2010年8月31日 星期二

Army Revises Training to Deal With Unfit Recruits

Anne McQuary for The New York Times

Soldiers at Fort Jackson, like Pvt. Alyssa Leggat, work on push-ups. The fitness regime involves more agility and balance training.

At War
FORT JACKSON, S.C. — Dawn breaks at this, the Army’s largest training post, with the reliable sound of fresh recruits marching to their morning exercise. But these days, something looks different.

Notes from Afghanistan, Pakistan, Iraq and other areas of conflict in the post-9/11 era. Go to the Blog »

Anne McQuary for The New York Times

It’s 5:30 on a recent morning, and basic training is in progress at Fort Jackson, S.C. A new exercise regimen is “more whole body,” a platoon leader says.

Anne McQuary for The New York Times

Butter and maple syrup? They’re performance-limiting foods, recruits at Fort Jackson are told.

That familiar standby, the situp, is gone, or almost gone. Exercises that look like pilates or yoga routines are in. And the traditional bane of the new private, the long run, has been downgraded.

This is the Army’s new physical-training program, which has been rolled out this year at its five basic training posts that handle 145,000 recruits a year. Nearly a decade in the making, its official goal is to reduce injuries and better prepare soldiers for the rigors of combat in rough terrain like Afghanistan.

But as much as anything, the program was created to help address one of the most pressing issues facing the military today: overweight and unfit recruits.

“What we were finding was that the soldiers we’re getting in today’s Army are not in as good shape as they used to be,” said Lt. Gen. Mark Hertling, who oversees basic training for the Army. “This is not just an Army issue. This is a national issue.”

Excess weight is the leading reason the Army rejects potential recruits. And while that has been true for years, the problem has worsened as the waistlines of America’s youth have expanded. This year, a group of retired generals and admirals released a report titled “Too Fat to Fight.”

“Between 1995 and 2008, the proportion of potential recruits who failed their physicals each year because they were overweight rose nearly 70 percent,” the report concluded.

Though the Army screens out the seriously obese and completely unfit, it is still finding that many of the recruits who reach basic training have less strength and endurance than privates past. It is the legacy of junk food and video games, compounded by a reduction in gym classes in many high schools, Army officials assert.

As a result, it is harder for recruits to reach Army fitness standards, and more are getting injured along the way. General Hertling said that the percentage of male recruits who failed the most basic fitness test at one training center rose to more than one in five in 2006, up from just 4 percent in 2000. The percentages were higher for women.

Another study found that at one training center in 2002, 3 recruits suffered stress fractures of the pubic bone, but last year the number rose to 39. The reason, General Hertling said: not enough weight-bearing exercise and a diet heavy on sugared sodas and energy drinks but light in calcium and iron.

The new fitness regime tries to deal with all these problems by incorporating more stretching, more exercises for the abdomen and lower back, instead of the traditional situps, and more agility and balance training. It increases in difficulty more gradually. And it sets up a multiweek course of linked exercises, rather than offering discrete drills.

There are fewer situps, different kinds of push-ups and fewer long runs, which Army officials say are good for building strength and endurance but often lead to injuries. They also do not necessarily prepare soldiers for carrying heavy packs or sprinting short distances.

“We haven’t eliminated running,” General Hertling said. “But it’s trying to get away from that being the only thing we do.” (The new system does include plenty of sprinting.)

Some of the new routines would look familiar to a devotee of pilates, yoga or even the latest home workout regimens on DVD, with a variety of side twists, back bridges and rowinglike exercises. “It’s more whole body,” said First Lt. Tameeka Hayes, a platoon leader for a class of new privates at Fort Jackson. “No one who has done this routine says we’ve made it easier.”

The program was largely the brainchild of two former gym teachers who now run the Army Physical Fitness School based here. They are a military version of Click and Clack, finishing each other’s sentences and wisecracking with the alternating beat of gas-fired pistons.

One, Stephen Van Camp, is a former professional kick-boxer who unwittingly ran a marathon with a fractured ankle. “That’s not tough. That’s stupid,” he now says. The other, Frank Palkoska, is a former Army officer and West Point fitness instructor who adorns his office here with black-and-white photographs of 19th-century exercise classes and an assortment of retrograde equipment like medicine balls and wooden dumbbells.

“It’s back to the future,” Mr. Palkoska says before starting into a lament about the Xbox generation. “Technology is great, but it’s killing us.”

As he and Mr. Van Camp started developing what became a 434-page manual, they began by considering what combat soldiers do and came up with a checklist of things like throwing grenades and dodging gunfire.

Then they matched those needs with exercises. Some of those are already in use by the Army, but others are new and still others are drawn from century-old routines. There are drills that mimic climbing, that teach soldiers how to roll and that require swift lateral movements. Some are done in body armor.

The old style of physical training, he said, was less relevant to soldiers’ tasks, which entail lots of jumping, crouching and climbing. “What we did in the morning had nothing to do with what we did the rest of the day,” Mr. Palkoska said.

Under General Hertling, the new regimen will also include a makeover of the mess halls at its training bases. At Fort Jackson, there are more green leafy vegetables, less fried food, and milk instead of soda. The food line includes color-coded messages to encourage privates to eat low-fat entrees (marked in green). And there are other changes: no more assaulting tires with bayonets, but more time spent on rifle marksmanship and fighting with padded pugil sticks.

The trick now will be to push the program into the rest of the Army, where evidence suggests many soldiers are becoming overweight, particularly during or soon after deployments. The Army Training and Doctrine Command recently distributed the new fitness policy to the entire Army, officially replacing a physical fitness field manual that was first published in 1992.

While the training posts will have to follow the new program, since they are under General Hertling’s command, it is not mandatory for officers in the field. Every unit’s exercise routine is determined by its commander, and the current generation of officers has been indoctrinated under the old system.

The key, Mr. Palkoska says, will be to revamp the Army’s fitness test, which is taken twice a year. It measures a soldier’s ability to do situps, push-ups and a two-mile run. Since soldiers often train to the test, those are the exercises most of them do.

Mr. Palkoska and Mr. Van Camp hope the Army will revise that test by including new kinds of exercises and perhaps eliminating the situp.

“We know kids today are less fit,” Mr. Palkoska said. “We have to adjust.”

Soldier Held in Slaying

FORT McPHERSON, Ga. (AP) — Sgt. Rashad Valmont of the Army Reserve was fasting to meet strict military weight guidelines and nearly catatonic when he shot and killed a supervisor, the soldier’s lawyer said.

Details of the shooting were revealed for the first time Monday at a military hearing to determine if there was enough evidence to go to trial.

The lawyer, William Cassara, said that Sergeant Valmont, who faces a premeditated murder charge, was dehydrated, exhausted and delirious when he burst into Master Sgt. Pedro Mercado’s office in Fort Gillem in June. Mr. Cassara said Sergeant Valmont had spent weeks trying body wraps and sauna treatments and starving himself.





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2010年8月30日 星期一

Illuminating advice on the dark art of ‘drip pricing’

Illuminating advice on the dark art of ‘drip pricing’


“You inched towards the dark side,” joked one behavioural economist after he read a recent column in which I hinted that his field has some merits. It was a quip that got me thinking, because behavioural economics does indeed have a dark side. Behavioural economists study the psychology of economic decision-making, and if they are any good at their task they will discover something the unscrupulous salesman could use to his advantage.


A behavioural economist turned rogue would exploit the “endowment effect” – a tendency for people to put a higher value on something that they feel they already own. He or she would also try to create the sense that consumers would lose out if they did not buy, because people seem to hate the idea of losing £5 much more than they like the idea of gaining £5.

一个从行为经济学家转行的无赖会利用“禀赋效应”(endowment effect)——这是一种人们将更高价值赋予感觉自己已拥有物品的趋势。他(或她)同样会试图制造出一种感觉:即如果消费者不购买,他们就会吃亏。因为人们对于失去5英镑的痛恨,似乎要远甚于获得5英镑的欣喜。

Third, our rogue economist would attempt to suggest an “anchor” value that was much higher than the asking price, which would make the product seem cheap. It doesn’t seem to be hard to create such anchor values: they can be produced by inviting experimental subjects to write down the last two digits of their social security number.


Fourth, he or she would make the pricing as complex as possible so that people struggled to compare one offer with a rival offer. Fifth, he or she would try to create a sense of social approval – everyone is buying this. Finally, a rogue economist would throw in something free.


Many unscrupulous salesmen have figured this advice out for themselves already. Think of infomercials. “The TimCo smokemaster doesn’t retail for £200; it doesn’t retail for £100; it doesn’t retail for £50 … ” (anchoring to a price of £200) … “if our lines are busy, please try later” (social approval) … “the smokemaster is not available in regular stores” (loss aversion) … “but wait! When you buy the TimCo smokemaster you get the TimCo soup knife absolutely free” (complex pricing and use of “free”).


The UK’s Office of Fair Trading (OFT) has been turning to behavioural economists for advice on such tactics, and has found that there is no pricing scheme more pernicious than “drip pricing”. Under the scheme, customers agree to pay a price only to discover that there is a charge for delivery; another charge for paying by credit card, and another for insurance. Drip pricing taps into the endowment effect, because customers feel that they have already made the decision to purchase; it creates loss aversion because customers commit time and effort to the search before being hit with extra charges; and it is a form of complex pricing which makes it hard to compare offers.

英国公平交易办公室(Office of Fair Trading)一直在向行为经济学家求助,寻求应对此类伎俩的建议。他们发现,最缺德的花招要算是“水滴定价”。在这种招数中,消费者同意支付一个价格,但不成想随后送货要收费;使用信用卡支付也要收费,另外还有保险费。水滴定价利用了禀赋效应,因为客户觉得自己已做出了购买决定;它形成了损失厌恶感,因为在遭遇额外收费前,消费者已经在求购上投入了时间和精力;同时这也是一种复杂的定价方式,使消费者难以对价格进行比较。

The OFT research, conducted by consultants and academics at University College London, was based on a laboratory experiment in which students sat at a computer and were presented with hypothetical deals from two fictional retailers. The students were beguiled with various marketing tricks and had to decide from whom to purchase, in what quantity, and after how costly a search. There was no trick quite so guaranteed to confound them as drip pricing, in which they were hit first with an extra charge for handling and then with a charge for shipping. (A two-part drip is modest: according to the OFT, one package holiday provider used four unavoidable “drips”, and two computer retailers tacked on seven optional ones.)

由伦敦大学学院(University College London)的顾问和学者进行的OFT研究基于实验室试验,在实验中,一些学生坐在一台电脑前,面对2家虚拟的零售商提供的假想交易。学生们要面对各式各样的营销花招,必须决定在付出多大代价的搜索后,从哪家购买,以及购买多大的数量。在让学生们上当方面,没有哪种花招像水滴定价那样十拿九稳。在实验中,他们先是遇到了处理费用,然后是运费。(由两部分组成的水滴定价招数还算是普通的:OFT表示,一家旅行社提供的方案包括4颗无法避免的“水滴”;而2家电脑零售商则附加了7个可选项)。

The OFT has been firing warning shots about drip pricing, but it will have its work cut out to regulate it – there is usually some loophole through which price drippers can slip. Buyers should remember that if they walk away when the drips start to fall, they won’t get soaked.



2010年8月20日 星期五

The End of Management ?


The End of Management

Corporate bureaucracy is becoming obsolete. Why managers should act like venture capitalists

Underwood & Underwood/Corbis

An office pool in the 1950s.

Business guru Peter Drucker called management "the most important innovation of the 20th century." It was well-justified praise. Techniques for running large corporations, pioneered by men like Alfred Sloan of General Motors and refined at a bevy of elite business schools, helped fuel a century of unprecedented global prosperity.

But can this great 20th century innovation survive and thrive in the 21st? Evidence suggests: Probably not. "Modern" management is nearing its existential moment.

Corporations, whose leaders portray themselves as champions of the free market, were in fact created to circumvent that market. They were an answer to the challenge of organizing thousands of people in different places and with different skills to perform large and complex tasks, like building automobiles or providing nationwide telephone service.

In the relatively simple world of 1776, when Adam Smith wrote his classic "Wealth of Nations," the enlightened self-interest of individuals contracting separately with each other was sufficient to ensure economic progress. But 100 years later, the industrial revolution made Mr. Smith's vision seem quaint. A new means of organizing people and allocating resources for more complicated tasks was needed. Hence, the managed corporation—an answer to the central problem of the industrial age.

WSJ Deputy Managing Editor Alan Murray discusses some of the lessons new managers can learn from his new book, "The Wall Street Journal Essential Guide to Management."

For the next 100 years, the corporation served its purpose well. From Henry Ford to Harold Geneen, the great corporate managers of the 20th century fed the rise of a vast global middle class, providing both the financial means and the goods and services to bring luxury to the masses.

In recent years, however, most of the greatest management stories have been not triumphsof the corporation, but triumphs over the corporation. General Electric's Jack Welch may have been the last of the great corporate builders. But even Mr. Welch was famous for waging war on bureaucracy. Other management icons of recent decades earned their reputations by attacking entrenched corporate cultures, bypassing corporate hierarchies, undermining corporate structures, and otherwise using the tactics of revolution in a desperate effort to make the elephants dance. The best corporate managers have become, in a sense, enemies of the corporation.

The reasons for this are clear enough. Corporations are bureaucracies and managers are bureaucrats. Their fundamental tendency is toward self-perpetuation. They are, almost by definition, resistant to change. They were designed and tasked, not with reinforcing market forces, but with supplanting and even resisting the market.

Yet in today's world, gale-like market forces—rapid globalization, accelerating innovation, relentless competition—have intensified what economist Joseph Schumpeter called the forces of "creative destruction." Decades-old institutions like Lehman Brothers and Bear Stearns now can disappear overnight, while new ones like Google and Twitter can spring up from nowhere. A popular video circulating the Internet captures the geometric nature of these trends, noting that it took radio 38 years and television 13 years to reach audiences of 50 million people, while it took the Internet only four years, the iPod three years and Facebook two years to do the same. It's no surprise that fewer than 100 of the companies in the S&P 500 stock index were around when that index started in 1957.


A foam-brick-filled bathtub in the 'water lounge' at Google's Zurich office.

Even the best-managed companies aren't protected from this destructive clash between whirlwind change and corporate inertia. When I asked members of The Wall Street Journal's CEO Council, a group of chief executives who meet each year to deliberate on issues of public interest, to name the most influential business book they had read, many cited Clayton Christensen's "The Innovator's Dilemma." That book documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of "bad" management, but because they followed the dictates of "good" management. They listened closely to their customers. They carefully studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process, they missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.

The weakness of managed corporations in dealing with accelerating change is only half the double-flanked attack on traditional notions of corporate management. The other half comes from the erosion of the fundamental justification for corporations in the first place.

British economist Ronald Coase laid out the basic logic of the managed corporation in his 1937 work, "The Nature of the Firm." He argued corporations were necessary because of what he called "transaction costs." It was simply too complicated and too costly to search for and find the right worker at the right moment for any given task, or to search for supplies, or to renegotiate prices, police performance and protect trade secrets in an open marketplace. The corporation might not be as good at allocating labor and capital as the marketplace; it made up for those weaknesses by reducing transaction costs.

Mr. Coase received his Nobel Prize in 1991—the very dawn of the Internet age. Since then, the ability of human beings on different continents and with vastly different skills and interests to work together and coordinate complex tasks has taken quantum leaps. Complicated enterprises, like maintaining Wikipedia or building a Linux operating system, now can be accomplished with little or no corporate management structure at all.

That's led some utopians, like Don Tapscott and Anthony Williams, authors of the book "Wikinomics," to predict the rise of "mass collaboration" as the new form of economic organization. They believe corporate hierarchies will disappear, as individuals are empowered to work together in creating "a new era, perhaps even a golden one, on par with the Italian renaissance or the rise of Athenian democracy."

That's heady stuff, and almost certainly exaggerated. Even the most starry-eyed techno-enthusiasts have a hard time imagining, say, a Boeing 787 built by "mass collaboration." Still, the trends here are big and undeniable. Change is rapidly accelerating. Transaction costs are rapidly diminishing. And as a result, everything we learned in the last century about managing large corporations is in need of a serious rethink. We have both a need and an opportunity to devise a new form of economic organization, and a new science of management, that can deal with the breakneck realities of 21st century change.

The strategy consultant Gary Hamel is a leading advocate for rethinking management. He's building a new, online management "laboratory" where leading management practitioners and thinkers can work together—a form of mass collaboration—on innovative ideas for handling modern management challenges.

What will the replacement for the corporation look like? Even Mr. Hamel doesn't have an answer for that one. "The thing that limits us," he admits, "is that we are extraordinarily familiar with the old model, but the new model, we haven't even seen yet."

This much, though, is clear: The new model will have to be more like the marketplace, and less like corporations of the past. It will need to be flexible, agile, able to quickly adjust to market developments, and ruthless in reallocating resources to new opportunities.

Resource allocation will be one of the biggest challenges. The beauty of markets is that, over time, they tend to ensure that both people and money end up employed in the highest-value enterprises. In corporations, decisions about allocating resources are made by people with a vested interest in the status quo. "The single biggest reason companies fail," says Mr. Hamel, "is that they overinvest in what is, as opposed to what might be."

This is the core of the innovator's dilemma. The big companies Mr. Christensen studied failed, not necessarily because they didn't see the coming innovations, but because they failed to adequately invest in those innovations. To avoid this problem, the people who control large pools of capital need to act more like venture capitalists, and less like corporate finance departments. They need to make lots of bets, not just a few big ones, and they need to be willing to cut their losses.

The resource allocation problem is one Google has tried to address with its "20%" policy. All engineers are allowed to spend 20% of their time working on Google-related projects other than those assigned to them. The company says this system has helped it develop innovative products, such as Google News. Because engineers don't have to compete for funds, the Google approach doesn't have the discipline of a true marketplace, and it hasn't yet proven itself as a way to generate incremental profits. But it does allow new ideas to get some attention.

[management2]Granger Collection

Alfred P. Sloan of General Motors

In addition to resource allocation, there's the even bigger challenge of creating structures that motivate and inspire workers. There's plenty of evidence that most workers in today's complex organizations are simply not engaged in their work. Many are like Jim Halpert from "The Office," who in season one of the popular TV show declared: "This is just a job.…If this were my career, I'd have to throw myself in front of a train."

The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband. SAS Institute Inc., the privately held software company in North Carolina that invests heavily in both research and development and in generous employee benefits, ranging from free on-site health care and elder care support to massages, is often cited as one company that could be paving the way. The company has nurtured a reputation as both a source of innovative products and a great place to work.

Information gathering also needs to be broader and more inclusive. Former Procter & Gamble CEO A.G. Lafley's demand that the company cull product ideas from outside the company, rather than developing them all from within, was a step in this direction. (It even has a website for submitting ideas.) The new model will have to go further. New mechanisms will have to be created for harnessing the "wisdom of crowds." Feedback loops will need to be built that allow products and services to constantly evolve in response to new information. Change, innovation, adaptability, all have to become orders of the day.

Can the 20th-century corporation evolve into this new, 21st-century organization? It won't be easy. The "innovator's dilemma" applies to management, as well as technology. But the time has come to find out. The old methods won't last much longer.

—Adapted from "The Wall Street Journal Essential Guide to Management" by Alan Murray. Copyright 2010 by Dow Jones & Co. Published by Harper Business, an imprint of HarperCollins Publishers.

2010年8月18日 星期三

珍惜生命 富士康6萬人誓師

  • 【記者蒼弘慈/台北報導】








2010年8月16日 星期一

For Apple Suppliers, Pressure to Win

For Apple Suppliers, Pressure to Win

Indictment Alleging Employee Kickback Scheme Highlights the Value of Information in Race for Prestigious Contracts

Allegations of a kickback scheme orchestrated by an Apple Inc. employee underscore the pressures on companies that hope to serve as suppliers to the fast-growing Silicon Valley giant.

Apple also named Mr. Devine in a civil suit filed Friday in U.S. District Court in San Jose, Calif., that includes allegations of fraud and violations of racketeering laws. He is scheduled to make a court appearance on Monday.

"Apple is committed to the highest ethical standards in the way we do business," said an Apple spokesman, adding that it has "zero tolerance for dishonest behavior inside or outside of the company."

Mr. Devine, of Sunnyvale, Calif., couldn't be reached for comment. Arlette Lee, an agent for the Internal Revenue Service, confirmed that it conducted the investigation jointly with the FBI and Mr. Devine was being held in an undisclosed location by the U.S. Marshals Service.

Ms. Lee said Mr. Devine didn't yet have an attorney. She declined to comment on Mr. Ang's whereabouts. Mr. Ang, of Singapore, couldn't be reached for comment. The FBI and the U.S. Marshals Service didn't return calls seeking comment.

According to the indictment and the civil suit, Mr. Devine came up with an elaborate scheme in which he supplied companies such as Cresyn Co. in South Korea, Kaedar Electronics Co. in China and Jin Li Mould Manufacturing Pte. Ltd. in Singapore with confidential information that would let them negotiate favorable contracts with Apple. The companies provided goods such as mechanical parts, tooling and fixtures in connection with products that included Apple iPods and iPhones, according to the documents.

The allegations point to the high financial stakes for suppliers, which made regular payments to Mr. Devine in exchange for information that would help them in dealing with Apple—including Apple's sales volume forecasts, product specifications, competitors' target prices and bids, according to the indictment and Apple's complaint. In a correspondence with Jin Li Mould, for example, Mr. Devine recommended that it offer Apple a price of two U.S. cents for a part, in between the one cent that Apple desires and the four cents submitted by a competitor.

A spokesman for Cresyn, an earphone maker in South Korea, on Monday expressed regret about the situation but said that its contract with the Apple employee was "not illegal."

Jin Li and Cresyn couldn't be reached for comment. Calls to Kaedar Electronics' China office went unanswered Sunday. A spokesman for Pegatron Corp., the manufacturing subsidiary of Asustek Computer Inc. of Taiwan, said Pegatron acquired Kaedar in late 2008 or early 2009. The Pegatron spokesman, Charles Lin, said he wasn't aware of the indictment or lawsuit against Mr. Devine. The Wall Street Journal previously reported that Pegatron is working on an iPhone for a second mobile standard, CDMA, for Apple.

The indictment and the civil suit also suggest the effort Mr. Devine made to avoid detection at a company well known for its tight security. Mr. Devine corresponded with the suppliers through Hotmail and Gmail accounts that he created, even telling one contact that the "Apple IT team will randomly scan email for suspicious email communications for forecast, cost and new model information," according to the indictment.

Mr. Devine asked for payments in traveler's checks and opened as many as 14 bank accounts in the U.S. and overseas, some of which were in his wife's name and a corporation that he set up called CPK Engineering Inc., the indictment alleged. The document states he requested that payments be wired in amounts less than $10,000 to avoid detection and used code words such as "sample" instead of "payment" to further disguise the transactions. Mr. Devine shared part of the money with Mr. Ang, who was an employee of Jin Li, and helped broker deals with Jin Li as well as others, the document alleges.

Apple's lawsuit said Mr. Devine began working for Apple in July 2005 as a manager responsible for selecting and managing relationships with companies that supply Apple with parts and materials for iPods and iPod accessories. His profile on networking website LinkedIn said he graduated from the Sloan School of Management at the Massachusetts Institute of Technology in 2005 and worked at testing equipment maker Teradyne Inc. from 1998 to 2005.

Apple also stated, in its complaint, that the company began investigating Mr. Devine last April for a possible violation of its corporate policy and found a cache of suspicious e-mails from Hotmail and Gmail accounts in his company laptop that contained discussions with suppliers that included confidential corporate information and acknowledgments of payments received.

The Cupertino, Calif., company said these activities apparently took place from October 2006 until the present. The federal indictment said the alleged scheme took place no later than February 2007.

—Ian Sherr and Ting-I Tsai contributed to this article

Hurd Deal Inflamed H-P Board

Hurd Deal Inflamed H-P Board
H-P's board decided to oust Mark Hurd after the chief executive reached a sexual-harassment-claim settlement that directors thought impeded their probe of the claim.

Corporate Scandals: HP

Corporate Scandals: Why HP Had to Oust Mark Hurd

In congressional testimony almost four years ago, Mark Hurd, the CEO of computer and printer maker HP, told the House Energy and Commerce Committee that "if [company founders] Bill Hewlett and Dave Packard were alive today, they'd be appalled, they'd be embarrassed." At the time, HP was under fire for spying on journalists and board members in order to determine the sources of leaks to the press. The embarrassing incident had forced Patricia Dunn, the company's then chairwoman, to step down. She faced felony charges that were later dismissed.

If an espionage scandal would have shamed H and P then, how appalled would they be today? While Hurd escaped relatively unscathed from the spying affair — he claimed no knowledge of the seedier aspects of the company's tactics — he's causing consternation over a new issue. Hurd resigned on Aug. 6 as HP's chairman and CEO amid charges that he sexually harassed Jodie Fisher, a former actress and reality-television personality who worked for HP as a marketing consultant. Hurd settled the sexual-harassment claim with Fisher for an undisclosed sum, and Fisher has denied having an "affair or intimate sexual relationship" with Hurd, who is married. Though HP says Hurd did not violate the company's sexual-harassment policies, the company found that Hurd submitted inaccurate expense reports that concealed his personal relationship with Fisher. These expenses totaled about $20,000, according to reports. HP also says Fisher was at times paid for nonexistent work. (See the top 10 CEO scandals.)

Hurd's abrupt departure stunned Silicon Valley. He took control of HP in April 2005, coming in as the staid, efficient antidote to ex-CEO Carly Fiorina, whose love of the limelight had worn thin on shareholders. (She engineered HP's tumultuous $24 billion merger with former rival Compaq and is now running for a Senate seat in California.) The hiring of Hurd, a relatively obscure CEO of a Midwestern ATM manufacturer, failed to inspire many analysts and shareholders. But he quickly exceeded expectations by shedding expenses — he cut 15,200 jobs early in his tenure — and stabilizing the company. Under Hurd's leadership, HP surpassed IBM as the world's largest technology company. "It's sad," says Bruce Kogut, professor of leadership and ethics at Columbia Business School. "One of the best CEOs in the country lost his job." (See why HP cashiered Carly Fiorina.)

Did he have to get kicked out of the C-suite? In an era in which CEOs have cooked books, stolen from company coffers and behaved more egregiously than Hurd allegedly did, was the board's action a disservice to shareholders and customers? The market seems to think so: the company's stock dipped 8% on Monday, the first full day of trading since news of Hurd's departure broke. "The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," Oracle CEO Larry Ellison reportedly wrote in an e-mail to the New York Times.

Several leadership experts, however, believe Hurd's punishment was justified. "Given these revelations, it was not a bad idea for him to go," says E. Allan Lind, professor of leadership at Duke's Fuqua School of Business. "People don't like their leaders to have frailties. That's just the way it works." (See the top 10 crooked CEOs.)

The $20,000 in expenses that Hurd allegedly fudged is spare change for a $115 billion company like HP. Plus, he has promised to pay that money back. But for a CEO, sometimes the severity of the mistake doesn't matter. "The error in judgment may not seem very significant," says Paul Hodgson, senior research associate at the Corporate Library, a governance-research firm. "But those errors can now potentially spill into other areas of a CEO's daily life. Once that happens, you've lost that trust, and it's extremely difficult to get back."

Hurd's indiscretion could also magnify within a company like HP, which possesses a strong corporate culture. The company, founded in 1939, has long espoused the guiding principle known as "the HP Way." "We work together to create a culture of inclusion built on trust, respect and dignity for all," according to a statement on the company's website about HP's corporate objectives, which "have guided the company in the conduct of its business since 1957, when first written by co-founders Bill Hewlett and Dave Packard." The code also promises "uncompromising integrity." Clearly, Hurd's actions violated this tenet. If a midlevel manager had submitted $20,000 worth of bogus expenses, he or she would probably be ousted in an instant. Why should the CEO get away with such impropriety?

"HP has long believed very strongly that there's a certain way to do things," says David Costanza, professor of organizational sciences and psychology at George Washington University. "And how many companies have stuck around as long, and been as successful, as HP? The formula has worked. They had to fire him. The stock may take a short-term hit, but for the long-term success of the company, it's a good thing. The move reinforces that strong culture."

HP, however, is in danger of developing a culture of controversy. It's been a tumultuous decade: first there was the Compaq merger, then Fiorina was forced out, then the spying scandal and now the Hurd mess. "It's bizarre," says Kogut. "What's going to happen next?" Hurd's ouster will cost the company some hard cash: the CEO will leave with a $12.2 million severance check and the potential to earn millions more in stock compensation. Plus, HP will have to fork over millions more to hire a new chief. "Sure, it's a boot," says Kogut of Hurd's forced resignation. "But he'll live well afterward." Will HP?