The Greediest Guys in the Room

The movie ‘The Smartest Guys in the Room’ is a comprehensive history and analysis of the rise of Enron and its dramatic and catastrophic collapse. It starts when Ken Lay becomes CEO of Houston Natural Gas and concludes with the collapse of Enron. Along the way it paints a fascinating and compelling picture not only of what Enron did as a company, but also the personalities that ran it and the details of where and how it went wrong.

The core of the Enron story is the people, an array of brilliant, egotistical, and arrogant executives who create a corporate culture that selects for raw intelligence and vicious competition and discards most of the social virtues typical of a corporation. Both the intelligence and the arrogance come through clearly. Whatever else those involved in the Enron story were, they were smart. The company was filled with people capable of solving advanced equations in their head, and brilliant economists who came up with both revolutionary trading techniques and ways of exploiting legal loopholes before anyone else. That it captures not only the weaknesses but also the strengths of Enron and shows how much talent was let loose in an environment with no effective controls.

I think that one of the obvious systemic causes of the Enron scandal is the legal and regulatory structure. First, laws regulations allow firms to provide consulting services to a company and then turn around and provide the audited report about the financial results of these consulting activities. This is an obvious conflict of interest that is built into the legal structure.

Second, a private company like Enron currently hires and pays its own auditors. This again is a conflict of interest built into the legal system because the auditor has an incentive not to issue an unfavorable report on the company that is paying him or her.

Third, most large companies like Enron are allowed to manage their own employee pension funds. Again, this is a conflict of interest built into our legal system because the company has an incentive to use these funds in ways that advantage the company even when they may disadvantage employees.

And fourth, most companies like Enron have codes of ethics that prohibit managers and executives from being involved in another business entity that does business with their own company. But these codes of ethics are voluntary and can be set aside by the board of directors. The managers and executives, of course, have a fiduciary duty to act in the best interest of the company and its shareholders, But the law leaves considerable discretion to managers and executives to exercise their own business judgment about what is in the best interests of the company.

                Add to this, in an individualistic point of view, managers at Enron grew arrogant, thinking themselves as invincible. Due to its leaders, there was a tendency for the company to seal itself off from forces on the outside. Or perhaps it was the corporate culture in which they operated that led to the problem. They had rank-and-yank performance appraisal system, which eliminated anyone who fell behind, survival of the fittest as they say.

                It was painful to watch the outcome of this scandal. However, I am more pleased that I had the opportunity to watch this movie as this shows an accurate picture of what us, the future leaders would have to deal with in the near future. 

Pointing Fingers

Ford VS Firestone Tires 

Ok, it's the second time we have an ethics analysis regarding Ford. Hopefully this is not indicative of the company's priorities and values nowadays. Here's the link of the case.

To summarize: Car has tire/gear problem. Ford blames Firestone. Firestone blames Ford. People die. 

According to investigation, there were 46 deaths and more than 300 incidents involving the Firestone tires in Ford Explorer. There was a tire recall but long after all the injuries and deaths. Of course the company face a lot of mounting lawsuits.

Who then should be accountable? According the the presenters, the Explorer's lack of stability was mainly due to lower recommended psi and also due to the modifications which were made to the Firestone ATX and Wilderness tires. Ford Executives however, put the blame on Firestone with now the infamous statement 'it is not a vehicle problem and is a Firestone problem'. 

The group presented various alternative courses of action at the moment when Ford and Firestone knew about the issue. 

Ford should have not lowered the psi and modified the firestone and wilderness tires just to lower costs and pressured to hasten the quality assurance process just to meet the release/introduction deadline. Ford should have at least sent a notification to their consumers of the modification made.
Firestone on the other hand, should've had their own quality control and made sure that the tires attached to the car would be on par. They should not have signed-off releasing the car without their recommended psi. 

This case wouldn't have been as messy if they did not point fingers at each other and blame one another for the fault that is clearly directed at them both. It would be best that when this issue came about, they immediately recalled the units, modified its configurations and changed it cars. The cases filed were dragging and left an unpleasant taste in the mouth.  

The Grass is Greener on the Other Side

We had an ethics/business analysis of Brian's Franchise. Here is the link of the 2-pager case.

The ethical dilemma in this case was to determine whether Brian should continue or stop his marijuana planting business. 

The presenting group gave 3 alternative courses of action : 

1. Continue selling in Amsterdam
2. Change business model 
3. Plant something else aside from marijuana

The group determined that Brian should discontinue selling marijuana and focus on other plants to cultivate. 

The class also provided other alternative course of action: Brian can sell marijuana to legal channels such as pharmaceuticals as medicine. This sparked a bit of debate amongst the class because it crossed a fine line between ethics and business. 

I agree with the presenting group's recommendation to stop selling marijuana because I have seen the effects of this drug to a close relative. Seeing someone that you love spiral down because of addiction is heartbreaking. Brian in the case is a bright young fellow that can choose to jump careers because he has the talent to do so. He is not in dire need of money and does not have a family to support. True, there are losses on costs if he jumps ship, however, could he see himself being the person who supplies drugs to addicts whom are not only wasting their life but their family's as well? 

The case in my eyes was black and white and does even a tinge of gray in it. Everything is a choice and we should always do the correct one. 

Service Learning Activity

I am thankful that I am connected with institutions that value charity. Through their guidance, I have experienced tree planting, assisting the elderly, take care of orphans, teaching children in an indigenous community, build houses for the families who were affected by the typhoon, and so much more. 

As part of my MBA curriculum, I am again fortunate enough to have an opportunity to help. We were asked to create a CSR activity with our chosen community or charity. Since we believe that the children are our future, we chose to help out Tuloy Foundation which helps out orphaned children. According to their profile, Tuloy Foundation has been in the service of poor, abandoned and orphaned children, particularly the ones of the streets, since 1993. These children, coming from impoverished families, are helped by the foundation through a comprehensive program that provides the stability and security of a home, education, practical skills training, and equipping them with healthy values for their transformation into contributing members of future generations. Tuloy is heavily dependent on donors and benefactors to cover for food, basic needs and education.  As of now, there are about 220 resident and 800 non-resident children in our care that are hopeful because every donation that comes in means that another child can be able to eat, live and study.

The health of kids are often neglected because of that, we chose provide medicines for the sickly orphans. For this CSR activity, we will organize a fund drive to raise money to buy the needed medicines. Personally, I will seek help of my friends, office mates and family members to donate. I'll research more on how I could raise more money, though. 

According to an article from Harvard Business Review, there are 5 reasons why we should donate to charity: 

1. May improve your sense of well-being
2. Supporting a cause can help you feel informed about issues of social injustice
3. Giving to charity out of Spiritual conviction can strengthen your spiritual life
4. Volunteering with charity may result in physical and social benefits
5. Donations are tax deductible (For businesses only)

I can't help but to feel excited in executing our Service Learning Activity!  

Ford Pinto

My dad adores his Ford Explorer. He does not like anyone to drive his car, not even his children who maybe a better driver than he is. It maybe my Dad's influence on me, but I have always had a fond interest in Ford Cars. I've been drooling over the Mustang GT500 for 3 years now. 

For this weeks session, we were asked to analyze the Ford Pinto Case.

To summarize, company builds car, car has terrible problem, company ignores it, people die.

In 1968, then Ford president Lee Iaccoca decided that the company would not sit idly by as new Japanese competitors dominated the small car segment. He pushed the board to green light the Pinto Program and a couple of months later, the program was underway. It had impressive targets, weighing no more than 2000 pounds, priced at $2000 and a delivery deadline of just 25 months.

I guess it's too good to be true for Ford. A problem was quickly discovered in the fuel tank design. The fuel tank, positioned behind the rear axle and in front of the rear bumper would tear away and spill fuel beneath the car. Also, the tank was easily punctured by bolts protruding from the differential and nearby brackets. This would create fire in seconds. 

Engineering teams quickly proposed solutions such as installing tank shields or borrow a design Ford already used in it's Capri--a much safer gas tank. 

Ford still pushed the Pinto into production. 

According to Motherjones, by conservative estimates Pinto crashes have caused 500 burn deaths to people who would not have been seriously injured if the car had not burst into flames. The figure could be as high as 900. 

So who is to blame for all these? 

Safety Engineers were apprehensive to tell Ford President Lee Iacocca about the flaws in the design as they knew it wouldn't matter. If anyone would mention it to Iaccoca according to a Ford Safety Engineer  "That person would have been fired. Safety wasn't a popular subject around Ford in those days. With Lee it was taboo. Whenever a problem was raised that meant a delay on the Pinto, Lee would chomp on his cigar, look out the window and say 'Read the product objectives and get back to work.'"

Why did Lee Ioccoca allow the Ford Pinto to be released? Iacocca was in a hurry. He wanted the car in showrooms for the 1971 model year. That meant one of the shortest production planning periods in modern automotive history: just 25 months, when the normal time span was 43 months. That also meant that the Pinto's tooling was developed at the same time as product development. So, it was later alleged, when Ford engineers found a serious defect in the gasoline tank, it was too late. The tooling process was well under way.

With all that death's over his head, how could he set aside all that guilt? 

Existential Questions

Our professor showed us a Work - Leisure - Integration Matrix. Here's what it looks like : 

We were asked to determine which level we are in the matrix and share it to our group. 

So where am I in the matrix? 

Let me give you a brief background of myself. 

I am a 25 year old, female who recently left as job as an HR Advisor in a multi-national company to focus on their family business while studying MBA. I am not in a relationship, I love dogs and I have friends whom I occasionally go out with when I think I am financially capable to do so. I collect Loki merchandise and those little lego toys(I only collect villains). 

Career-wise, I feel like I am in a stand still. Granted, my father is happy that one of his young-lings finally took interest in the business he built and I am am happy that he is happy. However, I find working in our business a tad boring. Maybe I was accustomed to the fast paced, professional companies that I worked with before. Pay is not going well too, nowadays. I am given allowance, and I feel that by savings are slowly thinning up. I could go find another job, but after one of our Admin goes back from maternity leave(June, she hasn't left yet). I plan to work in HR again as soon as I get my father's consent. So if I were to choose which stage I am in for Work, I would be in Job:getting. I may sound like an ungrateful spoiled kid, but I am not ready to work in our business.. yet. Maybe after I have experienced being at the top when I've climbed up the corporate ladder. 

When I am not at work, I study. I am very thankful that I am taking up MBA right now. Aside from it being an escape from the monotony at work, it has become my beacon of hope(haha). I meet interesting people, I learn a lot and I am hopeful of what this course can offer me. Going out with friends may be challenging to do now, however, I know that it will be better towards the end of the year. I am beginning to find comfort with myself and with my family. I am currently in Utility for Leisure. 

Combined, I feel like I am still in the Gratification stage. I have 'work' and have fun but there is a gutting feeling that I am just coasting in life. I am living life on auto-pilot. I haven't done any major life changing decisions lately and I missed doing that. 

After ranting out about life, I often feel fueled. It is a good feeling. 

Personal Values Assessment

Answering online assessments have become an unwelcomed hobby recently. From 'Which Spice Girl are you' to 'What fast food chain are you based on your favorite pizza topping?'--I've answered it all. 

A few weeks ago, We were asked to answer a values assessment. Sure enough, I had a relatively easy time answering. I did a personality test October of last year. Here is the result: 

Your values show:

• Seeking new opportunities to develop and grow helps you find a deep sense of meaning and progress in your life

• Utilising the wisdom of your experience to guide and benefit others adds meaning to your life.

• You have high aspirations and seek to improve your circumstances.

• You like to ensure information is clearly understood and expressed.

• You see possibilities where others cannot and you have an understanding of the steps needed to get there.

• You seek holistic balance by striving to maintain harmony in all aspects of your life.

• Experience has provided you with insight and understanding, enabling you to think clearly and to guide others.

Ohmygoodness I sound like a saint!

After taking both test done online and in school, I have learned that values are fundamental to each and every person and help provide us with personal, social and cultural worth; in essence, they shape our identity and help us find our place in society. Not only do they guide us by signifying what is important, good or useful, but they can also inspire and motivate us. Regardless of social and cultural differences, mums globally see the responsibility of instilling values as their individual role.

Sailor Moon Transformation

Life Plan... To those that haven't found their purpose or even iffy to set goals in life, composing a Life Plan is difficult feat. It's embarrassing to say, but I am part of that group. Well, I do have plans in life but I tend to do it in the most obscure kind of way. The more abstract my plan is, the better. I find comfort in the assurance that I have a higher chance for success if I lack the timeline and metrics for it. It all changed when I was required to to a career and life plan for an assignment. I was put into a pedestal, and I did not have a choice but to do it(maybe I did, it was just risky not do it for my grades sake).

Part of that life plan was to create a personal vision and mission statement. After careful thought, I managed to come up with these:

Personal Vision Statement

                I envision myself as an individual of character and competence, committed to live a life of passion, compassion, with a pursuit for excellence, while staying true to self.

Personal Mission Statement

                My mission is to find peacefulness within myself by looking inward while using my heart and mind to pursue knowledge, creating balance among all my obligations. I want to build a reputation of being dedicated to every goal I choose to pursue while having successes in per personal and professional life. 

An AHA moment! I didn't expect it, but these simple statements made a profound impact in me. When I was young, I was always intrigued what Serena must feel like when she transforms into Sailor Moon. I think I had a taste of that when I made my vision and vision. I felt a sudden surge of enlightenment because it put things into perspective. My actions are a reflection of what my vision and mission is in life. It was easier to create my career and life plan after that.