Smart Cards

In thinking about the numerous terminologies within the area of Information Technology that we have discussed in the preceding five weeks, I decided to focus on what I might share with my employer that I believe may be both beneficial and possibly a reality. The subject of my presentation and written report is on smart cards.

My objectives are as follows:
- Provide a brief history of smart cards
- Describe the differences between magnetic stripe cards and smart cards
- Identify and describe smart card classification parameters
- Provide the advantages of smart cards
- Most importantly, deliver rationale to support a recommendation for my company to determine the feasibility of offering smart cards to our members.

History
Many people believe that smart cards are a recent invention. This is not so. As early as 1968, German inventors Jurgen Dethloff and Helmet Grotrupp first filed a patent for using plastic as a carrier for microchips. In 1970, Japanese inventor Kunitake Ariumura applied for a similar patent. Smart cards were introduced in Japan that year. In 1974, Frenchman Roland Moreno registered his smart card patent in France. Europeans continue to be the largest users of smart cards.

Magnetic Stripe Card versus Smart Card
A magnetic stripe card can be easily read and altered by anyone with access to the right equipment. Card skimming is the term that describes the process of reading data of a valid card and copying it bit for bit onto another card. Magnetic cards cannot be used for storing confidential information.
A smart card is basically a card that is usually in the size and shape of a credit card and has a very tiny computer embedded within it.

Smart Card Classifications
Components Interface OS Used
Memory Cards Contactless Java
Chip Cards Contact Multos
Hybrid

Component-Based Classification
Memory Cards are those without a processor. Memory cards are the most common and least expensive, around $1 when purchased in bulk. Memory cards contain EEPROM (electrically erasable programmable read-only memory), which is similar to a data storage device where all the application data gets written. Memory cards also contain ROM (read-only memory), which stores data that does not change during the card life (card number, cardholder’s name, etc.). Chip cards (AKA Microprocessor cards) are those with a processor. These are the cards that can technically be called “Smart Cards”. The components of a chip card include ROM, EEPROM, RAM, and CPU. Chip cards are more expensive than memory cards, ranging from $2 to $20. There are multiple applications for chip cards. These include access control, electronic purses, credit and other financial cards, travel, ticketing, and other applications where high security is required.

Interface-Based Classification
Smart cards are also classified on the basis of the method of their communication and data transfer with the reader device. Contact cards must be inserted into a reader. Contact card limitations include the certainty of a limited life, electrostatic charges due to improper contact may damage circuits, and removing a card from a reader before a transaction is completed can damage the card. This is referred to as card tearing. Contactless cards must pass near an antenna to carry out the transaction. The reading distance varies from a few centimeters to up to 50cm. Contactless cards eliminate the limitations of contact cards and are often used in places where a transaction must be carried out very quickly (i.e. mass transit, road tolling, etc.). A hybrid card (AKA Combi Card) has both a contact and a contactless interface. The contactless chip is for applications that require fast transaction times. The contact chip is use for applications that require higher security.

OS-Based Classification
This classification is based on operating system (OS). Smart-card operating systems (SCOS) are placed on the ROM and usually occupy less than 16kB. Some of the main OS include MaultOS, JavaCard, Cyberflex, StarCOS, and MFC.

Advantages of Smart Cards
Smart cards can hold up to 32kB of data where magnetic cards can hold only approximately 1000 bits. Card participants can store a lot of additional information on the cards. Data can be protected against unauthorized viewing. Smart cards cannot be easily replicated – they are much more secure than magnetic stripe cards. While smart cards have caught on in various sectors, they have not been as successful in the financial cards sector. The amount of money invested by the various players in the magnetic stripe card infrastructure and the slightly higher cost of smart cards have been identified as two reasons why smart cards have not yet been successful in the financial cards sector.

Recommendation
While I recognize and accept that smart cards have not yet made the strides in the financial cards sector as in other sectors, I believe that it is both responsible and imperative that the management of my company investigate the feasibility of providing smart card services to its members in the near future. One of the first facts to support my claim to the importance in considering smart cards is security. Smart cards provide an opportunity to combat fraud and skimming. According to David Breitkopf, “Paul Garcia, the chairman, president, and chief executive of the Atlanta transaction processor Global Payments Inc. said that as smart cards become more common elsewhere, U.S. card systems are becoming comparatively less secure, and more attractive to criminals” (American Banker, 2005, Vol. 170, Issue 125). As mentioned earlier, smart cards are more secure than traditional magnetic stripe cards.
Next, I believe that financial institutions need to consider smart cards to protect their interests. According to Kreinin Souccar, “As long as the banks are on the sidelines, telecommunications companies, information technology developers, and transportation authorities all may be in position to seize the payments territory that historically belonged to financial institutions” (American Banker, 1999, Vo. 164, Issue 176).
Strides in smart card implementation in Europe have far surpassed the U.S. According to Alfred Schmauss, chairman of the cards working group of the European Payments Council, “The banking group charged with creating a single European market for payment cards has told Europe’s banks to convert to smart cards by 2010. Switching their magnetic stripe credit card and debit cards to smart cards that conform to the international standard known as EMV will boost security as Europe moves to common card standards” (Cardline, 2005, Vol. 5, Issue 39).
Europe has made great strides with smart cards. I believe this success will force the U.S. to eventually (soon) respond. I have witnessed unprecedented instances of fraud, identity theft, phishing, skimming, etc. in the banking profession. Smart cards can combat a great deal of this activity. I believe fraud costs will soon outweigh the cost of implementing smart cards, if they haven’t already. For this reason, it also seems only logical and responsible for management to explore smart cards in depth.
Lastly, being a leader in offering smart cards in our market, when able, would provide us with a competitive edge. If our smart card were promoted as safer and more convenient, I believe we would not only retain market share, but also gain new market share. Can we imagine a hybrid card that could be waved as the member/customer enters our place of business? Tellers could greet customers as they walked toward them with account information already accessed. Would this not provide customer quality service? The speed in which members/customers is greatly improved. Can we imagine this same card being a consolidation of an account ID card, ATM card, debit card, with improved security? Could this card be expanded to be a phone card and also include a means for paying tolls and tickets? Could our smart card also serve as a driver’s license with adequate information and be a health care card? An all-encompassing smart card in the U.S. in the near future may be a reality toward a more ubiquitous world.

Bank of America - Facts, Controversies, Conclusions

In choosing a company for the week 5 assignment, it seemed natural to choose a commercial bank to monitor because I have been employed in the banking industry for over 30 years. I decided to discover which bank was the largest commercial bank in the U.S and to monitor it. I did a Google Web search in order to determine which was largest. My search, largest us bank, provided results 1 - 10 of about 35,000,000 for largest us bank (0.24 seconds). The first two of the initial ten results displayed were infoplease.com and Wikipedia. The infoplease.com site provided a table of the 30 largest commercial banks in the U.S. It was from this table that I learned the largest commercial bank in the U.S. is Bank of America Corp. with total assets (in millions of dollars) of $1,082,243. It was also interesting to discover that 5 of the largest 30 banks in the U.S. are based in Ohio. The Wikipedia information about Bank of America consisted of 11 pages. I found them to be well written, easy to read and understand, and helpful.
In week 2 of our class we wrote about business debacles. Knowing that debacles take place in many businesses, and knowing that they also are likely to take place in the banking industry, I wondered if Bank of America was involved in any debacles. I conducted another Google Web search, bank of america debacles. The search results were 1 – 10 of about 74,700 for bank of america debacles (0.5 seconds). In scanning some of these, I did not find what I was really searching for, which was more information about a debacle entitled The Matthew Shinnick incident, found in the Wikipedia information obtained earlier. Google Web search results for matthew shinnick were 1 – 10 of about 22,900 for matthew shinnick (0.10 seconds). I found the most well written article about the Matthew Shinnick incident written by David Lazarus of the San Francisco Chronicle at SFGate.com. The introductory paragraph was very much an “attention-getter”. According to Lazarus, “San Francisco resident Matthew Shinnick tried to sell a pair of mountain bikes on Craigslist late last year. He attracted a buyer, received a check in the mail – and ended up handcuffed by police in a downtown Bank of America branch and jailed for almost 12 hours.” The article continues on to describe how the victim was strip-searched, sat in jail, and his family was forced to provide bail until he could prove his innocence. To make a long story short, in a good faith effort Shinnick asked the teller if the account on which the check he was given for payment had sufficient funds prior to presenting the check for cash. The teller advised that sufficient funds existed. Shinnick then endorsed the check for cash. Unfortunately, while sufficient funds existed in the account, the check was bogus and Matthew Shinnick was an innocent victim of an attempted scam as bank personnel alerted the police. Bank of America publicly stated that they regretted the incident but claimed they had a responsibility to report suspicious activities. Shinnick said, “. . . it’s up to banks not to call the police until they’re certain that a crime has been perpetrated – and that the person standing there is a crook and not a victim.” San Francisco malpractice attorney Jennifer Becker observed, “that incident of wrongful arrest could get totally out of hand with online commerce and eBay and all the opportunities for fraud.” Shinnick paid approximately $14,000 to clear his name. Bank of America paid him nothing.
I wondered what other potential or actual lawsuits might have involved Bank of America. Google searching thus far had been rewarding, so my next Google Web search results were 1 – 10 of about 1,230,000 for bank of america lawsuits (0.25 seconds). Here I discovered an interesting lawsuit involving excessive overdraft fees. Bank of America’s policy is to pay the largest debits first. This means that if a customer has $1,000 of collected funds in his/her account, and debits presented for payment are say $5, $20, $30, $75, $110 and $900, only the $900 debit is paid and the others are all deemed NSF. A fee for each NSF is assessed. More overdrafts, more NSF fees. I found this practice to be common among many banks because it is simply a way to generate increased fee income. I was reasonably sure this practice would create a “stir” among consumers who were victims of large NSF fees that alone oftentimes exceed the individual check amounts. My next google search was excessive NSF fees bank of america. Results were 1 – 10 of about 165,000 for excessive NSF fees bank of america (0.05 seconds). I was correct in my assumption that this topic has created quite a “stir”. The first result was quite graphic – Bank of America sucks : : The Daily Journal : : Jay Allen.org. What I thought might be quite interesting was a result labeled Rip Off Report: Bank of America steals my money in OVERDRAFT . . . This site, Rip-Off Report.com, is a blog where consumers voiced their complaints and others commented and/or rebutted. I found it interesting to note that the first posting was back on 10-15-06. The most recent posting was 3-21-07. People have been commenting on this same topic for over five months! I work in the lending area for my employer, so I am not as knowledgeable in regard to our policies, fees, etc. in connection with deposit services. The negativity associated with the practice of paying the largest checks first immediately prompted me to investigate whether or not our institution engages in this practice. I was happy to learn that we do not.
I had not yet visited Bank of America’s company web site, so I decided to go here next to see what I could learn. Under About Bank of America, Bank of America News, Newsroom, Press Releases, Special Incident Announcements, I thought I might find official statements in regard to hot topics such as the Matthew Shinnick incident, excessive NSF fees, etc. I did not find anything, and releases were archived for several years. When reviewing these press releases, my conclusion is that Bank of America is doing a good job “selling itself” on its positive accomplishments. It appears, at least at the company web site, they avoid addressing negative public relations.
In searching around, I also had previously discovered that Bank of America had made a name for itself by providing credit to illegal immigrants. My google search, illegal immigrants bank of america was expanded to a Google blog search. The blog search resulted in 1-10 of about 12,964 for illegal immigrants bank of america (0.06 seconds). I chose a blog search because it was my belief that I would find bloggers “letting it all hang out” on a hot topic such as this. I believe my assumption was correct. I found a blog where a boycott of Bank of America was being promoted (Americans for Legal Immigration). Other bloggers were quite “pronounced” as well (Bank of America competes with Loan Sharks – naked capitalism.com).
As I reflect on Bank of America - what I have learned about them, and conclusions I’ve drawn - my simple conclusion is that Bank of America is an example where biggest is not always best in institutional relations with its customers. I found bloggers making continuous reference to difficulty in being able to express concerns to a human company representative. This then led to a feeling that the bank’s relationships with its customers lacked desired necessary human elements. I believe this argument can be supported by several examples. In the case of Matthew Shinnick, while the bank expressed regret, it would not compensate Mr. Shinnick for expenses in clearing himself. In the issue of excessive NSF fees – the bank continues the practice. In the issue involving illegal immigrants, the bank defends its position by saying its product offerings to immigrants is legal, and seemingly disregards public perception. When viewing the company web site, no responses to negative publicity are provided here. Bank of America seems to choose to predominantly only focus on its business successes at the press release area of its web site.
I somewhat draw a comparison to Enron. Bank of America is very large and powerful, as was Enron, and appears to be almost “too big for its breeches”, seemingly snubbing its consumer market. Has Bank of America become so large that it feels it can never fail, the same perceived mindset that Enron once seemed to portray?
After reading and studying a vast array of negative communication in connection with the activities of Bank of America, I lastly needed to assess the company’s financial performance. Anyone can go to www.FFIEC.gov and find UBPR (Uniform Bank Performance Reports) provided by the FDIC (Federal Deposit Insurance Corporation). In reviewing certain areas of the UBPR of Bank of America, my assessment is they are doing very well. Their growth rates in total assets have been trending very positively over the last five years. Net income has also increased each year, as has cash dividends declared.
My employment has always been in small community banks. From my experience, community bankers are always very concerned with their image in the marketplace. They are also concerned whether or not their activities will impact the performance of the company. Obviously, negativities surrounding certain activities of Bank of America have not impaired its financial performance. I find them lucky!

Financial Institutions, Mass Collabortion, and Everyware

There are generally three types of organizations that fall under the general classification of “financial institution” - commercial banks, thrift institutions, and credit unions. I am employed by a small community-chartered federal credit union.
When thinking about information technology concepts, processes, and tools, I think about not only a newly-discovered information technology opportunity that I would recommend to my employer, but also about this opportunity benefiting all financial institutions.
As I recall the degree of technological advancement within the banking industry in the last several decades, I firmly believe mass collaboration would be advantageous to both my organization and more broadly, the banking industry. Evidence exists of open communication within the credit union industry, and also within the commercial banking industry, but minimally with one another across identifying lines. Minimal collaboration exists between banks and credit unions because they remain fiercely competitive. Barriers exist with each of them that require softening in order to accomplish true industry collaboration. What if all financial institutions collaborated while they continued to compete with one another? The banking industry has already changed to where all institutions appear and operate very similar to one another, so it seems that collaborating with one another in a spirit of openness would be a natural fit. I believe the knowledge each would gain from one other would be valuable in many ways – competing, improving operations, etc.
So how does one spark this collaboration? I believe that blogging is one way that this open collaboration can transpire. I find the blogging atmosphere within the credit union segment to be very open and wide spread. I further believe the open and national, possibly global reach characteristic are similar in most industries. So if blogging characteristics predominantly include openness and a national and/or world-wide audience, then blogging among all financial institutions would result in a great deal of information generation from all three segments over a wide spectrum. The knowledge gained from the exchange of information would allow for each segment to continue to compete, but in a different way. One might argue that a banker has access to credit union blogs and vice versa. I’m talking about well-known, widespread, intensely posted blogging by all financial institutions. Blog with one another I say!
If the world is preparing for a more ubiquitous world, then open collaboration seems an opportunity to prepare for, discuss, and keep abreast of changes toward an everyware atmosphere. If everyware takes shape as the author describes, an industry that relies heavily on PCs will face dramatic change when PCs as we know them today become obsolete. Again I ask, would it not be beneficial for all within the banking industry (banks, thrifts, credit unions) to be openly communicating with one another prior to transformation to an everyware world? As Greenfield describes, “Largely as a consequence of their complex and densely interwoven nature, in the event of a breakdown in ubiquitous systems, it may not be possible to figure out where something’s gone wrong. Even expert technicians may find themselves unable to determine which component or subsystem is responsible for the default (Greenfield, 2006, P. 152). If all financial institutions were openly mass collaborating, there would be many more sources of information and communication channels for all to utilize to address situations as described above, as well as other accompanying unknowns.
I realistically envision change toward a more ubiquitous environment in the banking industry. I imagine transformation that would allow bank personnel to conduct opening and closing security procedures by the touch of a hand. I also see financial transactions being conducted near instantaneously. In the same respect, what new physical appearance will financial institutions inherit? What is difficult for me to envision in an everyware financial institution is the employee’s role. Will we all become tech specialists that only report to work in order to trouble shoot when technological problems surface? It seems as if the human element might easily be replaced in a ubiquitous banking environment.
The changes I have witnessed in over 30 years that I have been employed in the banking industry lead me to the conclusion that it appears Moore’s law has held true, and may just continue in the future. This means industry wide mass collaboration is simply a smart preparatory move to ubiquitous financial transacting. The big question is, will there be a need for financial institutions as we find them today in a ubiquitous banking environment? It seems very realistic that in-home banking may replace traditional routine financial transacting.

Hancock Federal Credit Union and Networking

The organization that I chose for discussion surrounding electronic networks that are currently active in an organization of my choice is my employer, Hancock Federal Credit Union, a community-chartered federal credit union with total assets of just under $50 million.
Hancock Federal has attempted to keep pace with larger competitors’ technological advances. The credit union is likely similar to its local competitors in the area of networking. However, I believe the credit union has many opportunitites to adopt/enhance additional technological opportunities.
In thinking about how credit unions network with one another, I seemed to recall a website I had once visited that provided a format for credit union employees to exchange questions and answers with one another. I contacted my superior, the President/CEO of our company. She advised that with pre-registration, I could communicate with other credit union officials with questions, comments, etc. via http://www.cuna.org/. CUNA stands for Credit Union National Association. At this site I also found links to other organizations. One link that I have visited in the past was http://www.ocul.org/. OCUL is the Ohio Credit Union League. A great deal of information about changes in the industry, regulatory changes, educational opportunities, etc. are all available. Both CUNA and the OCUL are good sources of information.
I conducted several Google searches. These included credit union networking, financial institution networking, credit union intercommunication, financial institution intercommunication, and the agency that regulates credit unions - the National Credit Union Agency (NCUA). What I failed to locate were any truly “open” formats. I elected to do another Google search, credit union blogs. Bingo – my search results provided me with http://www.opensourcecu.com/.
It was interesting to find key words that related to the text readings in the About tab at Open Source CU. According to Open Source CU, “Created as an idea exchange, Open Source CU is an outlet and resource for credit union leaders toward the goals of opening communications between members and management, using technology that fits the movement’s inherent cooperative nature, and converting marketing sales-speak into legitimate conversation.”
While industry websites such as CUNA, OCUL, and NCUA are all helpful and provide easy access for credit union management and employees to access information, these don’t provide the true networking or “sharing” that Open Source CU provides. I believe Open Source CU can provide our credit union with an avenue to openly discuss any credit union question or idea nationwide within the credit union industry, providing a vast and valuable resource.
In recent years, credit unions have become increasingly similar to commercial banks. Many credit unions now offer business deposit and loan services. Our institution began offering business loans in early 2006 in a limited capacity. Being successful in this venture, the decision was made recently to expand our business lending activities. In order to do this, our current business lending policy requires expansion and must comply with credit union regulations. My supervisor recently gave me the task of developing a comprehensive, legally compliant business lending policy. In the last several weeks, I have been searching for a company or someone who has successfully developed a thorough business loan policy that could be used as a template. I know that commercial bank consultants sell such policies that can be modified to “fit” the particular goals/needs of the purchaser. I have been searching for a consultant or company within the credit union industry that sells policies. I have yet to find one. A google search provided me with the regulations that must align with a business loan policy, but no avenues toward possible purchase of credit union policies. I am confident that such a product is out there. I now believe that the Open Source CU blog just may be my answer. This blog is viewed by many in the credit union industry. If acceptable protocol in blogging is to seek help in locating tools that serve credit unions, then location of this blog may serve my needs and become an open format for future sharing. It is my plan to utilize the blog to make such an inquiry.
In Wikinomics chapter 4, particularly in the area of HARNESSING IDEAGORAS, in a paragraph title Instilling the Culture, according to authors Tapscott and Williams, “Companies still need to break down deep-rooted biases that inhibit them from seizing opportunities to open up innovation. Many firms are just now coming to the realization that they can turn some of their underutilized assets into new and lucrative revenue streams.” (2006, p. 112). Something similar to this aligns with communication I found at Open Source CU. “The concept of open source began . . . . Progammers began sharing their work instead of selling it off. And by pooling their ideas together, these programmers ignited an open source movement that refuses to slow down.” It appears that the credit union industry via blogs such as Open Source CU is advancing its efforts to promote sharing of ideas.
Another google search led me to http://www.credituniontechtalk.com/, consulting services. I have contacted them in regard to my desire to purchase a pre-designed business loan policy. It was also interesting to find reference to a VP of Information Systems at this site. I recalled reading in Wikinomics, according to Tapscott and Williams, “A little over twenty years ago, the idea of appointing a chief executive for information technology was still novel, even laughable” (2006, p. 109). However, this was the first reference to an IT executive officer that I have found in the credit union industry. Maybe our industry is not as technologically advanced as once perceived.
Will bots enter into the financial institution industry? I speculate that some may experiment with the concept; however, I’m hesitant to confidently say that this will be successful. While many consumers are becoming more comfortable transacting in a less personalized way (ATMs, on-line banking, etc.), I believe that consumers still rely heavily on humans to answer complex questions and will continue to do so. The basis for my claim is simply from what I have experienced within the banking industry for over 30 years. Consumers continue to want to trust the care of one of their most valuable posessions, their money or finances, to human beings. According to Brown and Duguid in The Social Life of Information, “With bots, which are not well suited to weigh subjective issues such as quality and service, these will probably disappear much more quickly” (Brown and Duguid, 2002, p.47). It is my summation that our company is not in the forefront of networking with others within our industry. However, I have come to the realization that in order to become increasingly competitive, our industry will need to “step up” employment of networking opportunities in order to provide avenues to obtain and share information more quickly, in a less costly way. Increased networking will undoubtedly enhance our learning opportunities.

Northwest Airlines Debacle & Cluetrain Manifesto

The story to follow has to do with Northwest Airlines. Please note that I refer to this paper as a story. According to author Weinberger of The Cluetrain Manifesto, “Stories are how we make sense of things. Anything else is just information” (Weinberger, 2001, p. 151). I agree with the author about stories vs. information. Stories are a more dynamic, interesting way of communicating.
In August of 2006, Northwest Airlines cut wages and fired workers as a means to get out of bankruptcy. At this time, Northwest provided 50 of its now unemployed workers with a booklet that contained 101 money-saving tips. Management provided this “so-called” helpful tool in an attempt to appear sensitive to the realities of its workers newfound wage reduction or unemployment. Someone, plain and simple, “dropped the ball” with this one. Not only were several of the 101 tips considered by many to be insensitive to the newly unemployed, but the most talked-about tip was one to “dumpster dive”. According to Mike Hall at AFL-CIO Weblog, the exact wording was as follows: “Don’t be shy about pulling something you like out of the trash”. The booklet, and more particularly the dumpster diving tip, created a frenzy of Web communication, much of which was boldly negative toward Northwest. How could management be so insensitive to its workers plight?
Please allow me to share some examples of numerous negative comments about Northwest. The following are comments taken from www.bloggingstocks.com. “The workers had already dumpster-dove when they went to work for Northwest.” Another is more direct. “If the Northwest CEO will dumpster dive first, I’ll help push his head in the dumpster farther down.” Comments went to the extent of name calling. “Northwest, or Northworst, has always had a very big problem with labor relations. This didn’t surprise me at all. My friends and I laughed and said “they are at it again.”
Northwest errored a second time. Management attempted to pass the buck in its response to its actions by saying the booklet had been prepared by an outside company, which it had. However, the preparer was representing the company. Therefore, Northwest management should have taken responsibility as well. Its failure to do so only resulted in management and the Northwest Airlines company being viewed even more negatively.
I decided to see what the preparer of the booklet had to say about the publicity surrounding this debacle. From MY.DEL.ICIO.US, I found the media response from NEAS, Inc. President and CEO Philip Chard. A portion of the response is as follows: “While we did not author the flier, we were remiss in not properly reviewing it prior to distribution. As an EAP provider . . . we sincerely apologize that some of the information in the materials was not appropriate and was felt to be offensive.” Hooray for NEAS! If they took responsibility, why couldn’t Northwest? Again, Northwest employed NEAS; therefore, they should have taken, or at least shared responsibility in a futile attempt to demonstrate some sort of human caring for its employees by simply apologizing.
I wondered if the extensive negativity that was communicated everywhere via the Web adversely impacted the financial performance of Northwest. At the company website, I discovered a much improved financial performance for the full year 2006 as compared to 2005. My conclusion here is that the expense reduction as the result of the wage cuts and layoffs were more impacting than negative PR surrounding the debacle. I wondered, however. If the financial position of the company were similar to performing peers, would the negative PR surrounding the booklet impact the company to the extent that financial performance would be significantly affected, resultingly making it less competitive? I believe that it would because the extent of the negativity generated via the Web would result in decreased revenue.
This story is of a company that was going through significant change. When attempting to minimize the negative effects of wage reductions and layoffs by providing helpful tips, Northwest management simply did not comprehend the magnitude an oversight can have in the marketplace, or they would have hopefully been much more careful and responsible with material that finds its way into the public arena.
As the authors of Cluetrain point out, the web allows everyone to communicate openly and freely. I have learned people are not afraid to say exactly what is on their mind when communicating on the Web. The extent of response to Northwest management’s error and lack of responsibility demonstrates this.
I believe the authors of The Cluetrain Manifesto are saying that management needs to understand that the marketplace continues to change as the result of the Web. Companies must be aware of the depth and breadth of communication the Web provides and understand that this expansive communication dramatically changes the way in which we communicate, obtain information, and do business. Management must address these change and decide if they have confidence in the status quo, or if they should embrace and utilize change to their advantage. I further believe the authors challenge status quo management philosophies, and are promoting more open collaboration.
Lastly, the Cluetrain authors talk about the Web as a way to foster learning. “Imagine a world where everyone was constantly learning, a world where what you wondered was more interesting than what you knew, and curiosity counted for more than certain knowledge. Imagine a world where what you gave away was more valueable than what you held back, where joy was not a dirty work, where plan was not forbidden . . .”I cannot say with certainty that the Web will overcome business as it is today, but I can say with conviction that it has dramatically impacted the world and the business segment and will continue to do so in the future.