Posted Monday Nov 18 2013

Ericka Barrientos, campus rep for Gleim Reviews, presented this past Thursday  afternoon. 

We have multiple collections of the Gleim review books on reserve with our business librarian Tammie Woodward. 

Kimberly Ford CPA spoke that same hour. She presented an really interesting story on the evolution of her firm Hill and Ford. Originall  like many CPA firms at the time they performed tax and write up work. Today there is a focus on vaultaions and forensic activity. Much time is spent
analyzing situations and then following up with court testimony. She indicated a lot of business was
gained by such court exposure. 

Thanks for Ms. Ford for sharing her experiences with us. I noted several students followed her down the hallway still asking questions at the conclusion of her talk. 

Weekend November 17 2013

We study Total Quality Management in Managerial Accounting. My weekly newspaper column illustrates the difference between the Government's roll out of the ACA and what is happening at Hyundai. 

It’s Time for the Change Barrack Promised

‘We’re going to fundamentally Change America.’

Candidate Barrack  Obama, 2008

We’ve had some Glitches in the Affordable  Care Act ACA

President Obama 2013

Hyundai Motor’s President for  Research and Development and two other executives stepped down after a series of quality issues and recalls. Hyundai commented that ‘the latest personnel change represents our strong commitment to quality management and reaffirms  our  will to continuously improve R & D competitiveness.

Heads Roll at Hyundai Motor, Seoul, Korea this week

Notice the contrast in the two  approaches and reaction first in government versus a corporation.  Millions of people losing their paid for insurance plans who are locked out of the ACA, well that’s a glitch. The problems at Hyundai are not brushed aside as glitches. the President, as with so many government schemes, has created the ultimate unintended consequence. As a direct result of the ACA, more people are uninsured than ever before.   The legislation only works if healthy people pay more premiums to insure those with pre-existing conditions. This  is why Bill Clinton’s suggestion that as promised, you can keep your plan if you want it, will not work. “This will not fund the money needed to insure everyone.

It seems that such problems are popping up all over.  The US Navy’s Littoral Combat Ship on a recent War Game exercise suffered generator meltdowns, burst pipes, and propulsion troubles.  For the record during  World War II, the Allies built 814 destroyers and 1,102 convoy escorts.  The proposed purchase of Littorals has been cut from 52 to 32. It’s  a good thing this Navy is not trying to fight WW II again.

One reason for our success in WW II construction can be attributed to the Father of Total Quality Management, Dr. Edward Deming. Deming was schooled in statistical quality control. He fashioned a list of 14 ‘dos’ and six ‘don’t’ that became the foundation of TQM which has morphed to Six Sigma today.   General MacArthur brought the Dr. to Japan as he remade that country in the early 1950s. the result is the annual Japanese Deming Award, and Honda, Toyota, Sony, etc.  Savor the irony that Japan learned quality from the country that bombed it into surrender.  Starting with Rule  Six the list includes Institute Training, Leadership, Drive out Fear, and Break Down Barriers Between Staff Areas.

A list like this highlights the very difficult of instituting a successful social  or military program by the government.  LBJ’s various War on Poverty Program is still on the books But the government says that five decades later we have more folks in poverty than ever! Deming pointed out that until an organization removes the finger pointing between divisions and admit errors, nothing is going to change. Has anyone ever heard a politician admit one of their programs does not work?  From the War on Poverty to Education and now the ACA, such programs produce more poverty, less education, and now, more uninsured, the opposite of their original intention. The result is that the programs are never evaluated, improved , or eliminated, something business does every day

Clearly Hyundai held specific individuals accountable. At this point I doubt firing Kathleen Sebellius will improve things.  I doubt that firing Condi Rice after 911 would have shored up national security, but in both cases it would have been a start. Investigations now reveal a total lack of coordination between those that wrote the law and those designing the website.  In addition,  we need only look to Ron Johnson’s disastrous attempted re-make of J C Penny to witness what happens when changing 100% of a national firm without a test market.  JCP is a clothing store, health care is one sixth of the economy. There is no way it will be fixed by December 1.

Until politicians are willing to admit mistakes, and start over, the lack of progress and accountability will continue.  The lives  of those needing critical care who are losing their insurance now will depend on such a change. With the President’s   approval rating at its lowest ebb ever,  40%, so far we are not seeing any desire to get quality into the ACA. The  Administration does not seem to grasp that one cannot order quality or improvement.   That has to be an integral part of the system.  Until that happens expect the ACA to look a lot like JCP. 

Weekend November 2, 2013

Tesla TSLA is trading at a 274x price earnings ratio.   We are studying the contstruction of earnings per share which forms the denominator of the p/e ratio. Do you think this might be a little pricey?  Investors are paying $267 dollars to purchase one dollar of TSLA earnings.