medhatcanuck
Registered User
I posted this under the Charles Wang thread but thought this was more relevant to the Business of hockey.
So I was sitting in class and suddenly we get on topic of CA International. I was like, o great, let's hear about another fraudulent corp and they're jailtime, yadda yadda. Then I hear the founders names. Apparently in the 1960's Charles Wang and his 3 buddies started Computers Associates International Inc.
Interesting.
Wang built one of the most admired computer corporations of the 90's from ground up. His company made software applications for IBM. His company was regarded as one of the top tech companies along with Microsoft and IBM at the time.
This is where it gets interesting. in the late 90's a few of the top execs get jailtime for misleading financial reporting. CA aka Creative Accounting, found ways to backdate revenue and sign enormous contracts that recognized huge lumps of revenue in current periods. Sound Familiar?
At first I came here to protect Charles Wang because I'm pretty sure he gets disregarded around here for minor reasons, but the guy can't seem to learn from his mistakes.
CA International was hugely penalized and the stock price fell almost 40 some % because of backdating and revenue recognition fraudulence on long-term contracts. Now if you understand what these things are, they are quite similar to the contracts that have been handed out to Ilya Kovalchuk and Rick Dipietro. 15-20 year contracts in which revenue (cap-space) can be recognized in the 1st few years and in later years, record smaller amounts. In the business world, this allows statements to appear that they are on steroids and make the shareholders happy and for exponential growth (R&D). In the Hockey world, it allows or smaller cap hits in certain years to circumvent the cap.
This isn't the only thing that had an connected CA International to the Islander's organization. Wang set a corporate structure in which analysts set the sales goals. Which meant employees were compensated based on piece work that seemed fair to non-specialists. Now, there is no evidence to support this, but this is why I think the Islander's team is going to fall apart again, even with all it's young talent:
Wang likes creating high pressure environments in which analysts create compensation structures based on empirical data that might not be the correct way to motivate workers. You pay employees based on piece work, they will find ways to maximize their earnings without giving their best work. Now, hockey players are known to get performance bonuses, (piece work: goals=money). We have seen the goalscoring emergence of Grabner and Moulson, neither of which were goalscoring monsters with their formers. There is no doubt in my mind that the NYI have a performance-heavy compensation structure based towards individualism. teams like Detroit and Vancouver no doubt have broad-concentrated compensation packages where players earn bonuses based upon team performance. this means we will always see individuals excel in NY b/c of Hygiene factors such as compensation and bonuses but will never see a good team in NY because they don't have any real motivators.
As long as Wang keeps his CAInternational Inc. mentality in NY you won't be seeing a Chicago-like emergence anytime in the near or long term future.
If anyone is interested in this kind of stuff read (A Letter From Prison) from the Harvard Business Review. The hockey stuff won't be there since that was my perception and opinion. But yeah, hope i didn't bore whoever read this.
So I was sitting in class and suddenly we get on topic of CA International. I was like, o great, let's hear about another fraudulent corp and they're jailtime, yadda yadda. Then I hear the founders names. Apparently in the 1960's Charles Wang and his 3 buddies started Computers Associates International Inc.
Interesting.
Wang built one of the most admired computer corporations of the 90's from ground up. His company made software applications for IBM. His company was regarded as one of the top tech companies along with Microsoft and IBM at the time.
This is where it gets interesting. in the late 90's a few of the top execs get jailtime for misleading financial reporting. CA aka Creative Accounting, found ways to backdate revenue and sign enormous contracts that recognized huge lumps of revenue in current periods. Sound Familiar?
At first I came here to protect Charles Wang because I'm pretty sure he gets disregarded around here for minor reasons, but the guy can't seem to learn from his mistakes.
CA International was hugely penalized and the stock price fell almost 40 some % because of backdating and revenue recognition fraudulence on long-term contracts. Now if you understand what these things are, they are quite similar to the contracts that have been handed out to Ilya Kovalchuk and Rick Dipietro. 15-20 year contracts in which revenue (cap-space) can be recognized in the 1st few years and in later years, record smaller amounts. In the business world, this allows statements to appear that they are on steroids and make the shareholders happy and for exponential growth (R&D). In the Hockey world, it allows or smaller cap hits in certain years to circumvent the cap.
This isn't the only thing that had an connected CA International to the Islander's organization. Wang set a corporate structure in which analysts set the sales goals. Which meant employees were compensated based on piece work that seemed fair to non-specialists. Now, there is no evidence to support this, but this is why I think the Islander's team is going to fall apart again, even with all it's young talent:
Wang likes creating high pressure environments in which analysts create compensation structures based on empirical data that might not be the correct way to motivate workers. You pay employees based on piece work, they will find ways to maximize their earnings without giving their best work. Now, hockey players are known to get performance bonuses, (piece work: goals=money). We have seen the goalscoring emergence of Grabner and Moulson, neither of which were goalscoring monsters with their formers. There is no doubt in my mind that the NYI have a performance-heavy compensation structure based towards individualism. teams like Detroit and Vancouver no doubt have broad-concentrated compensation packages where players earn bonuses based upon team performance. this means we will always see individuals excel in NY b/c of Hygiene factors such as compensation and bonuses but will never see a good team in NY because they don't have any real motivators.
As long as Wang keeps his CAInternational Inc. mentality in NY you won't be seeing a Chicago-like emergence anytime in the near or long term future.
If anyone is interested in this kind of stuff read (A Letter From Prison) from the Harvard Business Review. The hockey stuff won't be there since that was my perception and opinion. But yeah, hope i didn't bore whoever read this.