Tag: Soviet Union

  • Facebook and the Fax Machine

    Facebook and the Fax Machine

    The South China Morning Post reports the Chinese government is allowing access to otherwise restricted sites like Facebook to those in the Shanghai free trade zone.

    In many ways this parallels the original Special Economic Zones set up by the People’s Republic of China at the beginning of the 1980s – these areas’ separate legal, immigration and economic status attracted foreign investment and trigged the economic boom that’s seen China become one of the world’s biggest economic powers.

    Just as manufactured goods were the key to the nation’s development 30 years ago, today it’s information as the PRC leadership works on moving China up the global value chain.

    For a nation of knowledge workers to succeed, the workers have to have access to knowledge.

    It’s claimed the humble fax machine was responsible for the fall of the Soviet Union, how true that is open to debate but an open flow of information is never good for those who rule without the support of their citizens.

    With the explosion of Chinese social networking sites, it’s become harder for the government to control the flow of information between citizens and the opening of the internet in parts of Shanghai is another small change.

    How the Chinese Communist Party manages to keep the support of its increasingly affluent and better informed citizens will define the course of 21st Century history.

    As China shifts from being a low cost manufactured goods supplier to a more sophisticated, diverse and expensive economy the government has no choice to face these challenges.

    Beijing’s cadres would be hoping our children aren’t talking about Facebook in 2012 Shanghai in the same way that we talk of fax machines in 1982 Leningrad.

    Image of a fax machine courtesy of Kix through sxc.hu

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  • The New Soviets

    The New Soviets

    US based investment writer Mike “Mish” Sherlock called Sony’s support line to get a repair for his recently purchased laptop computer.

    What followed was something from the 1970s Soviet Union – a simple request turned into a twelve day, 34 step odyssey of structural incompetence on the part of Sony.

    The tragic thing is Mike’s tale is all the result of mis-matched rewards in Sony’s organisation;

    • Sony’s management wanted to increase profits
    • Extended warranties were identified as a revenue generator
    • A senior manager decided cutting support costs would improve returns
    • The technical support is outsourced
    • Costs are saved by splitting contracts
    • Each outsourcer has a different IT platform
    • The outsourcing contracts have quotas and penalties
    • Individual staff are penalised for escalating problems
    • Support staff have tight performance criteria

    At every level performance indicators were met, despite the whole process costing far more than fixing the problem efficiently would have had – not to mention the loss of Mike as a customer – something that Sony can ill afford.

    Not surprisingly, the computer ended up being fixed by a local IT guy. Richard almost certainly earns a fraction of Sony’s Executive Vice President Group General Managers, or whatever the title they have to match their compensation packages is, yet he gets the job done.

    In Sony we see the Soviet model of management at work – an unaccountable, out of touch cadre of apparatchiks meeting their requirements under The Five Year Plan and are rewarded accordingly.

    Just like today’s Executive Vice President Group General Managers with their KPIs and bonuses.

    As we all know, the Soviet Union failed in 1991. One wonders when we’ll say the same thing about Sony or the dozens of other large corporations that have lost their way.

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