A rchive Date
[ 15-07-2002 ]
Category
[ International Relations ]
sub-Categoy
[ Cultures ]
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[http://slate.msn.com//?id=2057110
TOP STORIES
Malcolm Gladwell calls for a return of the Organization Man, and more on this week's corporate scandals
Updated Monday, July 15, 2002, at 8:06 AM PT
By Kate Taylor
Do young stars make bad CEO's?
The New Yorker's Malcolm Gladwell argues that Enron's downfall points to the weaknesses of its corporate "star system," in which young, high-powered Harvard and Wharton MBA's were aggressively recruited, then coddled and indulged. Gladwell's point is logical (one might even call it obvious), but the argument is underdeveloped: He relies too much on one company and one book (The War for Talent, by three McKinsey consultants) to draw the picture of the "talent myth" that he wants to explode. Nonetheless, his observations do raise an interesting question: Is it time for today's precocious narcissists to be replaced by yesterday's Organization Men? (7/15/02)
WorldCom shenanigans go back to 2000
The international finance director at WorldCom told Arthur Andersen he was concerned about the company's accounting practices in 2000, according to documents released by the House Energy and Commerce Committee today. Both the Washington Post and the New York Times point out that this means that (a) WorldCom was cooking the books much earlier than has been acknowledged, and (b) Andersen may have known about it. (7/15/02)
"God Bless Coke"
That's what former SEC chairman Arthur Levitt said about Coke's decision to start counting stock options as expenses. But it's unclear just what effect the accounting change will have, other than as good PR. Warren Buffett, who sits on Coke's board of directors, said that if corporations have to start counting options as expenses, they'll be encouraged to use forms of compensation that encourage better management. But Coke's CFO said the change won't reduce the number of options Coke grants employees. If other companies decide to follow suit, Coke could set an example for how to assess the value of options. Following a suggestion by Buffett, Coke will have investment banks submit bids to buy or sell the options and then average the bids. Other companies that count options as expenses use a pricing model known as Black-Scholes. (7/15/02)
In the land of the pundits, William Safire says we shouldn't get caught up in scapegoating, because the real fault in this stock mess lies with us, the investors. Always the scholar, Safire takes a line from Milton as advice to contrarians to consider getting into the market now… The Post's Howard Kurtz urges the press to question Washington's sudden conversion to the cause of corporate reform: "[P]oliticians have suddenly recast themselves as corporate reformers and developed amnesia about their relentless efforts to shore up what is now seen as a discredited system," Kurtz writes. "The press, with its notoriously short attention span, shouldn't let them get away with it." (7/15/02)
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