Epi Re..<<<<<Here we have two diametrically opposed sentences. In the first you blame mngt. for lack of infrastructure' but in the second you say on the whole they have performed magnificently>
Deliberately twisting my point does not make it diametrically opposed, I meant that in my opinion the lack of infrastructure was a specific failing but the other positives of AMD's performance outweighed that negative aspect and that "on the whole' they performed magnificently. Things aren't always black and white and the "on the whole" part of it keeps the statement congruent. I am saying that even though AMD made a specific failing there were other compensating factors in their overall performance. Do you understand? <<<<
Epi, please excuse my tardiness answering this as I felt were were spinning our wheels; and I wanted to think (a novel concept for me) before I answered. The reason I don't want to drop it just yet is that I feel that the difference in looking at the problem could mainly be the different way a manager and workers look at problems. I decided to use an example everyone on this board can understand.
In one of your posts to me you stated that you have 300,000 on margin in AMD stock. By that I am going to assume you have at least 500,000 in equities. Also, unless you were born with the proverbial golden spoon, you made that money by investing. To me that is a great track record. I also assume that like most successful investors you have a method of investing that works for you. You might only invest in small cap,companies with high REl. strength,high momentum, etc.. In other words, you have set up parameters that work for you; and you have the discipline to invest in only those stocks. Thats how you make money investing. What if one day I called you up and said "Epi, I know a great stock, sell your stocks and invest your money in stock ABC." You check on the stock and you find that ABC, while it has good momentum right now, it doesn't meet your parameters. Maybe the PE is too high or REL strength to low; and you decline naturally to take my advice. If I call you up a wk. later to ask if you took my advice; would I be correct to say you made a mistake and lost a great opportunity because the stock gained 30% for the wk. To that question, I would say no. In fact, I believe most of the investors here wouldn't either because investing willy nilly on rumors and hot stocks can be expensive. These types of stocks aren't a lost opportunity, collectively they are a a disaster waiting to happen. In the long run you make money by sticking by your parameters.
The same can be said of any company; set goals and have the discipline to do whatever neccessary to meet them. For AMD you can bet that the planning dept. called everybody together, engineering, marketing, design, manufacturing, etc. and decided what parameters the company had to set to produce the Duron chip, and how many company resources were available to produce said chip in a certain time. If you don't have enough resources, do you outsource or get more resources,Engineers, designers etc.. Most importantly, you need to decide what the product will do, what market it is in, and the selling price to make sure the company makes enough money to justify the company's ultimate parameter; I.e. profit margin. A company would normally use similar parameters for any product it produces. You say Deliberately twisting my point does not make it diametrically opposed, I meant that in my opinion the lack of infrastructure was a specific failing but the other positives of AMD's performance outweighed that negative aspect and that "on the whole' they performed magnificently. The trouble with that statement is the the same process that did 95% percent of the things right is the same process that chose the 5% wrong things also. If you are going to change the parameters to eliminate the 5%, you might also eliminate 20% of the right choices, thus ending up poorer for the effort. If you changed your parameters and chose ABC stock, you would have been richly rewarded that time, but what would happen the next time, and so on. You need to stick to your parameters in order to make a profit. Why do you expect AMD should do any different?
As for lost opportunities, an opportunity is only a lost opportunity if you have the resources to take advantage of the opportunity in the time frame it occurs; and do nothing. If the Duron chip wasn't ready during the q2 or for school, you cannot count it as a lost opportunity, unless you can show AMD had the resources and neglected to do anything about it. To rush a project to take advantage of an opportunity after it has incurred, would be like you buying a stock after it has peaked. You can't make money chasing stocks up in price. AMD won't make money chasing so called lost opportunities. It would be foolhardy to expect that AMD should have decided to go outside their parameters, and spent the extra resources a yr. ago in order to chase a problematic opportunity; because I doubt even Intel knew the extent of their problems. And even if AMD did know, I sincerely doubt AMD had the money to take advantage of the situation.
As for the management is ultimately responsible for any problem for any reason theory, I feel that would be a bad parameter for any company to have for several reasons. One is that I have shown you absurd examples, (earthquake in Taiwan, China attacking Taiwan) where the manager has no control over the problem. Secondly., there are problems which are recognised, but which are deemed to costly to fix, such as doing extensive employee checks as I showed you. Using old machinery can be a problem as it is not efficient, but what if the new machine isn't cost effective because it's use is limited; is that also mangments fault? And these aren't absurd examples, they happen to every company every day. The main problems though, are twofold and are somewhat interdependent. If you blame a manager for any and all problems; and the manager accepts responsibility, will that manager be an effective manager after a while. Would you want to work for a manager who is always apologizing for every problem the company will inevitably have. Someone doesn't show up for work, he apologizes, a vendor doesn't send the right parts, he apologizes, you show up drunk, he apologizes. Would you really want to work for this guy. If you undermine the managers authority, you will have no managers, period. A good example of this might be the Democratic and republican parties slinging mud at each other. Would you even want to vote for either guy as a dog catcher, much less president; and when either becomes president, will anybody want to follow his lead.
The other side of the theory is "if you are going to blame the manager for every problem, shouldn't the manager also get the credit for everything that is right". Lets say I am the manager and I have you design a new heat sink; and you come up with a billiant design. When I take that design to the boss, under your theory, I should be able to take the credit, and bonuses for your design. Is that fair? I say no. You worked hard, you had the brilliant design, all I did is assign you to it. How long would it be before you quit, and go where you get the recognition you deserve? No matter how great a manager thinks he is, if he doesn't give credit where credit is due, the workers will begin to despise him, and a despised manager is a fired manger in my book.
In the end, I believe that any management should be judged, not by whether problems show up, as they always do every day; but by how effectively they deal with them. The right response to any problem will ultimately cut costs by eliminating the size and frequency of said problem even if it can't be eliminated entirely. To assign responsibility and blame people needlessly will demoralize and undermine authority. To grab all of the credit will kill the morale of the workers. That theory should be buried as its time should never come. |
