The REAL reason Sony canceled the release of the movie “The Interview”

The REAL reason Sony canceled the release of the movie “The Interview”

1When Sony’s decision was aired throughout the media yesterday most people thought it was a result of a fear of fomenting terrorist acts. Japan, as well as South Korea and other regional nations well know that the capability of North Korea carrying out terrorist acts on U.S. soil is remote. The regime can make a lot of noise and boastful claims but since 1953 has this country ever been responsible for terrorism in other parts of the world? They are an insular, backward, starving country that will someday see regime change without a shot being fired. South Korea well knows that the threat posed consists mostly of empty rhetoric, oft-repeated claims of setting nations on fire or worse. It never happens. It never will. They are over 60 years past battle-hardened testing, and although hacking might be a hobby for some there, war is not going to be there strong point.

2So just why then did Sony pull this film – a move that will likely cost them at least $90 million in an unfavorable impact to their bottom line? The reason is a bit more subtle. In the past 10 years Japanese companies have been battered by lawsuits originating in the United States. Take a look at a few of the lawsuits that have originated in the United States that were aimed at Japanese companies:

  1. Norman v. Honda

The parents of Karen Norman sued Honda when their daughter died from not being able to escape from her Civic after backing into Galveston Bay. At first, the case sounds somewhat legitimate, until you learn the rest of the facts. For example, the Normans sued Honda because their daughter was unable to hit the emergency release button on the seatbelt. However, she failed to hit the button most likely because she had a blood-alcohol level of 0.17 and shouldn’t have been driving in the first place. The incident happened at 2 a.m. with passenger Josel Woods in the passenger seat. Woods was able to swim to safety. Here’s the kicker: the jury actually awarded the parents with just 25% of the damages considered contributorily negligent. Thus, the Normans basically sued and won against Honda in spite of their daughter’s obvious irresponsibility for driving under the influence. (See more at: http://www.businessinsurance.org/10-ridiculously-frivolous-lawsuits-against-big-businesses/#sthash.f0tZxVuk.dpuf).

  1. The feds reached a $1.2 billion settlement with Toyota Motor Corp. after a four-year criminal probe into the giant Japanese automaker’s handling of a spate of sudden accelerations in its vehicles. The investigation focused on whether Toyota was honest in reporting problems related to the unintended-acceleration troubles, which led to multiple accidents and fatalities. Toyota faces hundreds of lawsuits over the acceleration problems, which gained public attention after the deaths of a California highway patrolman and his family that were reportedly caused by the unintended acceleration of his Lexus, which is made by Toyota.

Starting in 2009, Toyota issued recalls for more than 10 million vehicles for various problems, including faulty brakes, gas pedals and floor mats. From 2010 through 2012, Toyota paid fines totaling more than $66 million for delays in reporting unintended-acceleration problems.

The National Highway Traffic Safety Administration never found defects in electronics or software in Toyota cars, which had been targeted as a possible cause by many, including some experts.

  1. Takata Prepares To Take $440 Million Hit From Airbag Recall

Reuters reported that Takata airbags, which found their way into 4 million Hondas, Toyotas, BMWs and other cars worldwide, will likely result in a major loss for the company going forward. This one is just the latest.

3There are many more examples of U.S. based lawsuits against Japanese companies that in spite of flimsy, scant and even highly questionable evidence, have resulted in monumental judgments the Japanese companies have had to pay in order to continue to do business in the United States. Japan is a country lacking natural resources, unlike North America, Africa, China and South America. They must export in order to survive. So pay they will.

If “The Interview” was released into U.S. theaters on Christmas Day, and so much as an unrelated incident of harm occurred to any movie-goer, Sony would be sued and sued for a lot of money. The plaintiffs would likely prevail given the fact that Sony had duly been provided ample warning that such a terrible outcome could be expected.

4The U.S. is a litigious society. If you are scalded by hot coffee you purchased from McDonald’s you can make a lot of money by suing. In fact, Americans spend more on civil litigation than any other industrialized country, according to a study in the Economic Journal – and twice as much on litigation as on new automobiles.

So just why did Sony pull their upcoming film “The Interview?” Had they not, they anticipated far greater than $90 million worth of settlements from lawsuits blaming them for anything even remotely connected to someone getting hurt in a U.S. movie theater while watching this particular movie. The decision was based upon a cost-benefit model, and the business decision was probably a good one.

Is Education to Blame for the STEM Skills Gap?

1Up until about 2014 virtually all of the research related to STEM skills shortages (especially) in technology companies was done quantitatively, with the instrument of choice the survey method and the respondents that were selected employers, businesses, technology firms. The research was conducted by government organizations, business associations and all of the large consulting firms. Pick any one of these studies and you will find consistent agreement in the methodology (quantitative), the instrument (survey) and the respondents chosen (employers). Some of the studies were conducted by Accenture (2012), Boston Consulting Group (2013), Congressional Budget Office (2011), Deloitte (2011), Manpower (2012), McKinsey (2012), President’s Council of Advisors on Science and Technology (2012), Price Waterhouse Coopers (2012), and the US Chamber of Commerce (2006). The conclusions were all the same, that is, that the education system was failing to provide STEM-qualified job applicants to industries that needed these skills in order to grow and innovate.

2Along with the survey conclusions, all of which contained high Cronbach’s (alpha) that measure internal consistency, recommendations for how to retool the education system to better inculcate STEM skills in students desiring to enter the workforce were suggested, explained and elaborated upon. Quantitative methods such as these are universally considered scientific; indeed evidence-based, positivist methodologies are only re-examined to the extent that the samples taken were (preferably) random, and sufficiently large enough to yield confidence to at least two standard deviations each side of the mean (95%). The researchers dutifully reported their survey results, along with every confirming statistic to support the validity of their conclusions. Consulting houses piled on to mimic their competitor studies and they all came to the same conclusions. Therein lies the rub.

3The bias lies not in the survey purpose, sample size, or design. The flaw is in the respondents chosen. Although it may seem intuitive to select employers as the respondents – after all, who better to judge the STEM skills it takes to be successful on the job? The qualitative studies that followed these methods have debunked, demystified and completely derailed the validity of the quantitative survey conclusions. Research question: What if employers had an incentive to blame education and the root cause of the problem was actually in the domain and under the control of the employers themselves? How would a researcher conduct a study to determine whether validity exists for such a theory and hypothesis?

4Dr. Peter Cappelli (2014) wrote his dissertation based upon all of these studies, plus a lot of tangential (tertiary) research, mixed in with data from government (Department of Labor for example), education, and industry. Rather than cross-sectional and quantitative, Dr. Cappelli approached the business problem with an historical lens to see how technology companies went from no STEM skills gap to an alleged STEM skills gap over a period of time (longitudinal). Qualitative researchers are criticized for lacking an evidence-based approach. Lacking experimental methodologies, randomized samples well-controlled and quantitative metrics, it is difficult for the interpretative researcher to garner the respect of colleagues in the peer-review process. Research methods have not matured yet to the point of comparability regarding credibility (internal validity), evidence, transferability (external validity), confirmability (objectivity) and reliability (dependability). Yet qualitative research methodologies in the interpretivist tradition, provide far more latitude when many nuanced exogenous variables, changing over the course of time, can bring a “best” persuasive description and explanation for what is going on with the business problem at hand based upon thorough exploratory research.

5The skills gaps surveys utilized skill classifications. Dr. Cappelli, in his research approach asked questions, developed strong inductive and logical support through case examples to answer these questions, then bundled the entire package to illustrate and portray an entirely different set of dynamics that accounted for the alleged STEM skills gaps. Coincident and following his initial research, others (Charette, 2013) have approached the problem with similar tools and questions, the outcome of which has buttressed Dr. Cappelli’s seminal work, laid the ground for new theory, and consequently and likely qualifies Dr. Cappelli’s work as seminal in nature. In simple terms Dr. Cappelli searched the literature and found that problems largely caused by employers themselves were at the root of the STEM skills gap.

Case after case, data upon data, and analysis over time yielded the following results, all well supported by the careful sifting and interpretation of the evidence:

  1. Employers are unwilling to pay market-clearing wages for STEM skilled workers.
  2. Employers have largely abandoned their internal company training programs that were aimed at preparing new recruits for success on the job.
  3. Employers have increased their hurdle rates in terms of inflated educational and experience requirements for jobs that used to be performed by less educated, less skilled workers.
  4. Employers have a vested interest, an incentive to continue their practices above and to push the responsibility and problem solving unto the educational system. For example, these employer claims have the effect of cajoling the government toward a policy of increasing the number of H1-B visas granted so lower compensated STEM skilled recruit can be found in other countries.

References

Accenture. 2012. “Solving the Skills Paradox: Seven Ways to Solve Your Critical Skills Gap.”

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Solving-the-

Skills-Paradox.pdf.

Boston Consulting Group. 2013. “The U.S. Skills Gap: Could it Threaten the U.S.

Manufacturing Renaissance?” https://www.bcgperspectives.com/content/articles/lean_manufacturing_us_skills_gap_co uld_threaten_manufacturing_renaissance/.

Cappelli, Peter. 1995. “Rethinking the ‘Skills Gap’.” California Management Review 37(4): 108- 124.
Cappelli, Peter. 1999. The New Deal at Work: Managing the Market-Driven Workplace. Boston: Harvard Business School Press.

Cappelli, Peter. 2003 “Will There Really Be a Labor Shortage?.”Organizational Dynamic 32(3): 221-233.

Cappelli, Peter. 2012. That Pesky Skill Shortage in Manufacturing. HR Executive. http://www.hreonline.com/HRE/view/story.jhtml?id=534354686.

Cappelli, P. (2014, August). Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US. Retrieved from http://www.nber.org/papers/w20382

CBO. 2011. “CBO’s Labor Force Projections Through 2021.” Congressional Budget Office.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/120xx/doc12052/03-22- laborforceprojections.pdf.
CVTS 2013. Continuing Vocational Training Statistics. Brussels: European Commission. Http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Continuing_vocational_tr aining_statistics

Charette, R. N. (2013). The STEM crisis is a myth. IEEE Spectrum. Retrieved from http://www.k12accountability.org/resources/STEM-Education/The_STEM_Crisis_Is_a_Myth.pdf

Deloitte. 2011. “Boiling Point? The Skills Gap in U.S. Manufacturing.” Manufacturing Institute. http://www.themanufacturinginstitute.org/~/media/A07730B2A798437D98501E798C2E 13AA.ashx.

Manpower 2012. The Talent Shortage Survey. http://www.manpowergroup.us/campaigns/talent- shortage-2012/pdf/2012_Talent_Shortage_Survey_Results_US_FINALFINAL.pdf

McKinsey. 2012. “The World at Work: Jobs, Pay and Skills for 3.5 Billion People.” McKinsey Global Institute.

http://www.mckinsey.com/insights/employment_and_growth/the_world_at_work.

President’s Council of Advisors on Science and Technology. 2012.

http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-engage-to-excel-final_2-25-12.pdf.

PWC. 2012. “Facing the Talent Challenge: Global CEO Survey.”

http://www.pwc.com/gx/en/ceosurvey/2012/key-findings/hr-talent-strategies.jhtml.

U.S. Chamber of Commerce. 2006. “The State of American Business 2006.” Washington D.C.