Business school rules

In the latest chapter in the continuing saga of “The Value of Having MBAs Running Industry”, I give you Wednesday’s news:

The board of directors of Hewlett-Packard is weighing whether or not to fire CEO Leo Apotheker, who only took office last November after previous CEO Mark Hurd was sacked over a scandal involving fraudulent expense reports and putting his mistress on the “consulting” payroll.

The board, which has already shown a clear and consistent capacity to hire nothing but cretins (Apotheker will be the third CEO in six years to hit the road, and Hurd was preceded by Carly Fiorina), is considering Meg Whitman as a replacement. Obviously the adoration of the hobgoblin of little minds isn’t limited to little statesmen and philosophers and divines, but pervades the H-P boardroom.

(Also, the phrase “doing the same thing over and over again, expecting different results” comes to mind.)

HP used to be the gold standard for PC hardware, the best of the best. After Fiorina, Hurd and Apotheker they’re kind of the jest of the rest. (As we Bruins used to refer to USC.) But whatever happens, you can bet there’ll be more layoffs to demonstrate to shareholders that, by God, they’re taking action. And the board will ensure that compensation for senior management (and themselves) will continue to be “competitive”, because otherwise how could you ever attract high-quality talent out of the best business schools?

Along the same lines, Moody’s has lowered the ratings on Bank of America, Wells Fargo and Citi. This is because the investment services firm believes that in the not-unlikely event that the three banks’ management will continue making boneheaded decisions, the federal government will not try to bail them out again.

(I wonder if the banks are going to try to get back all those campaign donations they made to our elected officials?)

So it’ll be more of a challenge for executives at those institutions to collect their usual bonuses if we-the-people aren’t propping up their financial infrastructure.

The good news, though, is that they could toss their hats into the ring for running H-P.