals and constantly harassed by the hostile Board of Directors. You also have a massive supply of funds to draw on, since the wealthiest stockholders always support your group. Also, your only opponent for the position was executive vice president under the former president and is forever stained by that association. He faces additional opposition from a small fringe group among the stockholders that has endorsed its own candidate for president. Of course, this candidate has no chance of winning, but he will take much needed stockholder votes away from your chief opponent.

In spite of all these advantages, you still face a tough battle. And even though more stockholders vote for your chief opponent than you, through a bizarre and outdated rule involving regions of the election, you still win, and an arbitration panel strongly biased in your favor upholds your slim victory. Of course, it also helped that the person in charge of counting the votes in one of the disputed regions also ran your campaign in that region...

At first, though, none of this matters. You have a folksy, down-home kind of charm that initially appeals to both the stockholders and the board of directors. You have a strong stockholder approval rating. You appoint several new members to your executive committee, many of whom were on the executive committee under your father, a previous company president. You even appoint an executive vice president who is generally regarded as a highly competent businessman who will help make up for your shortcomings, even though he is in questionable health.

Eventually, however, the stockholders begin to realize your many flaws. They recognize your lack of proper qualifications as a leader, your lack of experience in business, and even your general lack of ability to command the English language!

They also begin to notice the many blunders you make in the operation of your business, as you return to many of the fiscal policies that caused your company to experience huge losses and massive debt in the past.

They also begin to notice your inability to maintain good relations with other companies, who were once considered strong corporate allies, but who now are beginning to shun you. It has even gotten to the point where two of your largest competitors, who make products that technologically inferior but have massive reserves of manpower and natural resources to draw on, have begun to openly discuss the prospect of combining their efforts to hold your corporation in check.

The stockholders also notice that the board of directors, which was once firmly behind you, has begun to draw away from your ill-advised policies. It has even gotten to the point where one of the members of the board who used to support you has become so disgusted with your activities that he has openly declared his opposition to you, and will now be voting against you most of the time.

As all this begins to add up and more and more stockholders begin to disapprove of you, you decide to use the corporation's large cash reserves to pay a dividend to all the stockholders in a last-ditch effort to BUY their support. Soon, however, you discover that due to a significant error in the accounting department, you don't have NEARLY as much cash available as you thought.

"No problem" you say, "We'll just borrow a huge sum of money in order to keep paying the dividends. Never mind that this will create even more debt for the company--We promised the stockholders those dividends and we're going to pay them, even if we end up paying massive amounts of interest on the money we borrow to do it. Who cares if this goes against all laws of basic economics?"

But hey, it still doesn’t work! Your stockholder approval rating is still lower than ever, and your company is hemorrhaging money.

But then, disaster strikes! In one single day, a major foreign competitor initiates a massive attack against your company, wiping out many of your assets and destroying the lives of thousands of your stockholders. Your support suddenly soars, as panicked stockholders look to any anchor they can find to help them weather this particular storm.

This attack assumes almost mythical proportions as you start to use it as justification for everything you do. You engage in open warfare with your competitors. You pass new corporate rules that allow you to suspend the rights of stockholders at will. Anyone who speaks out against your policies is branded as a traitor to the company. The attack takes on a life of its own and you bring it up whenever anyone questions your policies. In fact, you seem to work it into your response anytime anyone asks you anything!

And, worse yet, you are able to use the attack as a justification for a massive takeover of an insignificant enemy, who had nothing to do with the attack on your company. And although the initial takeover is easy, you find that running this company in the aftermath has become a logistical nightmare, demanding that you continue to pour money and resources into it with little or no return on your investments.

A couple of years later, due to these ill-advised fiscal policies and P.R. blunders, your corporation has massive debts, it has lost its status as a major player in the business world, and your international competitors hate your guts and are working to undermine your operations any way they can.

But you still soldier on, continuing to give generous benefits to the wealthy stockholders while ignoring those who actually need them. Your company is despoiling the environment as all regulations instituted by the previous president are thrown out. Employees are being laid off by the thousands, but the wealthy stockholders don’t care as long as you continue to line their pockets. In fact, nobody seems to care. The damage you are doing to the future of your company may be irreversible, and yet STILL nobody seems to care. You instigated an unjustified and massive takeover of one of your competitors who had NOTHING to do with the big attack, and STILL people don’t care!

Now, you are due to face re-election, but the opposition candidates are bitterly divided among themselves, so you are probably going to be re-elected. The company’s financial situation is grim, but somehow you have managed to keep any stockholders from realizing this. You continue to distract the stockholders’ attention with continuous corporate warfare with rival international corporations, most of which are no real competition for you. You justify these wars with reasons that are flimsy at best, and outright lies at worst. And, the fact that you are beating up on your weaker competitors is destroying what little respect you still have with other international businesses. As a result, more people hate your company than ever before, and continue to work to undermine your interests.

But none of this matters. Through a clever campaign of lies, slanderous attacks, and disinformation, helpfully spread by a willing media, you defeat your opponent by a VERY slim margin. You take this tiny majority as a mandate from the stockholders to do whatever you want. You immediately set about trying to dismantle the pension system that has kept your retired employees living comfortably for decades. You do this because you believe the advisors that tell you you can do whatever you want because “the stockholders have spoken”.

But the stockholders are wising up. They are beginning to realize just what a complete disaster your policies are. They are made even more aware of the incompetence of your administration when you demonstrate your ineptitude by totally mis-handling a major disaster at one of your corporation's major holdings. They also learn that you have been secretly spying on the lives of several of your own stockholders, in direct violation of both company rules and even the laws of the country.

You've created a disaster People all over the globe view your company with venomous hate. Your company books are a disaster. The board of directors, still controlled by your faction, continues to rubberstamp everything you do, even though they realize most of your decisions will have disastrous effects on your company. Thanks to policies you have instituted, you have managed to drop your company from a long period of success and prosperity into disaster and bankruptcy. You have succeeded admirably in taking the reputation of your corporation from one to be admired and respected to one to be feared and shunned in the international community. The damage you have done will take years to repair. If it can be repaired...

Good job!

>>>This story is entirely a work of fiction. Any resemblance to actual persons or events is entirely coincidental. Or is it?


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