I’ll throw one out for the MBAs in the hizzou:
On the Tuesday Morning Quarterback blog on ESPN, Gregg Easterbrook writes a column about the weekend’s NFL action as well as other random topics. This week’s blog has two points I think we all would enjoy:
1) There’s the story of former CEO of HP, who stepped down amidst allegations she hired PIs to find a leak on the HP board. Who cares? Well, the PIs called the phone company, gave personal information claiming to be members of the board to get phone records, and then used that info to determine who was the leaker. Problem is, this is against the law. So now she had to step down and may also face legal action.
Well, her story is she’s claiming she’s being unfairly branded as a publicity seeker. She claims this in her new book. Written about herself. With her picture all over the cover. That’s the way to prove you don’t want publicity, eh?
And she also claims she was treated unfairly at HP. Her severance package was 21 MILLION AMERICAN DOLLARS!!!. She made 36 million for her 5 years of work!!! Can I be treated unfairly? Please? PLEASE???!!!
2) There’s a “classical” economics experiment where two people are in a room. A third party walks in with $1000, and states the rules: Person A gets to decide how to split the money between Persons A & B. Person B gets to decide whether or not to accept it (Deal or no deal?). If B decided not to accept, no one gets anything.
Well, “classical” economics tell us the logical way for the deal to go down is for A to offer himself $999 and offer B $1. Logic tells us B should accept, because if he does, he gets $1, otherwise he gets zippy.
Well, as you can imagine, results from real people differ slightly. You have to get up to about $300 before B thinks about accepting. “Classical” economists tell us this prove humans are illogical.
Mr. Easterbrook claims a different take. It just proves money isn’t everything, and B would rather lose money than feel like a chump for getting the short end of the stick. Also, A is a fool for proposing such a lopsided split that will almost always be denied.
This can be expanded to a world view in that if both parties in a negotiating situation negotiate keeping the other’s interest in mind, the negotiations go much better. Basically, the basis of civilization is when we can start to take other’s consideration into account when we negotiate.
Just thought you’d find the article interesting, and see if anyone else had any thoughts
My $.02 Weed
Illogical thinking makes the world go round
If you didn’t get some gratification out of punishing unfair behavior, justice wouldn’t exist. In this case, B isn’t really being wronged, but B also appreciates that A isn’t bringing any more value to the table than B is, so the split better be darn near even.
The sad part is when A does a lot more work, like keeping the owner of the $1,000 happy, just so B can have a slice that they feel entitled to. Then A does deserve to ask whatever, while B shouldn’t be trying to punish. I think that gets lost on a lot of people, especially when talking about CEO pay. It’s like the owner says to A, “I’ll give you $1,000, but only if you find someone to take some of the money with you.” If A then presents this scenaro to B, I would condemn B for asking for anything more than $1.
That’s not to say that I think $7.2 million/year is a bum rap.
True
I’m not saying CEOs shouldn’t get paid. I bet the majority of them work 100+ hours a week and have no life outside their business one. But I do have a problem with CEOs who run their business into the ground, with millions of shareholders losing money, and then that CEO getting 8 digit severance packages and benefits for life.
This chick from HP may be arrested for breaking the law performing her duties as HP CEO, and she gets 17 mil in severance? That don’t compute.
Conversely, the idea of “entitlement” in America has gotten out of hand. Why work hard when you can BS your way to megamillions via lawsuit or discrimination?
My $.02 Weed
Entitlement
I think entitlement should come with a price tag.
—
Matthew P. Barnson
Chicago is #1
Caught the latest Business Week annual rankings — congrats to Daniel’s alma mata on getting chosen as the #1 business school in the country.
At least Vandy has crawled back into the top 30!