Preventing Corporate Fiascos (eBook)

Thang Nhut Nguyen teaches Information Systems and Decision Science undergraduate and MBA courses at CSU Long Beach since 1999. He holds a BSEE from University Laval, Quebec, MS in Information & Computer Science from Georgia Institute of Technology, and PhD in Information Technology and Engineering from George Mason University. He has over 35 years of field experience in business and IT with IBM (retiree), former Candle Corporation and SAIC, and actively researches robotics and automation, decision science, software engineering and intelligence and biologically-inspired computing. He has published in major journals including Information and Management, IBM Journal of Research and Development, and Communications of the Association for Information Systems. He is the author of the textbook Essentials of Statistics for Business and Economics: An Effective Approach.

Contents 6
List of Figures 8
List of Tables 10
Chapter 1: Prologue 11
On the What's and Why's 11
On the How's 15
Chapter 2: Corporate Fiascos 20
Barings Bankruptcy Case Study 25
What Happened and When? 25
How the Collapse Finally Happened 29
Why It Happened? 30
Lehman Brothers Bankruptcy Case Study 34
What Happened and When? 34
How It Finally Happened? 36
Why It Happened? 37
Summary and Discussion 38
Chapter 3: Preventing Corporate Fiascos: A Systemic Approach 41
On a Basis of Fiasco Prevention 42
The Foundation: Figure 3.1 Explained 42
An Analogy-Based Characterization for Prevention 46
Cancer Analogy 48
Additional Insights from Cancer Analogy into Fiasco Prevention 52
Systems Thinking (Descriptive) on Clockworks: Figure 3.4 Explained 54
A Conceptual Model for Prevention 55
Conceptual Modeling: A Framework and Model for Prevention 56
Conceptual Modeling: Exception Management 57
Conceptual Modeling: Understanding Decisions 58
Organizational Modeling: An Oversight Organizational Unit 60
Implementation Considerations and Implication 60
Summary and Discussion 63
Chapter 4: Preventing Corporate Fiascos: Corporate Information Exceptions 65
Enron Bankruptcy as Use Case 66
Enron Collapse in Brief 66
What Has Been Done? 69
Exploiting the Cell-Human and Human-Institution Analogy 70
Detailed Analogy Between Milieu Interieur in Human and Data Environment in Institution 70
Stability in Institution and Homeostasis in Human 72
Enron as a Cancerous Institution 74
Improved MBE Modeling Challenge 75
A Model from the Perspective of Information Exceptions 75
MBE Revisited for Prevention: Completeness in Information Environment 75
MBE Revisited for Prevention: Automated Policy Hierarchy and Processes 76
MBE Revisited for Prevention: Complementarity Property 77
MBE Revisited for Prevention: Overall Corporate Governance 78
Example Implementation 78
Enron Case in the Context of Fiasco Prevention 78
Extension to Other Business Cases 83
Summary and Discussion 85
Benefits and Values 85
Chapter 5: Preventing Corporate Fiascos: Understanding Corporate Decisions 88
On Decisions 91
A Brief Literature Review on Decision Theory 91
Decision Science Approach 91
Decision Neuroscience Approach 92
At the neurophysiological level, according to Daeyaol Lee of the Kalvi foundation (Kavli Foundation, 2011), decision making involves the coordination of multiple brain areas. To understand lower level brain disorders and their effects, Lee took a top-dow 92
A Systemic Approach to Understanding Decisions 93
A Conceptual Model for Understanding Decisions 95
Understanding, Explaining, Evaluating, and Predicting Decisions 96
Building a Repertory Grid 96
Understanding and Measuring the Decisions Made on Exceptions 97
Repertory Grid of Decision Constructs: Elicitation, Analysis and Evaluation 98
Asking (Eliciting) the What 99
Asking (Eliciting) Why Using Hinkle’s Laddering Up 100
Asking (Eliciting) How Using Landfield’s Laddering Down 101
Filling in All Cells of the Grid 101
Analyzing the Repertory Grid with a Consideration of Integrated Neuroeconomics 102
Summary and Discussions 103
Chapter 6: Preventing Corporate Fiascos: Corporate Oversight Organization Unit 108
Formation of an Oversight Organization Unit 108
Skills Set of the Oversight Organization Unit 113
Chapter 7: Preventing Corporate Fiascos: Beyond the Institutions 115
Institution-Market and Market-Economy Components 117
Market Crash and Economic Meltdown Avoidance 122
Chapter 8: Epilogue 124
Towards a Mathematical Basis for Fiasco Prevention 124
The Why Towards a Theory of Prevention 125
Insights from the Laws of Nature 125
Insights from Homeomorphism Between Components 126
Insights from ?-Field 127
The What to Be Considered in a Theory of Prevention 128
Identifying DNA of Higher Level Components 128
Identifying Complex Organizational Structure of Higher Components 128
Characterizing Problems in the Context of Laws of Nature, Topological Space and ?-Field 129
Finding Mathematical Solutions 131
The How to Proceed in a Theory of Prevention 131
Bibliography 132
Index 142