U S. Management in face of Globalism: Decline: pleaee note your future challenges in HRM>
The dollar's woes reflect the world's collective verdict on the ability of the U.S. to manage the global financial system.
Last November, president George W. Bush, in an interview with Fox Business Network, summoned his inner high-school cheerleader. "We have a strong dollar policy, and it's important for the world to know that," he said. "And if people would look at the strength of our economy, they'd realize why I believe that the dollar will be stronger." Since then, the greenback, which had been slumping against foreign currencies for years, has wilted like spinach in a sauté pan at the Olive Garden. Given that the typical audience for Fox Business Network could comfortably fit into Rupert Murdoch's downtown Manhattan loft, it's no surprise the world failed to get the message. The greenback last week hit new lows against foreign currencies. The dollar is so sad, we should consider renaming it the dolor.
At some level, the dollar's woes reflect the world's collective verdict on the ability of the United States—businesses, individuals, the government, the Federal Reserve—to manage the global financial system and the world's largest economy. Lately the verdict has been two thumbs down. Countries that outsourced their monetary policy by pegging domestic currencies to the dollar are having second thoughts. Kuwait last year detached the dinar from the dollar, and Qatar government officials last week said they were considering doing the same. International financiers are unnerved by the toxic combination of "misplaced assumptions about housing, a lack of necessary regulation and irresponsible use of debt with sophisticated financial instruments," said Ashraf Laidi, currency strategist at CMC Markets.
Dissing American financial management is an affront to national pride tantamount to standing in Rome and asking, loudly, if Italians are able to make pasta. For the United States invented the concept and practice of running large, complex systems. Along with baseball and deep-frying, management is one of our great national pastimes. The world's first M.B.A.s were awarded by pioneering yuppie factories like the Wharton School at the University of Pennsylvania. (Wharton's founding in 1881 was quickly followed by the first time-share summer houses in the Hamptons.) Henry Ford's revolutionary assembly line was the gold standard in global manufacturing for decades. Contemporary American institutions stand for excellence in managing everything from supply chains (Wal-Mart) to delivery services (Federal Express and UPS).
Americans' ability to manage complex systems has been the ultimate competitive advantage. It has allowed the United States to enjoy high growth and low inflation—a record we haven't hesitated to lord over our foreign friends. The shelves in the business section of a bookstore in a mall in Johannesburg are stocked with the same volumes you'll find in a Barnes & Noble in Pittsburgh: memoirs by cornfed paragons of capitalism like Jack Welch, wealth-building advice from American money managers, large tomes on how Andrew Carnegie and John D. Rockefeller built global businesses from scratch.
But today? Not so much. Thanks to widespread incompetence, American management is on its way to becoming an international laughingstock. Faith in American financial sobriety has been widely undermined by the subprime mess. The very mention of the strong-dollar policy now elicits raucous bouts of knee-slapping in even the most sober Swiss banks. (How do you say "schadenfreude" in German?) Earlier this month, as oil hovered near $100 a barrel, President Bush complained to OPEC about high oil prices. OPEC president Chakib Khelil responded acidly that the crude's remarkable run had nothing to do with the reluctance of Persian Gulf nations to pump oil, and everything to do with the "mismanagement of the U.S. economy." Since Bush's plea, oil has gushed to $110 per barrel. (How do you say "schadenfreude" in Arabic?)
Americans abroad are constantly taunted by perceived failings of American management. America's aviation system is now the butt of jokes because 9-year-olds have become accustomed to removing their Heelys before boarding a plane. As my family and I passed through the snaking security line in Cancún's airport last month, we were harangued by a security guard who encouraged tourists to sing along with him: "Please. Do not. Remove. Your shoes."
The concern extends beyond airlines to America's industrial complex at large. Leery of the ability of provincial American executives, with their limited language skills, to negotiate today's global business environment, the boards of massive U.S. firms like Coca-Cola, Pepsi-Cola, Alcoa, and insurer AIG have hired foreign-born CEOs. Carl Icahn, the 1980s corporate raider, has reinvented himself as a borscht-belt comedian/activist investor, who delights conferences and reporters with jokes at CEOs' expense. On a recent "60 Minutes," Icahn complained to Lesley Stahl about the incompetence of American management. "I see our country going off a cliff, and I feel bad about it."
Icahn is moping all the way to the bank. The market's recognition of management failures gives him the opportunities to acquire companies on the cheap. But those of us who aren't billionaire corporate raiders—which is to say pretty much all of us—must manage through this management crisis on our own.
posted by Paschal Baute @ 6:55 PM
9 comments
9 Comments:
In 1987 President Regan commissioned a report to show where tax dollars were actually going. The Grace report reported that one third of potential tax dollars was immediately wasted on the diluted bureaucracy that has become our government. Things seem to have only gotten worse. But the government is only half to blame in this mis management of the dollar. If the Federal Reserve thinks that billion dollar banking bail outs, and large interest rate cuts are the only way to save our economy we are already dead. In 1913 when the Fed was created we washed our hands of the control of our own currency. The unfortunate fact is that the is no check or balance for the Fed and it's policy (or lack there of). This dictatorship of the dollar is at best a poor management strategy. Maybe it is time for REAL change.
Well, I won't pretend that I know a lot about this topic, when indeed I don't and most of this is way over my head. But as the average American, I do know that it is totally depressing to think that our country, as great as it is, is in the financial shape that it is. And as far as losing our edge in management, I think that is equally depressing. To me, the only thing I can think of that each of these situations could possibly have in common is greed. Billions of dollars are wasted by our government (remember the government is the people) so it is the persons that we put into office that become greedy and fluff their own nest. Likewise, the same in many corporations. Greed and mismanagement seem to be rampant. Now, please don't laugh at my blog. I may be way off base here, but it's just my gut instinct and besides we all know "the love of money is the root of all evil."
Valerie Carr
Ok you guys...you know I am clueless when it comes to the government or politics! I do watch the news and see the reports about the dollar being at an all time low and that barrels of gas are extremely expensive. I see that when I fill my car up with gas! I also see that like a third of my paycheck is gone by the time the government gets done nickel and diming me with every tax under the sun. But that's really all I know!
While I don't know much about this topic I do know that yes the economy is in bad shape. We all see it in the gas prices as they shoot up to a rediculous price. That isnt the only thing that has gotten out of hand. Have we taken a look at the grocery? As a person who has to see and hear it daily the prices of everything is going up. From food items to things like shampoo. Yes it is true I don't knwo much when it comes to the technical terms of the economy but I do see the effects daily.
I am with you all when it comes to this topic. I may not know alot about the global financial system, but I know that it has gotten worse over these last few years. As a single mother of two children it is very hard for me to make sure that we are financially secure. I almost thought about quitting school when the gas prices soar up so high. I believe it is ridiculous and yes I can see a big change in the prices at the grocery stores and any other store at that. I have some family members and friends that have lost their houses, because of the mismanagement of the dollar. I believe that it is only because of greed and that is not helping this country in any way, shape or form. I see this country going down day by day and it is sad, because this is suppose to be the country that everyone wants to live in and now no one is wanting to deal with this country, because of the mismanagement that our government has created within these last few years.
Kimberly Combs
Although I am not an individual that knows much about politics I do know that the economy is changing. As a single mom of three children I find it very difficult to make ends meat. At this point in my life it is irrelevant the value of a dollar and how it came to be that value. The task at hand now, is to figure out what we need to do as a society/government to fix the problem before it gets any worse. It doesn't matter if the government is at fault or not they are the only ones that can make the huge changes that need to be made in order for us to survive.
I try and keep up with the political scene and personally, I saw it coming (the finanical crisis). I have been saving my money and only purchase essentials for the past six months. Honestly, I saw better times when I was unemployed or maybe I am just scared of the future of the economic position that most Americans are facing (record forclosures, job losses and major banks borrowing from China and other countries). I suggest that we pay down our debt and save... because things are so uncertain with the economy.
Tammy Davis
I try and save money all the time but it never works. When I buy only my family's needs the needs are going up. I have to have gas but it takes 40 dollars to fill my car up. My daughter eats ceral in the mornings it is four dollars a box. I am very nervous about the money for the future, I dont think we will have any. Well I guess I won't
Jerri
Maybe I am a bit nieve or ignorant to some aspects of the topic at hand. It is clearly stated that the cause of our current economic state is due to lack of management. We did not become who we are by luck or chance. This maybe a sign ti get back to the basics, get back to what is was that has made us such a great country. Has it been mismanaged? Signs clearly point to yes. Can it be fixed? Once our leaders recognize why we are in this prediciment.
Lamont R. Brown
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