Why do you think lowering the maximum wage is a bad idea?

[The Don]

Thank you wrs. Very interesting.
Now everyone knows you arent just some gas bag spouting uneducated theory.

For better or worse wrs' posts speak for themselves but just because wrs has been in and around large organisations doesn't give wrs any better insight into how they should be run.

Notice how the posts quit? (At least for the moment).

Well it was the middle of he night here, I do require some sleep.

Maybe everyone took a break to go back to the drawing boards...gathering themselves for the second wave.

In my case I was asleep.

 

[wrs]

And you've come out of that 30 year career with some IMO bizarre ideas about the way the business world works, the motivations of those involved and a lack of understanding of economies of scale.

You may think them bizarre but I don't live my life worrying about what other people think of my ideas. I would never be accused of being a people pleaser.

Your attitude towards doctors is insulting (suggesting that they are just pill-pushers in the pockets of big-pharma)

It is you that have inferred this from a single comment. I haven't written a treatise on doctors that gives you some larger view of my thoughts on the matter so for you to make a broad generalization from a single statement says a lot about how narrow your thought process is.

and your insistence that small inefficient companies are better for the the economies runs counter to both economic theory and common sense.

Small companies aren't inefficient just because you say so. My company was small and it wasn't inefficient at all.

In your post you laud IBM's $3bn failed investment but if, as you suggest, IBM had been broken up years before because it had become too large, it would never have been able to afford to make that investment.

Once again, you missed my point didn't you? IBM behaves far better than most large companies. Xerox did too and unfortunately, it's not doing well in business now but that is more a matter of not having another product line. IBM has been able to milk it's hardware business for a long time and the benefit of having software and services has been what kept them competitive. IBM is an example of a company that spends a lot or did anyway on basic research. We did a project for the Watson Research Lab in Yorktown. It was on a par with Xerox PARC where I also had a chance to work. Xerox tended to give it's good ideas away and in fact, Java is based on the PCR for the Globalview system. That was a failed product but more because they didn't have the hardware power at the time to support their advanced computing ideas.

The fact that these companies did spend their money to benefit both the advancement of technology and the economy is what I am suggesting that big corporations need to do if they are that large. IBM still does stupid things like stock buybacks but at least it does recycle money back into the the economy. It used to be entirely captive with regard to it's hardware but it divested a lot of that stuff. It sold it's disk drive business to Hitachi, it's PC business to Lenovo and it's printer business was spun out and recently it's POS business which has been around forever, was sold to Toshiba. The disk business was a money loser because smaller more nimble competitors like Seagate and WD were chewing IBM up.

IBM has been a unique example of a big company that has changed some of it's ways over the years but it's a rare case. I give them credit as one of the best companies I ever worked in. They treated their employees well and they had a good view of business albeit somewhat predatory. My neighbor is a retired IBM exec and he is living well on his retirement package and by selling his stock while the price is high.

 

[wrs]

Apple's R&D costs are hardly peanuts, in 2013 they were around $4bn.

http://appleinsider.com/articles/13...s-surge-33-on-pace-to-top-4-billion-this-year

It's a pittance compared to revenue and in 2002 when they were developing the ipod, it was less than $500m.

Some of Apple's shareholders have been calling for the Apple cash reserve to be released back to the shareholders. Apple on the other hand are reluctant to do this and presumably want to keep the cash on hand for future liabilities and to weather possible future hard times.

Gee, how about that. Possible future hard times? What a load of crap.

Apple are under no obligation to anyone other than their shareholders. If and when the shareholders want their money they'll get it.

Shows you know nothing about real business. It's the customers that matter to a business, not the shareholders.

 

[The Don]

Gee, how about that. Possible future hard times? What a load of crap.

Well I've heard of many businesses who have failed to make it through difficult times because they've failed to build up enough of a reserve.

Shows you know nothing about real business. It's the customers that matter to a business, not the shareholders.

....and yet when you look at articles of incorporation the executives' responsibility is to the shareholders, not to the customers.

Now a major part of that is ensuring that there is a viable business and a major part of that is ensuring that there is a revenue stream but in terms of legal responsibilities it comes down to the shareholders.

 

[The Don]

It is you that have inferred this from a single comment. I haven't written a treatise on doctors that gives you some larger view of my thoughts on the matter so for you to make a broad generalization from a single statement says a lot about how narrow your thought process is.

All I have to go on are the posts you've written that I've read. You said.....

Drug companies produce drugs and have doctors sell them.

...which I contend is a gross distortion of the relationship between doctor and pharmaceutical company and implies that doctors do not have their patients' welfare as their primary concern.

Small companies aren't inefficient just because you say so. My company was small and it wasn't inefficient at all.

You are correct, there are small efficient companies but then again there are whole industries where economies of scale dictate that only large companies can thrive. Pharmaceuticals, car manufacturing and most heavy industry are examples of these kinds of industries.

Even in industries like IT consulting, small concerns can find it more difficult to operate efficiently. If you're a small specialist company, you're very susceptible to changes in demand for your specialty whereas a larger organisation spreads the risk across a variety of specialties.

I cannot compete on price with the big players in the industry and I certainly cannot compete on the scope of service offered. Instead I have to rely on the specialist skills of my consultants being recognised and being in demand and I need to be nimble enough to spot and take advantage of changes in the market.

It has also helped to have comparatively large cash reserves (up to 3 years of turnover) to help tide us over some tricky periods without laying people off. This isn't through some sense of compassion, it's just that they are more or less irreplaceable.

Once again, you missed my point didn't you? IBM behaves far better than most large companies. Xerox did too and unfortunately, it's not doing well in business now but that is more a matter of not having another product line. IBM has been able to milk it's hardware business for a long time and the benefit of having software and services has been what kept them competitive. IBM is an example of a company that spends a lot or did anyway on basic research. We did a project for the Watson Research Lab in Yorktown. It was on a par with Xerox PARC where I also had a chance to work. Xerox tended to give it's good ideas away and in fact, Java is based on the PCR for the Globalview system. That was a failed product but more because they didn't have the hardware power at the time to support their advanced computing ideas.

The fact that these companies did spend their money to benefit both the advancement of technology and the economy is what I am suggesting that big corporations need to do if they are that large. IBM still does stupid things like stock buybacks but at least it does recycle money back into the the economy. It used to be entirely captive with regard to it's hardware but it divested a lot of that stuff. It sold it's disk drive business to Hitachi, it's PC business to Lenovo and it's printer business was spun out and recently it's POS business which has been around forever, was sold to Toshiba. The disk business was a money loser because smaller more nimble competitors like Seagate and WD were chewing IBM up.

IBM has been a unique example of a big company that has changed some of it's ways over the years but it's a rare case. I give them credit as one of the best companies I ever worked in. They treated their employees well and they had a good view of business albeit somewhat predatory. My neighbor is a retired IBM exec and he is living well on his retirement package and by selling his stock while the price is high.

I'm not sure what your point is here. You seem to be a bit of a fanboi for IBM but I'm not entirely sure what lessons you want other companies to take away from them. Certainly blowing $3bn on a failed project doesn't seem like a good idea and though you claim they were in part motivated by wanting to progress technology, I'm sure that their past record on taking out and protecting patents shows that, as it should be, the shareholders were uppermost in the minds of the executives.



edited to add.....

...and to get us back on topic, IBM isn't sparing it its rewards for its top executives. Admittedly they've waived their bonuses for 2013/14 to keep the shareholders happy but in the past they've been quite generous

During his tenure at the top of Big Blue, Palmisano transformed the company, increased profitability and saw the stock price grow. Palmisano ran IBM from 2002 until 2012. The stock doubled in that time period and the market cap jumped some 30 percent. He reoriented IBM toward a focus on profitable services and software and away from traditional business lines like personal computers and technology hardware.

All told, the website Footnoted.com has estimated that the value of the former executive's total retirement package could be nearly $271 million.

source: http://www.cnbc.com/id/100565278

 

[Ziggurat]

Shows you know nothing about real business. It's the customers that matter to a business, not the shareholders.

The only obligation Apple has to its customers is to deliver good products. Whether it sits on large cash reserves or distributes those reserves to shareholders is none of its customers' concern.