Worst business decisions ever?

Editors at the 24/7 Wall St. website identified the most costly mistakes made by US corporations. Here are 5 big missteps that had enormous consequences.

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VIDEO ON MSN MONEY

357Comments
Nov 23, 2012 7:22PM
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My favorite was watching Wang Labs implode when Fred Wang took over from the brilliant Dr. An Wang (Fred's father).

Fred had ZERO skills and appointed so many family members to important posts that they should have changed the name to NEPOTISM, Labs.

The level of incompetence amongst these family members was even greater than that of Fred himself. One of the most notorious was Ed Yang who was appointed to run the western region.

Needless to say only a few years after the switch, the company went from the number one word processing company in the world to bankrupt.

Fred either fired or pushed out all of the talented executives that built the company in order to make room for the family and their chosen ones.

Prior to Fred's reign Wang was the number 3 computer company in the world with over 33,000 employees and 1980 revenues of $3 Billion. Wang filed for bankruptcy in 1992.

Nov 23, 2012 6:11PM
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Here's an interesting footnote to RCA - when RCA built the Spectra 70 series Mainframe computers to compete against IBM, RCA was an easy 10 - 15 years ahead in the technology of the machine.  It would take IBM another 10-15 years to implement the feature the RCA machines had! 
Nov 20, 2012 12:47PM
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They missed a good one in their study. Lucent Technologies. Was going great guns. And then Rich McGinn, a total incompetent, was appointed CEO (Carly Fiorina was one of his minions). First problem was the switch from anticipating the market and guiding it to "Market driven R&D", Second problem was an aquisition mania during which companies like Ascend and INS were bought at highly inflatd prices and given control of major Lucent Technolgies sectors without having the requisite knowlege of the Network (their space was enterprise), Third supporting and poviding financing for unqualified (in both senses) network contenders rainging from Global Crossings to PPL.
Nov 20, 2012 12:45PM
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Worst business decisions:

 

Coke comes out with new formula

Excite passed on the opportunity to buy Google for $750,000

IBM lets Microsoft keep the rights to MS-DOS

Electronic Data Systems passes up the opportunity to buy Microsoft for $60,000,000

Decca Records passes on signing up the Beatles because "guitar groups are on the way out."

Financial companies won't hire me because I don't have experience, even though I have been self-employed in the financial field for the past 10 years and have letters of recommendation that come from top people (Presidents, Managing Partners, Founders, etc.) in corporation's that everyone has heard of

Nov 20, 2012 11:48AM
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My parents in the 60's decided to provide for their children by opening a whole life insurance policy with a final payout equal to the value of a house. They figured that the value of a house would be more than enough in case the future went sour and we would not be homeless.

The value of that policy was 15,000 dollars.

Inflation's relentless march making the 5 cent candy bar into the dollar candy bar is the one factor that one cannot adequately prepare for.

Many prior retirees have seen their once "comfortable" retirement turn into a financial nightmare with things like gasoline going from $2 to $4 within a couple of years and the ever increasing taxes and increases in utility costs.

Retirees are projected to be about 1/4 of the total population within the next 20 years and the costs of providing services to those who can no longer take care of themselves will possibly create an exponential rise in costs to meet those needs.

Failure to plan sufficiently could cause you to see poverty in your twilight years.
Nov 20, 2012 8:38AM
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How to lose your assets in less that 45 days: There are less than 45 days left before Year End. The Fiscal Cliff looms and publicly traded companies who lived fully off stock activity are preparing one last dividend offering before the bottom falls out. Which comes first- payment of the dividend or bankruptcy filings? When a business announces a dividend sharing, it says "shareholders on day XX of record will be paid on day XX". With the exception of yesterday's criminally-orchestrated market pump, markets have been steadily declining since Election Day. Layoffs and terminations have been increasing. The 3rd quarter was dismal. The big events of the 4th quarter aren't building any momentum. It is very likely that dividend qualification day occurs on a downward slope. Shorters would have that covered and literally cause a stock price to fall below the value of the dividend. The next day of course, dividend w.hores sell out and cause that stock to collapse entirely. Shorters get paid first because there is no delay like the dividend so by the time dividend payout day arrives... it could come a day and dollar too late. The kicker... a great deal of this activity will come from two sources-- illegal offshore (dark) and super computerized funds. The very real potential exists that around or on 12/21/12, combined computerized and adverse influences wipes out the financial sector completely. Not a fantasy... consider the aspects and manipulation culminating in a single bad trade/sale day. BOOM... Wall Street is out of business.

 

Laugh it off now. Fools always do. I may not be Roubini but we tend to arrive at the same answers fairly often. Too many on the deck, all leaning in the same direction. No economy in offset. Gravity. It's not rocket science, just commonsense. When YOU are broke, it's the shelter not bail, ahead.

Nov 20, 2012 1:45AM
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How about Microsoft with Windows 8?  Or keeping Ballmer around while dumping talent?  Or throwing a lifeline to Apple?
Nov 19, 2012 10:04PM
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I think all the entities you portray in your slide show pale by comparison with the biggest mistake of all... going global, mass terminating personnel who were also customers, selling factories, trade secrets and becoming drop-ship importers with hired-in administrative management in leased office space. There's little to no chance that ANY corporate brands of today will exist or be remembered 25 years from now-- when their Board Directors and Executive Management become eligible for parole or release from prison.
Nov 19, 2012 9:54PM
Nov 19, 2012 9:11PM
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That's because the name RCA was sold and the new owners slapped it on cheap junk hoping to cash in on it's former good reputation.
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