CEO

Anything You Can Do, I Can Do Better

Posted on by kristin30111f14

Last Thursday (September 18), Larry Ellison, the Chief Executive Officer and co-founder of Oracle Corporation, announced that he would be stepping down from his position as CEO to become the company’s new Executive Chairman. So who is replacing Ellison as the new Chief Executive Officer? A woman. Well, not quite. Safra Catz, the Chief Financial Officer for Oracle Corporation, has been named co-CEO alongside Mark Hurd.1

Safra Catz, a Chi Omega Fraternity alumna, first joined Oracle Corporation in 1999 as a Senior Vice President. Since her time at Oracle, Safra Catz has risen through the corporate ranks to become one of the most powerful women in business – number fourteen according to Forbes. Catz has served as an Executive Vice President, an interim Chief Financial Officer, a full-time Chief Financial Officer, co-president of Oracle, as well as a member of the board. In 2013, Catz was named as the highest paid executive woman, earning more than $44 million! So why was Safra Catz only promoted to co-Chief Executive Officer?

Since Larry Ellison was known for his “aggressive” business tactics and will power, it will be interesting to see how Safra Catz adopts her own management style.1 In her new position as co-CEO, Catz will be responsible for overseeing all manufacturing, financial, and legal aspects of Oracle Corporation.2 These responsibilities are not unlike what a project manager faces in his or her occupation. Project managers are responsible for many things:

  • Making sure that all activities (especially critical activities) are finished in their order of precedence and on time;
  • Overseeing that the project is completed within budget;
  • Establishing that the project meets its quality goals; and
  • Ensuring that the people assigned to the project receive the motivation, direction, and information needed to complete their jobs.3

Additionally, a project manager knows that project planning is essential for the efficiency of a project. Organizing and planning a project is helpful when:

  • Work tasks are specifically defined and have clear deadlines;
  • The job is somewhat unique to the organization;
  • The work within the project contains complex and interrelated tasks requiring specialized skills, perhaps from various departments;
  • The project is critical to the organization; and
  • The project cuts across organizational lines.3

As co-Chief Executive Officer, Safra Catz will take on many responsibilities, many of which are very similar to what a project manager has to do. As an executive suite-level manager, Catz has cross-functional expertise, is able to lead, negotiate, and reach goals, have the necessary political skills to deal with stockholders, stakeholders, etc., and be able to maintain the perception of her company.4 Project managers, like CEOs, must be able to lead members of their teams, some of which consist of members of various departments (like a matrix project). Project managers must also be able to give the proper motivation and leadership for their team members, as well as provide logistical information. While Safra Catz (and Mark Hurd) may not be as hands-on as a regular project manager, CEOs share many common skills and characteristics of project managers.

Sources:

1) http://fortune.com/2014/09/18/larry-ellison-to-step-down-as-ceo-of-oracle/

2) http://www.businessinsider.com/oracles-new-co-ceo-is-safra-catz-2014-9

3) Principles of Operations Management: Sustainability and Supply Chain Management (class text)

4) http://www.pmi.org/Knowledge-Center/Next-CEO.aspx

Is Caterpillar’s Labor Management Leading To Its Demise?

Posted on by spr1321jcastiglione

Recently manufacturing employees at Caterpillar plants in Illinois and across the world suffered significant pay cuts as well as cuts to some of their benefits. Now Caterpillar is experiencing a backlash from its employees. At an Ontario plant, workers were locked out when they refused to accept a 50% pay cut. In response, Caterpillar moved production to Muncie, Indiana where workers were willing to accept the lower wages. In May of last year, Caterpillar threatened to cut health care and other benefits for employees at a plant in Joliet, which resulted in a three month strike. Workers were finally forced to accept the cuts and returned to work. Caterpillar is also currently in a dispute with workers at a Milwaukee plant.

On the contrary, Caterpillar’s earnings would not indicate a need to cut employee wages. The company earned almost $6 billion in profits this year from a record-setting $66 billion in sales. In addition, the average salary of executive at has increased by 56% in the last six years and CEO Doug Oberhelman’s salary has risen by sixty percent since 2011. He made $22 million last year. His rationale behind Caterpillar’s hard line on labor is that they have a need to stay competitive. He says the only reason executive salaries rose so greatly is because people in these positions are going to find other work if they don’t receive a competitive wage. Whether such a steep increase is justified depends on who you ask. At the same time, he believes he has no reason to raise employee wages when he can just easily open a plant in a Southern state, where workers would gladly accept lower wages. He also contends that workers these days are less skilled and thus don’t deserve more money.

Oberhelman has received opposition on both of these points. Opponents argue that the only reason workers seem less skilled is because too much is demanded from them for too little pay. They also say that manufacturing employees at nearby rivals Cat and Komatsu plants are paid $3-$4 more per hour for the same work. However, people in these positions have much less mobility because there are a lot less manufacturing jobs today.

Caterpillar needs to resolve this issue with its employees before serious damage is done. Their reputation is on the line, which could ultimately affect their bottom line. Constant conflict with its employees could result in reduced productivity and quality from them. I believe they should just pay their employees wages that are comparable to nearby competitors. If the company is profitable and executives are experiencing pay bumps, shouldn’t lower-level employees experience them too? Who do you think is right or wrong in this situation? Do you think Caterpillar’s ongoing conflict with its employees is going to hurt the company in the long run?

http://www.businessweek.com/articles/2013-05-16/caterpillars-doug-oberhelman-manufacturings-mouthpiece#p4