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View Diary: Harvard innovation guru: Pursuit of profit is killing the U.S. economy (199 comments)

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  •  Actually, some do. We fired 1400 IT professionals (2+ / 0-)
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    Pithy Cherub, qofdisks

    to outsource the business to India for a supposed (on paper) 2% increase in return.  But my point wasn't that profit is bad.  It's just bad when only quarterly profits are considered and this is happening due to the changes in corp. exec compensation and the Wall Street casino situation.

    Plutocracy (noun) Greek ploutokratia, from ploutos wealth; 1) government by the wealthy; 2) 21st c. U.S.A.; 3) 22nd c. The World

    by bkamr on Fri Dec 09, 2011 at 07:01:06 PM PST

    [ Parent ]

    •  I would venture that outsourcing (0+ / 0-)

      1400 IT professionals is more of a long-term decision on profitability than one of a short-term.  Like you, I agree that decisions made soley for the benefit of short-term results are, well, short sighted.  My read of the Forbes article linked in this diary is that Christensen is lamenting the short sighted long-term decisions by many American companies.

      Koch Industries, Inc: Quilted Northern, Angel Soft, Brawny, Sparkle, Soft 'n Gentle, Mardi Gras, Vanity Fair, Dixie

      by ChiTownDenny on Sat Dec 10, 2011 at 08:30:44 AM PST

      [ Parent ]

      •  I sat in the meetings as the decision was being (0+ / 0-)

        made about the situation I mentioned.  It was short term, alright.  In fact, a number of 6-9 month risk analysis slides got dropped from the ppt pitch to even make the case for the single digit projected profit increase in Q1 of the move ... upon which the end-of-year bonuses were paid before the profit was even realized.  

        As the executive wrecking crew, we got the bonus in our checks, and the employees got pink slips in theirs.  Some workers were "lucky" enough to be kept on for 6 months to train their replacements.  The executive crew moved on to other positions in the conglomerate.  Then, the IT company got sold to one equity fund and then to another -- it belongs to a Citigroup Equity Group, at the moment.

        Saddest thing I've ever seen and been a part of.  And it wasn't just the IT professionals' jobs ... it was also all the regional mom and pop IT shops that were gobbled up to create the thing in the first place -- those were the small business, innovation shops.  

        Sadly, Directors, VP's, and CEO's of the smaller companies in the large conglomerates can earn their chops (and bonuses) this way, and move on and up.  The executive teams that propose and initiate the outsourcing don't stay with the companies they outsource, so there's plenty of personal upside to short term, paper plans, for out-sourcing and no down-side. If the plan doesn't pan out, the conglomerate can just sell the division to an equity fund who can use a Bain management style treatment to bleed money out of it for awhile.

        I left the corporate world after 20 years after that experience.

        Plutocracy (noun) Greek ploutokratia, from ploutos wealth; 1) government by the wealthy; 2) 21st c. U.S.A.; 3) 22nd c. The World

        by bkamr on Sat Dec 10, 2011 at 10:08:36 AM PST

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