Tech Corruption in China [Infographic]


Counterfeiting, knock-offs, fake Apple Stores, cybercrime



Tech Corruption in China [Infographic]
A new chart illustrates the love/hate relationship China has with technology. Having the largest internet user base in the world, along with a country-wide firewall, China has been at odds with the internet, as well as all sorts of corruption surrounding counterfeit technology, product knock-offs, cybercrime, etc.
Shanzhai, the Chinese outfit that copies Apple products, and maker of the D-Pad and the E-Pad, is blamed for taking part in cutting into 2.1 million U.S. jobs, at a loss of $48 billion in legitimate sales. So far, 22 completely fake Apple stores have been uncovered in China, featuring employees that actually believe their paychecks are coming from Cupertino, and there is no word on whether the fronts are selling real iOS products, Shanzhai knock-offs or straight counterfeits. And, the fact that Chinese counterfeiters operate so freely goes to show that the country’s intellectual property laws are a bit more loose than those in the U.S.
Chinese users of its version of Facebook presently outnumber the entire population of the United States, and cybercrime is rampant – The U.S. Chamber of Commerce was hacked in 2010, promopting many companies to disallow employees visiting China from bringing mobile devices along, for fear of information being compromised.
Hat tip to Web Hosting Geeks


Strategist: Law is “great first step” for boosting economy



Last week, President Obama signed into law the Jumpstart Our Business Startups Act, more commonly known as the JOBS Act. The White House administration is hoping that small businesses and startups will drive recovery and create new jobs.
In a press release the White House released, the President said:
“America’s high-growth entrepreneurs and small businesses play a vital role in creating jobs and growing the economy. I’m pleased Congress took bipartisan action to pass this bill.  These proposals will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that’s built to last.”
What do you think the JOBS Act will do for small businesses and startups? Please share.
The bill covers several provisions, but the most prominent one is “crowdfunding.” Under this element, startups and small businesses can solicit the general public for investment, which democratizes funding efforts.
Michael McGeary, Strategist at Hattery LabsMichael McGeary, who is a strategist with venture capital firm Hattery Labs, worked with lawmakers on this bill and told us that crowdfunding was the “#1 way for direct benefits as the bill rolls out.”
“It’s gonna make it available for people all over the country to give what they can to a startup they believe in and get equity in return, which will help on both sides,” he said.
Crowdfunding will specifically help those startups that don’t need millions of dollars but that still need some to get their feet of the ground. McGeary said it would help startups become companies more quickly and also give them more growth potential. He also told us that he expects to see more companies such as Kickstarter and IndieGoGo as the JOBS Act is rolled out.
While some people have questioned the impact of crowdfunding on traditional funding methods, McGeary doesn’t believe they will be harmed in any way. In fact, he believes they will be enhanced by crowdfunding.
“Crowdfunding is not going to utterly change that system,” he said. “All it’s gonna do is make it better for more people to get more ideas to the marketplace faster.”
He went on to say that it would draw in a wider community to what’s happening in the Silicon Valley because more people will be involved. This will furthermore help to create a more transparent startup economy since the community will be bigger and more diverse.
The JOBS Act will also lighten the regulatory hurdles that small businesses must go through in the expansion of “mini public offerings” and the creation of an “IPO On-Ramp.” These provisions will not only eliminate forced IPOs, but it will also speed up the process for businesses to grow at a faster rate.
Despite the strong bipartisan support, there has been some opposition to the bill. In a post inRolling Stone entitled “Why Obama’s JOBS Act Couldn’t Suck Worse,” Matt Taibbi discusses the fraud and scams that could take place in the stock market as a result of the law:
“In fact, one could say this law is not just a sweeping piece of deregulation that will have an increase in securities fraud as an accidental, ancillary consequence. No, this law actually appears to have been specifically written to encourage fraud in the stock markets.”
The Huffington Post also pointed to the dissatisfaction of the labor parties suggesting that the White House chose the tech community to alleviate concerns raised over the SOPA outbreak in January. Others have indicated that the law could open the door for weak IPOs.
McGeary, however, told us that he does not believe the negatives outweigh the positives. According to him, the people who are advocating the law are adamant on its success and, therefore, are determined to keep fraud away.
“There’s no investment without risk,” McGeary said.
“If bad actors do enter the system and fraud does start to proliferate through the crowdfunding system, there’s gonna be a movement afoot in Washington very quickly to make sure that any regulations that have to be changed or augmented in that way, will happen swiftly,” he added.
While McGeary believes the JOBS Act is a “great first step,” he believes that more needs to be done in terms of the startup community, especially in the areas of long term STEM education and spectrum and broadband patents.
The SEC is currently requesting feedback on the law, as it contemplates potential regulatory measures.
Do you see more concerns or benefits with the JOBS Act? Let us know in the comments.




Advantages and Disadvantages of Decentralization



A central command structure derives from an autocratic style of management. Autocracy is not necessarily an intention and could be incidental. For example, typically start-ups and business that have just been founded are naturally autocratic with the founding members primarily running the show. Gradually, as the business grows and the headcount expands, the organization begins to take on a different structure with departmental heads and other teams. The top management is unable to keep tabs on all organizational functions and prefer to delegate responsibility and distribute the power of making decisions.

Decentralization: Inspecting the Tradeoffs
Decentralization often comes into picture to tackle the disadvantages of centralization. Although a decentralized command structure does help to overcome the cons of autocratic management such as lack of ownership and authority, as you go down the hierarchical organization structure, it has its own unique set of pros and cons. Let us explore these merits and demerits of decentralization and put into perspective the tradeoffs involved when adopting this management concept.

Advantages of Decentralization
  • The top management and promoters of the firm have distributed the decision-making authority and are therefore, left with more time to pursue the strategy for realizing the organization's long-term vision. Day-to-day problem solving is no longer the biggest concern for the higher-ups.
  • Operational independence makes it easier for the organization to grow overall. Activities such as franchising, diversification and hiring of employees at the departmental levels do not need constant intervention from the top management. Consequently, expansion becomes easier, raising capital and inducting additional workforce become less time-consuming. Decentralization greatly benefits huge organizations spread over several thousand employees and geographic locations.
  • Increased decision-making power directly translates into greater accountability. Local managers and even other employees further down the corporate ladder are motivated to take ownership of their work. Leadership qualities find expression outside the boardroom within the silos and cubicles as well. The overall atmosphere tends to boost employee morale leading to greater job satisfaction than the strict confines of a centralized setup. Grooming future leaders is also much easier in such an atmosphere.
  • There's no longer just one center of excellence in the organization but several pockets of excellence full of talented people spread out across the organization. Authority is delegated at the local level, which means decisions are more informed and accelerated though not always strategic.
  • Decentralized power means greater transparency which in turn ensures that fewer mistakes are made. A decision is usually a democratic and participative outcome and if there's a goof up in progress, chances are great that someone will spot it. While there's ownership of success, decentralized authority also ensures that there are fewer scapegoats. A mistake cannot be mapped to one single person (this can be a demerit under some other circumstances).
  • Perhaps, one of the most powerful outcomes of decentralization is the possibility of open innovation. With talent spread out across all levels and locations and the resulting networking possibilities, bright minds get together with ideas, leading to innovation rapidly. There are no bureaucratic bottlenecks or hindrances to exchange of ideas.
  • In a decentralized setup, it becomes easy to spot the weak links that are consistently affecting the bottom lines. Therefore, it becomes easier to plug the leaks in time and make sure that the lessons learned are effectively conveyed to all other subunits within the organization.
  • The adoption of organizational standards and best practices is also facilitated by a decentralized setup. Transparency in process ensures that it is easy for the various local teams to emulate and adopt the methods and processes that brought success to a team located elsewhere.
  • One of the major advantages of decentralized way of taking decisions is witnessed during a sudden change in the local business environment such as the onset of recession or currency devaluation, etc. Businesses are able to respond and adapt quickly to these changes when authority is decentralized.
  • Retail businesses like Walmart and hotel chains often benefit from having a decentralized style of management. Businesses, where quick decisions amidst fast-paced changes in environment are the order of the day, stand to benefit from decentralization.
Disadvantages of Decentralization
  • Too much emphasis on localized way of taking decisions may end up blurring the bigger picture. As you go down the corporate ladder, employees seem to lose sight of the organizational vision.
  • A highly decentralized organization can be the battleground for unhealthy competition between local managers leading to lack of co-operation and coordination. As a result, interdependent functions may suffer and resolving interdepartmental conflicts is difficult when authority has been delegated. In addition, there is costly duplication of work (activities, processes and outcomes) that may impact economy of scale.
  • Decentralization is not always a good strategy to begin with, especially when the organization is still to find its footing in the market. Pushing decisions down the hierarchy without assessing if those levels in fact have the required skills and capabilities, is a mistake that could prove to be costly.
  • While decentralization promotes the spread of standards and best practices, different managers perceive them differently. Therefore, implementation of uniform organization-wide consistent policies becomes problematic. In case of emergencies that require adoption of organization-wide standards, the diffusion of authority and independent opinions and actions pose a major hindrance.
  • Decentralization often gives rise to an employee population composed mainly of generalists and very few specialists. External specialist consultants often need to be sought when the need arises, further adding to the costs.
  • Work allocation and performance evaluation are not consistent in a strongly decentralized establishment. A subunit that is a cost center ends up getting a raw deal, whereas revenue generating units reap the benefits of a good performance by their subunit. It is difficult to measure the performance of cost centers and the associated employees as they do not generate profits.
  • Businesses like fast food chains such as McDonald's where specialization is important and consistency in service is vital, stand to benefit from a more centralized work culture.
We have seen both the advantages and disadvantages of decentralization. That hopefully makes clear what the tradeoffs could be in adopting this concept in an organization. However, most disadvantages of decentralization can be overcome by controlling the degree nf authority delegated to the lower levels of the organization. Both centralization and decentralization have their extremes which is why, the key is to avoid those extremes and take the middle road. A combination of both concepts and a conscious deviation from theautocratic management style is recommended as a plausible strategy. Striking a balance between how much independence is given to individual business units and what kind of decisions remain under the central command could lead to a successful strategy.
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