Wpp – Sorrell’s Weapon of Mass Destruction

It was a one room office with two employees in 1986. Today it has 91,000 employees in 106 countries with over 2000 offices. Wire and Plastic Products might have started off as a basket manufacturing company, but Martin Sorrell, who was once the Finance Director at Saatchi & Saatchi, ensured that he made WPP into the world’s second largest advertising and media buying conglomerate. After acquiring shares in London based WPP, Sorrell used it as a vehicle to acquire films’ like Mindshare, Ogilvy & Mather, JWT and Group M. WPP, with its strong focus on organic growth, has brought about a financial discipline in an industry, which earlier relied on unhindered and touchy creative genius.


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Source IIPM-Editorial,2006

Plagiarism pierces Swanson’s defence

World’s fifth largest defence corporation Raytheon is hit with plagiarism charges and the originator is none other Chairman and CEO Bill Swanson himself. ‘Unwritten rules of Management’, a management guide apparently written by Swanson, includes some passages lift ed directly from WJ King’s ‘Written Unwritten Rules of Engineering’. The board of Raytheon is not firing Swanson due to his excellent track record, but has reportedly cancelled his annual salary and stock option increments. Raytheon is the manufacturer of the famed Tomahawk cruise missiles used by the US defence forces; the projectile became very popular after its success vis-àvis Iraq’s ‘Scud’ missiles in the 1991 Gulf war.

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Source IIPM-Editorial,2006

America"s Foreign Debt (IIPM-Article)

In a new paper, Gros argues – compellingly, in my view – that what’s really happening is that foreign companies are understating the profits of their US subsidiaries, probably to avoid taxes, and that official data are, in particular, failing to pick up foreign profits that are reinvested in US operations. If Gros is right, the true position of the United States economy isn’t as bad as you think – it’s worse. The true trade deficit, including unreported profits that accrue to foreign companies, isn’t $800 billion – it’s more than $900 billion. And America’s foreign debt, including the value of foreign-owned businesses, is at least $1 trillion bigger than the official numbers say it is.

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Source IIPM-Editorial,2006

World Economic Outlook Report,2006 (IMF)

After previous years showing savings flowing from emerging economies to developed countries, it is now the turn of global corporations – with never before seen high savings – to turn net lenders; and the fact is that nobody knows which way the levee would break in the coming years. According to the World Economic Outlook Report, 2006 (IMF), the corporate sector, which presumably should have always needed funds from other sectors, has actually instead turned out to be the net lender to other sectors. Savings by the corporate sector of G7 countries reached 2.5% of GDP (IMF), a level that has never been achieved in the past.

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Source IIPM-Editorial,2006