We are studying successful communication strategies in EDAD 5610. One way to do this is to analyze communication breakdowns.  Handily there is no shortage of such failures, oddly few learn from them as these recent examples illustrate. Our two examples here are

Hugo Montegegro,  Now the former Arlington ISD Superintendent

John Lilley, Now the former Baylor University President

Hugo Montenegro  was apparently determined to earn outside speaking fees. Despite his annual salary of $270,000, he sought and received oputside fees in the amount of $14,000, about 5% of his salary.   And remember at his salary level he will by paying about one third of those fees in taxes anyway!   He ignored communications from his own attorney and made it clear he wanted to engage in such practices from the get go.  I am not sure where poilicy, ethics, and communication cross from one to the other but we know that Hugo managed to cross all three. Click and read the article for class Monday.

John Lilley reminds me of the statement that Taft made after engineering the worst loss his party ever suffered, “I cannot imagine how I could have done anything different!.”  Once again, Carnegie’s lessons can serve us well.  It appears that Lilley failed to build a consensus, to say the least.  Click and read the article for class Monday.

As you read the articles think about what we have learned about Total Quality Management and the psychology of dealing with people that might have prevented these incidents from occurring. My purpose of course is to insure that you make the connection so that these things do not happen to you!

 At UNT Dallas we believe that education should be fun and interesting. Actual photos from class demonstrate just that. Our latest photo album posted at left on the blog shows actual students participating in classroom presentations.  No doubt there will be protests about hair issues and costumes but until we can arrange for the same wardrobe and make up that the cable tv networks have, this will have to do.

Ford   reported the largest quarterly loss ever. A closer read of the article reveals that Ford did not actually lose this much cash failing to sell cars and trucks. Rather various asset write downs constitute most of the loss, though there was a loss selling vehicles. The ability to read and process such information is another reason for studying accounting.  After all Warren Buffet says he reads accounting reports, and invests accordingly.

As we mentioned in the previous post, there have been massive strategic mistakes at the major US based  auto makers.   Ford and GM are losing about a billion or so a month. Plans to introduce this or that in 2012 may be a bit late to save the day!  The two companies can only last as long as the cash holds out. However we give the current Ford  CEO the coveted Rearranging the Deck Chairs on the Titanic Award for his comment amidst all the record loss that

We got to the capital markets at the right time to borrow the money……

Jerry Flint  has reports on the auto industry since the 1950s. In this column he gives as good an explanation of managerial accounting as I have ever read. Once we exceed break even , fixed costs are covered and we can make some real money, that is the point of the entire exercise.  In this column he suggests that the high prices of gasoline are driving consumers to more fuel efficient cars, which is what the environmental types have always said.  Please read this column to understand why we study managerial accounting.

Another huge component of business is strategy.  Nightmare on Woodward Avenue examines how the pickup SUV strategy of Detroit has failed. Keeping a long term focus (remember Dr. Deming?) has resulted in cars that address the fuel crisis for foreign auto makers.EvenToyota blew it here with the ill timed Tundra.  Guess who is making more money?  I suspect Chrysler will be toast in perhaps 18 months. They do not have a ‘compact’ to sell or anything remotely economical.  Perhaps Navistar will buy their RAM truck line. I do not see that Chrysler has anything else to sell that anyone would want. While the car mags love the new 425 bhp Challenger, who wants it in big numbers. And in fact the high performance cars have never sold in large numbers. A two ton muscle car from Chrylser is late to the market just at the original Challenger was in 1970, again at the start of a fuel and emission crisis. The world will no longer tolerate the same mistake twice in a row.

Saving GM  mates strategy with managerial accounting.  In this column Mr. Flint analyzes past and current mistakes. now what to do?  Managing is a process of continually evaluating outcomes to improve delivery of product and service. The Americans have chosen short term profits over long term pursuit of strategy, now time is running out. GM and Ford are each down to maybe two years of operating cash. Ford just today reported yet another $9 B loss.  How long can this go on-about tow more years. It may be startling to think that all these giant Ford and Chevy dealerships could be left without a company in two years, a blink of an eye in car terms, but I am telling you and the cash flow statements are telling you, it could happen.  Two years and counting….

Demand for accounting majors is still growing. I was a finance major as an undergrad.  But the recent spate of failures at Fannie Mae, CITI, Lehman, has seen even more demand for accountants who can deconstruct statements rather than perhaps wish things would turn out the way they planned.  A tip of the hat to John Daniels in Student Development who spotted this article.
Seriously our recent accounting grads with a Bachelor’s  at UNT Dallas campus are landing jobs in the

$50 K area.  And I am getting rave e mails about the responsibility and on the job rewards, gee!  Knowing how to construct and read a financial statement is a valuable resource.

This short video won the award in its category at the Cannes Film Festival.  No wonder. It is less than five minutes long but consider how it grabs your attention and holds you.  And notice that there is no dialog.  As you know I am big on good communication, this video communicates!

The point is, could you craft a message like this, watch it a second time and look at all the ways the film maker drew you into the story, and look how much story was told in a short period of time.

Chuck Kim at Yahool makes this comment about The Dark Knight, which set a new box office weekend record as the market bounced. “I would not take a kid to see ‘The Dark Knight,’ said Chuck. “The Joker and Two-Face alone could give a kid nightmares.” The oft-mentioned violence is not of one of gore, he says, but more of the heart—and thus potentially more terrifying. “The main thing is that it is a very dark movie,” Chuck concludes.”There’s no ray of hope for the city.”

Hmm, not a ray of hope, no wonder this film is resonating with audiences. Understand that several of our big banks and brokerages have just been technically insolvent, ie, lacking enough capital to meet regulatory standards. No hope for the city indeed…. Chuck is not kidding, Vallejo, CA has declared bankruptcy. This city of 117,000 is being watched by other municipalities as whether bankruptcy is a way to SAVE the city. Yes you read that correctly. Now here is evidence of just how worried markets are about pending city bankruptcies.

The new social science of socionomics links how popular culture reflects the economic environment. There is no better social laboratory than the stock market, the prices are there for everyone to see every day. Optimism brings higher prices and pessimism brings lower prices. The lack of hope for Gotham City refects the frustration and low consumer expectations reflected in the markets. Indeed this is not the light and breezy Batman from the tv series in the 1960s. Dark Knight has set a box office weekend record of $155.3 M. Yet the movie was conceived and begun over a year ago. How did the producers anticipate the turn in emotion such that the movie would coincide with the downturn in expectations. Ah, that is the wonder of socionomics! A few weeks back the latest installment of indiana Jones conincided with a lft in markets. Jones is a consistent bull market figure. The movies began and continued through the up market 1980s. The vision of the Saturday serial hero vanquishing all foes hit a high note with audiences seeking to cast off the pessimism of the 1970s. Now Dark Knight fufills the opposite expectations.

Once again, Tom Sowell  Lays the blame where it belongs – on politicians. In this article he explains how politicians are asked to solve problems  they created.  Indeed, most political solutions are extremely short term as the time horizon for a politician is the next election. Yet many of these are long term problems. And so short term solutions are which results in events like the sub prime crisis.

Alert Student Maria Bravo provided this link to existing Accounting Certifications.   I will be asigning some research on this in accounting class. Click to see just how many there are. This is reflective of a couple of things.

One is that accounitng is a giagantic discipline with many facets. CPA is about an external assurance function. But accountants do many more things than that these days.

Another is I think from the simple fact that most people do not pass the exam. It is hard to track who gives up on the exam, but many do. And so there is a desire to attain some sort of certificaiton, and here they are. Do not be misled into thinking CIA or CMA are any easier than CPA simply because they exist.

Charles Minard’s  depiciton of Napoleon’s march to Moscow is regarded as the best graphic of the 19th century, or perhaps of the alst two centuies. Please click to read the articlle which explains how Minard portrayed six different forms of information on one easy to understand page.

Click here for a view of the map of Hannibal’s 221 BC crossing of the Alps.  And there is an additional article that provides more information about the two drawings.

And the book I mentioned in class, Tufte’s  book review is at this link.