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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.
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