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Baidu is the world's third largest Internet search engine
A Picture shows the logo of Baidu on its headquarters in Beijing. A US judge ruled Thursday that Baidu has a "plausible" legal case against a domain registry firm that let hackers commandeer the Chinese Internet search giant's website.
A US judge ruled Thursday that Baidu has a "plausible" legal case against a domain registry firm that let hackers commandeer the Chinese Internet search giant's website.
Chin backed two of seven claims Baidu made against in a suit filed in January.
In a partial victory for domain name company Register.com, US District Judge Denny Chin dismissed five of seven claims Baidu made against the firm, including breach of contract, complicity in trademark infringement and aiding trespass. He only backed two of Baidu's counts against Register.
"I hold that Baidu has alleged sufficient facts in its complaint to give rise to a plausible claim of gross negligence or recklessness," Chin said in his ruling.
"If these allegations are proven, then Register failed to follow its own security protocols and essentially handed over control of Baidu's account to an unauthorized intruder, who engaged in cyber vandalism."
Hackers launched a cyber-attack on Baidu on January 11 by gaining access to the search firm's account at Register, in a move the firm said cost it millions of dollars.
For about five hours, Baidu traffic was rerouted to a Web page showing an Iranian flag; a broken Star of David, and a written message stating "This site has been hacked by the Iranian Cyber Army."
Baidu is the world's third largest Internet search engine and is reported to control more than 70 percent of the Chinese-language market.
Hackers seized the Baidu account by duping a Register tech support worker into changing the email address that Baidu had on file at US-based Register, legal documents maintained.
The Register support worker asked the imposter for security verification information but didn't bother to check whether it was correct as required by Register policy, according to court paperwork.
The hacker later pretended to forget the Baidu account password and, because of the altered email address, was sent a link granting access and control.
"If Register had simply followed its own security protocols, the attack surely would have been averted and neither Register nor Baidu would have been victimized," Chin concluded.
Baidu and Register are due back in Chin's New York courtroom next month for a pre-trial hearing.
A couple of years ago, I did a post on my blog listing my 10 reasons why Chinese companies were failing in the United States.
In response to that post, Nina Ying Sun at the Plastics News Blog did her own post entitled "Why Chinese Companies Fail the US Market," explaining, agreeing on and challenging the items on my list.
Chinese companies are still failing in the United States at what I see as an alarming rate--and the reasons I see for that have not changed a bit.
Here is my list, with Ms. Sun's comments and then my comments on Ms. Sun's comments:
1. Chinese companies focus on a Chinese consumer, not an American one.
Ms. Sun's comment: "Chinese companies would like to find out more about their target American consumers, but they mostly rely on personal-level approaches to collect business information, lacking a systematic and scientific market investigation conducted by professional Westerners that understand the market."
My comment: Very interesting and, I think, accurate observation. Chinese clients have driven me nuts by asking my views on things that I know nothing about, and then completely ignoring my advice when I try to hook them up with real experts. The following are typical conversations:
Chinese client: How much should we pay for that U.S. trademark? Me: I have absolutely no idea. I just do not know such business well enough to be able to help you at all on this. But, we have worked with a company that does nothing but value IP and I would be happy to give you their name. Chinese client: But what is your best estimate? ---
Chinese client: Should we start out selling our product just on the West Coast or should we start out nationally?
Me: Good question. Difficult question. It seems to me the answer to this will hinge greatly on the costs involved and on your ability to set up distribution networks. My firm does not handle questions like this (and even if we did, I do not think it would make sense for you to pay law firm rates for this information) but I would be happy to refer you to top notch business consultants who do. Chinese client: Should we start out in Los Angeles, Chicago or New York?
2. Chinese companies fail to realize that one reputation-damaging mistake in the United States could doom them forever here.
Ms. Sun's comment: This one is dead-on. And how come they don't realize this common sense? Because they get by in China and assume it's the same in the States.
My comment. Exactly.
3. Chinese companies fail to realize it will take time for them to make an impact in the United States and they are unwilling to spend the time and money necessary to do so.
Ms. Sun's comment: Chinese people take such pride of the fact that industrialization, urbanization and modernization have happened in China in a much shorter period time than in the West that they believe, if you try hard enough, everything can be done fast and well. Why don't they invest enough money to lay the ground work for the new market? Well, they look at the exchange rate. The same exchange rate that makes the Chinese production cost in yuan seem so low magnifies the marketing cost in dollars in the States.
My comment: Okay. But see number two above. Haste oftentimes makes waste.
4. Chinese companies focus too much on the end result (making money), and by doing so, they sacrifice the professionalism that would allow them to achieve long- term success. Ms. Sun's comment: The Chinese would ideally like long -term success. But the drastic social, economic and political upheavals and changes in the past century have paralyzed Chinese people's long-term thinking. Fill the pocket as full as possible before the next change hits, be it credit policy, industry standards or consumer interest. My comment: Absolutely true. Why think long term if there may be no long term? This explains the reason for the problem, but it still needs to be resolved.
5. Chinese companies tell users what they want instead of listening to users.
Ms. Sun's comment: This obnoxious mentality is a hangover of the old Soviet-Union-style "planned economy" (1949-1978). That period of time featured insufficient supply of necessities and one-sided propaganda.
Although it's hard to question about China running a market, capitalistic economy today, the country skipped some vital steps in the development of the Western countries.
My comment: Same as for number four above.
6. Chinese companies focus too much on making money in the short term, rather than on building the quality necessary to sustain themselves in the long term.
Ms. Sun's comment: What pops up in my mind includes: vicious and endless price wars, a business environment that has deprived consumers their say, and lack of technology and craftsmanship.
My comment. I agree, but what pops into my mind is that companies must be broad-minded enough to recognize that what makes sense in one country may not make sense in another. Indeed, one might even say this of China's regions and there are certainly plenty of Chinese companies that have managed to succeed in China as a whole by localizing their product or their marketing by region.
7. Chinese companies fail to understand how beauty and design might distinguish their product from that of their competitors.
Ms. Sun's comment: Traditionally, domestic consumers simply can't afford beauty and design. Price is the only distinguishing point. Plus, the companies don't want to invest much on design, because it's bound to be copied by competitors right away, thanks to the absence of intellectual property protection in China.
My comment: All true, but see my answers to Number four and number seven above.
8. Chinese companies rely too much on phone calls and face-to-face meetings instead of e-mail.
Ms. Sun's Comment: This is probably part of the Asian culture, underscoring personal communication instead of machine-generated and less interactive e-mail. I don't think it's necessarily a disadvantage though. Japanese companies have done well in the U.S. market, despite their preference for in-person meetings and phone calls rather than e-mail.
My comment. When in Rome..... But, I agree this may not be a disadvantage, so long as the Chinese company has the time and the people for it.
9. Chinese companies fail to use "simple and elegant designs."
Ms. Sun's comment: Unfortunately, they are trapped in between complicated traditional styles and a blank page of modern Chinese inspiration. Again, they can't justify investment on design, because it will be copied by competitors overnight.
My comment: See my comment to number seven above.
10. Chinese companies fail to realize their need to hire MBAs and those with local knowledge. Ms. Sun's Comment: Call them cheap or arrogant. They don't trust MBAs or Western veterans unless foreseeable return is guaranteed. They also want everything under their control, not threats and risk brought by language barrier and different business values.
My comment: I don't know what to call this but I know it is not wise.
The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets.
Author: Charles R. Morris Publisher: Public Affairs Ah, if only we could capture the intellect of financial geniuses in a book.
Only then will we be able to finesse our craft of investing, boost our confidence, harness positive energy and make killings in the stampeding environment of stock markets.
Best yet, if the approaches of these geniuses are poles apart.
We can then garner the best of each and excel midway, making us fearless yet grounded by reality and logic.
With that need in mind, Charles R. Morris puts together in his new book three sages, distilling distinctive investment styles of the two, and reminiscing the essence of one fine public servant.
But does profiling the lives of sages offer useful lessons for all of us?
Not really, if the sages are Warren Buffett, George Soros and Paul Volcker.
Much less so if the profiles make up of a series of quick recounts and lack in-depth analysis of the financial wisdom of these successful individuals.
Furthermore, while the life of the enigmatic Buffett is never tiring to read, his investment philosophies are more comprehensibly documented in Alice Schroeder’s Snowball.
Soros, meanwhile, has authored a number of books in which he offers more detailed descriptions of his trading methods and strategies.
The most well-known one being Soros’ magnum opus, The Alchemy of Finance, from which Morris, too, has quoted.
Morris, in a ham-fisted attempt to document the extraordinary life and career of Soros in slightly over 50 pages, has made Soros seem less of a sage than he deservingly is.
Although Morris regards Soros as a keen global trend reader with “feline sensitivity to quivers of disharmony in the economic flux”, his account of Soros’ trading history in quick succession and brief summation makes Soros looks more like a barbaric trader short of conviction and confidence.
On a few occasions, Morris makes it seem like Soros’ success comes more from luck than flair. “My father changes his position on the market because his back starts killing him. It has nothing to do with reason,” Robert Soros is quoted as saying about his father’s investing intuition.
Morris’ inclusion of Robert’s comment offers little humour but reinforces Soros’ veering conviction. In addition, Morris’ narrative of economic scenarios prevailing at the time is too swift and brief, confusing reader sthe least but disabling them from doing their own analysis the most.
“Without great conviction, (Soros) expects credit contraction. The stock market and house markets are both weakening, banks are in serious trouble and currencies are pushing against their upper bounds. On the positive side, the budget deficit is falling along with interest rates, and banks are slowly improving their balance sheets. What to do?”
Anyone will get lost in this economic scenario. Yet there are more. Indeed, Morris’ impatience with economic theories is most obvious in the chapter on Paul Volcker, the man whom Alan Greenspan succeeded as former chairman of Federal Reserve.
Hoping to cover Volcker’s two-decade long career as an expert in monetary policies, Morris sails through the various economic conditions from which Volcker honed his lore, but remains short on specific attributes that make Volcker a man of implacable integrity.
The reader lapses into a trance of economic frenzy, hearing not the voice of a great man calming wave after wave of financial disruption, but the sound of screeching financial jargons that deafens anyone unfamiliar with the interlocking world of US economy and politics.
But the book does shine with its more personal portrait of Warren Buffett. Morris focuses less on the technicality of financial markets but more on the young and endearing Buffett, when he achieved his first billion and his journey to become the beacon of sound judgement in the world of investment.
At over 900 pages, Alice Schroeder’s Snowball seems to have covered nearly everything that people want to know about Buffett.
But Morris is sensible enough to know his disadvantage and smart enough to have included a summary of Buffett’s witty anecdotes on Wall Street’s follies.
On the issue of accounting misrepresentation, Buffett quips and compares it with Abraham Lincoln’s riddle: “How many legs does a dog have if you call his tail a leg? The answer: Four, because calling a tail a leg does not make it a leg.’”
His failure and inability to walk the reader through economic wilderness notwithstanding, Morris has done a fair job in drawing these biographical sketches.
But sages have feelings, too. A deeper look into their inner worlds may be more rewarding than the brief recounts that Morris has provided.
The Three Gorges Dam discharges water to lower the level in the reservoir in Yichang, Hubei province August 5, 2009.
Credit: Reuters/China Daily
BEIJING | Mon Jul 19, 2010 5:17am BST
Officials said the controversial Three Gorges Dam helped mitigate flooding this year [Reuters] BEIJING (Reuters) - China's massive Three Gorges dam is facing a major test of the flood control function that was one of the key justifications for its construction, as torrential rains swell the rivers that feed it, state media said Monday.
Much of China has been suffering flooding and landslides after weeks of torrential downpours. At least 146 people have died since the start of this month, as a result of the rains, and another 40 are missing.
The peak flow of water hitting the giant reservoir on the Yangtze River, China's longest, will be higher than in 1998 when devastating floods killed over 4,000 people and forced some 18 million to relocate, the official China Daily said.
Engineers have raised the rate at which water is being sluiced out of the reservoir, to make room for new waves of floodwaters expected this week.
"The levels of this flooding will be higher than the historic floods of 1954 and 1998," Wei Shanzhong, Head of the Flood Control and Drought Administration office for the Yangtze River, told state Television.
"The rain in the gorges area will have an immediate affect on the water flow, to around 70,000 cubic meters (per second)."
Overall however, the flood this year is expected to be shorter than the 1998 disaster. When the flood-tide hits, locks that allow shipping on the reservoir up to the city of Chongqing, a southwestern hub, will be closed if the water comes faster than 45,000 cubic meters per second, the China Daily report added.
The dam was given the go-ahead by the government in 1992, against unusually visible domestic opposition -- with environmentalists warning the reservoir could turn into a cesspool of raw sewage and industrial chemicals trapped behind the dam, and feared silt could also cause problems.
The government justified its decision to push ahead by citing massive clean power generation and flood control were cited as the reasons it was pushed through. If it fails in the latter task it will add to concerns about the dam's overall cost and impact.
However even if the dam succeeds in its role of holding back deadly floodwaters there may still be problems downstream where continuous rains have also weakened dikes. Further north at least 20 people are missing after a landslide last night in a mountainous corner of Shaanxi province, around 400 km (250 miles) from the provincial capital of Xian.
Altogether over 38 million people have been affected and over 1.3 million have had to be evacuated, because of the weather, the Ministry of Civil Affairs was quoted as saying by the China Daily. July 20 (Bloomberg) -- China’s Three Gorges Dam, the largest in the world, help alleviate flooding in central China by containing the heaviest rush of water in more than 12 years.
Water flow down Asia’s longest river was contained and released at a “safe level,” Huang Hua, assistant director of public affairs at China Three Gorges Corp., the operator, said by phone today. Operations at the Hubei province dam, including power generation, are “all normal”, he said.
Rainfall since July 1 has affected about 38 million people and forced the relocation of 1.3 million in 11 provinces, the Ministry of Civil Affairs said July 16. Rice output in China, which accounts for 35 percent of global production, may drop by 10 percent on torrential rains and outbreak of pests, industry website cngrain.com said today.
“Three Gorges can comfortably handle the flood water,” Chairman Cao Guangjing said in a statement on its website today. “For the control of flooding downstream, Three Gorges is working very effectively.”
The speed of the water rushing down the river peaked at 70,000 cubic meters a second, though the volume probably won’t be as big as 1998, with the peak level lasting a shorter time, Cao said in the statement. The flow is expected to drop to 60,000 cubic meters a second by 8 a.m. tomorrow, it said.
The 1998 flood, when the water flow reached 50,000 cubic meters a second, killed about 4,000 people and forced the evacuation of 18.4 million, causing economic losses of at least 166.6 billion yuan ($25 billion). That flood, which had affected central and northeast China, lasted for months.
Record Level
The Three Gorges Dam, which started operations in 2003, can handle water flow at 98,800 cubic meters a second, the official Xinhua News Agency said, citing Cao. The record high was 70,800 cubic meters per second in 1981, the news agency said, citing an unidentified spokesman at the dam operator.
Flood and landslides triggered by torrential rains have left at least 41 people dead and 84 missing in Shaanxi and Sichuan provinces, the official Xinhua News Agency said, citing flood control authorities. Economic losses in the 11 provinces totaled 29.52 billion yuan, the civil affairs ministry said.
“Heavy rains in July pounded on Hubei’s grain, cotton, vegetable, aquaculture and livestock producing areas before shifting westward and northward,” said cngrain.com, which is owned by China Grain Reserves Corp. “The rains also induced pests outbreaks this week.”
Ravages Crops
In some of the main producing areas, the output decline may be as much as 20 percent, cngrain said. Persistent and wide- ranging rains ravaged early rice crops in Jiangxi and Anhui provinces, with about 23 percent of the area in Jiangxi affected, it said. The early rice crop was in flowering stage when the rains hit, it added.
Regions in Liaoning, Jilin, Heilongjiang, Inner Mongolia, Shandong, Anhui, Hubei, Hunan, Chongqing, Guizhou, Yunnan and Guangdong will have heavy rain in the next 24 hours, the China Meteorological Administration said in a statement.
Typhoon Chanthu may land in Guangdong or Hainan province on July 22, the weather bureau said at 11:18 a.m. local time.
Highways, Old Towns
More than 80 percent of the old township in Guangan city in Sichuan province were submerged after the biggest flood since 1847 hit the city, China Broadcasting Union reported today. More than two kilometers of the No. 318 national highway in county Qu, located in the eastern part of Sichuan Basin, was flooded yesterday at 6 p.m. The water blocked cars from the area and left the county an “isolated island,” according to the Chengdu Business Day.
The Chongqing Maritime Bureau has suspended shipping in the areas of Baishatuo Bridge, Chongqing Port, Tongluoxia, and Huangcaoxia since yesterday, Xinhua said. Chaotianmen port, the largest in Chongqing and the site where the Yangtze River and Jialing River merges, was partly inundated by the peak flow yesterday afternoon, People.com.cn reported.
Part of the Sichuan-Tibet highway may only be open again on July 28, after rain led to spillage of mud and rock, Xinhua said, citing the Communications Bureau of Tibet.
Flooding in southern China this year poses a challenge for agricultural production, Chen Mengshan, the Ministry of Agriculture’s spokesman and chief economist, said July 16.
China Three Gorges, the parent of Shanghai-listed China Yangtze Power Co., is building dams on the Yangtze River to control floods and help end electricity shortages in the world’s fastest-growing major economy. The nation is the world’s largest consumer of energy, according to the International Energy Agency.
--Winnie Zhu and Feiwen Rong, with assistance from Penny Peng and Miao Han. Editors: Tan Hwee Ann, John Liu. To contact the editors responsible for this story: Bruce Grant at bruceg@bloomberg.net; Andrew Hobbs in Sydney at ahobbs@bloomberg.net.
China braces for more floods
Officials said the controversial Three Gorges Dam helped mitigate flooding this year [Reuters]
China is bracing for its second powerful storm in less than a week, as the death toll from floods and landslides across the country climbed to nearly 300 this month.
Tropical storm Chanthu is expected to make landfall in Guangdong and Hainan provinces on Thursday, and it may pick up force while over the South China Sea.
The government has advised people to stay indoors, the official Xinhua news agency said. Last week, typhoon Conson skirted the resort island of Hainan, killing two people, before heading into Vietnam.
Spreading north
Much of southern and central China has been suffering flooding and landslides after weeks of torrential downpours and the deluge is spreading north, with Liaoyuan city in northeastern Jilin under waters 1m deep on Wednesday, state television reported.
Weeks of torrential rains have left three-quarters of provinces under water [Reuters]
Northeastern Liaoning province was experiencing its heaviest rainfall since 1994, state news agency Xinhua said.
Flooding is common in southern China during the annual rainy season, but this year has been the worst in decades in some areas.
At least 273 people have died as a result of the rains this month, bringing to 701 the number killed so far this year.
Another 347 are missing, the government said on Wednesday.
This year's death toll is the worst since 1998, when the highest water levels in five decades claimed 4,150 lives.
Already, three-quarters of China's provinces have been plagued by flooding and 25 rivers have seen record-high water levels, officials said.
Flooding, particularly along the Yangtze river basin, has overwhelmed reservoirs, swamped towns and cities, destroyed farms, and caused landslides that have smothered communities, including toppling 645,000 houses. The government estimates that the rains have caused direct economic damage of $21bn.
Typhoon season
With the typhoon season only just starting - six to eight typhoons are expected this year – and another bout of heavy rain forecast in the Yangtze region for Thursday, there are fears of another mass disaster on the scale of 1998. But Liu Ning, general secretary of the government's flood prevention agency, said that should not happen. He said the country was far better prepared than in 1998 and the overall water volume was not as high this time, although some rivers had risen above the peak of that year.
Rescue teams have been struggling to help those affected by the floods [AFP]
Since 1998, dykes have been improved and the massive Three Gorges dam completed.
Only a few dykes have failed this year, unlike in 1998 when thousands did, Liu told a news conference. But he warned that since 60 to 80 per cent of the annual rainfall occurs between June and August, the authorities should ramp up preparations and "be prepared to prevent and combat potential disasters".
The Three Gorges dam was given the go-ahead by the government in 1992, against unusually visible and vocal domestic opposition – with environmentalists warning the reservoir could turn into a cesspool of raw sewage and industrial chemicals trapped behind the dam. The $50bn project has already displaced millions as their homes were covered by the damming of the river. Millions more are expected to have to move within the next decade.
The government justified its decision to push ahead by citing massive clean power generation and flood control.
The Three Gorges Dam faced its highest levels ever this week and water breached the 2km long and 200m high dam.
But Liu said although water levels in the upper stretches of the Yangtze had surpassed 1998 marks, "the flood situation is still not as severe because the Three Gorges Dam has played a key role in preventing floods along the river this year"
Blogetery.com, a little-known WordPress platform used by more than 70,000 blogs, was shut down by its Web hosting company more than a week ago and nobody seems willing to say why or who is responsible.
BurstNet, the Web-hosting company, informed Blogetery's operator that service was terminated at the request of some law enforcement agency but wouldn't say which one. As for the reason, BurstNet hasn't made that clear either. In an e-mail to Blogetery's operator, BurstNet managers did say that they had little choice but to terminate service.
"Please note that this was not a typical case in which suspension and notification would be the norm," BurstNet wrote to Blogetery's operator. "This was a critical matter brought to our attention by law enforcement officials. We had to immediately remove the server."
BurstNet executives were not immediately available for comment.
Though BurstNet never indicated Blogetery's problems were caused by copyright violations, TorrentFreak, a blog that covers Web file-sharing issues and broke the story, wrote that the U.S. government may be involved as part of stepped-up antipiracy operations. Nearly three weeks ago, a group of federal law enforcement agencies, including the U.S. District Court for the Southern District of New York and the U.S. Immigration and Customs Enforcement (ICE), a unit of the Department of Homeland Security--seized assets and Web sites belonging to people authorities say operated illegal file-sharing sites. President Obama has said his administration is going to get tough on piracy and counterfeiting.
But on Sunday, a spokeswoman for ICE said "while ICE's Internet piracy enforcement efforts are still very much ongoing, we were not involved with the action."
A spokesman for the Recording Industry Association of America said Sunday that the trade group for the four top record labels had nothing to do with Blogetery's shut down. A spokesman for the Motion Picture Association of America said he had never heard of Blogetery.
That the MPAA and RIAA may not be involved makes sense. Typically, they give warnings before they move like this. They also try to make big news out of any enforcement efforts; they want them to act as deterrents.
And these trade groups have historically had to file lawsuits, spend millions of dollars, and wait years before convincing courts to shut down such sites as TorrentSpy, Isohuntand Napster. If this was a copyright issue, BurstNet would likely have to deal with the Digital Millennium Copyright Act's safe harbor. This a provision designed to protect Web service providers from being held responsible for copyright violations committed by users.
Blogetery's operator said he played by the rules. In the e-mail exchange with BurstNet, the blog platform's operator, said that he always obeyed copyright law. Whenever anyone on his platform was accused of posting links to unauthorized movie or music files, he said he removed the material "within 24 hours."
Sure, there's still lots unanswered questions. We don't know which law enforcement agency is involved. We don't know whether BurstNet disconnected Blogetery with proper cause. We don't know for sure whether the reason for the shut down was due to copyright violations.
But at this point, it sure doesn't appear to be a generic file-sharing issue.
Update 3:20 p.m. PT: In an interview, a BurstNet spokesman declined to identify the law enforcement agency that ordered Blogetery shut down or provide the reason but did say that it had nothing to do with copyright violations.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
TALENT management is essential for all companies, especially for small and medium-scale enterprises (SMEs), in order for them to grow their business. However, recruiting and retaining talent is always hard for SMEs due to their size and lack of emphasis on staff management.
A lot of SMEs view talent management as a “cost”. This need not necessarily be so. The problem is exacerbated when new generations are not interested to work in SMEs; they prefer to join multinational companies (MNCs).
SMEs tend to take in family members or those within the family. When this is not possible, they employ outsiders.
Malaysian Institute of Management (MIM) general council member Zul Baharom says managing talent is a problem for large and small organisations alike.
“In this regard, family-owned businesses suffer the most. A way out of this perilous situation, as seen by early entrepreneurs, is a marriage of convenience. Another fast way out is to maintain family interests,” he tells StarBizWeek.
“This crucial stage of developmental growth often coincides with a period of low profit, which explains why proper talent management development is usually not considered by the owners,” he says.
Zul Baharom: Managing talent is a problem for large and small organisations alike.
In situations where small organisations do invest in talent management, the results have been surprisingly positive.
“Take the case of the SMR Group, a family-based small HR training and consultancy company of some 32 years. It grew to become an international enterprise and was later listed on Bursa Malaysia,” he says.
Its founder and owner Dr R. Palan believes that talented people play a key role in ensuring the company’s culture and business to remain “right”.
“This was achieved by a long process of talent management and intervention to get the better managers and consultants in place. Thus, there is a need for third or fourth generations of family owners to develop to the fullest potential, the talent within and re-orienting the company culture and values towards the future development of their businesses,” he says.
Retaining talent
Malaysian Institute of Human Resource Management president Ramley Razalli says it may be difficult for SMEs to secure talent due to the general perception that they lacked success and, therefore, lack stability.
Ramley Razalli: SMEs must select those with entrepreneurial inclination.
“However, we have found that SMEs are generally successful and the well-known ones may be able to attract talent, but not necessarily the best,” he says.
SMEs must find avenues to publicise their success stories to be branded, he says. “Some information technology (IT) companies are successful in recruiting talents. This is perhaps, due to the pioneering spirits of the individuals. They are like artists, and there is a big market for those who are good,” he says.
Ramley says associations should employ human resource experts to assist and guide members. Meanwhile, SMR HR Group chairman and chief executive officer Dr R. Palan says SMEs have to find innovative ways to secure talent as traditional job hiring approach may not work for them.
“Championing their vision and mission, showing the talent their growth path, will enable the SMEs to win the war for talent,” he says.
He says large corporations may have the ability to offer more but SMEs are nimble; they can offer more on a personal basis. SMEs have to communicate this fact when recruiting, he says. The main and first issue, says Palan, is finding the right person for the right job.
R. Palan: Find innovative ways to secure talent.
“The person may be qualified but need not necessarily be suitable for the SMEs. The issue of differentiating competencies for success is an important one,” he says.
SMEs need talent that is in short supply and the Talent Corporation that is being set up in the 10th Malaysia Plan is expected to identify their needs and address them.
“The second problem is one of retention. SMEs don’t have the bandwidth of MNCs or government-linked companies (GLCs) when it comes to compensation and remuneration,” he says.
He says the high employee turnover is an obstacle for SMEs growth, thus SMEs have to consider initiatives such as flexible benefits, employee share options and partnerships.
Talent development spending is unnecessary?
Zul says investment in talent management can help to attract and retain senior management.
“An employee see the company’s commitment in developing talent management as a positive indication of the owner’s effort to expand its business horizons. It goes without saying that a pool of trained and talented professionals will become more engaged and motivated,” he says.
This has a tremendous impact as it enables talented managers to link their future professional career development with the company’s long term business plans.
Palan says talent management and retention will be considered as “expensive” if this is seen as a cost but if good employees are viewed as “an asset”, this can be seen as an investment and value creation.
“In the past, money motivated people but today – purpose, passion and autonomy are strong motivating factors. The carrot and stick approach may no longer be the only way to keep good people and the sooner SMEs recognise that, the better it will be for their bottom line,” he says.
He says SMEs can take advantage of the funds allocated for the development of talent by the Human Resources Development Corp.
New generations prefer MNCs?
MIM’s Zul says young people today tend to view working in an SME or running one’s own business as last resorts, something they will only consider when they are unable to find work in a larger company.
“The preference is to work in MNCs or GLCs because they perceived these organisations as being more stable. They want to get away from the ‘home environment’. This may explain why Felda schemes are still being run by the same people who pioneered the scheme,” he says.
He points out that the majority of SME owners prefer to do everything themselves and distrust the younger generation.
“They will take in family members or those within the family. When this is not possible, they employ outsiders. It is imperative for SME entrepreneurs to set up a pool of talents for succession planning to ensure the survival of family business,” he adds.
Ramley says the selection process is important. “SMEs must select those with entrepreneurial inclination, those open to multi-tasking, and in some cases those with a nose for marketing but without academic qualifications,” he says.
He says SMEs must employ a different breed of talent unlike those employed by MNCs and large companies.
“Job designing is important in SMEs to ascertain the type of talent required. In doing so, they will be able to search and secure the talents needed,” he says.
Palan says SMEs with the right leadership can offer much.
“Microsoft started with four employees and companies such as Google and Air Asia with less than a dozen employees. They grew into world class large companies,” he says.
Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime – Chinese proverb
TUNA doesn’t often get caught in the crossfire of criticism against the government and its agencies, but that’s exactly what’s happening. This week, politicians and bloggers brought the glare of scrutiny on two government-linked companies (GLCs), both set up several years ago to grab a slice of the lucrative global tuna market.
In their blogs, Tun Dr Mahathir Mohamad and businessman Syed Akbar Ali targeted Langkawi Tuna Corp Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd.
Langkawi Tuna was meant to undertake tuna farming in Bukit Malut, Langkawi. The business model was to catch yellowfin tuna in the Indian Ocean, transfer the fish to cages and tow the live haul back to Langkawi, where they would be fattened up over a few months before they were sold. It is understood that about RM50mil was injected into the company as paid-up capital and advances.
In a deal reportedly worth A$4.3mil (RM12mil), it bought four vessels from Australia, including a 30-year-old tuna purse seine boat. However, insiders say the project was a non-starter mainly because Langkawi was too far from the fishing grounds and its waters were not optimal for tuna farming.
There’s no mention of Langkawi Tuna on the Khazanah website, and it’s not among the three key holdings and initiatives in the agriculture sector that were listed in Khazanah’s annual review 2010. It’s understood that the company has ceased operations. Dr Mahathir called it a “failed venture” and a “failed experiment”.
The other GLC is Malaysian International Tuna Port Sdn Bhd (MITP), which was awarded a 32-year concession to manage, operate and develop a tuna port at Batu Maung in Penang. It’s a 60:40 joint venture between Bindforce Sdn Bhd (controlled by Sabah businessman Datuk Annuar Zaini Binyamin) and the Fisheries Development Authority of Malaysia (LKIM), a statutory body under the Agriculture and Agro-based Industry Ministry (MOA).
MITP’s woes have largely stemmed from delays in the port’s final phase of construction, leading to huge cost overruns and a strain on the company’s cash flow. Last November, it failed to pay a profit payment on its RM240mil Islamic bonds.
The bond issuance was backed by a letter of support from the MOA, and this has raised the question whether the Government will now have to bear MITP’s obligations to the bondholders.
Since misery loves company and in keeping with the fisheries theme, let’s bring in a third initiative that has run aground – Konsortium Perikanan Nasional Bhd (KPNB). As the name suggests, the company was formed to spearhead the development of the local fisheries industry.
Says the MOA website: “The mandate of KPNB is to implement effective measures towards the modernisation of fishing fleet, improvements in fish processing, and efficient marketing and distribution activities. In turn, KPNB is expected to act as a catalyst to the growth in investment opportunities of fisheries industry activities.”
It appears that KPNB has debt problems as well. On March 4, it defaulted on a credit facility of RM7.56mil taken from Bank Pertanian Malaysia Bhd.
In addition, one of its indirect shareholders, Oilcorp Bhd, are in financial trouble too and was classified a PN17 company last September.
According to an April 29 announcement to Bursa Malaysia, Oilcorp’s 70% subsidiary, Layar Visi Sdn Bhd, has a 51% stake in KPNB. Oilcorp’s latest audited accounts indicate that the auditors’ report on Layar Visi’s financial statements contained “a disclaimer of opinion on material uncertainties on its ability to continue as a going concern”. Layar Visi has invested RM17.85mil in KPNB.
A common thread with these three fisheries-related projects is that they were part of a wave of enthusiasm for the so-called new agriculture, which involves large-scale farming, the broader use of modern technology (particularly biotechnology and information and communications technology), and the participation of entrepreneurial farmers and skilled workforce.
The Ninth Malaysia Plan embraces new agriculture as a way to boost the sector’s contribution to the Malaysian economy via improved productivity, more emphasis on food production, greater innovation, a deeper capacity to generate wealth and higher exports. The idea was to make agriculture the country’s third engine of economic growth, after manufacturing and services.
These days, it’s hard to hear anybody promoting agriculture with the same gusto and optimism. That in itself is not necessarily a bad thing. Different times and circumstances often call for different strategies and emphases. But the tragedy with Langkawi Tuna, MITP and KPNB is that so much has been spent and yet, there’s so little to show for it. What started out as noble policies have ended up as expensive flops.
There are certainly lessons of a lifetime to be learnt here. Hopefully, we’re not too busy fishing for short-term opportunities to pay attention.
OPTIMISTICALLY CAUTIOUS By ERROL OH
Deputy executive editor Errol Oh has no patience for fishing... and ill-conceived and poorly executed businesses.
Greg Sandoval covers media and digital entertainment for CNET News. He is a former reporter for The Washington Post and the Los Angeles Times. 
