Job Hierarchy in Zappo's Is Now Holacracy

(12/30/2013) The world largest online shoes shop -- Zappo's -- has gone through some organizational structure changes. Their new structure is called "Holacracy, a radical “self-governing” operating system where there are no job titles and no managers." As the business continues to grow, the Holacracy introduced into Zappo's is to "scale Zappos without letting bureaucracy set in." This reorganization gets much attention because Zappo's the largest company to implement Holacracy so far. Next time when you are upset by Zappo's customer service representative, you cannot ask "let me talk to your manager!"

Traffic Controversy of Chris Christie

(12/26/2013) The bridge traffic controversy of Chris Christie (NJ's governor) just could not be distinguished. After reading the details of the whole event, I found it interesting. The controversy is Bill Baroni (deputy director of the Port Authority of New York and Jersey) and David Wildstein (then the director of interstate capital projects and an ally of Christie's) were accused to conduct a unapproved traffic study at the town of Fort Lee in September 2013 on a highway entrance to the George Washington Bridge. Two of three lanes of Fort Lee "to the George Washington Bridge had been closed, causing dangerous traffic jams in the borough on the first day of school." A potential reason of this traffic disaster was that the Mayer of Fort Lee, Mark Sokolich (D), did not endorse Christie's reelection bid and the controversial part is "Neither he nor Port Authority Executive Director Patrick Foye -- who was appointed by New York Gov. Andrew Cuomo (D) -- were given any advance warning." And another development is that Mr. Baroni "acknowledged that no one ever sought approval for the study, which, without an alternative route, was guaranteed to create traffic congestion.... Wildstein and Baroni have since resigned and hired attorneys to represent them."

Definitely the person who caused the traffic disaster know Queuing theory very well. Highway traffic is one example of queuing management. The traffic of Fort Lee is extremely busy in the normal time since "the George Washington Bridge, which is the busiest bridge in the United States," which implies that the highway system at that part has been reached close to its system capacity (maybe close to 90 or 95 % utilization in this case). In a queuing system that it's utilization rate has reached close to its capacity, any cut in the capacity will make the highway utilization reach above 100%, which implies that traffic will be backlogged till the capacity increases or the demand diminishes. In this article, it says "On approximately 20 occasions in the last forty days, our Borough has been completely gridlocked," wrote Sokolich to Baroni, who was Christie's top official at the Port Authority. "Traveling from the south to the north end of our Borough takes upwards of one hour. Our safety vehicles are unable to traverse our own thoroughfares to attend to emergencies which place our residents in harms way."

(1/8/2014) In Chinese, we say "Paper cannot cover the fire." Now this scandal exploded in the Governor's office as emails revealed that Christie's administration is linked to the Bridge Traffic retaliation. Christie's trouble is far from over due to these potential lawsuits.

Racist Tweet or Badly Planned Joke?

(12/23/2013) A PR executive tweeted a 'racist' message before she flew to Africa for vacation:

This message stirred a huge controversy and Justine Sacco was immediately fired by her employer. Justine Sacco immediately apologized on the Internet: "Sacco apologized "for being insensitive to this crisis -- which does not discriminate by race, gender or sexual orientation, but which terrifies us all uniformly -- and to the millions of people living with the virus, I am ashamed."".

But several people who knows Justine Sacco think it was a badly planned joke. One reporter who had contacted Justine Sacco describes "“I think she was more mocking the aloofness white people can have on this issue, not celebrating that aloofness,” says one friend."

I think he has a point.

Bitcoin Crashing

(12/18/2013) After Chinese government officially challenged the validity of Bitcoin, the value of Bitcoin continued to drop further. Today (12/18/2013), the Bitcoin dropped 17% when "the People's Bank of China (PBoC) has ordered third-party payment providers to stop using the virtual currency." Without a trusted central financial institution (like US Federal government), the users of Bitcoin have to transact on a software follows Bitcoin Protocol. "Users send payments by broadcasting digitally signed messages that transfer ownership of bitcoins, the unit of currency." I never have trust on Bitcoin, and even doubt its function to be used as a transaction currency. Look at the historical value of Bitcoin, if its value fluctuates so dramatically, how can it be used as a currency? Bitcoin itself has become a speculation commodity like gold or oil. When an influential player (like China) challenges its validity, it crashes. It eventually proves to be just a bubble.

Bitcoin historical price accessed on 12/18/2013

Bitcoin price on 12/18/2013.

(3/5/2014) Not only Bitcoin's volatility is a concern, it's safety just damaging the currency's credibility even further. One week ago, the world's biggest bitcoin exchange, Mt. Gox,  filed bankruptcy as nearly half a billion dollars worth of bitcoins were stolen due to computer hacks. Today, another bitcoin exchange, flexcoin.com, is shut down due to another hack and a loss of around $600 K worth of currency. The Japanese government now considers a regulation "adding that banks and securities firms will not be able to handle bitcoin as part of their main business, suggesting the crypto-currency will be treated more as a commodity, like gold." It may means the day that bitcoin survives as a currency is soon to be over.

Microsoft Is Conservative on Surface 2

(12/18/2013) Once burnt, twice shy. Microsoft's revenge product -- Surface 1st generation -- costed $900 million USD charge due to product glitches and overstock. This time, Microsoft's Surface 2 is sold out in many retail stores. The reason it is sold out is because Microsoft is conservative with its production and inventory. Surface 2 received positive reviews and the app crashing and dropped Wi-Fi issues have been improved. With conservative production forecasts, at least Microsoft does not have to be forced to write off inventories or has huge price-cut.

How Much Kindles Make You Buy More from Amazon

(12/17/2013) $443 per year, based on a research done by Consumer Intelligence Research Partners (CIRP). The headline on Time.com is misleading. The kindle users don't spend more (some maybe), but other retailers lose $443 per year to Amazon.com. That is what Mr. Bezos gets when he sell you Kindle tablets at the price of its production cost. Kindles do fulfill its mission: get Amazon Kindle users to spend more. Since Kindles suck out spendings from consumer's pockets so well, no wonder Amazon give consumers more BONUS: $57 to own a Kindle Fire FDX tablet and pay the leftover in next 90 days.

A Warning from Carl Sagan

(12/16/2013) This is a video originally aired on "Charlie Rose" in 1996. Carl Sagan, as an outstanding scientist and astronomer, gave us a warning about that general public not knowing science and technology. He said "We live on an age that based on sciences and technologies... if we general public does not understand sciences and technologies ... who is making all the decisions about sciences and technologies are going to determine what kind of future our children will live in."

I think what Sagan said applies to business operations too. Now the business financial and tax manipulations are so complicated, not even financial experts can figure out what's really going on. Same as the global supply chain. The consumers are so far and alienated from the real suppliers, they do not know how their purchasing decisions form the global labor and production division and show less interest to know the complexity too.

Shameful Pollution

(12/15/2013) The world largest semiconductor assembling and testing firm, ASE (Advanced Semiconductor Engineering), was shut down recently due to water pollution. They discharged wastewater (without processing) directly into the Houjin River in Kaoshiung City, which is located in southern Taiwan. ASE's K7 plant has seriously polluted the river, which the government spent $100 million USD years ago in order to cleanse the previous pollution. However, the penalty from the the government is merely $20,000 per day if the wastewater exceeds the standard (the discharged wastewater is more than four times higher than the acceptable level.) After the K7 plant pollution was revealed, another ASE's plant in Chung-Li city was caught again for discharging wastewater though ASE said the operations in Chung-Li is unaffected.

So far, the semiconductor and electronics industries remain alert for further development in case the Taiwan Government forces a more large scale shutdown. One CEO from another Taiwanese said that if ASE is totally shutdown, around 1/3 of the global semiconductor production will be impacted (news in Chinese) since ASE is the largest semiconductor assembling and testing firm. I feel ashamed of this company's greed and the inability of our government. However, Taiwan recently has experienced several business scandals (intentionally mislabled cooking oils and mixing with inedible oil, and other industry-grade ingredients used in food). Business consciousness is very underdeveloped in Taiwan as well as many Asian countries since the economic growth has been #1 goal of many governments and getting rich is #1 goal for many people. Consumers in the developed countries are rarely aware of this dark side of global supply chain and hidden costs of global economic growth. Try to google this news, you won't get many returns.

Schneider Logistics Settled Over Wage Theft Allegations

(12/11/2013) Schneider Logistics, a Walmart warehouse contractor, settled in the State of California over wage theft allegation. Schneider was accused of "failing to pay them for overtime and illegally deducting wages from their paychecks, among other claims" filed by 568 warehouse workers. Walmart was under pressure in this lawsuit since the workers handles Walmart merchandises. Well, Walmart gave a routine defense: none of the workers are directly employed by Walmart. Using contractor to perform some key business functions is one way that big business to be exempt from benefit packages and expensive HR investment. Example like this includes: Southwest Airline's ground crew in some smaller airports (Bronson, MO; Keywest, FL, I knew it through my personal conversation with the ground crew there). The reason: save $$$.


(5/14/2014) This is another settlement. Finally, the contractor of Walmart agreed, Schneider Logistics, the settlement ($21 millions) for the "backpay to warehouse workers in California who claim they were systematically shorted on pay for years.". 

Drug Cartel in Smartphone Business

(12/10/2013) The drug cartels in South America still get their hand dirty, but maybe smarter now. They buy stolen phones from the US and resell them like news one to people in their market. The technology to block resell stolen smartphones is available. Absolute Software's technology has shown that it can trace the phone to the location. However, Apple, Google, Verizon & AT&T ... won't do anything. Why? First, many people cell phones are in the contract, so it means they will have to replace new phones otherwise they still have to pay the service. Second, very few people who rely on smartphones can now live without it. Three, cell phone users tend to stick to the same maker (due to learning curve of switching) and the same wireless service provider (contract and service level preference).

The companies (Apple, Google, Verizon & AT&T ... ) can sell you new phones to replace your stolen ones, why do they ever make effort to sacrifice their profit? Good and evil only differ in a very fine line here.

Runway Competition: Someone's Give Becomes Someone's Take

(12/6/2013) The landing and taking off time slots in busy airports are very precious. For the American Airlines and US Airways merger to be approved, they have to give up some spots to Southwest and Virgin. Well, I think it is good for travelers in New York, right?

Amazon's Delivery Drone

(12/1/2013) Amazon wants to delivery its product through Drones? No kidding? Watch this 60-Minute report. Jeff Bezos has proved several times that he is right, will he be right again?

We had a discussion about Amazon's service innovations today (12/2/2013) in the MBA class. Students showed their concerns about jobs (retailers before, maybe logistics later) being eliminated from many service innovations now. The jobless issue will be a more severe problem in terms of social justice and stability. Jeff Bezos responded (in 60 Minute's interviwe)  "It's the Internet that changes these." When new technologies are available to improve and better serve the customers, are those changes also driven by consumer's demand? Do you enjoy Amazon's good service and prompt delivery? What are your comments on this employment (or unemployment) issue resulting from technology changes?

This analyst says Amazon's flying drone is just an marketing gimmick (12/3/2013) for free advertisement. How do you think?