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Article by Mohan Babu

The darker side of corporate America

Corporate America is infested with white-collar criminals. MOHAN BABU warns professionals in India to verify the authenticity or genuineness of a prospective foreign business partner or employer in the US, to avoid being duped

As I write my weekly column, I am also looking at the latest Fortune 500 list that just appeared and gaze in wonder at the company listed at number five Enron! The Fortune magazine, in trying to justify the inclusion of Enron in the list, and answering the million-dollar question, “Why the heck is Enron on the list?” states, “On Dec 2, Enron went into bankruptcy (a fact that doesn’t disqualify it for the 500 list)”. While the appearance of the beleaguered corporation in the venerable Fortune 500 list does not surprise corporate executives and financial analysts in the US, it does raise eyebrows. What does Fortune 500 and the inclusion of Enron in the list mean to Indian technologists? A lot. Especially since most Indian technologists and technology companies use this list and others to benchmark American companies and gauge the strength of their prospective employer or client.

While looking for core strength of companies, the oft-quoted maxim used by financial companies, “past performance is no guarantee of its future success,” comes to mind. This is especially true in today’s topsy-turvy world of corporate jugglery. The American financial reporting system is extremely complex, and although there is a tremendous amount of information out there, it requires a lot of persistence to scan through the volumes of data and make sense. Added to the financial reports are the surveys and reports on the health and strengths of various sectors that are done by companies like Gartner and IDC. Of course, reputed magazines too publish surveys on everything, from lists of leading companies and salaries surveys to “100 best employers”. Most of the time, analysts in the US are not content to rely on one source alone; they refer to a number of sources before forming their own opinion. Candidates looking for jobs get referrals from a number of sources, read up about the company, look at the past records and then formulate an opinion. Similarly, companies go through a process of whetting information on suppliers and vendors before signing long-term contracts.

Indians, especially those who do not have a good understanding of the ways of corporate America are especially vulnerable while dealing with their (American) counterparts. Corporate America and the financial system is a modern marvel with the economy fuelling entrepreneurs. Zillions of players co-exist in the same sphere of operations. For instance, hundreds, if not thousands of companies with “micro” or “soft” in their names co-exist with the real Microsoft. Of course, most of them have little or no resemblance to the software giant. With the advent of the Web, even a small company (or individual) with little or no real business can create a façade of being a “large” American corporation, complete with a snazzy website and live customer-service operated by an American sounding person (outsourced to a call centre somewhere on the globe!).

Along with the innovative entrepreneurship, American business also has a “dark side” with the existence of hundreds of thousands of “ponzi” and white-collar criminals. As with most other things, in business, if it is too good to be true, it must be suspect. Take for example an e-mail that I recently received, titled suggestively: “Hi-tech industry manufacturer is now seeking motivated individuals with entrepreneurial drive for US and Canadian expansion. Huge compensation benefits programme offered!” The mail went on to say, “Due to our overwhelming growth of nearly 1,000% over the last three years, we have an immediate need and are willing to train and develop even non-experienced individuals in local markets. Now you can have your very own part-time or full-time business backed with full company support and startup capital if needed and work right from the comfort of your home. Create your own hours!” I can empathise with budding entrepreneurs in India, sitting in front of their computer screens in cybercafé’s who happen to receive mails like these, succumbing to their greed.

I frequently receive e-mails from small Indian tech companies and individuals who have dealt with their American counterparts and have been duped. These small businesses work hard on acquiring the necessary foreign exchange from various sources in India and send them as “deposit” to prospective clients without knowing anything about their operations. Even individuals promised a cushy high-tech job and an American visa do not balk at shelling out thousands of rupees, without verifying the authenticity of the prospective employers. By the time they realise they have been swindled, it is too late to do anything, especially if they are sitting in a faraway land.

Going back to my original example of Enron, if a business house in India or elsewhere in the world were to deal with a company merely based on the fact they are listed in a “reputed” survey (like in the Fortune 500), they would be doing so at their own risk. Of course, no large Indian company is going to deal with foreign counterparts without due process, but you get the idea!

Getting down to the details of the various sources and resources one could use to verify the authenticity or genuineness of a prospective foreign business partner or employer would require a book by itself. However, there are a number of useful resources on the Web that are free and easy to use. One good resource would be the local Chamber of Commerce and BBB (Better Business Bureau) of the region where the company does business. Most of these organisations also maintain excellent and easy-to-use websites. Shooting off an e-mail asking for references may not cost you much but the returns can be astounding. While dealing with businesses in a free economy, it is your responsibility to be cautious.




About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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