how to start a financial revolution in your local community.
A retired professor of business and economics, Tom Greco has spent twenty years studying community currency systems around the world, including historical models (such as during the Great Depression), and the scores of contemporary examples now operating in the United States, Canada, Europe, South America, Australia, New Zealand, and Japan. He helped establish the Tucson Traders currency in Arizona, and he has served as a consultant for many others. No pie-in-the-sky idealist, Greco offers a realistic vision of how healthy local economies can be supplemented with flourishing community currencies.
Anyone who works routinely with money needs this book—this means bankers, stockbrokers, merchants, community organizers, loan sharks, gamblers, investors, bank robbers, hedgefund operators, sports agents, and ordinary people.
Customer Reviews:
muddled thnking accompanied by good intentions.......2005-09-05
Contrary to the enthusiastic reviews, I have to forewarn possible purchasers of this book. It is a mix good information and superficial, misleading, and wrong information which together are likely to result in un-necessary difficulties if not disaster for projects supporting community based currencies.
Without being tasked to rewrite this book let me cite a few examples. In the context of asset based currencies no mention is given on American Colonial script, the issuance of the Continental Congress's "Continentals," The US Civil War Greenbacks, or of the currently existing right of the US Treasury to issue silver certificates. A first lesson would be to examine successful commons centered currencies.
It doesn't really deal with the various banking and monetary scams, including the Great Depression, version 1.0, that have been inflicted upon the US economy to serve private interests. It doesn't deal with the fact that credit cards are a way of generating debt, and thereby money, particularly when debt as extended in violation of existing fractional reserve laws relative to banking operations.
Often what is described as "brief" historys or descriptions get immediately side tracked onto tangential material of little importance. The basic definition of money is all over the map, and there is little analysis developing a clear definition.
To the extent that it uses material offered by the Federal Reserve it is using material that it deliberately misleading. The Federal Reserve is essential a privately owned and controlled corporation which acts in the interest of its investors and shareholders. Through the strategic political lobbying of the Congress it has obtained the primary right to issue and control our currency in the interest of its share holders and participant banks, not in the interest of the people of the US as a nation. Through the same legislation enabled by the ignorance and duplicity of our bribed politicians it has acquired the branding rights to pretend to be an institution of the US Government. To the extent that the faith in the US Currency is based upon this association it is misinformation.
These are critical times in which we can expect to see a major collapse of the monetary and economic ideologies that have extracted so much wealth from the people of the US and from the World. While I fully support the concept and practice of community based currencies let this book not be your only source of information. Also, check into more serious analyses by sources such as the American Monetary Institute's "The Lost Science of Money." Greco's book seems to be in the lesser sense very much a "new age" sort primer without being serious about monetary history, current policies, or principles.
Given that most people are unable to evaluate financial statements, this sort of feel good, skimming, and muddled presentation could easily lay the foundation for "well intentioned" fraud. On the other side, if these community based currencies are established wrongly it could expose people to a lot of legal and tax related trouble. There is massive irrationality and political ideologies afoot already in the "management" of the US and Global economy. When erecting community currencies it will serve our interests better by developing an understanding of the related material also from more serious sources. Sure this is a cheaper book and appeals to irrational exuberance, but will it provide a solid foundation?
good information if you're patient.......2004-12-06
This book has lots of good information in it, but the author's enthusiasm for local currencies leads him to order the book in an ineffective way: rather than highlighting particular currency projects, he should highlight the issues with and potential solutions to our monetary system. The most useful information -- currency formation, interest basics, suggested improvements (e.g. returning to a separation of on-demand and savings/investment accounts) -- was buried in the second half of the book.
The current monetary system has several problems -- (1) distribution of wealth from poor to rich through payment of interest, (2) environmental degradation by necessitating continuous growth in order to repay interest, (3) increased risk of war since governments can print currency instead of increasing taxes, and (4) devaluation of currency through illegitimate creation of money.
These are legitimate concerns. Another concern, that the banking system can lead to shortages of money, seems refuted by the phenomenon of deflation/falling prices. If limited to a small subsection of a larger economy, local falling revenues (and rising currency value) would still present difficulties when goods must be imported from outside the locality; but use of local currency (that the outside suppliers wouldn't accept) is irrelevant to the situation.
I would also disagree with the author that the wealth distribution and the partial reserve problems are linked. The wealth distribution problem stems from needy people paying wealthy people for use of currency. There is no difference in this regard between borrowing cash directly from a person (i.e. 100% reserve) and taking out a bank loan (i.e. creation of new, illegitimate money), despite what the author seems to believe. The borrower will (or, rather, should) only do so if the intended use of the money yields a benefit greater than the agreed interest rate. Whether interest goes to both bank and depositor or to the bank only (solely to cover administrative costs), this will be the case (driving an unsustainable need for growth, liquidating the real wealth of our natural environment).
Repayment risk coverage is not much considered in this book, though later chapters do admit a need for a reserve to cover chronic debit accounts. Discussion of the effects of higher interest rates for poorer people is not to be found, instead treating all borrowers/consumers equally. Loans herein are always "monetization of assets" (e.g. mortgages), but unsecured loans are (and should be) a possibility. Should all borrowers (or all citizens, for that matter) pay equally for insurance against defaults? The author would seem to imply so; whether good or bad an idea, some justification for doing so would be helpful.
All in all, this book is a worthwhile read -- but definitely not the only book you'll need to read on currency or flaws in our economic system (e.g. subsidized pollution, tax code that favors property ownership, etc). Incidentally, if anyone knows of a good book on currency exchange (which is not covered in the above book), I would like to hear from you.
Knowledge can set you free.......2002-03-29
Make an estimate of the amount of time you have spent on preparing yourself to earn money, on getting it, and of taking care of it when you have it. Wouldn't it be worthwile to really understand what it is you are spending all this energy on?
Tom Greco has been doing some of that work for you, with integrity, passion and enormous dedication.
The time has come to shed some light on the mysterious workings of our money. Read why it is a losing game for most people, of why it is our master instead of our servant. More important still: what you can do to change it for yourself and for your own community.
a valuable book.......2002-03-27
This book is a fruit of the author's "warm heart and cool head." The value of this book is to demonstrate a theory and a method for democratizing the power to issue money. We can understand the necessity for local currencies in order to decrease the concentration of power in monetary and financial system.
DO YOU KNOW WHAT MONEY IS?.......2002-03-13
MONEY, by Thomas Greco, is one of those books that will cast a light on the shadows of economy as we've known it. But as it happens with every time light is cast, other shadowy areas emerge. The dark side of a system which we take for granted. If anyone suffers or has concerns about money, by reading this book it'll become clear that most people suffer and are concerned about something they didn't even know what it was. What IS money? Why do we suffer under it? What's the problem with money? Most of the world uses it today, though few realize that Legal Tender has legal implications, is part of a legal contract which we agree on even though we haven't even read the large print, much less the small print. By reading MONEY, both large and small print become clear and understandable. This is a book that is both easy to read and easy to understand, and what's perhaps most interesting, a book which will make us realize that our economic problems might not be our personal fault after all, but rather the fault of a system which was never quite right. Money is a technology with side effects. Poverty is a result of money for money functions under the rule of scarcity. If it's scarce, it's more valuable but if it's too scarce, its function as a `tool of exchange' does not work properly anymore.
MONEY is the beginning of a long road we have ahead of us. A few aspects, especially at the end, might still be too close to our present paradigm about economy, but this should change as more people around the world experience different systems of Alternatives to Legal Tender and thus see their very lives changed for the better. MONEY is only one step -but perhaps the first step most of us need- in the path towards a more humane future.
Book Description
This digital document is an article from E, published by Earth Action Network, Inc. on May 1, 2002. The length of the article is 821 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: The color of money: alternative currency promotes fresh thinking about sustainable economics. (Money Matters).(barter systems)(Brief Article)
Author: C.B. Gaines
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E (Magazine/Journal)
Date: May 1, 2002
Publisher: Earth Action Network, Inc.
Volume: 13
Issue: 3
Page: 44(2)
Article Type: Brief Article
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Join the thousands of professionals who have already gotten Inside the Technical Consulting Business — and discover how to channel your technical know-how into an exciting career as an independent consultant. This Third Edition of Harvey Kaye's bestselling guide gives you the focused, no-nonsense help you need to start and run your own consulting practice in today's ultracompetitive environment. What's inside: Setting up your consulting business. The lowdown on finances, record-keeping, office space, taxes, and choosing the form of business organization that's right for you.
Insider's guide to proposals and contracts. Gives plenty of examples to use in your own consulting practice.
Marketing secrets your boss never told you. Tips on creating demand for your services and keeping your clients coming back for repeat business.
PLUS ALL-NEW MATERIAL ON:
- Creating your personal strategic marketing plan. A step-by-step guide to developing and maintaining your competitive edge.
- Learn from the pros. "Meet the Pros" interviews show how successful consultants handled some of the very problems you're likely to encounter.
- Building successful client relationships. The inside scoop on keeping clients happy while protecting your own professional interests.
- The technical challenges of consulting. A consultant's primer on problem-solving, coping with the information explosion, and organizing for maximum productivity.
Customer Reviews:
A Superficial Text of Limited Usefulness.......2002-08-21
If you are looking for one book on how to successfully consult as an engineer, this is not it. Readable in a weekend, the text is too superficial.
It breezes over the nuts and bolts of consulting. Important tax law, such as IRS 'right-of-control' criteria for independency and methods of calculating/paying estimated taxes, are barely covered. Contract writing/review - a vital aspect of the consultation process, is hardly mentioned (although proposals, non-legally binding documents, are well covered). In general, the coverage of the legal and liability aspects of consulting is cursory.
Kaye makes good points, but many would be obvious to any professional experienced enough to consult. What professional doesn't know how to dress for an interview or that bringing physical samples of work to the sales meeting is a good idea?
When detail is provided, Kaye often favors an approach without substantiation. For example, on the all important topic of billing rates, calculation of rates based upon desired annual income is covered in detail, while methods of researching the rate which the market will bear are scarcely covered. Yet in real markets, the billable rate will be influenced (if not based entirely) upon the market rate. In fact, comparison of the market rate and the desired rate may lead the individual to choose *not* to consult. Analysis appropriate in a text about launching a practice.
In conclusion, although Kaye's book has an affirming message and a fine bibliography, it holds few revelations or useful tools and will rarely be use for later reference.
For those trying to decide whether to consult or interested in the "nuts & bolts" of consulting, I recommend Nolo's excellent, "Working for Yourself, Law & Taxes for Independent Contractors . . ." by Fishman. I am unable to recommend any books on marketing for consultants.
Excellantly Written.......2002-08-13
This book is easy to read. It covers all the bases and gives you a good idea as to how much you are really worth as a consultant. It's a "must have" as a reference book for anyone going out on their own.
Excellent resource for the technical consultant!!!.......1999-10-28
ANYONE considering technical consulting as a full or part-time profession MUST READ THIS BOOK! It cover all aspects of consulting (including a personal reality checklist) in an easy-to-read manner and will be a permanent reference in my library.
Invaluable information, filled with countless wise tips!.......1999-04-26
As an e-commerce consultant I was pleasantly surprised to see that someone had written about exactly the kinds of experiences I've had with clients over the years. This is the first consulting book I've come across that covers all the issues in a straightforward way. It's full of great tips based on real life experience. Other consulting books tend to have a lot of fluff and padding, but this one gets right to the juicy issues in a concise manner. I makes for enjoyable reading, at times it is hard to put down. This is an essential book for anyone doing consulting or contract-based work.
Book Description
This digital document is an article from International Journal of Commerce and Management, published by International Academy of Business Disciplines and Eberly College of Business Information Technology on June 22, 2004. The length of the article is 1004 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Microenterprises in Africa: a New Viewpoint.(Book Review)
Author: Joanna Cassin Schreiber
Publication:
International Journal of Commerce and Management (Refereed)
Date: June 22, 2004
Publisher: International Academy of Business Disciplines and Eberly College of Business Information Technology
Volume: 14
Issue: 2
Page: 78(2)
Article Type: Book Review
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Success and Failure of Microbusiness Owners in Africa: A Psychological Approach
Manufacturer: Quorum Books
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 General
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ASIN: 1567202969 |
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Only if they do the right thing at the right time will owners of small businesses succeed. Simple enough, but what are the factors in their psychological makeup that enable them to do it? Frese and his contributors have studied small businesses in four African countries from a psychological perspective--the first time this has been done--and report that it's the psychological aspects of their strategies, not just the strategies themselves, that contribute significantly to their success. They also prove that many of the stereotypes that seem to characterize the owners of microbusinesses are clearly incorrect. Executives, analysts, bankers, international entrepreneurs, and their academic colleagues will discover that many of the conclusions they have drawn from previous studies can not be generalized. Only by separating those that can be generalized from those that can not, can we get a true understanding of the small business entrepreneurial dynamic. Frese and his colleagues focus on South Africa, Zimbabwe, Uganda, and Zambia to produce a clear overview of the research on microbusiness and entrepreneurship in developing countries. They find that psychological strategies are closely related to entrepreneurial success, but because conditions in these countries differ widely, the particulars of certain strategies and their effectiveness may also differ. They show that a number of ideas prevalent among professionals and entrepreneurship researchers in developing countries need to be challenged. Among them, that microenterprise owners who started their companies because they were unemployed do worse than those who started for other, more "positive" reasons. Also, that human capital (education) represents the most important set of variables to be considered for success (it isn't), or that employing family members decreases success (it doesn't). Well written and impeccably researched, the book is an essential contribution to corporate and academic libraries, as well as to the knowledge of individuals in business, psychology, entrepreneurial and regional studies, and related fields.
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Metaphor and Gender in Business Media Discourse: A Critical Cognitive Study
Veronika Koller
Manufacturer: Palgrave Macmillan
ProductGroup: Book
Binding: Hardcover
Communications
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Postmodernism
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ASIN: 1403932913
Release Date: 2004-08-12 |
Book Description
This new study reconciles cognitive metaphor theory with Critical Discourse Analysis to offer a fresh approach to the study of metaphor. In applying this framework to a substantial corpus of texts from business magazines, the author shows how metaphors of war, sports and evolutionary struggle are used to construct business as a masculinized social domain. In view of the subtle but pervasive socio-cognitive impact of these metaphors, the study raises the question of possible alternatives and the scope for change in business media discourse.
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Computing and Software Design Career Directory: A Practical, One-Stop Guide to Getting a Job in the High-Tech World of Comuters (Career Advisor Series)
Bradley J. Morgan
Manufacturer: Visible Ink Pr
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Binding: Paperback
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ASIN: 0810394480 |
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Computing and Software Design: Career Directory (Career Advisor Series)
Bradley J. Morgan
Manufacturer: Thomson Gale
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Binding: Hardcover
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ASIN: 081039152X |
Book Description
Wealthy individuals and families face special challenges in managing wealth, as wealth has often been amassed as the result of inheritance or business acumen, not necessarily financial sophistication. The Stewardship of Private Wealth helps enhance the financial sophistication of the reader so that he or she is able to competently shepherd family assets, working in tandem with suitable and competent professionals rather than abdicating decision-making to outsiders who may have little interest in preserving or building that wealth. The Stewardship of Private Wealth covers: The psychological effects of wealth; The importance of maintaining personal control over the management of assets; Philanthropic inclinations and planning; Asset allocation, portfolio management, and money management; Venture capital, real estate and oil and gas investing, and other investment alternatives.
Book Description
Corporate CEOs are headline news. Stock prices rise and fall at word of their hiring and firing. Business media debate their merits and defects as if individual leaders determined the health of the economy. Yet we know surprisingly little about how CEOs are selected and dismissed or about their true power. This is the first book to take us into the often secretive world of the CEO selection process. Rakesh Khurana's findings are surprising and disturbing. In recent years, he shows, corporations have increasingly sought CEOs who are above all else charismatic, whose fame and force of personality impress analysts and the business media, but whose experience and abilities are not necessarily right for companies' specific needs. The labor market for CEOs, Khurana concludes, is far less rational than we might think.
Khurana's findings are based on a study of the hiring and firing of CEOs at over 850 of America's largest companies and on extensive interviews with CEOs, corporate board members, and consultants at executive search firms. Written with exceptional clarity and verve, the book explains the basic mechanics of the selection process and how hiring priorities have changed with the rise of shareholder activism. Khurana argues that the market for CEOs, which we often assume runs on cool calculation and the impersonal forces of supply and demand, is culturally determined and too frequently inefficient. Its emphasis on charisma artificially limits the number of candidates considered, giving them extraordinary leverage to demand high salaries and power. It also raises expectations and increases the chance that a CEO will be fired for failing to meet shareholders' hopes. The result is corporate instability and too little attention to long-term strategy.
The book is a major contribution to our understanding of corporate culture and the nature of markets and leadership in general.
Customer Reviews:
A landmark look at the Cult of CEO.......2005-01-20
A brutally honest look at what is wrong with how CEOs are chosen in America today. I read an advance copy of this book and could not believe it was allowed to go to press. Dr. Khurana certainly has put his professional aspirations on the line to be so bold, but this is the kind of book that makes a difference in the world.
This book presents what I considered some amazing and enlightening information not normally available to ordinary people. We can read about the stupefying emoluments, titanic disasters, and spectacular firings of CEOs in the popular press, but it is hard to find out the inner workings of how these people got into these positions of influence to begin with. Many of the academic treatises on management I have read seem like distant observations from an ivory tower. Refreshingly, parts of this book sounded to me like the information came from furtive phone calls late at night.
Of course, part of the problem is that the foxes are already in charge of the chicken coop. I, too, would recommend this book to members of corporate boards responsible for the performance of top executives. There are plenty of brilliant executives who should be promoted based upon sound character and true leadership ability. Everyone knows that in many cases this is not happening, but Dr. Khurana has identified the defective process that underlies the problem. It is up to boards of directors to learn about and correct their mistakes.
The final page of the book uses an analogy from the Wizard of Oz about drawing back the curtain to shed light on the inner workings of power, and Dr. Khurana has done a good job of this. His book is to CEO succession as Sinclair Lewis' "The Jungle" was to the meat packing industry--it will turn your stomach and make you cry out for change if you read it.
Study this book if you are looking for a CEO.......2004-01-30
The selection of a new CEO can be as mysterious as the election of a new Pope, the opacity raising questions about the efficiency and legitimacy of the decisions reached. Because external CEO searches are generally undertaken by companies in the throes of a real or perceived crisis, stakeholders hope the outside CEO will be their savior. Because single-handedly saving a troubled corporation is no ordinary job, boards bent on finding a corporate messiah are not interested in ordinary qualifications but a person who is thought to possess charisma. Enron's Skilling offers a dramatic and instructive illustration of the perils of charismatic corporate ladership. Corporations would do well to reconsider their models of leadership and ways of choosing leaders.
In the decade following McCoy's appointment as CEO, Chicago's Bank One Corporation acquired over 100 banks, moved from 37th largest bank to fourth, and stock increased 500%. In 1999 Bank One began to falter, the stock fell, integrating First Chicago was more difficult than expected, the conservative style clashed with the entrepreneurial culture and McCoy's management style, which was included in the Harvard Business School's required general management course, was seen to be a liability rather than an asset. A revolt gathered steam and a generous separation agreement was negotiated. Stock jumped 11% on the announcement but became volatile with media coverage of the high-profile search for the best person in the US to lead Bank One back to the top with the leadership as the overriding principle guiding the search. Dimon was top of the short list. "In late February, Dimon flew into Chicago to deliver a two-hour presentation to the Bank One search committee. By this time, he had decided he wanted the job. Dimon's presentation seemed to leave his audience breathless. He talked about his philosophy of management, covering such topics as his leadership style and the importance of clearly articulating to people their roles and responsibilities. He also spoke about the importance of instituting a more extensive stock-option plan to better align the incentives of the executives with those of the shareholders. Dimon's bluntness and self-confidence impressed the committee." He wasn't afraid to lead, he said all the right things, he had a plan, he was prepared to make the tough decisions that others wouldn't make. In one brief appearance that Dimon himself largely orchestrated he met Bank One's high standards of leadership. Dimon was appointed over insider Istock and stock soared 30%.
Bank One's CEO succession process followed a familiar script with little emphasis on the company's strategic position and whether the candidate's background was appropriate. If the new CEO is unable to deliver quickly, the wisdom of the selection is questioned. This is the first thread of irrational behavior in what should be a carefully considered process. The leadership school believes that CEOs play a critical role in a firm's performance, while the constraint school believes that internal and external constraints limit the CEO's ability to affect performance. A third school suggests that the pertinent question to answer is 'When does leadership matter?' rather than 'Does leadership matter?' as the leader's impact is highly case-sensitive. "As the Bank One story illustrates, however, it is not only the criteria directors use in choosing a new CEO that calls into question the efficiency and overall rationality of the external CEO market. So do many other features of the search itself." Not only was the initial boost to the stock price short lived, but the board was questioned on its control over the CEO after five directors, including the internal candidate for CEO, "volunteered" to retire from the board after five months. Whether the benefits would be worth the price agreed by the board would remain an open question for an unforeseeable length of time.
"How are we to account for these remarkable, ultimately disquieting features of the external CEO search: the overestimation of the CEO's role and the fixation on charisma; the somewhat Byzantine nature of the search process itself, simultaneously closed to many presumably qualified candidates and open to the influence of many external actors; and the questionable outcomes that this process often produces? This book is an attempt to answer this very question." Boards seriously underestimate the damage that outside succession entails and if the firm is already in trouble, hiring an outside CEO might threaten the survival of the organization itself. A remarkable feature of the Bank One search was that the board passed up an experienced, highly qualified executive who knew the company and its business well. The airplane interview technique in which the incumbent CEO conducts a surprise interview with successor candidates individually and asks who should lead the company assuming both are killed provides very interesting information about the chemistry of the group. Repeating the process three months later when candidates are better prepared but only the incumbent CEO is killed, provides further valuable information. All information is shared with those involved in the final decision. If the process is initiated early enough, the shortlisted candidates can be moved into testing situations that may help the final decision.
Kurana, Assistant Professor of Organizational Behavior at the Harvard Business School wrote this book based on a study of hiring and firing of CEOs at over 850 of America's largest companies. Anyone who is involved in the selection process of a CEO would be wise to study his findings.
Important piece of work.......2003-11-10
In this important work, Khurana focuses the spotlight on the high-risk dynamics of CEO recruiting - particularly in cases where a company has not been doing well, and its former CEO has been disposed of. He demonstrates that this drama is being played out with increasing frequency in the large corporations which play a major role in our economy.
He finds that a pattern has begun repeating itself in such situations: Boards of directors don't usually take action until a company situation has been deteriorating for a while, so even when they begin the recruiting process, they are already under pressure to take bold and decisive action. This impels them to begin by rejecting any current inside candidates who are felt to be part of the problem, thus incapable of breathing new life into the organization. Underlying this "explanation" is the fear that the press, investors, and the media might not applaud a less-than-spectacular candidate such as any merely competent insider. Such lack of enthusiasm by all these onlookers might well lead to further erosion of stock which has probably already suffered. Thus the directors embark on a quest for some outside candidate who might possess the magic powers to provide salvation. The rejection of inside candidates and the quest for some superstar who can pull a rabbit from the hat are, Khurana asserts, the first steps down a slippery slope that frequently end in tragedy. The book describes the descent and how it has and will affect American business.
This is a fine book that presents a number of fresh insights about a critical issue in the world of large corporations. It is written cogently, with erudition, by an author who is rightfully passionate about his subject. Of the hundreds of management titles published in recent years, this description wouldn't apply to more than a handful.
It is interesting to compare Khurana's findings with those described in the book, "Good to Great" by Jim Collins. Collins reports on a number of companies that outperformed their competitors by huge orders of magnitude. According to Collins the CEOs of these spectacularly performing companies (a) were, with one exception, recruited from within and (b) were definitely non-charismatic leaders, selected for their capabilities with no expectation that they would perform miracles or provide instant cures. These findings certainly lend support to Khurana's assertions. The fact that one of Collins "Good to Great" companies, Gillette, ended up as a Khurana case when its CEO was forced out of his position in 2000 suggests that any generalizations in this field must take into account the rapid changes in the world.
In a final chapter, Khurana attempts a description of some possible solutions to the problems he has identified. His main prescriptions are that the CEO job market be opened up and that some more professional recruiting and evaluation processes be created for CEOs. These are rather weak palliatives for the seemingly intractable trends Khurana has described. The book's strengths lie in its portrayal of the way the CEO labor market is operating, the insights into why it is working that way and its portrayal of implications for the future of large American corporations if the trends continue.
Moreover his findings raise two fundamental issues which, though clearly beyond the scope of this book, must be dealt with in any quest for amelioration.
First issue: When things are going well, boards of directors play very stereotypical and structured roles that rarely include in-depth managerial initiatives. The chances that a board of directors, could, once it becomes evident that a company needs new leadership, mobilize itself into an effective working group and then put in the time and energy to (1) decide why the company is in trouble (2) sketch some of the remedial actions that are needed to cure it (3) set out a rational professional search and bring in new CEO in circumstances in which he or she might succeed and (4) have the patience to permit a new CEO to effect a transformation, is virtually zero. Thus a realistic conclusion from the book's findings is that the chances of success in such a venture are so slight as to be not worthy of the attempt. And if that is the inescapable conclusion, then some solutions more drastic than Khurana's may be called for. One example might be consultants who are dedicated to filling in some sort of CEO role during a transitional year or two in such situations, working with the board to evolve a strategy. I am not recommending such a step - merely suggesting that some new thinking is required.
The second issue -- again assuming that the risks in CEO recruiting will continue to be unacceptably high -- concerns a board's responsibility for making certain that they are never forced to undertake the impossible search. Instead of focusing on what boards have to do to improve their techniques for replacing the CEO, it might be more useful to ask whether it shouldn't be a responsibility of boards to ensure this doesn't happen. What mechanisms need to be built in for boards to assess managerial performance on an ongoing basis and to take prompt action when performance is not satisfactory.
While these are important issues that need to be dealt with, I do not criticize Khurana for not dealing with them in his very fine book. He has done yeoman service in identifying the issues and, in that respect, has hit a bull's eye.
fun but flawed.......2003-09-25
I really enjoyed parts of this book, but the broader points he was trying to make fell flat. The thesis, that we should be wary of charisma and value competency more, is welcome to most people-perhaps everyone sufficiently detached-and his anecdotes provide interesting and powerful support.
For example, as a former banker I appreciated the point he made that big NYC bankers tend to be investment bankers, which is different than commercial banking, which is different than retail banking. It may seem like inside baseball to outsiders, but that's exactly the point: if you don't know the difference, you shouldn't be a bank director. Thus my conclusion would be that instead of telling current board members to be less foolish, it would be more practical to focus on reforming the way board members are chosen. In my experience, most bank board members were absolutely incapable of judging competence on the essential technical issues to sound banking (eg, how credit quality, spread, and volume are related), and choosing board members based on some objective criteria would seem to advance the search for a good CEO better than telling the current board members to not fall for the next empty suit.
But more broadly, is the flawed method of picking a CEO worse than before? Khurana's own data suggests that new CEOs don't matter much, which mean they aren't worse either. And the issue of arbitrariness is somewhat overstated, compared to a platonic ideal that has never existed. Picking any manager, such as a head of IT, raises the same example of cliquish, suboptimal groupthink. The same could be said for how collectives choose politicians, pundits or professors. In the words of Flaubert, "our ignorance of history makes us libel our own times. People have always been like this."
Lastly, he relies a lot on outdated sociological treatises (C Wright Mills, Weber, Whyte), and the idea of a WASP closed society. For example, at one point he mentions that in 1950 most CEOs where white, male, and Protestant, and the same is true today. But as pointed out it in Brook's Bobos in Paradise, you would be remiss not to mention the dramatic change over the past 50 years. For example, back then the Kennedy family were considered outside the establishment. Jews are now around 20% of Harvard's undergrad, and 13% of the Fortune 500 CEOs, even though 3% of the US population. The WASP elite have given way to a much more meritocratic elite, and the fact that it extends to the boardroom is partially a result of the new process for choosing CEOs. In predictable sociological fashion his straw man argument is the dopey institution-free economist, that conventional wisdom that Keynes and Galbraith effectively invoked, but which is now a tired parody of current economic thinking. In the end, there is nothing really deep here, just a fun book highlighting the current foibles of specific group of people trying to deal with incomplete information and coalition building.
Packed with Knowledge!.......2002-10-12
Charisma and reputation have replaced management experience and industry expertise in the corner office. Certainly that's not news to anyone who has read the business press at any time in the past decade, but the trend is certainly important enough to warrant the comprehensive examination provided by Rakesh Kurana. Starting with an analysis of the increasing power of activist institutional investors, Kurana traces the process through which boards of directors have forsaken mature managers for media darlings in their CEO searches. In light of the spate of embarrassing and enraging CEO scandals, we from getAbstract recommend this book to all readers.
Books:
- La riqueza de las naciones / An Inquiry Into the Nature and Causes of the Wealth of Nations (El Libro De Bolsillo / the Pocket Book)
- Ludwig Von Mises: The Man and His Economics (Library of Modern Thinkers)
- Macroeconomics: Private Markets and Public Choice plus MyEconLab (7th Edition)
- Managing Downside Risk in Financial Markets (With- CD-ROM) (Quantitative Finance)
- Managing Global Innovation: Uncovering the Secrets of Future Competitiveness
- Mathematics of Interest Rates, Insurance, Social Security, and Pensions
- Meaning and Validity of Economic Theory (Essay index reprint series)
- Model Reduction Methods for Vector Autoregressive Processes (Lecture Notes in Economics and Mathematical Systems)
- Monetary and Fiscal Policies in the Euro Area
- New Strategies for Financial Services Firms: The Life-Cycle-Solution Approach (Information Age Economy)
Books Index
Books Home
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- History: Fiction or Science
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- Equity Finance: Venture Capital, Buyouts, Restructure and Reorganizations
- History: Fiction or Science
- Justice Hall
- From Good Market Research to Great Marketing: A How-To Guide for Home Builders
- Basic Camp Management: An Introduction to Camp Administration
- Free Trade: Informal Economies at the U.S.-Mexican Border
- Hearing Voices - Collected Stories & Drawings
