You know a corporate scandal is serious when prime ministers and heads of state start to mention it. The fact that Japan’s premier Yoshihiko Noda took time in an FT interview on Monday to talk about the problems at Olympus is doubly significant, therefore. As our correspondents Michiyo Nakamoto and Mure Dickie point out, it’s “highly unusual for a Japanese prime minister to comment on events involving a private company”. Here’s what Mr Noda said:
What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism. Japanese society is not that kind of society.
Whatever the reason for Michael Woodford’s abrupt exit from Olympus (of which more later), everyone can agree that if the board’s chosen chief executive leaves prematurely, something has probably gone wrong.
With hindsight, Michael Woodford foretold his downfall in this year’s Olympus annual report. “It’s a simple word ‘change’, but you have to have an extremely close relationship with the chairman if you are going to be successful in executing that change.”
Even Europhile economists must have pricked up their ears at the offer of £250,000 to the person who comes up with the best plan for winding up the euro. Only the Nobel offers a more valuable bounty to the dismal scientists.
But whatever you think of the goal, is the Wolfson Economics Prize – offered by Lord Wolfson, the youthful, Eurosceptic, Conservative chief executive of Next, the UK retailer – the best way to achieve it? These days, bright business ideas often emerge through collaboration, rather than competition. Read more
Under the surface of the current anti-capitalist protests, from Wall Street to the City of London, is a decade-old sore that never healed. On October 16 2001, Enron hosted the earnings call that first alerted the world to the toxicity of its off-balance-sheet arrangements. It triggered a death spiral. By December 2, Enron was bankrupt. Within a year, Arthur Andersen, its auditor, had disintegrated.
Research in Motion’s offer to compensate its users affected by the BlackBerry network failure of the past week with $100 of free applications is a neat idea in that it costs the company far less than the apparent gain to its customers.
Given the zero cost of distribution and the fact that RIM only has to pay the wholesale cost to publishers of games such as Sims 3 – as well as gaining the benefit of hooking BlackBerry users into its ecosystem, it is a modest price to pay. Read more
I think most obituaries of Robert Galvin – who helped take Motorola from a family firm to a $11bn leader in mobile phones – understate his contribution to management practice, for he was, at the very least, the godfather of Six Sigma.
The omission is understandable. Six Sigma – which focuses managers obsessively on improving quality and eliminating defects – was the process improvement technique of choice for large companies in the 1990s, but it seems to have faded from public view recently. I spent a day at General Electric’s Crotonville leadership development centre in September and I didn’t hear Six Sigma mentioned once. Yet 15 years ago, when Jack Welch was in his pomp, the air would have been thick with boasts about how many “black belt” leaders of Six Sigma initiatives GE had bred. Read more
With the award of the Nobel for economics to Thomas Sargent and Christopher Sims this week, the US once again took the lion’s share of the annual prizes. Its citizens gained seven awards (including the not-strictly-Nobel economics prize) and its grip on the Nobels shows little sign of weakening.