Theories X and Y

Theories X and Y

Oct 6th 2008
From Economist.com

Theory X and Theory Y was an idea devised by Douglas McGregor (see article) in his 1960 book “The Human Side of Enterprise”. It encapsulated a fundamental distinction between management styles and has formed the basis for much subsequent writing on the subject.

Theory X is an authoritarian style where the emphasis is on “productivity, on the concept of a fair day’s work, on the evils of feather-bedding and restriction of output, on rewards for performance … [it] reflects an underlying belief that management must counteract an inherent human tendency to avoid work”. Theory X is the style that predominated in business after the mechanistic system of scientific management had swept everything before it in the first few decades of the 20th century.

Theory Y is a participative style of management which “assumes that people will exercise self-direction and self-control in the achievement of organisational objectives to the degree that they are committed to those objectives”. It is management’s main task in such a system to maximise that commitment.

Theory X assumes that individuals are base, work-shy and constantly in need of a good prod. It always has a ready-made excuse for failure—the innate limitations of all human resources. Theory Y, however, assumes that individuals go to work of their own accord, because work is the only way in which they have a chance of satisfying their (high-level) need for achievement and self-respect. People will work without prodding; it has been their fate since Adam and Eve were banished from the Garden of Eden.

Theory Y gives management no easy excuses for failure. It challenges them “to innovate, to discover new ways of organising and directing human effort, even though we recognise that the perfect organisation, like the perfect vacuum, is practically out of reach”. McGregor urged companies to adopt Theory Y. Only it, he believed, could motivate human beings to the highest levels of achievement. Theory X merely satisfied their lower-level physical needs and could not hope to be as productive. “Man is a wanting animal,” wrote McGregor, “as soon as one of his needs is satisfied another appears in its place.”

There are parallels with Abraham Maslow’s hierarchy of needs, and Maslow was indeed greatly influenced by McGregor. So much so that he tried to introduce Theory Y into a Californian electronics business, but found that the idea in its extreme form did not work well. All individuals, he concluded, however independent and mature, need some form of structure around them and some direction from others. Maslow also criticised Theory Y for its “inhumanity” to the weak, and to those not capable of a high level of self-motivation.

In his comic classic “Up the Organisation”, Robert Townsend wrote powerfully in support of Theory Y:

People don’t hate work. It’s as natural as rest or play. They don’t have to be forced or threatened. If they commit themselves to mutual objectives, they’ll drive themselves more effectively than you can drive them. But they’ll commit themselves only to the extent they can see ways of satisfying their ego and development needs.

Further reading

Lorsch, J. and Morse, J., “Beyond Theory Y”, Harvard Business Review, May–June 1970

McGregor, D., “Leadership and Motivation: Essays”, MIT Press, 1966; 1969

McGregor, D., “The Human Side of Enterprise”, McGraw-Hill, 1960; annotated edn, McGraw-Hill, 2006

Townsend, R., “Up the Organisation”, Michael Joseph, 1970; reprinted as “Further Up the Organisation”, Coronet, 1985

Conservation

Living on the edge

Oct 6th 2008
From Economist.com

More species of wildlife are under threat

IT IS not just investment bankers who face extinction: more animals are now at risk too. The International Union for Conservation of Nature publishes the Red List, its annual inventory of species under threat, on Monday 6th October. The bleak news is that of the 44,838 species considered, 16,928 are threatened with extinction, including almost a quarter of the world's mammals. It is not all bad news though. Some endangered species, such as African Elephants and Wild Horses, are beginning to recover. Less photogenic beasts should beware; conservationists find it easier to stir up public sympathy for charismatic megafauna. Emma's Giant Rat and Rameshwaram Parachute Spiders are a lot less cuddly but just as much at risk.

M. Siliwal

6 Lessons We Should Have Learned Already

6 Lessons We Should Have Learned Already

Posted by Paul B. Carroll and Chunka Mui on September 30, 2008 1:39 PM

reat leaders are forged in times of crisis. The credit crisis that surrounds us creates an opportunity to learn--but only if we begin by understanding that the crisis is not the result of one-time mistakes or bad luck.

Instead, the collapse of Washington Mutual, Wachovia, Lehman Brothers, AIG, Bear Stearns, Merrill Lynch, and others soon to fall stem from discredited strategies that should have been avoided, according to the research into 2,500 major failures that we did for our Harvard Business Review article, "Seven Ways to Fail Big" and for our recently published book, Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years.

Here are six lessons that, had they been learned a decade ago, would have kept us from being in our current mess:

1. It doesn't work to let dealmakers make all their money up front. Whether it's lenders hawking mortgages, bankers pushing bonds, or salespeople closing contracts before the end of the quarter, dealmakers have to have responsibility for the health of those decisions years down the road. Where possible, the individuals who make the deals should also have their compensation depend on the long-term performance of those deals.

Green Tree Financial showed how dangerous it can be to separate up-front fees from long-term responsibility. In the 1990s, Green Tree offered mortgages on mobile homes that made no long-term sense -- the mortgages lasted 30 years, while the underlying assets had a useful life of just 10 to 15 years. Yet, because Green Tree employees from the CEO on down had so much of their pay tied to the growth in the number of mortgages, the company churned out flawed loans at an ever-accelerating pace. When problems started to surface, Green Tree actually managed to sell itself to Conseco for almost $6 billion in 1999. Conseco subsequently wrote off all the profits that Green Tree ever recorded and went into bankruptcy proceedings.

Subprime lenders, having missed the Green Tree lesson, likewise became addicted to up-front fees and generated an astonishing number of bad loans that were turned into securities and sold.

2. Risks may correlate more than you think. In other words, a single problem can take you down if it's severe enough.

Long Term Capital Management thought it had diversified its risks in the 1990s but found its whole portfolio turning sour simultaneously and collapsed in 1998. Having missed that lesson, this time around companies such as Merrill Lynch and WaMu built huge portfolios of mortgage-related securities that relied on historical data suggesting that housing markets were localized -- in other words, the market in Denver was independent of the market in Sacramento, which was independent of the market in Pittsburgh. In fact, the credit crunch has clobbered all markets and all classes of lenders.

3. In a crisis, liquidity can disappear overnight.

LTCM thought that, in the event of problems, it could always unwind its positions in orderly fashion. In fact, all buyers disappeared. The same thing happened to Merrill, WaMu and others. The market got so scared so fast that nobody would buy their debt portfolios at almost any price. While Bank of America might have bought Merrill at a bargain for $50B, they also acquired $64B of toxic debt that will eventually mushroom the true cost of the acquisition.

4. It's incredibly dangerous to buy a business unless you understand it in excruciating detail.

Conseco showed the danger. It had a great record of buying and integrating companies, but they were all in insurance. Conseco didn't know anything about mortgages. It was so clueless about the problems with Green Tree's business model that it actually stepped up the mortgage business, right to the point where it collapsed. AIG repeated the mistake when it started offering credit-default insurance on mortgage-backed securities that it didn't understand. Merrill made this mistake when it decided it could copy Goldman Sachs and invest its own capital in what turned out to be toxic loans. (And Bank of America may have made this mistake when it agreed to buy Merrill, whose retail brokerage operation, investment banking unit and investment portfolio are outside its expertise.) As a colleague of ours says: Don't assume someone smarter than you will understand the risks you're taking on.

5. Whenever anyone says they've managed to do away with risk, head for the hills.

LTCM said its portfolio was impervious to risk. AIG and others said the same thing about the securities that were built based on subprime mortgages. We've no doubt that yet others will be saying the same as they argue for ways to take advantage of others' mistakes as the current crisis unfolds.

6. Perhaps the greatest lesson of all is that bad strategies can happen to great companies and smart people, even those acting on seemingly thorough analysis and the best of intentions. The humility that comes with this lesson should cause the smartest companies and managers to instill process and cultural mechanisms that absorb these lessons and avoid such mistakes in the future. (We don't have the space here to go into it, but that has a lot of do with creating a culture of constructive debate and deliberation. We discuss this in our HBR article and have even made the relevant chapter free at our web site.) 

The next generation of great leaders will be the ones who absorb these lessons. Everyone else is doomed to repeat the same mistakes.

Paul B. Carroll wrote for the Wall Street Journal for 17 years. He is the coauthor of Billion-Dollar Lessons and the author of Big Blues: The Unmaking of IBM.Chunka Mui is the coauthor of Billions-Dollar Lessons and the coauthor of Unleashing the Killer App. He is a fellow at Diamond Management & Technology Consultants. For more on their work, visit www.billiondollarlessons.com

How Sarah Palin Should Prepare... and How You Should, Too

How Sarah Palin Should Prepare... and How You Should, Too

Posted by Nick Morgan on September 30, 2008 2:52 PM

The anticipated audience for the Vice Presidential debate threatens to exceed that of the first Presidential debate, and it's not necessarily because of the issues on the table. No, the crowd for this show is more akin to people who watch NASCAR races in hopes of a crash. 

One thing is clear: it's make or break for Sarah Palin's political career. But leaders of all types--political or no--routinely face challenging and public tests of their leadership and, specifically, their communication skills. If you're facing a similar situation, where a presentation will have a lasting effect on your career, here are some well-tested tactics to employ. Successful implementation of these techniques can help turn the heat of the spotlight into a warm glow.

First, remember that every speech is two conversations - the verbal (the content) and the non-verbal (the body language). If the two are aligned, you can be effective. If the two are not aligned, the audience believes the non-verbal every time.

The most important implication of this fact is that you must rehearse. If you don't, your body language will tell the audience - no matter how good you think you are - that you are doing this for the first time. While that's charming in 3-year-olds' dance performances, it doesn't cut it when you're expected to look like you know what you're doing. We are all unconscious experts in reading body language, and we'll pick up instantly if you're an amateur at this particular game.

Second, rehearse under conditions as close to reality as possible. If you can get into the hall, rehearse there. If not, approximate it. The reason is that surprises at the event itself will throw you, and more than 3 surprises will flummox you. And that will show up in your body language. If the lights are brighter, or the sound is more echo-y, or the stage is bigger than you anticipated, that takes mental energy to deal with - mental energy that you won't be putting into a sparkling performance.

Third, to further ensure that your two conversations are aligned, make certain that you are comfortable with and passionate about your content. If it doesn't ring true to you, you won't be able to make it ring true to for you audience. Once again, your body will betray your ambivalence.

Confidence comes from having a great speech - for you - knowing it cold, and rehearsing it thoroughly. Don't ever think, I'll just wing it. The people who wing it are never as good as they think they are.

It's also important to engage in positive self-talk. If that sounds too 'new age', get over it. You will be engaging in negative self-talk, also known as worrying. It will seep into your unconscious and give your body language a fine patina of fear, uncertainty, and doubt. You must combat that unconscious self-betrayal by telling yourself, constantly, I'm going to be fine; I know the material well; I'm excited to have this chance; and so on.

Olympic-level athletes understand that the need for mental conditioning is just as important as the need for physical conditioning. It's the same for speakers in high-stakes situations. Adrenaline will be coursing through your system. You need to be ready for it.

Just before the speech, there are three things you can do to improve your performance.

• First, breathe. Deep breathing from your belly or diaphragm. If you don't know how to breathe from your belly, take a yoga or a singing class. A good teacher from either of those worlds can show you how to breathe diaphragmatically,
• Second, focus on your emotional connection to the material you're about to deliver. A speech is both an emotional and an intellectual journey the speaker takes the audience on, so feel that emotion, strongly and clearly, before you start. You know what that is, right?
• Third, get the opening line in your head, stand up straight, smile, and go for it. As they say in the acting world, break a leg.

Nick Morgan is one of America's top communications theorists and coaches. His new book on authentic communications, Trust Me: Four Steps to Authenticity and Charisma, is due out in December 2008.

7 Steps to Stop Finger-Pointing in a Crisis

7 Steps to Stop Finger-Pointing in a Crisis

Posted by Marshall Goldsmith on October 1, 2008 10:51 AM

Today's question for Ask the Coach:

After any crisis -- like the economic crisis we now experiencing -- there is a lot of finger-pointing. Any tips on how to help my team avoid finger-pointing when we face a crisis?

You are making a great point. I have seen massiveamounts of finger pointing on TV and on the internet this week. 

Concerning our economic crisis - I have seen 'experts' blame the President, the Congress, Democrats, Republicans, Socialists, the free enterprise system, bankers, consumers, economists, regulators, deregulators, 'rich people' and even other competing 'experts.'
Strangely enough, I have seen very few people pointing the finger of responsibility at themselves!

It was be so refreshing to hear at least one person say, "One of the main reasons that our country is in trouble, is because people like me screwed up. I was really wrong on this one."

My suggestions to help your team avoid finger-pointing in a time of crisis:

1. Encourage everyone on your team to remember four words that can help all of you get though your crisis in the best way possible: help more, judge less. Reflect upon these four words. Aside from work, how many of us have friends and family members at home who might be happy if we 'helped' a little more - and 'judged' a little less?

2. Try to get team members to focus on a future that they can impact, not a past that they cannot change anyway. Have you ever made a fool of yourself in front of important people before? It was bad enough when it happened. Having others make you relive this 'fool making' experience is usually not that helpful.

3. Try to get people to take responsibility for their own behavior. Sometimes it is easier to see our own mistakes in other people than in the mirror. We may not be able to change what other people have done, but we can certainly change ourselves.

4. Ask each person to reflect on the question, "What can I learn from this crisis?" Anyone can provide leadership when times are easy. Great leaders - and great teams - step up when times are tough. Rather than get lost in whining, have each team member focus on how he or she can grow from this experience. 

5. Ask everyone on your team to reflect on the question, "What can we learn from this crisis?" After each person's individual reflection, encourage your team to engage in collection reflection. Find ways to improve cross-team communication and build teamwork.

6. Encourage each team member to avoid speaking when angry or out of control. We all get angry. That is natural and completely appropriate. We just don't have to talk until we settle down and can collect our thoughts. Plenty of research has shown how our 'angry mind' can lead to irrational behavior that we later regret.

7. Before speaking don't just ask, "Am I correct?" - ask "Will this help?"Just because we believe that something is true, we don't have to say it. If our comment may be hurtful to individuals or destructive to teamwork, it can sometimes just be left unsaid. 

Deutsche Bank: Wirtschaftskrise trifft auch die Logistikbranche

Deutsche Bank: Wirtschaftskrise trifft auch die Logistikbranche

06.10.2008

DB-Research-Analyst Eric Heymann (li.) und Olaf Meuser, Geschäftsleitung der Deutschen Bank in Hamburg (Foto: Rainer Barck)

Hamburg. Die Logistikbranche bleibt von der aktuellen Konjunkturschwäche, den Veränderungen der globalen Warenströme und den Auswirkungen der Finanzkrise nicht verschont. Zu diesen Ergebnissen kommt die aktuelle Studie „Logistik in Deutschland – Wachstumsbranche in turbulenten Zeiten“ der Deutschen Bank (DB) Research, Frankfurt, die am heutigen Donnerstag in Hamburg vorgestellt wurde. Danach wird die globale Konjunkturschwäche mindestens bis 2010 anhalten. Weniger Produktion und Handel werden das Wachstum der Logistik in den kommenden Jahren auf jährliche Steigerungsraten von zwei bis drei Prozent drücken.

Bis Mitte des nächsten Jahrzehnts kann die Logistik-Branche mit einem nominalen Umsatzwachstum von durchschnittlich fünf Prozent pro Jahr rechnen. Die Insolvenzquote im Logistik-Sektor wird in Deutschland rund doppelt so hoch liegen wie der Durchschnitt aller anderen Branchen. „Insolvenzen, Firmenübernahmen und Kooperationen bleiben für die Branche charakteristisch“, so DB-Research-Analyst Eric Heymann.

Langfristiger Wachstumstreiber wird die Kontraktlogistik sein. Die Sparte könne bis 2015 Umsatzzuwächse von bis zu zehn Prozent pro Jahr verbuchen, sagtt Eric Heymann. „Der erforderliche Wandel vom Frachtführer zum Kontraktlogistiker ist allerdings nicht einfach. Es sind finanzielle Kapazitäten, Management-Knowhow und eine internationale Ausrichtung erforderlich.“ Kleine und mittelständische Unternehmen (KMU), denen sich Chancen als Subunternehmer oder Nischenanbieter böten, könnten in dem Segment Kontraktlogistik in Kooperationen erfolgreich agieren.
Bei den weltweiten Transporten wird das Problem der Überkapazitäten wieder in den Vordergrund rücken. Der verfügbare Laderaum wird die Margen senken. Die Warenströme im pazifischen Raum werden an Bedeutung zunehmen.
Zudem werden sich die Folgen der gegenwärtigen Finanzkrise auf die Kapitalbeschaffung der Unternehmen auswirken. Finanzierung wird teurer und schwieriger. „Die Fähigkeit der Banken, Kredite an KMU zu vergeben, ist in Deutschland nicht gefährdet“, erklärt Olaf Meuser, in der Geschäftsleitung der Deutschen Bank Hamburg verantwortlich für das Firmenkundengeschäft. „Die höheren Finanzierungskosten werden sich jedoch auf die Gewinn-und-Verlust-Rechnungen sowie die Ertragskraft der Unternehmen auswirken.“ Die Bedingungen für die Vergabe werden sich künftig stärker an der Verfassung eines Unternehmens, an Management, Erträgen und der Funktion in der Wertschöpfungskette, orientieren.
Gleichwohl sehen die Analysten von DB Research kein Ende der Globalisierung. „Die Logistik wird kurzfristig schwierige Zeiten durchmachen, aber mittel- und langfristig bleiben die Wachstumstrends intakt“, resümiert Heymann. „Insbesondere der Trend zu umfassenden Logistik-Angeboten aus einer Hand setzt sich fort und trägt zur Konsolidierung bei.“ (rb/ak)

DB Schenker fährt regelmäßig nach China

DB Schenker fährt regelmäßig nach China

06.10.2008

Hamburg. DB Schenker, der Transport- und Logistikdienstleister der Deutschen Bahn, plant, nach den Feierlichkeiten zum chinesischen Neujahr im Februar 2009 fahrplanmäßige Güterzüge nach China anzubieten.

Unter dem Produktnamen „Trans Eurasia Express“ sollen zunächst wöchentlich jeweils zwei Containerzüge verkehren, die China in weniger als 20 Tagen mit Deutschland verbinden sollen. „Dank unserer Kooperation mit fünf weiteren Eisenbahnen, darunter der russischen und der chinesischen Bahn, können wir unseren Kunden eine attraktive und verlässliche neue Handelsroute zwischen den Märkten in China und Mitteleuropa eröffnen“, sagte DB-Vorstandsvorsitzender Hartmut Mehdorn zur Ankunft des ersten Trans Eurasia Express in Hamburg. In der Hansestadt ist heute ein im Auftrag von Fujitsu Siemens Computers beladener Containerzug aus Xiangtang nach nur 17 Tagen Fahrt über die rund 10.000 Kilometer lange Strecke angekommen. Mehdorn sieht das neue Angebot als „attraktive Ergänzung zur langsameren Seefracht und zur deutlich teureren Luftfracht“.

„Mit Einführung des Regelfahrplans und festen Abfahrtszeiten wollen wir mit diesem neuen Verbindungsstück in unserem globalen Netzwerk eine neue Qualität im transkontinentalen Warenaustausch bieten“, sagte Norbert Bensel, als Chef von DB Schenker im Vorstand der DB ML AG für das Ressort Transport und Logistik verantwortlich. Kundeninteresse sei vorhanden, so Bensel.

Die Containerzüge sollen über die eurasische Landbrücke Shanghai und Peking jeweils mit Hamburg, Nürnberg beziehungsweise Duisburg in einem wöchentlichen Regelverkehr verbinden. Interesse für das neue Angebot würden Firmen aus dem Automobilbereich, aus der Chemieindustrie, der Haushaltsgerätetechnik, aus dem Maschinenbau und der Papierindustrie bekunden. Die Vermarktung der Züge wird von den DB-Schenker-Landesgesellschaften übernommen. (sv)

Depression index

The D-word

Oct 2nd 2008
From Economist.com

Signs of a pending depression? The Economist's D-word index

MANY comparisons may be made between the devastation being wrought on America's financial system today and the Wall Street crash of 1929. One similarity that the world is desperate to avoid is a repeat of the depression of the 1930s. Hopes are pinned on the American bail-out plan that the House of Representatives is set to reconsider on Friday October 3rd. If the fear of depression is anything to go by, the future looks bleak. A survey of newspaper articles over the past two decades shows a sharp spike in mentions of the dreaded D-word, as commentators have started to think the worst. The prognostications may possibly turn out to be true, or perhaps the only thing we have to fear are the fears of journalists themselves.

AP

Monday, September 29, 2008

Teaching Robots New Tricks

Robotic helicopters learn complex tricks by analyzing demos.

By Rachel Kremen

Programming instructions for robots can be a time-consuming, labor-intensive task. Many roboticists believe that training robots by demonstrating new skills could speed up the process and enable the machines to perform more difficult tasks. Now researchers have created such a system for robotic helicopters. With their approach, the team can train a robotic helicopter to perform a complicated aerial maneuver in less than 30 minutes simply by analyzing video footage of the trick. The work could one day be applied to a wide variety of robots on land and sea, as well as in the air.

For very basic aerial maneuvers, researchers can program specific commands based on the way a human operator would use the controls. But aerial acrobatics, such as flying upside down, require a more robust and adaptive approach. A gust of wind or a small variation in the helicopter's starting position can send the vehicle completely off course if adjustments aren't made immediately to the flight plan. "It's not sufficient to just replay the same sequence of controls as a human pilot," says Pieter Abbeel, who worked as a researcher on the project while completing his PhD at Stanford University. With the apprenticeship approach, the robot can make changes mid-flight because it's not tied to a specific series of commands. This could help autonomous helicopters deal with real-world challenges, such as landing on slanted terrain or coping with sudden changes in weather conditions, ultimately resulting in more stable flight.

Training begins with a human expert demonstrating a new trick on a remote-controlled helicopter. As the expert repeats the maneuver, one of the researchers presses a button to indicate the start and end time of each attempt. The expert needs to perform each trick approximately 10 times, so that subtle deviations can be eliminated and the software can calculate the ideal path. The software carefully warps the timing of each video clip so that it can compare the attempts. Small blips in the data, known as noise, are also eliminated. Ultimately, the software creates a highly accurate aerodynamic model of the trick that the autonomous helicopter uses as a flight guide.

Once in the air, the robotic helicopter wirelessly relays information from its onboard sensors to a computer on the ground. "We place a number of instruments on the helicopters--gyroscopes, accelerometers, and a magnetic compass--to figure out the position and orientation," saysAndrew Ng, an assistant professor of computer science at Stanford University, who also worked on the project. "We wirelessly send the instrument readings down to a desktop computer on the ground, which computes the appropriate control commands." These commands are sent back to the helicopter 20 times per second. Video cameras on the ground also help to keep track of the helicopter.

With each attempt, the robot learns how to perfect the trick. "The first time, it might take a turn a bit too wide. It will then use its knowledge of its own dynamics to learn to adjust the way it takes a turn," Ng says.

Watch and learn: Researchers at Stanford University taught autonomous helicopters, such as the one shown above, how to perform tricks using an approach called ‘apprenticeship learning’. An ideal flight path was created for each trick using software that automatically analyzed video clips of the maneuver. Credit: Ben Tse

MULTIMEDIA   Watch an autonomous helicopter perform several complicated stunts.

At a recent demonstration at Stanford, an autonomous helicopter used this approach to perform several complicated tricks, including loops with pirouettes and a backward funnel maneuver known as the hurricane. The team was even able to demonstrate a particularly difficult stunt called the tic toc, in which the helicopter hovers with its tail down while its nose swings back and forth like an inverted pendulum. Such a trick had been impossible to perform using hard coding, and it represented an impressive achievement for the team. "We can now trust our helicopter controls a lot more [and achieve] higher-performance flight," says Abbeel, who now works as an assistant professor in the Department of Electrical Engineering and Computer Science at the University of California, Berkeley.

Eric Feron, a professor of aerospace engineering at the Georgia Institute of Technology, was not involved in the Stanford project but is impressed by the performance of the autonomous helicopters trained using the approach. He also appreciates the underlying methodology. "When I was involved in similar research back in early 2000," he says, "there was definitely what I would call human intervention in figuring out what the online control systems should be doing in order to repeat the maneuvers. We had to program the computers ourselves." Feron says the Stanford work represents a significant gain in efficiency, by cutting down the learning time to half an hour. "At the end of our research, we were able to maybe do a new maneuver in one day," he says.

Abbeel notes that while the autonomous helicopters have achieved a new level of reliability, there is room for improvement, and safety will be a key concern if such robots are ever flown over populated areas. The machines have to be able to fly at least as well as an expert human pilot, even while doing complicated maneuvers, he says, and simple back-and-forth flight won't be good enough for search-and-rescue missions. "I like to imagine a future in which someday, if there is an accident out on the ocean, a fleet of a dozen autonomous helicopters can be instantaneously deployed to search for survivors," he says. This could help offset the lack of human pilots qualified to perform such a task and increase the chance of locating survivors.

The learning system could be used on other kinds of robots as well, Ng says, such as those that do housework or work in factories. "It could also allow for the very precise control of cars, motorcycles, fixed-wing aircraft, and even sea-based vehicles," he says.

In the future, the team hopes to make their system more flexible. "When we as humans learn, there are many things that speed up the process besides demonstrations. An expert pilot might give advice in other forms," says Abbeel, such as verbal or written tips. Ideally, the team hopes to design a system that can incorporate such advice.

Oiling the system

Sep 28th 2008
From Economist.com

It may seem unfair, but a bailout is essential

SUSPICION of banks is a recurrent historical theme, from President Andrew Jackson’s opposition to “money power” in the early 19th century, to the British Labour party’s suspicion of the “bankers’ ramp” that forced it from office in 1931.

So there is a natural temptation to think that the current crisis may be entirely artificial, a device dreamed up by bankers to help them out of a hole. But if there is a conspiracy, it is extremely well organised and extraordinarily risky.

The money markets are a bit like the sewers of the financial system: in normal times, nobody notices them but when they get blocked up, the stench is abominable. And they are severely congested at the moment. The good news is that, unlike last week, it is possible for banks to borrow overnight at a reasonable rate. The bad news is that borrowing at longer rates is either impossible or prohibitively expensive.

Why is this? The problem seems to relate to the money-market fund sector, which suffered an outflow of assets when one of them “broke the buck” (failed to repay clients at face value) last week. Other funds are desperate not to repeat the trick, so are desperately opting for safe assets, which means those offered by the American government.

Consequently, three-month Treasury bills were yielding just 0.43% last week (something like 2% would be more normal). According to Barclays Capital, the cost of long-term financial debt was some 450 basis points (4.5 percentage points) above that of government debt, compared with a normal spread of less than 50 basis points. Shorter term, the gap between three month Libor (the rate at which banks borrow) and that paid by the government is getting wider and wider (see chart).

At that level, it is simply uneconomic for banks to lend money to customers. So they won’t. Banks are getting by on borrowing overnight, but the markets for one and three-month loans have dried up. That explains why central banks have been forced to offer billions of dollars at those maturities.

This cannot last long without causing immense damage. Companies will be unable to raise new money and, more importantly, refinance old loans. Corporate bankruptcies will soar. Consumers will also find it difficult, or expensive, to borrow. The result will be a sharp downturn in demand that will push the economy into a deep recession.

So some kind of bailout deal is necessary. Whether all the details were right is, at the moment, secondary to whether it does the trick. And the trick will be the restoration of confidence in the banking system.

It is, indeed, unfair that banks tend to be rescued when they go wrong whereas coal mines and shoe retailers do not. But banks play a key role in oiling the system; they provide the credit that lets the rest of us do business. They also have innate risk, because they lend more money then they have cash in hand. To put it another way, they borrow short and lend long. This has made them the subject of panics throughout history, and those panics have always led to economic turbulence. The authorities can let them go bust, but the risk is depression. Or they can hold their noses and bail them out.

They have, after all, not got away entirely scot-free. A lot of bonuses in recent years have been paid in the form of restricted stock, and that has fallen sharply in value. Jobs have been lost at Bear Stearns and Lehman Brothers, and more will follow. In future, banks will have to accept a lot more regulation; in particular, higher capital ratios that will restrict the potential for profitability.

And there will be more crises in future. Now that investment banks are part of commercial banks, we have returned to the risks that characterised the system before the Glass-Steagall Act of 1933—specifically, that reckless investment banks can fritter away retail depositors’ money. And what will we have to do if that happens? Bail them out again.

Thursday, October 02, 2008 Hijacking Satellite Navigation Sending false signals to GPS receivers could disrupt critical infrastructure. By Erica Naone The Global Positioning System (GPS) lies at the heart of an increasing number of technologies, from vehicle navigation systems to the power grid. And yet, although the military version of GPS includes security features such as encryption, civilian signals are transmitted in the clear. Now, researchers at Cornell University and Virginia Tech have demonstrated a relatively simple way to fool ordinary GPS receivers into accepting bogus signals using a briefcase-size transmitter. Paul Kintner, a professor of electrical and computer engineering at Cornell, who worked on the project, warns that society is becoming dependent on GPS for an ever-broadening list of applications, including management of the power grid and tracking criminals under house arrest. "I'm just amazed at the way people are using these GPS systems," Kintner says. "Ten years from now, there will be more ways that we just don't know about--it migrates into our technological fabric, and we become dependent on it." Kintner and his group, which recently presented details of the spoofing attack at the Institute of Navigation's Global Navigation Satellite Systems (GNSS) meeting in Savannah, GA, did not start out looking for a way to subvert GPS. They were working on a software-based GPS receiver to help them understand the effects of solar flares on GPS satellites. But as their design progressed, Todd Humphreys, one of the researchers in the group, realized that the same system could be used to spoof ordinary GPS signals. Here's how GPS works: roughly 30 satellites orbit the earth, broadcasting signals that can be picked up by a receiver virtually anywhere on the planet. By collecting signals from several satellites and measuring the time delay between each signal, GPS receivers can calculate their exact position and receive very precise time signals. The software GPS device built at Cornell can receive and transmit any GPS signal. To attack a target receiver, the device need only be placed nearby. It would start out simply retransmitting ordinary satellite signals without any modifications. After a few seconds, the target receiver should focus on the signal coming from the device, because it's the clearest source. At that point, the device could begin modifying transmissions, altering the signals little by little until the target receiver shows any time and position the attacker chooses. Kintner says that an attacker could use fake GPS signals to disrupt the power grid, potentially causing power spikes and even damaging generators. The same trick could let criminals under house arrest move around freely, he adds. Out of position: Researchers have found that a software-based GPS device (shown above) can fool GPS receivers into accepting erroneous positional information. The attack could disrupt critical infrastructure, they warn.  Credit: Paul Kintner and Steve Powell, School of Electrical and Computer Engineering, Cornell Univers The Global Positioning System (GPS) lies at the heart of an increasing number of technologies, from vehicle navigation systems to the power grid. And yet, although the military version of GPS includes security features such as encryption, civilian signals are transmitted in the clear. Now, researchers at Cornell University and Virginia Tech have demonstrated a relatively simple way to fool ordinary GPS receivers into accepting bogus signals using a briefcase-size transmitter. Paul Kintner, a professor of electrical and computer engineering at Cornell, who worked on the project, warns that society is becoming dependent on GPS for an ever-broadening list of applications, including management of the power grid and tracking criminals under house arrest. "I'm just amazed at the way people are using these GPS systems," Kintner says. "Ten years from now, there will be more ways that we just don't know about--it migrates into our technological fabric, and we become dependent on it." Kintner and his group, which recently presented details of the spoofing attack at the Institute of Navigation's Global Navigation Satellite Systems (GNSS) meeting in Savannah, GA, did not start out looking for a way to subvert GPS. They were working on a software-based GPS receiver to help them understand the effects of solar flares on GPS satellites. But as their design progressed, Todd Humphreys, one of the researchers in the group, realized that the same system could be used to spoof ordinary GPS signals. Here's how GPS works: roughly 30 satellites orbit the earth, broadcasting signals that can be picked up by a receiver virtually anywhere on the planet. By collecting signals from several satellites and measuring the time delay between each signal, GPS receivers can calculate their exact position and receive very precise time signals. The software GPS device built at Cornell can receive and transmit any GPS signal. To attack a target receiver, the device need only be placed nearby. It would start out simply retransmitting ordinary satellite signals without any modifications. After a few seconds, the target receiver should focus on the signal coming from the device, because it's the clearest source. At that point, the device could begin modifying transmissions, altering the signals little by little until the target receiver shows any time and position the attacker chooses. Kintner says that an attacker could use fake GPS signals to disrupt the power grid, potentially causing power spikes and even damaging generators. The same trick could let criminals under house arrest move around freely, he adds.

Outsourcing

Sep 29th 2008
From Economist.com

Outsourcing is a term used to describe almost any corporate activity that is managed by an outside vendor, from the running of the company’s cafeteria to the provision of courier services. It is most commonly used, however, to apply to the transfer of the management of an organisation’s computer facilities to an outside agent. This transfer of management responsibility is frequently accompanied by a transfer (from the buyer of the outsourcing service to the vendor) of the specialist internal staff who are already carrying out that activity.

Outsourcing has three main advantages:

• The greater economies of scale that can be gained by a third party that is able to pool the activity of a large number of firms. It is thus frequently cheaper for a firm to outsource specialist activities (where it cannot hope to gain economies of scale on its own) than it is to carry them out itself. Some firms gain the economies of scale by taking on the activity of others, becoming an outsourcer themselves.

• The ability of a specialist outsourcing firm to keep abreast of the latest developments in its field. This has been a particularly significant factor in the area of information technology, where technological change has been so rapid that companies’ in-house capabilities are hard pressed to keep up with it.

• The way that it enables small firms to do things for which they could not justify hiring full-time employees.

The most commonly cited disadvantage of outsourcing is the loss of control involved in derogating responsibility for particular processes to others.

Outsourcing is not a new phenomenon. Companies have outsourced their advertising, for instance, for almost as long as advertising has been in existence (and J. Walter Thompson has been in business since the 1880s). Financial services such as factoring and leasing, the outsourcing respectively of the accounts receivable function and of capital funding, have also been available from outside providers for many years.

But it has grown exceptionally fast in recent years. According to one estimate, in 1946 only 20% of a typical American manufacturing company’s value-added in production and operations came from outside sources; 50 years later the proportion had tripled to 60%.

Much of the increase came from the outsourcing of IT functions. This was bolstered later by the outsourcing of other functions (such as logistics) that were in areas that themselves had a high degree of it content. Banks, for instance, began to outsource the IT-intensive processing of financial instruments such as loans or mortgage-backed securities. The savings from such moves could be dramatic. By deciding to outsource the origination, packaging and servicing of all its personal loans, both old and new, one British bank cut the average cost of processing by over 75%. In the car industry in the 1990s, firms with the biggest profit per car, such as Toyota, Honda and Chrysler, were also the biggest outsourcers (sourcing around 70% to various suppliers). Those that outsourced the least (General Motors, for example, which outsourced only 30% of its value-added) were the least profitable.

The nature of outsourcing contracts has changed over time. What started off as a straightforward arm’s-length agreement between a buyer and a supplier moved on to become structured more like a partnership agreement. In this, not only is any increase in the clients’ volume of business reflected in the outsourcer’s scale of charges, but both parties in some way share the risks and rewards of the outsourced activity.

Relationships like this vary over time and require firms to learn how to work together in entirely new ways. In the early 1990s, in a groundbreaking five-year outsourcing agreement with BP, Accenture (then called Andersen Consulting) took over responsibility for running the day-to-day operation of BP’s accounting systems. BP retained control of accounting policy and the interpretation of data for business decision-making. In return, Accenture guaranteed BP that it would reduce the cost of running the service by 20%.

Some firms have been so taken with the idea of outsourcing that they have left themselves with little to do. An American company called Monorail Computers outsourced the manufacture of its computers as well as the ordering, delivery and the accounts receivable. Only the design was left to be handled in-house.

Further reading

Aalders, R., “The IT Outsourcing Guide”, John Wiley & Sons, 2001

Magretta, J., “What Management Is: How It Works and Why It’s Everyone’s Business”, Free Press, New York, 2002; Profile Books, London, 2003

Shenzhou VII spaceship lands safely

Shenzhou VII spaceship lands safely

(Agencies/chinadaily.com.cn)
Updated: 2008-09-28 17:53

BEIJING -- The Shenzhou-7 space module carrying three astronauts landed safely by parachute Sunday afternoon in China's northern grassland, after a landmark spacewalk mission that leads the country further in its space exploration.

The re-entry capsule of the China's Shenzhou VII spaceship is seen before landing on the grassland of North China's Inner Mongolia Autonomous Region, September 28, 2008. [Xinhua]

Astronauts Zhai Zhigang, Liu Boming, and Jing Haipeng came back from a 68-hour flight, which included a 20-minute spacewalk on Saturday.

"It was a glorious mission, full of challenges but the result is perfect. I'm proud of my country," said Zhai Zhigang, sitting on a chair after emerging from the module.

The space capsule was suspended down by a 1,000-square-meter parachute and landed on its flank at Siziwang Banner in central Inner Mongolia, where 300 search and rescue staff waited.

Premier Wen Jiabao, who arrived at the control center to watch the landing, clapped hands and beamed with smile when watching the spacecraft touch the ground.

The taikonauts were examined by doctors and adapted themselves to the gravitation on the Earth before exiting the module, the search headquarters told Xinhua.

They will be taken to a hospital in the Inner Mongolian capital Hohhot for medical examination and are scheduled to fly back to Beijing on Monday. The trio have to spend about two weeks in quarantine before meeting their family, said Zhai's wife Zhang Shujing.

The three men, all born in 1966, were blasted off at 9:10 p.m. on Thursday on the country's third space crusade. China put a lone Yang Liwei in space in 2003, and sent two men on a five-day journey in 2005. The successful spacewalk mission makes China the third to master the extravehicular activity (EVA) technology following the United States and Russia.

In this video grab from China Central Television, Chinese astronauts are seated in front of the re-entry capsule of the Shenzhou VII spaceship afer landing safely in North China's Inner Mongolia Autonomous Region, September 28, 2008. [Xinhua]

During the spacewalk on Saturday, Zhai wore a hulking 4-million-U.S.dollar homemade Feitian space suit and spent 20 minutes outside the spacecraft. Tethered to the craft with two safety wires and a long electric cord providing oxygen and communications, he moved slowly along a set of handrails around the orbital module.

"Shenzhou-7 is now outside the spacecraft. I feel well. I am here greeting the Chinese people and people of the whole world," Zhai said. He waved a Chinese flag handed over by his companion Liu Boming, who helped the "walk" in the orbital module.

Later Zhai retrieved a test sample of solid lubricant placed outside the orbiter, as part of an experiment to test the durability of the materials.

After the spacewalk, he was congratulated by Chinese President Hu Jintao, who watched live transmission of the spacewalk from the Beijing control center. Hu hailed the spacewalk as a breakthrough and thanked the taikonauts for their devotion and excellent performance. He inquired the taikonauts of their health and lives in space through a phone.

Other tasks of the mission included carrying out trials of satellite data relay and releasing a 40-kilogram companion satellite, which was left in the space with the orbital module and the extravehicular space suits.

The live telecast of the historic moment was watched by tens of millions of Chinese and met with applauses and cheers by crowds before downtown outdoor screens and office television sets.

hinesische Raumfahrt

Die Erde hat die Taikonauten wieder

Das chinesische Raumschiff „Shenzhou 7“ ist wieder zurück auf der Erde. Die drei Astronauten landeten in der inneren Mongolei im Norden Chinas.

Jing Haipeng, Zhai Zhigang und Liu Boming sind wohlbehalten gelandet

Das chinesische Fernsehen zeigte Live-Bilder der schwebenden Kapsel an einem großen Fallschirm, bevor sie in der Nähe des geplanten Landeplatzes aufsetzte. Das Raumschiff habe den gefährlichen Wiedereintritt in die Erdatmosphäre gut überstanden, berichtete die Nachrichtenagentur Xinhua. Auch seien die Astronauten bei guter Gesundheit. Während des Raumfluges hatte Kommandant Zhai Zhigang den ersten Weltraumspaziergang eines chinesischen Astronauten unternommen, Proben gesammelt und einen kleinen Satelliten ausgesetzt.

ZUM THEMA

Weltraumspaziergang:
Chinesischer Taikonaut sicher zurück

Raumfahrt:
Überirdische Machtdemonstration

Aufbruch ins All:
Ein Blick zurück

Die Freude über den geglückten Weltraumspaziergang am Samstag war groß. Ganz ohne Schrecksekunden lief er jedoch ab. Ein Feueralarm im Orbiter sorgte für einige Aufregung, wie die Bodenkontrolle enthüllte. Ursache sei die Fehlermeldung eines Sensors gewesen, berichtete ein Sprecher des Raumfahrtprogramms, Wang Zhaoyao. „Wir waren ziemlich nervös, als der Astronaut in der Rückkehrkapsel den Feueralarm berichtete.“ Doch hat sich die Aufregung nach seinen Angaben sofort gelegt, als klar wurde, dass der Alarm aus dem Orbiter kam, in dem gar kein Feuer ausbrechen konnte, weil er während des Ausflugs ins All keinen Sauerstoff enthielt und in einem Vakuum war.

Feueralarm während Außeneinsatz

Vor der Rückkehr von „Shenzhou 7“ zur Erde hatte die Bodenkontrolle mit dem ausgesetzten Satelliten untersucht, wie sich zwei Himmelskörper kontrollieren lassen, die dicht beieinander sind. Auch Tests zur besseren Datenkommunikation über das Netzwerk von Satelliten und Beobachtungsstationen wurden abgeschlossen. Es war das erste Mal, dass China einen Satelliten von einem Raumschiff aus in eine Umlaufbahn gebracht hat. Der mit Kameras und Kommunikationsausrüstung ausgestattete Satellit soll bei künftigen Raumflügen helfen, Daten weiterzugeben und Andockmanöver zu verfolgen.

hb/dpa