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Show ' Without far we can E hertzes. Ve are all plain people and don know how " ). Bernard Malamud. American author ( 1914-1986- go. Sunday, April 28, 1SS3' The Daily Herald Downsizings ean'fl Bast in changing markets By BEVERLY GOLDBERG 65 ufactured elsewhere. These companies are all refusing to add people to perform functions that outsiders can do better. The organizations taking this path to long-tercompetitiveness have made in the way their leaders lead, in changes the way their organizations are governed and in their use of technology (and the kinds of technology they use). They are also working to establish employee relations that make these shifts less painful for all concerned, while making it clear that they are not offering lifetime employ ment. Analyzing how companies taking this road have achieved their transformation Many corporations around the globe recognize that the repeated dow nsizings of the past few years have put them at risk. They realize that making further cuts to increase quarterly profits will affect their core competencies. They accept that it is time to find a new road to meeting shareand the aad is growth. holder demands are not They willing, however, to expand the way they did in the past. They remember all too well the costly redundancies and bloated bureaucracies that were the result of those earlier expansions. Instead, they are looking for ways to restructure so that they can begin to make new products, deliver new sen ices and reach into new areas of the globe. But they are determined to do so in w hen markets such a way that change be will able to respond to again they events quickly. makes apparent that it required significant In other words, they want to be able to will and determination to do what they all for contract as painlessly as possible have done and that all have not taken concerned when the winds of change once the same steps. exactly again buffet them. There are. however, seven principles These companies are finding ways to that appear and reappear in the course of into the stasis of order, aoid descending their actions. These principles ways to shift gears without flying off into studying tools serve for keeping organizations as chaos. Thai is, they are moving off in new flexible and poised for lean, strong, directions, but those directions are always growth: centered on their core competencies. 1. Set ethical standards and do not For example. Transnet of the Republic from them. Build an deviations accept of South Africa, a huge transportation based on trust, honesty and organization that few was privatized just a company years ago. was drastically downsized as integrity. 2. Establish a social contract. Set part of its goal of meeting outside compeand conditions of employexpectations tition once I'.N. sanctions were lifted. ment with current, future and temporary Its chairman. Anton Moolman. concerned with growth, restructured the employees. 3. Maintain a strong, lean organization downsized organization and added enorbased on core competencies. Avoid permous amounts of technology so it could manently adding people and positions that into combinbusinesses other by expand relate don't to those things that are the key ing its ability to move goods with the to the success. organization's knowledge collected as a byproduct. 4. Develop leadership skills at every is Another example Destec Energy of level of the organization. Work with Houston. Texas. Its chief executive and selected individuals to help them develop chairman. Charles Goff. says his goals are the skills needed to make the organization to make Destec "as flat an organization as run when lean and expand when appropripossible." "find ways to stay entrepreate. neurial" and "remain flexible and agile." 5. Be open to learning, encourage He believes that by expanding globally experimentation and be innovative. Conwithout building a huge headquarters stantly try new things based on informan staff, he can avoid the expense and tion garnered from suppliers, customers, that would result from adding laysuccesses, failures, experts, nations and ers of management. institutions. Instead, he sends out one or two experts 6. Avoid restructuring when you should trom the core organization who hire manbe regoverning. Assess your strategic and agers from the local community to developerational governance models frequently op and run the operations. The experts to be sure they match your scope, size and in and training provide the expertise structure. the of energy that is 7. Ensure connectivity. Build human Destec's core competency. and electronic communications and inforIn addition, numerous companies have mation networks that tie together people turned to outsourcing or alliances to take and offices, enabling rapid response and advantage of their core competencies as collaborative work regardless of time and thev grow. location. British Petroleum has outsourced both Beverly Goldberg is a vice president of its financial and its information technolothe Tw entieth Century Fund and with John G. Sifonis of "Corporation on a gy functions. Nike does not manufacture the shoes it sells, focusing instead on its Tightrope: Balancing Leadership. Govercompetencies in design and marketing. nance, and Technology in an Age of ComAnd more than of the complexity." Much of this editorial is drawn ponents used in Canon's copiers are man from that book. - stulti-ticalio- or three-quarte- Outlawing low waaes won't put end to low pay By JAMES W. COONS is the sole objective, why not or i.WJ.v.' i The response by thoughtful proponents of the minimum wage is that the demand for labor would shrink at high wage levels but is insensitive to wage increases at low levels. In other words, the law of supply and wage" George Stigler. the noted University of Chicago economist, told the story of a farmer in the city of Indiana. Pa . who thought he noticed that sick pigs tended to' have straight tails. In an effort to cure them, he would chop off the offending appendages. The growing support in Washington. D.C.. for raising the minimum wage would apply the same medicine to g jobs, and with the same result. Outlawing low wages addresses the symptom of low pay but not the cause, leaving the illness uncured. One of the most widely accepted tenets of economic theory is that price controls cause either shortages or surpluses bv preventing prices from moving to levels that align demand with supply. At artificially high prices, for example, sellers are willing to supply more than buyers demand, creating an unwanted surplus. Wages are the price of labor, and a legal minimum wage is a price control. Few propositions are more thoroughly and more conv incexplained by theory evidence and analysis ingly supported by than that the minimum wage, as a price control, creates a surplus of labor in the form of unemployed workers. Spreading support in Congress for raising the minimum from $4.25 per hour to as high as $5.25 springs from the desire to see that all workers receive a livable wage." This sentiment is shared by all of good will, not just advocates of legal action. But if $4.25 does not prov ide a suitable lifestyle, an increase to $5.25 is surely not enough. Even at $7.25 per hour, a e worker still earns less than the poverty threshold for a family of four. If a "livable full-tim- i Obsoruations demand does apply to labor, but for some reason malfunctions for jobs. Although a plausible hypothesis, supporting evidence is slim and shaky. A handful of studies in recent years by economists Dav id Card and Alan Krueger of Princeton and Lawrence Katz of Harvard purport to uncover neutral or positive effc.ls on employment from past increases in the legal minimum. These fringe findings lack the credibility necessary to overturn decades of research that they contradict. Among their shortcomings are data too flawed to analyze, time spans too short to observe effects and results too weak to support conclusions. Lawmakers in Washington can and should help those with low skills in Indiana. Pa., and throughout the country by improving the education system and reforming fiscal and regulatory policy in ways that raise the rate of capital formation. Because in the end. education, skills and access to capital determine worker productivity, and productivity determines pay. End James W. Coons is senior vice president low-ski- and chief economist National Bank. rf ll t&xfa)i6 TORTHt LONG TERM bu ifoow Nothing m A BUSINESS WWII! HAS s jrf yjx) UY offTfouSAUBS of empires vmwa swU SC0K1 CfO. has waj&Hnms "TAKE BE OUTTHEKt VfllH A TIN CUP . NO&JSlNKSi BEING A - A. etf'fs vgf w PVE-WLUO- N- ND TOfWWHATISA.lt. DOUAR BONUS Lctao "painting" Mayor Stewart in a "questionable or even negative light." Trust me on this: May or Stewart does his ow n painting with his own brush. Mr. Oldham makes it sound like a bunch of Ted Kennedy Democrats have invaded Provo. putting the savior of our moral values the last standard bearer for the conservative point of view on public trial. Mr. Oldham then states that he and the Journal must break their silence and go to bat for their guy. It is time to stop blowing smoke. Stewart came on the scene and bought himself the mayor's job. Much like a conquering army of one. he entered the ev il shnne of armed only government waste, and with the mandate from his supporters has sought to right all the wrongs of the past 50 years. Several department heads told me they were afraid to stand up to Stew art out of fear for their jobs. He fired some of the department heads because they showed an independence not conducive to life in his kingdom. He freely bestowed on his campaign Knowing only pain President Clinton recently vetoed the bill that would have eliminated the pera bill forming of partial birth abortions passed by Congress. The bill was purportedly vetoed by the president in order to save the mother's lives in crisis situations. But not all mothers die in delivery because of that. There are many mothers who may have a serious problem with a particular birth but will refuse the partial abortion because GihI made that baby possible and wants it to be born. What is it about a partial-birt- h abortion that would save a mother's life? The baby s would already be Kirn and to take time to abort the child at this time would take longer than the procedure of finishing the birth. The baby would be w ithin seconds of giving out its first anxious cry and knowing what it is to know daylight and to begin to know what this world is all about the first experience at pressing his or her face against the mother's sweet, flowing breast, if I may take out of context a line from Joyce Kilmer's poem, "Trees." Would not the mother who might agree to this type of abortion be not concerned about her other children a child in a drowning situation or in a burning building, etc.? Many mothers yes, and and older siblings hav e giv fathers, too en their lives for toddlers or even older children. Could this type of an abortion be used to rid parents of a baby w ith birth defects? Some of the dearest children are those with birth defects. Sometimes they are clumsy, but those who I have known are dearly loved. Then there is the ugly thought of the procedure used: Scissoring the baby's brain at the base of the skull and then sucking out the brain with a suction lube. That child would know pain and nothing else about this world. Mr. Clinton is our president and a very powerful man, but I believe him to be an ev il man a small man who wants to be big but never will be. He was a tainted man when he came to office and he will leave office even more so. three-fourth- Jack W. Carey Springville The right to criticize Mark Eddington of The Daily Herald wrote a recent piece on Mayor George Stewart. It was followed by an impassioned response in the ( 'tah County Journal, w ritten by Lev or Oldham. It seems the world is split between hero worship on the part of the Journal and a midterm reality check by the Herald. The problem w ith this picture is that Eddington's article was for the most part positive. It hailed Stewart's accomplishments, even though at present many of them are simply plans on a draw ing board. Is Stew art running this city like his ow n personal kingdom? Oldham would utter a resounding. "No. your Majesty." Mr. Oldham blames the "local Liberal media" for - helpers important appointed positions, which can be considered spoils of victory. He fired the director of Economic Development and. as any good dictator, appointed himself Economic Czar. You see. nobody can do it better than the King. Is King George a hypocrite? Well, let's look at just a couple of issues. During the debate ov er the golf course, he told us the golf course had to make money or it would be leased to the private sector. Kean Ridd explained that, given a years, the natural popularity and maturity of the course would make it profitable. "Not good enough." came the kingly reply. "We will lease it out." Now that the course is leased, ask the mayor when the city expects to see a real profit from the transaction. Five years at the earliest. Where is the urgency for profits now ? The second issue is even more direct. Mayor Stewart would have his loyal subjects believe that he would never do anything on Sunday to disrupt the peace of the day. Yet. when it came to hiring a new police chief, it wasn't too much to meet with the new chief on Sunday and inv ite the council members to do the same. Mayor, do you really think hiring your new police chief couldn't have waited until after the Sabbath? 1 don't know the man Mr. Oldham is w riting about. The George Stewart I know has taken the paintbrush in hand and searched out the spotlight, depicting himself as championing the standards of decency for his adopted city. He has set himself up as the director of public thought and conscience. He has attempted to ride ov er the top of the council on many issues that impact the people of Provo unfairly. Now he wants to build a mall. It appears this w ill be the crow ning achievement of his administration. This mall is still in the planning stages, without a signed development agreement. Yet. according to sources inside his administration, almost every conceivable rainy day fund in the city has been pillaged to come up w ith the money to buy the neces few-mor- sary land to build it. We This project is. at best, a gamble. owe it to ourselves to have experts makiE& decision involv ing the literally millions uf tax dollars he continues to spend, chasing his dream. Where are the checks and bal ances in our current city government Where does executive privilege end and balanced covernins! beam? At the end of the dav. we have the mak S ings of a great debate. On the one side. i r Y0U20NKS SeCURTTY AN0MAU15T0 vs REPORT' eurr I CANT J i t I ! y ! J ! J . ers. i Eddington wrote an overview of May- or Stewart's first two years. I thought he ! was fair with the mayor and didn't portray" ! him in a negative light, though he coutf have w ith relative ease. On the other hafrtj; J Oldham's attack on Eddington shows obv ious bias. He really likes Steward, and ' so playing journalistic "hardball" witfr ' "'' ! him w ould be out of the question. Hon Allpht'n ! Prove' J t i A bad example i i i circulated ! 18. I tire J in a Provo newspaper on Aprj of all the emphasis on compel live sports. Today's youth need morq examples of cooperation to bless their lives. Live by the sword, you die by tho sword. The story is the same one for con petition. ,.JU Letters policy letters to the editor are welcotne.1 Please address them to: Editor. The Daily Herald. P.O. Box 717. UTSMK1-0717- . hAXSOi-m-.U- i i " . Pirno,"" Letters must he signed and include the writers full name, address and ,,; daytime telephone immln-- r for verift- cation. Preference is given to letters " that are typed, double sniced and less, " than 4(H) words in length. letters that are too long, unsigned, ;. illegible, obscene or libelous will not be published. iWTHermesm. i;7JW5 ! Helen H. Adam Provo TALK I'MONPUTT. J ! BY GARRY TRUDEAU BC MOVIN6UUL.NO i 1 J Mil AAi, TUI5S 7hR. t supporters who seek their sustenance. feasting on Mayor Stewart's words. They applaud his tenacity and bullheadedness. j They feel he is one of them and should continue to right the wrongs perpetrated) by those Sabbath swimmers and Sunday golfers who don't believe as they do. On the other side are those who enjoy concerts in the park on Sunday. Theyi believe a mayor, duly elected, should rep-- ( i resent all citizens, not just those who vcx. ed for him. They believe that although J they have their ow n standards of behavior ' they need to be sensitive to those who lij i among them who believe differently. As the debate continues, responsible ! reporting is a must. Wr have a right To hear both sides and make up our minds- - j based on facts and to criticize. Part Of the greatness of this country rests in fa? right of its citizens to criticize their lead" Doonesbury JHEUNSeM5TU i mm t I I r tnanny THIN6HAS ;.--u vl-ri- ! " Huntington - t i I |