Oracle's School of Testosterone Management
It's interesting that Lawrence J. Ellison believes he's creating the management style for the Internet Age ("Oracle: Why it's cool again," Cover Story, May 8). The organizing principle of the Internet is a feminine one: The Web is built on relationships, not hierarchy. Nobody is in charge; there's not a Lone Ranger in sight. Oracle is pursuing a relationship strategy in the marketplace, but when it comes to Oracle's own community, "It's all about centralized control, and Larry is in charge."
Ellison appears to think that one should manage to the lowest common denominator--ignoring the fact that 98% of folks come to work to do a good job and to contribute to the success of the enterprise. His "drill down" approach may save money in the near term, but it produces a cost consciousness that arises out of fear of reprisal rather than out of genuine concern for profitability. Rather than treating his people as intelligent business partners, Ellison is operating as an all-knowing patriarch with a bunch of naughty children.
You perpetuate the image of leader as white male conqueror and create the impression that there aren't more humane and effective ways to run a business. You also suggest that guys like Ellison are courageous to clamp down, when in fact what takes the most guts in today's business world is to experiment with new ways of leading and managing that don't rely on the old Lone Ranger approach. Both Business Week and Ellison have fallen into the testosterone trap.
Cambridge, Mass.Return to top
What's Right about Compuware
The sexual-harassment case against Compuware CEO Peter J. Karmanos Jr. by a female former employee, which you say is pending, was dismissed by the court prior to trial ("Compuware's Y2K bug," The Corporation, May 8).
Next, Damian Rinaldi of First Albany Corp. FAC/Equities was quoted as saying that Compuware's software business is a "horrendous mess." He actually said the business had a "horrendous miss" in the fiscal fourth quarter. This is a significant difference.
The competitive sales situation you outline involving a unit of Dutch banking giant ABN Amro is misleading. The $6 million contract to which you refer remains in place. We did compete on an ABN Amro business opportunity in which our price was more than 25% higher than the prior contract. However, the proposal doubled the software capacity of the previous agreement, included $2.3 million of new products, and no price increase. While we did not close this business, we continue to enjoy a solid and financially important relationship with ABN Amro on a global basis.
Finally, I would expect our competitors to take any opportunity to say that we "price-gouge." Our customers renew their software agreements at an over-95% rate. Is it such a stretch to think that customers derive incredible value from new investment in our products?
Farmington Hills, Mich.Editor's note: The lawsuit is still pending. In January, a Michigan judge dismissed the sexual harassment claim, saying Karmanos' alleged behavior, while "unprofessional and inappropriate," was not pervasive enough to constitute a hostile work environment. But he allowed the case to proceed on a remaining charge--that Karmanos allegedly coerced a woman to resign after he pressured her to alter her testimony in a sexual harassment case involving another female employee.Return to top
Taking Another Look at Futures
We are disappointed that "The case against single-stock futures" (Finance, May 22) turned into an attempt to generate controversy rather than explain the issues. The clearest example is citing the General Accounting Office's warning that single-stock futures could encourage manipulation. The report made it clear that the "warning" was from fearful competitors, not the GAO.
Furthermore, author Joseph Weber describes a futures transaction in which the seller of the contract satisfies his obligation by delivering stock. But stock-based futures contracts settle by means of a cash payment. He suggests that the Securities & Exchange Commission's insider-trading rules could be avoided by using futures as a surrogate for stock. That is incorrect: Our proposal to amend the law preserves SEC jurisdiction to enforce insider- and short-swing trading prohibitions.
Weber also compares futures margins with margins on stock. The correct, apples-to-apples comparison is futures margins and margins on synthetic futures created by using security options, as we pointed out to him. We have agreed that such margins should be at the same levels, but he suggests that options have less risk than futures, and ignores the sell-side risk of the option writer. He assumes the public trader does not write security options or take the same risk as a futures trader.
What's more, Weber argues that Congress might be "rushing to approve a product of limited appeal." Bear in mind that, in the face of overwhelming opposition, the Chicago Mercantile Exchange in 1982 created equity indexes, a useful product that has served the public interest well. The SEC and its regulated exchanges opposed futures on indexes with all of the same arguments they now raise against futures on individual securities. Yet they are now among the most popular contracts on securities exchanges and futures exchanges alike. Futures trading of equity indexes has enhanced customer opportunity, and the public has clearly benefited from the existence of these products.
Scott Gordon, Chairman
James J. McNulty, President & CEO
Chicago Mercantile Exchange
ChicagoReturn to top