On March 19, 1908, the Ford Model T was announced. Although the car would not begin shipping until September of that year, the response to the announcement was enthusiastic. One agent wrote, “we have rubbed our eyes several times to make sure we were not dreaming,” and another exclaimed, “It is without doubt the greatest creation in automobiles ever placed before a people, and it means that this circular alone will flood your factory with orders.”
Business
Stealing Again?
I was very happy with the thoughtful comments (that are still ongoing) to my post of a few days ago called Hypocrite?. I have another one now for the readers.
Airing now on a newtork called AXN is a show called Contender Asia.
Hypocrite?
In the past I have been known to tell people who “share” music online that they are thieves. Not as if they are doing anything worth throwing them in jail for – don’t get me wrong there. But the fact that people who share files that happen to be copyrighted music to me smells like stealing. In other words, the product is being taken and used, and no royalty paid.
Naive Observations Prompted by Foster
A) Business schools are difficult to get into – for freshman and those who finish core courses. When our students transfer they are told the average required for business is 3.8 or 3.9 (liberal arts is around 3, some engineering are lower than that, education is always low). The courses for engineering are, however, much more demanding. My daughter found the meeting for incoming liberal arts students at a 4-year school dominated by the majority who wanted to strategize getting into business. This emphasis on grade point means business attracts smart, competent majors; it may, however, discourage risk takers and people who want to take challenging classes.
B) When I was advising I found many students were pushed by their parents who ran businesses and thought that major would bring an acumen they lacked. I wonder if horticulture would help a florist or greenhouse business, construction science a home builder, etc. more. (Not that basic courses in accounting, management law, etc. wouldn’t be useful.)
C) In papers we typed, bound, etc., management techniques seemed “proved” in a soft science way. With my background in Henry James, I soon realized it takes an idiot to lose money in oil companies during boom years & a genius to make it during rough ones. Their examples were from boom years and seldom acknowledged the problems with such a cyclic industry. When I began in 1979, typing was a decent part of our business; when I sold it in 1992, papers had become a smaller – if much easier – part. Now, few make a living typing student papers. Such changes in technology are not always addressed in pure management models.
D) On the other hand, the business that bought me out was run by guys coming through business school. They were young and energetic when I was getting tired, but they also knew what they were doing. They are still making a good profit.
Stupidity–Communist-Style and Capitalist-Style
There’s an old story about a Soviet-era factory that made bathtubs. Plant management was measured on the total tonnage of output produced–and valves & faucets don’t add much to the weight, certainly not compared with the difficulty of manufacturing them. So the factory simply made and shipped thousands of bathtubs, without valves or faucets.
The above story may be apocryphal, but the writer “Viktor Suvorov” tells an even worse one, based on his personal experience. At the time, he was working on a communal farm in Russia:
The General Secretary of the Party set a task: there must be a sharp rise in agricultural output. So the whole country reflected on how best to achieve this magnificent aim.
The fertilizer plant serving the communes in Suvorov’s area resolved to do its part:
A vast meeting, thousands strong, complete with brass bands, speeches, placards, and banners, was urgently called at the local Chemical Combine. To a man, they shouted slogans, applauded, chanted patriotic songs. After that meeting, a competitive economy drive was launched at the Chemical Combine to harvest raw materials and energy resources.
The drive lasted all winter, and in the spring, on Lenin’s birthday, all the workers came in and worked without pay, making extra fertilizer from the materials that had been saved…several thousand tons of liquid nitrogen fertilizer, which they patriotically decided to hand over, free of charge, to the Region’s collective farms.
The local communes were told that all fertilizer must be picked up in 24 hours–the factory’s product tanks were full, and if the bonus fertilizer was not removed, production would come to a standstill. Suvorov was the truck driver for his collective, and it was his task to go to the plant and pick up the farm’s allocation. Problem: the truck could only carry 1.5 tons at a time, and a round-trip to the plant would take about 10 hours. The commune’s allocation was 150 tons. There was also a shortage of fuel for the truck. And Suvorov knew that if he didn’t complete his mission, the director of the commune would be replaced. While the man was not to everybody’s liking, his expected replacement was much worse.
What to do?
When Suvorov arrived at the plant with his truck, he saw that the other communal farms had faced the same problem, and had hit on a solution.
There was a long queue of trucks of different makes, dimensions, and colours standing outside the Chemical Combine. But the queue was moving fast. I soon discovered that lorries, which had only a moment before been loaded, were already returning and taking up new places in the queue. Every one of these lorries ostensibly needed many hours to deliver its valuable load to its destination and then to return. But they rejoined the queue in a matter of minutes. Then came my turn. My tanks were rapidly filled with the foul-smelling liquid, and the man in charge marked down on his list that my native kolkhoz had just received the first one and a half tons of fertilizer. I drove my lorry out through the Combine’s gates and followed the group of lorries which had loaded up before mine. All of them, as if at a word of command, turned off the road and descended a steep slope toward the river Dneiper. I did the same. In no time at all, they had emptied their tanks. I did the same. Over the smotth surface of the great river, the cradle of Russian civiliztion, slowly spread a huge poisonous, yellow, stinking stain.
The great fertilizer production drive was undoubtedly marked down in government records as a tremendous success.
Don’t be too smug, though, fellow capitalists. My next example of institutional stupidity comes from the American private sector.