Gut feeling about your CEO is spot on

Gut feeling about CEO is spot on

Gut feeling about CEO is spot on.

That gut feeling many workers, laborers and other underlings have about their CEOs is spot on, according to three recent studies in the Journal of Management, the Journal of Management Studies and the Journal of Leadership and Organizational Studies that say CEO greed is bad for business.

But how do you define greed? Are compassionate CEOs better for business? How do you know if the leader is doing more harm than good? And can anybody rein in the I-Me-Mine type leader anyway?

University of Delaware researcher Katalin Takacs Haynes and three collaborators — Michael A. Hitt and Matthew Josefy of Texas A&M University and Joanna Tochman Campbell of the University of Cincinnati — have chased such questions for several years, digging into annual reports, comparing credentials with claims and developing useful definitions that could shed more light on the impact of a company’s top leader on employees, business partners and investors.

They test the assumption that self-interest is a universal trait of CEOs (spoiler alert: it’s alive and well), show that too much altruism can harm company performance, reveal the dark, self-destructive tendencies of some entrepreneurs and family-owned businesses and provide a way to measure and correlate greed, arrogance and company performance.

“We tried to look at what we think greed is more objectively,” said Haynes, who was recently promoted to associate professor of management in UD’s Alfred Lerner College of Business and Economics. “What we’re trying to do is clean up some of the definitions and make sure we’re all talking about the same concepts.”

In their studies, researchers offer plenty of evidence that some leaders are insatiable when it comes to compensation. How much is too much? They don’t put a number on that. But they do add plenty of nuance to the question and point to a mix of motivations that goes beyond raw greed.

“It’s not for us to judge what too much is for anybody else,” said Haynes, “but we can see when the outcome of somebody’s work is the greater good, and when it is not just greed that is operating in them.”

Greed seems all too apparent to many workers. The recent recession left millions without jobs and many companies sinking into a sea of red. At the same time, though, stunning bonuses and other perks were landing in the laps of people at the helm.

Haynes, who joined the UD faculty in 2011, has found the range of pay within companies an intriguing question, too.

“Why is it that in some companies there is a huge difference between the pay of the top executive and the average worker or the lowest-paid employee and in other companies the pay is a lot closer?” she said.

Many a minimum-wage worker, making $15,080 per year, has wondered that, and so have those in the middle class, who may work a year to make what some CEOs make in a day.

But if you make more than anyone else does that mean you’re greedy?

The question is more complicated than water-cooler conversations might suggest. And Haynes and her collaborators go to the data for answers, leaving emotion, indignation and cries for justice to others. They leave others to correlate the data with names, too.

Instead, they offer definitions and analytical tools that add clarity, allow for apples-to-apples comparisons and shed new light on how a leader’s objectives shape company performance.

“It’s possible that high pay is perfectly deserved because of high contributions, high skill sets,” Haynes said, “and just because somebody doesn’t have high pay doesn’t mean they aren’t greedy.”

The marks of greed are found elsewhere — in a reporting category that tracks “other” compensation and perquisites, in the pay rates of other top executives, in compensation demands during times of company stress, for example.

Haynes’ studies included interviews (with anonymity assured), publicly reported data, written surveys, essays and a review of published information and interviews with CEOs.

The studies also examined managerial hubris and how it differs from self-confidence.

“Hubris is an extreme manifestation of confidence, characterized by preoccupation with fantasies of success and power, excessive feelings of self-importance, as well as arrogance,” researchers wrote.

“Say I’m a stunt driver and I have jumped across five burning cars before with my car,” Haynes said. “I’m pretty confident I can do that — and maybe even six. Say I’m not a stunt driver. To say I could jump through six burning cars would be arrogance. And if I drag you to go with me, it could be criminal.”

Risk aversion can harm a company. But risk for short-term gain without thought of the company’s future is a sign of greed.

“Some CEOs take risks and it will pay off,” she said. “They will have reliable performance and we can forecast that. We know their track record. Others take foolish risks not based on their previous performance.”

Such risks may be especially prevalent among young entrepreneurs, who underestimate the resources needed to help a startup succeed and fail to recognize that more than money is at stake.

“While financial capital is an important concern with these behaviors, the effects on human and social capital are often overlooked, despite the fact that they are highly critical for the success and ultimate survival of entrepreneurial ventures,” the researchers wrote.

Generally, researchers found that greed is worse among short-term leaders with weak boards.

The good news, Haynes said, is that strong corporate governance can rein in CEO greed and keep both self-interest and altruism in proper balance. And that is where the greatest success is found.

“Overall, we conclude that measured self-interest keeps managers focused on the firm’s goals and measured altruism helps the firm to build and maintain strong human and social capital,” researchers wrote.

 

Source:  sciencedaily.com

Monsanto Buys Big Data Weather Company

 

 

Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B:

 

 Comment 39 Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B


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Monsanto Buys Weather Big Data Company Climate Corporation For Around $1.1B

 

 

 

 

 

 

 

 

 

 

 

 

Today’s big acquisition is a huge agritech exit: Biotech company Monsanto has bought Climate Corporation for approximately $1.1 billion. While the Monsanto press release says $930 million, we’re hearing from investors that the actual price is past the $1 billion mark, because part of the all-cash deal will be paid out over time as an employee retention plan.

Climate Corporation is backed by Founders Fund, Khosla, Google Ventures, NEA, Index Ventures and Atomico. The company uses machine learning to predict the weather and other essential elements for agribusiness.

Monsanto focuses on providing seeds, biotechnology traits and crop production products for farmers around the world. The acquired company will continue to operate as the Climate Corporation, and Monsanto will leverage its big data expertise to optimize farming globally.

This is a pretty cunning move. It comes on the same day that Monsanto — one of the world’s largest argibusiness companies — reported a larger-than-expected, increased 4th quarter loss, of $249 million, or $0.47 per share.

And Monsanto is positioning this acquisition as part of a longer-term recovery plan, hoping that Climate Corporation’s climate change monitoring technology will help Monsanto manage future risk better. Monsanto has weathered (pun intended) a lot of bad PR over the years around issues like genetic modification and the general trammelling of smaller agricultural enterprises, so it will be interesting to see how Climate Corporation fits into that mix.

Here is a link to the press release on the Monsanto home page.

Good morning,

Monsanto just announced it has signed a definitive agreement to acquire The Climate Corporation for $930M. The full press release and supporting information is available on http://www.monsanto.com.

The acquisition will combine The Climate Corporation’s expertise in agriculture analytics and risk-management with Monsanto’s R&D capabilities, and will provide farmers access to more information about the many factors that affect the success of their crops.

We would like to invite you to join us later this morning for a call related to today’s announcement. We’ll use this call to provide details about the announcement and then have an opportunity to take some of your questions.

David Friedberg, chief executive officer of The Climate Corporation and Monsanto’s executive vice president of global strategy, Kerry Preete will provide an overview of the announcement.

The COO of Climate Corporation, Greg Smirin, says that the acquisition is an ideal fit for both companies: “As we all know, the weather is becoming more extreme. We found that we had kindred spirits with the folks at Monsanto; The data science that we have developed can be applied to improve seed production immensely.”

Climate Corporation CEO David Friedberg comes from an interesting tech background. He is an ex-Googler, where he served as one of its first corporate development execs. (One of the deals he tried to do while there was to convince Google to buy Skype, according to Index’s Neil Rimer, who wrote the first VC check for Climate Corporation’s $300,000 seed round. Obviously the Skype deal never happened, but Friedberg ushered in a number of other biggies for Google nevertheless.)

 

“Monsanto Protection Act,” Provison snuck into Law

“Monsanto Protection Act,” and How Did It Sneak Into Law? A provison that protects the biotech giant from litigation passed Congress without many members knowing about it:

"MON 810", a variety of genetically modified maize (corn) developed by Monsanto Company is pictured January 23, 2012. The agricultural giant posted a large increase in quarterly earnings on strong results in corn seed sales in the US and Latin America

“MON 810”, a variety of genetically modified maize (corn) developed by Monsanto Company.

“MON 810”, a variety of genetically modified maize (corn) developed by Monsanto Company. The agricultural giant posted a large increase in quarterly earnings on strong results in corn seed sales in the US and Latin America. Slipped into the Agricultural Appropriations Bill, which passed through Congress last week, was a small provision that’s a big deal for Monsanto and its opponents. The provision protects genetically modified seeds from litigation in the face of health risks and has thus been dubbed the “Monsanto Protection Act” by activists who oppose the biotech giant. President Barack Obama signed the spending bill, including the provision, into law on Tuesday.

Since the act’s passing, more than a quarter million people have signed a petition opposing the provision and a rally, consisting largely of farmers organized by the Food Democracy Now network, protested outside the White House Wednesday. Not only has anger been directed at the Monsanto Protection Act’s content, but the way in which the provision was passed through Congress without appropriate review by the Agricultural or Judiciary Committees. The biotech rider instead was introduced anonymously as the larger bill progressed — little wonder food activists are accusing lobbyists and Congress members of backroom dealings.

The Food Democracy Now and the Center for Food are directing blame at the Senate Appropriations Committee and its chairman, Sen. Barbara Mikulski, D-Md. According to reports, many members of Congress were apparently unaware that the “Monsanto Protection Act” even existed within the spending bill, HR 933; they voted in order to avert a government shutdown.

“It sets a terrible precedent,” the International Business Times. “Though it will only remain in effect for six months until the government finds another way to fund its operations, the message it sends is that corporations can get around consumer safety protections if they get Congress on their side. Furthermore, it sets a precedent that suggests that court challenges are a privilege, not a right.”

Apple hasn’t learned, charm world’s largest population

Apple is the world’s largest company – with nearly $600 billion in market value – getting bigger is a tough challenge. Still hasn’t learned how to charm the world’s largest population:

If you're the world's largest company - with nearly $600 billion in market value - getting bigger is a tough challenge. But if Apple can learn how to charm the world's largest population, the possibilities are limitless.

If you’re the world’s largest company – with nearly $600 billion in market value – getting bigger is a tough challenge. But if Apple can learn how to charm the world’s largest population, the possibilities are limitless.

Tim Cook, Apple’s reserved and soft-spoken CEO, has a tendency to wax euphoric about the China market and his company’s place in it. When asked last year by an analyst whether China could replace the U.S. as Apple’s biggest market, Cook positively gushed. “How far can it go?” he responded, referring to China’s prospects. “Certainly in my lifetime I’ve never seen a country with as many people rising into the middle class, with people wanting to buy Apple products.” He didn’t directly answer the analyst’s question, but concluded, “The sky is the limit.” You may think you know the story of Apple (AAPL) in China — how the men and women who make iPods and iPhones for Apple partner Foxconn labor under punishing conditions. But there’s another Apple Goes to China story, and this one is the tale of an underdog — yes, underdog — that has the potential to unlock billions and billions of dollars in additional revenue, just by eking out market share gains in core products such as smartphones and PCs. If you think Apple, the most valuable company in the world, with a market cap of nearly $600 billion, has nowhere to go but down, we humbly suggest you turn your gaze to the East. Even as China experiences a sharper-than-expected economic slowdown, it continues to mint millions of consumers who covet Apple’s products. In its fiscal first half of the year, Apple has reported $12.4 billion in sales from greater China, and analysts believe Apple could garner $25 billion or more in China sales in calendar 2012. And that’s up from $13.3 billion last fiscal year, and almost nothing five years ago. In 2007 — the year before the iPhone became available internationally — Apple’s annual revenue from China was “a few hundred millions of dollars,” Cook has said. The company didn’t open its first store in China, a modern glass-and-metal structure in Beijing, until 2008, a full seven years after launching its retail strategy in the U.S.The company has yet to secure a deal to run the iPhone on the China Mobile network. For years the two companies have been negotiating; every year the rumor mill churns that a deal between the two is imminent. There’s fresh speculation, once again, that the iPhone 5 will be the device that seals the deal. A source at China Mobile will say only that the two companies continue to have conversations, but that no final deal has been reached. But just as the availability of the iPhone on new carriers in the U.S. expanded Apple’s reach, a China Mobile deal would have a huge impact on Apple’s presence in China. The cellphone company has a 66% market share in China. Meanwhile Apple is moving in smaller, smart ways to further immerse itself in the China market. The new iOS 6 operating system integrates popular sites in China like Sina Weibo, the microblog that’s more or less the equivalent of Twitter. And the Mac OS 10.8 upgrade includes a package of popular Mandarin sites, including Youku, a video destination. And while it lacks the massive reach of its Chinese competitors and Samsung, Apple has dramatically expanded the number of stores it permits to sell its devices; there are 11,000 places in China to buy the iPhone, up 138% from last year. The aggressive expansion plainly continues. One Shanghai suburb boasts two Apple licensee stores. “Business has been very good,” says Xie Li-jun, the manager of one of the stores.

Is it real? A fake Apple store in Kunming in China's southwest