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252 pages

English

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Our nation is still reeling from the 346 fatalities suffered on two flights of the Boeing 737 MAX 8 planes, the first in May 2017 and the second in March 2019. These are just one of the series of costly and deadly consequences of defective products described in this book. Besides the Boeing 737 planes, the examples of bad products include automobiles, electrical energy networks, pipelines, bridges and other large structures, banks, drinkable water, and financial services. While the immediate or proximate causes of the disasters have been bad design or bad production, the root or underlying causes have been bad corporate management and business cultures caused by corporate leaders.

The final five chapters provide short essays on product design, production, quality control, management, and culture and what the leaders of our private companies and government agencies might do to reduce the pitfalls that have led to so many defective products and their dire consequences.

Sujets

Economie gestion

General officer

Economics

Business

General

Finance

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Publié par	Outskirts Press
Date de parution	30 mars 2023
Nombre de lectures	0
EAN13	9781977263438
Langue	English

Informations légales : prix de location à la page 0,0500€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

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Pitfalls of Corporate Leadership Crises of Management and Culture All Rights Reserved. Copyright © 2023 Francis J. Clauss v1.0
The opinions expressed in this manuscript are solely the opinions of the author and do not represent the opinions or thoughts of the publisher. The author has represented and warranted full ownership and/or legal right to publish all the materials in this book.
This book may not be reproduced, transmitted, or stored in whole or in part by any means, including graphic, electronic, or mechanical without the express written consent of the publisher except in the case of brief quotations embodied in critical articles and reviews.
Outskirts Press, Inc. http://www.outskirtspress.com
Outskirts Press and the "OP" logo are trademarks belonging to Outskirts Press, Inc.
PRINTED IN THE UNITED STATES OF AMERICA
OTHER BOOKS BY THE AUTHOR
Technology and Management Surface Effects on Spacecraft Materials (Editor, 1960) Engineer's Guide to High-Temperature Materials (1969) Solid Lubricants and Self-Lubricating Solids (1972) Applied Management Science and Spreadsheet Modeling (1996) Corporate Financial Analysis with Microsoft Excel (2010) Product Quality: A Crisis of Management and Culture (2016)
History Alcatraz: Island of Many Mistakes (1981) Cable Cars: Past and Present (1982) Angel Island: Jewel of San Francisco Bay (1982) Opera in Old San Francisco: A Brief Anecdotal History (coauthor with Mary J. Clauss, 2013) Italy: An Operatic History (2017)
DEDICATION
We are fortunate to live in a nation that combines a social and political system of democracy with an economic system of capitalism. This book is dedicated to those who profess and practice the highest ideals of each.
TABLE OF CONTENTS
Preface
PART I: THE IMPORTANCE OF GOOD QUALITY AND THE CONSEQUENCES OF BAD QUALITY
Chapter 1: A Management Concept of Quality
Complex Mechanisms
Chapter 2: Automobiles for a Changing World
Chapter 3: GM’s Defective Ignition Switch
Chapter 4: Volkswagen’s Toxic Diesel Exhausts
Chapter 5: Takata’s Exploding Airbags
Chapter 6: Boeing’s 737 MAX Disaster
Large Complex Structures
Chapter 7: Bridges
Chapter 8: Replacing the Eastern Span of the Bay Bridge
Chapter 9: Other Major Structures
Financial Services
Chapter 10: Wells Fargo Bank’s Accounts Scandal
Energy and the Earth’s Environment
Chapter 11: Enron’s Energy Scandal
Chapter 12: PG&E and Its Exploding Gas Line
Chapter 13: PG&E and California Wildfires
Chapter 14: Flint City’s Water Crisis
PART II: TOOLS FOR QUALITY PROUCTS
Chapter 15: Quality of Design
Chapter 16: Quality of Production
Chapter 17: Quality Assurance
Chapter 18: Quality of Management
Chapter 19: Quality of Culture
Bibliography
References and Citations
Nota bene : Numbers for any figures, tables, and references or citations begin anew at one in each chapter.
PREFACE
This book is a revision of the author’s earlier book entitled Product Quality , which was published in 2017. Its thesis remains the same – viz., good product quality is important, often a matter of life and death. We can and should do a better job of providing it.
A few examples and chapters from the earlier book are largely intact, others have been expanded and updated, and four new chapters have been added for (1) the two fatal crashes of Boeing 737 MAX airplanes, (2) the Wells Fargo fraudulent accounts scandal, (3) the Pacific Gas and Electric Company and the devastating California Wildfires, and (4) the deadly Flint City water crisis.
The reason for changing my book’s title to Pitfalls of Corporate Leadership is the persistence of corporate leaders for causing bad product quality and leaving others to suffer its consequences. As examples in both the earlier book and this one illustrate, although the proximate or immediate causes of bad product quality and its consequences have been defects in design, production, or quality assurance, the underlying or root causes were poor management and culture created by poor leadership at the top. This is reflected in the book’s subtitle, Crises of Management and Culture.
Our government is critical to balancing the roles and goals of our economic system of capitalism with those of our social and political system of democracy. The author hopes that this book will help readers understand better the problems we currently face and the roles of our government and private business so as to secure a better working relationship between the two.
…………
As you read the examples in the first 14 chapters, think not only about the technology of design, production, and quality control, but also about the roles of corporate management and culture . Again and again, you will find that mandates by autocratic leaders to reduce costs and expedite the development of new products or update old ones have caused the opposite. Instead of reducing costs or expediting work, they (1) introduced defects that led to thousands of injuries, and hundreds of deaths; (2) increased costs and delayed the development of new products or revising old ones; (3) emitted toxic gases into the earth’s atmosphere that have shortened countless lives; (4) resulted in severe financial losses for investors; (5) caused heavy losses and corporate bankruptcies; and, (6) destroyed companies that had been noted for creating products that were safe and effective and replaced them with managements and cultures that produced products that were deadly, costly, and overdue. These have been pitfalls of poor business leaders.
While maximum profit for stakeholders is a legitimate and proper goal of a private business, it is not an open-ended invitation to operate outside the safety and rights of their workers, consumers, the country they serve, and the world and its environment.
The first three chapters of the final five discuss the functions and responsibilities (F&Rs) for product design, production, and quality assurance that are critical to product performance and safety. The final two chapters discuss how poor managements and cultures caused bad product designs, bad production, and bad quality that then led to dire consequences. They tell what corporate leaders might do to correct bad business managements and cultures.
A Bit of Economic History
From 1929 to 1939, our nation and others suffered through the worldwide Great Depression. In 1933, the Financial Act of that year incorporated the Glass-Steagall provisions of 1932 that had separated investment banks and commercial banks. Following the end of World War II in 1948, as industry converted from a wartime to a peacetime economy, our nation emerged as a great power.
In 1999, the enactment of the Gramm-Leech-Bliley Act (GLBA). pulled down the legal barriers that separated investment banks and commercial banks. GLBA and later legislation allowed investment banks to acquire or merge with other financial services, such as credit card and insurance companies.
The Bitter Legacy of GLBA
The enactment of GLBA led to the Great Recession of 2007-2009, after which the financial sector of our economy was bailed out by taxpayers. It also upset the traditional role of investment banks, which had been to provide capital to found private companies and to fund their acquisition of factories, equipment, and other fixed assets needed to design and produce goods or provide services for customers.
GLBA allowed investment banks, commercial banks, insurance companies, credit card companies, and other forms of financial services such as equity financing, mutual funds, hedge funds, and venture capitalism. GLBA has also encouraged the formation of holding companies, in which the. parent (or "umbrella") entities are financial services that hold the ownership or the controlling stock or membership in other companies. which are known as subsidiaries of the holding company. It is the subsidiaries, not the holding companies, that design and produce goods or provide services to customers. Although leaders of holding companies do not actively oversee or manage the design or production of goods or services, they can and do dictate conditions for their design, production, testing, costs, and delivery dates which subsidiaries are expected to satisfy.
The subsidiaries of the holding companies now take orders from leaders of the holding companies, whose primary goal is profit from the operation of their subsidiaries. Many harms from this merging of roles and goals are illustrated in the first 14 chapters of this book.
While the leaders of banks and holding companies profited handsomely from GLBA, consumers and the public suffered. Among the consequences of GLBA and related acts were unsafe products that killed, injured, and caused billions of dollars in losses for holding companies, their subsidiaries, and private investors.
Instructions from holding company leaders to the managers of their subsidiaries were usually equivalent to "run it like you own it" – which carries the tacit message "and don’t tell me of any problems that you are being paid to solve yourself or you will be fired." In effect, it created an information firewall that prevented bad information from reaching the leaders of a holding company, thereby limiting their liability for what was done to perform what they had directed or mandated their subsidiaries to do.
The weak point in this system of limited liability holding companies and their subsidiaries is the lack of a management informa-tion system that reports critical activities in the subsidiaries to a holding company leader. This has led to harmful consequences, as illustrated by examples in the first 14 chapters of this book. In these examples, the harm caused by bad products from subsidiaries was directly related to performance mandates from financial leaders of the holding companies that controlled them.
While the subsidiaries followed the dictates of the leaders of their holding companies, their relationship was structured and manage