Japan is still in Deflation — Roberto Rigobon

MIT Sloan Professor Roberto Rigobon

From Nikkei (published 10/21/14)

Next week is a big week for those keeping track of the success of Japanese economic policies. New interest rate numbers will be released on October 29 and these numbers represent the most current report card on Abenomics, as the policies of Japan’s Prime Minister Shinzo Abe are called.

Abenomics was presented just weeks after Abe took office in 2012 as the ultimate solution to almost two decades of stagnation in the country.  The program has three pillars: monetary easing, structural reforms and renewed fiscal stimulus. One of the most important goals of Abenomics is increasing inflation, and ultimately changing inflation expectations—hoping to reverse a decade of deflation. To do so, the government began printing Yens in abundance.

Initial signs of success showed in the exchange rate, asset prices, and inflation rate. In fact, the official CPI for July 2014 shows a large annual inflation rate by Japanese standards: 3.4 percent. And from that perspective, it seems as if Abe’s policies have been effective and the job has been accomplished.

More recently, however, the economy has once again shown signs of weakness: Inflation expectations remain surprisingly low at around 1 percent, asset prices and bond markets seem to be unconvinced by the achievements, and the real economy is starting to slow.

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GM can recover if it changes the culture — Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From Detroit Free Press

It’s been a rough year for General Motors. The company has recalled more than 28 million vehicles worldwide and is liable for billions of dollars in automotive repairs and victim compensation. It suffered an 85% drop in its second-quarter earnings and faces multiple state investigations, not to mention class-action lawsuits related to safety issues. Can GM recover from this massive crisis?

It can make a comeback, but the recovery hinges on changing the organization’s culture. For years, GM focused on cost-effectiveness and the bottom line, creating what the new CEO Mary Barra calls “a pattern of incompetence and neglect.” To address the current crisis, she of course needs to fix the safety problems, but she also needs to create a new company culture. Safety must become the priority over cost savings in order to regain consumer and market trust, and GM’s focus needs to be on the customer.

So far, Barra, who inherited the crisis when she was promoted to CEO this past January, is moving in the right direction. By firing 15 employees who were involved in the lack of communication about safety issues, she sent a powerful message both within and outside of the company about the company’s changing priorities.

Read the full post at the Detroit Free Press.

Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management.

Ben Shields — Thoughts on Patriots’ Deflategate

MIT Sloan Lecturer Ben Shields, the former director of social media and marketing at ESPN and co-author of The Sports Strategist, talks about deflate-gate, the investigation into whether the New England Patriots used deflated footballs in the Jan. 18 AFC championship game. Shields explains why the Patriots are prone to negative press and social media backlash and what the organization should do as a result.

MIT MBA students tour Silicon Valley as tech campuses expand — Shany Alon

MIT Sloan MBA '16 Shany Alon

MIT Sloan MBA ’16, Shany Alon

From Xconomy

It’s easy to catch the technology bug. After all, tech companies are pretty much everywhere. I became hooked when I worked as an IT consultant at Accenture after college, and plan to work at a technology company after I finish my MBA. So when I had the opportunity to participate in a Technology Trek at MIT, I jumped at the chance of visiting some of the leading market players recognized globally for their entrepreneurial and technological innovation.

I was very curious about what it’s like to work at a larger technology company, especially big ones with more resources like Facebook and Google. What is their culture really like? What kind of impact can a recent MBA graduate make? During our Technology Trek last week with 27 other MIT Sloan MBA students, I was able to get some answers.

First up was Google’s Mountain View campus. I had never seen it before, and was taken by the size of campus, the people I met, and the general atmosphere. In addition to the famous Google bikes that employees use to get around, we also saw the Wellness Center complete with nap rooms, yoga studios, and a juice bar. During our tour, we learned that Google is opening new offices just a few miles away. It’s pretty big now, but soon it will double in size!

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