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Worst and Stupidest Corporate Business Decisions Ever Made

By Amarendra Bhushan for CEOWORLD Magazine Updated:December 21, 2009

IBM- when IBM ceded dominance of the software market to Microsoft for $80,000, paying Bill Gates a fee for his operating system and failing to tie him sufficiently to their firm. IBM did not appreciate the potential value of the software market, and were overconfident that they could dominate the hardware market.

Western Union Telegraph Company- telephone- In 1876, the Western Union Telegraph Company was offered the patent for the telephone at an asking price of US$100,000. In knocking back the single most valuable patent in history, its then president wrote: “We have come to the conclusion that it has no commercial possibilities … What use could this company make of an electrical toy?”

ENRON- Enron’s decision to resort to financial chicanery and fraud highlights the fact that for decisions to work well, they need to inspire trust. By deciding to go for an illegal, unethical solution to the pressures of rising shareholder expectations, senior executives lost everything. The decisions that work best are honest and compelling. They engage people and gather their own momentum.

Ross Perot- Microsoft- Texas businessman and two-time US presidential runner Ross Perot offered to buy Microsoft in 1979 for US$15 million. Gates wanted US$60 million. Perot walked away empty-handed and Microsoft today has a market value of US$265 billion.

Apple – Atari- “So we went to Atari and said, “Hey we’ve got this amazing thing, even built with some of your parts, what do you think about funding us? Or we’ll give it to you. We just want to do it. Pay our salary, we’ll come work for you.” And they said, “No”. So then we went to Hewlett Packard and they said, “Hey, we don’t need you; you haven’t even got through college yet.” — Apple Computer Co-Founder Steve Jobs on attempts to get Atari and HP interested in he and Steve Wozniak’s personal computer. HP recovered nicely (though not quite as nicely, I suspect as they would have if they’d chanced it) but where is Atari today.

Digital Research- IBM once hired Bill Gates to come up with the operating software for a new IBM computer… and Gates turned to a company called Digital Research. He set up a meeting between owner Gary Kildall and IBM … but Kildall couldn’t make the meeting and sent his wife, Dorothy McEwen, instead. Dorothy McEwen felt that the IBM contract is not fair. So she turned the contract down. Bill Gates went elsewhere, eventually coming up with a program called DOS, then we all know what happened.

Lehman Brothers- Investment firm Lehman Brothers’ main holdings were in real estate and subprime mortgages. When the subprime mortgage crisis first sparked in 2006-07, the firm took out enormous loans based on their liquid assets instead of selling off their huge shares of failing mortgage propriety. Debt ate up the company and, in 2008, it eclipsed Enron as the biggest bankruptcy in US history.

Google wont work: Excite CEO George Bell- In 1999, former Excite CEO George Bell had the opportunity to buy Google for US$1 million — but passed on the opportunity. Google now has a market value of US$163 billion.

Decca Record’s Dick Rowe rejects the Beatles- The Beatles defined the music of the sixties, and have basically influenced every musical act to existing today. Hell, the sound of Paul McCartney and John Lennon in harmony sent millions of fans temporarily insane, but one man wasn’t impressed. After auditioning the upcoming band early in 1962, Dick Rowe from Decca records rejected the Beatles from his label, saying ‘guitar music’ is on the way out”. The Fab Four went on to be bigger than Jesus, while a successful career judging Idol beckoned for Rowe.

“640K ought to be enough for anybody.” – Bill Gates, 1981

“Drill for oil? You mean drill into the ground to try to find oil? You’re crazy.” – Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in 1859

“But what … is it good for?” – Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip.

“There is no reason anyone would want a computer in their home.” –Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977

“The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” --David Sarnoff’s associates in response to his urgings for investment in the radio in the 1920s. I hope he fired all of them.

“The concept is interesting and well-formed, but in order to earn better than a ‘C,’ the idea must be feasible.” – A Yale University management professor in response to Fred Smith’s paper proposing reliable overnight delivery service. (Smith went on to found Federal Express Corp.[FedEx])

“Heavier-than-air flying machines are impossible.” -- Lord Kelvin, president, Royal Society, 1895.

“Airplanes are interesting toys but of no military value.” -- Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre. Wasn’t France bombed in World War Two?

“I’m just glad it will be Clark Gable falling on his face and not Gary Cooper” -- Gary Cooper on his decision not to take the leading role in “Gone With the Wind”

“We don’t like their sound, and guitar music is on the way out.” --Decca Recording Co. rejecting the Beatles, 1962. Pwned!

In 1933 Coca-Cola declined an opportunity to buy it’s then-bankrupt and insignificant rival Pepsi – Cola

In 1999, Excite declined the opportunity to buy Google for $1 million. It’s possible that ANY quote on this from Excite would be — a-hum — unprintable.

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” — Western-Union internal memo, 1876. Alexander Bell offered the patent for the Telephone to Western-Union in 1876 for $100,000. They declined. The telephone patent has been estimated as the most valuable patent of all time. Bell’s Company, AT&T, later aquired Western-Union. Special Note — In 1971 AT&T turned down an offer to own the Internet. Oh well.

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