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Many American companies have done incredibly well this year. A number posted extraordinary financial results in 2011. Others have launched products that revolutionized markets.
Of course, many big public corporations also did very poorly. Several nearly destroyed their business and dragged down shareholder value with it. 24/7 Wall St. combed through the S&P 500 to find the best and worst managed companies in America for 2011.
To make a list of semifinalists, 24/7 Wall St. considered stock price, changes in earnings per share, major shifts in market share and changes in management, among other data. Once the initial screen was complete, we reviewed product launch success, financial results, success of new management and the performance of each company within its industry. The editors then sifted through the finalist to identify those that rewarded both customers and shareholders and those that caused these two groups the most harm.
24/7 Wall St.: Ten brands that will disappear in 2012
Neither the best-run companies list nor the worst-run companies list includes a large number of corporations from any single industry. This indicates our methodology identifies well- and worst-managed companies regardless of the industry. Based on our criteria, the management of Starbucks did as good a job as the management of Oracle — two of the best-run companies. Similarly, Eastman Kodak management did as poorly as the management of American Airline parent AMR — two of the worst-run companies.
Worst
1. Avon Products
- CEO name (tenure): Andrea Jung (12 years)
- YTD stock: down 40 percent
- Latest quarter EPS: flat at $0.38
- Insider ownership: 1.75 percent
- Key event: SEC starts investigation
Avon’s management has taken one of the greatest franchise operations in the world and nearly ruined it. The company has bungled its move into markets like China, where it faces a bribery probe. Revenue growth in emerging markets, such as Brazil and Russia, has faltered. When it announced third-quarter earnings, Avon said it could no longer support its guidance for the balance of the year. The news caused several analysts to downgrade the company’s financial prospects and its stock. CEO Andrea Jung said Avon would continue to seek solutions through another of her interminable restructurings of personnel and operations. Just after Avon announced financial results, it disclosed an SEC investigation into improper contacts between the company’s management and Wall St. analysts. (Since this article was originally published, Avon announced that longtime chief executive Jung, would step down in January of 2012, ending her 12 year term as the longest-serving female executive at a Fortune 500 company.)
24/7 Wall St.: Biggest corporate layoffs of all time
2. Research In Motion
- CEO name (tenure): Jim Balsillie (19 years)
- YTD stock: down 71 percent
- Latest quarter EPS: down 57 percent to $0.63
- Insider ownership: N/A
- Key event: takes $485 million Playbook write-down
Research In Motion was “the” smartphone company until Apple released the first iPhone in mid-2007. RIM had every chance to move from its core enterprise market into the consumer one, but was slow to do so and released poorly designed products. It then allowed itself to be flanked by another generation of smartphones built with the Google Android mobile operating system. RIM management continued the destruction of the company’s value through the release of several other badly built and badly marketed products, the most recent of which was the tablet PC Playbook meant to compete with Apple's iPad. Sales have been so poor that RIM recently took a $485 million write-down on its Playbook inventory. RIM has recently warned twice that it would miss earnings forecasts. Three months ago, RIM said it would fire 2,000 of its 19,000 workers. RIM’s BlackBerry was the first smartphone, but its sales are close to putting it in last place among its competition. On December 7, after a trademark dispute, RIM backed down on its plan to change the name of its OS.
3. AMR
- CEO name (tenure): Thomas Horton (less than 1 year)
- YTD stock: down 99 percent
- Latest quarter EPS: loss of $0.48, down from $0.39
- Insider ownership: 1 percent
- Key event: declares Chapter 11
AMR, parent company of American Airlines, declared Chapter 11 recently. CEO Gerard Arpey turned down the board’s offer to stay as chief executive. Perhaps he was too humiliated by what he had done to ruin what was once considered the flagship airline of the United States. The most recent error on management’s part was its inability to settle labor disputes with the pilots, losing Wall Street’s confidence in the airline’s viability in the process. Investors traded shares down relentlessly during the month before the bankruptcy filing. Arpey’s greatest mistake, however, was his decision not to merge American with another large U.S. carrier. Meanwhile, a merger between United and Continental was put together to cut routes, personnel and equipment costs, among other things. Delta and Northwest set a marriage for the same reasons. American was left on the outside of the industry’s cost cutting trend.
Click here to read all of 24/7's best- and worst-run companies.
Leave a Comment:
So much for how private business is better run than govt.....the truth is that as with anything run by humans, it is the quality of talent in personnel that determines the outcome. Anyone who has worked for a large corporation knows what a mess they usually are. Govt's limited resources usually push efficiency, where businesses pass the costs of their mistakes on to the customers. The difference is that sometimes businesses screw up to the point they go under, while govt reforms and moves on.
Your comparison in the last sentence, although true is really misleading. Government only reforms because their money supply is seemingly endless. Any business could do exactly the same thing if ONLY they had a bottomless money pit.......and that is why Government will never be run efficiently, because there is no bottom line.
Why is it that the left despises Big Business but strongly believes in Big Government when the government is even more corrupt, inefficient, and misleading than Big Buiness ever was. At least with big business an individual can chose not to invest in the company or buy ANY of their products. With Big Government, we have absolutely no recourse except to do EXACTLY what they tell us.
I wonder, can you name any Business having as large a negative debt as the Federal Goverment? Not any is there?
Mare- that is where competition comes into play: Businesses have to be efficient otherwise their competition will get the larger market share. Thus, over time, the more efficient businesses will succeed while the wasteful businesses will fail. And the result to the consumer is a better product at a better price.
Because taxpayers don't have a choice about paying taxes or using government services, there is no competition. There is no reason for government to be more efficient.
many consumers have negative debt because they live off credit cards.
companies do as well, and they use off shore accounts or fancy accounting tricks to hide their negative debts
"Why is it that the left despises Big Business but strongly believes in Big Government when the government is even more corrupt, inefficient, and misleading than Big Buiness ever was."
Really, thats why so many are unemployed and so many corporations did so extremely well this last year while EVERYONE else suffered, because Big Business is not corrupt, they outright tell you they are going to take everything from you, only in small print.
Mare...
As one who sees the inside workings of government on a DAILY basis, there is no such thing as "efficiency" in government or it's lexicon.
The amount of waste would even make the most jaded look on in awe. Unfortunately, I can't get into details, but please rest assured that I DO what I can on my level to bring the waste to the attention of those who SHOULD do something about it.
Government efficiency? About as good as a three dollar bill.
I know a lot of people who work for government. I could tell you things that would make your head spin and eyes roll back. Example...what about an employee who goes home and filets fish while on the clock? Well run? Yeah...maybe if you like waste and laziness.
Rob... you ain't seen NOTHING.
Let me just say $15,000 for a door... nothing special other than being an exotic imported wood... and there were hundreds of them.
Mare P
ROTFLMAO!!!!
Please, please tell me you aren't serious!
Government's limited resources? You mean government's UNLIMITED resources. Better known as budget deficits which just keep mounting. When our criminal government wastes the last round of revenue they just tell you they need to raise their revenue, debt ceiling. Where do you think their revenue comes from? Us, via more and more taxes of any different size, color and variety.
Efficiency? You mean the $70 BILLION Dollars a year in waste fraud and abuse in Medicare and Medicaid alone? If you need more I have a list of over 350 other examples of massive waste, fraud and abuse.
If businesses pass the cost of their mistakes onto the consumers there's usually a competitor that will capitalize on the inefficiency with a lower cost product.
OK, I give, show me where in the last 70 years our government reformed and did not create more and more debt. If our government was a Forbe's 2000 Corporation it would have been bankrupt in 1950. I'll take a solid 3M, McDonalds, Staples or Merck over our incompetent government.
Your apparent worship of the public sector either exposes your indoctrination or your delusion, neither of which is healthy. The main difference between our government and a properly run private sector business is that the private sector has investors and shareholders it is responsible to. Our government has brainwashed us to the point where they just keep blaming everything and everybody but itself.
The private sector corporations are responsible to their investors and shareholders, government is only beholden to itself. Itself is us. If you're so proud of our governments 70 year track record I recommend you and other government worshippers just send it more of your hard earned money, It'll be interesting to see what kind of Return On Investment you get.
Wake up America, to ask ANYONE to pay another penny more to our dysfunctional government is not only stupid, it's criminal.
I worked for a state agency at the county courthouse in my home town, and I was required to do my job plus the job of two people at the County Clerk's office because "they didn't have the manpower to expend". The county clerk had two people that were supposed to be doing part of the job I was doing, but they were busy taking smoke breaks and going out to lunch to be bothered. There were certain things they had to do for me that I ended up doing and telling them to record later because I didn't have time to wait for them to take forever. One of them fussed at me for not having proper form on one of my documents and I told her that since I was doing my job plus hers and another persons, she could be nice enough to fix the mistake for me.
FreedomRingsLoud...but many businesses have special protection ( from government) so that they are guaranteed a profit and/or are protected from competition. Health Insurance Companies, drug companies, to some degree defense companies and farmers are either protected by or subsidized by government. It starts out as seeming like a good idea ( we do want to have good agricultural industry and wonder drugs ) but the greed takes over and it gets way out of control.
GCCal, the left doesn't despise big business. The idea of big business isn't inherently good or bad. It's just that big business run badly effects not only tens of thousands of the people that are employed by them but also the environment, the economy, and hundreds of thousands or millions of consumers. The concern of the left is the when big business is run badly the negative effects are so far reaching that these companies need to be well regulated. And as far as taxes, big business has been enjoying the lowest actual tax burden in the history of America. That for the most part goes for their basic tax-rate, but in an unconscionable way with the amount of loopholes and deductions they take advantage of. No, not all of them across the board, but the one's who do are making out like fat-cats and have the average American paying not only for their wealth, but their mistakes and their greed.
The reason why #4 The Eastman Kodak Co went south is because Antonio Perez was also responsible for taking down #7 Hewlett Packard too! Suprisingly he is still a CEO! He is also Obama's newest jobs creationist director! He hacked over 60,000 jobs from both companies!
I was going to comment on government efficiency but I see that many of the above said it just as well.
A lot of that fraud in medicare and medicaid is due to all the people without insurance. Due to an unregulated system that allows insurance to cherry pick its customers, and lets the sick people go without.
By efficiency, I believe Mare was referring to budget limits for goverment agencies. Are there some who are wasteful, absolutely. But there just as many that are severely underfunded, and do miracles to meet their obligations.
MM-584706
You're right. The government should NOT be subsidizing ANY private industry. That's what the free-market is for. When Apple creates a great new product investors and shareholders rush in and reward it by investing their money in it. When a corporation decentralizes its business model and spreads its governance over its management teams it succeeds and the value of the company increases. this happens because the lower level managers are closer to the fundamental workings of the company, NOT the upper management, Board of Directors, CEO, COO or CFO's.
When our Federal government creates the monopoly of power it has over the past 100 years the States and the People are in essence eliminated from the government's performance except for 2 Senators and a Representative. This is NOT how the Framer's envisioned our Constitutionally limited government to function.
If you're a salaried employee instead of hourly with a private company, you're "on the clock" 24/7. So that argument doesn't hold water.
Do you really believe government run anything is more efficient than a private business? You people are nuts.
At least private enterprise produces something ,otherwise it will not survive. The federal government produces nothing! Only gets in the way of everything,and redistributes others hard earned gains.And does it very inefficiently i might add!
Yeah, you're right the federal highway system is nothing. the military is nothing. The fact that we have cleaner air and water than in the 70's when you could light a river on fire is nothing.
your arguments hold no water at all.
michigan,
the feds didn't build the highways or the military equipment our soldiers use. all contracted out to private companies buddy.
The feds didn't build the highways, but it was their moolah that got it started. Why do you think it's called the Eisenhower Interstate Highway System? Same for the FDA, why do you think there IS a law to protect water and air? Maybe because in the not so distant past many Companies were dumping anything and everything in the air and water. So we got tired of it and forced our government to fix it. Now they are in bed with the enemy, like the SEC. It's all about money and power, not what is good for ALL Americans.
right on gccal...the reason government can run such huge deficits is they have guns to enforce the will of their corporate masters.
The feds didn't build the highways, but it was their moolah that got it started.
(They literally printed the money so I guess this is technically correct.)
Sprint should be on the list of "worst-run companies" - Sprint in Overland Park can best be described as Dilbert's wet dream, and is likely the inspiration for that particular comic strip.
Dysfunctional to the point of being hilarious.
Mare. It does not always work that way. Many government run organizations simply go back to the Congress to increase their budgets. The big issue with Corporations in the U.S. is the way they will pay a CEO millions of dollars and the company is run extremely bad. Executive salaries simply do not reflect the management of the company but rather inside politics with the Board of Directors. If you took a look at the salaries and goodies for the "bad companies' for their top executives you would find them making millions while the producers in the company had a pay cut.
The Private sector folks ALWAYS have an answer how to run government... So here is an example how THEY manage their business... albeit a small but glaring sample.
The worst run private business will never be as bad as Government.
actually, if people consider the government as a badly run business, then they are mistaken. for all that is dysfunctional in it, it still survives and continues to operate.
sure, there are times that the government lights are turned off because the money "ran out". but in actuality, the money didn't run out.
it simply hasn't been allocated by congress. its like a citizen having plenty of money in the bank but didn't bother to pay the light bill.
people forget that congress is the check writers and their bank is the us treasury.
When businesses are badly run, they just ask for government money and give bonuses to their incompetent "top" executives.
There's no incentive for saving money in a government organization. In fact, if you do not spend all the money you receive in your fiscal budget, you run the risk of having that budget reduced next year. The result is 50 boxes of pens, truck loads of toilet paper and other tons of items being purchased at the end of the year to ensure all the money is spent - then a request made for more money for the next year.
ShopperBen,
Almost the dumbest thing I have ever heard.
The US gov is negative 14 trillion dollars. That sound ok to you? That means that every living American must kick in $42,000 tomorrow for us to be debt free.
As anyone with common sense knows.......
The average person will spend their money more carefully than when they are spending someone else's money.
That is precisely why gov sucks....oh, and the corruption and a few other things.
Johnlaz, If we did give the gov. $42,000 they wouldn't pay off the debt. They would spend it on anything but the debt. Clinton in his second term actually had money to start paying on the principle. Bush gave the rich tax cuts instead. Our government will never be out of debt.
How about a report on the nation's WORST_RUN non-profits. Several in the North Carolina area for sure.
Good point......
And the company that caters to them in South Carolina... Blackbaud. It's a very poorly run company as well.
There should be an article about the worst run government agencies.
It can be simplified: Governments are the worst run organizations in the world.
I'd nominate the IRS for that "worst run" list.
Give all the CEOs 25 million, kick them out, and hire them somewhere else.
you mean give them 25 cents and kick them out.
I nominate Bank of America as one of the worst run and most dysfunctional companies ever!
Oooh! They sound like they need to be bailed out by taxpayers.
It's not a company..but if it was..#1 be CONGRESS!
How about just plain worst companies? I can think of a few: Goldman Sachs, Bank of America, JP Morgan Chase...
Mike....you beat me to it. lol.
Comcast gets my vote for worst run company.
You are right on target. Look at the CEO (Original owners son) who is fined 1/2 million because of not disclosing information publicly in a timely manner. And they must have dozens and dozens of legal staff and public liaison people to oversee these types of things. This company just has a simple monopoly that has allowed them to coast along. Let's have dual cable companies in the same territories and see how they really fare.
So right about that ! They have absolute disdain for their customers. Private companies with protections of utilities are the worst, Comcast may well top the list !
no one plans to fail...but some never get started...yet they can be the loudest critics of those who miss the mark
RIM is NOT an American company!!
RIM is a Canadian company!!
It does not change the fact that RIM was one of the worst run company in the last couple of years.
On the topic of worst-run American companies, HP has to be on the list.
True, but they operate in the US. The title is "Worst Run Companies in America" not "Worst run American Companies." Regardless, the company is just a big joke now.
How does Netflix escape this list?
They did manage to make the list of the top 5 companies to go under by 2015.
They're number 9 if you click the link for the full article.
There are no better examples of the failure of the megacorps than Walmart and AT&T. While they may call themselves successful by way of earnings, they are actually the least healthy examples of free enterprise.
To wit: When any company becomes as big as these two, individual customer satisfaction is the first to suffer. You are basically just one out of millions of patrons. So, if they lose your business, or even that of a thousand in a single day, it doesn't make a dent in the CEO's desk. No one cares whether you are satisfied because you just don't matter.
In one sense, the large mega-conglomerate is not unlike our bloated and wasteful government; they've become too big to give a flying rat's patootie about anyone but themselves.
First of all, the worst run company is THE UNITED STATES OF AMERICA!!!! Secondly Research in Motion is CANADIAN!! And Third, how did both the NBA and the NFL not make the list. Shame on them for putting hundreds of small business owners on thin ice because of the loss of revenue due to labor problems.
Does your brother run Pats Aircraft, LLC? Lol
Apple should be on the worst run list. They look great now but they arent setting themselves up for continued success.
Why?
They seem to be doing just fine thank you. Sitting on piles of cash, 0 debt, a franchise second to none in the World ! They are in tech so they have to keep up, but so far they are doing a fine job. That Apple Symbol is the most sought after in the entire world !
If government agencies could be equated with private entities many would easily go the top of any list of poorly managed companies. How about the SEC? Education? Defense (or should it be renamed Offense)? The CIA? And how about Congress as a truly dysfunctional enterprise? No contest!
unless they are monopolies, bad companies cannot survive in the market place because the consumers won't allow it.
however, if they do have bad qualities but still manage to survive, then this implies there are some good qualities in it that are off setting the bad ones.
Happens all the time in the US. US consumers have been conditioned to just accept whatever bad business practice is unloaded on them...much less savvy in negotiating for services than people in other countries. Many people still happily do business with BoA when there are many other banks that could give them more for less; lots of people still do business with antiquated phone companies who charge exorbitant rates, including fraudulent charges; and many people willingly pay $1000s to certain insurance companies when they could get the same insurance with another company for $100s less. We don't have "educated" consumers here...so many inefficient companies survive and thrive here.
Reality...anything run by humans is corrupt (government or private business). Government is a necessary evil because, as a whole, individual people and their businesses will act as base animals without laws and someone to enforce them...destroying, killing, etc. anything that gets in the way of their success. If you want to know what the EPA really does....go take a trip to almost any country in Asia and breath or drink in all the pollution. I think the reason ultra-conservatives express such nutty ideas is because they've been pampered and insulated from the realities of the human animal concept we claim to love in this country. Let them do away with government and all the laws...and watch as we descend into the Dark Ages.
Obama will probably appoint these losers to run the US and ruin the rest of the country.
Netflix anyone? Shouldn't they be #1?
Actually it wasn't that long ago that the United States was a badly polluted as China. We invented the EPA to try and strike a balance between making profit and not destroying our environment. You still can't drink the water where I live though.
Businesses lobby the government massively to try and get around things like EPA regulations and do things that they are harmful in the long term in order to make short term profits. The largest problem with American business these days is that you have to be completely ruthless to succeed. Most corporations walk a fine line of legality and when they stumble over it they either find a scape goat to take the blame or make a deal to pay an insignificant fine. Anyone remember BP? They made record profits while cleaning up the gulf oil spill and are doing everything in their power not to pay people affected by the spill.
True...the problem is that many people who knew how the US was before the EPA are dead or too young to really remember how life was here before it. It is an endless cycle...every generation needs to relearn the lessons learned by their forebears. We're doomed.
AmericanPauper.....how true. I remember when there were almost no eagles or osprey due to DDT, and I remember Love Canal, etc.