Preventing Corporate Fiascos

A Systemic Approach

verfasst von: Thang Nhut Nguyen

Verlag: Palgrave Macmillan US

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

The lasting effects of corporate fiascos on business and the economy have spurred investigations, panel discussions, and research in an attempt to find out why these events happen and ways to prevent them. Through case studies and analysis of bankruptcy and institutional collapse, Preventing Corporate Fiascos examines the root cause of these disasters and offers a management exceptions system that diagnoses potential failure from the start.
Dr. Nguyen's unique framework is inspired by the biological spectrum, using cancer and disease as a metaphor for prevention and destruction. He uses a proven management repertory grid technique to evaluate aberrant and emotionally-charged decisions which could bring an institution to collapse. By recognizing the institution, its employees, the market and the economy as components of the biological spectrum, we can identify aggravating failure and disease and begin to take effective steps toward prevention.<

Inhaltsverzeichnis

Frontmatter

Chapter 1. Prologue

Abstract

We introduce a scheme to prevent corporate fiascos based on the fact that an institution, its employees, the market it is associated with, and the economy in which it is an actor are all components of a biological spectrum. Within this natural scope we consider an institutional fiasco as analogous to a cancer in a human. We attempt early detection of the signs and/or symptoms of a cancer-like disease in an institution, called exceptions. The aberrant decisions of the exception-decision complex are analyzed and evaluated for a timely correction. The evaluation task is assisted by an Oversight organization unit operating in parallel with the institution authority. We extend the concept beyond institutions to the market and the economy. The prologue outlines what is conceived and defined, why and how the ideas and the scheme are developed over the eight chapters of the manuscript, including acknowledgements.

Thang Nhut Nguyen

Chapter 2. Corporate Fiascos

Abstract

Corporate fiascos have been studied by many researchers, professionals, and others. The research has been conducted in terms of what happened and why, to understand from different business perspectives, and for domain-specific reforms in different disciplines. We approach fiascos somewhat differently. We follow a systemic approach. We also take the view that corporate fiascos result from a series of faulty events. The faulty events are called exceptions. The associated aberrant decisions can be visionary, strategic, managerial, or operational. We present two main investigations into systemic solutions: exceptions detection (what happened, when and how); and decision understanding (why it happened and who was involved). Together called the intertwined exceptions-decisions complex subject to management control.

Thang Nhut Nguyen

Chapter 3. Preventing Corporate Fiascos: A Systemic Approach

Abstract

In this chapter we present a systemic approach to fiasco prevention. We establish a framework containing a conceptual model covering four interrelated domains in which systems thinking for fiasco prevention are exercised: (1) the institution itself; (2) exception management, where signs or symptoms of fiasco are detected and exposed; (3) corporate decisions, to understand and evaluate how they cause or address exceptions; and (4) an independent Oversight organization unit chartered with enhanced management and corporate governance control to remediate or prevent aberrant decisions. We discuss the utility and values of the framework and the conceptual model.

Thang Nhut Nguyen

Chapter 4. Preventing Corporate Fiascos: Corporate Information Exceptions

Abstract

The general analogy sketched in Chap. 3 between cell-human and human-institution is further explored for insights into handling corporate information exceptions, since the cell-human component handles signs and symptoms of disease quite well. The analogy assists in identifying additional requirements definitions in our application modeling and development suitable for fiasco prevention. Note that there is always some form of management of information exceptions in an institution, called a management by exceptions (MBE) system. We inject the idea that the main functionalities of our revised and improved MBE will be analogous to: (1) the autonomic part of the central nervous system in humans; and (2) features of the human immunization system. The improved MBE will address both stability and exceptions in an institution.

Thang Nhut Nguyen

Chapter 5. Preventing Corporate Fiascos: Understanding Corporate Decisions

Abstract

This chapter is on the decision domain in the conceptual model and is inspired by Albert Camus’s statement that “Life is a collection of choices” and Antonio Damasio’s statement that most human decisions are emotion-driven. Although we are interested in all decisions, we pay more attention to the second: (1) rational decisions via decision analysis and modern quantitative methods in decision science; (2) irrational decisions as investigated in decision neuroscience and decision neuroeconomics. We attempt to understand corporate decisions from the decision makers' perspective, their view of the world. We explore the use of George Kelly’s personal construct theory (PCT) and his repertory grid (RG) technique for the understanding and measuring the criticality of decisions made by the responsible parties.

Thang Nhut Nguyen

Chapter 6. Preventing Corporate Fiascos: Corporate Oversight Organization Unit

Abstract

An Oversight unit as an independent unit exists in government as well as in business and industry (such as GAO or General Accounting Office, SEC or security exchange commission or other regulators). For institutions, it exists narrowly in the form of a Board of Directors for strategic issues, an Accounting Audit (operations), an Ethics Committee, and/or other ad hoc committees when needs arrive (crisis management). We suggest an Oversight unit which is permanent and parallel to the institution’s management-leadership for enhanced corporate governance. It operates as a watchdog with a capability for analysis and evaluation. It is chartered by the Board of Directors. It can access corporate information management and question management-leadership on decisions. It mimics partially the functionality of an immunization system in the human-cell component.

Thang Nhut Nguyen

Chapter 7. Preventing Corporate Fiascos: Beyond the Institutions

Abstract

We developed the tetrahedron model for fiasco prevention in the human-institution component in a systemic framework. The problem and solution is in the set-theoretic domain. The problem can be expressed as σ-algebra for the finding of the optimum decision subset, called generated σ(Δ) where Δ is the subset which hurts the institution. The conceptual model of institution-exception-decision-Oversight unit can be now extended to market and economy, where the institution is part of the market or economy. Beyond the institution level the problem is quite different due to the heavily networked structure of the market and the economy, even though hierarchies of structures exist. We argue that the conceptual model will still work for market and economy components.

Thang Nhut Nguyen

Chapter 8. Epilogue

Abstract

We argue that the institution has the emergent ability which we would call the wisdom of the institution (wisdom of the enterprise). Therefore with well-learned technique on repertory grid built for the understanding of decisions, even with a relatively incomplete MBE, the Oversight organization unit can predict whether the institution is heading to a corporate fiasco or not.

Thang Nhut Nguyen

Backmatter

Titel: Preventing Corporate Fiascos
verfasst von: Thang Nhut Nguyen
Verlag: Palgrave Macmillan US
Electronic ISBN: 978-1-137-49250-0
Print ISBN: 978-1-137-48964-7
DOI: https://doi.org/10.1057/978-1-137-49250-0