Tag Archives: Business

Network Liabilities- Citigroup Pays for a Rush to Risk

The Reckoning – Citigroup Pays for a Rush to Risk – Series – NYTimes.com
But many Citigroup insiders say the bank’s risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings — and executives’ multimillion-dollar bonuses — failed to rein them in, these insiders say. [my emphasis]

This NY Times article points out that the normal risk management controls at Citigroup that should have reined in exposure to CDOs [collateralized debt…] were thrwarted.

By?

“ties that clouded judgment.”

I suppose that is a network liability.  Every organization is cris-crossed  with network ties.  The question is why these had such an impact.  Org Culture?  Greed?  Something structural in the network?  The technology of communication?

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Filed under Banking, Business, Social Networks

Paid to Destroy their Companies

The Wall Street Journal Online – Interactive Graphics

What is wrong with this picture?  What reasonable justification is there for thes ekinds of compensation packages?

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Filed under Uncategorized

ikea as a malevolent force for Scandinavian hate-mongering?

The good folks at orgtheory.net cite some research showing that Ikea’s naming of products is not as random as meets the eye of the non-Scandinavian.

nonrandomness that i can’t explain « orgtheory.net

I swore off Ikea after we reached a certain income threshold.  I’d been burned by too many of those lock down bolts-on-the-end-of-screws.

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Filed under Business, humor

Osama Bin Laden is a Great Manager

I can’t take credit for first publishing this, but you’ll have to take my word that I came to a similar conclusion as this fellow on my own.

He said it very nicely though.

An organization that maximizes return on investment, builds up the world’s most
recognizable brand name overnight, creates synergy between PR message and HR
recruiting, attracts motivated loyal employees who make the ultimate sacrifice to extend
the mission into new markets and keeps expanding despite the world’s most hostile
environment is every manager’s dream. One manager turned this dream into a reality:
Osama bin Laden.
– Hans van der Weijden

From:  1 Hans Van Der Weijden, “Al-Qaida, The Business Model.” Interface, February 2005, p. 14, 15.
<http://www.sviib.nl/interface/magazine/pdf/21_3_alquada.pdf&gt;.

The same policy paper I found this made reference to the fct that when many terrorists are in custody and asked if tehy belong to Al_Qaeda, they are not sure (!).  This seems like a good data point for how it is much more of a social movement or even Caastellsian network organization as opposed to a normal, bounded organization than common perception would suggest.

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Filed under organization studies, Terrorism

Thoughts on SL Banking ban

I know I’ve talked to people about virtual worlds and when they point out that it is “odd” or somehow “wrong” for people to adopt other identities, I sometimes repsond that the ability to do so, or at least, the ability to do anything meaningful as your alter ego, will be limited by how porous the boundary between virtual and real wrold is.  moreover, that barrier is getting more porous in most cases.  As virtual worlds develop, what people want to do in and iwth them will bump against the very real world of durable identity and the need for regulation

So, the fall out from the banking crisis as described in his WSJ article seems to affirm my point.

First, only in SL  :>):

Cheer Up, Ben: Your Economy Isn’t As Bad as This One – WSJ.com
On Sunday night, the female character was wandering topless through the virtual lobby of a Second Life bank called BCX Bank, where a sign said it was “not currently accepting deposits or paying interest.”

I still don’t get very well what these banks’ business model was?  What is their loan portfolio?  How could they possible deliver 100% returns?  The answers are not clear.  I suppose partly it is speculative dynamics around land.  Do the bankers know about Linden’s plans to control land supply?  Would that constitute insider information?  Or, through fast growth SL business; this was the story behind Ginko Financial which failed last summer and was purportedly investing in gambling in SL (another story of regulation).

For example, how can this guy say the ban will not effect his business?

Cheer Up, Ben: Your Economy Isn’t As Bad as This One – WSJ.comSteve Smith, who runs BCX bank under the avatar name Travis Ristow, yesterday said depositors — who are owed a total of $20,000 — will be able to get their money back next week. The bank, which had promised to pay depositors more than 200% in annual interest, is now allowing only small withdrawals.

“This won’t affect us long term. It’s just a short-term difficulty,” said Mr. Smith, 40 years old, who also has significant land and real-estate interests in Second Life. He said he retired from the real-life mortgage business to devote his time exclusively to his Second Life enterprises.

Finally, there is one mention that one bank was arbitraging Linden-US exchanges to the tune of $15,000/year in profit. and

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Filed under Banking, Business, policy, Political Economy, Second Life, virtual worlds

Social Networking and Business

Peter Durand asked this question over at linkedin.

I thought to myself, “I should be able to say something about this.” Here is my first crack. I think its ok. Its helpful to have someone with a practical question ask it to get me to focus.

My initial response raises more questions (which I’ll return to at the end.)

What is the most effective way for a professional service firm to use social networking apps? (After all quantity of connections does not equal quality.)

(1) What are the business goals behind the use of social networking Web 2.0 apps such as LinkedIn, Plaxo and Facebook?
(2) As volume of connections increase, how can integrity and authenticity be maintained?
(3) And, most tricky, how can the business value of social networking apps be described to senior leaders who tend to operate on the other side of the technology gap?

Great questions. I need to have good answers for myself. Some quick hits.

1) The goal for any particular business must be part of an overall approach to customers and relationship management. However, if a given business seeks or has one way, firm to customer communication, they will find lots of conflicts because most SNS have reciprocity built into them.
2) Facebook is an interesting case. Due to its initial growth exclusively through college domain name emails (bubba@college.edu) college students flocked to it creating a “network effect.” A network effect is when a product becomes more valuable as the network of users increases. The value of a carrot to me is not affected by the number of carrot owners. The value of fax machine goes up as more people have them. But, now that Facebook has thrown itself open, will the attractiveness of network effects offset the negatives of the lower baseline trustworthiness of the average user. The second half of that sentence is the predator fear. On MySpace, due to its low threshold for authenticating users, I don’t know who is a predator so newbies are vulnerable and power users are wary.

3) Short answer: how do they feel about this: Cluetrain.com elevator pitch. If they feel threatened, don’t bother. If they feel invigorated, than explain that SNS are a way to have more conversations between you and any one of your customers/stakeholders.

If that seems like too much of a cop out, especially for decision makers who feel threatened by conversations but can be convinced otherwise, I might try this.

Markets are about conversations. Even when you don’t see or monitor those conversations, it is the most natural form of communicating. In a brand-intense, information saturated economy, conversations are even more important, and the new scarcity, the new value driver is “real” conversations. For more and more people, they are choosing to substitute many-to-many forms of communication for the older one-to-many. That is the difference between a radio ad and a blog, between mass media and wiki media. We are not “adding” SNS to our lives, we are building our lives around them, and adding TV, print, radio as we need or want to.

Peter’s Blog response.

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Filed under Business, Networks, participatory technology, Social Network Sites