The Gutsball Blog
What does the future hold for the economy in China
What does the future hold for the economy in China? While growth there continues to surpass by a significant margin, the stagnant, if not troubled, western economies, I sense “a disturbance in the force”. Moreover, I would advise caution with respect to reported growth rates, not a lot of transparency there, when considering first or further investment.
To begin with, the business environment can be challenging for foreign companies. Regulatory and licensing requirements are difficult to navigate and time consuming. Local corruption has been well documented and seems to be accepted pretty matter-of-factly by the federal government. In a quest for more revenue, perhaps brought on by a slowing economy, tax laws seem to change somewhat quickly with emphasis on stricter standards; so, taxes are more burdensome, the rules more arcane. Not what you’d expect from a flourishing economy, especially as is typical nearly everywhere else, one seeking foreign investment to stimulate growth. Lastly, the competition for qualified people is pretty stiff, expect to pay up.
On Global Accounting Standards
So, the Securities Exchange Commission (SEC) here in the U.S. has decided they may not be so crazy about the idea of one global accounting standard, according to the New York Times over the weekend. Huh? Now you come out with this? After how many years of international squabbling and causing every business person I know to wring their hands, if not freeze in place, at the thought of yet again more reporting requirements and government oversight.
I’m all for more transparency, and if the Enron / WorldCom scandals have taught us anything, surely the lesson is that the cheaters get caught eventually. And I know there will be a hue and cry for more regulation in light of the latest saga of corporate misdeed and greed with respect to the Libor rates uproar. But you can’t regulate everything, you’ve got to pick your spots and apply at appropriate levels, e.g. why do small businesses in the U.S. have reporting requirements similar to these of companies in the Fortune 500 under Sarbanes Oxley, better known at SOX?
Organizing for Success
It’s been said that companies are perfectly designed to produce their results. And, you can apply that statement to both good and bad results. By the way, don’t limit your thinking solely to the bottom line because other numbers e.g. customer and employee satisfaction are equally important; there is strong evidence to support the notion that they are directly correlated, to profitability.
What kind of organization do you lead or work for? Are people organized for success or does your company adhere to the traditional (Read: Outdated) command and control structure? Can people, no matter how far away from the strategic management level, still recognize and are energized by the contributions they make to the business every day? Is there transparency? An articulated set of operating principles and, if so, are you true to them?
Leadership and the European Debt Crisis
As the debt crisis in Europe worsens, there are questions that must be asked: “Where was the leadership?” “Why was there no accountability?” “How could things have gotten this far?”
It’s too easy to say that the leadership of the several economically troubled countries are simply politicians whose only goal in life is to be re-elected, keep their party in power…in essence keep their jobs. After all, leaders of business have constituencies they are responsible to as well.
Perhaps it would be useful to examine some of the business leader’s key characteristics. Then, you can decide for yourself whether the heads of state for those countries in deep financial difficulty measure up.