There are some things that one just didn’t do. That’s the way I was brought up. It’s not gray; it was black and white. Now the ethical standard seems to be if everybody else is doing it, I can do it too. Carry that over into the banking. Everybody else is doing these funny loans and having earnings grow faster, building up their margins, leveraging those margins. The more leverage A gets, the more leverage B feels inclined to get. So the system fed on itself and drove bankers to making decisions that they, presumably, should have known better than to make. I don’t blame government for this. I was at a meeting of CEOs, even though I haven’t been to one for quite a while, and someone asked me to sum up the morning. This was a bunch of bankers and other CEOs. They said, what do you think… Read more →
EppsNet Archive: Business
Chick’s vs. Dick’s
Last year, Dick’s Sporting Goods bought Chick’s Sporting Goods. According to the Orange County Register, the four Chick’s locations in Orange County, including the one in Tustin that I shop at, will all be replaced by Dick’s by the second half of 2009. I’m not happy about this. Oh, I know there are people who like Dick’s, and there are people who are 50-50 on the matter and can go either way, but there are also a lot of people like me who really prefer Chick’s. In fact, I’ve been doing Chick’s for so long that I don’t see how I’m ever going to get used to Dick’s. Read more →
The Halo Effect
The halo effect is a cognitive bias whereby people tend to make specific inferences on the basis of a general impression. It was first identified by psychologist Edward Thorndike in 1920. I read an interesting article this weekend by Phil Rosenzweig, the author of The Halo Effect: … and the Eight Other Business Delusions That Deceive Managers, on the halo effect in the business world: Imagine a company that is doing well, with rising sales, high profits, and a sharply increasing stock price. The tendency is to infer that the company has a sound strategy, a visionary leader, motivated employees, an excellent customer orientation, a vibrant culture, and so on. But when that same company suffers a decline–if sales fall and profits shrink–many people are quick to conclude that the company’s strategy went wrong, its people became complacent, it neglected its customers, its culture became stodgy, and more. In fact,… Read more →