Inside Info from the Graziadio School...


12,000 Dow by Y2K?
Joseph J. Grano, President, PaineWebber (Spring 1998 GSBM Commencement Address)

By the year 2000, we will enjoy a Dow Jones Index of over 12,000.

What is the Best Age to Become an Entrepreneur?
Professor Bob Ronstadt

The answer, albeit a tentative one, appears to be late 'Twenties when an individual has previously selected an industry/company/mentor to help prepare them for an entrepreneurial launch. Research suggests that entrepreneurs are better off starting their careers earlier rather than later. Perhaps the most compelling evidence is offered by entrepreneurs themselves who often wish they had started at an earlier age.

Debt is No Bargain
Professors Michael Kinsman and Joe Newman

During the past two decades, US firms issued more new debt than new equity. Our study of firm debt and performance over a period of nine years indicates that a rise in debt use is associated with a fall in performance measured by shareholder wealth. This suggests that something other than firm performance is necessary to explain the increase in debt use over the past two decades. We also found that knowledgeable investors, including insiders, lack a consistent preference for firms with more debt.

Cohesive Culture Critical to Empowerment
Professor Al Hoisman

A totally empowered workforce represents an ideal goal for an organization. Experience shows us that organizations with strong, cohesive cultures deal with transitions toward empowerment more readily than do weak cultures. An important component of an organization's culture is its reward system. Do managers who successfully take chances receive recognition and rewards from the organization, or are nails that stick up above the rest pounded down?

 
Out of the Loop...

"$100 million is way too much to pay for Microsoft." IBM, 1982

 

More Americans Telecommuting

No longer is telecommuting something done mainly by people doing data entry or other lower paying work. At AT&T more than half of the US based managers telecommute at least six days every month, and a study by market research firm FIND/SVP says that the average telecommuter has an average household income of $51,000. There are now more than 11.1 million Americans telecommuting, a 39% increase since 1995. (USA Today 17 Apr 98)

Who Suffers Most?

Question: If employees feel stressed both at home and at work, which of those two aspects of their lives suffers most?

Answer: Most stress is expressed at home. According to a 1993 study, The Changing Workforce, job-to-home spillover is three times as great as home-to-job spillover. Looks like it's easier to kick the dog than to yell at the boss! (Families and Work Institute)

US Leads on Y2K Readiness

While industry observers decry the lack of initiative on the part of US companies to prepare computerized systems for the transition to the next millennium, the rest of the world is in much worse shape. For instance, only 8% of German companies have a formal program to deal with the problem, as opposed to 80% of large US firms. And one in five French companies hasn't begun to overhaul its information systems, according to a 1997 Ernst & Young study. Meanwhile, the former Eastern Bloc countries are suffering a dearth of programmers because many have been lured to high-wage nations such as the US, and some Asian nations may be laboring under a false sense of security because they believe their systems, which are programmed to recognize traditional cultural calendars, are immune. "Their understanding of the problem is, 'It's not such a big deal, we'll cope with it at the end.' Now they've got no options." (USA Today 13 Apr 98)

Worried about Y2K? Now There's D10K!

Experts predict financial software may go haywire if the Dow Jones Industrial Average tops 10,000. Many software programs are designed to handle only four-digit Dows, says one software designer, who says that concern over the D10K problem soon "will spawn the usual parade of opportunists" to fix the bug. (Wall Street Journal 26 Mar 98)

Electricity Deregulation Arrived in California March 31

Except for those few who generate their own electricity, most Californians have just entered the brave new world of competition in the electric industry. As of March 31, customers of investor-owned electric utilities have a choice in purchasing electricity. A 10 percent mandated rate reduction should have already shown up on the electric bills of these customers.

Previously, all components of electric service were typically provided by a monopoly electric utility -- including generation, transmission and distribution, meter reading and maintenance of electric lines and equipment. Restructuring involves separating these functions so that no single company controls all three. Two new entities will now be involved to ensure fair and open access: the Independent System Operator (ISO) and the Power Exchange (PX). As of March 31, customers of these investor-owned companies will be able to choose to stay with that utility or buy from a non-utility service provider (Direct Access).

Municipal utilities, such as the Los Angeles Department of Water and Power, have a few more months before they lose monopoly control in their areas.

For more information, access the California Public Utilities Commission Web Site.

 
Out of the Loop...

"Who the hell wants to hear actors talk?" Warner Brothers, 1927

 

Voters May Cross Party Lines in California Primary

California’s primary election on June 2 will feature both the new and the familiar this year.

The new feature is that for the first time California voters will be allowed to vote for whomever they wish in the primary election rather than only voting for candidates within the party with which they are registered. On a more familiar note, voters will again be faced with several ballot initiatives. Nine have qualified for the June ballot, while another 51 are in the signature-gathering process in hopes of making the November ballot.

Of the nine ititiatives, five would change the state constitution. Four of the initiatives relate to the criminal justice system and two to public schools. Another has to do with term limits for Congress. Of particular interest to business people might be Propositions 224 and 226. Proposition 224 would change the way in which contracts are awarded for state-funded design and engineering services. It would require cost comparisons between the bid of a private contractor and the cost of having state employees do the project as well as defining other elements of the competitive bidding process. Proposition 226 requires, among other things, employees or union members to give permission before an employer can withhold wages or union dues for political contributions.

Information about any of these ballot initiatives can be obtained from the Legislative Analyst’s Office Home Page.


 

Book Loop...


Bruce Hansen
suggests

Maverick
Ricardo Semler

Semler turned his family's business, the aging Semco corporation of Brazil, into the most revolutionary business success story of our time. By eliminating uneeded layers of management and allowing employees unprecedented democracy in the workplace, he created a company that challenged the old ways and blazed a path to success in an uncertain economy.

Don Sime
suggests

Leadership Jazz
Max De Pree

Leadership in the workplace, says Max DePree, is like playing jazz; it's more an art than a science. Today's successful managers are attuned to the needs and ideas of their followers and even step aside at times to be followers themselves. As a result, they spark vitality and productivity from their work force. They cultivate communication and spontaneity, diversity and creativity, and the unique potential of every person in the organization to contribute to the success of the team.

Chic Fojtik
suggests

The Second Curve
Ian Morrison

Ian Morrison creates a revolutionary new business model that can be used no matter what the market upheaval. His theory is deceptively simple: one must ride the first curve--a company's traditional business carried out in a familiar corporate culture--to the all-important second curve. The second curve is the future--new technologies, new customers, and new markets that companies must command to survive and thrive.


In Response to Professor Strom's article,
"The Human Side of Corporate Downsizing,"
reader Cathy Lavin recommends...

Climb a Fallen Ladder
Rochelle H. Gordon, MD & Catherine E. Harold

Now there’s hope and guidance for the millions of people who have been downsized, the "working worried" still clinging to long-held jobs, their families, and their friends. In Climb a Fallen Ladder: How to Survive (and Thrive!) in a Downsized America, Dr. Rochelle Gordon and Catherine Harold offer inspiring and instructive stories of real people and proven principles for coping and thriving in this new age of anxiety. Although everyone is talking about downsizing, no one is talking to the workers.

Climb a Fallen Ladder is the first book about downsizing to address employees’ emotional and psychological needs. It will help displaced or despairing workers cope with the crisis, maintain dignity and a sense of self at work and at home, and take command of life at the most vulnerable time.

Destined to become a classic, Climb a Fallen Ladder is for everyone who works or wants to. It’s a must read for Human Resources personnel, Outplacement advisors, Community leaders, Employee Assistance personnel, Union officials and any manager faced with the task of downsizing or supervising a downsized staff. Indeed, everyone who has a stake in the happiness and welfare of the American workforce will benefit from Climb a Fallen Ladder.

 

Loop du Jour...


Comparing California With Other States
(1995 data from the California Department of Finance.)

Retail Trade - #1 ($2.4 trillion)

Farm Production - #1 ($22.3 billion)

Visitors to State Parks - #2 (64 million)

Average Teacher Salaries - #8 ($43,000)

Crime Rate - #13 (5,831 per 100,000 population)

Cars per 1,000 Residents - #37 (465)

Energy Consumption - #48 (240.5 million BTU)


Connections...


Strategic Leadership Forum - An international business organization of senior executives focusing on the issues of strategic management and planning. Their mission is to advance the understanding and practice of strategic management as the integrative force for improving personal and organizational performance and achieving global competitiveness.

 
Out of the Loop...

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication." Western Union, 1876

 
 

L.A. Loop...


L.A. Area Labor & Employment

Los Angeles-Long Beach MSA (Los Angeles County)
(Data Not Adjusted for Seasonality. Non-Percentage Data in Thousands)

 

Feb 97

Dec 97

Jan 98

Feb 98

% Change

     

Revised

Prelim.

Month

Year

Civilian Labor Force

4,435.6

4,557.4

4,531.3

4,564.8

0.7%

2.9%

Civilian Employment

4,104.8

4,284.9

4,237.5

4,289.1

1.2%

4.5%

Civilian Unemployment

330.8

272.5

293.8

275.7

-6.2%

-16.7%

Local Unemployment Rate

7.5%

6.0%

6.5%

6.0%

   

Calif. Unemployment Rate

7.1%

5.6%

6.7%

6.3%

   

US Unemployment Rate

5.7%

4.4%

5.2%

5.0%

   

This information is produced by the Labor Market Information Division of the California State Employment Development Department (EDD). If you need assistance, please call (916) 262-2162. More...


Upcoming...


May 28 - "Hard Science and Soft Management: Some Emotional Realities About Business." Graziadio School Management Partners Quarterly Breakfast featuring Professor Wayne Strom. 7am, Westlake Village Hyatt. Call 310/568-5639 for more information.

June 10 - Chinese Ministry of Foreign Trade and Economic Cooperation and the Mayor of Zhuhai, China present business & investment opportunities in China. Call Ellen Castillo of the Los Angeles Area Chamber of Commerce at 213/580-7565.

June 16 - Lessons in Leadership with Michael Hammar co-sponsored by Pepperdine University. Call 800/873-3451 for more information.

June 17 - Lessons in Leadership with Michael Hammar co-sponsored by Pepperdine University. Call 800/873-3451 for more information.

August 28 - Pepperdine University Alumni Association Picnic and Concert at the Hollywood Bowl. A GREAT AMERICAN CONCERT WITH FIREWORKS! To place your order, please contact Crystal Guy at University Events at (310) 456-4448.


Top Ten Average Weekly Hours in Non Agricultural Industries

(L.A. - December 1997)*

1. Motor vehicle mfg. 49.4
2. Metal forging & stamping 49.4
3. Paperboard container mfg. 48.5
4. Preserved fruit production 48.3
5. Commercial printing 47.8
6. Screw machining 47.7
7. Beverage mfg. 47.6
8. Millwork & plywood 46.9
9. Lighting & wiring 46.8
10. Textile mill production 46.5



Top Ten Average Weekly Earnings in Non Agricultural Industries

(L.A. - December 1997)*

1. Movie production

$1345.88

2. Beverage mfg.

$1191.90

3. Communication engrs.

$1007.60

4. Aircraft & parts mfg.

$991.87

5. Petroleum refining

$978.08

6. Communications equip. mfg.

$924.42

7. Building contractors

$910.66

8. Elec., gas, sanitation engrs.

$907.49

9. Mining

$886.60

10. Heavy construction

$881.79

*Source: State of California, Employment Development Department, Labor Market Information Division, Information Services Group, (916) 262-2162. More...



Nadir...


 

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