Deal: The Epitome of Fate?

The financial turmoil has unravelled into an oscillating malignance. From nationalisation of banks to high-profile bailout packages, nothing has stemmed the flow of this unprecedented downturn. However, the performance of stock markets is so inconsistent with underlying economic principles, it borders on the comical. Angered investors and laid off workers have voiced their continued concern over government efforts to counter these financial calamities, but admittedly all propositions have failed to materialise. Ultimately, we have become victim to our greatest human frailty, greed. Large scale corporate greed accounted for the collapse of investment banking giant Lehman Brothers. It encapsulates our inability to acknowledge failure and take responsibility for the remedial process. Instead, the conglomerate was left in tatters due to CEO Richard Fuld’s mind-boggling decision to refuse its buyout from Korean Development Bank for $26 per share. Losing personal touch with reality through preposterous executive pay is comprehensible, but to put the company at risk with the option of resorting to safe haven is despicable. Its share price fell heaps and bounds over the past two years, and accepting this deal may have sparked a revival in the wider economic framework. Unfortunately, the perpetrators did not pay the price for their notoriety; we did!

Although many heads have cited loyalty and prestige as reasons to veto company buyouts, their disapproval marks the intrinsic source of disrepute. Similar to Fuld’s actions, Yahoo Founder & Chief Jerry Young refused the $47.5 Billion offered by Microsoft. In a nutshell, this would have increased the market share of both companies in the online search sector and simultaneously enable them to compete heads-on with market leader Google. It seems that the highest order of Chiefs have carved a niche for themselves as ruthless individuals who pride themselves on exclusivity rather than sustainability. Yang was left to rue his decision amid heightened pressure from shareholders and Yahoo’s continued stagnation in the commercial online search market, with Google continuing to propagate its stronghold. His resignation as CEO followed shortly, and marked a gloomy end to a generally prosperous reign. His failure was magnified when Microsoft resumed negotiations, however, with a comparatively lower offer price of $20 Billion. Moreover, in light of their under-par performance Microsoft’s offer had more strings attached to it. Agreement on such a buyout would oversee Microsoft revamping Yahoo’s management structure and corporate culture to correspond with the doctrines of their own company. Effectively, the remnants of Yahoo’s own corporate culture would remain concealed, with cross-cultural coordination simply a delusion.

The significance of such offers may be understated in times of prosperity, but in times of crises a company should not view it as an undermining of their cultural values. Customs may be pre-eminent, but even they evolve with time. Promoting flexibility requires adjustment, and adjustment is aligned with change. Importantly, cultural heritage cannot be overshadowed by any corporate buyout, but an obsolete culture calls for innovation, and Microsoft may be that critical driver to mutual success. The question beckons whether Yahoo will relinquish to the power of the “deal”? Contemporary history suggests they would be foolish not to.