Sunday, January 31, 2010

The Ethics of Shoplifting

Some time ago in this space, I did an ethics post on pilferage, and how this actually hurts everybody who does business with the pilfered company much more than it does the business itself. I’ve also had a few choice comments in this space about personal responsibility, and how there are times when suing someone over matters of strict liability is more complicated than people seem to think it is. I hadn’t expected, however, that both threads would be picked up in a single news story…

There’s a case out of Honolulu being reported by Fox News online about a man who died after allegedly taking two 12-packs of beer out of a hotel convenience store without paying for them, was confronted by the store manager and another hotel patrol about the theft, initiated a fight with the store owner, and subsequently died of injuries sustained during the confrontation. Because this is a Fox case the linked story is leaving out the fact that the man actually died of mechanical asphyxia after the convenience store manager and the other hotel guest sat on his back while waiting for the police to arrive, which complicates matters a bit, but I think the ethical questions are essentially the same whether we give the original story a pro-business/anti-crime slant or not – at least, once we realize that the shoplifter’s wife is now suing for wrongful death…

On the one hand, the dead man was committing a crime; if the facts of the case as stated are accurate, we can easily conclude that if he’d just paid for the beer instead of trying to steal it, he would still be alive. We can also attack the shoplifter on moral grounds, in that his theft wasn’t motivated by the necessity of feeding his family or any other worthwhile enterprise; the man in question was on vacation from California and was just trying to save money on his vacation expenses. The loss of merchandise would certainly have impacted the livelihood of the store owner, and might easily have driven up the price of everything in the store for everyone else who shops there. But even if all of this is true, it’s still difficult to ethically defend the practice of killing someone over misdemeanor theft, in this case for less than $50 worth of merchandise. Stealing beer may be a heinous offense, but it’s still difficult to support making it a capital one…

On the other side of the case, the shoplifter’s wife most certainly has been deprived of his companionship and income (California is a community-property state; therefore his income is also hers) without due process or compensation, and it would be impossible to argue that the store manager and his companion had any right to take the shoplifter’s life. It seems unlikely that they meant to do so, and even more unlikely that you’d be able to convince an jury to convict them of murder (negligent homicide will be hard enough to prosecute), but negligence seems fairly straightforward in this case. If you don’t know how to safely apprehend someone you shouldn’t try; and if you kill them in the process you are, in fact, being negligent. But by the same token, all the manager and his companion were trying to do was their civic duty (e.g. preventing a criminal from escaping the police). Many people would criticize them for ducking that obligation, although it isn’t usually considered a crime to do so…

In fact, there are actually two ethical questions here. First, should the widow of the shoplifter be compensated because the two men in our story killed him for a trivial offense, and if so, should the chain of convenience stores and the resort in which the store was located share responsibility for the award? And second, should the killers be sent to prison for attempting to stop a tourist from stealing from the store?

It’s worth thinking about…

Saturday, January 30, 2010

The Grad School Diaries: The Cottonwood Conundrum

As winter in East Lansing starts to merge into spring a bizarre phenomenon has been gradually filling our streets, stray corners, and sometimes most of our deck. It’s a strange white fluff, which looks almost like snow from a distance, but is clearly some kind of plant matter – there’s no way it could be snow given the warm daytime temperatures and the fact that it doesn’t melt. For the past few weeks we’ve been seeing it all over town, drifting by on the wind and piling up wherever it bumps into something solid, but there’s no clear sign of where it’s coming from. It’s another mystery about our new home…

Back in Los Angeles there are a variety of annual drifts and jettisons that you get used to, at least after a while. Probably the best known are the jacaranda trees, and their huge output of brilliant purple flowers, which go through two cycles each calendar year. The blossoms are beautiful, and the tree in bloom is amazing to see, but when the flowers fall off they stick to anything they land on like glue – and they stain it the same vibrant purple until you’ve soaked whatever it is in bleach. Which isn’t always possible – imagine having your car stained purple, for example. At our home in Redondo Beach we had an excellent view of a colossal (40 feet tall at least, and nearly as wide!) jacaranda, which grew in the back yard of the people across the street. I always said it was the ideal situation: we got to see the tree in bloom, but we didn’t have to clean up after it…

We have falling leaves in the Southwest, too; despite the fact that people from other parts of the country persist in believing that Los Angeles has no seasons (or that the seasons are, actually, flash-flood season, fire season and earthquake season), the leaves do turn colors and fall off the trees; our microscopic front yard in Redondo was often covered with the output of the single large tree that grew there for weeks at a time. And you also get odd drifts of pollen, seed pods, pine cones, flowers and whatnot. But in all of my life, I’ve never seen anything like these drifts of white fluff that are now floating around town like flurries of snow…

Eventually we started looking things up online and asking around. A few short searches revealed that the fluff we were seeing was part of the reproductive cycle of the cottonwood tree; the fluff contains seeds that will germinate to form the next generation of the species – if the seeds were properly fertilized before they set out on the wind. That’s right, folks; the output we were seeing was limited to female cottonwood trees. This surprised me for two reasons: one was that we don’t have a cottonwood tree anywhere on our property, and neither do our neighbors on either side, across the street, or behind us. But just as important, in my opinion, was the fact that trees can be female in the first place…

Now, I know that plants come in male and female varieties; that’s why you need bees carrying pollen from one to the other, and all of that other stuff we were supposed to learn about in high school biology class when I was asleep. But you don’t think about trees working the same way, even though they obviously do. One can easily get these lunatic images of what sorts of creatures would pollinate very large plants, with owls or hawks pollinating oaks and pines, condors taking care of giant sequoias, ospreys looking after anything that grows along the banks of rivers, and small, slimy things that scuttle through the air ducts pollinating whatever it is that keeps growing along the interior walls of the Business School complex…

But I digress…

A year ago, while I had certainly heard of cottonwood trees, I don’t believe I’d ever seen one, and I’d certainly never seen their fine white fluff drifting by on the wind. Today it’s just another sign of spring in the town where we live. I can’t help wondering what other routine mysteries are still waiting to sprout around us…

Thursday, January 28, 2010

Couldn’t Agree More

When the story first came out about the full-service airlines planning to charge for checked baggage – and more for each additional bag – I remember commenting that this was playing directly into the hands of Southwest Airlines, and any other discount carrier who decided to enact a similar “free luggage” policy. Even assuming that the profits made on the bag fees would cover the cost of passengers who were sufficiently irritated by the policy to change airlines – which I think we have reason to doubt – this still would not change the fact that many customers would jump ship to Southwest, increasing that airline’s profitability and cash position, and giving them a bigger club with which to beat on their full-service rivals. I didn’t make a big deal out of it at the time – it’s elementary business development theory and nothing that any first-year business school student couldn’t tell you without pausing to think. But now it seems like the President of Southwest agrees with me…

A few weeks back, the President of Southwest Airlines, Gary Kelly, was interviewed on CNBC regarding the new, increased baggage fees being charged by some of the major airlines. Kelly was pleased, to say the least, commenting that he hoped the competition would start charging $100 per bag, and more for the second one, and quipping that Southwest would be grateful for any customers the full-service airlines wanted to send him – implying that there would be quite a few of them. It’s a rather unkind remark, especially when you consider that Southwest recorded a profit of $116 million last year, during a period when most of their competition was in the red (and some of it was begging for Federal bail-out money). My question is: how come nobody else thought of an idea this simple?

Granted that Southwest has been one of the more profitable carriers for a while now, and therefore was in the best position to avoid following the industry trend toward new fees, it still seems amazing that no other company was able to figure out that baggage fees would end up being wildly unpopular, or to work out that taking the position of being the “only” airline not to charge them would be good for business. Certainly, there was no great difficulty in predicting that these new fee programs would spread industry-wide; even bloggers without any industry connections were able to work that out. Nor was it any great leap that these charges would generate widespread outrage; consumer advocates were practically foaming at the mouth as soon as these charges appeared. The only logical answer is that all of the companies in question believed that the bonanza of revenue to be gained with new fees would make up for the loss in business – which remains to be seen…

It’s bad science to claim that Southwest’s excellent year lies entirely in their refusal to charge baggage fees; there might well have been other factors involved. However, when you consider the implications of that refusal, a different picture emerges. If we consider that Southwest was moved to make this decision based on a superior understanding of what their key customer base actually wants – and of what actions might draw customers away from the competition – then this move is more than just an opportunistic move away from their industry’s mainstream, but rather the natural result of superior strategy and forward planning. It should be interesting to see what happens going forward; if the full-service carriers continue to annoy their customers to little financial benefit; if Southwest continues to give people service they want at prices that appeal to them; if the American public (or at least that part of it that travels by airplane) continues to vote with their feet…

Wednesday, January 27, 2010

Fair and Balanced?

I was online reading news stories this week, and I came across a gleeful piece about how Newsday, the Long Island daily paper, made a huge mistake in making its web side a pay service. The authors were obviously appalled that anyone would be trying to charge for web content – even as little as $5 per week – and were crowing that after three months, only 35 people had signed up for the pay service. The authors also mentioned the $4 million that Newsday spent redesigning their website, and calculated that the paper has grossed $9,000 – suggesting that the remaining $3,991,000 was a waste of money, and that the site’s readership has dropped from millions of people each month to just 35. If you didn’t already assume a healthy skepticism about anything you read on line, let me suggest that this article would be a good place to start…

If you actually read down through the rest of the story, which you can find in the New York Observer online site, you will find out that the drop in traffic to the Newsday site is significant – it goes from 2.2 million unique visits in October to 1.5 million in December – but hardly the disaster the headline would imply. You will also note that the site is available free of charge to anyone who already has a subscription to the paper or subscribes to Optimum Cable, one of the local cable providers (which happens to be owned by the same people who own the newspaper). Together, that’s believed to be something along the lines of 75% of the population of Long Island. We might also wonder if the drop is actually going to affect the long-term performance of the paper, since it has only been three months since it became a pay service…

Now, no one is claiming that charging money for content on the Internet is an especially successful business strategy; most of the companies that have tried it so far have met with marginal results at best. It’s especially problematic in the news business, since there are still a large number of free news services available online, and all of them will carry the same news stories – sometimes literally, as in the case of stories purchased from the AP, UPI, Reuter’s and other wire services. And it probably is true that if the traffic flow to the Newsday site continues to drop the owners will find it increasingly difficult to sell advertising space on the page. I’m even willing to concede that life has become hellish for the local reporting staff working for Newsday, and that they are desperately unhappy with the current configuration of their employer (to the point of resurrecting the nickname “Hellville” for Long Island). The headline is still deceptive…

Of course, in the grand scheme of things, it hardly matters if someone who runs a free-content website is complaining about pay-for-access sites; even assuming that they’re not jealous of the $9,000 in subscription money (that’s the equivalent of a LOT of paid Internet advertising, folks), they’re still right that charging for content is both obnoxious and silly – especially given the availability of alternate websites. I just can’t help thinking that if we’re going to hold up unpaid web producers (and bloggers) as some pure and unbiased reporting source, then we have the same responsibility for telling the truth and checking the facts as any other news source – and we deserve the same mockery and contempt when we slant the news to suit our own particular biases…

Of course, that’s just my opinion. I could be wrong…

Sunday, January 24, 2010

The Ethics of Special Promotions

There was a humorous news story online this week about a bar in Singapore that is planning to take the traditional “Ladies Night” promotion to an extreme never seen in the Western World: called “Fill My Cups” it’s a merchandise give-away program that offers free drinks to women based on bra size. The better endowed the woman is, the more free drinks she gets, with those in the “D” or higher sizes getting a free bottle of premium vodka (which retails locally for the equivalent of $168 USD). You can read the story here if you want to, but assuming that the news site offering the story isn’t just having one on us, the piece offers a number of interesting ethical questions…

First off, doesn’t this count as discrimination? In the U.S. there have already been lawsuits complaining that conventional “Ladies Night” programs, which merely feature discounted drinks for all persons claiming to be female, unfairly discriminate against male bar patrons. Most of these cases have been thrown out on the grounds that the businesses are merely attempting to attract a segment of the population that has traditionally be underserved in their industry (and that most male bar patrons would rather have more women in the place than lower booze prices anyway), but when we start getting into the range of two or three days of take-home pay at minimum wage (or a week’s worth of groceries for a family of four) this doesn’t seem as funny, somehow. Giving one class of customer with specific appearance characteristics free merchandise while excluding all of the others is just one small step away from having different pricing scales for people on the basis of whether or not you like them, which is one even smaller step away from doing so based on skin color or ethnicity – which isn’t funny at all…

On the other side of the issue, the bar in this story isn’t planning to make a regular policy of giving away merchandise to anyone; the promotion is a single-night event for which they are taking reservations in advance. Moreover, the event is clearly a loss-leader; the owners are hoping that the women receiving free drinks will bring male companions (who will have to pay for their own drinks) or attract single males who will, in turn, consider a venue populated by large-breasted women who have been drinking heavily to be suitable to their own requirements. Viewed in this context, the event isn’t any more discriminatory than any other loss-leader, and if the women in the bar’s market consider the idea offensive or derogatory, they have the very simple action of not attending. This leads us to consider the question of whether it is ethically correct for people who are not being harmed in any substantive way to interfere with a business development stunt simply because they don’t approve of it. If the owners feel this program will increase their business, don’t they have a right to stage such an event in peace?

Of course, we can also argue about the corrosive effects of additional appearance-based value judgments, the promotion of alcohol consumption, the objectification of women, or inappropriate loss-leader promotions on our society (or Singapore’s society, anyway) in general, and the ethics of all of those things, but that’s really beyond the scope of the story – and today’s question. Is the loss-leader promotion described in the linked news story an unethical business practice that promotes the worst elements of society in order to sell more intoxicants, or is it a harmless business-development exercise? It’s worth thinking about…

Saturday, January 23, 2010

The Grad School Diaries: Still At the Zoo

“Another cracker, my dear?” I asked, offering the package to my wife. She accepted one gracefully, and we leaned back into the patio furniture. I took another sip from my drink, and considered the show going on before us. About a hundred yards away, a brightly-painted airplane came screaming down the runway and vanished again into the mist.

“Was that a CRJ?” my wife asked, referring to the commonly-used short-haul aircraft formally called a Canadair Regional Jet by the manufacturer.

“One of the early ones,” I agreed. “All of the CRJ family have the same basic form – narrow fuselage, T-tail, tip spoilers, fuselage-mounted engines and so on, but the 100 and 200 models are about ten meters shorter than the later 700 and 1000 types.”

It’s trivia that only an airplane hobbyist (or flight crew member, perhaps) would care about, but my long-suffering spouse has had many years of experience with my obsession and knows to expect this sort of behavior when there are airplanes around. We’re sitting on the enclosed patio at the Air Zoo’s original facility, a much smaller building located a quarter-mile or so closer to the Kalamazoo/Battle Creek International Airport. I’d imagine that having the museum located right next to the runway of a full-sized airport was very appealing when they were first getting organized, but today most of the attention is on the newer building, which includes an actual snack bar and a dining area overlooking the main gallery. The only food facilities here at the original facility are a trio of vending machines on the glassed-in patio overlooking the airfield…

We spent most of the morning walking around and looking at airplanes in the new facility, then drove down the service road to this smaller building, which has a definite 1970s flavor to it, with a focus on space exploration and the (then new) Space Shuttle program. I always enjoy that sort of exhibit, but for me the real treasure here is the World War II exhibits, which include old friends like the Corsair and Hellcat, but also include much rarer birds, like the Douglas Dauntless and the Waco glider. It’s one of the only collections I’ve ever seen that has the Hellcat and the earlier Wildcat displayed side-by-side with the graceful Corsair and the powerful Skyraider. They also feature classics like the F-80 Shooting Star and F-86 SaberJet, and a military version of the DC-3 (called a Skytrain) that you can actually climb into. And the only examples of the B-57 Canberra and F-84F Thunderstreak I’ve ever gotten to see up close…

Not that long ago I was still thinking about one day pursuing an advanced degree in history, most likely as a retirement project. Without a college degree in history (or any reason for graduate programs to take me seriously), getting in would have been a challenge, and with my middle-aged-man’s memory getting worse every year, I don’t know how I could have passed Comprehensive exams. But over many years of frantic scrambling, working multiple minimum-wage jobs just to stay alive and being bewildered by many aspects of my life, there have been times when spending the whole day pottering around a facility like this, studying the subject of my obsession at close range in the dry, cool silence, sounded like heaven itself…

I know it’s an illusion, of course. I’ve experienced a real doctoral program now, and serenity does not seem to be a regular part of the experience. Going for a doctorate in history would probably be just as stressful and just as bewildering as the program I’m in now, and it seems doubtful that anyone is going to let me take a degree in The History of Airplanes anyway. All things considered, there’s probably more serenity to be had sitting here, on a comfortable patio that apparently no one ever uses, watching the world go by and having a vending-machine snack with the love of my life. The serenity here is also illusory; soon enough we will have to get back in the Torrent and head back to East Lansing, so I can spend the rest of Spring Break working madly to try to catch up. But for the moment, it seems like more than enough to just be here today…

Thursday, January 21, 2010

Don’t Respect the Wolf

I was reading through some news stories online today while I waited for the overworked printer in the Management office to chug through the articles I’m supposed to bring to class on Tuesday, and I noticed a certain amount of controversy over Photoshop, and the modified pictures it can produce. Some people have gone to great lengths to express their disapproval and dismay at these pictures; the reactions range from calls for stronger self-regulatory measures within the various media to t-shirts that mock bad Photoshop work being sold on the “Fail Blog” website. It’s a silly thing to get worked up over, of course – retouched pictures and other photographic fakes have been around for over a century and easily predate the electronic computer itself, and they’ve never actually brought down our civilization. But then I noticed a story that proves you don’t even need Photoshop to throw a spanner in the works…

A story available on the UPI Online “Odd News” page details the controversy surrounding the winning entry in the British Natural History Museum’s annual photography contest, which has now been disqualified because the photo depicts a rented wolf. I was not previously aware that it was possible to rent large carnivores for photo shoots, but it appears that this particular wolf, named “Ossian,” is a well-known specimen from a wildlife park outside of Madrid. The Museum is insisting that the photographer return the cash prize ($16,300 USD), and says it intends to ban him from future competitions. Meanwhile, other nature photographers (and zoologists) are saying that the Museum should have known the photograph was a fake immediately, since the wolf in it is hurdling a fence like a racehorse, instead of sensibly pushing through the opening in the rails, the way an actual wild animal would…

My immediate reaction was “you can’t blame a guy for trying,” followed by puzzlement that anyone really cares if the wolf is wild, rented or part of a three-year carnivore lease program from GMAC. Unless the contest specified that the photos had to be of wild animals, captured in the wild by a photographer who had slept on the ground and eaten freeze-dried beans for a week, in order to qualify, I can’t imagine why it matters where, when or how the winning entry was obtained. It’s not like the animal in the picture isn’t actually a wolf, or that wolves can’t (or for that matter absolutely wouldn’t ever) jump over fences, especially if there are tasty farm animals on the other side. But I think the key thing to consider here is that there was almost certainly someone going over these pictures to make sure they hadn’t been altered in Photoshop (or the equivalent), and that individual did not notice anything was wrong – because he or she was probably just looking for digitally altered photos, and this one hadn’t been tampered with. It just wasn’t real in the first place…

The lesson here is that the threat isn’t always where you expect it to be, and the counter-measures you’ve emplaced aren’t always the right ones. You could have hired the MIT Media Lab to analyze this picture, spent tens of millions of dollars going over it pixel by pixel, and still never spotted a hoax that was created using a method that would have been possible a century ago. Computerized security is only as good as the people using it, and if the managers involved don’t stop to consider the possibilities, then there’s an excellent chance that the product you just bought really exists, and does what the seller claims it does, but is still not what it appears to be. Because, let’s face it: sooner or later, somebody is going to present you with your industry’s equivalent of a rented wolf. The question is, are you going to notice that they’ve done so…

Wednesday, January 20, 2010

Dispatch Blues

Last Sunday I mentioned our difficulties in getting our new oven installed. Some of you have wondered about this, so let me state for the record that the actual installers who showed up on Sunday afternoon and did the work were professional and courteous, and their work was quite satisfactory. I’m not blaming them for any of this; they were just trying to make the best out of the bag of snakes their employers had handed them. My point in writing about this, then and now, is to point out just how unnecessary all of this was. It’s not exactly a cautionary tale – I don’t suppose any of you would try running a company in this fashion – but it’s still worth a closer look…

The trouble really began before New Year’s, when my wife and I went to Sears to get a new oven. Ours was original equipment when they built the house, and after 30 years of intense use it was on its last legs. We’d put up with it for a year and half, but after the front half of the door fell off for the second time, scattering shards of glass all over the kitchen and requiring us to open the door by pulling on the mounting bolts that had secured the handle (until it broke and fell off, too) we’d had enough. Our first indication that this was not going to be a simple transaction came when the Sears people told us they couldn’t handle the installation. It seems that our old oven was a custom install, and was wider than any model currently on sale – by about three-quarters of an inch. Sears can handle making room for something wider (by enlarging the hole the appliance goes into) but making it smaller was beyond them…

Fortunately, it was not beyond the abilities of Greg, our amazing general contractor. Greg and his merry band of craftsmen took care of the repairs we wanted when we first moved in, and they’ve taken on a few additional repairs since. In the event, Greg took some measurements, calculated a few numbers, and told me that he could do the job in an hour or so – and he already had all of the materials he’d need at home in the back of the workshop. With his help, the size of the aperture would not be an issue, and I went back to Sears to schedule the install for two days after Greg was scheduled to finish. Almost at once, we came upon a second issue: the Sears installers were booked up for more than two weeks, clearing the backlog that had piled up over the holidays. I found this irritating, since the holiday season doesn’t exactly sneak up on you (it’s the same date every year), and it’s not exactly like people don’t need to replace malfunctioning appliances during this time (things break when they break). But I scheduled the install for the first available date, 15 days into the new year and 19 into the future…

Which is how things stood until two days before the scheduled install, when the company that Sears subcontracted our job to called us to say that the installer who was supposed to show up two days later had Jury Duty, and could they move back until the following day (which was Saturday). We found this to be even more irritating, considering that Jury Duty doesn’t sneak up on you either; you generally know you’re going to have it two or three months in advance, and you could tell your employer to schedule accordingly. But we agreed to the change – only to have the company call us back on Friday and say that their remaining installer had a “family issue” and it was now going to have to be Monday. At which point we called Sears directly and started demanding a refund on the delivery and installation charges…

Now, for all I know this could be the only time this installation company – or our local Sears location, for that matter – has ever allowed a situation like this to develop. All I know is that as far as last week is concerned, their average is zero – and it may be awhile before we give them another chance…

Monday, January 18, 2010

Hoax or Game-Changer?

Every once in a while you see a news story that will prompt you to wonder if things have gone too far – in this case, if technology has final left the tracks and is now careening down the street leaving chaos in its wake. Over the years, we’ve seen a lot of developments of the humble ink-jet printer; from machines that can print a full-color photograph onto the top of a cake in colored icing (resulting in a better picture quality than most desktop printers AND a better tasting dessert than most people can make at home) to molecular-level devices that can actually produce living cells by layering them one microscopic level at a time (which could, at least in theory, build living replacement organs that exactly match your DNA requirements). But this time, I have to wonder…

According to a story I found online this week, the MIT Fluid Interfaces Group is working on a device that will create food – literally, any kind of food you like – using a layering process similar to the one used by an ink-jet printer. The system, which the FIG is calling Cornucopia, uses a series of refrigerated canisters to store whatever raw ingredients you like to eat and a sophisticated sprayer head to put down layers of food, creating (at least in theory) almost anything you could ever want to eat. The central cavity of the machine then either heats or flash-freezes your meal, depending on what it is and how you like it; in theory, it should be able to handle gazpacho or conventional soup just as easily. But that’s really not the point…

If the storage canisters are properly climate controlled (they’d have to be) and the Cornucopia unit is interfaced with your computer (it’s hard to imagine why it wouldn’t be) then you could probably remote-program it to produce food whenever you like, even remotely from work or from you web-enabled phone. If you can work out the supply and delivery aspects of the system (fresh canisters once a week? Automate/computerized/robotic delivery systems?) then you should be able to just program the unit with your meals in advance, and never cook or shop for groceries again. The time and space-savings would be absolutely insane (no refrigerator, no stove, no over, no microwave, not even a can opener), and at least in theory, everyone who owned such a device could eat nutritionally-balanced meals that tasted like whatever they really like to eat. And even that isn’t the most mind-blowing implication of all of this…

Remember the molecular printer? If this technology can be used to build someone a new liver or pancreas, programming it to create generic chicken or beef muscle tissue shouldn’t be much of a challenge. So, in theory, you could put the raw ingredients (amino acids and carbohydrates?) into the top, and the Cornucopia could build you a cheeseburger or a steak that has never been within fifty miles of a cow. Food that a vegan could eat that would be visually, chemically, and taste-indistinguishable from an actual animal-product cheeseburger – and, again in theory, would have the perfect number of calories to maintain weight and nutrients to keep you healthy in a size with the perfect bulk to satisfy your hunger…

Devotees of the “Star Trek” television franchise will already be familiar with the concept of a “food replicator” – a microwave-oven-sized device that can fabricate almost any food item you want on demand. Later versions of the show featured voice-activated examples that could produce anything from “Tea, Earl Grey, hot” to alien delicacies never heard of on Earth, but all of it was simply dismissed as fantastical; science-fiction plot devices that would never exist in the real world, or if they did, would require another few centuries to be practical. Which is exactly the same reaction people had to the idea of a portable computer the size of a notebook with hundreds of gigabytes of memory and a wireless interface connecting it to virtually every other computer (and user) on the planet…

You know, like the one I’m using to write these words…

It hasn’t even been one lifetime since the “replicator” appeared on Star Trek in 1966, and if anything the technology curve seems to be speeding up as we go forward. If this article is correct, we could all be telling the kitchen systems to whip up a meal for us in a few years, and then going and playing video games on the Wii until it’s ready. Unless this is all a hoax, of course…

Sunday, January 17, 2010

The Ethics of Customer Service

I’ve had a couple of occasions in the last week to consider the question of ethics in a customer service situation. In one case we had an example of minimum-wage food service workers who were clearly overpaid; in another (which we will consider in more detail in the regular post sequence) we had to deal with a subcontracting company that clearly is not up to handling the urban hustle and flow of a major metropolis like East Lansing, Michigan (population 42,000). I’ve spent a fair amount of time in customer service myself (including a few years in lower-level food service), and I don’t generally consider myself to be a difficult customer, but this week I’ve been spewing wrath over a number of people who truly earned it – and I find myself wondering about the ethics of the situation. So let’s take a closer look…

We all know that the company has a responsibility to its customers – they’re paying us to do whatever it is we do, and we owe them a reasonable product or service in exchange for their money. Part of this, even in the most insulated company, is giving the customer whatever support they need to have the optimal experience doing business with us, even if that’s just taking their money, making change, and processing them through our facility as quickly as possible. In the case of a fast-food restaurant, this would include making the food correctly, filling the customer’s order correctly, getting them their product as quickly as possible and inconveniencing them as little as possible. I regret to say that my local Burger King franchise failed on all of these points last Sunday, and I was forced to go back to the store and make my displeasure clear. Which didn’t do much for either of us…

Now, I’m not the type to make a scene in public. In the Burger King case, all I did was ask to see the manager on duty, show her the product we’d discovered upon getting home and unwrapping our purchases, and request that they supply us with the complete and correct menu items (including such elements as buns, condiments, and meat that didn’t look as if it the whole package had been slammed repeatedly into a wall). Unfortunately, there really wasn’t any way to do this without providing a dozen or so people with entertainment – and a good reason to cancel their orders and leave. In the case of the subcontractors, we’d purchased a major appliance from a national chain here in town, and their installers made us wait for two extra weeks before they could work us into their busy schedule, and then failed to show up on the day specified or the following day, resulting in our calling the original retailer and requesting that they either get someone out to make good on the contract or refund our money for the delivery/install.

In both cases, I’ve given the employers good reason to fire someone; in the latter case, it’s a reason to stop using that subcontractor altogether, which might result in several people losing their jobs. This raises the question of whether I have any ethical responsibility to incompetent sandwich makers, lackadaisical installers, or dispatchers with no real grasp of either scheduling details or the importance of not annoying your customers. On the one hand, if I were willing to just let all of this slide, none of those people or companies would be in trouble; on the other hand, both cases were grossly incompetent, at least from a customer service standpoint, and probably from a public health and contract law standpoint, respectively, as well.

So do I have any responsibility to the incompetents involved? Do I have any responsibility to the other consumers in this market, who will be inconvenienced (or even ripped-off; it depends on your point of view) if I don’t take action? Do I have a responsibility to my readers (assuming that I have readers) to tell you about these events so that you can be wary of similar screw-ups? Beyond the simple requirements of good manners and civilized behavior, do I have any additional ethical responsibilities as a customer, or does paying my money (and abiding by the law) give me the right to do as I please?

It’s worth thinking about…

Saturday, January 16, 2010

The Grad School Diaries: At the Zoo

I’ve seen a lot of vintage aircraft over the years, including a fair number of P-40 Warhawks. But I’d never seen a pink one until now…

That was my first thought upon walking into the air museum in Kalamazoo, Michigan, which bills itself (logically enough) as the Air Zoo. It’s Spring Break 2009, and I’m taking the day off from my (increasingly frantic) studies to do something completely unconnected with MSU, the doctoral program, or any other serious pursuit. Aircraft have been an interest of mine for almost literally as long as I can remember; even in early childhood I read, watched and poured over everything I could find about the biggest, fastest and coolest airplanes ever built, and the larger-than-life men who designed, built and flew them. Someday, I knew, I would grow up and become a pilot, and fly away in search of adventure…

It’s possible that even the three-year-old me knew this was a naïve and hopeless dream. Certainly, long before I reached the age when I could have done anything about following such an ambition it had been made painfully clear to me that I lacked any of the natural aptitudes one might need to pilot high-performance aircraft successfully (let alone with the superior ability I fantasized about), not least of which was my almost total lack of ambition. I’m not ashamed of what I do or what I’ve done; I’m a manager and a scholar and a storyteller, a writer and an auditor and a consulting expert on a number of useful subjects – and I’m relatively good at all of it. But over the ensuing forty or so years I’ve never lost my fascination with aircraft, and I still read about them, study them, and go to see them when there’s a museum or an air show handy for that purpose…

Which makes it more surprising that I would have waited nine months before going to Kalamazoo to visit the Air Zoo than it is that I’d take a day off during Spring Break and do just that. Which is why, on a cold and rainy morning in early spring we find ourselves turning off the Interstate and navigating down a local road to the multi-building campus where Central Michigan’s premier aircraft museum awaits, next door to the Kalamazoo International Airport. As you walk into the newer of the two main buildings there is, indeed, a P-40 Warhawk suspended from the ceiling, oriented so the aircraft appears to be coming right at you. What makes this specimen so unique, however, is the fact that it is painted a bright pink. The informational plaque indicates that this specific airplane was used as an air racer after being disposed of by the military, and served as the mount of one of the first female racing pilots – hence the unusual color. It’s thus historically significant for at least two reasons, but also quite different from what you were probably expecting. You could use it as a metaphor for the entire Air Zoo (or for Central Michigan itself, for that matter) if you wanted to…

I could probably fill an entire blog, not just a couple entries for one, talking about the displays at the Air Zoo, or more accurately, dragging the unwilling reader up and down the array of aircraft and related materials on display, while I fill your ears with more than you ever wanted to know about these machines and the place they have occupied in my imagination over four decades of study. Some of them you’ve already heard of, unless you’ve been living in a cave all your life, such as the Gumman F-14 Tomcat (featured in the movie “Top Gun”) and the Wright Brothers’ Flyer; others are obscure even by my standards, like the XP-55 Ascender – I’m not sure there’s another example on display anywhere in the United States. Some are old friends, like the North American B-25 Mitchell, while others are things I’ve read about for years but never seen before, like the B-57. But the most important thing, I think, is that sense of wonder I still feel upon walking into the huge main gallery and seeing all of the planes on display…

Someday, perhaps, all of this will finally lose its fascination for me; perhaps I’ll finally settle down into more sensible pursuits, like brushing up on my statistics, or searching for previously undiscovered treasures at garage sales, or even hitting a little white ball with a crooked stick until it drops into a hole in the ground. Out there in the world are a million things I should probably be doing right now, all of them more important than looking at vintage airplanes and learning more things about them, and maybe one day soon I will put all of this behind me and go on to be a sensible, mature, proper, grown-up person like everybody else my age likes to think they are…

Just between you and me, however, I would not bet money on that…

Friday, January 15, 2010

History Lesson I

The other day someone was commenting on the “new” General Motors doing all of the same old things – specifically, building one basic vehicle and then modifying the body to make a Chevrolet version, and Buick version, a Cadillac version, and so on. I remarked that the company hadn’t started out that way, and was a bit surprised when no one at the table knew the story of how GM wound up with 20-plus brand names in the first place. If you already know that story you may want to skip ahead to the next Grad School Diary post, which is a good bit and has airplanes in it. But if you can’t remember, you may want to stick around; there’s a lesson here that goes well beyond the automotive industry…

General Motors didn’t invent the concept of multiple brands (or “name plates” as they’re sometimes called in the industry), any more than Henry Ford invented the automobile, but for sixty or seventy years they were the most successful users of the strategy. Put simply, Ford’s early products were optimized for mass fabrication – Henry Ford himself remarked that the customer could have his Model T in any color he liked – as long as that color was black. But while low-cost provider is a powerful strategic position, it’s not the only position, and General Motors hit upon the idea of differentiated products relatively early in the industry’s development. The idea behind the original five divisions was that the customer would start out with the low-cost, high-value product from Chevrolet, then gradually (when his or her income level rose) develop a desire for more luxury in their transportation and opt for a Pontiac, then graduate to an Oldsmobile, move on to a Buick, and finally purchase a Cadillac to let everyone know they’d arrived. All they needed was five vehicles with relatively similar shapes, sizes and capabilities, and an increasing amount of both accessories and mark-up…

It may seem obvious to us today, but it’s important to remember that the early days of the automotive industry were also relatively early in the Industrial Revolution in the United States, and the car companies were, in fact, some of the very first national brands. It wasn’t until decades later than the company began using essentially the same design, and then even the same components and parts, to build cars for different brands within the company. And even then, it was years before people began to realize that if the cars were mechanically identical, then you were paying two or three times as much for such meaningless extras as leather seats and improved clocks without actually receiving any additional value for your money. Things probably came to a peak with the Cadillac Cimarron of the 1980’s, which was essentially the same vehicle as a Chevy Cavalier, except for a chromed luggage rack, different floor mats, and twice the price tag…

Eventually the customer complaints got back to headquarters, and GM started working to give its different vehicles different capabilities as well as more unique body styles, but by then the damage was done. Once people stop finding added value in the features you are charging extra for, your product is no longer going to be seen as worth the price. General Motors didn’t help matters by sacrificing mechanical reliability as they tried to find more differentiation for their products; the predictable result was higher-end models that were not only perceived as dolled-up Chevrolets, but were in fact less reliable (and less fuel efficient) than the lower-priced versions. Nor did the introduction and/or acquisition of over a dozen additional brands do any good; the extra products complicated supply and logistics and sucked up huge amounts of additional advertising and marketing budgets, but did nothing to convince people that the products were worth the money…

The lesson here seems obvious: if your customers don’t see any added value in your product, you can’t charge more for it – and your differentiation strategy can only end in failure. But before we start ragging on GM for failing to figure that out, we should probably remember that they didn’t start out that way – and before they started making those mistakes they did manage to become the world’s largest and most profitable automaker. If your business makes use of a differentiation strategy, or even if you just have different product lines at different price levels, you may want to check on whether your customers still believe they’re getting their money’s worth…

Thursday, January 14, 2010

Take the Train?

It’s a truism in America that public transportation is cheaper than driving one’s own car – and, in fact, many people are convinced that public transportation is ridden exclusively by those people who can not afford to drive. Of course, riding a bus or train is usually slower than driving, but most people will assure you that the amount you save on parking, gasoline, car repairs and insurance more than makes up for the time you are spending. Environmentalists praise public transportation, claiming that the lower emissions of one bus compared to 40 cars (or one train compared to 300 cars) is more than enough motivation for riding it. Some people will go so far as to praise the lower stress involved in riding over driving, or cite the ability to read, study, nap, or whatever during this time. But what happens when the country is in the grips of the worst recession in a generation, and the price of riding public transit isn’t cost effective?

A story reported this week in the Mercury News tells the sad tale of the Bay Area Rapid Transit system, better known in Northern California as BART. Often hailed as California’s greatest public works project ever, BARD connects most of the communities in and around the San Francisco Bay Area in a network of trains and subways convenient to both main airports and most of the business districts. But despite the pro-environmental and anti-big-business nature of the Bay Area, the BART system is currently losing on the order of $130 to $140 million each year – which has led to price hikes in an attempt to stem the losses, which has lowered ridership even further. People were reluctant to use BART when it was priced competitively – citing commutes that were as much as 8 times longer, in terms of minutes in transit, than driving a car – but with price hikes making driving cheaper, the system is doing even worse…

Some of the problem is political – the contract the city signed with the bus and train operator’s union is so disadvantageous for the city it’s surprising there haven’t been riots – and some of it is simple bureaucracy – none of the people who could change the situation has any personal or financial motivation for doing so – but most of it is just poor management. The city needs to encourage ridership any way it can, and placing various nuisance fees (what is an SFO round-trip surcharge, anyway? And in what world is it a good idea to more than double it when your ridership is already dropping?) on riders who are already dubious about your service is no way to run a railroad. Or, in this case, a public transit system…

In the long run, the City and State will continue to support the BART system, but with California’s budget already at the breaking point, the last thing they need is to put more strain of the highway system, run up costs for road repairs and bridge maintenance (above the levels those things are already at), and shovel more money into an inefficient public works project. Unless somebody in the City by the Bay wakes up and smells the smog, things are about to get worse for our friends in Northern California…

Wednesday, January 13, 2010

Belling the Cat – Again?

In yesterday’s post I brought you the story of how the six largest US banks are planning to distribute $112 billion in year-end bonuses (or even more, if their year-end earnings are high enough), and how there’s nothing you or I or even the President can do about it unless we happen to be stockholders. In fact, there’s actually a lot more than you and I can do about it than the President can; we can buy stock in these companies and start agitating for a stockholder’s revolt (the President can’t; all of his investments are held in bind trust while he’s in office). You can view the story here if you didn’t yesterday, but the point is, even this does not explain what I mean by “belling the cat.” So let me clear that up…

For those who don’t remember, Aesop’s Fables include the story of a grand meeting of mice to discuss the scourge of their existence: the cat! After several hours of discussion and debate, a clever young mouse gets up and suggests that they put a bell around the cat’s neck, so they can always hear her coming and run away in time. The idea is met with great acclaim, until an old, wise mouse gets up and says: “That’s a great idea! But there’s just one problem: which one of you is going to volunteer to put the bell on the cat?” Upon which, the meeting rapidly adjourns…

In the case of the banks, I’ve already mentioned that none of the parties expressing dismay and outrage over these plans has any standing (legal or otherwise) to compel these corporations to give out more reasonable bonuses or do anything else; so long as no laws are broken the government can’t take any action, and these are private companies and therefore not accountable to public opinion. Only the stockholders of these companies have any control over the salaries and bonuses being paid, and there’s some dispute about whether they do either. But quite apart from that depressing fact, there’s the issue that for the most part, even the people who could exert pressure on these corporations don’t want to…

Elected officials, such as congressmen and senators, could in theory pass laws that prevent banks from paying this type of bonus. But those laws would be subject to legal challenge (there’s nothing in the Constitution that says Congress can legislate ethical behavior) and would also run the risk of the banks giving greater financial support to political opponents who are not trying to pass such legislation. Institutional stock owners (such as mutual funds) could form voting blocks and attempt to put pressure on the banks, but such institutions are themselves run by executives who would be subject to the same sorts of laws; there’s really no point in expecting them to take such actions. Wealthy private stockholders could band together and exert the needed pressure, and occasionally some of them do, but they’re more likely to demand a bigger piece of the action for themselves than to impose limits on behalf of the average American…

In fact, for the most part, the only people who could impose such restrictions are either bankers themselves or people who can not afford to make enemies of the bankers. Unless all of the rest of us band together and demand accountability from our political leaders (in terms of election reform and “clean money” laws) and our business leaders (in terms of stockholder revolts and other organized small stockholder actions), the people extending these bonus structures will continue to ignore both the government and the stockholders exactly the way cats would ignore a group of unruly mice voting to bell them…

And no one is likely to volunteer to get the job done, either…

Tuesday, January 12, 2010

Belling the Cat

I read with great amusement – the nasty, cynical sort of amusement I always experience at times like these – the stories in the news about taxpayer outrage regarding the bonus structures some of the largest surviving financial institutions (including several of those bailed out with public money last year) are currently implementing. According to this story from ABC News six of the largest US banks have are planning to give their top managers $112 billion (or possibly even more) in year-end bonuses. This is causing a great deal of consternation in Washington, where Administration officials have been quoted as saying that it’s outrageous that the banks are going right back to business as usual after the buyout, and a great deal of anger and resentment across the country as people struggling to find work react to the story. So why am I laughing? Because it was obvious all along that this was going to happen…

The first thing to keep in mind about this story is that all of the banks in question have repaid their bailout money, and are therefore no longer under Federal control. So it’s not actually your money they are paying their chief executives, unless you’re one of the stockholders. The other thing to keep in mind is that while this may be tone-deaf, arrogant, or downright disgusting, it isn’t actually illegal. There are Federal laws about HOW a corporation can go about compensating its people, but not about how much; so long as the stockholders of these companies are okay with the use of those funds, there isn’t anything our government can do about it (a fact that several Administration officials seem to have forgotten). Perhaps even more to the point, there’s no clear evidence that these corporations are actually doing anything wrong…

Consider, for a moment, the possibility that these companies may be right when they say that these top officials are the best talent available, and that the companies’ performance will be even worse without those individuals running things. Personally, I can’t help thinking that a chimp, two hedgehogs and a slug could run a bank better than some of the idiots who are shortly to be receiving billion-dollar paydays, but I’ve been wrong before, and it’s certainly possible that these allegations are correct. In that case, allowing these key personnel to be snapped up by foreign financial institutions would be foolish, and using the $112 billion to pay bonuses with is only responsible management practice. Here again, it would be my preference to take the same funds and put them into small business loans, thus stimulating the economy, creating millions of new jobs, creating tens of millions of new banking customers who would then be able to pay the bank interest on car loans, credit cards bills and mortgages, and not making the rest of America angry enough to get out the pitchforks OR giving the banks’ political enemies the capital to permanently hamstring the entire industry with new regulations…

But that’s just me, and in any case it’s not important. The reason that none of this outrage or outcry is going to matter in the slightest is that none of the people crying out to express their outrage has any control whatsoever over the banks in question. As previously noted, none of these institutions are beholden to the Federal government any longer, so Administration officials can say whatever they want; the banks don’t have to listen. The same goes for the “person-on-the-street” out there in America. Unless you’re a stockholder, Bank of America and Goldman don’t care what you think of them; you can take your business elsewhere, but you’ll have trouble finding a bank that isn’t run exactly the same way. For the amount of good any of this is going to do, it might as well be a group of mice demanding that the cat wear a bell for their safety…

And even that doesn’t consider how closely this situation resembles the original Aesop’s Fable…

Monday, January 11, 2010

Vulture Update

Back in July of 2008 I brought you the bizarre story of the Orthopedic Hospital of Wisconsin, and its unfortunate tenure as the roosting spot for a flock of turkey vultures. For those of you who missed it, you can find the story here if you want to. As I noted at the time, the birds didn’t really pose any threat to human life, let alone to patients at the hospital, since they won’t attack any living creature (vultures eat carrion almost exclusively) and they don’t carry anything that people can catch (vultures are surprisingly disease-free creatures, considering their diet). Nevertheless, patients were complaining because, in fairness, it can be rather disconcerting to wake up in the hospital and find a vulture perched on your windowsill. Now it turns out that the people at the Orthopedic Hospital of Wisconsin should have been counting their blessings…

According to a story being reported this week in USA Today by way of Delaware Online, a woman in Ridgeway, Virginia is under siege by a flock of 200 or so black vultures, which are eating the roof off of her house. It turns out that this species of vulture likes to chew on rubber, and the unfortunate in our story owns the only house with rubber shingles on the roof anywhere in the neighborhood. Each day 30 or 35 individual birds turn up to munch on the roof, which is now leaking and causing a great deal of distress to the owner, given the winter weather in Ridgeway. Even worse, the vultures are too smart and aggressive to scare away, and Federal law protecting migratory birds makes it illegal to kill them. You might be able to get a kill permit to take out a few individuals, but that will take at least 3 months, by which time the roof will be gone, the rest of the house will have been destroyed by water damage, and the owner will either be homeless or insane, or both. And moving isn’t really an option, because who’s going to buy a house that’s being eaten by vultures?

It’s an even better example of how unexpected conditions can impact your business than the original story was, not least of all because the vultures are impacting the local real estate market and the business opportunities for people who make rubber roofing materials almost as much as they are the homeowner in our story. It’s hard to imagine anyone in the Ridgeway area (or, in fact, anyone else who has read this story on the Internet) ever agreeing to purchase rubber roofing products after this, and anyone who was thinking of moving into the area is now going to be looking for houses with steel shingles (or some other substance that vultures don’t eat) and refusing to consider houses with rubber ones. Which should, in turn, make life difficult for realtors in the area; just as a guess, I don’t think the real estate agent’s license exam in Virginia includes Wildlife Management as one of its subject areas…

Now, I’m not suggesting that you compile a list of every species that could possibly impact your business though its daily behavior, because such a list would take longer than you are likely to have in your lifespan, let alone your strategic planning cycle. I am suggesting that having a contingency plan is a good thing, and that having one that is flexible enough to include what to do if a species you’d previously never even heard of (such as a highly aggressive, carnivorous cousin of the humble turkey vulture) starts to disrupt your business is probably a very good thing. I’m also thinking about investing in those steel roof shingles, as soon as the price comes down far enough that I can afford them – and assuming that nothing out there snacks on those…

Saturday, January 9, 2010

The Grad School Diaries: The Pie-Hole Principle

The weather is still miserable this morning, as the planet gradually makes its way toward summer and the long Michigan winter drags by, but neither of us cares. We’re on our way to our new regular breakfast spot: The Grand Traverse Pie Company, at Grand River and Haggadorn in East Lansing. Despite the name, the restaurant also offers other kinds of food, including a number of breakfast items. We like it because the food is excellent, prices are good, the location is campus-adjacent, and the people who work there are nice. I can also report that the dining area is clean, comfortable and well-lit, and the atmosphere suits us very well during those intervals when we’re trying to get ready for another day of work, school, teaching, and other career-oriented madness. The fact that it’s the first place we went in East Lansing is just a coincidence…

In July of 2008 we left Los Angeles and drove from California to Michigan, arriving in East Lansing around lunchtime on the 10th. To some people it might all have seemed routine, but we were coming home to a place we had never been before, and knew only from pictures and streaming Web videos. After exiting from the Interstate and driving around two sides of the MSU campus we eventually found ourselves at the small strip mall that houses the Pie Company. We decided to stop and try the place, since it met our two primary requirements for road food: it was clean, and we could keep an eye on our car (and its vast load of luggage and other belongings) from our table. Little did we know that this would be the start of a business relationship that would become a regular part of our work day, make us regulars on the local scene, and replace the bakery café where we had started many of our mornings back in L.A.…

Anyone meeting us first thing in the morning would probably assume that my wife and I have been together since High School, and these days they’d probably assume that we’ve been living in the area for years and purchasing out breakfast at the Pie Company since the place first opened. Only a very acute observer would realize that this is a new passage in our lives; that we came together by pure chance at a time in our lives when neither of us really believed we would ever have such happiness, and that we arrived in Central Michigan by an even greater chance. The difference of a few seconds or bytes one way or another, and I might never have cracked into the top levels of the GMAT; a single bad answer or committee member’s whim and I might not have been accepted by MSU; if the events of my life to date hadn’t all lined up just right we might not have had the resources to take a chance on graduate school at this time of our lives; if my wife or I had made our choices based on logic rather than emotion, we might not have ended up together at all…

When I think about how completely insane a chance I’m taking, and all of the dozens (if not thousands) of things that will have to break just right for me to pull this off, I can’t help thinking that my entire life to this point has been one long case of beating the odds. Had anything not broken just right in my past, I probably wouldn’t be sitting here in this really nice bakery café having breakfast with the most wonderful woman I have ever known, waiting for the sun to rise and the world to warm up and the bagels to toast. I don’t know where fortune will take me next; I don’t really know if there will be a new breakfast spot waiting for me four years hence, let alone a new job, a new challenge and a new home. But when I look across the table, I have to say that so far I’m coming out ahead. Deal the cards, and let’s play another hand…

Wednesday, January 6, 2010

Most Hated Company?

A few posts back I made reference to AIG becoming the most hated company in America, a feat I describe as having been “unthinkable” only a few years ago, when the Vice President’s old company pretty much had that sewed up. Well, the truth is, there’s no empirical evidence to confirm that everyone else hated Halliburton as much as I did; the fact is, if you were an employee or a stockholder you probably liked the company just fine, and if you are anywhere to the right of center on the political spectrum, you probably figured that if it wasn’t the Big H it would have been somebody else. AIG, on the other hand, appears to have some significant evidence behind it…

According to this study I found online, by several objective matters, AIG has become the most hated company in America, not just because they’ve taken $180 billion of your tax dollars, but also because they’ve lost 99% of their investment value due to bad choices, stupidity and greed and fired enough people to contribute significantly to the unemployment rate, and their senior management is apparently still tone-deaf (or blind) to the outrage they’ve created. Nor is it a surprise to find Citigroup on the list; while not quite as hapless as AIG (and not quite as toxic to our economy), they’ve managed to lose 90% of their share value over the last few years, and they’re also the second largest credit card company in the country, which means that innocently or not, they’ve been responsible for a lot of people going into credit card debt from which they will likely never emerge…

Not all of the names on this list are that obvious, however. Sprint is remarkable only for not appearing higher on the list (it’s easily the most despised cell carrier of the lot; the people who make Verizon look good), but you probably wouldn’t have expected to see K-Mart or Rite-Aid on the list; apparently, their massive financial losses in the past year make up for the fact that they didn’t tank the economy or take vast amount of public money to stay alive and then complain about the terms of the bailout. Abercrombie & Fitch is also a bit of a surprise; apparently, in addition to their child-porn print advertising they also have really crappy customer service and a miserable atmosphere in which to work. And it’s rather startling to find Dell – once the darling of the tech stocks – on this list; it would seem that their neglect of the new “netbook” product category is costing them, and their decision to slash jobs isn’t making them any friends…

United Airlines is not a surprise, given what we’ve been hearing about their customer service and public relations policies over the past year, but it is a bit shocking to realize that all of the people (including me!) who suggested that if they run that aspect of their business like incompetents, the rest of it must also be faulty are apparently correct. It was more surprising to find Hertz on the list; their poor financial performance and sweeping layoffs have made them unpopular, but most people would not have guessed that they’d also make the “Worst Companies to Work For” list. The really amazing one is Gibson; one of the industry leaders, they have a huge following of loyal customers – but getting into trouble for using materials harvested from an endangered species of tree is causing them some trouble…

I call your attention to all of these, the obvious as well as the surprising, not because I expect to amaze or disturb you, but simply to point out that with very few exceptions, all of these companies were at the top of their industry not long ago, and not one of them actually set out to join the most hated firms in America. Not long ago, in fact, you’d have considered investing in most of these while picking on Halliburton, Gateway, Texas Instruments or Enron for being a bunch of arrogant jackasses. Now they’ve all got public relations issues to which the term “blast radius” can (at least figuratively) be applied. If that doesn’t make you wonder where your company will end up in a year or two, it should…

Monday, January 4, 2010

Too Big to Fail?

Suppose for a moment that your company makes a product that is the most popular of its kind; the most common and most popular brand in the world. There are many government users, but the product is even more popular in the private sector, and export versions are found in literally every country in the world. Your industry is wide open, and there are in fact many competing products, but none are as cheap, few are as reliable, and certainly none are as well known as your flagship product. Given such a position in the market, is there any way your company could possibly fail?

Well, before you answer that question, you might want to check in with a Russian company called OAO Izhmash, manufacturer of the Kalashnikov, better known as the AK-47 assault rifle. Designed by Mikhail Kalashnikov in 1947 (hence the name), the AK-47 is the most common assault weapon on Earth, with an estimated 70 million examples of the type in service around the world. It’s widely considered to be the most reliable and repairable assault rifle ever built, with documented cases of AK-47s being left buried in mud or sand for years at a time, and then being fished out, wiped off, and working perfectly. So what could possibly cause the company that has been making them since 1947 to file for bankruptcy? In a word: piracy…

According to this story in the Globe and Mail, OAO Izhmash has applied for bankruptcy protection this week, largely because the market has been flooded with cheap foreign knock-offs of its premiere product, the AK-47. The Russian army isn’t buying a lot of weapons these days, but the main problem is that some versions of the AK are available for as little as $50, according to the online article. Apparently, Mr. Kalashnikov succeeded a little too well when he designed the weapon to be easy to fabricate…

Now, as you’ve probably guessed, I’m not calling this to your attention because I believe that any of you are going to neglect to patent, trademark or copyright your work as thoroughly as possible. I’m also not going to cry for a Soviet-era arms manufacturer that is now seeing its birds coming home to roost; the company’s treatment of Mr. Kalashnikov (who has never seen a dime of royalties for ANY of his designs) would be enough to make dislike them, and their State-sponsored contracts served them well enough back in the day. I’m telling you about this situation because it demonstrates that however much we may dislike anti-piracy measures, they’re not always the result of a greedy corporation wanting a bigger slice of the pie – and the cost of circumventing them isn’t always limited to having to pay 99 cents on iTunes…

If you’re a manufacturer (of anything; industry isn’t important here) you need to pay attention to knock-off versions of your product, and fight for your market share. You can use legal action when you’re being ripped off outright, but in the case of imitation products you can employ any number of strategies to maintain your market position – high quality and low cost being the two most familiar ones – but you can’t just bury your head in the sand and hope that people will see through the competition. And if you’re a consumer, you need to think very carefully every time you consider buying a knock-off version of a familiar product. Someday the company being knocked off might be your own…

Sunday, January 3, 2010

The Ethics of Snow Removal

The other day at lunch, several of us were discussing different methods of snow removal. Some of my colleagues favor the old-fashioned snow shovel, which has the advantages of never needing gasoline, operating without lubrication or mechanical repairs, and providing an aerobic workout in addition to clearing your driveway and sidewalk. A counter-point was made in favor of the snow thrower: that it has the advantage of not taking all morning, not leaving the user soaked in his or her own sweat, and not causing heart attacks in middle-aged men who use it (a combination of over-exertion and constriction of the blood vessels due to the cold). Still others spoke in favor of the snow-removal service, which is even more expensive than owning your own snow-thrower, but requires no effort whatsoever and will continue to remove the snow even when you are not around. Which in East Lansing, at least, is a major selling point, considering that the city has an ordinance that requires you to clear your sidewalk within 24 hours of the end of each snowstorm…

Now, I’m not going to argue that having cleared sidewalks is a good idea. A lot of people in this city need to be able to walk, at least as far as the bus stop, and they really can’t do that effectively if there’s three feet of snow in their way. Nor can you reasonably expect to use an honor system to ensure that the sidewalks get cleared; there’s always going to be at least a few people on each block who can’t be bothered, don’t have the time, are physically incapable of shoveling snow, or are unwilling to risk the aforementioned heart attacks in order to do so. That means a municipal ordinance, along with a fine for failure to comply and city inspectors to enforce compliance and all of the other little joys that come with trying to regulate polite behavior. And that, I regret to say, takes us back into the realm of ethics, and the issue of whether you should ever try to legislate manners…

Granted that keeping your sidewalk clear is polite, at the very least, the question of whether or not you should be compelled to do so is still valid. To be at all legitimate, an ordinance must be equally applied to everyone who lives in that jurisdiction, and snow removal is not a task that lies equally on all residents. The elderly and infirm do not have the option of shoveling snow, and middle-aged men with blood pressure conditions would assume a disproportionate risk if they attempted to do so. By the same token, anyone living on a limited income (the elderly again, plus anyone trying to survive on disability payments, social security, or a graduate student’s stipend) will suffer a disproportionate loss in attempting to pay for a snow thrower or a snow removal service. In fact, during a recession, the only people who will be able to comply with such an ordinance without suffering economic hardship will be those youthful enough (and healthy enough) to shovel their snow by hand…

The problem here is that show (and ice) removal isn’t just a matter of appearances, like those Homeowner’s Association regulations about grass length and tree trimming you may have read about. Deep snow is impassible to all but the strongest and fittest walkers, and ice (particularly black ice) is dangerous for just about everybody. In theory, the city (or county) could just purchase small-gage snow removal machinery and hire extra personnel to run it each winter, and fold the cost into the property tax they charge the residents, but no one wants to pay extra taxes, and this does nothing to address the economic issues associated with disproportionate burdens anyway. In fact, one could quite reasonably contend that this unfairly penalizes people who have the youth (and health) to shovel snow but lack the funds to pay additional taxes…

To people raised in warm-weather cities this may seem like a trivial issue, or at most a side effect of living somewhere that gets enough snow to be a problem. When you actually consider it, however, it’s a fundamental example of the conflict between having the local government be responsible for everyone and expecting your neighbors to clean up after themselves. How do you find the optimal balance between those extremes? It’s worth thinking about…

Saturday, January 2, 2010

The Grad School Diaries: An Angel in My Tree

Okay, not really. Actually, it’s a bird; a Northern cardinal (C. cardinalis), and its only resemblance to an angel is that they both have wings. But if you sit at my desk, by the window overlooking our deck, and watch all of the wildlife that comes by to investigate our bird feeders (and eat from them, in the case of the actual birds), you might start to notice some other points in common…

The cardinals, male and female, are adorable little birds; I find their feeding behavior, a sort of hopping about looking for seeds to crack with their large orange beaks, to be somehow very endearing. The tiny chickadees are usually the first to find the feeders when I fill them and hang them on the stand; they’re fearless little things, smaller than the palm of my hand, flitting in to land within inches of me, grab a beak-full of seeds and then sprinting back to the safety of our giant pine tree. The blue jays take the prize for cheek, though; they’ll squawk like a hawk, trying to scare the smaller birds away from the food before barreling right in, knocking the others aside. By contrast, our huge flock of sparrows all line up and wait for their turn at the feeder like workmen at a lunch counter…

Then there are the grackles, seasonal visitors who stop by during their migration to and from the forests in Canada. They’re big, shiny black birds, about half-way between the blue jays and a crow in size, with iridescent feathers around their necks and huge golden eyes that give them a permanently astonished look. They’re very appealing, too. Then there are the less common birds, like the purple finch, the goldfinch, and the Oriole, all of which stop by once in a while. They’re fun to watch out for, and I always enjoy seeing a new bird in the yard. Once in a while we get a woodpecker or two, and every few days an actual hawk – a big red-tailed hawk, if I’m not mistaken) – really does patrol his territory, which includes most of our subdivision. We will sometimes see him perch in a tree near our yard; sometimes we hear his call, too…

Then there are the animals that come by the deck. We’ve got dozens of squirrels, of at least three different species, that frequent our yard, and one day last week we had all three species on the deck at the same time. Some of them have become familiar to me over time; Rocky the fox squirrel is easy to spot, given that he’s larger than our cat and his huge, fluffy tail is edged in rusty orange. His rival, whom we call Scrat, is smaller, with a much rattier tail. Then we have Eastern grey squirrels; much smaller than the fox squirrels and without the reddish edge to their fur. Many of the individuals who frequent our yard are from the rare “black morph” – glossy black with white markings, which seems odd for a “grey” squirrel. We’ve nicknamed the largest one Shadow; he’s much glossier and fluffier than any of the others, and therefore easy to identify. Dale is the only red squirrel who comes by regularly; he’s a small rodent with a big attitude, and we think he chases off the other red squirrels. In any case, he’d the closest thing to a central-casting squirrel, with his handsome red-brown fur and white stomach and chest…

Cutest and dumbest of our squirrels has to be Alvin, our chipmunk. He’s so dumb he sometimes flings himself into the clear plastic sides of our main bird feeder trying to get at the seeds within, never realizing that there’s a clear barrier between him and the food. He’s easily light enough to climb onto the bird’s perch and access the feed through the doors; Dale does this on a regular basis, and Alvin is smaller and lighter than the red squirrels by a wide margin. But he’s apparently too dim to figure this out…

This is how I pass a great many of my days, working frantically to keep up with my class work. Most days when I’m sitting here there will be a fine red cardinal (or, sometimes, a whole flock of them) on a branch outside my window. Sometimes it will be 30 or 40 sparrows, or a cavalcade of squirrels, or a lone and very hapless chipmunk. Sometimes I will spot a wild rabbit hopping timidly through the grass, or see the majestic hawk soaring through the clear winter sky, or hear the drumming of a woodpecker. It’s fun to watch, and it helps me to feel more connected to the world outside, as well as making me feel better about having chosen to spend five years in this place. But ultimately, none of that really matters…

They make me happy. I could not feel more blessed if there really was an angel in my tree. And that’s important on days like today, when I’m so overwhelmed, frustrated and depressed that I can barely stand myself. At those times, the beautiful and loveable red bird outside my window really does make me feel better. Like a light in the darkness, or a friend when you really need one, they help me to carry on…

Maybe it really IS an Angel in my tree…