"(T)o say that the individual is culturally constituted has become a truism. . . . We assume, almost without question, that a self belongs to a specific cultural world much as it speaks a native language." James Clifford

Friday, April 11, 2014

New Birds of Prey in Modern Retail

In a dysfunctional organization, the shared pathology fortifies its defense mechanisms with an obstinacy that appears rock-solid. Lines such as, “Unfortunately, the product cannot be returned” can be seen as part of an egg shell that seems to be durable until it is cracked open. By analogy, cracking the egg entails parsing such lines as are typically dished out to outsiders. Let’s take a look.

First, the word cannot is incorrectly used in the sentence, for a store’s return policy is not a law; whereas a business is subject to a law, no such requirement pertains to a company’s own policies. To treat the latter as tantamount to laws is essentially to vaunt the self-importance of the company, store, and even the employee enunciating the policy-law. “Your policies are not laws; of course you can make an exception, even if your supervisor is the person who can do it.” The word cannot serves the organizational dysfunction by giving the impression externally that the company is more than it is (i.e., a state of sorts with its own laws). At the employee level, the devise is essentially a power-grab—a distended or exaggerated urge to control others being a typical symptom of insecurity borne of underlying weakness.

Substituting may not for cannot gives the customer at least an implied opening that from the standpoint of the organizational pathology could prompt him or her to push through the defense mechanisms and trounce the core weakness. Were an “upper” manager to even consider such a linguistic change, an underling would likely contend that every customer would be returning items. The fallacy in this reasoning goes by the wayside in the mechanizations of the organizational dysfunction. Indeed, ignoring or dismissing logical fallacies is itself one of the defense mechanisms!  This is arguing with such an employee or manager is apt to be an exercise in futility.

Notice the "exchanges accepted" instead of "accept exchanges." The passive voice extends to "are revised" and "are shipped," suggesting an underlying mentality of weakness. Also, the forcefulness of the "must" (as one might expect pertains to a law) is belied by the inherent subjectivity in "mint condition." Finally, the blood-red color, as well as the black background color, suggests a certain passive-aggressiveness in line with the use of "must" for what is actually a policy (rather than a law). (Image Source: omgmiamiswimsuits.com)

Second, the use of the passive mood also hints at the underlying weakness in the dysfunctional organization because the action is sidestepped. “We do not accept returned items” highlights the action (i.e., the refusing) of the company’s employees/managers whereas “cannot be returned” omits the actor entirely! The latter phraseology matches the insecurity that naturally manifests out of weakness. Besides implying that the power of the actor to act is in some way compromised or enervated, the passive voice hides the actor and thus protects him or her from being confronted. The actor’s underlying fear here is that a head-to-head clash would not end well for the actor, given his or her own and shared (i.e., organizational) pathology.

Third, just as the choice of the word cannot and the use of the passive voice both involve a manipulatory fabrication (i.e., lying with a hidden agenda), so too does the addition of the unnecessary adverb, unfortunately. For the stealth actor (i.e., the non-supervisory or managerial employee), the policy is hardly unfortunate; otherwise, the policy would not be “on the books.” Lest the adverb is intended to refer to the customer [rather, lest the policy’s formulator or the employee mouthing it is referring to the customers]—as though the fact that the customers would have to keep ill-suited products were unfortunate—the policy itself indicates just how much its formulator and implementers really sympathize, especially since the formulator can change the policy. In other words, the use of the word is a lie designed to give the customer the false impression that “the store” really cares and that unfortunately the policy cannot be changed (and by whom?).


Even the tactic itself in such a line is a lie in that the pathogens are utterly unwilling to tolerate the very same tactic directed back at them. A customer wanting more than a glimpse of the sickness need only reply, “Unfortunately any refusal to accept back the deformed item will have to be turned over to small claims court.” Even though the particular employee would have no involvement in such legal proceedings, and thus no rational reason to bristle at the customer’s stated policy/law, he or she would be too accustomed to dictating terms to customers to let that privilege lapse without at least a spike in anger and attempt to regain the upper hand. “You are free to do so,” an employee might retort, as though he or she were granting or allowing the freedom. In fact, the implication is rather arrogant, again as if the company were akin to a state rather than being a mere counter-party in a commercial exchange. 

The hidden agenda becomes apparent by realizing that the statement is duplicitous or redundant, as the customer obviously already knows that he or she has the liberty to sue. The employee knows this of course, either consciously or unconsciously, and is not really informing the customer that he or she can go to small-claims court. “I don’t need you to tell me I can do what I’ve already told you I know I am free to do,” an astute customer might retort in turn. 

The exchange of words is really a control battle stemming from an organizational pathology’s attempts to defend itself against potentially interlarding intruders. The threat is of course over-stated—hence the exaggerated intent to “nail down the hatches” to weather the perceived storm. Yet the “new birds of prey”—Nietzsche’s label for those among the weak who can’t resist their urge do dominate (even the strong)—are not content to merely defend, for they must have the upper hand in order to feel sufficiently protected. 

Wednesday, May 30, 2012

India’s Business Environment: Beyond Corruption

In spite of expected growth of 6 or 7 percent for 2012, the economy of India was facing a pessimistic outlook at the time. The underlying cause seems to have been mismanagement by the federal government—in particular, by the ruling Congress Party. In actuality, the problem lies in the Indian business culture, and the society itself. As such, the problem is not so easily fixed as a change of government or policy.


The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.

Monday, May 21, 2012

Facebook’s IPO: Morgan Stanley’s Conflict of Interest

Morgan Stanley’s underwriting of Facebook’s IPO has been thought by some of the bank’s rivals to be incompetently managed.  According to the New York Times, “(r)ival bankers and big investors have complained that Morgan Stanley botched the I.P.O., setting the price too high and selling too many shares to the public.”[1] Interestingly, the incompetence is positively correlated with unethical policy decisions at the bank. Even as the bankers as underwriters were eager to sell lots of shares, they may have given some of their institutional customers—albeit only the most preferred, as per the bank’s other services—some privileged information. If this charge is true, the conflict of interest at the bank should be closely examined by Congress and any relevant regulators.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.


1. Evelyn Rusli and Michael De La Merced, “Facebook I.P.O. Raises Regulatory Concerns,” The New York Times, May 22, 2012.

Sunday, May 20, 2012

The Huffington Post Gilds the Lily: Facebook’s IPO Plummets?

On the day of its IPO, Facebook issued at $38 and went to a high of $45 before returning to near its issue price (closing at $38.23). On the next trading day, the price fell to about $34 in the early afternoon. This represents about 10% off the issue price. The Huffington Post headlined “Stock Plummets,” which must have been irresistible to anyone who had bought the stock. The Huff was using the $45 high as its benchmark, from which the $34 price represents a 25% drop. As if that were a plummeting, using the 10% off figure would have made the self-aggrandizing headline too obvious. At the very least, the headline detracts from the credibility of the Huffington Post.


The full essay is at "Taking the Face Off Facebook."

Tuesday, May 15, 2012

A Conflict-of-Interest in Lobbying: The Case of JPMorgan

At the JP Morgan stockholder meeting on May 15, 2012, as the FBI was opening an investigation into the bank’s $2 (or $3 )billion loss on credit derivatives, Chair/CEO Jamie Dimon gave what the Huffington Post calls “a spirited defense of the bank’s efforts to lobby against stiffer financial regulation.” He argued that the bank’s interest is the same as the stockholders—namely, to make the financial system strong and sound. What he omitted was the part about the bank’s interest including its own profit, even if systemic risk of the system is increased as a result. In general, any business looks primary after its own interests, and only then to the general interests of the system.


The full essay is at "JPMorgan: An Unethical Monstrosity," available at Amazon. 

Saturday, May 5, 2012

Holding the Unfit Accountable vs. Murdoch’s Entitlement to Power

“A damning report [in late April 2012] on the hacking scandal at Rupert Murdoch’s British newspapers concluding that Mr. Murdoch is “not a fit person” to run a huge international company has convulsed Britain’s political and media worlds and threatened a core asset of Mr. Murdoch’s American-based News Corporation.”[1] The report also “found that three senior Murdoch executives misled Parliament in testimony” and “alleges that the company sought to cover up widespread phone hacking.”[2]


The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.


1. John F. Burns and Ravi Somaiya, “Panel in Hacking Case Finds Murdoch Unfit as News Titan,” The New York Times, May 1, 2012
2. Ibid.

Wednesday, May 2, 2012

Wealth: Benefitting and Distorting Society

“One of the great political and economic challenges of our time is figuring out the balance between wealth that benefits society and wealth that distorts.”[1] In terms of benefitting society, invested (as distinct from donated) wealth can benefit consumers by enabling better and cheaper products. Economists estimate that for every dollar invested in productive enterprise, there is $5 of benefit to consumers.  Interestingly, this does not apply to money that is donated (rather than invested) to feed the poor (i.e., consumption rather than production).

In terms of distorting society, the study of “rent seeking” describes how “people or companies get rich because of their power, not because of their ideas.”[2] That is, “wealthy individuals and corporations are able to influence politicians and regulators to make seemingly insignificant changes to regulations that benefit themselves. In other words, to rig the game.”[3] Wealth can have a distorting effect not only on society, but also on the political and economic systems.  Contributing to the financial crisis, for example, “some of the [U.S.’s] largest banks actively manipulated customers and regulators and, sometimes, their own stockholders to profit from dangerous risk.” Moreover, for “many economists, rising inequality can create exactly the wrong outcomes for society over all. Rather than simply serving as an invitation for everybody to engage in potentially beneficial risk-taking, inequality can allow those with wealth to crush new ideas.”[4]

It is said that there will always be the rich and always be the poor. To some extent, economic inequality simply reflects the decisions people make—choices that reflect character, will-power, talent and aptitude. To reduce all of these to a uniformity would take a rather astonishing re-working of the human genome. Even so, it is also the case that the rich are able to exchange or use their economic power for political power and thus “rig the system” in their own favor—such that they can become even richer.

It seems to me that a society must recognize some economic inequality, given human nature and free-will. To take a simple example, some students will force themselves to study more while others will make the easier choice of going out for a beer. Most people would agree that the students who studied and got A’s should be wealthier. The economic inequality is justified by their greater sacrifice. Furthermore, if wealthy people are necessary for investment in productive enterprise to be possible or sufficient, then some economic inequality is justified because it serves society by benefitting consumers as well as the wealthy.

At the same time, society also has an interest in protecting the viability of itself, including its political and economic systems, from being distorted by the rich into serving them disproportionately. An upper limit on wealth is thus justified. The difficulty lies in determining where to draw the line. Just because there is no mathematical equation that will give “the” answer does not justify refusing to draw the line—treating economic liberty as having no upper limit. I suspect that this lapse is a salient part of American culture.


1.Adam Davidson, “The Purpose ofSpectacular Wealth, According to a Spectacularly Wealthy Guy,” The New York Times, May 1, 2012. 
2. Ibid.
3. Ibid.
4. Ibid.