Malcolm S. Salter

8 Results

 

How Short-Termism Invites Corruption--And What to Do About It

Malcolm S. Salter

A long-term time horizon is most sensible where a business or investor has some edge and when short-term risks associated with a longer-term strategy are hedged and opportunity costs minimized. However, when perverse, short-term incentives artificially encourage executives to ignore high-yielding, long-term opportunities, then the costs of short-termism set in. The recent financial crisis suggests that the rise of short-termism has been especially troublesome in the finance industry. In this paper, Malcom Salter starts by analyzing a case involving the mortgage-banking desk at Citigroup because it can help us think about how short-termism-the collapsed time horizon of both business decision makers and investors-not only sabotages an enterprise's reputation and value, but also invites individual and institutional corruption. He then examines the key drivers of short-termism in contemporary business, and their potential effects on the behavior of both executives and their organizations. He concludes by proposing mechanisms to deter the corrupting effects of short-termism, including changes in both business and public policy. Read More

Lawful but Corrupt: Gaming and the Problem of Institutional Corruption in the Private Sector

Malcolm S. Salter

In the business world, "gaming" refers to the act of subverting the intent of rules or laws without technically breaking them--a skillful if unsavory way to achieve private gain. Harvard Business School professor emeritus Malcolm S. Salter explores how gaming the system can lead to institutional corruption, citing examples from Enron and early efforts by some banks to game the implementation of the Dodd-Frank financial reform act. Read More

GM: What Went Wrong and What’s Next

For decades, General Motors reigned as the king of automakers. What went wrong? We asked HBS faculty to reflect on the wrong turns and missed opportunities of the former industry leader, and to suggest ideas for recovery. Read More

Innovation Corrupted: How Managers Can Avoid Another Enron

Malcolm S. Salter

The train wreck that was Enron provides key insights for improving corporate governance and financial incentives as well as organizational processes that strengthen ethical discipline, says HBS professor emeritus Malcolm S. Salter. His new book, Innovation Corrupted: The Origins and Legacy of Enron's Collapse, is a deep reflection on the present and future of business. Read More

Learning from Private-Equity Boards

Boards of professionally sponsored buyouts are more informed, hands-on, and interventionist than public company boards. HBS professor emeritus Malcolm S. Salter argues that this board model could have helped Enron—and perhaps your company as well. Read More

Enron Jury Sent the Right Message

Although the actions of Enron's executives were in many areas neither clearly legal nor illegal, jurors sent an unambiguous message that all executives should heed: Truth telling and ethical discipline are the cornerstone values in corporate governance. Read More

American Auto’s Troubled Road

Harvard Business School faculty dissect where U.S. auto makers went wrong, and how they might again get on the road to growth. From HBS Alumni Bulletin. Read More

Enron’s Lessons for Managers

Like the Challenger space shuttle disaster was a learning experience for engineers, so too is the Enron crash for managers, says Harvard Business School professor Malcolm S. Salter. Yet what have we learned? Read More