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2 Abdul Wahab Alfalaij & James Howard Merkel
On The Art f Business

Another
FOOD FOR THOUGHT Production

By Abdul Wahab Alfalaij & James Howard Merkel
"Its the road you are on"
Copyright 2003 Abdul Wahab Alfalaij and James Howard Merkel THE KINGDOM OF BAHRAIN MINISTRY OF INFORMATION DIRECTORATE OF PUBLICATIONS & PRESS Ref. License of Printing & Publishing a Book Reference No. at the Author's Rights Bureau: 922/2003 Reference No. at the Directorate of Public Libraries at Ministry of Education : 3501 D.A./2002 ISBN : 99901-552-0-8 Type of Classifier : Scientific - Economic deals with principles of art of commerce and business which may lead to wealth. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from both the copyright owner and the publisher. Requests for permission to make copies of any part of this work should be mailed to Food For Thought Production, Permission Department, 19134 San Jose Ave., Industry, Ca 91748 ISBN 0-9754714-0-6 INTERNATIONAL FIRST Edition
This publication and all FOOD FOR THOUGHT publications are based on the quality of honesty. They are protected by copyright and trademark. Any unauthorized reproduction of the materials contained within them is strictly prohibited. The philosophies of On the Art of Business and The California Kid are known and practiced in every country on earth. If you attempt to transfer unauthorized copies of these materials to anyone and are detected by an honest person you may be branded as a thief. At the very least you will be recognized to be a dishonest person. Unauthorized reproduction or publication may result in the ruin of your good name and reputation. Once your reputation is tarnished or ruined it is most difficult to ever restore it to its former status. Should anyone request that you give them a copy of these protected works, please do us and yourself a favour and direct them to our web site, where they may purchase a copy for themselves. We, the publishers at FOOD FOR THOUGHT Productions, charge a nominal price for our publications. We offer good value for a good price. Because all people have a need and want to obtain good value for a good price, we make this good value available. You have the ability to acquire this good value. All factors are at PAR. P=VZC, Price equals Value relative to the Need, Want, Ability, Availability, etc. The California Kid
The following concepts are FOOD FOR THOUGHT Production Trademarks and internationally protected concepts:
1.) The War, Peace, and Business linear mathematical relationship.
-1___________________0_________________+1 WAR PEACE BUSINESS
2.) The War, Peace, and Business triangular mathematical relationship.
BUSINESS (+1)
WAR (-1) PEACE (0) Price equals Value as is relative to the ZC Factors. ZC is 3.) P=VZC the factor of human consciousness, of Need, Want, Greed, Ability, Availability, etc. Therefore:
P=VZC
4.) The Urgency Scale
The Urgency Scale

Buyer Urgency Low Buyer Urgency High
0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
--------------------------------------|---------------------------------------------------PAR Seller Urgency High Seller Urgency Low 5.) The Ability / Availability Scale
The Ability / Availability Scale

Buyer Ability Lower Buyer Ability Higher
0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
--------------------------------------|---------------------------------------------------PAR
Seller (Product) Availability Higher Seller (Product) Availability Lower
6.)
On The Art of Business
7.) The California Kid (TCK) 8.) Public Relations Model Communications Symmetrical or Asymmetrical Audience Internal or External Financial Revenue stream(s) 1 or Revenue stream(s) 2 Strategy Promotion of the Positive (P+) or Limitation of the
Negative (L-) I Communications: a) Symmetrical communications are exchanges of information, two-way communications, first communication and the response or feedback that follows b) Asymmetrical communications are one-way information transfers that do not need or desire a response or feedback II Audience: a) Internal Audience(s) are those individuals, departments, or organizations having status within the recipient of the public relation efforts, including management, employees, participants, stakeholders, etc. b) External Audience(s) are those individuals, departments, or organizations having no status within the recipient of the public relation efforts, including government and political entities, media entities, pressure and lobbyist groups, financial institutions, potential customers, the general public, etc. III Financial: a) Financial revenue stream(s) 1 refers to revenues that are derived from the prime or normal course of an entitys business. This is how an entity first gets its money and continues to receive its cash flow from these prime activities, the sale or trade of its primary products or services b) Financial revenue stream(s) 2 refers to revenues that are derived from investment(s) of the entitys Revenue stream(s) 1-saved funds, including investment(s) outside the entitys normal business practices
IV Strategy: a) P+ is the Promotion of the Positive that brings any positive aspect of the organization into a more positive light. b) L- is the Limitation of the Negative, which reduces any negative exposure that could affect the functions, communications, strategic activities, or financial implications of the organization and the opinions of audiences internal and or external to the organization. This publication has been created for the purpose of educating the general public. It is our intention that the subject matter presented herein should be used for the betterment of your individual life. As an individual, you have the right to pursue happiness in all its varied forms, for only you truly know what makes you happy. However, we have found that the knowledge that you are financially secure helps a great deal. Use this and all FOOD FOR THOUGHT Productions wisely, and they will serve you well. The authors have taken precautions in the preparation process to ensure that materials presented are accurate. Please note, however, that much of what passes for knowledge is nothing more than common sense, and a great deal of what we offer to the reader has survived the test of time and experience. Neither the authors nor the publisher take any responsibility for any errors or omissions. The author and publisher specifically disclaim any liability resulting from the use or application of the information contained in this publication or any other FOOD FOR THOUGHT Production. The information is not intended to serve as legal advice related to individual situations. The material presented herein is meant to be timely. Much of it is timeless.
Table of Contents
MissionStatement. ix Foreword Acknowledgement.xi Introduction.xxi
PROLOGUE .............................................................................................. 1 War .................................................................................................... 3 Part I The Distraction of War .................................................... .3 Part II Sun Tzu Art of War ......................................................... 8 ACT I OBSERVATION AND PERCEPTION ..................................... 55 Relativity: Time and Space Matter ................................................. 57 Part I Relativity ........................................................................ 57 Part II Time .............................................................................. 70 Part III Space ............................................................................ 80 Peace................................................................................................ 83 Business ........................................................................................... 85 Consciousness ................................................................................. 97 Value ............................................................................................. 103 Truth & Honesty............................................................................ 109 Trust .............................................................................................. 113 Life ................................................................................................ 115 Emotions and Character Traits ..................................................... 121 Part I The Basics .................................................................... 121 Part II Laziness ....................................................................... 130 Part III Competence and Confidence ..................................... 132 Reward and Punishment ................................................................ 137 Corruption ..................................................................................... 143 ISM ................................................................................................ 147 Democracy .................................................................................... 155 ACT II ANALYSIS................................................................................ 163 The Individual ............................................................................... 165 Family............................................................................................ 171 Associations .................................................................................. 173 The Better Team ............................................................................ 179 Have's and Have-not's ................................................................... 185
Part I The Game ..................................................................... 185 Part II Migration ..................................................................... 187 Public Relations............................................................................. 197 ACT III CHOICES ................................................................................ 221 Communication ............................................................................. 223 Part I Communication ............................................................ 223 Part II Spin ............................................................................. 228 Corporate Governance ................................................................... 231 Risk................................................................................................ 243 Part I The Risk We Take ........................................................ 243 Part II Certainty and Uncertainty ........................................... 245 Fatigue ........................................................................................... 251 Chaos or Complexity ..................................................................... 255 ACT IV DECISIONS ............................................................................ 259 Wealth ........................................................................................... 261 Part I What It Is ...................................................................... 261 Part II Cash Flow ................................................................... 265 Knowledge .................................................................................... 269 Part I Stupidity, Ignorance, and the Idiot ............................... 269 Part II Acquisition of Knowledge .......................................... 272 Part III Experience ................................................................. 278 Part IV Teaching .................................................................... 279 Part V Knowledge Management ............................................ 279 Part VI Core Logic ................................................................. 289 Part VII Wisdom .................................................................... 291 Conventional and Unconventional ............................................... 297 Leverage ........................................................................................ 303 ECONOMY ................................................................................... 307 Part I Economy ....................................................................... 307 Part II INFLATION ............................................................... 311 Benefit and Loss ............................................................................ 317 Investments.................................................................................... 323 Part I Rating System............................................................... 323 Part II Investment ................................................................... 325 Part III Retirement.................................................................. 333 Part IV Speculation ................................................................ 337 Banking ......................................................................................... 345
Part I Banking ........................................................................ 345 Part II Security ....................................................................... 347 Contracts and Agreements............................................................. 351 ACT V DO IT ......................................................................................... 355 Action ............................................................................................ 357 Strategy.......................................................................................... 361 Part I .......................................................................................... 361 Part II The Thirty-Six Strategies of Ancient China ................ 367 Start-up .......................................................................................... 375 Manufacturing, Production, and Service ....................................... 381 Marketing ...................................................................................... 385 Deals .............................................................................................. 389 Distribution.................................................................................... 393 Cosmetics ...................................................................................... 397 Secrecy .......................................................................................... 401 Epilogue ........................................................................................ 403
References..417
Mission Statement
We, the members of the Better Team, hereinafter known as Team On the Art of Business (Team AoB), hereby endeavour to create a product to be sold for profit. The scope of our project shall be limited only by the boundaries of our imagination. The number of products we initially intend to sell is one million units. The time frame in which we shall accomplish this task is one year from the time of completion of the product, when the product is ready for sale to the general public. By reading this book and learning the principles contained within it, you can do the same thing and become rich and wealthy Our conduct during the period of observation, analysis, creation of options, consciously reasoned decisions, research and development (including product, legal, financial, vehicle of accomplishment), production, testing, marketing, sales, distribution, banking, re-investment, conversion of gross to net profits, and starting of the process for a second time (proof of repeatability) shall be based on the principles of honesty, faith, creativity (imagineering), objective-oriented choices and decisions, desire and persistence, our ability/availability to possess and/or need to acquire any and all resources and knowledge required to complete the task at hand within the allotted time frame. Considering the above, we must first ask the question: What product can be created that will meet or beat the criteria given above? Our carefully reasoned answer is simple: The product vehicle of imaginative thought as presented in the context of a publication to be sold via traditional and electronic means (brick and mortar stores and the Internet). Conscious reasoning dictates that we must create a product than can be
manufactured once and sold many million times, distributed in pure simplicity, and desired by the greatest possible audience, beneficial to all that consume, digest, and practice the technical methods of this art form. In order to satisfy the financial aspects of our mission, we must consider the total volume of product sales in the form of Price verse Value. In order to command a purchasing audience (our customers) of such volume needed to meet our projected profit target at the price per value numbers stated above, in the time frame allocated, we will necessarily have to consider the entire population of the planet earth. Therefore, we find no subject other than the acquisition of wealth to qualify. Since wealth is the accumulation of vast amounts of value and valuables, we have made a conscious decision to start at the beginning, proceed in a logical manner, and be persistent in our actions. Thus we will control our own destiny by shaping reality to meet our own requirements. The number of individuals who will desire to purchase our product in sufficient volume to meet the possible scenario above is easy to calculate. Two hundred thousand customers each in the following markets: North America, South America, China, India, and Europe (east and west), hence the necessity of multiple languages. Our level of urgency (high) dictates that our product should exceed par in value versus price. Our resources include several comfortable work spaces (offices and hotels), pens and paper, one laptop computer, one desktop computer, our desire and determination to acquire any additional resources that will be required, our currently possessed knowledge, our ability to acquire additional knowledge as needed, our belief that we have developed a faultless strategy, our individuality, our objectiveness of purpose, and the technical method of imagineering. Therefore, as we have observed, perceived, analysed, formed concepts through the process of imagineering, made competent decisions, and NOW we shall begin our actions. We shall DO IT. Note: As we all have businesses that we currently operate, except for
myself, as I am unemployed, this project is nothing more than a part-time endeavour for each of us. JAMES HOWARD MERKEL Bahrain, January 1, 2002
Foreword & Acknowledgements

Without the associations that I have made and kept over my lifetime and of the personal relationships that I have maintained with my co-author, A.W. Al Falaij, and our contributing authors, this book would not have been possible. Patient according to Websters means enduring affliction or pain without anger or complaint; understanding; tolerant; persevering: steadfast. Patience according to Websters means the fact, quality, or habit of being patient. Patience is a virtue. Slow down and take a break. The California Kid L.J. Merkel has for more than twenty-five years been president of a small business corporation (fewer than twenty employees) located in The City of Industry, California. She has more practical knowledge in running a business than anyone I have ever known, or probably ever will know. I value her advice: Get it right. If you dont know what you are doing, find out from someone that does, then get it right. When I was an employee working at the small business, I learned to take responsibility for my actions. I made mistakes and had to learn the hard way that it was easier and faster to get it right the first time than to have to do the job over again. Lasting harmony with a woman [was] an undertaking in which I twice failed rather disgracefully. Albert Einstein L.J.'s better half, H.J. Merkel always told me, You have a head on your shoulders. Start using it. A. W., my co-author, has been conducting international business for more than thirty years; his expertise was already widely recognized at the time I met him in Taipei in the early 80s. Since then, I have looked upon him as my mentor. I thank him for all the good advice that he has been
willing to give me. His first lesson, which I have never forgotten, was to have patience, patience, patience. Abdul Karim Alfalaij, a man of White Heart, undertook the responsibility of educating me in the ways of the Arab mind. Ray Chung, my partner and brother, educated me in the ways of the Chinese mind and demonstrated what it meant to worknot just when you have to, but all the time. Diane Taren, another Kid from L.A. like me, taught me what it meant to be a foreigner in a foreign land. Although I had been doing international business in foreign countries for more than twenty years when I met her, she taught me what the real meaning of being a foreigner was. Raymond Wong, my other Chinese brother, is a classic example of the Overseas Chinese, who are currently the largest and richest independent group of foreign business people in the world. They are everywhere, doing all and every kind of business. They control in excess of two trillion dollars, which they are able to keep out of the grasp of governments. Kamal Alfalaij (the younger) is directly responsible for authoring the chapters on public relations, corporate governance, knowledge, strategy, and the epilogue. With a little help from my friends. John Lennon and Paul McCartney, the Beatles, a better team. The first lesson I would like to convey is that you need to learn to communicate, effectively, understandably, and (most important) continually in all your business affairs. My co-author and I, along with our contributing authors, constitute the individual members of a Better Team. People in particular:
Albert Einstein D.J. Winter and family. Dave taught me what the physical world is all about. "Kids fall down and sometimes get hurt. Thats how they learn about density." Gail Glassco and family. Gail once told me that the secret to life was a four-
letter word: WORK. Pete McNulty and family. Heres to the sun. Neighbours, Joe and Jan. Slightly to the north The Merkel family and offshoots thereof. Ed Possnecke, my first mentor. Dr. Tim Scott. Lives in my fingers and my soul. Blair Busching and Bob Gaudreau. A really great team. A. Qardar, A. Aziz, A. Rahman, A. Wahid, and their wonderful brother, Jamal, and the crew of Marsim, all products of Bahrain. Salah. Individuals I have know worldwide. Barbara Ardinger, my editor, and Llumina Press. Individuals I have know worldwide. Ed Possnecke, Double Duty as Printing Production Consultant Tom Irons, Associate to the Pos Steve Vance, My Tech Guru My Bankers at Farmers & Merchants Bank, and HSBC Barbara Ardinger, my editor, and Llumina Press.
Mona Alfalaij, my beloved daughter, currently living in Toronto, Canada. The inspiration of my life. -A.W. Alfalaij. Last but not least The California Kid, without whose inspiration none of this would have been possible. Aka the Plastic Kid, he is known for his prolific use of credit cards. He says, Track me if you can. He was born in Hollywood, California. As of the writing of this book, he says he is halfway to a three-digit life. We dont know his real name. We have met with him on numerous occasions, in numerous different countries, and on several of these occasions, he was using a different name and holding a matching passport and credit cards. He can be subtle, so very subtle that he appears to be invisible, or (more correctly said), he is visible like the wind, a refreshing force that just passes you by. He told us of the more than ten years he spent in a Shao Lin monastery,
just like the Kung Fu guy on television. He possesses great knowledge of Chinese medicine and the art of healing. He professes to have conducted good business in more than twenty countries around the world. And, he adds, I have conducted business in most other countries of the world without ever having been in them. He calls himself an advisor to good and bad business people of the world. He likes to advise people on the intricacies of conducting business, hiding assets, and avoiding taxes. He is quite clear on the subject of taxes. He says, Do not evade. That is illegal. But avoid paying them if you can. He charges anywhere from $5,000 per hour to a few beers per project. He was most gracious with our team, the authors of On the Art of Business. Many of the ideas presented in this book are his ideas and products of his imaginative thought, for which we are extremely grateful. He has agreed to charge us one beer per page that we publish. He possesses riches beyond measure. He refers to himself as a typist extraordinaire. We were introduced to him by Dr. Tim Scott, in Taipei, Taiwan, more than twenty years ago. We believe he is the epitome of an individualist in the Neo-Tech and Ayn Rand tradition of pure Objectivism. He is Amerasian, a true Overseas Chinese, that brotherhood of disenfranchised individuals who currently control in excess of two trillion dollars, a great deal of which is in real assets (highly liquid) minimally effected by inflation and which they have been able to keep out of the hands of governments. He often relates a story of his youth, telling us that he wanted to be a writer when he grew up and explaining that in order to be a rock-n-roll star you have to look like a queer, but to be a writer you only have to look like a drunk. His consciousness is profound, his honesty absolute. He says he does not believe in the truth, as the truth can be manipulated. Honesty, however, is absolute. A person is either honest or dishonest; there is no middle ground. When we asked him where he came from he answered, California, the
mystical land of riches and treasure, a country two hundred years older than the United States of America. When the San Andreas Fault rips its way up from the Gulf of California, the rest of America will sink into the Atlantic. Good riddance. California will float. His Golden Rule: Think for Yourself. Saying that the biggest risk is in not taking any, he always carries a copy of Sun Tzus Art of War with him wherever he goes. He says he is writing a book on the concept what you should know and what governments and socialistic organizations (big)SOBs, as he calls themdo not wish you to know. He avoids all forms of authority and holds them in contempt, saying that a man who consciously thinks for himself cannot be controlled. He tells everyone that his true purpose on earth is to help everyone he meets. He wants to enlighten all. He told us that his own enlightenment comes through the acquisition of knowledge filtered through beer and nicotine. We have noticed that everyone seems to be listening to what he has to say. He holds knowledge paramount, saying, You can never have enough. As far as we can ascertain, he prefers to stand rather than sit. We mostly find him standing at a bar in three- to five-star hotels. Always, he is advising someone on the subject of business. His motto is prudence, yet he speculates like a compulsive gambler. We find it amazing that he always seems to know the outcome of whatever event he is speculating on. He seems to know the future and perhaps has 20 /20 foresight. We have heard people call him the Oracle, Mr. Vision, and the Prophet. We are privileged to be able to call him our friend. The Kids bibliography sources (in his own words): What is contained within this publication is largely information residing in the Public Domain; it is common sense that has been known for thousands of years. The thoughts and concepts have been written and expressed by many individuals and will remain valid for
thousands of years to come. The following individuals have published works expressing these common sense ideas of which we have borrowed to some extent for the purpose of validity. Sun Tzu, Art of War. All of Ayn Rand, the creator of objectivism. Frank Wallace, Neo Tech, an interesting read, obviously a follower of the above. William D. Montapert, The Omega Strategy, you hit the nail on the head with regards to inflation, banking & speculation. Sun Fan, Twelve Golden Rules of Business. Sir Arthur Conan Doyle, The Complete Sherlock Holmes. Robert Kyosaki, Retire Young Retire Rich, from the Rich Dad Poor Dad series. Edward T. Hall; The Silent Language (everything that speaks to you without saying a word) Hugh Courtney, 20 / 20 Foresight: Crafting Strategy in an Uncertain World, (Know your risk) Napoleon Hill, Think & Grow Rich Robert Anton Wilson, Right Where You Are Sitting Now Mario Puzo, The Godfather.... make him an offer he can't refuse Bill Austin, [email protected]. With his kind permission, we were granted limited use of quotations found on his web site. Public relations input from all sources. Strategies, the hundreds of books, and thousands of conversations on the subject that we have read and been a part of. All media: TV, radio, and all printed matter; for the most part the rhetorical propaganda stream. Much thanks to Rush Limbaugh who sees things the way they really are. Bill Handel (KFI A.M. 640), the only lawyer out side of Perry Mason and Douglas Miller that I trust to be honest to some extent. Writers that we have read in the Conservative Chronical, including but not limited to Charley Reese, "War as a distraction" and other timely
topics (King Features Syndicate), Samuel Francis, his wonderful works on immigration and other timely topics (Creators Syndicate), Joseph Sobran "What do we owe the State" and other timely topics (Griffin Internet Syndicate), William Buckley (Universal Press Syndicate), Pat Buchanan (King Features Syndicate), all of whom have lifted the veil from their vision and see the world as it really is. Scarnes New Complete Guide to Gambling. You want to bet? Graham Green, a wonderful Catholic writer, The Power and the Glory, The Heart of the Matter; Loser Take All, etc. The power of observation and belief. Trader Vics book of food and drink. Eat hard, drink hard; then lets go... Mr.Boston, Deluxe Official Bartenders Guide. You have to play by the rules. The Holy Bible and The Holy Koran. It is all in your head. Nothing more need be said. The Kids Resources: Common sense. Technology input from all sources.
In the Kids own words, These are some of my inspirational sources: Budweiser Heineken Tobourg Steinlager Fosters Corona Amstel And all beers in general. Cervesa este la nectura de vida del oro (Beer is the golden nectar of life) I woke up this morning and I got myself a
beer. Jim Morrison and the Doors. Fuzz of the puppy that pissed on your leg. You cannot buy a beer; you can only rent it for a little while. Jameson, Bushmills, and Paddys (The Irish created whiskey. They made it to drink. Scotch whiskey was only made it to sell.) Marlboro, Dunhill. Nicotine in general, optically active molecule that enhances thought. City of Amsterdam, The State of Mind. State of California, City of Los Angeles, Cities of West Covina, Newport and Huntington Beach - Surf City, Encinitas and Table Top, (all of which are prisoners of the United States of America). Republic of Taiwan, birthplace of Lisa and Big Mike. Republic of Philippines and San Miguel Beer. Republic of Thailand. One knight in Bangkok, a good man stumbles. Republic of Singapore, Land of the lion. Damn English didnt know that the cat was a tiger. Republic of Indonesia. 13,000 islands of ... Republic of Malaysia. Across the causeway from Singapore. Japan. Testing ground for the annihilation of the world. South Korea. Itawon. Mexico. In particular, Tijuana, Ensenada, Maztatlan, Oaxaca, San Jose del Pacifico. The Magic Mountain, venue for the growth of hongos, la comida de dios, food of the gods. Dunes & Waters, and of course, tequila. Chinese food, Arabic food, Italian food, chicken in all its forms, comida del mar, hamburger, and Coca-Cola. (Currently caffeine, originally Coke contained cocaine. Make it for a dime, sell it for a dollar, and make it addictivethe true secret of the acquisition of wealth and success.) Romania (the last Romantic relic of ancient Rome). Hong Kong (my true love). Gulf Cooperate Countries (GCC) and Yemen. Damn sand gets into everything. Chop sticks, Quay Tsur. It has always amazed me that the Chinese can
carry great weight across their shoulders using a single sturdy stick, but they must use two sticks to pick a single grain of rice. The invention of the computer. Let your fingers do the talking. Cheap sex, anywhere it can be found. She was buns up kneeling, and I was wheeling and dealing. Frank Zappa, Mothers of Invention A special thanks goes to: All of my wives and children, including but not limited to Lisa, Michael California and Thomas Joseph. Locations: The Caravan Group of Hotels, in particular the Aradous Hotel, Bahrain, where they made me feel at home. Mandarin Hotel, Hong Kong. UpTown Hotel and Coffee Shop, Amsterdam. Rosarito Beach Hotel, Baja California, Mexico. Hilton, InterCon and Sheraton Hotels (unquestionable class). Alfalaij family home. My flat at the Al Mutanabi Building, Bahrain. Bars and beaches around the world. And a very special thanks goes to the Kingdom of Bahrain, the venue of creation of this study and of all life, a nation state in which good business always resides. And (lest I forget) all oceans and seas everywhere. Men in ships go forth. Note: Bahrain (aka) Phoenicia, Aradous, Tylos, Delmon, and the Pearl of the Gulf are all names that have been assigned to the original Garden of Eden, as recorded in the Bible. Bahrain is the birthplace of creation. A note on quotations found in this publication. Some quotation may appear more than once in different chapters. This is because they fit
different situations. The primary purpose for including quotations is to make the reader think. That is, after all, the main purpose of this book. And of course to help the reader make more money, become rich and wealthy, and (most important) stay that way forever. Should any legal owner of the intellectual property rights of quotations which appear in this publication object to our use, please contact us so we may rectify the situation, thank you. Disclaimer: The authors of this book do not endorse the use of alcohol or drugs, nor do we necessarily go along with some of the Kids anti-authoritarian sentiments. However, his genius for conducting good business and making massive profits is undeniable. Once again, we do not speak for the California Kid, as he is an individual whose inspirations we have kindly been allowed to use. James Howard Merkel, Bahrain, December 31, 2002
Introduction
When my co-author and I started this project we did not know what we were going to write about or what subject would we were qualified to write about. We did, however, know about business. We had to be creative. When I picked up my dictionary (Websters New Riverside Dictionary) to look up the word creativity, I noticed that not only was there creativity, but there were also create, creation, creative, and creator. We were proposing to create a product to sell so we could make a profit. We were going to create a book. We had high hopes and wanted to create the best product we possibly could, something of value. We wanted to create a Work of Art. Art, according to Websters, means, The activity of using imagination and skill to create beautiful things; works as paintings, that result from this creativity; a field or category of artistic activities, literature, music, or ballet; a non-scientific branch of learning, especially one of the humanities, a trade or craft and the methods employed in it; a practical skill: knack; the quality of being cunning: Artfulness. Beauty, according to Websters, means, a quality or combination of qualities that delights the senses or appeals to the mind; one that is beautiful; an outstanding or conspicuous example. We wanted to create something that was not only functional but also beautiful. The mathematical sciences particularly exhibit order, symmetry, and limitation; and these are the greatest forms of the beautiful. Aristotle (384-322 B.C.), Metaphysica. We also realized that business is not easy to do. You have to fight, fight hard to be successful. Sometimes it is a war out in the business world. This thought immediately brought to mind the classic work of Sun Tzu, Art of War. We wanted to use the proven strategies that have enabled men to
be successful in war to also be successful (and have a little enjoyment) in businessand, for that matter, be successful in life. Painting is art, sculpture is art, music is art. There are many types of art in the world today, and business is the best art of all. The world's first and most respected and enduring treatise on military strategy is Sun Tzu's "The Art of War", written some 2500 years ago. It is still used by government military forces the world over. The other side of the war coin is peace. But there is no art of peace. However, there is art in harmony, in which the state of peace is a venue for harmony's existence. Other than a venue/location for peace, peace is a nonentity. On the mathematical scale, it possesses zero value, save for its being a location. A "work of art" has value. What is life without a little art? The principles set down within this book have been proven over time. These theories are prerequisites to the understanding of the nature of business. They are demonstrated in the nature of life. Therefore please find the following concepts that we developed through the use of our collective creativity: -1___________________0_________________+1 WAR PEACE BUSINESS
On a continuum starting at negative one (-1), we have war. Moving in a positive direction, we come to zero (0), which is peace. Traveling still further in the same positive direction, we arrive at positive one (1), which is business. Looking closely, we notice that 0 is round, not singularly erect. In fact, a zero could be elongated, as a cloud spreads out to cover a larger area, toward both war and peace. War is war, and business is business. Peace seems to be somewhere in the middle. You are either in war or out of war, you are in business or you are out of business. It is a life or death
pursuit, in war or business. To the reader, please understand that the purpose of this book is to promote the value of business on a universal scale. In order to do that, it will be necessary to educate some readers, to some extent, in the realities of the world as they affect businesses. In addition, we will be drawing the reader's attention to the concepts of both war and peace. People in business usually start out by developing a plan of business. They have goals they wish to reach, but that can only be reached if transactions are completed, brought to fruition, made to satisfy the parties to the transaction. Our objective is to achieve orderly simplicity within the complexities of business that is conducted in a world full of chaos. A negotiated peace, striving to reach zero, does not provide for the acquisition of either a positive or a negative value, and certainly not for the making of a profit. Therefore, the so-called big scorepeaceis nothing more than a missed goal. People who have traveled the distance to reach peace with the intention of gaining something end up settling for zero profit without the realization of any compensation for their work. Not to mention the cost of their efforts and investments trying to arrive at peace. "The business of war" is, as they say, profitable. This is so because war is the destruction of created values and valuables, and it becomes necessary to rebuild the infrastructure destroyed by war. The rebuilding of the destruction is paid for by businesses. War is thus continually creating its own need: business must rebuild the wasteland created by the destruction of war. War is the province of government. In this book, unless otherwise noted, government = a social body's acceptance of its capacity and willingness to wage war, and the negative value of war. As the lead author of this book, and an American, I think it is best to speak from a familiar point of view. Therefore, it has been my observation that America is the undisputed land of economic prosperity, the country that fostered the worlds greatest economy. However, America is a fishbowl, and Americans and the other residents are the fish and other
creatures that are swimming inside the bowl. The rest of the world walks around the table on which the fishbowl sits, admiring the fishbowl and thinking how wonderful it would be to live in such a place. Like Disneyland, "the happiest place on earth," America has been a place totally isolated from the troubles outside its walls. That is, until September 11, 2001. Big Business, government, and various political and social lobbyists control the media in all its forms. They authorize exactly what the public is allowed to see, hear, and believe. When a Big Business runs into difficulty, tens of thousands of people are left without jobs. Small business must come to the rescue and absorb the people that have been laid off. (Note: Big businesses and organizations are defined as having five thousand or more employees.) This phenomenon of the precipitation of mass unemployment is not limited, but exists worldwide. As my contributing authors are varied in their nationalities and ethnic backgrounds and religious beliefs, and are all widely experienced in multiple international trade and business disciplines, we hope to convey to the reader the benefits of our collective knowledge and views of business and the real world in which business is conducted. People owning Big Businesses are considered to be wealthy. Starting a Big Business is impossible, unless you are already very wealthy, for the simple reason that smaller businesses must grow into Big Businesses. It is, however, possible for any individual to start his or her own Small Business and grow it into a Big Business. Therefore, it is possible for anyone to become successful, and even rich and wealthy. This book is not an attempt to distract or degrade the commercial success of any business anywhere in the world where business is conducted. This book will, however, attempt to compile the collective ideals of good business, factors and qualities that affect all types of business ventures in general. We will draw on the essence of cultures, companies, organizations, and individuals, some that have failed and some that have succeeded in their commercial business endeavors. We will try to
identify what, exactly, is the real art of business. We do not proclaim to know exactly what the real art is, but we hope that this study will lend insight into the "art of business." Cynic, according to Websters, means one who believes that all human action has selfish motives. Cynicism is a defense. Cynical people are protecting themselves from corrupt and greedy people and groups. You must protect yourself before you protect others. Further, this book does not attempt to degrade or condemn governance or governments. It does, however, offer a cynical slant on negative organizational functions and practices. People are individuals. They have an absolute right to live and sustain their lives through the acquisition of the necessities of life, including everything else that they have the ability to acquire along the way by their own honest efforts. They have the right to think and believe what they wish to think and believe without restriction. I love my god, and I love my country, I love my business and way of life. I just don't like the incapable and/or unqualified individuals, groups, and/or organizations that try to stand in between my loves and me between me and my luvs. In the real world, we still have to deal with the things that make us sad and happy. We hope to be allowed to do this without interference from others. Quantum mechanics is very impressive. But an inner voice tells me that it is not yet the real thing. The theory yields a lot, but it hardly brings us any closer to the secret of the Old One. In any case I am convinced that He doesn't play dice. Albert Einstein We also wish to make clear that not all business is positive. There are negative businesses and negative business practices that run contrary to positive or good businesses and good business practices. Most notably, the differences between positive and negative are viewed in relation to honesty and dishonesty. If you have not caused any action that would qualify you to be classed as either honest or dishonest, then you have committed no
action, or at least no observable action, and most probably you exist in a state of peace. You are in a state without conflict As this publication is being written during the year 2002, many ideas and issues contained herein are meant to be timely. Globalization and international immigration, corruption, business and peace oriented activities will be touched upon. The Greek letter, delta, , invoked the thought of a pyramid to my co-author and I, like the pyramid on the dollar bill. The delta is also a mathematical sign used in science and engineering to signify change. In Websters, it is defined as a triangular alluvial deposit at the mouth of a river. Alluvial gold, for example, is the sediment of gold deposited in the sands of a riverbed.
BUSINESS (+1)
WAR (-1) PEACE (0) One way to observe the mathematical relationship between war, peace, and business is to visualize a triangle with business on the top and war and peace sharing the angles at the ends of the bottom line. You will notice that the width of the line from war to business is narrower than the line from peace to business. The path from war to business is a less traveled path than the other. It
is not necessary to travel from war to peace and then on to business. If you go directly upward from the bottom to the top, you may take the direct route from war to business. This is the best route, even if it is the least used. In fact, as the shortest distance between two points is a straight line, going from war to business is closer than having to travel from war through peace and then traveling on to business. Why, then, does the entire world, especially politicians and peace advocates, choose to have either war or peace as their central theme, their ultimate goal? They all place much stock on achieving peace, when, in fact, peace is nothing. It is zero. It has neither negative nor positive value. In a mathematical equation, it counts for nothing. What would the world leaders, both political and peace seekers, do if peace was ever attained, if ever, and at what cost would peace be achieved? Someone should explain the math. Everyone should seek business that has a positive value. There are only three kinds of people in this world, employers, employees, and the unemployed. The government considers you to be a statistic. Peace advocates do not know what they should consider you to be, other than charitable donors, but their thinking is as scattered as the electron cloud of zero. At least religions consider you to have a soul. However, to business you are a member of a potential money-making team, someone willing to participate in his or her own survival and search for prosperity. To business, you are someone who will work, rationally or intelligently, to grow and prosper. That is because, hopefully, you have a desire to grow, prosper, and become rich and wealthy. You will be good for the others in business around you. Business is concerned with your life today. Governments are not concerned with your life at all, except insofar as they can control you. They are the only organizations on earth that exercise their politically-motivated, self-legislated, legal right to kill. They plan to end life that, in their opinion, has become uncontrollable. The only other choice you have, as offered by the peace seekers, is to rest in peace.
In the twentieth century, it is estimated that the rulers of states and nations and their forces have murdered nearly 180 million of their own citizens. This does not account for foreigners that have been killed in wars. The argument is this: without states and nations would as many people have been arbitrarily killed? Have states and nations justified their alarming death rates by their contributions to the service of mankind? Or would we as the families of human beings have been better off without these death-mongering organizations? This book will make you successful. If you follow the path and learn it well, it will make you rich and/or wealthy. That is unless you are not willing to do the work. Observe, Perceive, and Learn. Think about your observations. Analyze the data (do the math). Integrate your analyzed data with the knowledge you possess and form concept(s) and options. Create cognitive choices (rationally and intelligently). Decide exactly what it is that you want to do. Make a decision. DO IT. Take action and complete the action. Finish what you start. Time is the most precious asset that you possess. It cannot be replaced or restarted. Once past, it is forever gone. Quickly now, use your imagination to visualize the riches and wealth that you wish to acquire, the good life that you wish to live. I am enough of an artist to draw freely upon my imagination. Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world. Albert Einstein Do not waste time. Life and business are relative; Do the math: In life E=MC2 and in business P=VZC I don't believe in mathematics. Albert Einstein
Do not worry about your problems with mathematics; I assure you mine are far greater. Albert Einstein THOUGHTS and QUOTATIONS: Beauty is always beautiful. Trash is always trashy. There is beautiful ART and there is trashy ART; but it is always called ART. Diane Taren
As artists, we must learn to be self-nourishing. We must become alert enough to consciously replenish our creative resources as we draw on them.Julia Cameron Artistic creativity is a whirlpool of imagination that swirls in the depths of the mind. Robert Toth Every child is an artist, the problem is how to remain an artist once he grows up. Pablo Picasso Good Art maketh glad the heart of man. Jeff Krewson
White. A blank page or canvas. So many possibilities. Sunday in the Park with George, lyrics by James Lapine Art, like morality, consists of drawing the line somewhere. G.K. Chesterton Art is just a pigment of your imagination. Tony Follari, comedian Rubbish in, rubbish out does not apply to a junk Artist. Tony Follari, comedian Perfect love is rare indeed - for to be a lover will require that you continually have the subtlety of the very wise, the flexibility of the child, the
sensitivity of the artist, the understanding of the philosopher, the acceptance of the saint, the tolerance of the scholar, and the fortitude of the certain. Leo Buscaglia Art is born in attention. Its midwife is detail. Julia Cameron The more perfect the artist, the more completely separate in him will be the man who suffers and the mind which creates. T S. Eliot I tell you, the more I think, the more I feel that there is nothing more truly artistic than to love people. Vincent van Gogh My mother said to me, 'If you become a soldier, you'll be a general; if you become a monk, you'll end up as the pope.' Instead, I became a painter and wound up as Picasso. Pablo Picasso Art produces ugly things which frequently become beautiful with time. Fashion, on the other hand, produces beautiful things which always become ugly with time. Jean Cocteau French poet, novelist, director Art is a jealous mistress. Ralph Waldo Emerson
PROLOGUE
War
Part I The Distraction of War
Please understand that for the past 2,500 years the majority of all governments have used Sun Tzus book, Art of War, to carry out their military intentions against their enemies. Governments today use the principles found in this book to carry out their intentions against the people they attempt to control, including you, the individual. It is time that you, the individual, use this book, and the principles contained in it, to free yourself from the controlling coercive efforts of governments and other individuals or groups of individuals.
Do Not Let Anyone Control You!

From the Declaration of Independence of the United States of America: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That
whenever any form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as them shall seem most likely to effect their Safety and Happiness. Distraction of War Panacea, according to Websters, means a remedy for all ills; diseases, or difficulties: cure-all. War and the inflation of a nations currency are the panaceas chosen by the ruling elite. In 1967, for example, $16 or $17 would buy two good-size paper bags of groceries from the supermarket; now $20 will purchase only one small plastic bag full of meager essentials. One dollar in 1967 would get you products that today cost $5.25. Much the same is true for the period of 1942 to 1967, just not magnified as much: $.42 to $1.00. The American Federal Reserve, as is true with most governments of the world, as directed by politicians, has inflated the currency by the simple method of printing money. Saying that they need to protect the citizens and the economy, they print more and more and more. They accomplish this task by injecting funny money (money which is not backed by real value) into the system in the form of needed stimulation, stimulation that today, and for the past half century, has been needed because economies are suffering at the governments instigation. Economies are always suffering. Our lifebloodthe economy of the society of manhas been and continues to be tampered with by governments. The Congress or other such representative bodies of government overspend and run up deficits. Then the government issues bonds to cover the bad checks that have been issued to satisfy the irresponsibility of the bureaucratic need to spend. Inflation is the friend of government. Governments need to grow, they need to spend, they need a reason to protect everyone from every evil in the world. They need a reason to exist, so they create or invent a reason. They create inflation, along with wars.
Whether it is the First World War, the Second World War, the Korean War, the Cold War, the Vietnam War, the first Gulf War (GW I), wars in Bosnia and Somalia, the War on Poverty, the War on Drugs, the War against Terrorism, and as the politicians have gotten it their way we have now seen Gulf War II (the Bush Revenge), war has always been characterized as necessary to protect the citizenry of the world. This time the excuse or distraction is because of weapons of mass destruction. The results of war are profits. Governments sell war bonds to the public, patriotism (the governments religion) runs rampant, money gets injected into the economy through defense companies and construction companies enjoying the fruits of war in the form of government contracts. Many men and women in the military and civilian sectors would have been able to enjoy the dropping of these fruits had they not died as part of the expense of these wars. Inflation continues to erode societys values. People cannot afford health care, retired civilian and military persons are cheated out of their retirements, and the tranquility of later life has been stolen from the middle class in a calculated, diabolical manner meant to satisfy the growth of government. Wars have always been distractions. Ernest Hemingway said, The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. Do you think he meant scoundrels? When we separate reality from what is happening in the real world, conscious individuals will know the difference. Honesty Strikes Home, The California Kid, December 2002. War, according to Websters, means armed conflict between nations,
states, or factions; a determined struggle, especially for a specific goal; a state of antagonism or discord; military techniques of procedures as a science. Force and mind are opposites; morality ends where the gun begins. Ayn Rand In war and business: we think about profits first. Hence, risk, but risk to whom? War, I can see where it helps my business; but I dont feel secure; I have a gut feeling; a hunch; a whim to distance myself. The California Kid Prejudice, according to Websters, means a bias for or against something formed without sufficient basis; irrational intolerance of or hostility toward members of a certain race, religion, or group. Racism is a primitive form of social unity or collectivism based on the genetic makeup of man as has evolved through his ancestry. The doctrine of racism decrees that man is not to be judged by his individual character, his intellect, or his personal code of ethics, but rather by having been tainted by blood, pure blood being best, unless it produces a skin color disliked by someone else. Mixed or tainted blood is viewed as being less than desirable, at least in the view of the pure-blooded, the so called elite of society, the aristocracy of the Old World, in their distorted views of class. It makes us wonder. The ruling class, majestic by blood, better than the restwho made them the boss today or any other day in history? Albert Einstein was arguably the greatest scientific mind of the twentieth century. His theory of relativity (summarized as E=MC2) has brought about the creation of both some of the worlds greatest technological advances and the world's most destructive weapon, the nuclear bomb.
When asked what weapons would be used in the next world war, Einstein is said to have replied, I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones. Time is the most precious commodity known to man. Once past, it cannot be retrieved, regenerated, or recycled. It can never be used again, there is no equity in time past, time is only rented. Time is a one-time-use only, disposable product that everyone on earth is given at birth. No two gifts of time are ever exactly the same. Every life starts at a precise moment in time and will eventually end. How much time do you have left in your inventory? Great spirits have always found violent opposition from mediocre minds. The latter cannot understand it when a [person] does not thoughtlessly submit to hereditary prejudices but honestly and courageously uses their intelligence. Albert Einstein My co-author, our contributing authors, and I hope that the reader will recognize the folly of war and actively pursue the path of business, bypassing the pursuit of peace, for the pursuit of peace is nothing more than a waste of time. Lasting peace is achieved within the natural course of business, as a by-product of good business. However, as temporary peace is a result of successful war (on one side or the other), you might ask yourself the following question: Do you wish to rent peace at the price of war, or would you rather buy business and receive peace as a bonus rebate to the purchase? How much time do you, as an individual, have left on this earth, in this reality? The California Kid If you are negotiating, you are talking, not fighting. For the most part, negotiations in war limit the fighting, as the different sides are hoping to achieve a cease-fire. In business, negotiations are used to resolve
differences and reach common ground in which the parties are satisfied to a degree that values may be traded by mutual consent. The threat of global terrorism and the proliferation of weapons of mass destruction are real. Just look at India, Pakistan, and North Korea, the world's newest nuclear powers. Consider the networks of terror, Al Qaeda, the non-state that wields enormous power directed at western values and western people. If religious prophecies are to be believed, can the Apocalypse, the end of civilization, as we know it, be far off? A human being is part of the whole called by us human beings, the universe, a part limited in time and space. We experience ourselves, our thoughts and feelings as something separate from the rest. A kind of optical delusion of consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from the prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty... We shall require a substantially new manner of thinking if mankind is to survive. Albert Einstein Xenophobia, the fear of strangers, is only one in many of the causes of wars. Businesses, on the other hand, have always warmly accepted strangers as potential new customers, new opportunities with whom they could conduct trade and business and make profits. One wonders when the political community will take notice of this fact and change the tone of their rhetoric or their propaganda to reflect the much-preferred business agenda that would give birth to peace through the presence of prosperity generated by the atmosphere of profitability created by good business. However, was a war ever planed with benevolence in mind? (Be honest, now) Whoever heard of governments or other groups and/or individuals making mischief in order to instigate profitable unrest? If war = hell and peace = heaven, then it stands to reason that business is the common ground between the two. Business is reality on earth. Taking business out of the equation, [war] (-1) + [business] (1) = [peace] (0), then
the result would be (-1), or peace residing at less than 0. On the other hand, if we take war out of the equation, we have peace in the positive regions of reality. Nothing positive can be said of war. War is the absence of peace, to a very high degree. War is the presence of destruction. Governments require businesses to pay for war. The California Kid
Part II Sun Tzu Art of War

The following translation of the ancient writing of the strategies of warfare, as laid down in the thirteen tenants of Sun Tzu, is the work of A.W. Alfalaij, James Howard Merkel, Ray Chung and Raymond Wong. The On the Art of Business authors notes appear in italics.
The Art of War, the worlds oldest and most respected treatise on the subject and theory of victory in war, was observed, perceived, conceptualized, and demonstrated some 2,500 years ago by the Master of the Strategy of War, the Chinese strategist, General Sun Tzu. To this day, it is still used by military practitioners the world over. Whether business people realize it or not, business is also conducted by means of these tenets. We will now discuss the meaning of the theories and describe the essence of the thirteen tenants, which are as follows: ART OF WAR By Sun Tzu
Following is the most famous story told about the great general and his method of strategic thinking and control of armies. Sun Tzu was put to a test one time as requested by the King of Wu. He agreed to perform a demonstration for the King. Sun Tzu suggested to the king that he could use women for the purposes of the demonstration and asked for a legion of 300 young ladies to be brought forth to the courtyard. They were instructed to form rank and file. The legion was to be split into two companies facing the king. Sun Tzu then requested that two of the kings most beloved concubines should act as company commanders, and to this request the king also agreed. The entire legion of women was outfitted with helmets and armor. They carried swords and shields and were ordered to stand. Sun Tzu instructed the entire legion regarding the ways of military methods, how the drum is used as a signal of military commands, how the troops are to act in accordance with the different soundings of the drums, whether to advance or withdraw, whether to go right or left, and to about-face, or turn around. He instructed them regarding what they could not do, what actions were prohibited to them. Sun Tzus instructions were clear and concise. Upon hearing the first beating of the drum, you will assemble. Upon hearing the second beating of the drum, you will advance with your weapons. Upon hearing the third drumming, you will deploy into proper military formation. As young girls do not take some matters very seriously, many of them began to laugh and giggle. Sun Tzu then personally took up the drum and began the first drumming. He demonstrated the procedure three times and fully explained the instructions five times. As before,
thinking that this play was great fun, the women continued to giggle and laugh. Sun Tzu was greatly enraged by their lack of decorum, for such a lack of respect and order is never to be tolerated by the troops comprising an army. He ordered the Master of Laws to summon the executioner. When the executioner arrived, Sun Tzu turned to the king and explained that when the instruction are clear and fully understood, that when the orders are not trusted by the troops, the fault lies within the general himself. It is the generals offense. However, when the instructions have been made perfectly clear, the procedures demonstrated three times and the explanations given five times, then the fault lies with the officers and it is their offense. He then asked the Master of Laws what, according to the Laws of Military Discipline, the procedure was. In reply, the Master of Laws said the offenders are to be beheaded. Sun Tzu then ordered the executioner to carry out the law and behead the two company commanders, the kings favorite concubines. The king, upon hearing this, advanced to be nearer to the general. As the executioner positioned himself to carry out the order of execution, the king spoke up and said, I am aware that the general is indeed qualified to command armies and the troops that comprise them. However, it will not be necessary to carry out these executions. The loss of my two beloved concubines would not please me. My food would not taste as sweet. This execution is not appropriate at this time. Sun Tzu then addressed the king. I have already received my commission from the ruler. I am the commanding General of the Armies. According to the rules
that govern the actions of generals; when a general has received his commission as General of the Armies and is in fact commanding the armies, even though the ruler may issue new orders to the general, the general is not obligated to abide by these new orders. The general is not subject to automatically obeying the new orders. He then nodded to the executioner to carry out the beheadings. Sun Tzu then selected two more of the kings beloved concubines to replace the last two company commanders. When instructed, he proceeded to beat the drum. This time the legion advanced and withdrew, went left and right, they preformed an about-face in accordance with the sounding of the drum. No laughter was heard, no uninstructed motion was detected. Sun Tzu then turned to the king and said, your army is now well ordered. You may now employ them. They may be sent forth unto fire and water. They may be used to settle all matters under heaven. The thirteen tenants of waging warfare: 1. Estimations 2. Action in war 3. Offensive stratagems 4. Disposition 5. Strategic force 6. Weakness of vacuity and strength of substance 7. Combat 8. Nine changes 9. Maneuvers 10. Configurations of terrain 11. Nine situations of terrains 12. Fire and incendiary attacks 13. Using spies
As The Art of War has been translated into many languages from the ancient Chinese, an understanding of this art, as set forth by the authors, is essential. War is to the state as business is to the individual /company /corporation. War and/or business are the greatest and the most important affairs of the state. Business is the most important affair of individuals / company(s) / corporations. The difference between war and business is the difference between life and death, positive and negative, between survival and extinction. Please note that the references to the ruler, general, troops, masses, and officers in this publication are comparable to corporate officers, managers, governmental official and employees in the world of today. Try to use your imagination in considering situations that you may find yourself in to be associated to the Art of War strategies. According to Sun Tzu: 1. Estimations Five factors exist: The Tao Heaven Earth Generals Laws and order Warfare is a great matter of concern to the nation. It is the determination of death and life. It must be thoroughly examined. The Tao (Way) of thinking is what will determine levels of survival or extinction. They must be observed. The control of personnel (troops) in order to eliminate the fear within the individual must be instilled. When properly oriented or indoctrinated, when the people (the troops) are in accord with the Way, they will not abandon the ruler and/or the
general. They will live or die without reservation, they will not fear, there will be no danger of betrayal. Heaven is composed of Yin and Yang , day and night, hot and cold, male and female, black and white, good and evil, the limits of the seasons. It is said to be the things not within the control of man Earth is the explicit of near and far, low and high, the degree of difficulty or easiness, restriction or openness, dangerous and safe. It is the association with the fatal or survivable actions. It is said to be the things within the control of man Generals are the principles of the essence of wisdom, credibility, benevolence, courage, and strictness in discipline. Note: The generals as principals are not to be confused with generals as commanders of men. Law and order are concerned with military organization, the chain of command, discipline, regulation, the way of command, and management of logistics, also control over expenses. Law and order constitute the basis of our actions. Any other path is an invitation to danger, destruction, and death. There are no generals that have not heard of these five factors. The commanders and generals who understand and practice these five factors will be victorious, but for those who do not practice these five factors, victory will not be assured. Those who do not know them will not be victorious. Within the Five Factors: When estimating, be concerned with the capacity and context of the
ruler and general. The general is subject to the ruler only until the general is commissioned to undertake action by the ruler. After commissioning and once on the battlefield, the general is the supreme commander and is not subject to anyone, not even the ruler, save for his own volition and the achievement of success. Save for dismissal for failure or for lack of understanding of the basic five rules of victory, the ruler who retains a general who exhibits a profound understanding of these factors will be victorious. The ruler who does not dismiss a general who lacks a profound understanding of these factors does not possess the capacity to rule and will not be victorious. Estimating consists of the following questions in search of answers: The way of the ruler. Which ruler knows the better way? The ability of the ruler. Which ruler possesses the better ability? The advantage of the ruler. Which ruler possesses the greater advantages of heaven and earth? The law and order of the ruler. Which ruler better implements law and order over his subjects? The strengths of the ruler. Which ruler possesses the greatest strengths (power)? The training of the troops of the ruler. Which ruler has implemented the best training of techniques to the troops? The policies of reward and punishment. Which ruler has established, implemented, and instilled the least ambiguous, most clearly understandable policy of reward and punishment? Once the advantages have been estimated, after careful observation, implement the strategic power by use of field tactics, as dictated by the environmental factors of heaven and earth. Use force and strategic powers to control any tactical imbalance of power in accordance with advantages and according to your desired goals to be gained and realized. Warfare is based on and is the way of deception. In war it is your duty to deceive the enemy. When capable, display incapability. When committed to action, show inactivity. When your goal is near, show a
priority to gain a distant goal; when your goal is far off, show a priority to obtain a close and convenient goal. Entice them (the enemy) by showing them treasure, for causing disorder in their ranks creates opportunity for seizure. If they (the enemy) are significant, make preparations accordingly; if they are strong take measures to avoid them. If the enemy is angry, cause them to become more so. If they are comfortable and rested, cause them to move and make efforts to sap their strength. If they are disciplined and united, cause a riff within them and make them divide against themselves. Focus your attacks on their weakest point. Make your moves where they least expect you to go. Victory is achieved when you follow these ways. The ways must be kept secret. Before the battle begins, analyze all factors to determine your odds of victory. If the odds are in your favor, your chances are good. If you determine that the odds are not in your favor, rethink your plans for action. If you have evaluated your chances of victory and defeat correctly, if you have completed many calculations, if you find that the majority of factors are in your favor, then with proper implementation of actions you will be victorious. If you have not completed many calculations, however, and if you find that only a few factors are in your favor, then you will be defeated. If you have done no calculations, what are your chances of victory? Under these analytical conditions, it will be obvious as to the outcome of the battle. By these means, you can observe, analyze, choose options, decide actions, and know victory or recognize defeat. According to Sun Tzu: 2. Action in War
The cost of a military campaign is, in fact, the most important aspect of any operation. Without adequate funding, a proper operation cannot be sustained, let alone competed to satisfaction. Military operations consist of horse-drawn attack (swift) chariots, leather-armored support chariots, and mailed, belted, armored troops, along with various types of provisions and supplies such as glue and lacquer for transport. For instance, the expenses of an army of one thousand four-horse attack chariots, one thousand support chariots, one hundred thousand troops, provisions and materials, various pieces of support equipment, advisors and guests would be one thousand pieces of gold per day. Only then can an army of one hundred thousand be mobilized. Battles (operations) that are long in coming will have a detrimental effect on both equipment and troops. When you attack cities, your strength will become exhausted. Long campaigns will consume your resources. Proper analysis on the part of your enemy will reveal your weakness. And then he will take advantage and counterattack. Under these conditions, even the wisest generals will not be able to achieve success. Therefore, even though your speed may not be optimum, avoid lengthy campaigns. No state or army has ever benefited from long, drawn-out warfare. Those who do not understand and comprehend the dangers consistent with the deployment of an army are incapable of truly knowing the advantages or potential advantages of military action. An extremely competent general, one who excels in the actions of military operations, will integrate the operation. Thus no portion of the operation is redundant, and operations and actions are not repeated unnecessarily. The general will not raise or move troops and people more than once, equipment and stocks will not be transported repeatedly, time will not be wasted due to the lack of oversight. Local content will be used. The army will gather provisions from the enemy by seizure in war. Local purchases will be expensive, as no good will exists. The state or nation can be drained of resources and impoverished when provisions or goods are transported to exceedingly distant destinations or when the cost of goods is
exceedingly expensive and disproportionate to the cost of local acquisition. In war, it is anger that motivates men to kill the enemy. Men are stimulated and motivated to seize material goods; to them this is their profit. A wise general will feed off the provisions of the enemy. One bushel of provisions taken from the enemy is worth twenty of our own. Capture chariots of the enemy and mix them in formation with our own. Capture troops of the enemy and treat them well and they will join us. Captured enemy flags and standards are replaced by our own. These are ways to defeat the enemy and strengthen our army. Armies value being victorious, but do not value protracted battle campaigns. The general who possesses a profound understanding of warfare and the objectives of battle will rule his immediate world. He will become the master of his own fate, champion of the people, and exulted hero of the nation. He is the ruler of a nations security and well-being. According to Sun Tzu: 3. Offensive Stratagems In planning offensives or attacks, the planers work out contingencies: what is best, what is second best, what would we prefer, and what would we settle for. To conquer the enemy is the desired goal; to destroy is the alternative. To conquer the enemy and preserve the value for your own use is the primary objective. This is preferable to the total destruction and loss of value, although in any battle this destruction is what we may have to settle for in the end. To be victorious one hundred times out of one hundred battles is not the ultimate measure of success. To conquer the enemy without having to fight is the greatest show of excellence, the true pinnacle of success. Defeat is defeat, but losing the spoils of war, or the assets of the vanquished, is to have settled for second best. The practical application of this theory is to first attack the enemys plans, then attack their alliances, then attack their army. The least desirable strategy is to attack their fortified structures, which is the final option, only
to be undertaken as a last resort and then with extreme reservation. Direct assault on a fortified structure will result in the loss of one third of your troops and resources, and the objective will not, necessarily be secured. The ultimate aim in conquest is the preservation of value. Subjugate the enemys army without a fight, capture fortifications without an attack, conquer nations without protracted warfarethis is the ultimate strategy to use when planning offensives and projects. Your aim is to acquire all under heaven still intact. One who is skilled in the principles of warfare wins battles without a fight, conquers cities without an attack, and defeats the enemy quickly without protracted warfare. These are the principles of planning offensives. In general: When your forces are ten times greater than those of the enemy, you may surround them; when five times greater, you may attack them. If your forces are only twice as great, divide their forces. When you are equal in strength, you may engage the enemy, and if you are fewer, then you must circumvent the enemy. If you are inferior, then you must avoid them. The smaller force that acts in an inflexible manner will become the captive of the greater force. A nations generals are its supporting pillars, the structures that hold erect and support the state. If the supports possess total integrity in design, quality of workmanship and material, the nation will be strong; however, if defects are present in any facet of the support, the nation will grow weak. The rulers, those who are ultimately responsible for the security and actions of a nation, posses the capacity to cause great harm to the nation in three ways: First, they do not realize when the army should advance or retreat and indiscriminately give the order for a specific action in contrast to the proper course of action, which is known as entangling the army. Second, they do not understand the affairs of military action, but insist on personal or direct control over the required actions as if they were ruling a population of civilians. Their course of action is ill advised and their
officers and troops will become confused. Third, they do not understand the nature of tactical balance of power. When they insist on assuming the responsibility of command, their officers will become doubtful and hesitant. When armies are confused, doubtful, and hesitant, strangers or enemies (neighboring rulers) may take advantage of the situation and dangers will arise. This situation is known as the disoriented assisting the enemy to victory. The five advantages by which you may know victory are as follows: First, know when to fight and when not to fight. Second, know the differences between large and small forces, and how to use each in its proper way. Third, ensure that all ranks, from the highest to the lowest, have the same desires and wishes. Unite them all as one. Fourth, be prepared. Be totally prepared and recognize and await the unprepared in the enemy. Fifth, the competent general must not be interfered with by the ruler (especially if the ruler is unqualified), He must be allowed to conduct military operations unimpeded. Thus you will know victory. By these five ways (Tao) one may know who will be victorious.
According to Sun Tzu: 4. Disposition Throughout the history of the world (ancient times), those who excelled in warfare have employed strategies by which they made themselves unconquerable. They awaited opportunities to conquer others. Ultimate defense, the ability to resist any attempts at being conquered, resides within ones own self. Invincibility resides within defense and
vulnerability resides within attack. You can make yourself invincible, but the enemys vulnerability is caused by his own actions or inactions. The ability to be conquered resides within the vulnerable. Masters of warfare have the ability to make themselves unconquerable. They do not, however, necessarily possess the ability to conquer others. Therefore, knowing the strategy of how to conquer others does not mean that you possess the ability to conquer others. You take on the mantle of invincibility in your methods of defense and vulnerability in your methods of attack. Take on sufficiency in defending and deficiency in attacking. If you evaluate your position or situation (your strengths and weaknesses) and determine that you cannot, for certain, be victorious in a preemptive attack, you must assume a position of defense. When you assume a proper means of defense, you will be able to fend off any attackers; if you assume the offensive position under the same circumstances, however, you risk the possibility of defeat. Masters of defense will bury themselves below the lowest depths of the earth, whereas masters of offence will attack from the greatest heights of heaven. This allows for survival of attack and promotes the greatest chance of victory when attacking. The fact than one can perceive victory when the perception of victory is common knowledge possessed by all is not the achievement of the ultimate in excellence, nor is struggling for victories, where all under heaven praise your feats the ultimate in excellence. To pick up a fat autumn hare is not to be considered a show of great strength. To see the sun and moon in the sky is not to be considered in possession of great vision. To hear the thunder in a storm is not to be considered in possession of exceptional hearing. The fact that the people sing the praises of those who excel at warfare means only that they conquered those who were easy to conquer. Those who achieved victory due to their possession of excellence in warfare are not praised for their demonstration of courage and wisdom; their victories
were simply free from error and miscalculation. Those who conduct warfare that is free from error and miscalculation move toward certain victory. They conquer those who were already defeated. Therefore, those who excel in warfare first prepare a position of ultimate defense. At the same time, they waste no opportunity to attack and defeat the enemy. These are the reasons that victorious armies first understand the conditions by which victory may be achieved, and only then do they engage the enemy in battle. Vanquished armies are those who seek to fight before they understand and obtain the necessary conditions for victory. Those who are skilled in the conduct of warfare cultivate the Tao (the Way) and preserve the laws and order; in this way they have governance over victory and defeat. The five factors of military methods of warfare are as follows: 1. Measurement. 2. Estimation of quantities (of forces). 3. Calculation (of the number of troops). 4. Weighing (comparing the results of calculation, strengths). 5. Victory. Observation of the earthly terrain is what gives rise to measurement; measurement gives rise to estimating of quantity; estimating of quantity gives rise to calculation; calculation gives rise to the weighing of strengths; weighing strengths gives birth to victory. In this way, the victorious army is comparable to a ton versus an ounce. The defeated army is comparable to an ounce versus a ton. The battle methods of the victorious are like the release of a dammed up river over a thousand-fathom gorge. This is the strategic nature of force. This is the nature of disposition. According to Sun Tzu: 5. Strategic Force
In general and for all intents and purposes, the command of a large army is like the command of a small army. The concern is in how to divide the forces to achieve the best advantage. In battling a large army the parameters are the same as for battling a small army. It is a matter of configuration and designation through communications, a matter controlled by the use of flags, banners, and pennants. It is the nature of knowing both the conventional and the unconventional, both the orthodox and the unorthodox, both the common and the uncommon that allows an army to enter into the military engagement of warfare and withstand the enemy without being defeated. When understanding these factors, the army that employs the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon is like a stone thrown against an egg. In this context, we are dealing with the substantial and the vacuous, the considerable versus the non-existent, the occupied versus the desolate. It is a matter of weakness and strength. One that possesses the knowledge and is skilled in the arts of the unconventional, the unorthodox, and the uncommon in maneuvers is the possessor of the endlessness of heaven and earth as limitless as the rivers and the seas. Those that employ the unconventional, the unorthodox, and the uncommon with a very high degree of efficiency are inexhaustible in their strengths. When one contemplates engaging in battle, it is with the conventional, the orthodox, the common that one considers first; however, it is with the employment of the unconventional, the unorthodox, the uncommon that one achieves certain victory. As the sun and moon are fixed in a perpetual cycle of day and night, as the seasons are in a cycle of constant repetition, the cycle of birth, life, death, and re-birth, such is the limitlessness of the tandem use of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon. Although the five notes of music may be fully heard, the scale of the
combinations of these five notes can never be fully exhausted. Although the five colors may be fully seen, the spectrum of the combinations of these five can never be fully displayed. Although the five flavors may be fully tasted, the variety of the combinations of these five can never be fully experienced. In warfare the strategic configurations of power and strengths do not outnumber the potential combinations of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon. The nature of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon is such that one produces the other in a never-ending cycle. Who can ever perceive and comprehend all of the possible combinations? When considering of the strategic configuration of power and force, we consider the sudden release of a great flood that carries large stones along its rushing currents, as visible to the observer. A threat or the threat of the use of force or power is the constraint and illustration of force and power. As a bird of prey dives to catch its prey, the immediate action of catching and crushing the prey in its beak and talons is the release of the power affecting the kill, the action of release of the constraint, and the timing of the release. Imagine a crossbow that has been fully cocked to maximum strength. This is the strategic configuration of power and strength. The constraint is the trigger to be released at the proper moment. Therefore, the force and power exhibited by those skilled in warfare is overwhelming and their timing is precise. In a battle, observers see chaos intermixed with specific actions. There are confusion, turbulence, and disorder intermingled with precise movements and well-timed maneuvers. There is thus a relationship between the ordered and the disordered, for the ordered use of chaos and discipline are circular in nature. Like the yin and the yang , they support each other; when used correctly in tandem, they cannot be defeated. Simulated confusion and chaos originate from clarity and control. The
illusion, or feigned display, of fear is generated from the possession of courage. The false appearance of weakness is a result of strength. Order and disorder are a matter of the interpretation of the numbers as they appear to the observer, and courage and fear are a matter concerned with the strategic configuration of power and strength. Strength and weakness are a matter concerned with the formation and deployment of forces. Therefore, to enable ones forces to move the enemy, one must deploy in a configuration to which the enemy must respond in a predicted manner that offers tangible values that the enemy requires, that the enemy must seize. Entice the enemy with treasure or profit and wait in ambush for the movement of the enemy. Wait with the foundation of proper deployment and configuration of strategic force and power. To excel at warfare, one must seek victory through the proper deployment and strategic configuration of force and power. Reliance solely on individual men is an unacceptable risk to be avoided at all cost, for only then may one select the men he chooses and employ them with proper strategic configuration of force and exploit them with power. In the proper employment and exploitation of the strategic configuration of force and power, one may command men in a battle as easily as rolling logs and stones down a mountain. The logs and stones are most stable when on flat ground, but when pushed on unstable ground will roll with all the force of their weight. If they are round, they will not stop rolling, whereas if they are square they will not start rolling without great effort but will stop with little effort. The proper deployment and strategic configuration of force and power allows one to command men in battle as easily as rolling round logs and boulders down a thousand-fathom mountain. Such is the nature of proper deployment and strategic configuration of force and power. According to Sun Tzu: 6. Weakness of vacuity and strength of substance It is generally known that the force that first occupies the battleground
will be rested and comfortable. This force will have secured the prime position for both defense and attack, and the enemy that arrives second, having had to hurry to the battleground, will experience fatigue. Those who understand and practice this reasoning and method of engagement will be able to compel the enemy and will not be compelled by others. They will be able to move the enemy while themselves being immovable. Thus: The enemy can be made to come to a predetermined location by the display of potential profit. They can be prevented from coming by the display of potential danger. If an enemy is rested, you must tire him; if he is has eaten regularly, you can cause him to miss meals and become hungry. You can move to positions he must defend, causing him to move to positions that will cause him fatigue, and you can likewise race to positions that he does not expect you to go to. When traveling to great distances (marching over a thousand li) without experiencing distress, proceed through unoccupied terrain. To ensure victory in every battle, attack positions the enemy cannot defend. To guarantee the success of a defended position, occupy locations the enemy cannot attack. Therefore: When you excel at attacking, the enemy does not know what position to defend first, but when you excel at defense, the enemy will not be able to determine where to launch and attack. Be therefore quiet so you will not be heard. Be so transparent that you will not be seen, be so smooth that you will not be felt; be so subtle that you become formless. Be the essence of the spirit, be spiritual, be invisible to all those that seek you. Become unknowable. Be Mysterious! Thus you will become soundless, the master of the fate of others. When we strike the emptiness and the weaknesses of the enemy, his vacuities, we will encounter no resistance. When we employ unattainable speed and unmatchable swiftness, our retreat will be unhampered.
When engagement is desired, even though the enemy has reinforced ramparts and well-designed moats, we strike objectives that require his redeployment. We attack positions that force the enemy to mount a rescue. When engagement is undesirable, impede and spoil the enemys movements and thwart his maneuvers, thereby successfully avoiding battle. You can defend the ground under your feet by merely diverting the movements of the enemy. If he is occupied somewhere else, he will not be able to attack. When you have achieved formlessness, you may determine the disposition of the enemy with impunity simply by observing his form. If you concentrate your forces while he is fragmented, your army will be whole while the enemy is divided. When your concentration of force is ten to one against his fragmented units, you may attack his fragments (one at a time) with all your strength. Attack the few with your many, engage in battle with a constrained enemy, attack in battle with the forces of many against the few, and then the few will find themselves in dire straits. The objectives of your attack must be kept secret from the enemy, which will force him to defend many locations. If he is forced to defend many locations at the same time, then your engagement in battle at the location of your choice will be with your many against their few. When the enemy concentrates on a frontal defense, his rear will be weak; if he reinforces his left flank, his right will be vulnerable. A defense of his rear will result in opportunity for frontal assault. When he prepares to protect his right flank, his left will be exposed. In the event that he chooses to defend all sides, if he leaves no position undefended, he will have fragmented his forces, whereas all of your possible objectives will be defended with but a few. Thus, the few must prepare against the many. The many are those who force others to prepare against defeat. Therefore: If you know the place and day of battle, you can transverse a great distance (march a thousand li), assemble, and be prepared for combat. If
you do not know the place and day of battle, your forces cannot assist each other, the left cannot help the right, the right cannot help the left, the front cannot help the rear, and those in the rear are powerless to help the front. When great distances become short, when the distant becomes near, and when the near is even closer, then the factors of battle become magnified. One who understands these principles can win the battle. A larger army can be forced not to fight. What advantage is the many against the few when the many do not know the when or where of the few? In this case, the advantage is with the few, and victory over the many is possible. You must accurately analyze the enemy to know the estimates of gain and loss. You must force the enemy to move by provoking him so that you may learn the patterns of his movements and why he stops. You must determine the disposition of the enemy to know what terrain is tenable and what terrain is fatal, where life may be sustained and where death may be found. You must explore and investigate the enemy to know the locations of his excesses and insufficiencies. Probe him to determine his weaknesses and strengths. When we have achieved formlessness, the disposition of the enemy is knowable, we may impose our strengths and measures upon him at the time and location of our own choosing to ensure victory. The enemy will not be able to understand our choices and methods of achieving success. He can know our disposition, by which we accomplish victory, but he cannot know the configuration by which we direct control of the victory. An armys disposition of its forces is like water. The configuration of water will leave the heights and seek the depths. The armys disposition of its forces is to evade the substantial and seek out and strike the emptiness of the enemy. As water configures its form to the shape of the terrain, an army directs control over victory in accordance with the factors adopted by the enemy. As water has no specific shape or form, an army has no specific or constant strategic configuration of force and power. When you have obtained the ability to change your form in accordance with the factors adopted by the enemy to extract victory from him, you will have achieved
the state of the spiritual, which is called divine. When you are visible like the wind, only the result can be seen. Thus the nature of things is to change. The seasons do not stay constant, the sun and moon rise and fall at different intervals and for longer and shorter durations of time, and days grow longer and retreat with the seasons while the moon waxes and wanes.
According to Sun Tzu: 7. Combat It is generally known within the military community that the strategies for employing an army are as follows. First a general will receive commands from the ruler; he then unites his armies and brings the masses together as a prerequisite to encamping the army and confronting the enemy. Nothing is more difficult in life than military combat, as the ultimate risk of failure is death. The most difficult action in military combat is to turn the circuitous into the straight, to turn adversity into advantage. Your objective is to control the movements of the enemy. You entice and bait him with profit and advantage in order to make him follow, while you may have started out later than the enemy, you will arrive at your desired destination before him. The results of your actions will have been to turn the enemys straight path into the circuitous one. Understanding this tactic is paramount in warfare. This is known as the calculations of the circuitous and of the direct. An army strives to attain advantages rather than confront danger. Engagement between armies has advantages, however, for engagement between masses is dangerous. When the entire army seeks to gain the advantage, it will struggle to arrive in an advantageous time. The speed that is realized by reduction of the size of the army will cause the loss of valued heavy equipment and baggage. Moving all the armies simultaneously at sustained accelerated rates of speed over extended periods of time, day and night, by means of
abandoning your armor and heavy equipment and your provisions and stores will ensure that stronger troops will arrive at the destination while the weaker and exhausted troops will lag behind, thus creating fragmentation within the ranks. Employing such a tactic to gain advantage, only one in ten will arrive at the battle site. At fifty li, the frontal forces of your armies will be thwarted. As a rule, only half of the army will arrive in good stead. At thirty li, two thirds of the army will arrive. Even by shortening the daily distance that one is pressed to achieve, loss of troops will be experienced; consequently, the army that has no armor and heavy equipment will be lost, for without provisions an army is lost. An army without stores is lost. A ruler (general) who does not know the plans of the enemy cannot prepare and secure alliances in advance. One who is not knowledgeable of the terrainmountains and forests, valleys and ravines, rivers and wetlandscannot effectively maneuver the army. In this case, it is necessary to employ the services of a local guide to gain advantage of the terrain, or the advantages of earth. The general who does not know the value of these factors is not qualified, nor is he in a position to command the army of a dominator, a hegemonist, or a true ruler. Therefore, the establishment of an army is based on deception. An army is mobilized and maneuvered by advantage. An army adapts to change by expanding and contracting, by dividing and consolidating the troops. The victorious army advances like the wind, marches like the forest, attacks, conquers, and plunders like fire, stands firm like the mountain, is formless like the darkness of the night, attacks like lightening and thunder. In order to be maintained in true moral and spirit, the army of the masses must be allowed to profit from their actions. Therefore, when one conquers, then plunders, the troops must be allowed to share in the profits, and the wealth is now possessed by the victorious. Property and land that are seized are divided up and places of advantage are held. They are annexed to enlarge the state. The profits must be divided and shared among
those who assisted in the conquest. First, calculation; only then, movement. If you understand the tactics of the direct and the circuitous and employ them in earnest at the earliest moment, you will become victorious. Military combat in battle is based on this strategy. According to the Book of Military Administration, make drums and gongs to be heard in the midst of battle, make flags on long poles to be seen. When armies are thus united, they will maintain order, and neither will the brave proceed alone nor will cowards run in the face of battle. Sights and sounds of the drums and flags will hold mens eyes and ears in concert with each other. By these means, large numbers of troops may be controlled. By day, use flags and banners, trumpets and drums; by night, use fires and drums. Hold mens eyes and ears by day and night. This will change them to trust their leadership. Chi is the inner strength of a man and of an army. As a mans strength is absolute in the morning, not as resolute during the day, and wane or become exhausted at night, Chi will also change over time. The army that commands the Chi of others will be victorious. The enemys Chi must be manipulated and changed. Therefore, do not attack when the enemy is in the height of Chi, when his Chi is absolute, but rather wait until his Chi has diminished. Thus the manipulation of Chi will be understood by those that know the tactics of war. Thus: An army that understands the ways of manipulation of Chi will, at times, be forced to wait until the change has taken place. Rest in quiet tranquility for the arrival of the boisterous, the overexcited. Wait quietly for those coming from a distance. The well fed await the hungry. This is the way of controlling the strengths of men. Know your enemy. Know his disposition by the order of his formation. Do not engage well-ordered flags, do not attack formations that march with precision. A victorious army will control and adapt to the changes that occur over the passage of time. Seek to control your enemy by the knowledge you possess. Avoid
being controlled by the knowledge you can possess. Therefore the principles of warfare are these: Do not charge up mountains. Do not attack an enemy that possesses the high ground. Do not attack well-defended hill formations where the enemy controls the terrain. Be weary of retreats and do not pursue, for they may be just a ruse. Highly activated troops (the elite core of an army) should be avoided. Do not swallow bait left by the enemy; profits as left for bait should not entice the well-ordered army. The actual retreat by the enemy should be allowed to proceed, save they become desperate and fight to the death with all their power under heaven. These are the military strategies of the victorious.
According to Sun Tzu: 8. Nine Changes A general understands the ways of military combat in battle. The general who has been commissioned to command, has united the armies into well-ordered troops, and has combined all armies into one, employs the strategy of the victorious. 1. Know the terrain. Do not allow fatigue to select your place of encampment. Entrapping terrain should be avoided at all cost as a place of rest. 2. When in a position to come together with allies, unite on integrated terrain. 3. Cross isolated terrain without delay and beware, for there is nowhere to run and nowhere to hide. 4. Plan carefully when confronted with encircled terrain. Strategies are planed for survival and victory. 5. Battle is not always inevitable, but when forced it must be engaged on terminal terrain. 6. Not all roads may be traveled. Armies have the choice between
the direct and the circuitous. 7 Not all armies may be attacked. Armies strive to survive. 8. Not all fortified cities may be assaulted. Cities are built for defense. 9. Some terrain may be contended, and some may not. The general must know the difference and therefore make prudent decisions. Some commands of a ruler given to a commissioned general are not absolute and are, therefore, not to be accepted or obeyed. The victorious general understands the nine factors of change and the advantage of the nine changes. He possesses the necessary understanding to control an army. Without this understanding and the ability to recognize when changes have or are about to occur, though the general knows the lay of the land, the topography and the geography, he will not be able to take full advantage of and realize the potential of various terrains, nor of his own troops. An understanding of the nine changes is essential for the control of an army. Without profound understanding of the techniques of change, though the general may possess profound understanding of the five advantages, he will not be able to absolutely control his men. Therefore: The wise general possesses profound understanding of change and advantage and contemplates and studies the intermixture of both. Perceived advantages in difficult situations, to which the general has given careful thought, may be relied upon, for difficulties detected in advantageous situations that are recognized by the wise may be overcome. Subjugate and suppress neighboring rulers (the enemy) with the expectation of danger and harm. Overwhelm these rulers with the necessity of performing tedious acts to maintain their status quo. Allow greed to entice the enemy into the chase of illusionary profits and advantage. The principles of warfare are as follows: You cannot rely upon an army deciding not to come towards you. However, you possess the means to await his arrival. In this instance, be
prepared. It is not your choice that an army will or will not attack you; however, you possess the means of undefeatable defense. This is the strategy of the victorious. Generals possess the capacity of an armys defeat. These five character traits are dangerous and must be understood and held in check: 1. Those recklessly willing to fight to the death may be killed. 2. Those with a cowardly, undying desire to live may be taken alive and captured. 3. Those prone to anger and possessed with a lack of patience may be insulted into blunderous action. 4. Those possessed with the ideal of self-perfection may be shamed into inappropriate action. 5. Those possessed with a conscientious nature and love for the people may be troubled by ruthlessness. These are dangerous traits when held by one who is in command. They must be held in check and must not be denied when brought to light. The fate of the army, its potential for self-destruction and death, will fall victim to these five traits of a general. When identified, they must be investigated, for these are fatal flaws in the character of a general.
According to Sun Tzu: 9. Maneuvers Deployment of armies and understanding the enemy are essential to the victorious. Therefore: To traverse mountains, travel through the valleys. During the course of your crossing, locate tenable ground to occupy the heights for advantage. Should the enemy have preceded you and hold the heights in advance of your arrival, do not challenge his position and do not climb in order to engage. In the mountains, the victorious general will deploy his armies in
this manner. When crossing a river, do not delay, but proceed to the far side with haste and deliberation, taking care not to falter. Once you have completed the crossing, distance yourself from the river. When the enemy is crossing a river with the intention of advancing upon your position, do not engage or confront them in the water. After half of their forces have completed the crossing and the remainder is still not on dry land, then it is advantageous to strike the enemys army in earnest, without entering the water yourself. If you desire to engage the enemy in battle, do not deploy your array of forces near the waters edge while facing the enemy positioned on land. To confront the enemy, first locate tenable ground and occupy the heights. Do not position the army downstream of the enemy. Although one may contend with armies, never confront the currents of the waters; do not battle the river. In this way, you may contend with armies in lands where rivers flow. The victorious general will deploy his army in this manner. When it is necessary to cross wetlands, marshes, and expanded low water, proceed with haste and do not stop or delay your crossing. Distance yourself from them and seek out tenable ground. If you find it necessary to engage in battle within the confines of the wetlands, seek and occupy the areas of marsh grass to aid in your concealment, with stands of trees at your back, as a safeguard in case a retreat becomes necessary. In wetlands, this is the way to deploy your armies. The task of deploying forces on level plains is to occupy the easy ground with the right flank positioned for support, terminal ground to the front, and tenable terrain to your rear. On plains, the competent general will deploy his forces in this manner. These four manners of deployment are advantageous to the competent general when encountering terrains of these types. Thus it has been proven that armies of the competent secure their advantage in this way. Armies of the competent occupy and enjoy the heights in terrain. They dislike and avoid occupation of low areas of lands. They hold the sunny (yang) side of the field in great esteem, and they have reservations
about the occupation of the shady (yin) position. As the sunlight nourishes and supports life (grass, trees, animals, the substantial in nature), the sunny ground will support an army. An army that maintains its health by avoiding illness and dangers and the causes of illness will obtain victory. The army that exploits the natural advantages of the terrain and occupies the sunny (yang) side of the land and allows the land to assist and sustain the army has achieved advantage. Rivers that appear disturbed from turmoil upstream or rain in the lands above your position will be cloudy and contain foam. An army must wait until the waters have cleared before crossing and must be distant from the shore when encamping. Observe and analyze battlefield conditions, such as the foam on the river indicating danger upstream. As rivers flow, dangers, floods, and torrents, will approach. The competent general avoids danger. Configurations of terrain that present danger must be avoided, such as steep gorges of torrential streams, heavens wells (valleys surrounded on all four sides may trap armies in the flooded well), heavens jail (armies in valleys surrounded on three sides may be bottled up and trapped in side), heavens net (entangling terrain, dense forest and jungles, and thick underbrush will hamper the movement and passage of men, vehicles, and equipment), heavens pit (mired wetlands and muddy ground will trap and hold men, vehicles, and equipment), heavens fissure (passage through ravines, long and narrow, and fissures in the earth maintained by high walls and lines of trees may conceal the enemy that awaits the passage of armies below). The competent general avoids and rapidly distances himself from deadly configurations of terrain. Do not approach them but remain at a safe distance. The enemy will be forced to approach and contend with them. As we face the dangers, the enemy will be compelled to occupy the lands in between, with the dangers at their rear. When they are encountered by the army, areas of danger must be thoroughly explored, for gorges and ravines, wetlands and marshes, reeds and tall grasses, mountain forest and heavy undergrowth may conceal
ambush and offer safe refuge for spies. The enemy will employ tactics advantageous to their victory; therefore, when silently concealed in gorges and ravines in near proximity to your position, they pose great threat. When they challenge you to battle with clamorous noise from safe distance, entice you to advance from afar, they hold advantageous ground and occupy easy terrain. They wish you to commit to engagement on terminal ground. The observant will: Take notice of the movement of trees. This signals the enemys approach. Be aware of obstructions and obstacles hastily or poorly concealed in heavy grasses or low shrubs. This is to arouse you and make you suspicious. See birds disturbed or taking flight. This is an ambush being staged. Consider the fleeing of animals in fear. This is the prelude to imminent or sudden attack. The sight of well-defined columns of dust appearing sharp against the sky speaks of the approach of vehicles; broad clouds of dust indicate the advance of the marching army. When dust or smoke disperses as it rises lazily into view, fires are being prepared. Sparse and scattered dust or columns of smoke foretell of the enemys encampment. When the enemy talks in cautious words and tones, but carries on with his preparations, his advancement is foretold. When the enemy is rash and belligerent in his communication and rushes to advance, he is prepared for swift retreat. If an enemy speaks apologetically, he desires rest. Chariots (vehicles) that angle and spread their course or path to the flanks and sides are deploying for the engagement of battle. Those who talk of peace while not concerned with the parameters or conditions of the peace are implementing and executing a preconceived strategy. Armies that race about and then gather in proper formation are keeping
to schedules laid down by strategy. Forces that separate, one in advance and one in retreat, are enticing you in accordance to a plan of deception. Men that stand about resting on their weapons exhibit signs of hunger, and thirsty men will drink before they assist in gathering water. If the opportunity to seize a potential advantage, treasure or gain is ignored, the army is fatigued. Birds in congregation sitting in idleness show the presence of peace and tranquility. The area is empty. Cries and shrill sounds in the darkness and emanating from the encampment of the enemy reveal fear. Armies in commotion, men in turbulence, evidence of disorder are all to be attributed to officers who are possessed with weakness, with lacking (authority, severity, and command of respect, etc.). When armies are not in control, signs and signals will emanate from them. Banners and flags will move in random. This is the time of chaos when the army has all but consumed itself. When they are both fatigued and exhausted, officers will become angry; such frustration breeds defeat. If horses are killed for food and eaten by the army, their stores of grain have been exhausted. If preparations of food cease and encampments are abandoned, invaders are said to have retired. Exhaustion has overcome them and they are desperate. Officers in command of men whose troops gather in small isolated groups, forming at random time after time and speaking in voices so as not to be heard have lost control of the masses. Officers who issue excessive rewards are troubled, distressed, and in pain of body and soul. They have consumed their resources. Officers who issue excessive punishment are in difficulty. Their burdens are excessive and too heavy. They are in dire straits. Officers who exhibit a change in behavior towards the masses, from
one of cruelty / brutality to that of fear, they are consumed with / have reached the pinnacle of stupidity. Officers who dispatch offerings in the hands of emissaries are buying time; they wish to purchase time to rest their army. If the enemy approaches to a near distance, maintains their position in good order, neither flanking nor engaging, nor do they break formation after a time, this is a query. This matter requires / demands careful investigation. A confident army does not give great credence or esteem, to an enemy that is more numerous than itself. The prevailing resolution is that ones own army may not advance aggressively without reserve, and the advance upon the larger force is to be measured. In this situation, one musters his own troops in an array of strength, performs competent analysis of the enemy, thoroughly contemplates the situation, and then conquers by use of strategy and tactics. It is only those officers who lack the ability (desired and drive) to: Contemplate, Integrate, Conceive, and Implement strategic planning, and still Exhibit disregard for the enemy. They will inevitably and most certainly be overwhelmed and captured by the forces of others. If punishment is inflicted on troops before they bond with each other and before they become attached and shed their individuality as a group, the troops will never become submissive. Troops that have become submissive through punishment and then are not controlled through punishment will lack discipline. They will be difficult to employ in situations. The lack of punishment inflicted or withheld from the troops after they have been conditioned and after they have been reduced to the state of submission will render them useless. They will be unemployable.
He who commands through civil methods and words and unifies through martial methods and force will know of the ways of the troops under his command. This is known as certain victory. Orders must be consistently issued to instruct the troops, for only then will the troops submit. If the orders are not issued consistently for the purpose of instructing the troops, then they will not submit. If the troops consistently carry out and fulfill the issued instruction then a mutual relationship will have been established. Therefore: Command with benevolence and unify with discipline. This is known as certain victory. According to Sun Tzu: 10. Configurations of Terrain Terrain is varied in its major configurations: accessible, suspended, stalemated, constricted, precipitous, expansive. Terrain that affords the opportunity to advance, both for your army and the army of the enemy, is termed accessible. Be first to occupy the high ground on the sunny (yang) side and protect your supply routes. You will then have secured advantage before the battle. Terrain that allows the opportunity to advance but restricts retreats is termed suspended. When confronted in this situation, if the enemy is not prepared, you may advance and defeat. If the enemy is prepared and you engage but do not defeat, retreat will be difficult. This is not to your advantage. Beware. Disaster will ensue. Terrain that neither allows you nor the enemy to advance is termed stalemated. If the enemy offers you bait, do not be fooled. Withdraw, for by retreating you will entice the enemy to follow. When a medium portion of his forces have exposed themselves, you may attack. This is advantageous. Terrain that is constricted in configuration and composed of narrow passes must be fully occupied to afford advantage. Troops must deploy to
all points of interest. If the enemy occupies constricted terrain and has deployed troops to all points, do not enter. Do not follow them in. If the enemy is not fully deployed, then you may proceed after them. Terrain that is precipitous in configuration is composed of heights. You must occupy and hold the heights and the Yang side and await the enemys advance. If the enemy occupies the heights and the Yang side of precipitous terrain, you must withdraw and depart. To follow is fatal. Instead, entice the enemy to follow you. Terrain that is expansive in configuration favors the powerful. If your forces are equal to the enemys, they will not be easily provoked into combat. It will not be advantageous to either force to engage in battle. The Way, or Tao, of terrain is contained in these six configurations. The competent general will investigate the nature of the terrain; the wise general cannot but investigate. In warfare there are six disastrous situations that can rout the ill-fated army: flight, insubordination, depression, collapse, chaos, and routed. These six are not caused by factors of heaven and earth but by the irresponsibility of the general. If one attacks ten, it is termed flight. When the troops are strong and the officers weak, it is termed insubordination. When the officers are strong and the troops are weak, it is termed depression. When officers and troops consumed with anger and insubordination, charge off to engage the enemy before the general knows the true capabilities of his forces and that of the enemy, this is termed collapse. When the general and higher officers lack authority because of weakness, when orders are not distinct and clearly understood, when officers and troops are not kept busy with duties, when rank and file are assembled in a manner of disarray, this is termed chaos. When the general is incapable of estimating the enemy, allows his inferior forces to attack superior forces and the weak to attack the strong,
and fails to ensure a positioned vanguard, this is termed routed. These six are the Tao of defeat. The general who has been commissioned to command must take responsibility for his actions. The ways of defeat must be investigated thoroughly. The different configurations of terrain are advantageous to the army. The way, or Tao, of the superior general is to investigate, analyze, and estimate the factors of terrain and the enemys strengths and weaknesses. The competent general must take control of victory. It is his responsibility to estimate ravines and defiles, to know the distant and the near, and to employ them in combat. These are the true test of a superior general. By these means, one may be certain of knowing victory; by ignoring them, one can only know defeat. If the ruler instructs that combat should be avoided, but the Tao of warfare indicates certain victory, it is permissible to engage in battle, if you must. If the ruler instructs that you must engage in combat, but the Tao of warfare indicates that you will not be victorious, then it is permissible to avoid doing battle. Thus, the general who does not seek fame and glory by his act of advancing into battle, nor does he avoid battle for fear of being disgraced and charged with the capital offence of retreating without substantial reason. He seeks only to gain advantage for the ruler and the nation by preserving the army and protecting the people. He is a treasure of the state. The general who regards his troops as his own young children may expect them to follow him into the deepest valleys. The general who regards his troops as his own beloved children may expect them to die for him. When a general treats his troops in good regard but they still cannot be employed, or when a general truly loves his troops but they cannot be commanded, or when in the face of chaos the troops cannot be governed, they are to be regarded and compared to arrogant children who have been spoiled. They cannot be used to attain victory. If a general knows that his troops are capable of attacking the enemy,
but does not know whether the enemy may be successfully attacked, he is only halfway to victory. If a general knows that the enemy may be successfully attacked, but does not realize that his troops are incapable of successful attack, he is only halfway to victory. The general who knows that his troops are capable of attack and that the enemy is capable of being attacked, but does not know that the terrain is unsuitable for successful battle is only halfway to victory. Thus, the general who truly knows his troops will never be deceived when moving his troops. When initiating an action, he will never be impoverished. Thus, the general who truly knows his troops and truly knows his own capabilities and understands the factors relating to the enemy is capable of being victorious when he chooses to engage in battle. Moreover, the general who knows the Tao of heaven and earth may expect to achieve complete victory.
According to Sun Tzu: 11. Nine Situations of Terrain There are nine situations of terrain that must be considered when planning strategies for the deployment of the military. They are dispersive terrain, measured terrain, contentious terrain, passable terrain, integrated terrain, deep terrain, harsh terrain, enclosed terrain, and terminal terrain. The competent general knows by way of investigation, all there is to be known in regard to the nine terrains and their changes, expansions, and contractions. He knows the factors that control human emotion and is in command of his own destiny and that of the forces under his command. The ruler whose general will engage in battle in his own territory is considered to be fighting in dispersive terrain. The ruler whose general will engage in battle in the territory of others but only ventures a careful distance within is considered to be in measured terrain.
Terrain that is advantageous to the army that first occupies the territory, claims the advantages, and is considered to be in control is termed contentious terrain. When two armies may enter the same terrain from different directions at the same time without interference from the other, it is said to be passable terrain. The ruler whose general enters into terrain that is surrounded on three sides, so that the one that occupies the terrain first, gains all the advantages of heaven and earth, is said to occupy integrated terrain.
The Ruler whose general enters a great distance into the enemys territory, circumventing and avoiding numerous cities and villages, is said to have traveled into deep terrain. Terrain that contains numerous natural impediments such as mountains, forests, ravines, defiles, wetlands, marshes, and roads that prove difficult to travel, is said to be harsh terrain. Terrain that is difficult to enter and leave, where the enemy may successfully strike with but a small army is said to be enclosed terrain. The ruler whose general must fight with his utmost intensity to survive, and should he not fight with his utmost intensity will perish, has engaged in battle on terminal terrain. For these reasons: When traveling in dispersive terrain, do not engage the enemy. When traveling through measured terrain, do not stop to encamp. When on contentious terrain, do not attack the enemy. When on passable terrain, do not follow or impede the enemy and do not allow your army to become isolated. When on integrated terrain, unite with and form alliances with nearby rulers. When on deep terrain, plunder to acquire provisions. When on harsh terrain, move with swiftness to exit the terrain.
When on enclosed terrain, use strategy. When on terminal terrain, engage in battle. Since the dawn of time, generals who excelled in the employment of their armies have been able to prevent the enemys forward and rear forces from uniting. They have been able to keep large and small forces from relying on each other, have been able to keep the exalted and the common from rescuing each other, and have been able to keep the enemys upper and lower ranks from trusting each other. They have caused the enemys troops to be separated, have prevented the enemys troops that have been separated from reuniting, and have caused the enemys assembled troops to become disordered. Generals who have excelled have moved when it was advantageous and have halted when they were at a disadvantage. They are not subject to the designs of others. When the enemy is numerous, well disciplined, and preparing to advance to engage you in battle, I say, Seize something of great value, something they love. Only in this way will you be able to convince them, with certainty, to listen to you and concede to your wishes. In the essence of warfare, speed of travel is essential. Take advantage of the enemys unpreparedness or absence. Move by way of unexpected routes, attack when and where it is least expected, attack when the enemy is not alert or on guard. In general, the Tao (way) of invasion of the enemys territory is as follows: The greater the distance you penetrate into enemy territory, the greater the solidarity your troops will form. When you are united, your enemy will not be able to prevail against you. When armies are in fertile lands, they must forage and plunder to acquire enough food and provisions to sustain their requirements of food and sustenance. The competent general nurtures his army and does not allow them to become fatigued from overwork. In this way, their Chi will be focused and their strengths will be maximized. The army that is mobilized and united under a formal plan of strategy
must become formless and questionable. It is imperative that they become an enigma to the enemy. When an army is positioned in such a way that it allows nowhere to retreat, they will fight until all officers and troops are exhausted. They will be willing to fight to the death; hence, there is nothing they cannot accomplish. When an army has penetrated deep into enemy territory, the troops will depend on and cling to each other. When there is no other alternative, the army will fight in earnest, and when they are about to die, they will exhibit their greatest strength. For these reasons, although the general does not instruct the troops, they will be prepared. They will be cooperative and work together as a unit, even though they are not bound together by covenants, contracts or orders. Although no orders have been issued, the troops will be dependable. They may be relied upon. Omens and myths are to be prohibited, and doubts are to be eliminated. In this way, the troops will fight to the death and die, if bested, without distraction. The fact that troops do not possess wealth does not mean that they reject material values. Even though troops are willing to die for the general, in reality they still possess the love of life. When ordered to battle, those who are sitting will weep on their sleeves and those who lie prone on the ground will allow tears to run down their cheeks. However, when thrown into a hopeless situation, these troops will have the strength and courage of fearless warriors of Chu and Kuei. A general who excels at deploying his armies is comparable to the shuai-jan (snake) that is found on Mt. Chang. When its head is struck, the tail responds without question; when the tail is struck, the head responds automatically. When the shuai-jan is struck in the middle of its body, both head and tail come to its defense. When asked, can the army be made to act in the way of the shuai-jan, the answer is yes. When crossing a river in a single boat, the sworn enemies of Wu and Yueh are caught by great winds.
They work together to save each other, assisting like left and right hands. Regardless of the impediment to flight such as fettered horses and disabled vehicles, troops that choose to flee cannot be stopped. The competent general uses the Tao of administration to unify the courage of the troops into oneness. He must understand what is hard and what is soft, what is strong and what is weak and employ the troops appropriately, as dictated by the terrain. The competent general who truly commands an army has transformed the many into one and leads the one by the hand. The one cannot help but follow. The competent general is always capable of maintaining his composure, tranquility, and obscurity. He maintains his own discipline and stands upright at all times. He is a mystery to both officers and troops, controlling the eyes and ears of all. He keeps them totally ignorant and in the dark with regard to all affairs. He changes his management style and alters his strategies to prevent others from understanding or recognizing any pattern to his intentions. He changes encampments and uses circuitous routes. The reasons for the things he does and the methods he employs are concealed from all. Where and when he takes an action are a mystery to those who desire clarity. He is beyond fathomability of all that wish to know or anticipate his intentions. When a General truly commands, at the moment of command in battle the troops will achieve the heights as if they have climbed ladders and then abandoned their support, their boats have been burned, and their cooking pots smashed. The general continues to lead and penetrate the enemy, releasing the trigger at the precise moment. His forces respond as if they were a flock of sheep, herded this way and that without knowing the where or why of their movements. Raising an army and directing them into danger is the responsibility of command that resides within the general. There are nine transformations of terrain: The advantages that are to be derived from these transformations are in
the expansions and contractions of offense and defense. Like the range of human emotions, they must all be investigated and fully explored. The Tao of the invader is this: Troops that have penetrated deeply inside the territory of the enemy will be unified; they will be as one. Troops that have penetrated only a cautious distance and are shallow inside the territory of the enemy have a tendency to scatter. They will be inclined to distance themselves from each other. When the army has left the relative safety of their own state and entered into the territory of the enemy, and when they have crossed the enemys border, they are said to be in isolated terrain. When all sides are open to others, the four sides of a territory are accessible. This is said to be passable terrain. When army has penetrated deeply into enemy territory and has advanced far inside the territory of others, this is said to be deep terrain. When an army has advanced only a short distance inside the enemys territory, and made only a shallow penetration, this is said to be measured terrain. When an army has strongholds to its rear and constrictions to the front, this is enclosed terrain. When an army is isolated with nowhere to go, and no place to advance or retreat, this is said to be terminal terrain. For these reasons: When on dispersive terrain, unify the will and purpose of the masses. When on measured terrain, hold the troops together in a group and consolidate them together into a single unit. When on contentious terrain, accelerate the rear forces forward and rapidly advance the rear elements of the army. When on passable terrain, concentrate on defense and focus on defensive measures. When on integrated terrain, ally with others; form alliances with other feudal lords.
When on deep terrain, ensure that your source of supply is continuous. You must have prepared sufficient supplies of provisions. Ensure that your source of supply is continuous. When on harsh terrain, rapidly advance and make haste in your crossings of roads and areas. When on enclosed terrain, obstruct any and all points of access and block any openings. When on terminal terrain, must make it clear to the troops that we will not live. Show the finality of the situation. Thus, it is the nature of an army to defend itself, fight in earnest when it is unavoidable, and promptly follow all orders when in dangerous circumstances. For these reasons: One must know the plans of potential allies; otherwise, it will be impossible to construct alliances. One who is not knowledgeable of the terrain, not familiar with the mountains, forest, ravines and defiles, marshes and wetlands, cannot maneuver the army. One who does not make use of a local guide cannot command and secure advantages afforded by the terrain. One who does not fully understand these factors cannot competently command the army of a dominator, a hegemon, a true king, or a ruler. When the armies of a true king, a dominator, or a hegemon engage and attack a great state, the masses to be conquered cannot assemble. They must be prohibited from rallying together. When the armies of the hegemon exert their awesome powers, alliances of the ones to be conquered will crumble and not be sustained. For these reasons, one does not contend with the alliances of others. One does not nurture or support the authority (chuan) of any other under heaven. You must have confidence in yourself when applying your awesome power to the enemy. By these means, you may conquer cities and dominate the states (Kingdom) of others. One who truly commands an army will bestow rewards that are not mandatory and enact the finest of governmental orders and laws that
transcend existing policy. You will command and direct the masses of all your armies as if you are commanding and directing one man. Instruct the troops to do your wishes without explanation and without revealing your purpose. Compel your troops and armies with the prospect of riches and treasures, offer the chance for profits, and never advise them of the dangers or possible harm they might incur. By these means: When you cast your armies into fatal or hopeless situations, they will be preserved and sustained. When you have your armies penetrating terminal terrain, they will survive and live. Only when the masses have penetrated dangerous or terminal terrain will they know the Tao of crafting victory out of defeat. If a general is truly competent and capable of prosecuting military affairs, then he knows how to read the enemy, knows what the plans of the enemy are in advance, and knows the enemys intentions. If the general is capable and focusing his strengths and directs them toward the enemy, he strikes out to great distances, one thousand li away. Then he is victorious and kills the enemys general. He is called skillful at accomplishing the tasks of military affairs. For these reasons: When war is declared and you are first commissioned to take up command and mobilize forces, you must close all points of access (borders) into your state, destroy all tallies and passports of travel, prevent the enemys emissaries from passing through and coming and going, and call the general staff together for the purpose of planning strategies intended to affect your own course of action. If the enemy allows you an opportunity, you must seize it; if he opens a door, you must race inside. When you attack, strike what the enemy values most. First attack what the enemy loves most, then subtly await his arrival. Do not set a time for
battle. Your advantage lies in reacting to the enemy so that you will know the proper time and strategy of battle. Determine what the enemy is doing now and what he will be doing so you can enact a successful course of action. For these reasons: First, you must be docile as a virgin, full of tranquility, peaceful as if you were at home. When the enemy opens the door, race inside without hesitation like a scurrying hare. Then you will be unstoppable. The enemy will not be able to withstand your advance. According to Sun Tzu: 12. Fire and Incendiary Attacks There five types of fire and incendiary attacks: 1. Incinerate and burn troops. 2. Incinerate and burn provisions. 3. Incinerate and burn supply trains. 4. Incinerate and burn weapons and armories. 5. Incinerate and burn assemblies and configurations. To implement an incendiary attack, you need the proper conditions. All material and equipment must be fully prepared in advance. When executing an incendiary attack, you must know when the time is right, the proper season, the proper days. The proper season is the dry season, the proper days are when the moon is in the houses of Chi, Pi, I, or Chen. These are the days when the wind will arise. Note: These references to Chi, the sieve, Pi, the wall, I, the wing, and Chen, the cross-bar, refer to directions of the moon. In ancient China, they did not use the north, east, south, and west, as we in the west do, but rather described the constellation of stars in the sky in the directions. In general, with regard to warfare by fire, you must respond to the five changes of fire:
1. If a fire starts within the enemy camp, you must respond with an attack from the outside. 2. If a fire starts within the enemy camp but the armies of the enemy remain quietly well ordered, you must wait. You cannot attack at this time. 3. When a fire turns into a roaring blaze and it is possible to follow up, then you may do so. If you cannot follow up, then you must resist the temptation to pursue. 4. If you can launch an attack from the outside without the assistance of an inside force, do so at the appropriate time. 5. If fires are started upwind, you cannot attack from downwind. Winds that rise up in the daytime will continue to blow; winds that rise up in the nighttime will not persist. Armies must understand the five changes of fire to be able to protect themselves from fire. Thus, armies that use fire to aid in attacks are enlightened. They must know the celestially appropriate times. Also, armies may use water to aid in their attacks. This is powerful, although water can be used only to sever or separate (troops from troops, troops from baggage and supplies). It cannot be used to capture. If you have achieved victory in battle and have succeeded in your attacks, however, do not exploit the victorious situation, it is tragic. Your efforts will be described as wasteful, and they are left wanting and exhibit your unnecessary delay. Thus, the wise general investigates and understands this. The competent general nurtures and develops the growth of this within his own competency. If a situation is not advantageous, you must not make your move. If you cannot achieve your objectives, do not employ your army. Unless you are threatened and in danger, do not engage in the practice of warfare. The ruler cannot mobilize his armies for reasons of personal anger. The general cannot engage the enemy in battle for reasons of personal aggravation.
When you have the advantage, then make your move, but when you do not have the advantage, restrict your movements. Your anger can be turned into happiness and your frustration can be turned into joy; however, a state that has been vanquished cannot be brought back to its former glory. The dead can never live again. For these reasons, the ruler who is enlightened exhibits discretion and the good general exhibits caution. In matters of concern regarding the safety and security of the state and the preservation of the armies, this is the Tao. According to Sun Tzu: 13. Using Spies When the ruler commands the general to move his armies of 100,000 troops on long campaigns, marching out to 1,000 li, the combined contributions of the common people and the house of the ruler will be a thousand pieces of gold per day. The families that will be troubled and inconvenienced both within the state and outside the state, those exhausted on the march, and those interrupted from their agricultural work will number 700,000. The armies of the state may remain in standoff with the enemy for years, and states of tension exist. They are said to be patiently waiting the singular day of battle advantageous for attainment of certain victory. The general who begrudges bestowing rewards of one hundred pieces to ranks and emissaries will not be able to know the situation of the enemy. This is the ultimate insult of inhumanity. It is said that such a person is not truly a general of the people, an assistant of the ruler, or the mastermind of victory. What facilitates enlightened rulers and wise and sagacious generals (those who are able to transcend the masses) to move and conquer others will do so through the acquisition of advanced knowledge. The acquisition of advanced knowledge cannot be achieved through communication with ghosts or spirits; it cannot be gained through
conjecture of phenomena or deduction through experience or forecast by means of heavenly measurements. Advanced knowledge is acquired from men. The advanced knowledge required is the true state and situation of the enemy. Thus, the use of spies is absolute. There are five types of spies: 1. Local spies are common people living within the local district of the enemy. 2. Internal spies are people of position within the government of the enemy. 3. Double spies are enemy agents who have been captured. You must value these above all and turn them with bribes and offers of wealth, bending them to your will. 4. Disposable spies are employed for the purpose of spreading rumor and disinformation outside of the state. They are employed to deal with enemy spies for the purpose of transferring false information. They can be sacrificed. 5. Living spies will return with information they have gathered. They will report in person and under great secrecy. When all types of spies are used together, their Tao is unknowable. This is referred to as heavenly manifestation and is the rulers most valuable treasure. Thus of all of the possible relationships that deal with the affairs of war, none is as important or as valued as highly as the relationship of spy and master. Spies command the greatest reward. The affairs of spies must be held in the greatest secrecy. One must possess the wisdom of a sage if he is to successfully run and control spies. One must be righteous, benevolent, and generous or he will not be able to successfully run and control spies. One must be insightful to perceive and understand the substance of the intelligence reports of spies. The work of spies is subtle, subtlety; there are no areas of warfare in
which one does not use and employ the talents of spies. If, before a mission has begun or is still in contemplation, knowledge of that mission is exposed, the spy and all he has informed should be put to death. In general, regarding the armies you wish to engage, the cities you intend to attack, and the targets of your assassination attempts, you must know the details. You must know the names of defensive commanders, who their assistants are, all who make up their staffs, the stationed guards, and all who attend them. It is absolute that you acquire advance knowledge from your spies for contemplation, as to all that is contained therein. The enemy has spies of their own; you must seek out and identify them. You must turn enemy spies for your own use; tempt them with bribes and rewards; instruct them in your way; retain them as they possess great value. This is the Tao of the acquisition and use of Double Agents. Through investigations of men, you can identify, recruit and employ both local and internal spies. Local and internal spies will provide you with knowledge that you will contemplate and develop, once developed this information will be given to disposable spies; it is to be used by the disposable spy to spread falsehoods, to misinform the enemy. By the acquisition of gathered information living spies may be utilized as needed and when required. The ruler must be thoroughly knowledgeable regarding these five aspects of espionage work. The knowledge of espionage work manifestly depends on the spies that you have captured and have been able to turn to your way; the double agents over whom you exert a controlling force, to these you must be exceedingly generous. In ancient history, the rise of the Yin Dynasty was due to I Chih serving under the house of Hsia; the rise of the Chou dynasty was due to Lu Ya who served under the house of Yin
Thus enlightened Rulers and competent and sagacious Generals are capable of acquiring, running and maintaining intelligent spies; they will be certain to achieve greatness. This is the essence of military warfare; advanced intelligence is both relied upon and necessary; it is the hidden strength that allows the armies of the Ruler to move on to victory.
The End
While War and Business require action, Peace does not require action, in fact the State of Peace is the absence of action; peace is a state of inaction, of non-conflict. War and Business are full of actions and conflicts, hence the need for estimation and negotiation, and the ability to carry out plans based on estimations and the results of negotiation. Successful war may precipitate a temporary peace however lasting peace is a by-product of business. Depending on your point of view therefore, there is no Art of Peace in peace itself, only a possible prescription for peace in the actions of successful war and/or business. Sun Tzu's "Art of War" is the most respected work on the subject of war. His ideas will serve every businessperson well. THOUGHTS and QUOTATIONS: Common sense is the collection of prejudices acquired by age eighteen. Albert Einstein. Don't forget to be kind to strangers. For some who have done this have entertained angels without realizing it. Hebrews 13:2. The pioneers of a warless world are the youth who refuse military service. --Albert Einstein.
He who joyfully marches in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would suffice. Albert Einstein. So long as there are men there will be wars. Albert Einstein. When you are fighting you are not doing business. The California Kid. All battles are fought by scared men who would have rather have been somewhere else. John Wayne.
ACT I OBSERVATION AND PERCEPTION
Chapter 1
Relativity: Time and Space Matter

Part I Relativity
Relate, according to Websters, means to narrate: tell; to have relation
or reference; to interact with other persons in a satisfying way; to respond favorably. With whom do you relate? How well do you relate? Related, according to Websters, means connection of persons by blood or marriage: kinship; a relative. Relations: dealing or associations among persons or groups; reference: regard; an account or narration. With whom are you related? How well have you related? Relative, according to Websters, means connected: related; considered with respect to others; referring to or modifying an antecedent; one related to another by kinship; one that is relative; a relative grammatical term. Do you hang out with your relatives or do they hang out with you? Relativity, according to Websters means the quality or state of being relative; a theory leading to the statement that mass and energy are equal, and mass, dimension, and time increase with velocity. Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute. THAT'S relativity. Albert Einstein. Distance, according to Websters, means spatial or chronological separation; the length of a path especially a straight line segment, that joins two points; the space that separates any two specified instants in time; the degree of difference separating two things in relationship; the degree of progress between two points in a course; aloofness; the whole way. How far do you have to go to get where you want to be? The California Kid. Gravity, according to Websters, means the attractive central gravitational force exerted by a celestial body such as the earth; weight; seriousness; importance. Gravity is the force exhibited on an object by another object, a larger object, or an object of the same size.
The moon affects the ocean tides. The moon is an object at great distance that affects water on earth. Human beings are mostly water. Gravity is a force that possesses factors related to matter, space, and time. Gravity is measured within the per moment, a period of time; 120 feet per second (approximate); the incalculable American system that is not based in science. When an object falls, it travels at the speed of gravity. In business, you are like an object; you can have effects on other objects, even from great distance, and you can be affected by other objects, even from great distances. However, in business we must react faster than the speed of gravity; we must act closer to the speed of light. Gravitation is not responsible for people falling in love. Albert Einstein. Light, according to Websters, means electromagnetic radiation that can be received by the normal unaided human eye and has wavelengths 3,900 and 7,700 angstroms; brightness, a source of light; the illumination from a source of light; a way of looking at or considering something; enlightenment: understanding. Always remember that there are two types of light: light that you can see and light that you can see by. The sun is the prime power source for the planet earth. The moon is the indirect light source of our near sun reflecting (bouncing) off. Stars are distant suns that shine directly toward earth. We can see their light, but it is difficult to see by their distant light alone. The energy radiated by the sun directly or bouncing off the moon and hitting the earth is near energy. It contains more useful energy than all the starlight that radiates and directly strikes the earth, their collective distant energy, time and distance, the constant of the universe: SPEED. Thanks for the explanation. NOW I can see the light. The California Kid.
Enlighten, according to Websters, means to provide with spiritual or intellectual understanding. Enlightenment is the noun of the verb enlighten. Enlightenment is the quality of possessing light or the effects of light, clarity of vision, perception. Light is a matter of the wavelength of energy, a particulate of non-matter that exhibits force. Waves in the ocean, like light, have peaks and valleys that travel. This is the essence of motion; this is the way, the Tao, of directed movement. Where does anything go from the place it is now to the place it will be in the future? The answer lies in the Tao, the way of directed motion. The answer lies in your enlightenment, your understanding of your situation relative to everything around you, which are all related to your possessed knowledge. The California Kid. In business, you have to make moves. What is your next move? You need to possess the quality of light, clarity of vision. You need to know what your next move is going to be. You also have to move or act as fast as you can. A telephone call travels nearly at the speed of light. I love to travel, but hate to arrive. Albert Einstein. Infinite, according to Websters, means without boundaries: limitless; immeasurably great or large; greater in value than any specified number, however large; having a measure that is infinite. Infinity is the adverb to the adjective infinite. A while, a long while, a short while, NOW, a moment before, a moment from NOW, a moment in Time, Infinity. In business, you can wait forever to do something, or you can do something NOW. The California Kid. In relation to time and space, infinity is forever. To the unlimited, that can be travelled, whether in distance or time. The theory of relativity, as
developed by Albert Einstein, E=MC2, takes into account that time is relative to the space in which it is calculated. Astronauts age less rapidly in outer space because they are travelling at a greater rate of speed than those of us on earth. There are the five ways (Tao) of victory. Sun Tzu, Art of War, Tenet 3, Offensive Stratagems. In business, there are many more than five ways to victory: Price = Value ZC Need = ZCn Greed = ZCg Want = ZCw Ability = ZCa1 Availability = ZCa2. Desire, Obsession, Persistence, and as many more as can be conceived by the conscious human mind. The multitude of Z factors is related to the individual who consciously considers the question of value. As Ayn Rand puts it in her study, The Objectivist Ethics: Value is that which one acts to gain and/or keep. The concept value is not primary; it presupposes an answer to the question, of value to whom and for what? The Z factors of consciousness are more commonly known as IDEAS. They are the thoughts that we consciously thinking individuals develop within our own minds. The energy of thought is the product of creative machine that produces ideas, in the form of wave energy. The exact wavelength of thought energy has not yet been determined by science; however, the answer is being sought out by many individuals. The purpose of this book is to help the reader to make money, a lot of money, in as short a time as possible and to gain the ability to make money repeatedly, as long as you have the Desire to make more money.
You will never make BIG MONEY until you decide that you WANT to acquire large amounts of money Therefore: If you wish to acquire money, then you will have to think of a way to attract money into your own pocket. You must use the power of thought to become a core of gravitational attraction as relates to money. The California Kid. Persistence is what separates the winners and the losers. No matter how many times you fail to achieve your goal, you have not lost until you stop trying. Winners never quit, and quitters never win. As it relates to thought, you only need one good idea to get rich. In business price and value are related. But what is the relationship? People can pay a high price or a low price. Sometimes they receive a great deal of value and sometimes they receive no value. Since price is the amount of money that is exchanged for an item of value, we must determine what factors influence the amount of value contained in any given item. Mathematically speaking, we must relate the value of anything to the factors that influence that value, hence the ZC factor. E=MC2. In Einsteins theory of relativity, energy equals matter (the quantity of as expressed in grams) times the square of the speed of light, C, the constant of the universe. This is the formula that everything in the universe abides by. In business, we have a similar formula: P=VZC, or price equals value relative to the ZC factor. This component is related to the factor of consciousness, need and want and desire and ability and availability, obsession, greed, etc. They are all parts of a multisided coin. (The multisided coin of valuenow theres a concept for you to think about. We live in a three-dimensional world; business is a four-
dimensional concept.) Price is related to energy. Value is related to matter. ZC is related to the constant of the universe, in that it is only through the conscious mind of the individual that reality exists at all. We possess the ability to control and shape our reality by use of our conscious mind. How much does something cost and how much value does it possess and what is the speed by which a transaction will take place? This is a universal factor consistent only in the human being, the individual who is conscious of his or her own reality and the reality of the universe in which he or she lives. Since the price that is paid for anything presupposes that a transaction has or will take place, the duration of time to complete the transaction may be determined, the speed in which the transaction was or will be conducted. The ZC factor must, therefore, be related to the speed of the transaction. Price is relative to value, need, want, ability, availability, and desire, etc.; that thing is not worth anything to me. I do not need it and I have no desire to possess it. Why do I care if I buy or not? I do not have the ability to pay for it. Is it even available? I will possibly pay you any price for that thing because I have an immediate need and desperate desire to acquire that thing NOW. I have cash on the barrelhead, right now. How much need or want you have or possess, relates to how fast you will acquire or get something or get something done. What is your ability to complete any task? What is the availability of anything to be bought or sold? If you wish to get rich, you had better ask yourself these questions. You will have to think about it! Need or greed certainly must be related to the speed of any transaction or acquisition, the speed of the need, or as Tom Cruise said in Top Gun: I have the Need for Speed. When forced to summarize the general theory of relativity in one sentence: Time and space and gravitation have no separate existence from matter. Albert Einstein. Therefore, the gravity of this situation, as it relates to business, is
dictated by need, want, ability, availability, greed, desire, etc. The ZC factor. How serious are you about success? How badly do you wish to become rich? How hard are you willing to work to succeed? To get rich, you will have to exert force on other individuals, whether near or far, to close deals and make profits. In relation to time and space, infinity is forever. To the unlimited, that can be travelled. The theory of relativity, E=MC2, takes into account that energy is relative to the mass of anything multiplied by the speed, no matter what space in which it is calculated. P=VZC, as developed by the authors of this book, takes into account that price is relative to the value relative to the speed. Par, according to Websters, means a normal standard or accepted average; a common and equal status or level: equality; the standard number of golf strokes needed by an expert to complete a hole; face value, as of a security. Normal Value is based on par. Adhering to the mathematical correctness of business, we use 1 as the value of par, in that one times any number equals that number. One times itself equals 1. One is the first positive whole number; anything having a positive value of less than 1 is not whole. As per the War Peace Business linear and triangular mathematical relationships developed by the authors, business has a positive value of 1. In the formula, E=MC2, we are dealing with the relative, the relationship of time, space, matter, and energy. Time and space are contained in the constant of the universe, C, the speed of light, as a collective. M stands for mass, the measure of any matter. The product of this relationship is energy, E. No other relationship exists in the real world outside this relationship! With P=VZC, we are dealing with the relative, the relationship of business, as expressed in price, P, which equals value, V, and the collective relative relationships of need, want, ability, availability,
etc, ZC. No other relationship exists outside of this theoretical relationship in the real business world. If A equals success, then the formula is: A = X + Y + Z; X is work; Y is play; Z is keep your mouth shut. Albert Einstein.
Note that in the following examples, all ZC values start at zero and progress in a positive direction. Zero has no value. When inserted into the ZC factor in the business relativity formula, zero would translate to no value; therefore, no price can be set. P=V0. Anything multiplied by nothing is nothing. Transactions that take place in which no value is exchanged for money or other value consideration are not business transactions. They are charitable gifts, the concept most valued by peace seekers. Zd you. Diane Taren. Further, once you move in a positive direction, no matter how far or how little, you are no longer at the point of zero. Now you are in positive territory. That translates to a positive value of the ZC factor. Anything positive that is multiplied by a positive factor, no matter how small, has a positive value. Once again, the scales run from 0 to 2.0. The values of the speed, the need, the greed, the urgency, the ability, and the availability must be greater than zero to possess value. But what value? According to the formula, P=VZC; any ZC, a value of less than 1 would mean that price and value must be adjusted to a relationship consistent with a less than a 1 value of value; however, a ZC value of greater than 1 would mean that price and value must be adjusted to a relationship consistent with a more than a 1 value of value. Therefore price is either discounted in cases of less than 1 values or is adjusted to a premium in cases of more than 1
values. Therefore: 1 must be par, or equal price, equal value. As the definition of par states, it is a normal standard, hence normality. This being so, it would stand to reason that twice the amount of a ZC factor of 1 as calculated with the formula, P=V ZC, must mean that V is twice the value. Price therefore would have to be adjusted to reflect a double premium: twice the value, twice the price.
The Urgency Scale

Buyer Urgency Low Buyer Urgency High
0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
------------------------------------------|---------------------------------------------------PAR
Seller Urgency High
Seller Urgency Low
The urgency scale supplies ZC values such as ZCn, ZCw, and ZCd, which are the need, want, and desire factors. The Need/Want (Urgency) Scale In the relativity business formula, P=VZC is calculated using the need/want scale, sometimes called the urgency scale. This scale is used to calculate the relative urgency of a situation in business, sometimes even in life. In using the relativity business formula, P=VZC, the urgency factor, ZC, will give you an indication of your sense of urgency. You may calculate degrees of urgency in relationships, such as the relationship between price and value, price in relation to value and urgency, and value in relation to price and urgency.
Practical Examples Let us say that in a supermarket, you can purchase a gallon of milk for $2.00. In a convenience store, it will cost $2.25. Do you have the need or want to save money by going to the supermarket? Do you have the ability to go? Is there availability of a supermarket in your area? Do you have the time to go to the larger market in order to save a little money, or will you be too busy doing something else? Using the relativity business formula, P=VZC, you can calculate your degree of urgency as follows: P=VZC $2.25 = $2.00 * ZC
In the supermarket, you can pay $2.00, and this is the best value, hence, the standard. In the convenience store, you must pay $2.25. This is the price. You can use algebra to isolate the ZC Factor: $2.25 = $2.00 * ZC $2.00 $2.00
= 1.125
By dividing by the amount in the form of money, the dollar, we also cancel out the factor of money. Thus 1.125 is a value, not an amount of money. However, because our original intention was to determine the amount of urgency as related to price and value, and par price (supermarket price) is $2.00, our ZC factor is used to calculate the incremental steps between 1.0 and 2.0 on the Urgency Scale, which are in 0.1 increments. Therefore, the ZC factor value of 1.125 is the Urgency Scale par value of 1.0 plus 0.125, this is slightly higher than the par of the scale.or a one-eighth increase in urgency. In the case of buyers who know they are in a hurry and know that they have a slightly urgent conscious reason to purchase, they may be willing to pay a little more for a product, as shown in the following example:
P=VZC
P = $2.00 * 1.2 (on the urgency scale).
Therefore: ZC is slightly urgent P = $2.40, which is the price the buyer will be willing to pay in relation to the value based on their selected degree of urgency. This is a one-fifth incremental increase in urgency.
P=VZC
P= $2.00 * 1.9 (on the urgency scale).
Therefore: ZC is highly urgent P= $3.80, which is the price the buyer will be willing to pay in relation to the value based on their selected degree of urgency. This is a nine-tenths incremental increase in urgency, which is nearly twice the price. In an airport, when you are about to get on a plane and travel to a different country, you must get rid of your local currency. You thus have a very high degree of urgency to spend all of your local cash immediately. Suppose you have $20.00 in local currency. Although you know that you will be purchasing items that are priced much higher than you could buy at home, you are a captive buyer in the airport and more concerned now with spending the local currency that you will not be able to spend at all when you get home. What is the actual value of the items that you will be willing to purchase? P=VZC if P = $20.00; then V * 2.0 (on the urgency scale) $20.00 = V * 2.0 2.0 2.0
V = $10.00
You will be getting $10.00 in value rather than losing $20.00 in local currency that you cannot spend at all in your own country. That is assuming that the money exchange is closed.
As a seller and using the same methods as demonstrated above, you can calculate the same range of values, price increase or discount, or degree of urgency. You will note that the difference is the direction in which the money flows. For buyers, it flows out of their pockets, whereas for sellers the money flows into their pockets.
The Ability/Availability Scale

Buyer Ability Lower Buyer Ability Higher
0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
---------------------------------------|---------------------------------------------------PAR Seller (Product) Availability Higher Seller (Product) Availability Lower
In this example, the ZC factor is related to the ability and/or availability of a given situation. This translates into your selling and purchasing ability. How much money or value do you possess or do you wish to possess? Is a product available or not?
Your calculation of these values is performed exactly the same as with the calculation of urgency. Buyers who do not have the means to buy are sometimes given special discounts. For example, third world countries that cannot afford the high western cost of AIDS drugs are allowed to purchase at below par value. Rich people are sometimes charged much higher prices simply because they can afford it. Or A seller who has too much stock may want to give a discount just to
get rid of the excess stock. They may want to make room for new stock that is about to arrive or possibly just increase their cash flow. A seller with very limited stock and not much of a chance to get any more may want to sell at a premium price, higher then par. The uses of both scales, the urgency scale and the ability/availability scale, are relative to any situation. Even if your needs and wants to buy are high but your ability to purchase is low, the price must be adjusted to accommodate you (or maybe you will have to borrow to increase your ability). If the price is not adjusted, possibly no transaction will take place. If the price cannot be adjusted, then your urgency, ability, or availability your ZCfactor must be adjusted. What happens if your ability to buy is high and the sellers need/want to sell is low? Will the seller want to increase his price? Will the increase be relatively higher than that of a seller who has a par value to sell? Individuals make conscious choices as to their ZC values. Please understand that we are talking about relativity. Even though the seller wants to charge too high a price, and even though the buyer is very rich, the deal still may not go through because nobody wants to get cheated. Cheating is dishonest. This book is based on honesty, just as good business is based on honesty. Peoples conscious GOOD business choices must be based on honesty. Bad or dishonest business does occur and does relate to the P=VZC formula. A thief may have the ability to sell stolen goods, but he does not have the right to sell them. His need to sell may be very high. He may need to get rid of the goods to get money for a fix or before he is caught; therefore, the price of whatever he is selling will be discounted. Any individual component of ZC factor may be used in the formula. When more than one component is relative, you must weigh them against each other to determine the value of ZC, hence, the complexity of business. Any determination of ZC values that is more or less than par is a conscious decision made by an individual. The choice of assigned values is made
according to the situation, according to the practice of observation and perception, analysis of the data, integration of the interpreted data as filtered through your possessed knowledge, and the will, want, or desire to make a conscious choice of assignment of value. E=MC2 is a much simpler theory than P=VZC as life is simpler than business. Everyone that is living is alive, but not everyone that is alive is in business. However, they should be. The California Kid. In the formula, E=MC2, C is constant. It never changes. In the formula, P=VZC, the ZC has many variables that change all the time, depending on the situation. If any ZC value equals zero, no value of ZC can exist; therefore, the value of any item as related to a transaction will be zero. That means no business transaction can take place. Should the transfer of items, goods, or products occur under a zero value basis or zero price basis, it is a matter of charity, not business. Business is a matter of negotiation. Life is a matter of the constant of the universe. The ZC values are negotiated based on the situation. As we say, The price is negotiable. We may calculate the negotiable components of the ZC factor. As a transaction is a trade, either money for value or value for value, which defines business, P=VZC is the simplest possible explanation or formula of business.
Everything should be made as simple as possible, but not simpler. Albert Einstein. If you understand the relationship between price, value and the various C Z factors, you can achieve better business success. To understand urgency, ability, availability, and all the other factors than can have good and bad effects on your business, you absolutely must use your conscious mind, the product of which will be relative to your success in business. Relativity works in business, but you must know the relationships.
Many people understand the principles of business as a formal or informal matter. For those who do not understand business, please use the technical method. Life is not simple, but it is simpler than business. Life and business have a direct relationship: Good Business = Good Life. The California Kid. In business, we sometimes we deal with many ZC factors in the same transaction. When combined ZC factors have a total value of 1, normality exists. Price will equal value, and no discount or premium is associated to value or price. In life, you may consider the combination of different ZC values in the same light. When equal to par, to 1, the state of normality exists; that is relativity.
P=VZC does work in Business.The California Kid.

Therefore:
The value of any Art is relative.
Part II Time
Time, according to Websters, means a continuous measurable quantity in which events occur in apparently irreversible order; an interval bounded by two points of this quantity: duration; a numerical measure of this interval, as in years, days, or minutes; a number representing a given point, as the present; as determined from a given point in the past; a system of numerical measure for this quantity. Time frame is the period in which an event or series of events occurs.
Lead time, sometimes referred to as advance notice, is the amount of time that is required to prepare for an event or series of events. Time is relevant. It is measured in relation to the space in which that period of time is perceived. The constant of the universe is the speed of light, approximately 186,000 miles per second, is always the same, which is why it is called the constant. Time is the third component in Albert Einsteins theory of relativity, E=MC2. Matter, according to Websters, means something that occupies space and displays the properties of inertia and gravitation when at rest as well as in motion; material; a subject of concern, interest, feeling, or action; < refused to discuss the matter; trouble or difficulty; < what is the matter with her; an approximate quantity, amount, or extent; < just a matter of time; something printed or written; something sent by mail; to be of significance or importance; no matter; < regardless of; wanted it no matter what the cost. Matter is measured by the quantity of mass that it possesses, the metric system of measurement, the gram, the centigram, the kilogram. Gold is sold by the gram. What matters most in your business? What matters most in your life? The California Kid. Element, according to Websters, means a fundamental part. Elements: the basic principles; a member of a set; a substance not separable into less complex substances by chemical means. Elemental, according to Websters, means of, relating to, or being an element; fundamental: essential; constituting or like a force of nature in power or effect. Elementary, according to Websters, means fundamental, essential, or irreducible; of or introducing fundamental principles. All matter consists of the simplest particles of individual elements known as atoms.
As Sir Arthur Conan Doyles classic detective, Sherlock Holmes, says: Elementary, my dear Watson. Energy equals mass times the constant of the universe squared. (To square something is to multiply it by itself; that is, 1 is the square of 1. 1 x 1 = 1. Four is the square of 2, 2 x 2 = 4. And so on.) The constant of the universe is a measure of the distance in which light travels during a specific period of time, per second, or one 60th of a minute. It is called the constant of the universe because it does not change. It is the same on earth as it is in outer space. It is also the approximate speed at which electrons travel around the nucleus of an atom. Atoms are composed of protons and neutrons (the nucleus) and electrons. They are the fundamental components of an element. As shown in the Periodic Table of Elements, all things in nature are composed of elements. Although time is not a physical thing, it is the most important element we possestime passes, time never stops, time cannot be reversed, lost time cannot be found, wasted time cannot be recycled or restored to its original state. Everyone on earth possesses time in a limited quantity: the time you are born until the time you die. Time is thus your most valuable commodity. Every employee sells his or her time to their employer. Every employer pay their employees for the time they work. There are 60 seconds to a minute, 60 minutes to an hour, 24 hours to a day, 7 days to a week, 52 weeks to a year, 10 years to a decade, 20 years to a score, 100 years to a century, 1,000 years to a millennium. But it is difficult to be precise about time. For instance, a tropical, or solar, year is 365 days, 5 hours, 48 minutes, 45.51 seconds, plus a fraction. The sidereal, or star measurement, year is 365 days, 6 hours, 9 minutes, 9.54 seconds). We erect boundaries of time in order to define amounts of time. We break the week up into days: Sunday, Monday, Tuesday, Wednesday, Thursday, Friday, Saturday. Certain days have different significance and value. Christians value Sunday above the rest, while Muslims place a
higher value on Friday, and Jews hold Saturday in reverence. Buddhists give thanks according the cycle of the moon. A chief event of life is the day in which we have encountered a mind that startled us. Ralph Waldo Emerson. We isolate the hour into sets of minutes: five minutes, ten minutes, fifteen minutes, half an hour, three quarters of an hour, and anything past fifty minutes is damn-near an hour. We divide the morning into early, middle, and late. We have the noon hour, which is the time to take a break and eat something. The fortnight was broken into two single one-week periods. The month is used to define certain activities of importance: monthly pay, monthly accounts, monthly reports, and you are sentenced to eighteen months in jail. The year is commonly broken up into four seasons: winter, spring, summer, and fall. But other seasons also exist, such as hunting, fishing, skiing, rainy, Christmas, and the tourist seasons. In sports there are the football season, basketball season, and baseball season. Baseball players used to be called the Boys of Summer. The time frame of a transaction at a store may be several minutes. In a deal, it may be several days or several years, depending on the specified boundary. In manufacturing, the production time frame, which is lead time plus production time, may be thirty days, forty-five days, or six months, depending on the actual amount of time required to prepare for and complete the production activities. The time frame of a football match (soccer to Americans) is two forty-five-minute halves, plus any additional time that the officials authorize, in addition to the "half time period." Although time is not a physical thing, people consider it to be physical. People tell time, they try to save time, conscious people try not to waste time or lose time, people try to make up for lost time and get paid by the amount of time they spend on their job. An eight-hour measure of time is
usually one days work, and forty hours is a usual workweek in America How we use time tells much about our character. Someone who is constantly late is not dependable, and you cannot rely on people who are constantly late to be on time for an appointment. With regard to being late, there are different time periods associated with these intervals. If you are a little late, you may just mumble something as you arrive. If you are a little later, you offer a slight apology. But if you are later than just a little late, this is mildly insulting and requires a full apology. If you are a lot late, you are considered rude, and to be extremely late is downright insulting. These periods of time are forms of communication. Time communicates. Time speaks. Communicating with someone in the middle of the morning or in the middle of the afternoon, at a time that takes someone away from their work, indicates a degree of importance. Depending on what time of the day you set it, an appointment communicates different levels of importance. A telephone call made very early in the morning usually indicates a matter of great importance, perhaps extreme urgency; the same sense of urgency applies to calls late in the evening, and telephone calls made in the middle of the night are usually regarding matters of life and death or profit and loss. Lead time differs from country to country and from culture to culture. It is difficult to know exactly what is the proper and/or appropriate lead time to give to someone in another country or culture; especially when you are dealing or transacting business in the international arena. These time frames must be learned by experience. When a young lady is asked at the last minute to go out on a date she will feel insulted. It is necessary to apologize to someone that you are inviting to a dinner party only a day or so before the event. The most aggravating thing about the younger generation is that I no longer belong to it. Albert Einstein.
In the Middle East you cannot plan appointments too far in the future, the future being relative from an hour to a week. In parts of Asia, like China or Taiwan, they require very little lead time to prepare samples and they are quite eager for you to approve the sample and place your order. Lead times are taken very seriously in all cultures where schedules are important; however, schedules are not important to all people. What is the right time is a question that must be asked in regard to most things we wish to do. If you attempt to schedule an appointment before the time is right, you may not be granted an audience. If you force an appointment by continually requesting that an appointment be made, when you arrive, you may be kept waiting. Time passes while you wait. Twenty minutes, thirty minutes, forty-five minutes (the insult period in American time). You have been communicated to without a word having been said. In some countries however, forty-five minutes is not an insult, but rather a normal period of preparation prior to meeting with someone with whom you intend to do business. The person kept waiting is expected to be patient, as patience is a sign of respect. It happens sometimes that when you are waiting to see someone of whom you would like to make a request, they will keep you waiting just to see how much respect you have. If the request is known to both parties in advance, at the end of an appropriate respectful waiting period they may grant the request through a subordinate without even meeting with you. Different cultures, different rules of behavior, different expectations, different actions and reactionsyou must learn to behave as others expect you to behave when you are in their country or when you are participating in business in their culture. When in Rome, do as the Romans do. When you are in someone elses country or culture, change your time schedule to their time schedule and do not automatically think that you are being insulted just because you have been made to wait. Learn to understand what is being communicated by the unspoken language of time. Not all cultures treat time in the same way. In Latin America, for instance,
scheduled time is not as important as it is in the United States. They are just not as concerned about making a schedule or keeping to a schedule that has been made. It is not a lack of respect, but a cultural norm. For Americans, when you are south of the border, you have to ask people you are associating with if you are on American time or Mexican time, Hora Americana, Hora Mexicana. This will help you to avoid wasting time.
The time for action is now. It's never too late to do something. Carl Sandburg. For some people, the concept of time seems to be linear: time is a straight line that extends into the future, along which events occur one at a time. They schedule appointments and keep appointments one at a time. In some cultures, however, people will set a range of time for visitors: Come at seven in the evening, they say, but this means any time between seven and eight. They will invite many visitors at the same time and will not adhere to the rule of first come first served. It is up to their discretion as to whom they wish to deal with first. The only reason for time is so that everything doesn't happen at once.Albert Einstein. Business that you intend to conduct over a certain period of time, which should or normally (in Western cultures) could be concluded in half an hour, will take you all day or even all week or all month in some Middle Eastern countries. Time is irrelevant to some people in some cultures. When doing business in other countries with people of other cultures, sometimes you have to learn to relax a little. If you dont, you may find that it is not your time to prosper. Sometimes you cannot act until the time is ripe. For the most part, Westerners (people from the western part of civilization, U.S.A. and Europe) are obsessed with the future and the
changes that will occur in the near and far-off future. They work extremely hard to foretell or predict the future and plan strategies and contingencies for events that may or may not occur. They enact various actions in an effort to shape the future. Time is dealt with as if it were a material thing: they save it, spend it, earn it, and waste it. They do not understand when someone tries to do two different things at the same time. I never think of the future. It comes soon enough. Albert Einstein. Businesses in Western cultures will typically develop five-year plans; in some Asian cultures they will develop five hundred-year business plans. This is a matter of your view of the future. While the country and culture of America is some two hundred years old, many cultures and countries of the world are more than five thousand years old. In America, a long time can be considered anything from a couple of minutes (waiting for an egg to boil) or days or weeks, a few months, maybe even five to twenty-five years; in Asia people think of a long time in terms of thousands of years. The State of Being Formal, according to Websters, means of or relating to the outward aspect of something; relating to the essential form of something; following or based on accepted conventions; marked by strict observation of forms; stiff or cold; outwardly correct but lacking in substance. Informal, according to Websters, means not following a prescribed form or pattern; characterized by a lack of formality; of or for ordinary use or communication: casual. Technical, according to Websters, means of, relating to, or derived from technique; of a particular subject: specialized; of or using scientific knowledge; in principle rather than practice; of, relating to, or derived from technology. Time can be classed in three different ways: Formal time is what we all deal with in our daily lives, the time that we are all familiar with. It is what we all know as time: minutes, seconds,
hours, days, weeks, months, years, and anything that can be categorized as a duration of time. Informal time is not exact, such as a little while, later, in an hour or so, in a minute or two. Technical time is terminology used by scientists and technicians: a light year (the distance light will travel in a years time), nanoseconds (one billionth of a second, 10-9). This is time precisely measured, calculable in usable measurements of time. For every one billion particles of antimatter, there were one billion and one particles of matter. And when the mutual annihilation was complete, one billionth remained - and that's our present universe. Albert Einstein. By understanding the three types of time, we are able to understand that man, in general, has three modes for almost everything he does in his life. The formal of anything is what is taken for granted, what is the normal. The informal is more often associated to part-time usage, like weekend skiers, amateur photographers, and hobbyists. The technical is anything that can be taught as a specific set of movements, techniques, and methods. Anyone can learn to ride a bicycle if they are instructed in the proper techniques, movements, and methods of handling a bike. For that matter, a person can learn how to play any sport or do any job if they take the time to learn the proper techniques, movements, and methods. Some people approach business in the formal manner. They take it for granted and go about their business in their normal everyday way. Some succeed and some fail. Others go about their business in an informal way, part-time or as a hobby. Some succeed and some fail. However, if you approach business in the technical way, you can succeed in business. Understand that it is estimated that nine out of ten businesses fail within the first five years (some say closer to 7 out of 10). These failed businesses, for the most part, have been run by formal and informal means. Business is no different from anything else in life; you have to learn how to do it.
Therefore, take the time to learn the proper techniques, movements, and methods, and you can be successful. No artist is ahead of his time. He is his time. It is just that the others are behind the time. Martha Graham. The world has changed. Many countries have changed over time, but many cultures have not, and people in these cultures do not like Americans or other progressive Europeans trying to change their culture. They find these attempts disrespectful. They view many Americans attitudes toward them as hostile, as if these Ugly Americans view other people as underdeveloped Americans. Americans are viewed as being hell-bent on progress, rolling down that linear time track into the future at an unstoppable speed. Foreigners wonder why it is that we Americans will not take the time to stop and smell the roses. It would be a shame to waste todays potential by frittering time away in irrelevant banter. The California Kid.
Art is Timeless
According to Sun Tzu, Tenet 2, Action in War: The general will not raise or move troops and people more than once. Equipment and stocks will not be transported repeatedly. Time will not be wasted due to the lack of oversight. THOUGHTS and QUOTATIONS: If you wish to Bet On Life try this: At 50 I have kids from 2 to 22; a Water Dragon breeds a Gold Dragon; with a Fire Dragon in the hole. The California Kid. For everything there is a season, And a time for every matter under heaven:
A time to be born, and a time to die; A time to plant, and a time to pluck up what is planted; A time to kill, and a time to heal; A time to break down, and a time to build up; A time to weep, and a time to laugh; A time to mourn, and a time to dance; A time to throw away stones, and a time to gather stones together; A time to embrace, and a time to refrain from embracing; A time to seek, and a time to lose; A time to keep, and a time to throw away; A time to tear, and a time to sew; A time to keep silence, and a time to speak; A time to love, and a time to hate, A time for war, and a time for peace. Ecclesiastes 3 1-8
Part III Space

Space, according to Websters, means a set of points or elements satisfying specified geometric conditions; the infinite three-dimensional area within which all material bodies move and exist; the expanse in which the solar system, stars, and galaxies exist: universe; an empty area; a particular place, as a seat on a train; an interval or period of time. Spaced, spacing. To place, arrange, or organize with spaces in between. All living and nonliving things have boundaries, the space that separates them from everything else is the area that borders these boundaries. The physical limitation of the matter possessed by anything defines where it begins and ends. The space that it occupies and the space it does not occupy. These are physical, they are real, and they exist in reality as measurable distances and volumes.
Physical areas or volumes of space are valued differently: how big is your house, your office, your hat or your hand. We pay a different price for office space than we do for warehouse space, P=VZC. How much room we need or want will dictate where we will live, work, and play. The space inside a box dictates how much of any given object you may place in the box. The space you have on a memory chip in a computer dictates how much information you can store in your computer. There are, however, nonphysical boundaries that also exist. The nonphysical boundaries exist as territories, areas of space that are defended by individuals, territorial individuals. This is known as territoriality. In man, this territoriality differs from person to person, from culture to culture. Dogs protect their territory or the territory of their masters. Armies protect their territory or the territory of their masters. Individual territories, such as the place where we sleep, eat, work, or relax (our favorite chair) are all areas of space that are possessed and defended by individuals and groups. Individuals and groups evoke different responses when they trespass into someone elses territory. Lets hope that you have something other than space between your ears.The California Kid. People also have a space that surrounds them that they do not wish violated. Back off, they seem to say, I need my space. In some cultures people are touchy-feely, while in other cultures, people do not like to be touched or have their loved ones touched. Dont stand too close to a grouch or he will bite your head off. When people from different cultures come together, the different ways in which they handle space can communicate different meanings. Someone who is touchy-feely getting too close to someone who is conscious of their personal safety zone will clash. Touchyfeely does not mean to cause this type of discomfort in others, as they are used to being able to get close. It is, however, a mode of communication that can dictate how a person feels about you, and in business you do not
want people you deal with to be uncomfortable. Be aware of space and what it means to others. Also, dont allow others to cheat you out of the space you feel comfortable with or space that you possess, have purchased, or own. If you dont know the spatial requirements of others, watch how they react when someone comes close to them. Try to stand firm. Dont back-up just because someone is getting close. This may feel funny to you at first, but it will communicate to others that you value your space and are not willing to give it up lightly. This self-acknowledgement of your own space will be a signal to others. They will automatically give you more respect, or they will try to usurp your space by way of force if you are continually backing-up. This signals that you are retreating. Try to ascertain your position and the position of others with regard to the matter of space. You must know when to stand firm and when to retreat. Most space is taken for granted. However, when certain spaces are trespassed upon it can lead to conflict and war. When I read this stuff I get all spaced out. The California Kid.
Space contains all Art.

According to Sun Tzu, Tenet 6. Weakness of Vacuity and Strength of Substance: By striking the emptiness of the enemy, his vacuities, his weaknesses, we will encounter no resistance. By employing unattainable speed, unmatchable swiftness, our retreat will be unhampered.
Chapter 2
Peace
Peace, according to Websters, means the absence of hostilities, as war; a treaty or agreement ending hostilities; a state of harmony , as between persons: concord; a state of security under the law; freedom from disquieting feelings and thoughts: serenity. The above definition shows us nothing about being positive Harmony exists in nature. Things and people interact, in many instances, without conflict, even complementarily to each other. In Oriental philosophical terms, the states of yin and yang exist in the world. The good and the bad live in harmony and co-exist as a whole; neither one is dominant or submissive all the time. One without the other is not in harmony , but in a state of dominance against an absent opponent. Man is yang; woman is yin; One having the power to give and the other having the power to receive. Reward and punishment, benefit and loss, are attempts to achieve a state of harmony as is administered by natural and supernatural means. The California Kid. Neutral, according to Websters, means not supporting or favoring either side in a war, quarrel, or contest; belonging to neither side nor party; in terms of physics: having a net electric charge of zero. Switzerland, which classifies itself as a neutral state among all the states in the world, insists that it is at perpetual peace, as opposed to other countries that, at one time or another, participate in war. However, it is not solely at peace that Switzerland resides. Switzerland is also recognized as one of the major banking capitals of the world, a true business Mecca. Peace in Switzerland is precipitated out of the state of business in which
they reside. A musician must make music, an artist must paint, a poet must write if he is to be ultimately at peace with himself. What one can be, one must be. Abraham Maslow. We have purposely limited our discussion of peace in the context of this publication due to our overwhelming belief that attempts to attain peace are a waste of time. We will not purposely burden the reader with this subject. We concede that harmony exists in vegetation. Plants live, grow, and produce. They are in harmony with nature. In business, harmony must exist in actions and positive results, the yang. The yin, however, is a distraction of action and a loss of results, the sunny verse the shady, the good versus bad of business. They must exist in a state of harmony.
Art has value; therefore peace by possession of harmony has value. The art in harmony is the self-created atmosphere in which it exists. However, we will admit that there is probably also an art of "keeping the peace" that appears to be relatively unknown to many governments.
According to Sun Tzu, Tenet 9, Maneuvers: Those who talk of peace while not concerned with the parameters or conditions of the peace are implementing and executing a preconceived strategy. THOUGHTS and QUOTATIONS: Peace I leave with you; my peace I give you. I do not give to you as the world gives. Do not let your hearts be troubled and do not be afraid. John 14:27. Imagine all the people living life in ..., what was it that john lennon was looking for? Oh, yea yea yea, and the world will live at par. The
California Kid.
Rest in Peace Chapter 3
Business
Trade, according to Websters, means an occupation requiring skilled labor: craft; the business of buying and selling commodities: commerce; the people working in or associated with a specified industry or business; the customers of a specified industry or business; an instance of buying or selling: transactions; exchange of one thing for another. Trade is business. The original business was called barter, the trading of goods for goods or goods for services. People doing business were called traders, and the roads that they traveled were called trade routes. The original marketplaces were called trade fairs. Today's professionals in the stock market are called stock traders. Trade is the economic life of any and all societies. Governments seek to control trade. Stock markets are controlled through legislated regulations, and all imports and exports are subject to governmental controls and restrictions. In many cases, it is necessary to obtain import and export permits, and some governments impose trade sanctions on disfavored countries, while some countries receive favorednation trade status. Import duties and tariffs imposed to protect domestic markets from cheaper imported goods are referred to as protectionism measures. Governments seek to protect us from ourselves by increasing the cost of what we buy. The U.S. government has recently slapped protectionist tariffs on imported steel, sparking other steel-producing countries to
respond in kind on American exported products The World Trade Organization (WTO) is expected to rule on the "fairness" of these protectionist policies within the next couple of years. In the meantime, the price of products imported from and exported to many countries will be more expensive for the people to purchase, while businesses will lose money because their products cost more than the competition. Of course, the sales tax on the higher price is still collected by the government, to their benefit. We, the observant, are able to see their version of competency and efficiency: bureaucracy in slow motion. For the most part, countries that pay higher wages to "labor" must sell their products for higher prices. Wealthy countries also subsidize certain industries, which allows those industries to sell their products for lower a price, to the dismay of countries unable to subsidize their own industries. These restrictions placed on "free trade" cause conflict between countries and bolster the government's control on society and the economy. In general, countries that maintain less restrictive trade policies and regulations, the so-called free or freer market economies, have a greater chance to prosper. "Civilization will only thrive on cities and trade." Alexander the Great as was aired on the BBCWorld, 2002. Business, according to Websters, means one's occupation; trade: commerce; a commercial enterprise; volume of trade; rightful concern. There is nothing in the definition that is even remotely associated with a negative concern. Business is positive by nature. It has always been positive. It is by definition "rightful." Business is not, however, successful by nature. It is well known that nearly nine out of ten businesses fail within their first five years. Therefore, the entrepreneur must be aware that success goes hand in hand with failure. This is the nature of trial and error. Business is measured in terms of value. In the world in general, all
people search and try to obtain possessions of value. It is the nature of business to create value, to produce goods that possess value. The California Kid.
A primary rule of thumb in business is that the only two subjects never discussed during a business meeting are religion and politics. Occupation, according to Websters, means an activity serving as one's regular employment. The act of being occupied is good, as it is something being done rather than nothing being done. This is positive, simply put, as something is better than nothing. The California Kid. Employ, according to Websters, means to put to service or use; to apply or devote (e.g. time) to an activity; to provide with gainful work. To employ is to make use of one's time and/or talents. Positively speaking, to employ or to be employed is much better than being unemployed. The world over, one of the measures of a societys economic stability is the percent of unemployment. As the percentage of unemployment rises, economic and social instability follows. When people are out of work, their personal lives suffer. Without "gainful employment, how does one feed or house a family or educate children? Employment, according to Websters, means the act of employing or state of being employed; an occupation or activity. Science is a wonderful thing if one does not have to earn one's living at it. Albert Einstein. When a person starts a business, he works to succeed. As a business grows, its owners actively seek hard-working individuals to work in the business, thus helping the business grow and prosper and creating yet more
opportunities requiring still more employees. All of this is positive. All of this is business. The have's and have not's of this world are always making attempts to gain from others or not lose what they have acquired. It may be arguable that society, or the "social group," has the right to take what they wish from those who have what they want, as the needs of the many outweigh the needs of the few. However, it is not a right to usurp the values and valuables of others simply because you have a desire to acquire possession of the values and valuables possessed by others. If you desire to gain employment, to sell your services to an employer, there are ways that will enable you to achieve success in finding a job: When looking for a job, you may avail yourself of the services of employment agencies. Such agencies will be able to steer you in the right direction. They can analyze your qualifications and prepare you for the best position available. Be careful to choose an agency with a proven track record before paying good money for nothing. Use publications that cater to employers looking for potential employees: newspaper classified ads, trade journals, magazines, and, of course, the Internet. Prepare personal letters of application that can be directed to specific companies you would wish to work for. Take care to produce a quality letter, as this is the first impression you will make. Use your personal acquaintances to assist you in meeting the right people in positions to hire you. When you apply in person, have a personal letter enumerating your qualifications. Be on your best behavior in mind, body and spirit. Look sharp and feel good about yourself. Items to be included in your personal letter should include your education and specialized knowledge and your experience as it relates to the position you are seeking. Be sure to highlight any special experiences that demonstrate the special qualifications you have. Include references, such as former employers and prominent people who are willing to attest to
your qualifications and character. When you apply to an employer, be specific about what position you wish to receive. Prepare yourself in knowledge of the company you are applying to. Know what they do, know about their products and services. Supply a photograph of yourself. Prepare an analysis of yourself that explains why you would be beneficial to the company. Emphasize what benefits you will bring to the company. Make sure that your personal letter is properly written. Make no mistakes. Have someone else review the letter to ensure that it is correct and presents you in the best light. Use the best quality paper you can afford. If your letter is multiple pages, put it in a folder or have it bound for protection. Make sure to present the letter to the proper person in authority to make a decision regarding your employment. When you are applying for employment, know that you are in the business of selling yourself. Know that employers are only interested in hiring people who will benefit the company and will maintain the existing harmony in the company. Gain, according to Websters, means to acquire possession of: earn; to win, as in a competition; to develop an increase in; to come to: reach; to secure as profit; to improve: increase; advantage: profit; an acquisition. In mathematical terms, to gain is to increase, traveling in a positive direction, moving from point A to point B. Going forward, rather than going backward, has always been the best way to reach one's (as describing an individual's) desired goal. Gainful, according to Websters, means producing gain; profitable. Businesses are started with one central premise: to make a profit, to achieve success and make money. Furthering one's ambitions is like striving to reach one's goal. Acquire, according to Websters, means to secure possession or
control of: get; to come to have. There are three ways to acquire money. You can earn it, accept charity (which is being given money for nothing in return), or you can steal it. These are, respectively, business, peace, and war. Profit, according to Websters, means an advantage gained: benefit; financial return after all business expenses have been met; to gain financially; to gain an advantage: benefit. Profits are better to acquire than losses are to incur. The California Kid. Create, according to Websters, means to bring into being; to give rise to. The secret of genius is to carry the spirit of childhood into maturity. Thomas Henry Huxley. From childhood, we are all creative; children are creative. An individual who creates a value out of something that has less value than what has been newly created is sometimes called an inventor or developer, or perhaps a creator. As Henry Ford, through his individual trend of thought, designed, created, and developed the basic concept of an assembly line, he consciously gave to the world a model for and a method of creating value and valuables better, faster, and at less expense. This concept enabled manufacturers the world over to produce more products, hire more people, and serve the public better. Business people create value and valuables desired by all people. The California Kid. Creation, according to Websters, means the act of creating; something that is created; all things in the world.
I want to know how God created this world. I am not interested in this or that phenomenon, in the spectrum of this or that element. I want to know His thoughts; the rest are details. Albert Einstein. Develop, according to Websters, means to realize the possibilities of; to grow, unfold, or expand gradually; to elaborate or enlarge; to acquire gradually. Business people develop business plans intended to create products that are sold for profit. Synonym, according to Websters, means a word whose meaning is identical or almost identical to that of another word in the same language. Work, according to Websters, means physical or mental effort directed toward a goal; a job: employment; the activity that serves as one's regular source of livelihood: occupation; something done as part of a job: task or duty. Webster's also offers these synonyms to the word work: business, employment, job, occupation. All positive, good things in general, come out of business. Business generates deals, transactions and profits and that translate into money. The California Kid. The creation of value is the power of a person or people voluntarily working together to form a business. Business is all about making money by the creation of value and valuables, which are then sold to customers and consumers. Individuals can make business and groups of individuals can make business. Whatever the case, business is conducted and profits are made. The twelve golden rules of business and twelve golden business practices were developed in China more than 2,500 years ago. They have been tested and proven over millennia.
Twelve Golden Rules of Business

Be a good judge of character. Take the time to get to know who you are dealing with. 2. Be customer-oriented. The customer is always right. 3. Be single-minded. Focus on what you are doing. 4. Be captivating in your sales promotion. Put some passion into your sales pitch. Be sincere and love what you do. 5. Be quick to respond. Dont waste time. 6. Be vigilant in credit control. It is your money. You should control it. 7. Be selective and recruit only the best. Those who work for you or with you reflect the quality of your business. 8. Be bold in marketing your products. Take a little chance on yourself, your abilities, and your consciously chosen products. 9. Be smart in product acquisition, Dont take quality for granted. Know what you are buying and selling. 10. Be adept in analyzing market opportunities. Observe and analyze. Consciously think about what is going on around you. It is about YOUR business environment. 11. Be a corporate model. Have pride in what you are doing, and other will respect you and your business. 12. Be farsighted in developing a total business plan. 1.
Take the time to look a little farther into the future than you normally do.
Twelve Golden Business Practices

Dont be penny-pinching. A miserly person is not appreciated. 2. Dont be wishy-washy Constantly changing your mind shows insecurity. Stick to your guns. 3. Dont be ostentatious. Spending too freely shows disrespect for the value of money. 4. Dont be dishonest. The words speak for themselves. 5. Dont be slow in debt collection. Once again, it is your money. Dont let others control it. 6. Dont slash prices arbitrarily. P=VZC Have a good reason for what you do. 7. Dont give in to herd instinct. Following the crowd does not mean you will be successful. 8. Dont work against the business cycle. Selling winter clothes in the heat of summer rarely brings profit. 9. Dont be a stick in the mud. Be willing to try new things and ideas. 10. Dont overbuy on credit. Protect your reserves. Dont incur needless debt. 11. Dont under-save. Keep reserve funds strong. A penny saved is a penny earned. Try it with DOLLARS. 12. Dont blindly endorse a product. Putting your good name on a bad product is NOT good 1.
business.
Business is the best of art of all!

According to Sun Tzu, Tenet 2, Action in War: In war, it is anger that motivates men to kill the enemy. Men are stimulated and motivated to seize material goods. To them, this is their profit. THOUGHTS and QUOTATIONS: A man to carry on a successful business must have imagination. He must see things as in a vision, a dream of the whole thing. Charles M Schwab. Good humor is a tonic for mind and body. It is the best antidote for anxiety and depression. It is a business asset. It attracts and keeps friends. It lightens human burdens. It is the direct route to serenity and contentment. Grenville Kleiser. Business is really more agreeable than pleasure; it interests the whole mind ... more deeply. But it does not look as if it did. Walter Baghot. Our main business is not to see what lies dimly at a distance, but to do what lies clearly at hand. Thomas Carlyle.
I love the man that can smile in trouble, that can gather strength from distress, and grow brave by reflection. 'Tis the business of little minds to shrink, but he whose heart is firm, and whose conscience approves his conduct, will pursue his principles unto death. Thomas Paine.
I find it rather easy to portray a businessman. Being bland, rather
cruel and incompetent come naturally to me. John Cleese. It is awfully important to know what is and what is not your business. Gertrude Stein. Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you off the map. Wayne Calloway. Most business plans fail. Obviously, success is not a realistic goal. But the people who manage the most spectacular failures get promoted because of their experience. Dogbert. To cultivate kindness is a valuable part of the business of life. Samuel Johnson. If you do a lot of things to build business, you'll build business. They don't have to be done perfectly to work, although the better you do them, the better they'll work. But the main point is that you have to do them -- a lot. Joe Girard, How to Sell Anything To Anybody Wherever you see a successful business, someone once made a courageous decision. Peter F. Drucker. There's no business like show business. Irving Berlin. There's no business like show business, but there are several businesses like accounting. David Letterman. It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. This, in turn, means that our statesmen, our
businessmen, our everyman must take on a science fictional way of thinking. Isaac Asimov. Mr. Ward, what is it that the foulest bastards on earth denounce us for, among other things? Oh yes, for our motto of 'Business as Usual.' Well--business as usual, Mr. Ward! Ayn Rand, Atlas Shrugged. Cut your losses and let your profits run. Proverb. Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. W. Edwards Deming. Business is good, the Universe is expanding. Tony Follari. They that go down to the sea in ships, that do business in great waters. These see the works of the Lord, and his wonders in the deep. Psalms 07:23. The secret to creativity is knowing how to hide your sources. Albert Einstein. The monotony and solitude of a quiet life stimulates the creative mind. Albert Einstein. It is unfortunate we can't buy many business executives for what they are worth and sell them for what they think they are worth. Malcolm Forbes. We've got this gift of love, but love is like a precious plant. You can just accept it and leave it in the cupboard or just think it's going to get on by itself. You've got to keep watering it. You've got to really look after it and nurture it. John Lennon.
Business is Love. The California Kid.
Chapter 4
Consciousness
Conscious according to Websters, means aware of one's own existence, sensations, and environment; capable of thought, will, or perception; awake; subjectively perceived; deliberate. Interference in the conscious mind of others, limiting, controlling or coercing is negative by nature. Let no person or organization attempt to limit an individual's conscious mechanisms of the creation of ideas. The California Kid. Everything we do during our waking hours, during our times of not sleeping, takes place in the conscious mind. Our sub-conscious mind resides at a deeper level of the brain, carrying out the passive functions of life; breathing, sweating, digestion for instance. You can control your breathing and even stop breathing by holding your breath for a short period of time, but the sub-conscious mind knows what is best for you and overrides your conscious mind as it recognizes the bodies need for oxygen.
I hope everyone, like Tommy, becomes aware this year. The California Kid. Conscience, according to Websters, means the faculty of recognizing the difference between right and wrong with regard to one's own sense of proper conduct. Our conscience lets us know what is right and what is wrong. In business, it is very important that you know what the right thing to do is, what should you be doing to improve your business. We make conscious decisions to do things right. If we know what the right thing to do is, and we chose a less attractive alternative, we are acting in a negative manner or a manner that is not as positive as what we could be doing. We should consciously understand what the consequences are to our negative or less positive actions and be prepared to accept responsibility of our actions. But not all our conscious decisions are the right thing to do, as we may have been coerced. Diane Taren. Although as human beings, we have free will to think and do what we wish, society has set limits on actions perceived by our conscience to be wrong. In many cases, governments enact laws to define what our conscience knows to be wrong. Things that are against the lawthe laws of nature and laws of societyare obvious. Sometimes laws limit the pleasures that we enjoy, like smoking, drinking, and sex, to name a few. Governments enact laws that are meant to protect us from danger, even if we cause the danger to ourselves; some laws thus protect us from ourselves. It is not the province of government to protect us from ourselves as long as we are doing activities that cause no harm to others. Within our own conscious mind, our conscience is our guide. Organizations that seek to control our conscious minds have overextended their authority. Our brain is the most powerful organ that we possess. It's the vehicle
that gives our conscious mind a ride. The California Kid. It is capable of experiencing pleasure in all the different forms that pleasure may be experienced. It can also experience pain. The conscious mind is capable of integrating all that we experience and differentiating between pleasure and pain. A conscious, rational, thinking individual will choose pleasure instead of pain. The limitation of our pleasures is the limitation of our pursuit of happiness. As individuals, we possess the inalienable right to pursue happiness; no government or organization or individual or group of individuals has the right to prevent us from pursuing happiness or limiting our efforts to pursue happiness. Our conscious mind is the essence of our conscious life. Our conscious life is the single most powerful entity in the reality of life, the reality of this world. With our conscious mind, we are capable of controlling nature and future events. We have the ability to dictate what the future will be, what the future will hold, what we will become, and how we will live our lives, our lives that we consciously live in the real world, in reality. Reality is merely an illusion, albeit a very persistent one. Albert Einstein. For the most part, governments recognize no ones right to exist except under their control. A truly conscious individual does not require others to exhibit control over their conscious lives. We conscious individuals need no external authority to govern our lives. Those individuals or groups of individuals that attempt to limit our conscious mind, our ability to think about what we choose to think about, are not truly conscious. They are less than truly conscious human beings. They are, in my opinion, subhuman. The California Kid. Our consciousness allows us to control our lives; however, we are endowed
with the power of free choice. We can choose to be controlled if this is what we wish. For the most part, governments, organizations, and individuals and groups of individuals that control peoples lives do so because the people have chosen to be controlled. They have chosen to be subjective in nature, letting other people run their lives. For the most part, business people, people who consciously choose to do good business, are truly conscious individuals. Business people do not let others run their lives or run their businesses. Business people have the ability to leverage the power of their conscious minds to transform nature into what they want nature to be. They are objective in their actions. They are not subject to the controlling efforts of others. Business people control their own destiny. If things do not turn out as we wish, we should wish for them as they turn out. Aristotle. The nutrition of the mind is information input. Knowledge is what we feed our conscious mind. As factories use raw materials to produce products, the mind uses information input to produce ideas through the use of our imagination. Business people realize the value of imaginative ideas. There are mechanisms in society to protect our ideas, such as copyright laws and patents on inventions. A creative individual should realize the value of his or her mental products and take steps to safeguard these values. If you are not a creative individual, it is because you have not chosen to be creative. Learn to think for yourself. Use your imagination and protect the thoughts that you develop in your conscious mind.
Our consciousness is the perception of any art.

Our subconscious mind is the machine that communicates with the conscious mind. It is the machine that communicates with the infinite wisdom of the universe. This later mechanism of communication is known
as prayer. Conducting GOOD BUSINESS is the conscious mechanism of prayer. The act of doing good business is to be regarded as consciously communicating on the proper wavelength with the infinite wisdom of the universe. Your prayers are answered by the realization of success. The subconscious mind turns wavelengths of thought into ideas. This is the core of your imagination. Control of the subconscious mind is limited (at this time) only because we have not fully comprehended the exact mechanism to accomplish the task. We do, however, have certain mechanisms to promote positive and negative subconscious action. The first thing you must realize is that your subconscious mind is like any other mechanism. If you disturb it while it is working, it will not work efficiently or effectively. Do yourself a favor and provide a tranquil working environment in which subconscious mind may do its best work. Go to a quiet place when you wish to subconsciously think, imagine, and dream. By the means of conscious suggestion, we can initiate subconscious thought. Think of something you wish to accomplish, reinforce your conscious thoughts by means of visual and audio means, and the subconscious mind will pick up the signals, the conscious wavelength of your intentions. Repeat this process over and over again. Do not stop your conscious suggestion process. Keep initiating again and again. At some point in time, the subconscious mind will respond and produce infinitely valuable thoughts along with valueless thoughts. However, the conscious mind is capable of filtering out the worthless and retaining the valuable. Dreams are subconscious thoughts, whether dreams at night or daydreams; dream your way to wealth. The California Kid. Train yourself to be habitual. Make it a habit to stimulate your subconscious mind into action that results in thoughts of imagination. The two types of imagination are the repackaging of someone elses ideas and the creation of your own ideas. Throughout life, you will primarily repackage the imaginative thoughts of others. It is a rare gem to truly
conceive a revolutionary thought, but when you do, treasure it, for it is worth a fortune. The more you practice positive stimulation of the subconscious thought process of imagineering, the more creative wealth-making ideas you will generate. Create creative ideas of imagination. The California Kid. The process of subconscious stimulation accomplished by use of emotional suggestions, both negative and positive, is as follows: Negative emotions, such as greed, revenge, envy, fear, jealousy, hatred, and anger, will cause a negative value conscious thought when developed through the subconscious mind. Positive emotions, such as love, hope, desire, faith, enthusiasm, and romance, will cause a positive value conscious thought when developed through the subconscious mind. Prayer is the use of the positive emotions to generate the specific wavelengths of mental energy needed to contact the infinite intelligence of the universe. The California Kid.
Even ugly art can be subconsciously appreciated.

According to Sun Tzu, Tenet 13, Using Spies: When all types of spies are used in conjunction, their Tao is unknowable. This is referred to as heavenly manifestation. It is the rulers most valuable treasure. THOUGHTS and QUOTATIONS: What we think, we become. In the words of The Buddha Enlightenment is man's emergence from his self-imposed immaturity. Immaturity is the inability to use one's understanding without guidance from another. This immaturity is self-imposed when its cause lies not in the lack of understanding, but in the lack of resolve and courage to use it without guidance from another. Have courage to use your own understanding! Immanuel Kant.
When I was a child, I spoke as a child, I understood as a child, I thought as a child; but when I became a man, I put away childish things. 1 Corinthians 13:11. Do not dwell in the past; do not dream of the future, concentrate the mind on the present moment. In the words of The Buddha Happiness is that state of consciousness which proceeds from the achievement of one's values. Ayn Rand. Thinking men cannot be ruled. Ayn Rand. If everyone is thinking alike, then somebody isn't thinking. General George S. Patton. A finely tempered nature longs to escape from the personal life into the world of objective perception and thought. Albert Einstein. The more man meditates upon good thoughts, the better will be his world and the world at large. Confucius.
Chapter 5
Value
Value, according to Websters, is an amount regarded as a fair equivalent for something, especially, in reference to goods or service; material worth; worth in importance or usefulness to the possessor; a standard or principle regarded as desirable or worthwhile; precise meaning, as of a term; in mathematical terms, a calculated or assigned numerical quantity; in terms of music, the relative length of a rest or tone. As Ayn Rand said in The Objectivist Ethics, Value is that which one acts to gain and/or keep. The concept value is not primary; it presupposes an answer to the question: of value to whom and for what? Ethics, according to Websters, means a principle of right or good conduct; a system of moral values; the branch of philosophy dealing with the rules of right conduct. Ethics is an objective necessity, but that does not mean that ethical business is risk free or even low risk. The California Kid. Moral, according to Websters, means of or pertaining to the principles of right and wrong; in accordance with standards of right conduct: virtuous; arising from the inner sense of right and wrong; psychological rather than physical or concrete; likely but not proved; the principle or lesson taught by a story, event, or experience; morals: conduct, especially sexual conduct, with regard to standards of right and wrong.
Morality, according to Websters, means the quality of being virtuous; moral behavior: virtue. Moralize, according to Websters, means to think, discuss, or judge in terms of morality. Once again, as Ayn Rand said in The Objectivist Ethics, when she asked the question, What is morality, or ethics? It is a code of value to guide mans choices and actionsthe choices of his life. Ethics, as a science, deals with discovering and defining such a code. Never let your sense of morals prevent you from doing what's right. Isaac Asimov. Virtue, according to Websters, means moral excellence; a particular beneficial quality: advantage; effective power; virtuous: righteous. Try not to be a person of success, but rather a person of virtue. Albert Einstein. As all people try to acquire values and valuables, the virtuous are capable of maintaining possession of what they have acquired. Value is that which one acts to gain and/or keepvirtue is the act by which one gains and/or keeps it. Ayn Rand. As individuals, we are capable of producing value and valuables. We do this by means of our work. We work hard to produce value for our own benefit first. There are more than 200 governments in the world. None are accepted by all people. There are many hundreds of religions in the world. None are accepted by all people. Business is universally accepted worldwide as the producer of value. Simply put, business people create values and valuables which are readily bought, sold or traded for other
items of value. The California Kid.
Business owners must see and understand the value in the people and things associated with their business, the company assets, the talents of the individuals with whom they work. The collective values of all employees, the value of quality suppliers which provide services, raw materials and components required for production of the business's productsall of these entities that possess value. One must learn to perceive and recognize values, understand the nature of the perceived values, use and protect the values they posses, and work hard for the values they wish to acquire. Unless they attempt to acquire our valuables with funny money. Diane Taren. Value takes many different shapes and forms. Money has value, gold has value; to a man dying of thirst in the desert, a drink of water has more value than all the gold in the world. A song copyrighted by the author that sells millions of copies worldwide has value to the owner of the copyright. The same song has value to the listener who enjoys listening to the song, as it gives him joy and happiness or provokes fond memories. It is the listener who pays the purchase price of the song, buys the record, tape, or CD. The one who buys is the customer. He purchases a product from the seller. If the seller wants too much money for the product, the customer will decline to buy. If the buyer is desperate to acquire the product, the value is increased: P=VZC. The value of anything is perceived by individuals who are capable of recognizing the worth of an item or a service, who desire to acquire possession of that value, and who will pay an agreed upon price to the seller. The value of items will differ from person to person. It is up to the individual to decide what value to place on anything How much is anything worth to you? How much time will you invest
to acquire a thing of value? How much money will you spend to purchase an item or service that you desire to own, or need to possess? People and groups spend money to rent houses, factories, stores, and offices and enjoy the privilege of occupying the space within the building. They do not own the building or the space but they possess the right to occupy it. They have evaluated the asking (sales or rental) price and either accepted, rejected, or negotiated a satisfactory price with the seller or landlord. A worker values his time and experience or expertise or knowledge, which are valuable to the worker, and he is willing to trade his valuables to the employer for an acceptable wage, salary, or fee. The employer recognizes the value the potential worker is offering and determines what price he is willing to pay to acquire the services of the worker. This is business: the creation of value, the sale of value, the purchase of value, the possession of value, the perception of value, the recognition of value, the determination of value, the transfer of value.
Value is a description or measurement of quality, of worth, of its art. Works of art (at least some of them) are valuable, and many of them possess great value.
According to Sun Tzu, Tenet 3, Offensive Stratagems: To conquer the enemy and preserve the value for your own use is the primary objective. This is preferable to the total destruction and loss of value. However, in any battle this destruction is what we may have to settle for in the end. THOUGHTS and QUOTATIONS: The value of a man resides in what he gives and not in what he is capable of receiving. Albert Einstein. Try not to become a man of success but rather to become a man of value. Albert Einstein.
I think most artists create out of despair. The very nature of creation is not a performing glory on the outside, it's a painful, difficult search within. Louise Nevelson. You have to learn to treat people as a resource you have to ask not what do they cost, but what is the yield, what can they produce? Peter F. Drucker. I cannot conceive of a personal God who would directly influence the actions of individuals, or would directly sit in judgment on creatures of his own creation. I cannot do this in spite of the fact that mechanistic causality has, to a certain extent, been placed in doubt by modern science. [He was speaking of Quantum Mechanics and the breaking down of determinism.] My religiosity consists in a humble admiration of the infinitely superior spirit that reveals itself in the little that we, with our weak and transitory understanding, can comprehend of reality. Morality is of the highest importancebut for us, not for God --Albert Einstein, The Human Side. The true value of a human being is determined primarily by the measure and the sense in which he has attained liberation from the self. Albert Einstein.
Chapter 6
Truth & Honesty

Profound, according to Websters, means of great depth: deep; deeply felt or held; penetrating: insightful; complete: total. Honest, according to Websters, means not deceptive: truthful; not fraudulent: genuine; of good repute; frank: sincere. Honesty, according to Websters, means the quality or state of being honest; synonyms include incorruptibility, incorruptness, integrity, rectitude, uprightness. Integrity, according to Websters, means strict adherence to a standard of value or conduct; personal honesty and independence; completeness: unity; soundness. Honesty is absolute. A person is either honest or dishonest. A business without honesty or that is less than honest ultimately will fail, either financially or morally. Honest people do not deal with or conduct business with dishonest individuals or groups, if they can help it. People fear having their values and valuables taken from them by any dishonest means. The California Kid. Employees are requested to give an honest day's work for an honest day's pay. Profound honesty is honesty without question, a purity of the quality of honesty itself. Honest businesses and individuals may expect to receive rewards; dishonest businesses and individuals may expect to receive punishments.
Personal honesty and integrity are the cornerstones of an individual businessperson. Honesty is a person's most valuable asset. His or her good name, good reputation, and good word depend on the individual's quality of honesty. A business that operates under the principles of profound honesty is elevated within the community. It is respected and treasured. The absence of honesty is a liability to an individual or business. Truth, according to Websters, means accordance with knowledge, fact, or actuality; the real state of affairs: fact; actuality: reality; a statement that is or is accepted as being true; the state of being truthful: honesty. You shall know the truth, and the truth shall make you mad. Aldous Huxley. The truth shall set you free. Truthful, according to Websters, means telling or inclined to tell the truth: honesty; corresponding to fact or reality. Truth is what stands the test of experience. Albert Einstein. As a component of honesty truth has value, as long as it is not manipulated. The California Kid. An example of manipulations is when I have smoked fifteen cigarettes out of a standard pack of twenty, and I tell someone I have smoked five. I tell them I have smoked ten or twelve. Technically, I have told the truth because I actually did smoke five. I did smoke ten. I smoked twelve and am telling the truth. However, honestly, I would have to tell them I smoked fifteen. That is also truthful. Values of honesty are not lost in the activity of secrecy as in relation to a businesses strategy of confidentiality. However, deceiving someone in order to hide your less than honest intentions is dishonest. Unlike truth, honesty cannot be manipulated. The California Kid.
It is a good thing to find an honest person. It is even better to have someone find you to be an honest person. If proved to be dishonest, it is most difficult to ever regain the respect once afforded you by others. From the moment of evidence of dishonesty, one is branded a dishonest person and someone who should be avoided at all cost. Businesses that are found to have operated in a dishonest manner are also to be avoided at all cost. A day without honesty is like a day without sunshine. We like the little bit of wisdom we saw on the BBC's Business Report: "A shady business never leads to a sunny life."
Honesty is contained in the "heart of art"

According to Sun Tzu, Tenet 9, Maneuvers: Forces that separate, one in advance and one in retreat, are enticing you in accordance to a plan of deception. THOUGHTS and QUOTATIONS: Love does not delight in evil but rejoices with the truth. 1 Corinthians 13:6. Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. Matthew 6:19-21. Honesty is the first chapter in the Book of Wisdom. Let it be our
endeavor to merit the character of a just nation. Thomas Jefferson. Truth never plays false roles of any kind, which is why people are so surprised when meeting it. Everyone must decide whether he wants the uncompromising truth or a counterfeit version of truth. Real wisdom consists of recommending the truth to yourself at every opportunity. Vernon Howard. One should not promise a child something, and then not give it to him, because as a result, the child will learn to lie. Babylonian Talmud, Sukkah 46b. The ideals that have lighted my way and time after time have give me new courage to face life cheerfully, have been Kindness, Beauty and Truth. Albert Einstein. If you are out to describe the truth, leave elegance to the tailor. Albert Einstein. Philosophy is the science which considers truth. Aristotle. The search for truth is more precious than its possession. Albert Einstein.
Chapter 7
Trust
Trust, according to Websters, means firm reliance in the honesty, dependability, strength, or character of someone or something; one in which faith or confidence is placed; care: custody; something given into one's care for the benefit or interest of another: charge; the state and obligation resulting from this; reliance on something in the future: hope; an interest in property that is held by 1 party for the benefit of another; a combination of corporations or firms formed especially for the purpose of reducing competition; confidence in a person's willingness and ability to pay: credit, to have or place confidence in: to rely upon; to believe; to allow to have use, or care for without misgivings; to extend financial credit to. Next to honesty, trust is the most important quality or virtue an individual or group can possess. If you do not trust the people you are dealing with, then maybe you should not be doing business with them. If your banker does not trust you, you will not gain the banks financial support and no line of credit will be extended to you. Your credibility will be bankrupt, possessing no value. When people don't trust a business, they will try to find another business to deal with. Someone who is not trustworthy will not receive endorsements from honest people. They will not be able to inspire confidence in others. People who do not have confidence in themselves cannot trust themselves to do the right thing. Businesspeople are required to have confidence. They must believe and trust that their business will be successful; otherwise, seeds of doubt will infect their thoughts, create
weaknesses in their abilities, and cause hesitation in their actions. We have all said it. "Please believe me. Please trust me." Trust me, I know what Im doing." "I would not trust that guy as far as I can spit." "I trust you as far as I can throw you." I do not trust you. What degree of trust do you place in someone or something? In business, sometimes it is a good thing not to trust anyone. Corrupt people are able to take advantage of their victims by getting the victim to trust them. Then they steal anything of value they can get their hands on. Trust is not given; trust is earned. One must have demonstrated trustworthiness in order to be trusted. The California Kid. In the better team, members are valued and trusted. Trust me, Im a virgin. Diane Taran.
The art of trust is in knowing whom to trust.

According to Sun Tzu, Tenet 7, Combat: By day, use flags and banners, trumpets and drums. By night, use fires and drums. Hold mens eyes and ears by day and by night. This will change them to trust their leadership. THOUGHTS and QUOTATIONS: Never trust the advice of a man in difficulties. Aesop.
Chapter 8
Life
Life, according to Websters, means the property or quality by which living organisms are distinguished from dead organisms or inanimate matter, especially as shown in the ability to grow, carry on metabolism, respond to stimuli, and reproduce; animation: vitality. Life is like riding a bicycle. To keep your balance you must keep moving. Albert Einstein. In an individual, conscious life, a life based on logical actions, is the only life to be lived. The essence of an individuals conscious life is the control that he or she possesses over his or her life, the ability to control present or future events. A person who is in control of their own life is a happy person. They have the ability to work, grow and prosper. A person who is without control, who is controlled by others is never truly happy. They are destined to a life of failure. The California Kid. Vitality, according to Websters, means the characteristic that distinguishes the living from the nonliving; the capacity to grow or develop; physical or intellectual vigor: energy. Happy, according to Websters, means fortunate; having, displaying or marked by pleasure or joy; fitting: appropriate; pleased and willing.
A vital man is a happy man. A vital man gives happiness to others. Diane Taren.
We speak about the condition of the life of a business. Yes, businesses have life; they are a living entity, as a corporation is an entity. They require nutrition, care, maintenance, regular servicing, and even love, as in the "love of life" and "I love my business." However, business owners sometimes love and sometimes hate their business, the "Business they are in." Hate is a negative. This is detrimental to the life of the business. If you do not like what you are doing, do something else. Never become a slave to anyone or anything, even to your business. Just as we treasure life, we should treasure our business. Treasure is accumulated or hidden wealth. It is regarded as especially valuable and is greatly valued. Your business is a treasure and should be treated as such. It has life and requires you to tend its needs and wants. Be good to your business and it will be good to you. Art is not living. It is a use of living. The artist has the ability to take that living and use it in a certain way, and produce art. Audre Lorde. Everybody wants to have a lively business. We want more customers, more orders, more sales, more deliveries. Along with more success, however, come more headaches, more problems, and more activities. Business people who are enjoying good business enjoy the challenge of being capable enough to make a business grow and prosper, to realize success, to feel the pumping of cash flow through the business. No one ever said that doing business was easy; otherwise, everyone would own a business. Just as you create the life of a child, you create the life of your business. Businesses can be alive, but sometimes they are not very lively. Activities that stimulate business are preferred activities, positive activities. The art of efficiency lies in doing preferred activities. We all try to stay
busy, but it is better to expend our energy on positive activities, helping something grow versus just keeping it alive. Business people, in general, possess a certain amount of vitality. They always seem to have a little extra energy. They seem to walk with purpose and theres a spring in their step. They have a willingness to work longer hours, keep appointments on-time, promptly return telephone calls, answer both electronic and written correspondence in a timely fashion, and follow up on their customers needs and wants. These are the necessities that absolutely must be done and done on time if you wish to succeed in business. It is vital to keep your business healthy and active. As a seller, you keep your buyers and suppliers happy. As a buyer, you keep your suppliers happy, as they should be trying to keep you happy. Isn't that what we all wanta "happy life, a healthy business"? Life is the art of being in love with all the values that surround you. The California Kid. According to Sun Tzu, Tenet 11, Nine Situations of Terrains: When your troops, your armies, have penetrated terminal terrain, they will survive. They will live. Only when the masses have penetrated dangerous or terminal terrain will they know the Tao of crafting victory out of defeat. Health, according to Websters, means the overall condition or functioning of an organism at a particular time; optimal mental and physical soundness and well being. Personal health is your prime asset. The loss of your health is a signal from your body and mind that something is wrong. The health of your business is as important to you as it is to your employees, suppliers, buyers, and others who rely on your business to remain healthy. You must take
care of your business. You must work hard to maintain a healthy bottom line. The health of your business depends on the profit of your business. The debate is whether you wish to die healthy or die unhealthy. Either way, you will be dead. However, if you are healthy, you stand a good chance to live longer than an unhealthy person. The same goes for your business. A healthy business will live longer and be more profitable than an unhealthy business. The California Kid. Just as you can overwork yourself, you can also overwork your business. Trying to grow too fast, or taking on more of a workload than you can handle can cause great harm to your business. Underworking is just as bad. Your business may starve. Its health will suffer. It is important to maintain harmony in your business within its environment. The health of your business depends upon your understanding of the environment, your observations and analysis of collected data, the choices you make, and the actions you take. We often despise what is most useful to us. Aesop. Just as in your own life you try to avoid catching disease, you must try to keep your business disease-free, free from infections such as laziness, dishonesty, poor cash flow, bad debt, discontented employees, corrupt associates, disease-ridden lawyers, poor hygiene (keep it clean), loneliness (the more customers, the better), ignorance, and stupidity. You have to limit complications and complexities. Remember the motto, K.I.S.S. Keep It Simple, Stupid, Stupid in this case refers to anyone who does not consciously work hard at taking care of his or her business. Just as your physical and mental health are necessary to your achievement of happiness, so regarding the health of your business it is necessary to achieve its own happiness (profits). People use the leverage of their conscious minds to maintain their mental health, control their emotions, acquire benefits and assets. You must use this same mental
leverage to control your business activities. Control the well-being of your business. Never assume that the business will take care of itself. This practice is only courting with disaster. Assume makes an ASS out of U and ME. It is said that a man who visually inspects all areas of his property on a daily basis will have quality piece of property. Therefore, it stands to reason that a business owner who inspects every facet of the business on a daily basis will have quality business. Old age is the natural enemy of the body. Businesses can also grow old. They can become out-dated and obsolete, and their value may be diminished. However, some businesses can grow very old and still function in a profitable manner. If you do not grow with the times, the times will grow without you. As circumstances within the environment change, your business must adapt to changing times.
Your health and the health of your business are your most valuable possessions, and should be considered the first pieces of art acquired in any art collection.
According to Sun Tzu, Tenet 9, Maneuvers: An army that maintains its health by avoiding illness (dangers) and the causes of illness will obtain victory. THOUGHTS and QUOTATIONS: Those instrumental goods which should serve to maintain the life and health of all human beings should be produced by the least possible labor of all. Albert Einstein. People like you and me, though mortal of course like everyone else, do not grow old no matter how long we live... [We] never cease to stand like curious children before the great mystery into which we were born. Albert Einstein in a letter to Otto Juliusburger.
How many are your works, O Lord! In wisdom you made them all; the earth is full of your creatures. There is the sea, vast and spacious, teeming with creatures beyond number - living things both large and small. Psalm 104:24-25. Do you believe in immortality? No, and one life is enough for me. Albert Einstein. How strange is the lot of us mortals! Each of us is here for a brief sojourn, for what purpose we know not, though sometimes sense it. But we know from daily life that we exist for other people first of all for whose smiles and well-being our own happiness depends. Albert Einstein. For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life. John 3:16. Common sense is the measure of the possible; it is composed of experience and prevision; it is calculation applied to life. HenriFrederic Amiel. Life shrinks or expands in proportion to one's courage. Anais Nin. Life is not a static thing. The only people who do not change their minds are incompetents in asylums and those in cemeteries. Everett McKinley Dirksen. Life is not easy for any of us. But what of that? We must have perseverance and above all confidence in ourselves. We must believe that we are gifted for something and that this thing must be attained. Marie
Curie. A baby is God's opinion that life should go on. Carl Sandburg. Ars Longa, Vita Brevis [ Art (is) Long, Life (is) Short]. Hippocrates. There are as many nights as days, and the one is just as long as the other in the year's course. Even a happy life cannot be without a measure of darkness, and the word 'happy' would lose its meaning if it were not balanced by sadness. Carl Jung. The wisdom of life consists in the elimination of nonessentials. Lin Yutang. There are two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle. Albert Einstein.
Chapter 9
Emotions and Character Traits

Part I The Basics
Anger, according to Websters, means a feeling of great displeasure or hostility: wrath. Anger is a negative emotion that is detrimental to good thinking. An angry person will make mistakes; they act on their feelings and not with their capacity of good judgment. Do not get angry with your opponents; get even or better yet, get ahead of them. The California Kid. Arrogance, according to Websters, means overbearing and selfimportant: haughty. People exhibiting an air of self-superiorityarrogant peopleare dangerous. They often brag and boast of their accomplishments, even to the point that they embellish and add fanciful details to what they have done or can do. They believe themselves to be better than others. Even if they truly are better at some things than another person, their arrogant behavior causes difficulty for others. Distance yourself from people exhibiting this character trait. Desire, according to Websters, means to hope or wish for ardently;
crave; to ask for; request. While desire is not negative in nature, it can lead to stronger, unhealthy negative emotions such as jealousy and envy. We all desire something. It is healthy to want; desire drives us into actions of acquisition. The California Kid. Dont just desire to acquire. Desire to acquire an exact amount of any possible value, an exact amount of money, valuables, commodities, properties, etc. It is not enough to desire a lot or a great deal of anything. You have to know exactly how much of anything you wish to acquire and possess. Determine exactly what you are willing to do to acquire items of value. Determine the time frame in which you intend to acquire your valuables. Think of a plan that will make your efforts successful. Get your ideas out of your conscious mind and on paper, or on a virtual page in a computer. Turn your ideas into something more than mental energy. Make them visible in the real world. Turn your visible thoughts into audible wavelengths. Read your thoughts out loud and listen to what you say. Ego, according to Websters, means the self, especially as distinct from the external world; the conscious personality component that most directly controls behavior and is most in touch with reality; self love: egotism. We all have an ego. It makes us who we are. It is wise, however, to keep your ego in check. Don't let your perception of self-worth go to your head. It is good to believe in yourself, but you should observe the realities of the environment around you and understand their place in that environment. The most important action of any individual is to protect himself or herself. You are not capable of helping others unless you have helped yourself first.
Selfishness is a Virtue. Ayn Rand. Do not allow others to control you. Do not succumb to the infliction of guilt by others. Others who wish to control you will employ devious tricks to coerce you into subjugation. They will employ any means to control you. Envy, according to Websters, means discontented desire for someone else's possessions or advantages. Envy is NEGATIVE! An envious person not only has an unhealthy desire to possess, but also will go to great lengths to destroy acquired values and valuables of others. Envious people suffer from a sickness. They are possessed with a parasite that eats them from the inside, a disease that consumes the individual and reduces a person to a vindictive subhuman. The California Kid. Emotion, according to Websters, means strong feeling; a particular feeling, love or hate. React to the actions of others with your conscious thoughts not your emotions. The California Kid. Faith, according to Websters, means belief in the truth, value, or trustworthiness of someone or something; loyalty or allegiance; belief and trust in God; religious conviction, a system of religious beliefs. I have deep faith that the principle of the universe will be beautiful and simple. Albert Einstein. Faith is developed by use of conscious initiation of the subconscious mind by means of positive suggestion. The winner has faith in his own
abilities above all. As an individual with free will and the right to choose, you can have faith in anything or anyone you wish; however, in business, have faith in yourself first. Many faithful believers have been robbed blind by people in whom they had faith. The California Kid. Once you have developed faith, know that you will succeed. Act as if you have already succeeded. Start conducting your life as a successful individual would. This act of having faith in yourself will consciously create an environment of success that will surround you. Feel, according to Websters, means to perceive through the sense of touch; to perceive as a physical sensation; to touch; to examine by touching; to undergo the experience of; to be aware of: sense; to suffer from emotionally; to believe: consider; to have compassion or pity; perception by touching; the sense of touch; the nature, state, or quality of something perceived through or as if through touch. Feeling, according to Websters, means the sensation involving tactile perception; a sensation perceived by touch; a physical sensation; emotion, especially compassion or sympathy. Feelings: sensibilities; a mental awareness; a distinct mood or impression; opinion: belief; sentiment; intuitive awareness; an aptitude: bent. Exhibiting emotional sensitivity; easily moved emotionally. If you are basing your conclusions and choices on the fact that you have touched something that is real, please proceed; however, if you have based your conclusions and choices on your emotional feelings, stop and think about what you are doing or about to do. Live in reality, not in your emotions. The California Kid. In general, people in business think about their actions. Calculated action or reaction to a given situation is better than an emotional response hastily contrived. Think; don't feel about your actions.
In business, always keep your emotions under control. It is better not to show your emotions to your business associates, as they will not react as favorably toward your feelings as they do toward your calculated thoughts. Also keep your personal character traits to acceptable, approved levels within society. Release: Sometimes you just have to scream. The California Kid. Fear, according to Websters, means alarm and agitation caused by expectation or realization of danger; an example of this feeling; reverence: awe; a state of dread or apprehension; to be frightened, to be apprehensive; to be in awe: revere; to suspect.
The basic fears that cause failure in life and business are as follows: death, old age, ill health, poverty; criticism, loss of love and property, and fear of failure. If you consciously know your own fears, you may conquer them. Fears are nothing more than states of mind. Eliminate your fears by rationally, consciously dissecting your fears piece by piece until there is nothing left of them. There is nothing to fear except fear itself. Franklin D. Roosevelt. Please note that when people fail because of fear they always seem to have an excuse or an alibi as to why they failed. Often the excuse starts with the word IF. If I only had more money, more time, a better job, if I had just been given a chance, if I only had a better education and more knowledge, if I were in better shape and better health, if I were not so short, fat, old, etc. There are so many excuses that start with the word IF it would be better IF you were to eliminate this particular word from you vocabulary
completely. The California Kid. Greed, according to Websters, means a desire to acquire more than one needs or deserves: avarice. It is likely that more deals and business ventures have failed because of greed than any other reason. A greedy person elevates the cost of a product above the value of the product. Greedy people often take on more responsibility than they are capable of satisfying. They can cause damage by their inability to operate efficiently. They are unable or incapable of providing quality products and services to their clients and customers. Most likely, they tried to carry too heavy of a workload. Don't deal with greedy people if there is any way to avoid it. These people exhibit an unnatural desire for possession, and they will not deal fairly with you. They are consumed with only pleasing themselves. Give me more; more, more, more. P=VZCg the ZC factor of greed. Hate, according to Websters, means to feel animosity or hostility toward: detest; to have distaste for. Hate is as negative as negative gets. Consider hate and war, one as destructive to the mind as the other is destructive to the body. Hate consumes the mind, body, and soul of an individual until there is nothing left except the outer shell which is left void of goodness and value. However, it is OK to hate the government for what they do to all of us, but you only need to pity SOBs for their unrealistic view of reality. The California Kid. Jealousy, according to Websters, means resentful or bitter in rivalry: envious; inclined to suspect rivalry; vigilant in guarding; arising from feelings of envy or bitterness. Jealousy is a feeling. Feelings do not belong in the daily activities of business. Jealous people display a negative emotional response toward the
people around them, causing instability in relationships. Jealousy is negative in its nature. Avoid jealous people and, more important, avoid becoming jealous yourself. If you find yourself becoming jealous of someone's good fortune, try to follow his or her example and create your own good fortune. Love, according to Websters, means intense affection; a feeling of attraction resulting from sexual desire; enthusiasm or fondness. I love my job, I love my business, I love what I do. My possession of love makes me happy. I love to work, and I love to succeed in life. The California Kid. Love as a concept exists in three states: Sexual or romantic love, as expressed between a man and a woman. Non-sexual love, such as friendship and the love of family, the love of your business, the love of your work. Intellectual or artistic love, the love of ideas, the love of thought, the love of products and services that have been created by individuals, and groups of individuals, who have used (leveraged) the power of their conscious minds to produce a product or service of value. God loves those who are masters of their work. The Prophet Mohammad. biz.b.o.h. Love is a very powerful, positive, healthy emotion. Love is capable of creating great joy in oneself and in others. It is OK to exhibit love in business. It is an infectious emotion that, when spread to others, creates great joy in all that are touched by it. All you need is Love. Loyal, according to Websters, means firm in allegiance to ones country and government; faithful to a person, ideal, or cause. Loyalty is
the noun to the adjective loyal. As an individual with free will and the right to choose, you can be loyal to whomever you wish; however, in business, be loyal to yourself first. Many loyal people have been left out to dry when the going got tough by people in whom they had faith. The California Kid. Passion, according to Websters, means powerful feeling; love; sexual desire; great enthusiasm; anger: rage. Synonyms are ardor, enthusiasm, fervor, fire, zeal. The great enthusiasm and passion of our struggle for peace is a waste of time. The California Kid. Passion exists in all states of being, the passion and rage of war, the passion and the glory. The zeal and fire of our convictions in business are real; at times, we must become warriors, when we fight, we fight to win. If you are going to have emotional feelings and the willingness to die in war for the pursuit peace, then the least you can do is be passionate about doing good business. The California Kid. Persistence, according to Websters, means to continue firmly and steadfastly despite obstacles; to continue in existence: endure. You can train yourself to become persistent by developing a definiteness of purpose, becoming self-reliant, preparing your plans and strategies carefully, working hard to acquire as much knowledge as will be needed to accomplish any given task, maintaining your desire to succeed at any and all tasks that you attempt to do, actively trying to help others to become persistent, initiating subconscious thoughts of persistence, developing wholesome habits and sticking with them. Know that all things require persistence. You can never give up or quit
if you wish to become successful in life and receive the rewards of wealth and riches. Pride, according to Websters, means proper respect for ones own dignity and worth; pleasure or satisfaction over something done, achieved or owned; a source of pride; excessive self-esteem: conceit. Be proud, but hold your pride in check. The California Kid. Sex, according to Websters, means one of the two divisions, male and female, into which many living things are grouped; the physiological and functional differences that distinguish the male and female; sexual intercourse. Sexual desire is the most powerful of human emotions. It can transform one into a superhuman, or (for that matter) a subhuman. Humans are driven to the act of procreation. The thought of sex can drive your imagination to previously unattainable heights. One should never underestimate the power of the sexual drive when tasked to complete any give project. Turn you desire for sex into a force that compels you to success. Sex is the most powerful stimulant of the human mind. Use it carefully and use it often. Note: This publication is designed to be as simple and understandable as possible, the general term sex is used in the above as we can all relate to the subject of sex, however, more correctly said what we are talking about here is libidinal energy, which is not quite the same thing as sex. Much thanks to Dr. Freud. Sincere, according to Websters, means not deceitful or hypocritical: honest. Sincerity is the noun of the adjective sincere. In business, you must be sincere; if not, your customers will know. When they sense your insincerity, they will start to look for another place to buy the product they want. Without sincerity all works are valueless, Iman Ali.
Both good and bad art will stir your emotions.

According to Sun Tzu, Tenet 1, Estimations: The Tao (way) of thinking is what will determine levels of survival or extinction. They must be observed. The control of personnel (troops) in order to eliminate the fear within the individual must be instilled. THOUGHTS and QUOTATIONS: Anger will never disappear so long as thoughts of resentment are cherished in the mind. Anger will disappear just as soon as thoughts of resentment are forgotten. The Buddha. Holding on to anger is like grasping a hot coal with the intent of throwing it at someone else; you are the one getting burned. The Buddha. Do not overrate what you have received, nor envy others. He who envies others does not obtain peace of mind. The Buddha. Perfect love is rare indeed, for to be a lover will require that you continually have the subtlety of the very wise, the flexibility of the child, the sensitivity of the artist, the understanding of the philosopher, the acceptance of the saint, the tolerance of the scholar, and the fortitude of the certain. Leo Buscaglia. An insincere and evil friend is more to be feared than a wild beast; a wild beast may wound your body, but an evil friend will wound your mind. The Buddha. Where love rules, there is no will to power and where power predominates, there love is lacking. The one is the shadow of the other.
Carl Jung. The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing. Albert Einstein. Few are those who see with their own eyes and feel with their own hearts. Albert Einstein. Love me when I least deserve it, because that's when I really need it. Swedish Proverb. Love can turn the cottage into a golden palace. German Proverb.
Part II Laziness
In the opinion of the authors, laziness is the single most fatal character trait that any businessperson can possess. We wish to emphasisno, more that that, we wish to stress this fact, and therefore we have devoted a separate part of this chapter to our discussion of this disease. Lazy, according to Websters, means disposed to be idle; moving slowly: sluggish. Laziness is a disease. People can become infected by exposure to other people who have contracted this disease. I'm tired of telling people what they're too lazy to know. Van Morrison. For the most part, all individuals are capable of working and creating
value. There are more hours in a day than are required for an individual to work and acquire the necessities required for survival; therefore, there is extra time during every day that an individual may use to create added value, increase gain, and make more profit. Most small businesses are started as part-time business. Businesspeople work at their part-time business before and after normal working hours and on weekends and holidays. It is not unusual for a businessperson to work all day, every day. In some cases individuals are on call 24/7. The customer is always right, and the successful business owner must comply with the customer's schedule, not his own schedule. Laziness makes it impossible for any individual to start a part-time business. Laziness is nothing more than the habit of resting before you get tired. Mortimer Caplan. The choice to become successful sometimes rests on nothing more than the will of the individual to do the work, complete the job, and satisfy the customer's request. More than that, an individual businessperson wishing to succeed, wishing the business to be successful, must desire not to be lazy because being lazy requires no effort. Being lazy is the easiest thing in the world to do. However, success in business and in life requires work, and work requires both physical and mental action. It is very simple and does not require long explanations. If you wish to become successful, if you desire to gain wealth and become rich, do not be lazy. And do not associate with carriers of this dreaded disease.
Laziness is the disease that prevents one from creating or even enjoying art.
THOUGHTS and QUOTATIONS: Reading, after a certain age, diverts the mind too much from its creative pursuits. Any man who reads too much and uses his own brain
too little falls into lazy habits of thinking. Albert Einstein. To be idle is a short road to death and to be diligent is a way of life; foolish people are idle, wise people are diligent. The Buddha. To perfect the art of laziness, one must find the time to practice. We have only our days off to be lazy. Diane Taren.
Part III Competence and Confidence
As character traits go, these are the good ones. Work hard and strive to achieve and acquire both. Competent, according to Websters, means qualified: capable: adequate for a specified purpose; legally fit or qualified: admissible. Competency in business is desired. There are, however, incompetent individuals who operate businesses. Knowing what to do does not make you competent; being able to do what you are supposed to do, and actually doing it, make you competent. Doing what you know how to do and actually getting the task completed are prerequisites to being considered competent. Efficient, according to Websters, means acting effectively with a minimum of waste or effort; exhibiting a high ratio of output to input. Efficiency is the noun of the adjective, efficient. An efficient businessperson is someone who gets his or her work finished without wasting time or other valuable resources. Inefficient people tend to contaminate the workplace. Inefficiency can be caused by many factors: laziness, apathy, lack of interest, low self-esteem. To be efficient, you must work hard to overcome difficulties. You must care about what you are doing. You must not be wasteful of your resources, time, money, or raw materials. You must value your actions and proceed in a prudent manner. Confidence, according to Websters, means reliance or trust; a trusting relationship; a feeling of self-assurance; the assurance that someone will
keep a secret; a secret. Synonyms are faith, belief, reliance, trust. Being competent in business is not always enough to achieve success. You must have confidence in yourself, confidence in your own ability, and you must be able to inspire others. You must be able to inspire confidence in others. You must be able to make other people believe in you and convince other people to have confidence in your abilities and in your good intentions. People, in general, and especially businesspeople, wish to be secure in the knowledge that a task assigned to another will in fact be completed to satisfaction and on time. Use the following steps to ensure confidence: Demand of yourself that you will possess confidence and display confidence to all people you meet. Demand of yourself the persistence to achieve confidence. Demand of yourself that you will complete any and all actions that you start. Create an image of yourself as the successful person you wish to become. Mentally picture yourself as this successful person as often as you can throughout your day. Do this every day. Know that the achievement of self-confidence is through the power of subconscious mental initiation. Inspire yourself into the state of confidence. Do this as often as you can throughout your day and do it every day. Put all of your desired goals on paper. Write them down and read the list to yourself many times. Develop the habit of consciously working to achieve step-by-step advancement toward your goals. Always make progress in the positive direction of successful completion of the steps you must take to reach success. Know that negative emotions will cause you to stray on your path to success. Consciously hold your negative emotions in check so as not to be affected by their influence. Consciously work to initiate positive emotional influence on your subconscious mind.
Good business people have confidence in their ability to run a good business, their ability to make profits. Businesspeople measure these profits in the form of money. The number one monetary currency in the world is the United States dollar; the words printed on these bills say it all: "In God we trust. All others pay cash. The California Kid. Bureaucracy, according to Websters, means administration of a government through bureaus and their officials; an administrative system that is unwieldy and inflexible in its operations. Bureaucracy has been described as a waste of time. It is also a waste of other resources: money, office space, communications abilities, and peoples lives. Bureaucracy creates no value. The people who work in bureaucratic quagmires produce no value; they do, however, require value producers to support their folly. Some big organizations have a need for bureaucracy. They need to explain and justify their incompetence. These big organizations create bureaucracies for the sole purpose of justifying their leviathan size. They do not need to be big to be competent; quite the contrary, efficiency is a by-product of competence, not of size, and certainly not of bureaucracy. The bigger the organization the bigger the bureaucratic BS (I dont mean Big Size). The California Kid. According to Sun Tzu, Tenet 9, Maneuvers: Deployment of armies and understanding the enemy are essential to the victorious. Therefore: These four manners of deployment are advantageous to the competent general when encountering terrains of these types; thus, it has been proven that armies of the competent secure their advantage in this way. Armies of the competent occupy and enjoy the heights in terrain. They dislike and avoid occupation of low areas of lands. They hold the sunny
(yang) side of the field in great esteem, they have reservations about the occupation of the shady (yin) position. As the sunlight nourishes and supports life (grass, trees, animals, the substantial in nature), the sunny ground will support an army. Business people must apply this to steering a company or corporation.
Competent individuals that are confident in themselves and efficient in their actions are an expression of living art
According to Sun Tzu, Tenet 11, Nine Situations of Terrains: The competent general knows by way of investigation all there is to be known in regard to the nine terrains, their changes, expansions, and contractions, and the factors that control human emotion. He is in command of his own destiny and that of the forces under his command. THOUGHTS and QUOTATIONS: A competent and self-confident person is incapable of jealousy in anything. Jealousy is invariably a symptom of neurotic insecurity. Robert A. Heinlein. If every day a man takes orders in silence from an incompetent superior, if every day he solemnly performs ritual acts which he privately finds ridiculous, if he unhesitatingly gives answers to questionnaires which are contrary to his real opinions and is prepared to deny his own self in public, if he sees no difficulty in feigning sympathy or even affection where, in fact, he feels only indifference or aversion, it still does not mean that he has entirely lost the use of one of the basic human senses, namely, the sense of humiliation. Vaclav Havel. Confidence is contagious. So is lack of confidence. Vince Lombardi.
My philosophy has always been to help women and men feel comfortable and confident through the clothes they wear. Georgio Armani. Skill and confidence are an unconquered army. George Herbert. You gain strength, experience and confidence by every experience where you really stop to look fear in the face. You must do the thing you cannot do. Eleanor Roosevelt. Life is not easy for any of us. But what of that? We must have perseverance and above all confidence in ourselves. We must believe that we are gifted for something and that this thing must be attained. Marie Curie. She lacks confidence, she craves admiration insatiably. She lives on the reflections of herself in the eyes of others. She does not care to be herself. Anais Nin. Confidence is a habit that can be developed by acting as if you already had the confidence you desire to have. Brian Tracy. Your self-confidence is directly connected to how much you feel you are making a difference in your world. Brian Tracy. I don't possess a lot of self-confidence. I'm an actor so I simply act confident every time I hit the stage. I am consumed with the fear of failing. Reaching deep down and finding confidence has made all my dreams come true. Arsenio Hall. Leadership is a matter of having people look at you and gain confidence, seeing how you react. If you're in control, they're in control. Tom Landry.
The longer I live, the less confidence I have in drugs and the greater is my confidence in the regulation and administration of diet and regimen. John Redman Coxe. Confidence, like art, never comes from having all the answers; it comes from being open to all the questions. Earl Gray Stevens. Self confidence is the key to the universe. Carrol Wrackley.
Chapter 10
Reward and Punishment

Punish, according to Websters, means to subject to a penalty for wrongdoing; to impose a penalty for; to treat roughly or injuriously. Proofreading this book is punishingly rewarding. The California Kid. Punishment, according to Websters, means a penalty for a crime or offence; rough or injurious treatment. Reward, according to Websters, means something given or offered for a special service, as the return of something lost; to give a reward to or for; to recompense. Rewarding, according to Websters, means yielding benefits, or a sense of satisfaction. There are penalties for doing negative or bad business, just as there are rewards and benefits from doing good business. Truly conscious people prefer less of the former and more of the latter. These are tools used to control individuals and groups alike: do a good job and get a bonus, screw up and lose that bonus. Businesses that treat their employees the right way are rewarded by receiving honest, dedicated, quality work in exchange. Pay more and people will work harder. They will take pride in what they are doing. It just seems to work out that way.
Employees who don't perform well, are continually late, and cause friction within the company are punished with dismissal, or at least they should be fired or laid-off, as they can be infectious to others. Employers who keep troublesome employees in the company are unjustly punishing the company. A company reacts to punishment and rewards just the same as individuals react, with dislike and fear of punishment, and they react with joy and pleasure at the receiving of rewards. Buyers who do not pay their bills on time are often punished by having to pay cash instead of being rewarded with a line of credit. They may have the terms of their credit modified in an adverse way. Sellers who supply faulty products are often punished by the loss of customers and profits. Disgrace, imprisonment, and ostracism are often used to punish liars, cheats, and thieves, the scum of any business community. Good businesspeople don't do business with corrupt individuals and organizations, or at least they shouldnt. If there were more good businesspeople in the world, maybe there would be less corruption. If you wish to acquire rewards you must do certain things that will aid you in your attempts to be successful. Below are some ideas that will assist you in becoming more successful. Make a personal analysis of yourself. Ask yourself whether you have achieved your goals or not, and if not, why not. Set a realistic time frame in which you can complete the tasks that are required to become successful. Do this often. Do you continually do your very best at everything you attempt to do, often doing more than is required of you? If not, why not? Do you work in the spirit of cooperation? Do you try to inspire others to do their very best? If not, why not? Do you continually try to improve your personal qualities and the qualities of your work? If so, how so? Do you make a conscious effort to look for ways to improve your self in all areas? Do you maintain persistence in completing your chosen tasks? Do you maintain the proper level of desire to complete all of your tasks? If not,
why not? Is your efficiency affected by negative personal character traits, such as laziness and procrastination? Have you tried to eliminate these negative traits from your personal inventory? Do you make decisions in a timely manner and stick with the decisions you make because they have been arrived at through conscious reasoning? Do you maintain an open mind toward new ideas and suggestions, respecting the opinions and beliefs of others? Do you allow the factors of fear to affect your daily work? Do you waste time and energy needlessly through lack of concentration? Do you actively try to budget your time and energy? Are you conservative when establishing these budgets? Do you allow others to control you? If so, why so and how so? Do you take risks? If so, is it too much risk or too little? Do you control your personal habits, vices, and desires? If not, why not? Do you control your emotions or do your emotions control you? Are your relationships, both personal and business, satisfactory and complementary? Are they pleasant and rewarding? If not, why not? Do you analyze your activities to determine if they are profitable and will lead to success? Are there other activities that would be more profitable? Are you respected by your associates and peers? If not, why not? Do you allow your conscience to be your guide? Have you been dishonest or unfair with anyone? If so, why so? Would you purchase your own products or services? If not, why not? Is the business you are in the right business for you to be in? Is there a better business that you should consider? (Substitute vocation for business if you wish.) Are people satisfied with the work you do? If not, why not? Could you do a better job? Do you actively look for opportunities? If not, why not?
You should actively try to develop more questions like the ones above to help improve your chances for achieving success and being rewarded for all your actions. Failure is a form of punishment for not doing something correctly. Some major causes of failure are listed below. Dishonesty. Not having enough knowledge. Not knowing what you are doing. Lacking the proper education on the subject you are faced with. Not having a proper plan of action. Not being prepared to act in specific ways necessary to achieve success. Not having the proper amount of desire to successfully accomplish any given task. Not setting your goals at realistic levels, either too high or too low. Not maintaining proper health, either personal health or business health. Lack of exercise, overindulgence, improper diet and nutrition, improper hygiene. Lack of self-control and discipline. Not maintaining proper levels of moderation. Do not seek to defeat yourself. Not maintaining healthy levels of desire. You must learn to control your urges and wants, your habits, vices, and sexual desires. Not maintaining a positive attitude in yourself and your self-projection toward others. Not being willing to continue. Lack of persistence and drive. Willingness to quit rather than to try again and fight to succeed. Laziness and procrastination. Putting off until tomorrow what you can accomplish today, or at least what you can start today. Not knowing that the lack of knowledge can be overcome by the participation of better team members. Some things are out of the control of an individual and require the assistance of another. Some people are not capable of acquiring the proper level of education on their own due to a hereditary deficiency in mental power. Succumbing to negative influences, criminal tendencies acquired in
youth, association with unfavorable individuals or groups. Being overly cautious. Lack of the willingness to take a risk. Being fatally influenced by negative emotional traits. Giving in to prejudices, superstitions, egotism, or vanity. Lack of the ability or willingness to make a decision. Making decisions that are not based on facts and good judgment. An unnatural desire to acquire something without being willing to work for the acquisition of whatever it is you desire, something for nothing. Attempting to do something you are not qualified to do. The wrong selection of a life partner or spouse. Succumbing to the factors of fear. Lack of exercising the proper amount of conscious thought, focused concentration and effort needed to accomplish any given task. Not maintaining the proper level of enthusiasm. Acting on your emotional whims instead of using your power to consciously think of what you will do next. Flagrant spending habits, lack of budgetary control. Intolerance of the opinions of others, be they on grounds of religion, race, or politics. Lack of the willingness or ability to cooperate with others. Being given something for nothing and assuming that you earned the right to possess whatever it was that you were given. Inheritance of any value and the lack of any form of understanding as to how that value was created. Lack of proper capital reserves. Rewards and punishment are tools to be used to encourage or discourage specific actions. Punishment and reward represent the two opposite ends of the artistic scale, good and not-so-good art.
Good art is rewarding, and not-so-good art is sometimes punishing
According to Sun Tzu, Tenet 1, Estimations: The policies of reward and punishment, which ruler has established, implemented, and instilled the least ambiguous, the most clearly understandable policy of reward and punishment? THOUGHTS and QUOTATIONS: A man's ethical behavior should be based effectually on sympathy, education, and social ties; no religious basis is necessary. Man would indeed be in a poor way if he had to be restrained by fear of punishment and hope of reward after death. Albert Einstein. As punishment for my contempt for authority, fate has made me an authority myself. Albert Einstein. Behold, children are a blessing from the Lord. The fruit of the womb is a reward. Like the arrows in the hand of a warrior, so are the children of one's youth. Happy is the man who has his quiver full of them. Psalm 127:3-5. The things that will destroy us are politics without principle; pleasure without conscience; wealth without work; knowledge without character; business without morality; science without humanity; and worship without sacrifice. Mahatma Gandhi.
Chapter 11
Corruption
Corruption, according to Websters, means evil depraved; dishonest: venal; rotting: putrid. This is not a chapter that the authors of this book, have enjoyed writing; it is however, a fact of life, in business and in the world we live in. Caveat: beware of corruption. Protect yourself from it, if possible. Also if possible, protect others from corruption as well. Fraud, according to Websters, means a deliberate deception perpetrated for unlawful or unfair gain; a trick or swindle; one who defrauds: cheat; an impostor. Fraud is a form of corruption found in business whereby dishonest people attempt to acquire values and valuables from others by employing dishonest means. Practitioners of fraud are sometimes exceedingly adept at what they do. Be always on your guard. The latest travesties of corporate corruption, Enron and Arthur Andersen, WorldCom, Global Crossing, et al., demonstrate the adage that "power corrupts and absolute power corrupts absolutely. No energy company was bigger or more powerful than Enron. Andersen was entrusted with the task of accounting and verifying the account books of a public corporation. Not only did they attempt to deny justice to the people, but they also premeditatedly tried to shield Enron, their "milk cow," from the embarrassment of prosecution. In business, if you commit acts of dishonesty (lying, cheating, and stealing), eventually you will have no business. Your customers will know when they have been lied to. They will eventually know when they have been cheated. They will know when someone is stealing from them.
Honest people do not do business with dishonest people, or at least they shouldnt. Once again, good businesspeople have the power to set good examples. It may be a long slow process, but maybe someday good business and good businesspeople will have a positive effect on people in the world in general. This may sound like chasing a dream, but it is a good dream to chase. Some people who believe themselves to be "above the law," people of power, governmental, mystical, or financial, are susceptible to abuse of power. In many cases, they are prone to corruption. The lesson to be learned is that dishonesty begets actions of evil. Honesty, on the other hand, promotes good actions. If you are going to be in business, there is only one acceptable course of action. You must become and stay an honest businessperson. Being honest is easy. Most people are basically honest to begin with. The hard part is staying honest. In business, people invest their time, physical efforts, and money to help their business grow and succeed. When trouble occurs, or when a great opportunity arises, many businesspeople are tempted to become less than honest, maybe because of fear of loss or possibly stimulated by greed. Once you allow yourself to be corrupted, it is most difficult to undo your actions. If you have committed acts of corruption and have not been caught, committing similar actions becomes easier and more frequent. Eventually, however, honest people will know. Honest people have ways of finding out. Bribery is a form of corruption that in business is so often called commissions payable, commissions paid or thank you for services rendered. The California Kid. Securing advantage by having a basis in corruption is negative, whereas securing advantage by the combination of honesty and work or action is good business.
As corruption is a component of the Art of War, we will leave a reference to art to Sun Tzu.
According to Sun Tzu, Tenet 13, Using Spies: Double spies are enemy agents that have been captured. You must value these above all. You must turn them with bribes and offers of wealth bending them to your will. THOUGHTS and QUOTATIONS: Lying makes a problem part of the future; truth makes a problem part of the past. Rick Pitino. Experience is an asset of which no worker can be cheated, no matter how selfish or greedy his immediate employer may be. Napoleon Hill. People are often unreasonable, illogical, and self-centered; forgive them anyway. If you are kind, people may accuse you of selfish, ulterior motives; Be kind anyway. If you are successful you will win some false friends and true enemies; succeed anyway. If you are honest and frank, people may cheat you; Be honest and frank anyway. What you spend years building, someone could destroy overnight; Build anyway. If you find serenity and happiness, they may be jealous; be happy anyway. The good you do today, people will often forget tomorrow; do good anyway. Give the world the best you have, and it may never be enough; Give the world the best you've got anyway. You see, in the final analysis, it is between you and God; It was never between you and them anyway. Mother Teresa. Possessions are a gift from God. They are not inherently evil, nor are possessions irrelevant to God -- if they were, then why the commandment, "Thou shalt not steal? Dr. Laura Schlessinger. Every gun that is made, every warship launched, every rocket fired
signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the clouds of war, it is humanity hanging on a cross of iron. Dwight Eisenhower. The truth may hurt, but a lie can cut a deeper wound. Unknown. We hang the petty thieves and appoint the great ones to public office. Aesop.
Chapter 12
ISM
Altruism, according to Websters, means selfless regard for the well being of others. Altruism combines two premises. The first is that any action that is taken for the benefit of others is good. The second is that any action taken for the benefit of ones own self is evil. In other words, the beneficiary of an action is the only criterion of moral value. That is unless the beneficiary is ones own self. There is no code of moral ethics permitted in the altruistic way of life in society. Thereby man is left stranded in the absence of moral guidance. Both the business tycoon and the bank robber are considered to be immoral, as they have sought to acquire gain for their own personal benefit. Individuals are doomed to live their lives in constant cynicism and guilt. They become cynical because they do not truly believe or practice the philosophy of altruism, and they feel guilty because they are powerless to reject it in the presence of others. You see, cynicism is a form of self protection. The California Kid Collectivism, according to Websters, means a system under which ownership and control of the means of producing and distributing goods is in the hands of the people collectively. As an individual, do you subscribe to the belief that anything and everything that you do in life belongs to everybody else? Communism, according to Websters, means a system in which production and goods are commonly owned; the theory of struggle toward communism through revolution; socialism as practiced in countries governed by communists.
As stated, communism is the borrowed system or theory of socialism achieved through revolution, that is, war. The commonality of these systems, socialism and communism, is that both theories advocate control of production and distribution of values and valuables, goods and services by a central authority. What you, as an individual, produce becomes part of the inventory of the many. Those individuals that produce nothing are still entitled to a share of everything produced by all others in the society. These are flawed systems in practice, as evident from the collapse of numerous socialistic and communistic countries and governments around the world. Any system that attempts to equalize, categorize, and centralize people into a single collective body is doomed from the beginning due to the most singular fact that people are, by nature, individuals and different from each other. Every person in the world has the right to their own pursuit of happiness, the right to work for, own, and keep the fruits of their labors. Capitalism, according to Websters, means an economic system characterized by open competition in a free market and by private or corporate ownership of the means of production and distribution. Anyone who attempts to acquire values and valuables (money, riches, and wealth) is a capitalist. We are capable of creating values and valuables by ourselves, by the power of our own work and our own value producing efforts. We exercise our powers of mental and physical leverage to create goods and services that are in demand by the general public. Nobody is forced to purchase our products, as the market is free. Anyone is capable of the production and sale of products within the market place. People actively seek to acquire products of value. Individuals exhibit the quality of pride in their work. Products are made by individuals who take pride in their work, and these products are consistently of higher quality than the shabbily made products of forced labor. Would you, as an individual, really wish to be forced to accept a shabbily made product simply because you were a part of the group?
Would you want to have products that you created to be distributed to all other members of society simply because they are part of the group? Would you like to have the central authority tell you what price your products may be sold for, regardless of the amount of time and work you put into making the product? We dont think so. As individual capitalists, we are free to make our own plans, free to make our own choices, free to work as little or as much as we decide is good for us. As individuals, we are masters of ourselves. As capitalists, we are allowed to produce as much as we wish and to sell all that we produce and to keep all the profits generated from our efforts. It is, after all, our mental and physical work that we leveraged to create quality products and services of higher value that have been voluntarily purchased by others wishing to possess these products and services. Fascism, according to Websters, means a governmental system marked by a centralized dictatorship, stringent socioeconomic controls, and often belligerent nationalism. Insidious, according to Websters, means working or spreading harmfully in a stealthy way; designed to entrap: treacherous; attractive but harmful: seductive. As defined, things and ideologies that are insidious are not easily detected. They are designed to be undetectable. This is the way (Tao) of entrapment. Nationalism, according to Websters, means concern for or attachment of a particular nations interests or culture; advocacy of national independence. Nationalism is an infantile disease, the measles of mankind. Albert Einstein. Negativism, according to Websters, means habitual skepticism or resistance to the ideas, orders, or suggestions of others. A pessimist believes that the only things that are guaranteed in life are
death and taxes. An optimist believes that before death there must be life, before life there must be sex, before taxes there must be profits to tax. Therefore the only things that are guaranteed in life are sex and business. The California Kid. Objective, according to Websters, means of or pertaining to a material object rather than a mental concept; having actual existence; not influenced by emotions or personal opinion; something that is worked toward or aspired to: goal. Objectivism is the philosophy that guides mankind through life in a morally productive manner, a code of values from which an individual is capable of making choices and taking action. The choices and the actions, based on the objectivist point of view, determine the purpose and the course of an individuals life. These choices and actions govern the way a person will live his or her own life. Metaphysics, according to Websters, means the branch of philosophy that methodically investigates the nature of first principles and the problems of ultimate reality. Emotions, feelings, and whims are not real. They are virtual within the mind. Yes, we all have feelings, emotions, and at times we express our whims, but these virtual nonentities have no business in the world of business. In a metaphysical world, we must deal with reality, the nature of things that actually exist, existence itself. Business exists and is the cornerstone of all sustainable existence or, in another way of putting it, business is life. Patriot, according to Websters, means someone who loves and defends his or her country. The passionate regard for ones own country, as taken to the level of religion, is the state of patriotism in todays world. Next to racism, patriotism is the most profound prejudicial ideology existing in the world. It is the religion of government. The California
Kid. Protectionism, according to Websters, means noun of the verb protection; the act of protecting or state of being protected; one that serves to protect; a system by which high duties are imposed on foreign competitors to protect domestic producers. Protectionism is restriction. It is governments way of limiting free enterprise for the benefit of nationalism or state-ism. Racism, according to Websters, means the belief that some races are inherently superior to others; discrimination based on race. Racism is a prejudicial set of nonvalues that are based on genetics rather an individuals character traits, i.e., honesty, integrity, self-esteem, and their acquired knowledge. Weakness of attitude becomes weakness of character. Albert Einstein. Real, according to Websters, means not imaginary or pretended: actual; authentic or genuine; < real gold>; essential: basic; serious: substantial; of or constituting fixed or stationary property, as buildings or land. Synonyms are substantial, substantive, tangible. Realism, according to Websters, means concern with factual truth and things as they really are: practicality; artistic representation intended as an un-idealized portrayal of objective reality. Reality, according to Websters, means the quality or state of being actual or true; one that is real; the totality of all existing things. Realize, according to Websters, means to comprehend fully or correctly; to make real: fulfill; to obtain or achieve <realize a profit>. Socialism, according to Websters, means a social system or theory in which the producers posses political power and the means of producing and distributing. It sounds good in theory. However, based on the social theory of ethics, socialism has seen fit to substitute society for God. The collective,
we are told, is the center of the universe for all men, women, and children. Although socialistic ethics professes as its chief concern life on earth, it is not the life of mankind but rather the life of the society, the collective group of people (individuals) who have been striped of their individuality. The individual is expected to be selfless, voiceless, and the possessor of no rights save for the rights of the group. The individual is to be subjugated to the status of slaves to the society, responsible for the needs and desires of the collective, subjectively controlled by the claims and demands of others, e.g., Cuba, the former U.S.S.R. Spiritualism, according to Websters, means the belief that the dead are able to communicate with the living, usually through a medium. Spiritual, according to Websters, means of, relating to, or having the nature of spirit; of or relating to religion or religious matters; ecclesiastical or sacred. Totalitarian, according to Websters, means having or exercising complete political control. Totalitarianism is the noun to the adjective totalitarian. We are in the position of a little child entering a huge library filled with books in many different languages. The child knows someone must have written those books. It does not know how. It does not understand the languages in which they are written. The child dimly suspects a mysterious order in the arrangement of the books but doesn't know what it is. That, it seems to me, is the attitude of even the most intelligent human being toward God. We see a universe marvelously arranging and obeying certain laws, but only dimly understand these laws. Our limited minds cannot grasp the mysterious force that moves the constellations. Albert Einstein. Subtle is the Lord, but malicious He is not. Albert Einstein. There remains something subtle, intangible and inexplicable.
Veneration for this force beyond anything that we can comprehend is my religion. Albert Einstein. Everyone in the world has the right to believe whatever they wish to believe. They do not, however, have the right to force their beliefs upon others. Terror, according to Websters, means overwhelmingly intense fear; one that causes terror; violence by a group to achieve a usually political objective. Terrorism, according to Websters, means systematic use of terror and intimidation especially in order to coerce.
Terrorism in the world today is a battle between the haves and havenots. The battle is being carried to the aggressors in response to their indiscriminate disregard for the rights of many different people of the world; Religious overtones exist within this movement. Rebellion, anarchy, revolt, and revolution all describe this deplorable movement.
On a scale of 1 to 10, 10 being the highest, capitalism is a 10. There are good art and not-so-good art. Capitalism, the core concept, the philosophy of business, is the owner of the best art of all; therefore, other ideologies and -ism's must fall at the lower end of the scale.
According to Sun Tzu, Tenet 6, Weakness of Vacuity and Strength of Substance: When you excel at attacking, the enemy does not know what position to defend first. When you excel at defense, the enemy will not be able to determine where to launch an attack, be so quiet as not to be heard. Be so
transparent as not to be seen. Be so smooth as not to be felt. Be subtle, so very subtle that you become formless. Be the essence of the spirit, spiritual. Be invisible to all those that seek you. Become unknowable, be mysterious! Mysterious! Thus you will become soundless, the master of the fate of others. If you wish to become the master of your own fate and escape the forces that use insidious means to control, you must become subtle, so very subtle. The California Kid.
Chapter 13
Democracy
According to Sun Tzu, Tenet 3, Offensive Stratagems: To be victorious one hundred times out of one hundred battles is not the ultimate measure of success. To conquer the enemy without having to fight is the greatest show of excellence, the pinnacle of success. Democracy, according to Websters, means government exercised either directly by the people or through elected representatives; a political or social unit based on democratic rule; rule by the majority; the principles of social equality and respect for the individual within the community. If democracy is the mechanism used by which the enemy voluntarily divides his forces so as to be conquered without a fight, then who is being conquered? The California Kid. In principle it sounds good, maybe too good. In practice, it is rule by the many over the objections of the few. The qualities of social equality and respect for the individual often fall short in reality. As one of the many forms of government, democracy may be the lesser evil in comparison to other forms of national rule. However, it may also be the most insidious device used by the elitist to effectively control the masses. Divide and rule. Julius Ceasar. The rule by the many over the few is divisive in nature. Just because
the many can physically and mentally coerce the few to comply with their will does not make the many right or superior compared to the few; it only demonstrates that they are more numerous. When we discuss an individual, we elevate that individual to the top of his or her personal existence, but when we discuss the many, we are expected to accept compromise, not superiority but, rather, mediocrity. The individual who is not compromised by the coercive nature of a larger group is often capable of obtaining greatness, rather than settling for the moderate success of a group. In terms of business, the democratic rule resides in the boardroom. The directors (representing the stakeholders of the corporation) of the board must work together and arrive at compromises meant to pacify one or more members of the board, often not to the ultimate well-being of the company or the business they are conducting. However, many small businesses are wholly owned by individuals who do not have to make compromises and who are able to ensure that the decisions made regarding the business are all in the best interest of the business. Businesses do not necessarily need to follow the flawed concept of governmental rule. Once again, governments do not create values. Businesses do not need to become quasi-governmental clones, trying to do something that is not in their nature or best interest. When asked what business we are in, our answer is always the same: "We are in the business of making money." Money is a measure of value. Businesses create values and valuables in order to make money. Having more money or even a lot of money can help make life easier and more comfortable, and it ultimately leads to the ability of an individual to resist and defend against the attempted control (by others) over an individuals life. Money supports your pursuit of happiness. In practical application, democracy is the election of people to fill the positions of government. These people are elected for a limited period of time (at least in theory). Then new elections are held to elect new people or reelect the old. People who run for office come from all facets of society:
businessmen, lawyers, taxi drivers, career politician, housewives, rich people who can buy their way into an election. This does not necessarily make them qualified to run a country, govern an economy, or protect or provide for the quality of life of the people living in the society. It just means that they had the ability to get elected. Most likely, they are very personable, possessing the ability to be liked. They are able to convince people to like them for whatever reason. Just because the people have the say in whom they elect, it does not mean that they elect the most qualified individuals. We hang the petty thieves and appoint the great ones to public office. Aesop. When an individual gets into elected office, they know that they are only there for a limited period of time. In many cases, these elected officials will do everything in their power to stay in power. They will make compromises with people who can keep them in power. They will make a conscious effort to do what their backers want them to do, whether or not what they are doing is good for the country or (more important) for the people living in the country. If they can make a profit or seize an opportunity to gain wealth from their elected position, they will do whatever is needed to be done to acquire the wealth. We are not saying that all politicians are incompetent, unqualified, or corrupt, but, in fact, many of them are. On the other hand, monarchies have a vested interest in running a country in the best possible way. They wish to preserve the seat of power for their future generations. Benevolent monarchs, in many cases, are truly loved by the people. As was recently said on the BBC, referring to Indonesia's Prime Ministers businesslike approach to government, "He is entering into the inherently messy business of democracy." More individuals own businesses by far than there are businesses governed
in a democratic fashion. In a democracy the rulers are the people! However, maybe it should be said that in a modern democracy are the people the rulers? The California Kid. According to Sun Tzu, Tenet 1, Initial Estimations: Within the five factors, when estimating, be concerned with the capacity and context of the ruler and general. The general is subject to the ruler only until the general is commissioned to action by the ruler. After commissioning, and once on the battlefield, the general is the supreme commander and not subject to anyone, even the ruler, save for his own volition and the achievement of success, save for dismissal for failure or for lack of understanding of the basic rules of success. The ruler who retains a general who exhibits a profound understanding of these factors will be victorious. The ruler who does not dismiss a general who lacks possession of a profound understanding of these factors does not possess the capacity to rule and will not be victorious.
The art in democracy lies in negotiating compromising your way through the mess.
and
According to Sun Tzu, Tenet 1, Estimations: If they are disciplined, united, cause a riff within them and make them divide amongst themselves. THOUGHTS and QUOTATIONS: A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's great
civilizations has been 200 years. These nations have progressed through this sequence: from bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; from dependency back again to bondage. Sir Alex Fraser Tytler. Under democracy, one party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, are right. H.L. Mencken.
As I would not be a slave, so I would not be a master. This expresses my idea of democracy. Abraham Lincoln. Democrats will play the old Washington game of calling reductions in the rate of growth of spending for any program a cut. Bruce Bartlett. Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote! Benjamin Franklin. The U.S.A. was founded in the name of democracy, equality and individual freedom, but is failing to deliver the fundamental promise of protecting rights for all. Amnesty International. All attempts to destroy democracy by terrorism will fail. It must be business as usual. Margaret Thatcher. Squeezing our money out of politicians is more difficult than
squeezing blood from a turnip. To paraphrase an Oscar Hammerstein love song, once they have found a way to take our money, they never let it go. Cal Thomas. Politics gives guys so much power that they tend to behave badly around women. And I hope I never get into that. William J. (Bill) Clinton. Those who cast the votes decide nothing. Those who count the votes decide everything. Josef Stalin. [When asked to name the chief qualification a politician should have] It's the ability to foretell what will happen tomorrow, next month, and next year --- and to explain afterward why it didn't happen. Sir Winston Churchill. Never trouble trouble till trouble troubles you. I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain. John Adams. You are never dedicated to something you have complete confidence in. No is fanatically shouting that the sun is going to rise tomorrow. They know is going to rise tomorrow. When people are fanatically dedicated to political or religious faiths or any other kinds of dogmas or goals, it's always because these dogmas or goals are in doubt. Robert M. Pirsig, Zen and the Art of Motorcycle Maintenance It may not always be easy, convenient, or politically correct to stand
for truth and right, but it is the right thing to do. Always. M. Russell Ballard. Mothers all want their sons to grow up to be president, but they don't want them to become politicians in the process. John Fitzgerald Kennedy. The simple fact is that when I took up my little sling and aimed at Communism, I also hit something else. What I hit was the forces of that great socialist revolution, which, in the name of liberalism, spasmodically, incompletely, somewhat formlessly, always in the same direction, has been inching its ice cap over the nation for two decades. ... [T]hough I knew it existed, I still had no adequate idea of its extent, the depth of its penetration or the fierce vindictiveness of its revolutionary temper, which is a reflex of it struggle to keep and advance its political power. Whittaker Chambers. Witness. Politics is supposed to be the second-oldest profession. I have come to realize that it bears a very close resemblance to the first. Ronald Reagan. Bush is in a strong position -- for now. Let's hope he knows that politics won't stay pleasantly boring forever. National Review Online. Can government really be active and, at the same time, limited? History suggests otherwise. Lew Rockwell. [O]ur political kultur is polluted with politics, the politics of the left. Call it Kultursmog. It pollutes every area of life it touches with politics. R. Emmett Tyrrell. Politicians are like diapers. They should both be changed frequently and for the same reason. Anonymous.
A low voter turnout is an indication of fewer people going to the polls. Dan Quayle. Politics is more difficult than physics. Albert Einstein. Ninety-eight percent of the adults in this country are decent, hardworking, honest Americans. It's the other lousy two percent that get all the publicity. But, then, we elected them. Lily Tomlin. A politician will do anything to keep his job even become a patriot. William Randolph Hearst. You cannot make a revolution with silk gloves. Joseph Stalin. Today's public figures can no longer write their own speeches or books, and there is some evidence that they can't read them either. Gore Vidal. Every election is a sort of advance auction sale of stolen goods. H.L. Mencken.
Politics is the art of the possible. Otto von Bismarck.
ACT II ANALYSIS
Chapter 14
The Individual
Individual, according to Websters, means of, for, or relating to a single human being; existing as a distinct entity: separate; having individuality: unlike others; a single person or organism, as opposed to a group. Individualism, according to Websters, means individuality; assertion of the self; the theory that one should have freedom in one's economic pursuits and should succeed by one's own initiative; the doctrine that the interests of the individual should have preference over the interest of the state or social group. Contrary to what seems to be a common belief, people are not equal in their value or their worth. However, equality does exist in each person. All people have possession of human rights, all people of the world have the right to live their own life and to pursue prosperity, all people have the right to make an effort to gain more than they have acquired to date. This is the personal right to acquire property. This right turns mere survival into the enjoyment of life. Hey, hey, you, you, get off of my cloud, dont hang around cause twos a crowdSir Mick Jagger. People have the right to work toward the acquisition of values and valuables. They have the right to have and to hold personal property. An individuals possession of his or her own personal property is the measure of a better life. People do not have the right to happiness, only the right to
pursue happiness. Nature does not guarantee happiness. Life is a struggle, and we must work hard or fight hard to achieve our goals of happiness. In most cases, they work and fight even harder to hold on to their happiness, to keep what has made them happy. Extrinsic, according to Websters, means not inherent; extraneous; small coming from the outside; external. People, individuals, make or develop their own character. They earn their skills by learning, by working to acquire knowledge. They are not born with or given as a gift their personal character qualities, their selfworth, self-esteem, their ability to raise the quality of their own life. Individuals must develop the capacity to better themselves and better their own lives. There are no average people in the world. There is uniqueness in all people. So many variables are present in each individuals character that it is impossible to be classed as average. Peoples looks, physical size, weight, skin color, bone structure, hair color, etc., all combine make up individuals, so much so that the term average simply cannot apply. All people have the ability to think rationally, to observe and think about what they have perceived. Individuals will gather together all of their perceptions of their own environment, their perceptions of the universe, and they will contemplate what they have gathered and transform these thoughts into integrated concepts, their own plans for their own life. The personally earned values of honesty, self-esteem, dignity, and selfdeveloped character count for more than anything else in a persons life. These values must be earned. People must work to achieve these values. Without these qualities, these values, a person is not a rational human being. They are less than human; they are subhuman. Dishonest as a lawyer. Diane Taren. Dishonest people are those who attempt to influence others by the use of unearned characteristics such as race, sex, facial appearance, age,
national identity, membership in any group. These subhumans exploit these unearned characteristics in others to praise or condemn, to judge, to reward or punish other people, other individuals. Dignity does not consist in possessing honors, but in deserving them. Aristotle. Dishonest people, politicians, purveyors of the media (radio, television, newspapers, etc.), criminals, the mystic elite, all use the techniques of constant bombardment, repetitious display and praise of unearned character traits, to wrongly confuse the general public, strip individuals of their selfesteem, force people into performing dishonest acts. These dishonest subhumans are value confiscators. Their whole purpose in life is to dishonestly acquire the earned values of others. Do not be fooled or persuaded to believe that these subhumans do not exist. In order to be an individual, one must be aware of the dangers that surround us all, all the people who cheat to acquire the values of others and are attempting to limit or diminish an individuals capacity or ability to enjoy their own life. It is not by sitting still at a grand distance and calling the human race larvae that men are to be helped. Albert Einstein. The ramblings of an individual may be incomprehensible to a person who prefers to live within the shrouded mind, the mind that is covered by the veil of contrived mysticism, whose particular view of the "collectively moral" world is distorted and plainly evident when you observe political parties in action. The individual becomes lost within the shadowy, indistinct world of group participation. The residing theme is to participate in the group or be ostracized. You are either IN or OUT. You are either with us or against us. This collective mentality is slow death for the individual. Agenda-based group support of an individual is nonexistent. Their
agenda is based on the groups control over the individual, the groups effectively reducing an individual person to a subcomponent of a larger entity. Governance of the natural order of things or control of a manmade political agenda based on control and exploitation of individuals and the values they possess is the desire of many groups. Governance has value, as long as the power of the governing body does not attempt to distort the natural order of things or is used to usurp the earned values of individuals or value earning groups. An individual uses the power of the mind to leverage his actions, which are required to accomplish value-earning tasks and achieve the desired goals of prosperity and the enjoyment of life. Governance used to restrict individuals from performing these required money-making actions, limiting the individual from accomplishing their value-earning tasks, or inhibiting someone from reaching their goals is the improper use of the power of governance. Individual or individualism, the choice is yours. The California Kid. In nature, the intelligence of the individual entity is the core logic that makes things work. "Man is a natural machine," not unlike a computer. The brain is a biological machine. Use of this machine by the individual leverages intelligence and allows man to function in the physical world.
Individuals create values and valuables. Art is value expressed by an individual.

According to Sun Tzu, Tenet 9, Maneuvers: Punishment inflicted on troops before they bond with each other, before they become attached (shed their individuality) as a group, will never make them submissive.
THOUGHTS and QUOTATIONS: I wanted to change the world. But I have found that the only thing one can be sure of changing is oneself. Aldous Huxley. Everything that is really great and inspiring is created by the individual who can labor in freedom. Albert Einstein. Weakness of attitude becomes weakness of character. Albert Einstein. There is only one corner of the universe you can be certain of improving, and that is your own self. Aldous Huxley. The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities. Ayn Rand. Whenever an individual or a business decides that success has been attained, progress stops. Thomas J. Watson, Jr. They say two heads are better than one. That is true. But only when each head has their own individual ideas that can be merged successfully with another individuals thought and ideas that can help take the deal closer to success. Diane Taren. Liberation cannot be achieved except through perceiving the identity of the individual spirit with the Universal Spirit. Atman and Brahman are identical. Their essence is pure Consciousness. Sankara. Worry not that no one knows of you; seek to be worth knowing. Confucius. There can be no such thing, in law or in morality, as actions forbidden to an individual, but permitted to a mob. Ayn Rand.
We're taking away your individual cubicles. In the new system you'll sign up for whatever cube is open that day. It's based on the model of public restrooms. But I call it hoteling because it increases my chances of getting tips. Each cubicle will have a computer, a chair, and a roll of notepaper Take one and pass it around. Dilbert's Pointy Haired Boss. Genius is essentially creative; it bears the stamp of the individual who possesses it. Anne Louise Germaine de Stael. So long as governments set the example of killing their enemies, private individuals will occasionally kill theirs. Elbert Hubbard. No other technique for the conduct of life attaches the individual so firmly to reality as laying emphasis on work; for his work at least gives him a secure place in a portion of reality, in the human community. Sigmund Freud. Individual commitment to a group effort - that is what makes a teamwork, a company work, a society work, a civilization work. Vince Lombardi.
Chapter 15
Family
Family, according to Websters, means a social unit consisting especially of a man and a woman and their offspring. Lasting harmony with a woman (was) an undertaking in which I twice failed rather disgracefully. Albert Einstein. As is used in business, individuals and family groups own and operate "family businesses" or "home businesses." Many businesses treat their employees as family, caring for family members with great affection and even love. Business owners want their business to grow, just as men and women want their children to grow-up healthy, wealthy, and wise. Chinese and other Asian businesses are often made up of extended families spanning generations and spread out to encompass all branches of the familymen, women, children, aunts, uncles, and cousins many times removed. "Blood is thicker than water." Family members trust other family members more readily than they trust strangers. In some industries, companies develop product lines that complement each other and encourage the purchase of the entire line of products. These product lines are referred to as a family of products. Cosmetic companies put out wide ranges of products dealing with health and beauty, including lipsticks, eyeliners, make-up and blush, while beverage companies offer a family of soft drinks in many different colors and flavors. We all belong to the family of human beings, the human race. If racism is to be practiced, then let us practice humanism. The California Kid.
Whatever your interpretation of the family, the family exists, for the most part as cohesive units working together for the benefit of all members concerned.
A loving family is a perfect "work of art."

According to Sun Tzu, Tenet 13, Using Spies: When the ruler commands the general to move forth his armies of 100,000 troops on long campaigns, marching out to 1,000 li, the combined contributions of the common people and the house of the ruler will be 1,000 pieces of gold per day. The families that will be troubled and inconvenienced, both within the state and outside the state, those exhausted on the march, and those interrupted from their agricultural work will number 700,000. THOUGHTS and QUOTATIONS: To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; we must first set our hearts right. Confucius. The principle of using interactivity as a creativity-builder is not restricted to computer games. Once we become fully conscious of this principle, we can find ways to become more interactive everywhere. We can make conversations with our family and friends more interactive than they once were. The more thoughtful our questions get to be, the more interactive the conversations. Steve Chandler, 100 Ways to Motivate Yourself. Your family and your love must be cultivated like a garden. Time, effort, and imagination must be summoned constantly to keep any relationship flourishing and growing. Jim Rohn.
If you don't know [your family's] history, then you don't know anything. You are a leaf that doesn't know it is part of a tree. Michael Crichton.
Chapter 16
Associations
Associate, according to Websters, means to join in a relationship; to link in the imagination or mind; a colleague or partner; a companion: comrade. Association, according to Websters, means the act of associating; an organized body of persons: a society. Next to doing things by yourself, associations with honorable individuals and honorable groups are paramount. Word of mouth" endorsements by competent, responsible individuals and groups are the best advertising. The California Kid. Good and bad associates and associations are to be determined by the individual. You must get to know the people you are in business with, the people with whom you work. What are their strengths and weaknesses? Are they honest? Do they possess integrity? Do they conduct their lives by a standard code of moral ethics? Are they moody or prone to fits of anger that disrupt more than they help? Do they command respect from others? Think about your associations. Do not allow your emotions to direct your actions. Just because a person makes you feel good does not mean that they are good for you. Partners, alliances, agents, brokers, and consultants all play a part in business associations. Both internal and external relationships will factor into decisions that must be made and opportunities that will arise. Do your relationships lend themselves to harmony or conflict? Strive to develop relationships and associations that are good for you and your business. Be on guard against dangerous liaisons. Family is the closest association that an individual can have, "Blood is
thicker than water." Friend, according to Websters, means someone whom one knows and likes; a supporter or patron of a cause or group. Be careful of involving your friends in your business; minor disagreements can cost you the loss of a good friend. The California Kid. He that is neither one thing nor the other has no friends. Aesop. What is a friend? A single soul dwelling in two bodies. Aristotle. Misfortune shows those who are not really friends. Aristotle. Peer, according to Websters, means one of equal status with another. Your peers are the people you associate with. They can be your buyers, suppliers and customers; your employees and employers; your neighbors, friends, and family. The people you deal with in business are a very important peer group to you and your business. Be very careful about what you say and do when you are in the company of your peers. After thirty years of martial arts contemplation and consideration of personal physical combat, and more than 100 benevolent barroom altercations, whereby I came to the rescue of another, this author is only recognized by family and peers as having mastered the aspects/consumption of the Golden Nectar of Life, beer, and possibly, individualism, unconventional action, and unorthodox thought. The California Kid. Incorrigible, according to Websters, means incapable of being reformed or corrected.
It gives me great pleasure indeed to see the stubbornness of an incorrigible nonconformist warmly acclaimed. Albert Einstein.
The art of association is in knowing with whom to associate.

According to Sun Tzu, Tenet 11, Nine Situations of Terrains: One must know the plans of potential allies; otherwise, it will be impossible to construct alliances. THOUGHTS and QUOTATIONS: A man only learns in two ways, one by reading, and the other by association with smarter people. Will Rogers. The world is like a mirror, you see? Smile, and your friends smile back. Japanese Zen saying. The best antiques are old friends. Unknown. Once more unto the breach, dear friends, once more;/ Or close the wall up with our English dead!/ In peace there's nothing so becomes a man/ As modest stillness and humility:/ But when the blast of war blows in our ears,/ Then imitate the action of the tiger;/ Stiffen the sinews, summon up the blood,/ Disguise fair nature with hard-favord rage;/ Then lend the eye a terrible aspect William Shakespeare, The Life of Henry the Fifth , III,i,1-9. To me, fair friend, you never can be old For as you were when first your eye I eyed, Such seems your beauty still. William Shakespeare. I count myself in nothing else so happy As in a soul rememb'ring my good friends. William Shakespeare.
Remember how in that communion only, beholding beauty with the eye of the mind, he will be enabled to bring forth, not images of beauty, but reality (for he has hold not of an image but of a reality), and bringing forth and nourishing true virtue to become the friend of God and be immortal, if mortal man may. Plato. Friends have all things in common. Plato. You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you. Dale Carnegie. He that is neither one thing nor the other has no friends. Aesop. Good humor is a tonic for mind and body. It is the best antidote for anxiety and depression. It is a business asset. It attracts and keeps friends. It lightens human burdens. It is the direct route to serenity and contentment. Grenville Kleiser. Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. W. Edwards Deming. There is nothing better than the encouragement of a good friend. Katherine Hathaway. Listening is a magnetic and strange thing, a creative force. The friends who listen to us are the ones we move toward, and we want to sit in their radius. When we are listened to, it creates us, makes us unfold and expand. Dr. Karl Menninger. Am I not destroying my enemies when I make friends of them? Abraham Lincoln.
Friends may come and go, but enemies accumulate. Thomas Jones. I no doubt deserved my enemies, but I don't believe I deserved my friends. Walt Whitman. Except in cases of necessity, which are rare, leave your friend to learn unpleasant things from his enemies; they are ready enough to tell them. Oliver Wendell Holmes. Never explainyour friends do not need it and your enemies will not believe you anyway. Elbert Hubbard. God save me from my friends. I can protect myself from my enemies. Martin Luther. Often we have no time for our friends, but all the time in the world for our enemies. Unknown. We really don't have enemies. It's just that some of our best friends are trying to kill us. Unknown. Friends are just enemies that don't have the guts to kill you. Judy Tenuda. I have now reigned about fifty years in victory or peace, beloved by my subjects, dreaded by my enemies, and respected by my allies. Riches and honors, power and pleasure, have waited on my call, nor does any earthly blessing appear to have been wanting to my felicity In this situation, I have diligently numbered the days of pure and genuine happiness which have fallen to my lot. They amount to fourteen. Abd Er-Rahman III of Spain.
It was a pleasant cafe, warm and clean and friendly, and I hung up my old water-proof on the coat rack to dry and put my worn and weathered felt hat on the rack above the bench and ordered a cafe au lait. The waiter brought it and I took out a notebook from the pocket of the coat and a pencil and started to write. Ernest Hemingway. There can be no friendship when there is no freedom; Friendship loves the free air, and will not be fenced up in straight and narrow enclosures. William Penn. If you wish to succeed in life, make perseverance your bosom friend, experience your wise counselor, caution your elder brother, and hope your guardian genius. Joseph Addison. Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx. Good friends are good for your health. Irwin Sarason. True friendship is like sound health; the value of it is seldom known until it be lost. Charles Caleb Colton. Honest criticism is hard to take, particularly from a relative, a friend, an acquaintance, or a strangerFranklin P. Jones. I get by with a little help from my friends. John Lennon.
Chapter 17
The Better Team

Team, according to Websters, means two or more players on the same side in a game; a group working together. We have all heard of teamwork, two or more people working together to achieve a collectively desired goal. There are good teams and bad teams, some teams win consistently, some lose almost all the time. Teams that practice together more will usually get better; they will improve their abilities. They will become a better team. Teamwork works! The better team works together to achieve better production of values and valuables, better delivery of goods and services, better protection of the wealth belonging to the team and the individuals that make up the team. The better team becomes a de facto family. It has a captain just as a family has a head of household, a leader, one who demonstrates the quality of leadership. In any project undertaken by the team, as in any business strategy, the first step is to make a plan. Team members are charged with completing specific tasks or sets of tasks. Each individual member is empowered to act independently to facilitate specific phases of the tasks as set forth in the business plan. Empowerment differs from delegation of authority, where one or more members of the team are tasked with completion or authorized to complete only one component of the overall project. Such components or tasks may include the research and development phase, testing, production, marketing, sales, project or product service, financial duties associated with the completion of the project, and realization of the profit that has been
made. Other team members are tasked with completing the other components of the project. This system or theory of operation, where members of the team are pigeonholed or limited in their scope of function, is called demarcation, which is the limiting or setting of boundaries in which an individual or set of individuals must confine their work. Demarcation does not employ the total physical and mental leverage of the individual or the team. In the stitching of a sweater, should one stitch break, all fall apart, the stitches before and stitches after. If a team depends on delegation of authority, this is what happens to a team. Empowerment is based upon the individuals and members of the better team being capable of completing an entire project on their own. Each individual is capable of doing the research and development, testing the products, services, producing the products, services, marketing the products, services, selling the products and services, servicing the customers' needs and wishes (remember, "the customer is ALWAYS right"), collecting payment and paying expenses, accounting the revenues, banking the profits. Each member of the team possesses an "A to Z" capability. In this fashion, members are free to work on the entire project or more than one project at the same time without limitations. All better team members support the activities of the others. While not assuming the duties or responsibilities of other team members, individually, they are able to use the support of other better team members, which leverages both physical and mental activities of the team. The better team does not limit an individual's activities or their workload. Individuals are free to perform to the best of their abilities at the proper pace to achieve the best result. Please understand that going too fast can be as bad as going too slow. "Haste makes waste." The better team does not empower the individuals. Individuals empower themselves. Empowerment is an inherent quality of the better team. Team members recognize the talents of others, help them to
recognize their own talents, assist them to use their talents effectively. In this way, you are able to benefit yourself and others at the same time. The California Kid. As with all teams, members will come and go from time to time. The quality of empowerment allows members to move on to other activities, separate and distanced from their former team, while still being capable to function as individuals, capable of completing projects on their own. Members of the better team, the individuals themselves, possess the capacity to function on their own; to perform all tasks from A to Z," without the assistance of others. They are capable of working effectively by themselves, of working on their own. When a member of a better team leaves the team, he is better prepared to fend for himself, not like a middle manager who has been pigeonholed. Teams and individuals may suffer from a "parting of the ways," should a parting take place, but members of a better team will be prepared to carry on. Know that selection of team members is paramount. Better team members are chosen for what they can contribute to the team, what enhanced value they will add to the team. Team members who possess specialized knowledge on any subject supplement the general knowledge that the team already possesses. It is not necessary that all team members be specialized experts in all fields. It will suffice that at least one team member is an expert in the field in which the team is conducting its business. The better team should not be limited in the capabilities needed to satisfactorily complete any chosen project. If the team is limited, then it is necessary to add to the team and select a new team member who will supply the qualifications required to achieve success. Know that team members must have incentives to agree to work with the team. Be prepared to offer an incentive to individuals you wish to join the team. This does not always mean a cash incentive, although cash is a very good incentive. Be creative in your selection of incentives, based on the individual you wish to recruit into the team.
Meet as often as possible with team members to coordinate activities. Remember that a better team is composed of individuals who have consented to work together. We stress the word TOGETHER. Endeavor to maintain harmony within the team. This is particularly important, as friction will only cause delays and negative results. An example of a better team was the Beatles, four individuals who, when they worked together, created values and valuables far beyond their own singular efforts. Yet they all had very successful solo careers beyond their breakup. As a group, they reached the very top, the pinnacle of the music industry, and more than thirty years after their breakup and the death of two of them, their music is still rated as best selling.
The better team is a "collection of fine art."

According to Sun Tzu, Tenet 11, Nine Situations of Terrains: The greater the distance you penetrate into enemy territory, the greater the solidarity your troops will form. When you are united, your enemy will not be able to prevail against you. THOUGHTS and QUOTATIONS: In union there is strength. Aesop. All winning teams are goal-oriented. Teams like these win consistently because everyone connected with them concentrates on specific objectives. They go about their business with blinders on; nothing will distract them from achieving their aims. Lou Holtz. We have to do the best we can. This is our sacred human responsibility. Albert Einstein. Teams that work together well dont necessarily like each other very well. A professional will not let that stand in the way of successful teamwork and will work together well in order to get the job done. Getting the job done is
rewarding both to the team as a whole, and to each individual in that team. Diane Taren. Success depends above all, upon people. Build relationships, teams, partnerships -- and motivate people to contribute. Cultivate leadership, creativity, excellence. Listen; seek new ideas and advice. Ruth Scott. We're going to turn this team around 360 degrees. Jason Kidd, upon being drafted to the Dallas Mavericks. In order to have a winner, the team must have a feeling of unity; every player must put the team first--ahead of personal glory. Paul Bear Bryant. If a team is to reach its potential, each player must be willing to subordinate his personal goals to the good of the team. Bud Wilkinson. Individual commitment to a group effort -- that is what makes a team work a company work, a society work, a civilization work. Vince Lombardi. It is amazing what can be accomplished when nobody cares about who gets the credit. Robert Yates. The nice thing about teamwork is that you always have others on your side. Margaret Carty. The ideas that come out of most brainstorming sessions are usually superficial, trivial, and not very original. They are rarely useful. The process, however, seems to make uncreative people feel that they are making innovative contributions and that others are listening to them. A Harvey Block. You put together the best team that you can with the players you've
got, and replace those who aren't good enough. Robert Crandall. No problem is insurmountable. With a little courage, teamwork and determination a person can overcome anything. B. Dodge. Coming together is a beginning, staying together is progress, and working together is success. Henry Ford. People have been known to achieve more as a result of working with others than against them. Dr. Allan Fromme. Win together, lose together, play together, stay together. Debra Mancuso.
Chapter 18
Have's and Have-not's

Part I The Game
Third-world countries are not subject to the same set of rules because they play a different, a less costly, less expensive game. The house still runs the game, aka system. Its just that some people play with nickels and some play with bigger money. Casinos make money because they offer what the customer wantsa chance, not necessarily a good chance, but at least a chance. Other more broad-based organizations limit the possible winnings, not only on individual bets, but in the overall winning limit, calling the rules after the roll of the dice, if the house suffers a loss. Some casinos run a clean game, but you can also find games that are rigged in the house's favor. Rich countries typically use their wealth to secure what they want. But anyone who has become wealthy knows how to acquire and hopefully, maintain his or her wealth, possesses knowledge we all should seek to acquire. Dishonest individuals and dishonest individuals within groups use political, mystical, or financial (PMF) power to gain. They are capable of recognizing opportunity. Third- and fourth-world countries and the people living in them are natural targets for predatory individuals and organizations that use the PMF powers. Governments impose trade and aid restrictions on other countries, depending on the availability and access to a country's resources. Natural resources can include cheap labor, raw materials, metal, minerals; access to markets, political alliances, or policy support. Some groups indoctrinate
their flocks of paying individuals in order to acquire moral authority, thereby being able to control certain actions performed by these individuals. Some organizations have become extremely wealthy on gifts, charity schemes, and tax-exempt internal business functions. It is understandable why these organizations use the PMF powers available to them. There are have's and have-nots in every country, the wealthy and middle-income families and individuals, the welfare and Social Security recipients, the homeless. Do not believe that the Have-nots simply accept their station in life; everyone wants a better life, "the good life." As governments create no value, but rather are required to take values and valuables from the people and the nation or state in order to support their activities, the have-nots are made to suffer most. When you have nothing, you have nothing to lose." You become less cooperative, even counterproductive. Unrest is born, even civil disobedience, you and the people in general forcefully object. This negative situation causes conflict and may lead to chaos and anarchy. Open rebellion cannot be far behind. When restrictions are placed on businesses, the business suffers, when the business suffers, everyone suffers. Governments can't get as much in taxes, some groups cannot get as much money in donations, and of course the population in general suffers and struggles to correct the situation. The ideal situation, the simplest solution is to keep business going, is to allow business to prosper, and all will benefit. The California Kid. In countries that have workable and favorable commercial atmospheres, the people are more satisfied with their lives and therefore more agreeable to normal productive, value-creating activities. Favorable business conditions promote more jobs and the need to hire more people. Wages that are paid out of the profits have been made from business transactions, these monies become part of the cash flow of the entire
society, and hence the life blood of the local, state, or national economy.
Have's purchase art for their collections; have-nots must create their own art.
Part II Migration
End of the Road Theory

In the beginning, somewhere in the Persian Gulf, man decided to take a walk *. He walked East. For thousands of years man has migrated to different parts of the world. No two journeys were ever the same; however, one overriding theme seems to be common: whenever man reached a point where he could not walk any farther, he stopped, set up camp, and began to live. As more and more people reached these final destinations, the end of the road, cities began to grow. First was China. When the walkers reached the Pacific Ocean they stopped, and civilization began. People were thrown together by the simple fact that they had reach the end of their journey; they had reached the cul-de-sac (French for bottom of the bag). Up to Korea and down the peninsula. Out to Japan and down the chain of islands to Okinawa the end of the road. * NOTE. Since this publication is primarily concerned with information technology (IT) we will deal with the recorded word as referenced in the Bible, and the subsequent adoption of that ongoing recorded time devices. The Old Testament references that, In the Beginning - God created man and he lived in the Garden of Eden, currently in use is the occidental calendar pegging current time as the year 2003. Prior to written & defined, universally accepted boundaries of time we find no support for the existence of consciousness in man. The Garden of Eden is the Birthplace of civilisation. Although the most recent research suggests that mankind first arose in Africa and that humankind left Africa and travelled in all those directions, we are dealing with the consciousness of man that developed civilisation not the physical development of the animal, man.
From the beginning people travelled in different directions. To the north was Greece and on to Europe, Scandinavia, and Russia. To the west and south was Africa. After China began to get crowded, people travelled south to the tip of India. The ones who went to Greece stopped, and a great civilization began. As Greece got crowded, they went to Rome, and a great civilization began, to Paris, to the State of Mind, Amsterdam, to the majesty that was Spain and Portugal, to Britain, London, which became the center of the world of commerce, to the New World, both South and North America. New York became the center of trade for the northern New World. Travelling west, they finally reached the Pacific Ocean. They had found California, the mythical land of riches and treasures. Whenever people got to the end of their road, whenever their journey ended because of there was no place left to go, great civilizations began. Not only did civilizations begin, but these cul-de-sacs became the centers of culture. They became the venues for collective knowledge. When many people are forced to live together by circumstances dictated by the end of the road, they naturally end up working together for the betterment of the community. They share their collective knowledge with each other. The creation of a civilization is nothing more than the location of the cul-desac, a place where people are forced to live and work together because they have come to the end of the road.
Neo-Migration
We do not wish to appear to be posing questions that may be interpreted as fostering conspiratorial theories; however, as governments for thousands of years have effectively used Sun Tzus, Art of War to control and conquer numerous populations, we may safely conclude that they will continue in this same practice. It is also safe to conclude that a population of value producers that does not practice strategies of defense, as laid down by Sun Tzu, will be defeated and enslaved or at best remain
subjugated to the powers that be, those who employ the strategies of war. Migration, according to Websters, means to move from a country or area and settle in another; to move periodically from one climate or region to another; immigrate: to leave one country and settle in another. What are the causes of migration? What are requirements of migrants? Haves, the wealthy migrants, do so because they wish to protect what they have already acquired. Overseas Chinese fleeing Hong Kong, China, and Taiwan have acquired their fortunes and are in fear of forced forfeiture to government interest. They look to walk the road, to the end of a journey. Many of these wealth-possessing migrants practice assimilation, blending into society as participants in the system, and many simply disappear like a diamonds in ice, subtly vanishing into invisibility to avoid the same type of government scrutiny that existed in the last place they left. Have-nots, the impoverished migrants, truly wish to acquire a better life. They come in two types: those who wish to assimilate and acquire a permanent residence and those who wish to work and send their wages and earnings to their families at home. They cower in ethnic enclaves, safely hidden from the view of the general population of legitimate citizenry, hopefully to be recognized only as second level employees when out in the public eye. Some groups within the immigrant communities will see their new host country as a cow they can milk, whereas others will see their new country as a good steak dinner still standing on four legs. Artificial grouping of immigrants who wish to assimilate will effectively become legitimate minority groups that gain political power and support from pro-diversity groups. The ones eating steak are only out for the party. I want to slum and drink all the rum that I can, Im a foreigner in a foreign land. Ray Davies. What are the implications of mass migration in a world of growing terrorism? With liberal policies in place, anyone with other than legitimate
migrant interest will use the system to subvert host countries, as shown by 9/11 activity cells. Socialistic benefit fraud is a way that governments perpetrate the insidious growth of socialism. They create a culture of non-value producers who will require government maintenance for years to come. This is positive for governments. It increases the need for their bureaucratic growth. Other beneficiaries of fraudulent migration are criminals (professional and amateur), document forgers, human traffickers, fake marriage brokers, fake marriage opportunists and pro-cheap-labor business owners. These fraudulent practices will continue to proliferate as long as profits are there to be made, with or without the support of various government and diverse migrant groups that support both pro and con agendas. Causes: Desire for a better economic life. Escape from tyranny, asylum. Survival in general. The desire to repossess previously confiscated lands, such as the Mexican invasion of California, is the reconquista (as termed by Samuel Francis in his articles on immigration as seen in the Conservative Chronicle) of a land that Mexican people considered to be legally theirs by virtue of long ago but not forgotten treaties. Their method of reconquista is through legal and illegal migration, rather than by military force. Are they to be considered non-assimilation-seeking migrant invaders? Reconquista is the reacquisition of arguably stolen land; these migrants realize that they will have a better life in a country that offers so many social programs to residents whether legal or non-legal. Should they not succeed with reacquisition, they will have, at least, secured a better life. What other countries are suffering the same phenomenon of reconquista? Welcome to the Hotel California The silent conquest of any country by third-world migrants continues on a global scale. Most of the third world is coming to Europe and North
America, the U.S. and Canada. Foreign culture enclaves are created which are viewed to be a negative reaction to liberal immigration policies by value producers; however, governments view this as a condition of supporter increase, no matter what their particular political persuasion. Requirements: Assimilation. Asylum. In many cases, the seekers wish to protect the wealth they have acquired. They are looking to migrate with much of their wealth intact. For the most part, they will become value producers. They will start their own businesses and will eventually be good for their new community by means of job creation. The nation of Overseas Chinese has practiced this policy for thousands of years. The most important factor they are concerned with is the acquisition of more money, more wealth. Their weapon is subtlety. They do not advertise their intention and keep primarily to themselves until such time as they have acquired position and status in the new community. Amnesty: The forgiving of illegal migration. The reason for amnesty is that political parties wishing to gain power or preserve the power they now possess believe that if they can champion the cause of the illegals they will be able to eventually gain their political support after amnesty is granted. Migrant assimilation is not the objective, as these migrants will become subject to the political party that supported their petition for amnesty and legal resident status. Another fallout of amnesty is that it suppresses the legitimate aspirations of immigrants across the globe, those who are desirous of practicing pro-assimilation. The lower labor cost of illegals is both desired and undesirable. Businesses that need more labor at a reduced cost, under the minimal wage set by law, do not support amnesty. Is amnesty a reward for breaking the immigration laws of any country? Is immigration a positive aspect or benefit to the growth of a developed society? When a society is growing and on the way to being considered developed it needs the infusion of new blood, whereas in developed societies, immigration serves to water down the values of those who created the values in the first place. Should the governors of society insist that existing legal populations
fully posses all of the things that mark a developed society, house, car, source of income, educational opportunity, and a safe and secure environment in which to live, before admitting any additional aliens requesting residence? Unemployment in the legal population suffers because illegals will capture a portion of the job market. The greed for cheap labor and cheap votes will keep the debate on the table, thus giving a sense of legitimacy to the practice of migration, both legal and illegal. The other side of the coin is that migrants need to support their families remaining in their home countries. These families will receive the monies that are the fruits of the migrants labors. This translates to a flight of capital from the host country. Racist overtones of some groups reflect the notion that a legitimate immigration and assimilation process (the melting pot) is not functioning as it once did. The pro-diversity group (pro-cheap-votes) plays the race card to prevent the stifling of mass immigration. What are the implications of mass immigration, and how serious could it get? Look at what is happening in Europe, and Australia. Boat people by the hundreds and thousands requesting asylum are being refused and detained on islands until repatriation can be effected. What would happen if twenty million Chinese decided to walk into Hong Kong? Certain economies could not absorb such an influx of economic prosperity seekers. What about fifty million Latin Americans walking north and crossing the borders into the land of freedom? Riots would surely ensue. Would the government take up arms to stop such an overwhelming asylum-seeking invasion? With the open border policy of Europe, once you are in, you can move from country to country freely. Would the legal citizenry take up arms to protect their way of life? How enforceable are policies that restrict the immigration of an enormous third world population that has nothing to lose? Those who wish to obtain a chance at a better life will continue to travel in the direction of prosperity. Will the legitimate individual rights and property rights of legal citizens be put in jeopardy? Will the legal citizens turn mild protest into
domestic security threats directed at the establishment (both public and private sectors) and create such unrest that the economies head in the direction of failure? Are we witnessing endless immigration on a world scale, travel from Have Not to Have? Will government media spin be able to convince a concerned legitimate population that the problem is not as great as it really is? Or will the veil be stripped away from the veiled truth? The political views of immigrants, in most cases, differ radically from the host country of their choice. Will we, as a world society, experience a change of domestic ideology through the simple method of mass immigration? Will cultures be affected in a negative or positive way? Will the melting pot theory continue to work, or will we become divisive in our attempts to curb legal and illegal immigration? Will the growing homeless populations become breeding grounds for crime? Are economically stable societies under siege? Will we see the decline in the positive value-creating capacity of immigration targets? Will a bronze culture that does not identify with a specific brand of nationalism emerge as people of color actively target non-bronze individuals as impediments to their pursuit of the better life? Will European and Anglo-Saxon cultures become a thing of the past? Western culture has been responsible for the greatest advancements in science, literature, the arts, and human liberty. Will this disappear? Will religious overtones become a factor in legal and illegal immigrant populations? Will traditional Western values become a curiosity of the times gone by? Will the Western system of value-oriented education suffer to the point that entire populations will no longer be able to maintain technological growth, only to be subjected to the growth of mediocrity? Is the fact that Anglo-Saxon societies actually did invade and conquer bronze societies in centuries past become a political issue for world courts to debate, and in fact instigate creation of such new world court forums? Do Western cultures owe anything to the would-be residents from the third world? Is it required that Western cultures practice altruism (self-
sacrifice) for the good of a third world population swarming their way? Are Western cultures to give up the sovereignty of their countries for the good of enlargement of their societies? Should Western countries be burdened with the cost of deportation of the coming flood of migrants, or should they simply turn them away to fend for themselves, thereby demonstrating that it is not safe to attempt access? Will the masses of the have-nots rise up against the haves in a class conflict that gives birth to either mass extermination or mass subjugation of the culturally and racially conquered? Will radicals of the ideologically elite simply brand immigration as a global security threat and instigate punitive measure against countries that do not physically control the outpouring of their repressed populations? Will stable governments brand countries that do not comply as rogue and pursue policies of imperialism and hegemony against such rogue states? Will these rogue governments actual encourage such migration for political advantages, sleeper cells, and pro-rogue lobbyist activities? Are the powers that be actually encouraging such immigration tactics to further their agenda of a new world order, one people under government by the elite? As we use the tools available to us, namely our conscious thinking ability, do we detect elitist mischief making, which is pure Sun Tzu, to conquer without having to engage in battle? Are governmental media campaigns practicing the Thirteenth Tenet, Espionage? Are they engaging in the use of expendable spies who spread false information to confuse the enemy? If you consider that the global elite is in control of all media, then it stands to reason that they consider the general population the enemy and will employ any means available to divide and conquer. Are incidents of mass genocide, whether by violence or disease, one of the causes of asylum migration? Is it a simple and acceptably desirous thinning out of the herds? Is mass immigration simply a method of sowing dissent within the general population, which will give rise to a reason for increased governmental and/or elitist control over a population? Is all of this a benevolent and protective security effort? Is it
subjugation of the population by request from the population? Our discussion of global migration has probably raised more questions than it has answered. Our concern is primarily concerned on its effects on good businesses and good business practices, we must ask ourselves this final question. Can or will individualism and the pursuit of individual happiness through the practice of good business and value creation be a more effective weapon in the protection of value production than the proliferation of democratic socialism that feeds economic decline, social, cultural, national, and racial disparity, the rise of mediocrity, tyranny, famine, pandemic spread of disease, rising inflation, and, ultimately, the realization of world war? According to Sun Tzu, Tenet 3, Planning Offensives: In planning offensives or projects, the planers work out contingencies, what is best and what is second best, what would we prefer and what would we settle for. To conquer is the desired goal. To destroy is the alternative. To conquer the enemy and preserve the value for your own use is the primary objective. This is preferable to the total destruction and loss of value; however, in any battle this destruction is what we may have to settle for in the end. Defeat is defeat, but the loss of the spoils of war or the assets of the vanquished is to have settled for second best.
THOUGHTS and QUOTATIONS: To Have or not to Have? That is the question I must ask myself before deciding to go into any deal. If I decide that I must have it then I figure out a way to get it. And there is no set formula for getting the deal. Only the components are the same. (Present, negotiate, agree and sign.) Before you get to present your idea or product you must get someone to listen to you and hopefully with your brief pitch you might get the
appointment to give your presentation. Okay so you hung out at a certain little coffee shop at noon time for the last ten days eating greasy french fries hoping you could accidentally bump into the guy that works with the guy who knows the guy who is the guy who can make the deal happen. Ask any famous artist how they got their big break. I know a lot of famous singers who have spent a zillion hours on several waiting room couches hoping for the chance to catch a meeting with the record executive to present his or her music. Those artists did not give up. They had to have fame. They did not give up. They got the deal. They believed in their product. Now the execs wait for that artist to show up for the meeting. IMPORTANT...Know which side of the table you are on in a deal. After the deal is done then notice how the table turns. For those who have today may not have tomorrow if they forget which side they sit on. Americans always had a great secure nation. One morning it was all gone. That great feeling of security we Americans don't have now. Us Americans woke up...our government is now at the neighborhood mechanic trying to repair the damage when they should be out shopping for a new car. Diane Taren. I don't feel we did wrong in taking this great country away from them. There were great numbers of people who needed new land, and the Indians were selfishly trying to keep it for themselves. John Wayne.
Chapter 19
Public Relations
Public relations has been described by many individuals and organizations in a number of different ways. It appears to be a catchall phrase to describe the methods that are used to persuade individuals and organizations to regard businesses, governments, institutions, and causes in a favorable, or at least a less negative way, with regard to whatever entity or ideal is being pitched. In essence, it is the attempts to build relations with the public. It takes the form of communication. It has bearing on audiences, it has financial implications, and it demands strategy to achieve its goals. Communications - Symmetrical or Asymmetrical Audience - Internal or External Financial - Revenue stream(s) 1 or Revenue stream(s) 2 Strategy - Promotion of the Positive (P+) or Limitation of the Negative (L-) 1. Communications: a) Symmetrical communications are exchanges of information. Twoway communications. First communication and the response or feedback that follows. b) Asymmetrical communications are one-way information transfers. They do not need or desire a response or feedback. 2. Audience: a) Internal audiences are individuals, departments, or organizations
having status within the recipient of the public relation efforts. Management, employees, participants, stakeholders, etc. b) External audiences are individuals, departments, or organizations having no status within the organization that generates the public relation efforts. Governments, political entities, media entities, pressure or lobby groups, financial institutions, potential customers, the general public, etc. 3. Financial: a) Financial revenue stream 1 refers to revenues that are derived from the prime or normal course of an entitys business. How an entity first gets its money and continues to receive its cash flow from these prime activities. The sale or trade of its primary products or services. b) Financial revenue stream 2 refers to revenues that are derived from investments of the entitys Revenue streams 1 saved funds. Investments outside the entitys normal business practices. 4. Strategy: a) P+ is the promotion of the positive. Brings any positive aspect of the organization or cause into a more positive light. b) L- is the limitation of the negative. Reduces any negative exposure that could affect the functions, communications, strategic activities, or financial implications of the organization or cause. Internal and external audience opinions of the organization or cause.
1. Importance of Public Relations

The importance of public relations in business cannot be overemphasised. It is the window through which people are able to look into the company and view the workings of the people that conduct operations. When any company is tasked to produce values for the benefit
of the stakeholders of the business or for the benefit of the customers, these operations must be transparent. They must be clearly understandable to all who wish to examine or participate. Customer participation is based on the trust they place in the business. As a way of making public relations understandable to the businessperson, we have done a study of a public corporation. The reader may find this boring, but the lessons it teaches will serve you well.
Public Relations at Pension Fund Commission (PFC)

In the case of the Bahrain Pension Fund Commission (PFC), the stakeholders, the participants are the people that have placed their trust in the officers of the PFC that the PFC will be operated efficiently, effectively, and profitably. They are relying on the PFC to be healthy many years from now. In the mission statement are contained the objectives and goals of the PFC. The statement acts as a detailed guide to instruct the different entities of management who work under top management in the various aspects of their duties and responsibilities of achieving the desired goals of the PFC. It is the duty of top management to ensure that the various managers complete their duties, achieve their objectives, reach their goals, oversee the actions of the various managers, and constantly watch that the overall strategic fit of the objectives will help to fulfil the master plan of the organization.
Executive Summary of the PFC

The PFC is an organization of the Bahrain government responsible for the collection, investing and paying of pension contributions to civil and military employees of the Kingdom of Bahrain. This is a monopoly scheme. Other supplementary products offered by the PFC include death grants, marriage gifts, loans, etc. Although the PFC has been prudent in its investment practices, returns are dependent on performance, which is tied to the international market.
Events like the September 11, 2001, attacks on the Pentagon and World Trade Center have had adverse affects on investments held by organizations like the PFC. As the PFC is committed to providing future pensions to its consumers, the performance of its investments and the increasing number of eligible pensioners over the next ten years, as projected by the Central Bureau for Statistics in Bahrain, will have considerable impact on the PFCs ability to maintain its current level of payment coverage. The major concern is that, should international markets experience a downturn in investment performance contrary to forecast, what will be required of the PFC to counter such developments? One possible remedy open to the PFC is to increase its product line. Customer questionnaire research indicates that the level of satisfaction is not as high as desired, and that more young people, seventy percent, have expressed a desire to obtain life insurance. The PFC is considering adding this capability to its existing product line. Also, the PFC has a desire to continue its current growth level of investment, which will be required to meet future pension payment commitments. To meet this desire, they will have to: 1) Train and educate the PFC staff to better care for and meet each customers needs and desires for competent service and quality products. 2) Conduct research in the international life insurance market for qualified providers capable of meeting the expectations of the PFCs investors. 3) After a requisite number of qualified life insurance providers have been identified, the PFC should conduct additional market research to determine the reasons their customers have to use this potential product. Is life insurance desired for old-age security, for savings and income, etc.? 4) Once critical analysis of the inclusion of life insurance as a viable
product for the PFC to offer to its customers has been determined, the PFC should develop a strategy for implementation of the inclusion of a life insurance system of sales and marketing that will meet customers needs and desires. Because PFC is operating in the financial services arena, which is highly competitive, the PFC must continue to be selective in offering specifically designed products that will meet the requirements of its customers, lest they decide to partake in similar services offered by the PFCs competition. The PFC must also expand its product range to include life insurance, which will fulfil the needs and wants of its desired target markets. The role of public relations in the context of the executive summary has both symmetrical and asymmetrical communications aspects: feedback from questionnaires offered to its customers and advice to the general population that PFC will be offering a new product, life insurance, to complement its current product line. Both internal and external audiences will need to be contacted. Educational requirements of employees and customer needs and wants will need to be researched. Qualified providers of life insurance services will need to be identified. The financial implications of international investment fall into the factor of revenue stream 2, while the inclusion of the new product, life insurance, will fall into the factor of revenue stream 1. The strategy involved is a P+, as all of the above is concerned with the promotion of the positive aspects of the PFC in future investment strategy and future product line expansion, rather than an attempt to reduce the negative aspects of any point considered above.
Marketing Plan of the PFC

Company Position The company position of the PFC as a monopoly within the
government of Bahrain is to maintain its core business of providing financial services and pension benefits to eligible civil and military pensioners. It also offers ancillary products, such as death grants, marriage gifts, loans, funeral expenses, compensation, etc. However, the international environment in which the PFC operates is highly volatile. To this end, the senior management of the PFC has adopted a policy of constant review. Continuing efforts to consolidate the PFCs organizational structure and administrative functions will lend themselves to smooth running business operations, improved investment performance, maintenance of a healthy growth outlook and development, all necessary to ensure internal harmony and increased integrations within operations aimed at ensuring smooth work flow. Global corrections in money markets that took place during the year 2000 have cast shadows on performance post-March, particularly in the United States NASDAQ stock market, and throughout the spectrum of technology-based companies. This slump has had an adverse effect on organizational portfolios as we enter the knowledge era of world globalization and multinational corporate interaction. The PFC, however, has maintained a prudent international investment strategy, limiting its exposure to only sixteen percent, primarily in conservative instruments that provide guaranteed investment capital. However, with the indicated forecast of statistical data showing that the largest number of future pensioners is currently between the ages of thirty and fifty, the number of eligible pensioners will be increasing over the next ten years. The PFC will require strong growth in its customer base, along with increased investment performance in order to maintain and meet its payment obligations. Customer satisfaction must be maintained concerning the choices of the PFCs current and future investment portfolio. The PFC has installed a new management team that takes an aggressive view of the overall picture. They have identified past lost opportunities due the PFCs inability to respond quickly enough to opportunities. Planning efforts must take into account that markets
sometimes move faster than the PFC can react. Their strategy is to develop a management mentality that takes into account what has happened in the past, what is happening now, and will happen in the future. They aim to sharpen their objectives and tailor their policies to allow better strategic direction of the PFCs corporate efforts. They intend to develop clear standards of performance and corporate control. They have adopted the attitude that planning has a direct role in the improvement of performance in situations that develop suddenly. The PFC prepares annual reports and develops long-range plans that deal with what the PFC is doing and what the PFC will be doing. The development of strategic plans is necessary to the maintenance of strategic fit within the context of the organizations goals, capabilities, and the changing market environment. This involves defining the corporate mission, establishing supporting objectives, creating a responsible investment portfolio, and managing its selected functional strategies. Public relations considerations that fall within the arena of the companys position are multifaceted. The new senior management must communicate symmetrically with their internal audience, the employees, to develop a concise working relationship in a P+ strategy, that will benefit the PFC overall. They also need to reassure their investors through asymmetrical communications that the slump in world money markets will not adversely affect the overall performance of the PFC. This falls under Lfinancial strategy communications, revenue stream 2, and is meant to forestall fears regarding international markets, which would give rise to a situation where the Government of the Kingdom of Bahrain would be required to intervene with capital infusion. Also, their current and longterm goals will have to be exploited in a P+ asymmetrical communications campaign to entice new customers, revenue stream 1, to instill confidence in both internal and external audiences that the new management team is aware of past problems and has instigated measures to ensure better performance in the future.
2. Objectives, mission and goals

Strategic Focus The mission of the PFC is to preserve and protect the monies that have been entrusted into its care; to provide responsive, valued, and ever improving pension and social security services to the primary stakeholders; and to, in the process, contribute to the development of the Kingdom of Bahrain. The objectives of the PFC are to protect the wealth of individuals, their target market, the civil and military employees of the Government of Bahrain, those who are participating and contributing into the PFC; the PFCs revenue stream 1; to preserve and ensure that the PFC will be able to provide the required retirement monies, pensions, and social security services to the participants at the time of their retirement and immediately in an emergency. The goals of the PFC are to continually profit from investments of revenue stream 1, thereby increasing the value of revenue stream 2. This is accomplished by making wise investments that return high yields, or at least the highest yields possible within the environmental scope of the PFC. Both symmetrical and asymmetrical communications directed to both internal and external audiences are necessary. Both revenue streams 1 and 2 are affected; however, only P+ strategies are required, as attempts are to promote rather than protect.
3. Strategies of focus
Strategies of focus are the plans that are made to ensure, to the greatest possible certainty, that the PFC prospers. The PFC relies on the strategy of focus to define a clear company mission, to define a sound business portfolio, and to coordinate the functional activities of all related strategies. The steps as outlined in the strategy of focus are as follows: 1) Define the company mission. 2) Set company objectives and goals.
3) Design the company portfolio. 4) The concern is with the business units, the products, and market level activities. Carry out planning, marketing, and other related functional strategies. The PFC exists to accomplish its desired goals, to carry out its chosen strategies. In the beginning, the goals were clear. Over time, however, the mission will change as new business products are added, new markets are explored, and changes in its operational environment occur. Should the management detect a drift in the organizations direction, it must investigate and revise, if necessary, the organizations sense of purpose. In order to accomplish this task, top management must continually ask the following questions: What is the organizations business? Who are the organizations customers? What do our customers value? These questions must be asked often and answered carefully and completely. The answers are the basis for the PFCs public relation policies. These are symmetrical communications, targeted toward an internal audience (within the organization requiring feedback). They accent the strategic promotion of the positive aspects of the PFC, P+.
4. Market Audit
A marketing audit answers three questions: 1) Where is the PFC in relationship to the environment in which it operates? 2) How did the PFC come to be where it is right now? 3) Where does the PFC wish to be in the future? Public relations must be functioning in symmetrical communications within an internal audience to answer the questions given above. Factors of financial concern, both revenue streams 1 and 2, are considered along with
the P+ strategy of the past, present, and future.
5. Situation Analysis
SWOT Strengths, Weaknesses, Opportunities, Threats A SWOT analysis of both the internal and external environment in which the PFC operates must be performed in order to answer marketing audit question #1, above. Both strengths and weakness are factors of the organizations internal functions, of which management must be in control. Opportunities and threats are external in nature, situations over which the management has no control. Strengths will warrant P+ asymmetrical communication to both internal and external audiences with regard to both financial and strategic aspects of the PFC. Weakness will warrant L- asymmetrical communication to both internal and external audiences with regard to both financial and strategic aspects of the PFC. Strengths As viewed from the point of its strengths, the PFC has performed satisfactorily in its profit-making ventures. While its activities are considered to be conservative or low risk, it has maintained an investment portfolio that has earned a consistent six percent over the past four years. For more than a quarter of a century, the PFC has operated in the financial arena, which has led to and provided exceptional expertise in the areas of financial investments. Due to the overall success and profitability experienced by the PFC, an established reputation for fiscal responsibility has been earned and maintained. Along with its operational achievements, the PFC has developed a dedicated and competent workforce. Public relations efforts should promote (P+) and highlight the achievements of the PFC in areas of its twenty-five-year history of conservative and prudent investment strategies, exceptional management of
financial investments, and the PFCs overall profitability and established reputation of fiscal responsibility, along with its maintenance of its dedicated and competence workforce. These efforts should be implemented to both inform internal and external audiences. Weaknesses Weaknesses are experienced by all groups involved in commercial activities. The PFC is no exception. A lack of customer focus has been a matter of concern for the PFC. It is a necessary function that the enterprise understands and realizes exactly what are the wants and desires of its customers. The PFC has been operating for several decades. A number of its most experienced members (employees) are now reaching the ends of their careers. Communication is a vital operational skill that is required to be a functional asset within any organization. Difficulties in this area have plagued the PFC. In addition, unskilled staff members have been assigned to work in areas that demand more qualified personnel. Public relations targeted to minimize (L-) the negative effects of the PFCs lack of customer understanding, their needs and wants, should be studied and enacted. An effort to identify competent upcoming internal or outside human resources needed to replace retiring personnel or instigate new communications programs, which the PFC lacks, requires symmetrical communications to both internal and external audiences. P+ asymmetrical communications should follow the L- campaign. Opportunities As a younger civil and military population enters governmental service, contributions to the PFC will increase and opportunities will arise. The chance for the PFC to expand its operations by increasing the number of products and services it can offer to its customers will increase the PFCs ability to profit. Areas of retirement-related investment look promising. Asymmetrical P+ communications aimed at enticing new or potential government employees, both civilian and military, to participate in the PFC
should be studied and enacted. Symmetrical communications, directed to both internal and external audiences, should be enacted to determine specifically what are the needs and wants of its current and potential customers with regard to its currents products and services and to the addition of new products and services. Threats On the downside of any organization are the threats that are to be faced and overcome. Competition from private groups will enter the market, thus capturing a certain market share of the PFCs potential customers, have negative affects. Dissatisfied customers may leave the PFC to participate in opportunities offered by the new competitors. Financial institutions that are in an expansive or growth phase may initiate merger or acquisition activities directed at the PFC. The necessity of the PFC to operate within governmental guidelines must be considered. Current and future regulations may cause difficulties for the PFC. The large number of both civil and military personnel currently enrolled in the PFC who will retire within the next ten years is a major concern. The trend for more governmental activities to be privatized will cause a decrease in the overall potential customer base, resulting in a loss of potential revenues (stream 1) derived from pension contributions. Asymmetrical P+ communications to external audiences are needed to limit the number of potential customers who may wish to avail themselves of similar PFC products and services offered by other companies. Lsymmetrical communications should be directed at internal audiences (current customers) who may be dissatisfied or become disillusioned with the PFCs performance and customer satisfaction efforts. The PFC needs to conduct L- external audience symmetrical communications with the government to determine if its current or future policies will have negative effects on the PFC with regard to financial or strategic decisions. The PFC will need to symmetrically L- communicate with investment strategists to keep abreast of revenue stream 2 performance vehicles needed to compensate for the higher number of retirees becoming eligible over the
next ten years, along with the decrease of government employees because of privatization of government programs. DRETS Demographic, Regulation, Economic, Technology, Social factors Demographic: The demographic factors of concern to the PFC are as follows: There is an increase of population from which to derive customers. The total number of households has increased. The life expectancy of the average individual is increasing. People are living longer, which effects the length of time the PFC will be required to provide pension benefits. Prolonged payments to pensioners will increase. The population is aging; therefore, more people will become eligible for pension benefits sooner. The population is better educated and informed about pension issues. This translates to the possibilities that they will decide to select a different option. More people are financially secure or independent, meaning that many people will opt not to participate in the PFC. P+ asymmetrical communications directed toward the potential customer population (external) in the growing population will directly affect revenue stream 1. L- symmetrical communications with internal audiences (investors) regarding the extended lifespan of current and future customers and increased pension payments due to the aging eligible pensioner population. L- asymmetrical to both internal (investor and customer) and external potential customer audiences to limit the gradual trend of increased competition capturing market share. More affluent potential customers who choose not to participate in pension type schemes. Regulation The Bahrain Government has great influence over the operations and services of the PFC, in that the PFC must operate within regulatory guidelines. Political and legal issues surrounding the PFC must be taken into consideration, along with the flexibility of the labor market. The possibility of a merger with another organization looms. In an effort to cut costs and improve the level of service offered to its customers, the PFC
must consider these possibilities. Even the possibility of a takeover exists from other financially strong intuitions. The PFC needs to enact L- symmetrical communications with the government to limit the effects of proposed legislation that could negatively affect the PFC with regard to political and legal ramifications and the general labor market. P+ and L- symmetrical communications need to be conducted with both internal (stakeholder) and external (financial guidance counselors) audiences regarding the financial implications of merger and takeover threats. Economic Gross National Product (GNP) factors chart changes in peoples income. Steady growth of the GNP offers increasingly new opportunities for emerging companies. This translates to more employment opportunities. Ups and downs in the economy will affect patterns of social spending, which will affect the demand for labor; affecting employment and unemployment. As major Bahrain investment houses are actively participating in the international market, stages of economic development will be affected by market swings. These investment houses are an important source of revenue for the PFC. The PFC needs to conduct P+ asymmetrical and symmetrical communications with potential customers (external audiences). The PFC needs to conduct P+ and L- communications with both internal (current customers and stakeholders) and external (potential customers, government entities, financial consultants) audiences regarding both revenue streams 1 and 2. Technology Advancements in technology affect the behavior of potential customers. With the proliferation of home computing and Internet access, a more sophisticated consumer public is emerging. As the public becomes better informed, they will weigh their options as to participating in the
PFC, the public could consider using the facilities of one of the PFCs competitors. The public is always seeking loans for the purchase of new homes or other properties from lending institutions offering the most attractive interest rates. Technology can also affect the employment spectrum, in that jobs may be created or eliminated due to new advancements. This affects potential revenue stream 1. Contributions will be affected in a negative way with increased unemployment, and positively affected by increased employment. Technology will also help the PFC in areas of information management, such as management information system (MIS) and management decision support system (MDSS) systems, which aid in strategic decision making. Advancements in banking technology have already affected the way people maintain their savings accounts and the way they make payments. The Internet allows people to interact with their bank from the privacy of their own homes. The PFC needs to conduct P+ asymmetrical communications with both internal (current customers) and external (potential customers) due to the fact that there now exists a much better informed public. The fact that technology advancements can both increase and decrease employment opportunities needs to be addressed to both internal (customers and stakeholders) and external (potential customers, governmental entities, financial guidance counselors, etc.), P+ in the case of employment increases and L- in the case of decreases in employment. Social factors Women in Bahrain now account for a significant portion of the work force; fully thirty-three percent of Bahrain woman are income earners. Many households will be experiencing a two-person income stream. This is positive for the PFC in that many households will have two contributors to the PFC. P+ communications are needed with regards to external (potential customers) audiences concerning PFC participation.
6. Business portfolio planning

The mission and objectives of the PFC need to be addressed with regard to the business portfolio. This is the source of the PFC revenue streams 1 and 2 funds (products and services and investments). The classic portfolio profile strategically fits the companys approach to new opportunities as related to the companys strengths and weaknesses. 1) In planning portfolio management, a company must decide which investments will receive more or less or no further investment. 2) Plans must be developed to address the issue of new product expansion, and new business investment inclusions within the portfolio. With regard to item 1), the PFC needs to develop P+ internal (stakeholder) audience communications concerning investments in order to receive more funding and L- internal (stakeholder) audience communications concerning investments which are to receive less or no additional funding. Both of these have financial revenue stream 2 ramifications. With regard to item 2), the PFC needs to develop P+ internal (customers and stockholders) audience communications regarding the consideration of new product expansion. This regards revenue stream 1. Consideration of new investments is an issue concerning revenue stream 2. This issue concerns both internal (customers and stakeholders) and external (potential customers, financial guidance counselors, etc.) audiences. Both are symmetrical communications and could potentially be both P+ and Lin nature.
7. Business portfolio analysis

In discussing the analysis of any businesss activity portfolio, we must be concerned with market growth in the context of individual industries,
such as technology, real property, service sector, financial instruments, money markets, stock markets, bond markets; financial services, etc. This applies to both products and services offered to the public and to investments held within the portfolio, revenue streams 1 and 2, respectively. Each individual item included in the businesss portfolio is to be considered a strategic business unit (SBU). The Boston Consulting Group (BCG) has developed a growth share matrix that sets a vertical axis of market growth on a specific industry basis. Clients are advised to locate their SBUs according to the specific industries in which they are operating. The horizontal axis measures the relative market share, which is defined as the sales of a specific SBU within the total market as measure by their total share divided by the largest firm in the industry. BGC assigns specific names and description to the four quadrants of its matrix. This is based on the amount of cash that a specific SBU generates or requires from the company holding it in its portfolio. On the high side of the vertical axis, going from best to worst, BGC assigns a rating of star, declining to question mark. On the low end of the vertical axis, going from best to worst, BGC assigns a rating of cash cow, declining to dog. The cash cow (lower left quadrant) contains SBUs that are the dominant players in a low-growth market. Stars (upper left quadrant) contain SBUs that may not generate sufficient cash flow to support the high demand for growth within their specific industries. As their business slows, they have a tendency to decline to cash cow status. Question mark or problem child SBUs are located in the upper right quadrant. They are SBUs having low market share of high growth industries. They require large cash infusions to maintain their market share, let alone increase their market share. These SBUs require careful consideration on the part of portfolio managers as to whether a specific SBU is maintained or phased out.
Dogs occupy the lower right quadrant. They fall within the low-growth market sector. Although they may generate sustainable cash flow, they are not expected to be big winners overall. While in general dogs are recommended to be dropped from portfolios, the final decision to drop or keep dogs is based on several factors, including their relationship with other SBUs, competitive considerations, and potential strategic alliances. Within the PFC, marriage allowances fall in this category; however, they are mandated by law at this time. Analysis of the PFC portfolio will indicate which SBUs will require cash infusion or cash reduction and what role each SBU will play in the portfolio in the future. The four considerations of cash infusion or reduction are as follows: 1) Invest more for growth of market share. 2) Invest more for maintenance of existing level of market share. 3) Harvest cash for short-term cash flow, risking the possibility of market share decline. 4) Divest completely. Get out of the market. This will have the effect of gaining cash. The PFC portfolio currently resides in the star quadrant, a high share of high growth vehicles. However, it will require huge amounts of cash to maintain this status during the next ten years, as a large percentage of its pensioners become eligible for retirement and the PFC will be obligated to increase pension funds dispersion. The PFC should develop P+ internal (stakeholder) and external (potential customers) audience communications, showing the quality of their investment portfolio. L- communications could be developed in case the international market continues to slide, in which case the target audience would be internal (stakeholders). Obvious revenue stream 2 factors exist.
8. Primary and secondary research
As the PFC makes its decision to increase its product line and add more SBUs to its portfolio, it will be necessary to research the satisfaction of existing customers with the proposed new product. The best way to introduce a new product is to build on the internal strengths of the PFC and take advantage of the opportunities that exist in this new sector. The obvious strengths are the PFCs healthy record of investment and a young upcoming population of potential government employees. As research also tells us that the next ten years will bring a flood of eligible pensioners to retirement, the PFC will have to contend with the obvious growth of payment obligations. Further, research tells us that the level of customer satisfaction must be improved. Questions to be answered by existing customers include: What is the level of satisfaction of contributors within the current employee and government contribution scheme? What is the level of satisfaction of contributors with the services they receive from the PFC? What other products and services would the customers like to see the PFC develop? What other products would the customers be willing to participate in? Both current employees and retired former employees should be consulted in regard to these questions. Also, both primary and secondary data will be necessary to ascertain the information. Information based on statistical data can reveal past return on investments along with the key performers within each sector. The levels of inflation, both past and projected, can be obtained from the Center for Statistics. Data regarding questions 1 and 2 can be obtained from questionnaires and related to the exact population in each population sector, as based on database information is exact in regard to how many people are paying and how many people are receiving. Also, it will be necessary to determine exactly what profession each person is or was in. This is also available in the PFC database. Once the overall determination of populations and professions is determined,
then an appropriate sampling may be decided upon.
9. Analysis of the research

What has been concluded by analysis of the primary and secondary data suggests the following: Customers are dissatisfied with customer service offered by the PFC. There is a strong belief that the government should contribute more to the PFC. Existing levels of pension payments support only a low standard of living. Life insurance is a popular desire, as expressed by seventy percent of clients between the ages of twenty-five and thirty-five.
Techniques
Techniques used to facilitate the operations of the PFC and activities that are required to satisfy the customers and stakeholders of the PFC are as follows: Carry out and complete analysis of staff members who are in direct contact with the customers or directly involved with consumers in whatever capacity may exist. Analyze the results of the collected data, as related to the staff members. Process the data. Forward the contemplated results to the training departments of the organization. Come full circle and upgrade the skills and qualifications of the staff members. Instill in all staff members that customer satisfaction is Job #1, the paramount objective of the organization. After the staff has completed the upgrade training course, they must be tested to ensure their complete understanding of the purpose of their mission. The testing must be conducted by an independent examiner. At least once a month, a program of customer feedback must be carried out to fully understand the customers point of view and ensure that the organization has not drifted from its ultimate objective of customer satisfaction.
The customer feedback informational report must be delivered to the marketing manager in a timely fashion. Most of the above relates to the symmetrical communications of the internal audience. Customer and employee feedback (both customers and employees are internal audiences of the PFC, as the customers are the actual owners of the PFC, having a vested interest is a two way communication function of the public relations model. The independent examiner is also involved in a symmetrical communications task; however, he would fall into the external audience category, as he is not physically part of the organization.
10. Impact of interest groups

Interest groups are organizations that desire to steer any targeted organization in the direction beneficial to the interest groups own interest. They promote their own agenda. For instance, an environmental interest group may desire that the PFC direct its efforts toward more proenvironmental activities, i.e., investment in companies that promote, develop, market or sell environmentally-oriented products or services. Interest groups have large followings that support their causes, and these supporters are potentially influential with regard to the community in which the PFC operates. Any organization or governmental entity that operates in the public sector must maintain the highest standard of decorum as perceived by the public at large. The PFC cannot afford to side-step issues that have become the focus of these influential interest groups. Further, interest groups have the ability to promote positive financial rewards beneficial to both revenue streams 1 and 2, in that more civil and military PFC participants will wish to take an active roll in the PFC. Just as interest groups affect corporate decisions in possible investment vehicles that the PFC may wish to participate in and/or governmental policy making decisions, they are capable of affecting the decisions of the PFC itself. The PFC cannot afford to offend or slight such organizations. For these reasons the PFCs public relations efforts in regard to their
relationships toward influential interest groups are critically important in both public opinion and financial decision making, not to mention the importance of strategically based choices. This is not meant to state that all demands issued by interest groups should be adhered to or plans developed to implement their demands; it means that issues put forth by interest groups must be investigated as a matter of course. In relation to the public relations model, interest groups are an external audience that potentially has the ability to affect both financial revenue streams 1 and 2. They affect the P+ and L- of strategy and are symmetrical in their communications functions.
11. Educational aspects

The educational aspects of a public relations campaign are evident in the value support of both internal and external audiences. The campaign to educate the stakeholders of the activities of the PFC is for purely operational reasons. The internal staff and the participants of the PFC, by necessity, requires the PFC to make clear what strategies the PFC intends to employ; thus, the PFC must enlist full support of all stakeholders. Any and all public relations campaigns are, or should be, designed to educate. The support received by the organization is a reflection and inherent part of a positive image and support base throughout all audiences it touches. Educational aspects are related to symmetrical communications. They attempt to portray positive images to all audiences they touch and will promote financial well-being. Strategies that are undertaken take heed from the degree of educational diligence the PFC exhibits.
12. Management actions and relations

1. Concepts of PR 1 The front line of communication is between people or media and the PFC and others. To achieve the PFCs target, in terms of its strategic point of view is to choose the right method of
communication to ensure that the information reaches its target audience effectively and to get to know the opinions and suggestions of the internal and external audiences of the PFC. 2. Role of Internal PR 1 To make employees aware of pension issues affecting the public and the latest developments regarding pension issues. 2 To make employees aware that information is accurate and meant the right way as presented to the public regarding the PFC. 3 To make sure that employees at the PFC are able to give the right picture to the public through the use of technology. 4 Ensure accuracy of information. 5 Improve image of PFC through their General Manager. 6 Care about Human Resources. 7 Support of the top management. 8 Base ideology in regard to the humanistic approach. 9 Waking of consciousness of the individual and the group. 10 Try to employ the capabilities of the right person for the benefit of the PFC. 11 Follow up of the Suggestion Box, suggestions made by the visitors, such as the public and concerned individuals. 12 Issue thank you letters to employees who speed up the work of the PFC with regard to the public. 3. Communication Methods 1 Books and publications. 2 Newsletters. 3 External media. Participation in local programs on TV, radio, and local newspapers. 4 Advertisements and press releases. 5 Internal media notice board. 6 Memos and letters sent out. 7 Lectures.
8 Monitor any changes in the laws governing the PFC. 4. Duties and Responsibilities 1 To inform the public of the PFC policies and increase the publics awareness with regard to PFC. 2 To promote the PFC to employees through parties and trips, sports activities. Give help in urgently needed situations. 3 Prepare annual reports. 4 Prepare schedules for visiting groups and guests. Have qualified employees accompany them during their visits. 5 Receive complaints and doubts voiced by the public visiting the PFC with regard to their business with the PFC. 6 Prepare announcements to be made to his Highness the King during national ceremonies. 7 Analyze negative and positive indicators. 8 Coordinate various departments. Seek improvements in policies that may make life easier for the employees and provide incentives as motivational factors. 9 Follow up what is published in local newspapers and official government publications. 10 Contact foreign PFC institutions to learn more about their experiences with regard to PFC issues. 11 Record all events by photographic and video means. 5. Personal and Academic Specification s for PFC Employees. The PFC should endeavour to employ individuals that meet certain standards: 1 High calibre of education, perfect attitude. 2 Well dressed, looking smart. 3 Clean at all times. 4 Well mannered. 5 Give a good impression of the PFC. 6 Available at all times. 7 Cooperative people.
People should be quick in their reactions. Observe changes immediately. Look out for rumours or negative public views. 9 People should be prepared mentally to reply to any questions put forth from the media. 10 People should be prepared to follow up regarding PFC issues through TV, radio, and newspapers. 11 For the most part, the strategies outlined above can apply to all businesses. Take care to understand the roll of public relations in all of your business strategies.
According to Sun Tzu, Tenet 7, Combat: According to the Book of Military Administration, make drums and gongs to be heard in the midst of battle, make flags on long poles to be seen. When armies are thus united, they will maintain presence of order. Neither will the brave proceed alone, nor cowards run in the face of battle.
The art of public relations lies in knowing the when and how, with whom and for what reason you should relate.
THOUGHTS and QUOTATIONS:
When relating to the public, be part of the audience. The California Kid
ACT III CHOICES
Chapter 20
Communication
Part I Communication
Communication, according to Websters, means the act of communicating; the exchange of ideas, messages, or information; communications: a system of communicating; the art and technology of communicating. Communication or, better-said, understandable communication is an absolute requirement in business. Understandable communication in business is the transfer, transmission, and presentation of information required by either buyer or seller to each other, with regard to the product or service, the terms and conditions associated with the completion of the transaction, the completion of the sale or purchase, the completion of the total deal Buyers and sellers must understand all factors associated with the products and services they are either buying or selling. They must possess and use the ability to convey this product relate knowledge to each other. They must be able to explain how the Deal will work, what are the terms and conditions associated with the deal. Understandable communications are not idle conversation, they are specific sets of instructions and advisements, which are given and received, with absolute clarity. The California Kid. There are several forms of understandable communication: written and spoken words, pictures and video presentations (a picture is worth a
thousand words). You can make a telephone call, send a fax transmission, e-mail your information, use the services of the government post office or a private courier company, such as UPS, FedEx, or DHL. Each method of communication has its own set of advantages and disadvantages. They differ in cost, speed of transmission, confirmation of receipt of transmission, security of delivery and confidentially. All of these factors are combined into your determination of the method in which you communicate. The post office is inexpensive and easy to use, but mail sometimes gets lost. E-mail is almost free, but other people can intercept and read your messages. Private courier services are the most secure, but they can be expensive. Telephones are the easiest to use, but information can be misunderstood. Fax transmissions are excellent forms of information transmission, even better if followed up by telephone conversations. The best form of communication is face-to-face, looking at the person with whom you are trying to communicate. Video conferencing to some extent fits this criterion. Sensitive or confidential communications should be conducted using security measures like electronic encryption, secret codes, whispering when in a crowded place. Details of a business project are not meant to become common knowledge. They are the private concerns of the parties involved in the project. Competitors constantly attempt to learn more about your projects. They may hope to acquire the project or the deal for themselves. This is known as stealing the deal. Do not underestimate the lengths that competitors, independent individuals, groups, organizations, or even governments will go to in order to complicate, interrupt, usurp, or steal your deals. They want to get the deal for themselves after you have used your mental and physical leveraged strengths to develop it to near fruition or completion. "Loose lips sink ships.
Negotiation, according to Websters, means noun of the verb negotiate: to meet and discuss with another in order to reach an agreement; to settle by meeting and discussing; to transfer title to or ownership of (e.g., notes) to another in exchange for equivalent value; to accomplish or cope with successfully. Propaganda, according to Websters, means the systematic widespread promotion of a particular doctrine or idea; material distributed to win people over to a particular doctrine. Some organizations use propaganda to spread their lies. The California Kid. Rhetoric, according to Websters, means the art of the effective and persuasive use of language; public speaking designed to persuade; showy, bombastic language. Some organizations use rhetoric to convince you that their lies are true. The California Kid. Understandable communication is a tool to be used to bring a project along every step of the way, from A to Z, from observation to concept to profit. Understandable communication skills are the most important tools that individuals or better team members possesses. Everyone wishes that they could communicate better; but whom do you wish to communicate with? You have to start communicating with yourself before you can communicate with others. After that, communicating with others becomes easy. When you say that you dont have the time to prepare for tomorrow, you are communicating to yourself that you have no future. You are exhibiting a negative form of communication. You should work at thinking positively; therefore, you should try to communicate positively at every chance. Rather than saying you dont have the time, try saying, I will find the time, or I need to
reorganize my schedule so that I have more time available to prepare for the future. Lots of folks confuse bad management with destiny. Elbert Hubbard. Say to yourself, I started investing wisely today so I can have a better residual cash flow tomorrow. I have rearranged my other duties to allow for more time to invest in today. Although my day is full, I know I can squeeze in a little time for a positive investment. I started to write a book today. I will write a page or two every day, and in a few months I will have created a vehicle of residual income. I will own a copyright, a piece of intellectual value, a product that can be sold over and over and over again. I only have to write the book once, but I can sell it a million times. Communicate with your banker. Ask your banker what is the best way to purchase a rental property. See if you can get a loan to purchase an apartment building. Maybe your banker knows of an opportunity that is available, or maybe he know who else you could talk to in order to find out this kind of information. Maybe you could communicate with your local real estate broker to find an opportunity for residual income. Once you start communicating in a positive way to yourself, you will find that you automatically communicate in a positive way with others. Use resources you currently possess. Start with your conscious mind and think about what you want to communicate to other people. Practice what you want to say by talking to yourself. Listen to yourself talking and be positively smart. By practicing on yourself today, you will be prepared to convey the exact information that will help you create a positive cash flow for tomorrow. Tomorrow never come because when it gets here it is today. Dont wait for tomorrow to start communicating positively smart with yourself; start communicating with yourself today. Slow and stop communications are the negative ones. Recognize the relative negative in comparison to the relative positive. Instead of saying,
I want a good job, say, I want to own my own business that will make profits every day. I need to get a job to increase my positive cash flow while I start my new business. Instead of saying, I will work hard and save my money, say, I will acquire residual income investments through the mechanism of working smart. Instead of saying, I want investments that will make me money when I sell, say, My investment policy allows me to make money now and it will make me more money later when I sell. Dont say anything that is negative, like I cant do that, I dont have any money now, I will wait until later, I never get a break, I cant afford to do that now, My time is limited, I dont know what to do, I dont know how to do it. Think about what you say. Think about what you say in terms of negative and positive and avoid all negative statements. What is the speed of your communication? Do you talk slowly? Do you think slowly? Speed is a matter of conscious effort to go faster. If you want to make more money now and more money in the future, then you have to find ways to make more money at a quicker pace. You need to think about investing your time, efforts, and resources in a faster vehicle. At one time you only crawled, then you learned to walk; then to run, ride a bicycle, and drive a car. You have flown in an airplane. You got faster with every leveraged advancement you made. NOW is the time to get on a faster investment vehicle, a residual investment vehicle, a positive cash flow vehicle. What you really need is a faster communication vehicle. You need to start thinking and communicating at the speed of light. What to communicate? Brainstorming inevitably produces moments of insightful truth in the context of the subject at hand, providing raw material for the body of any meaningful dialogue. But to whom is it meaningful? Communication must be integrated to be relevant to the specific audience being addressed. Even though the message may be the same, the way it is presented may differ from audience to audience. To achieve maximum effectiveness, messages must be creatively adapted to the specific audience. Communication anarchy occurs when the core of the
meaning of a message differs from an internal to an external audience (see the chapter on Public Relations). In business, advertising is communication, but communication differs from advertising in that advertising is limited in the amount of information it may convey. Communication is required to convey complex amounts of information. In business, it is better to communicate than to advertise.
The ability to effectively communicate is the art of transference of knowledge.

According to Sun Tzu, Tenet 5, Strategic Force: In battling a large army, the parameters are the same for battling a small army. It is a matter of configuration and designation. Through communications, a matter is controlled through the use of flags, banners, and pennants.
Part II Spin
Media spin, and the ignorance of the viewing public in not recognizing honesty or a literal truth versus a manipulated truth or deliberate falsehood, or the attempts of the purveyors of the media to manipulate the viewing public toward one bias or another is a crime and a shame and/or a crying shame. In speaking of honesty versus truth, the truth can be manipulated, while honesty can only be honest or dishonest. No middle ground exists between honesty and dishonesty. The media is most often truthful, but rarely honest. The California Kid. Manipulation, according to Websters, means the noun of the verb manipulate: to control or operate with dexterity: handle; to manage or influence shrewdly and often deviously. Unfortunately, all sections of society are populated with devious people who attempt to manipulate others to gain control of them, or usurp
or steal a desired value or valuable item created or possessed by other people or individuals or groups. This is especially true of groups and organization with specifically designed agendas. Acquisition of the created and developed values and valuables of others is on their agenda. Devious, according to Websters, means wandering from a direct or straight course; straying from a proper way: erring; not straight forward: shifty. As has been stated previously, the shortest distance between two points is a straight line. The act of wandering or straying from a straight course or a proper way is to some degree counterproductive unless youre trying to bypass an obstacle. When devious means are employed to manipulate others, the actions are less than honest. Theyre dishonest. Television, radio, and newspapers deliver the truth. However, it is their agenda to deliver the truth in a fashion that will make a profit and/or secure the favor of important or wealthy individuals or groups, such as governments and SOBs. They spin the story, crafting specific phrases that will get the attention of the public and hold that attention until a new story is ready for release. It is your absolute duty in business to learn to recognize when the truth is being manipulated, when a bias is being presented, when someone is not being honest. When someone says that they are not being totally honest, that means they are being dishonest.
Any imaginative work, such as stories in the news crafted with such care that they attract the attention of the public, must be art.
According to Sun Tzu, Tenet 13, Using Spies: Disposable spies are employed for the purpose of spreading rumor and disinformation outside the state. They are employed to deal with enemy spies for the purpose of transferring false information. They can be
sacrificed.
THOUGHTS and QUOTATIONS: The seller of the product is the artist of the deal. He can manipulate ones thoughts into believing that his or her product is a must-have. A good second hand car salesman is not going to tell you that the car is a lemon and that you will live unhappily ever after with the neighborhood mechanic. He will tell you that this car will save you money on gas. This can be true because most of the time your car will be parked at the mechanics garage. When someone is selling me something, I ask the stupid questions. Hello! What about the maintenance? What are the known faults of the product? Which parts break down more often than others? What are the average costs per year on repairs? Now if I go out and buy a Rolls Royce, I know that the car as a whole is built to last forever and thats why the price is so high. If I choose to buy an economy car, I will only pay a fraction of the price of the Rolls. When the Roll breaks down and a part has to be replaced, that amount can almost pay for a new economy car. Thats the difference between the luxury and the economy. Don't let someone sell you an economy product, even though they may package it luxuriously. Go ahead, ask the dumb questions before the contract is signed. It may save you a luxurious headache . Diane Taren. They'll talk about me showing cleavage and my belly, but they don't say anything about the artists who accept an award and can't even talk because they're so drugged out. After the awards show, I go home, drink my tea, and go to bed. Britney Spears. Without knowing the force of words, it is impossible to know men. Confucius. More wisdom is latent in things as they are than in all the words men
use. Antoine de Saint-Exupery. The product of tabloids is based on lies, rhetoric and propaganda. Diane Taren.
Chapter 21
Corporate Governance
In a sustainable world
According to Sun Tzu, Tenet 4, Disposition: Therefore, those who excel in warfare first prepare a position of ultimate defense. All the while, they waste no opportunity to attack and defeat the enemy. These are the reasons that victorious armies first understand the conditions by which victory may be achieved, and only then engage the enemy in battle. Vanquished armies are those that seek to fight before they understand the conditions necessary and obtain the conditions necessary for victory. Those that are skilled in the conduct of warfare cultivate the Tao (way) and preserve the laws and order; in this way they have governance over victory and defeat. It should be understood that all governance should be geared to be sustainable. Any other path is negative. When we discuss sustainability, we must be concerned with changing the negative patterns of behavior that exist in the world today. The importance of corporate governance Within the last several decades, certain events contrary to good business have emerged to compromise the reputations and the sustainability of corporate life in general and have caused serious damage to the confidence once held by the public, the consumers of the products and services the corporations produce. Corporate governance, or the lack of it, is to be blamed for these deteriorations. This is not a national but an
international problem, a global problem. It is a very serious corporate and governmental concern for countries the world over. Failures such as: U.S. saving and loans crisis Asia financial market crisis The accountability scandals of 2002: Arthur Andersen, Enron, WorldCom, etc. The unhealthy gap between executive compensation and corporate performance Continuing government and corporate scandals in America, Europe, and Asia These are not only individual business or corporate failures. They are failures of organizations, specifically BIG organizations, to govern themselves properly. These failures of organizations (governments and businesses, public and private) to properly govern themselves now drives the demand for changes in developed countries, developing countries, and underdeveloped countries. It is absolutely necessary for businesses, the corporate captains and their crews to learn, or relearn, the lessons of honest business, practical business, workable business, nonwasteful business, good business, if they wish to restore the publics trust, if they desire to sustain the life of their business and life of the communities in which they operate. As corporate governance moves from the boardroom to the center of the world economic spotlight (globalization), all public eyes will be on them and the supposed corporate watchdogs, the accounting firms that have been entrusted to protect the publics interest. The countries and governments that are in charge of them have instigated many changes, such as privatization of government-owned companies, deregulation, reregulation and new regulations in industries. Aging populations and the associated pension time bombs that will follow have directed business into the unfavorable situation known as the market crisis. In a sustainable world, businesses must be able to control themselves if
they wish to control their markets. They must work to improve the conditions in which they operate and the rules that govern their own houses. They must work to improve the conditions in which their market exist if they wish to control these markets. All of these conditions have gotten out of control. Like so many governments, businesses have gotten big. They have become leviathan in size. Like obese persons not in control of their weight, these big organizations have lost control of themselves. Their only concern seems to be to grow bigger, when, in fact, they should be concerned with how to sustain their health and maintain workability in their environment. Their enormous size dictates that they establish bureaus, and bureaucracy raises its ugly head. Bureaucracy has been described as a waste of time. Bureaucracy does not improve, but hinders good operational sustainability. It is the red tape that slows everything down and leads to crisis and eventually chaos. For example, when a Wal-Mart moves into a small community, many of the small businesses that operate in that community go out of business simply because they cannot compete against the giant. The small business owners, who were employers, now must become employees of some other business. Their former employees are out of work. In many cases, these former small business owners are forced into lower income categories, with wages instead of profits. Has the giant improved the quality of life in the community? All of these happenings have brought corporate governance into focus. Sustainability of businesses and the markets they serve is currently the top corporate subject under discussion in all of industry and in global communities. The welfare of the entire corporate system is affected by these matters. The lack of corporate governance and its negative effects directly relate to the loss of public benefits. Bad governance, therefore, can affect the entire economy and the societies that depend on their healthy economies. Corporate governance has now become one of the most important
issues in the reconstruction of good business practices and ethics. It is a corporate prerequisite. Good governance will ensure that corporations have access to the broadest base of financial facilities available, cheaper capital and cash flow, the lifeblood of business. Investors look at good governance as a way of enhancing corporate value, the stakeholders value. Good governance means good and fair business, which translates to investor confidence and the publics trust and willingness to support businesses in general. Accountability, as is related to a corporation, is usually thought of as a matter that should be taken for granted. It is always supposed to be present in a business. Corporations, stakeholders or investors, and the public must have trust in each other. This is absolutely necessary if our economic system is to be sustained. In this view, the relationship between the corporation and the stakeholder or investors goes further than that, because accountability exists in a direct legal relationship. However, the corporate relationship between the public, the consumers, and the corporations they support through their purchases is a matter of personal trust, where the legal relationship does not exist, other than in the case of deceit or fraud. Beneficiaries, trustees, investment managers, boards of directors, executive managers, senior managers, and managers all have an interconnected relationship within the reporting structure of the corporation. These relationships provide for the establishment of rules and procedures for making decisions on corporate affairs. By establishing these relationships, the responsible parties are able to provide for the corporate structure through which objectives are set and met, and the means for monitoring performance is put into place. Corporate governance is primarily about leadership. Those in charge must set the example for all others. Good and correct business decisions depend on the leaderships knowing what is right and wrong, not only in matters of efficiency, dependability, and the ability to identify financial opportunities, but also in judgment, showing good judgment in the decisions they make regarding opportunities and their responsibility and
the accountability that goes along with it. In this, the corporate entity must be transparent. The public must be able to clearly see past the walls of the building and into the integrity of the corporation itself. All organizations have a system of governance, the rules by which the corporation operates, how people interact with each other and the mechanism of decision-making. It is through the choice of leadership that the rules of good governance are made. These rules reflect the aims of the organization, its size, and the industry sector in which it will operate, the legal and social structures that exist in the local environments where the company is located and operates. Corporate governance differs from company to company, but all companies must adhere to the basics of honesty and integrity and good business practices if they wish to survive. Corporations not only have the responsibility of governing themselves, but they are also responsible for directing the public toward consumer responsibility. Companies do this by the way they deal with the public and the products that they produce for consumption by the public. Recognition Brand evaluation and recognition identify what the public wants and how corporations should use the publics demand for their products to stimulate the publics behavior or spending patterns in such a way that healthy respects for environmental or sustainable needs of our planet are the results. This thought requires that business people and companies and corporations understand not only what is good for the planet but plan their production in such a way that the public will recognize the benefits of renewable and recyclable consumer items. One sure way to get the publics attention is to point out the cost savings generated by limitations on waste. When items are carelessly discarded, they are left to nature to complete the job of biodegradation. This is the conversion of an item over long periods of time back into the raw materials found in nature, back into the raw materials that are required to produce more products, which must otherwise be acquired from virgin
sources. However, when items are purposely recycled, portions of new product may contain percentages of recycled materials along with virgin materials, thus reducing not only the amount of waste but also the amount of virgin materials needed to produce new items. Other items that do not require virgin materials may also be produced from these recycled materials, as plastics and paper products are routinely remanufactured using recycled materials into new items that do not warrant raw materials. In many parts of the world, the public has already been indoctrinated in methods of recycling items, such as metals, aluminum cans, glass and plastic bottles, newspapers and cardboard items. Even the disposal and recycling of hazardous chemical, solvents and oils has been shown to reduce pollution. The potential treatment of plastic housings on consumer electronic products and plastic packaging is another recycling effort. Even the conscious efforts of recycling household biodegradable garbage, through the process of composting, back into a high nutrient compost and fertilizers used to grow still further human and animal foodstuffs is gaining wide recognition. Using the recognizable recycled materials symbol to make the public aware that the manufacture is conscious of the value of recycling and takes pride in participation of these worthwhile programs conveys a message to consumers of the responsible practices of the corporations themselves. This is good for the reputation of the corporation. In the highly competitive world of product sales, it is advantageous to promote the positive activities of a corporation. It is seen to be a conscious move on the part of these manufacturers to demonstrate the value of the promotion of their sustainable activities and efforts. This is one of the reasons for their public relations efforts. Modern man has developed a deplorable habit of purchasing, using, and discarding, consumer items at an alarming rate. In many cases the reason for change is nothing more than the desire for a change in color. The number of disposable products available within our society is staggering. Although it the right of any person to pursue happiness,
responsible behavior is a necessity in this day and age, not to mention the negative consequences of indiscriminate waste and the related cost incurred by the practice. Corporations stand as guiding lights in a world striving for prosperity. These houses of entrepreneurial success are admired by consumers at large and have the ability and tendency to influence people. Their activities are emulated and copied by the general public that desires a better life and works hard to grow and prosper. It is a fact that corporations have a responsibility to their customers, customers being the corporations bread and butter. Corporations must encourage responsible behavior. Man is, for the most part, a moral animal. As a species, we have developed a standard of moral consciousness governed by a code of moral ethics. Corporations, the creators of values and valuables desired by consumers, are in the position to demonstrate to the general public what is good in this world. Political entities produce nothing of value save their attempts at the maintenance of law and order. It is up to the value producers, the businesses of the world, which for the most part are respected by the public, to lead the way to more responsible behavioral patterns in regard to the uses and abuses prevalent in consumer habits and traits. By and large, successful corporations and businesses practice good business ethics; otherwise, they would not be profitable. Consumers would shun their products and their brand names. Success in business is the essence of profitability. The desire to make money, the singular activity of business, is to produce items of value of which the public shows its appreciation by purchasing repetitively. Waste causes business to lose profits. Corporations that have good, sound development and production methods actively pursue the limitation of waste. It stands to reason that what is good for the value producer is also good for the value consumer. Corporations that have developed good business practices based on their
corporate strategies for the generation of profits have in effect created outlines or blueprints of morally acceptable standards of ethics in business, ethics in the production of values, ethics in the making of profit. GOOD ETHICS MAKE GOOD PROFITS. This policy of good ethics in business does not, however, lower the risk in any specific situation. Consumers, the people who appreciate and purchase the products produced by businesses and corporations, also live by standards, regardless of their means or their ability to live within their means. It is safe to believe that these consumers have a high regard for value; otherwise, why would businesses strive to produce the best quality products they can produce? It is illogical to believe that the common man is desirous of acquiring items of lesser value than items of higher value available to them, providing they can afford the higher value. In fact, this obviously logical process of selection of products of the highest value is the basis of corporate competition. P=VZC All businesses, at least the successful ones, make conscious efforts to produce their products to highly exacting standards and for the least cost, to be presented for sale to the public. There are, however, exceptions to the rule. What about China? They produce products for a lower price. Not high quality, but a product adequate for the consumer at a quality price. As the public in general will take the time to evaluate items they intend to purchase, corporations have the unique opportunity to influence this sector of the population. They can make the public aware of the morally acceptable practice of limitation of waste. As the old saying goes, Take care of your possessions and you will possess them longer. What about the items that are made for disposable purposes? Diane Taren. One of the newer practices in the auto industry is to refurbish an automobile that has been traded-in for a new car, and to certify the
previously owned vehicle (they used to be called used cars) as road worthy, thus generating consumer confidence in the selection of a vehicle of value. Not all car parts are made to last This will keep the consumer having to buy spare parts that break down. Just because a part is needed, it doesnt mean you have to buy a new car. Thus, creating purchase after purchase markets. Spare part business is big business. Diane Taren. The customers perceived value of a car that has been reconditioned by the original manufacturer or a qualified auto sales corporation is, in many cases, higher than a vehicle to be purchased from a private party. The manufacturer and the auto sales corporation have a stake in their reputation; whereas the private party is only interested in selling the car for an acceptable price. Private parties do not give warranties. The odds of a buyer purchasing more than one vehicle from the same private party over the course of a lifetime are not high, whereas a satisfied customer of an automobile manufacturer or auto sales corporation is likely to return for an additional purchase or possibly provide positive testimony to their peers as to the value of their purchase, hence, providing positive reassurance to potential customers. In life, people are driven to sustain their life. Any alternative path is futile. The pursuit of destruction is the pursuit of death. Logically, we all choose life over death, and we tend to choose products of higher value than products of lesser value. Life is a never-ending struggle to acquire value, and corporations are in the business of producing items of value that lessen the struggle of life. Convenience products that provide pleasure or at least reduce pain are big business. The pharmaceutical industry is tasked with the job of developing and producing medicines, salves, powders, ointments, etc., designed to make us feel good, look good, prolong our life, and lessen our pain. The pharmaceutical giants spend billions of dollars annually to build up their public relations, maintain their reputations, and to make the buying
public aware of the goodness of their products. And the Chinese copy these products at a lesser cost and pass these savings on to the consumer. Good public relations will convince the consumer that paying more, you get more, which is not always the case. If the Chinese spent more on their public relations, then their products would cost us more too. What are we paying for? We pay extra to be talked into buying the more expensive item. Diane Taren. It is a logical step for these corporations to use their public relations efforts to sway the public to practice activities that sustain life and to make the public aware of dysfunctional or dangerous activities. Their motivation is to develop and foster public trust in their products and their corporate reputations. Satisfied customers are happy customers, and happy customers will return to purchase more products. The building and maintaining of public image is paramount to maintaining the publics trust. Without public trust, a corporation will find it difficult to generate growth in sales. It is the duty of the officers of a corporation to develop corporate strategies that promote sales growth and maintain corporate well-being. When they do this correctly, they generate customer satisfaction and loyalty. It is the responsibility of corporate public relations departments to educate the public and to reinforce the value of their products. If successful, the public relations departments will have prepared the public for the acceptance of future public relations or marketing campaigns on face value alone. Accepted by the public on the sheer association of the corporate name on the label are products like Johnson and Johnson, Budweiser, Marlboro. This is especially true when the nature of the product is perceived by the consumer as having negative effects on their health, like smoking cigarettes and drinking alcohol. Like Johnson and Johnson family care products, both Budweiser and Marlboro (Philip Morris) are titans of the consumer products industry and have been so for most of the twentieth century.
Marketing departments differ from sales departments in that marketing sells image and makes the public aware of the product, while the sales department physically sells the product. Marketing activities do not generate revenues; they generate product acceptance, and corporate good will. The ability of the marketing department to convince the public that their products will provide satisfaction is measured in the volume of sales realized. New and improved, better than before,these are verbal tools used to differentiate the latest version from the last. Microsoft Windows version 5.0, Windows 98, Windows 2000, Windows XP all have the advantage of being able to claim new features, better performance, more reliability. Responsibility Corporate responsibility is not limited only to providing the public with truthful financial reporting and carrying out management and production functions. It is also responsible for obeying the laws and obligations and regulations that are in place to serve the expectations of societies, whether or not these are explicit or implicit, written or just implied. When adhered to by organizations, these implied (or implicit) expectations of society, governments, and businesses enhance the relationship between the organization and the public at large. If the organizations maintain this balance between the explicit and implicit, between the written and the unwritten, then they will have created the best value for the people they serve. This governance practice proves that companies that do so are generally sustainable. They promote sustainability in the world, they are the best performers, and in the long run they are held in the highest esteem as visionary organizations. According to Sun Tzu, Tenet 1, Initial Estimations: Five factors exist: The Tao, Heaven, Earth, Generals, and Laws and Order.
The Tao (way) of survival or extinction must be observed. The control of personnel (people, troops, employees) in order to eliminate the fear within the individual must be instilled. When properly oriented or indoctrinated, when the people (the troops, the employees) are in accord with the way, they will not abandon the ruler (the president, the CEO, the owners) and/or the general (the manager, supervisor). They will live or die, for without reservation, they will not fear. Heaven is composed of the yin and yang, the night and day, the cold and hot, the female and male, the black and white, the evil and good, the limits of the seasons. Earth is the explicit of near and far, of low and high, the degree of difficulty or easiness, the restrictiveness or openness, the dangerous and the safe, the association with the fatal or survivable actions. The realities that make up your explicit environment are the basis for all conscious thought. In order to understand these environmental factors, one must not be subjective to nonrealities of whim, feelings, emotions, and/or the mystics view of what ought to be. Generals are the principles of and are associated with and contain the essence of wisdom, credibility, benevolence, courage, and strictness in discipline. In the code of objective moral conduct, one knows what is right and what is wrong. Good business people act on what is right and distance themselves from any other path. The laws and order are concerned with military or business organization and discipline, regulation, the way of command, and management of logistics. Laws and order constitute the basis for our actions. Any other path is an invitation of danger, destruction, and death. The commanders, generals, presidents, CEOs, managers, and superiors that understand and practice these five factors will be victorious, for those who do not practice these five factors victory will not be assured,
and most likely will not be victorious.
Good corporate governance is an art that governments should be made to practice.
Chapter 22
Risk
Part I The Risk We Take
According to Sun Tzu, Tenet 4, Disposition: If you evaluate you position or situation (strengths and weaknesses) and determine that you cannot, for certain, be victorious in a preemptive attack, you must assume a position of defense. When you assume a proper means of defense, you will be able to fend off any attackers; however, to assume the offensive position under the same circumstances you risk the possibility defeat. Risk, according to Websters, means the possibility of suffering harm or loss: danger; to expose to the possibility of loss or danger. There is risk in everything we do. It is the amount of risk that we should be concerned with. To some people, small risk is acceptable, but taking a high risk may lead to large loss. Therefore, an individual may demand large rewards for taking (assuming) a high risk, or it is not worth taking that big a risk because of the chance to reap a small reward or losing everything. Rewards in business do not happen automatically. We work hard to make our business successful, but we do not always succeed. That is the risk of being in business. Limiting the amount of risk that we are willing to take is an art. Hundreds of books discuss risk and the ways of limiting risk to an acceptable level. How much risk are we willing to take? In a gambling casino, some people risk small change on slot machines, while others place bets on high-stakes crap tables. The degree of risk is the amount of money the individual is willing to lose, the amount that is being is risked on the
wager, risking on the bet, the risk they are taking to win or lose. This is an all or nothing risk. Business is a gamble. Nobody says that success is guaranteed. We work hard and hopefully smart, and we take our chances. We accept the amount of risk that we have chosen, the potential losses of time and money. In more than one case, our health, sanity and life are also at stake. But being in business is not an all or nothing risk. Being in business is not a one-time gamble. Business owners assume different degrees of risk depending on the individual project they are working on. A good business can make money the day it is born, or it may take many years to show a profit. The risk taken by the business owner/operator is often limited by the amount of cash flow that is available to nurture and feed the business until it can take care of itself. Not having enough positive cash flow is riskier than having adequate cash flow and cash in reserve. At some point in time, the business owner will evaluate how well the business is doing and make a conscious decision concerning the business losing money and being worth the risk of injecting more money, "sending good money after bad," or selling the business for what it is worth, or cutting their losses and closing the business down. Remember, most businesses fail within the first five years. You may want to start some other business in the future. You may wish to save your money and not to waste it on a bad or losing business venture. In the case of a good business, one that is stretching and straining its production capacity to meet the high volume of orders it has received and that has a need to grow, the owner and/or stake-holder must decide how much more money is needed to grow the business, purchase new equipment, order more and more supplies, and hire new employees. How much money is the company willing to risk, to allow its production capabilities to grow and expand its marketing efforts? What is the possibility of entering new domestic markets and/or markets in foreign countries?
For instance, when gambling on the success of a business in the domestic market versus deciding to risk potential failure in a completely separate operation carried out in a different country, is the company willing to take a chance? Is risking potential loss of time and money and the danger of complete failure worth the potential of success? This must be weighed against the company seizing the opportunity to reap a large reward and making a huge profit. How much risk is acceptable? How big a risk are you willing to accept? All of this depends on the amount of the potential reward and your evaluation of the amount of acceptable risk you are willing to take. According to Sun Tzu, Tenet 5, Strategic Force: To excel at welfare one must seek victory through the proper deployment and strategic configuration of force and power. Relying solely on individual men is an unacceptable risk to be avoided at all costs. Only then may one select the men he chooses and employ them with proper strategic configuration of force, exploiting them with power.
Part II Certainty and Uncertainty

According to Sun Tzu, Tenet 10, Configurations of Terrain: The different configurations of terrain are an advantage to the army. The way (Tao) of the superior general is to investigate, analyze, and estimate the factors of terrain and the enemys strengths and weaknesses. The competent general must take control of victory. It is his responsibility to estimate ravines and defiles, to know the distant and the near, and to employ them in combat. These are the true test of a superior general. By these means, one may be certain of knowing victory; by ignoring them one can only know defeat. Risk, for the most part, seems to be very closely related to the degree of certainty or uncertainty that exists in any given situation, exactly what
you know or do not know in reference to what will happen in the future. High risk implies that there will be severe negative consequences associated to making the wrong choice or deciding to take a specific action that turns out badly. High uncertainty, on the other hand, is when there is a broad range of outcomes that may not be predicted. You just dont know what is going to happen, so your ability to make the correct choice is in doubt. The tools available for determining the degree or level of certainty/uncertainty of an event happening or not happening are limited. One factor in making this determination is time. The more time that passes from the point of having to or wanting to make a decision on taking action and actually making the decision limits the degree of uncertainty. The passage of time gives access to the possibility that additional factors will reveal themselves. The situation may become clearer or less uncertain with the passage of time. In many cases, when decisions absolutely must be made, the only choice is yes, we will, or no, we wont. This is an all or nothing decision, a now or never decision to proceed; therefore, it is very important that the level of certainty or uncertainty be determined to a very high degree or very high certainty, or a very low degree of uncertainty. What are the odds of an event happening or not happening? An event known to be absolute or nearly absolute in the certainty of its happening still holds a degree of uncertainty in the question of when will this event occur. What is the time frame of the occurrence? A new set of uncertainties has thus developed and created a different set of questions as to the time frame of an event taking place: sooner or later, very soon, not too soon, not too distant, a long time from now, never. These are questions of certainty and uncertainty, of sooner or later. The answers to these questions carry with them the ability to evaluate the amount of risk to be undertaken. As there is an element of risk in almost everything that we do in life, it is extremely important that we are able to determine the amount or level of
risk we are willing to accept. The level of risk may be low or high. Portions of uncertainty can be eliminated through investigation and finding out the answers to questions that are raised in relation to the questions at hand. However, some level of uncertainty will still exist. This is called residual uncertainty. As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality. Albert Einstein. Given any situation, what uncertainty remains unknown when all that can be known is known describes a level of certainty or uncertainty. What is knowable and what is unknowable describes the possible and impossible. If something can be known, but you do not posses the ability to find out what it is that is unknown, then a degree of uncertainty exists. If you are able, through further investigation, to reveal facts that shed additional light on the uncertainty, then it is required that you perform further investigations. If it is possible to categorize uncertainty into specific levels of residual uncertainty, then you are taking the scientific approach to limiting uncertainty. When you assign the level of uncertainty to specific categories, you are creating a guide to the process of decision making. The four levels of residual uncertainty may be categorized in this way: Level 1. Little is left to be known. It is almost certainly known if and when an event will occur. Level 2. A limited set of possibilities exist. It is absolutely certain that one of the limited sets of possibilities will occur within a limited time frame. Level 3. A limited range of possibilities exist. It is certain that an event within a range of possible events will occur at some time in
the foreseeable future. Level 4. Total ambiguity. Nothing is certain. An event may or may not occur. If an event does occur, it is impossible to gauge the time frame of the occurrence. The significant problems we face cannot be solved at the same level of thinking we were at when we created them. Albert Einstein. By limiting the amount of uncertainty in any given situation, you are limiting the amount of risk associated with that situation. By using scientific methods of calculating the amount of uncertainty associated with any particular event occurring or not occurring, and at what point in time will the event occur, if ever, you are using a guide in the process of determining the amount of risk. As the objective in any risk-related situation is to limit the amount of risk you are exposed to, here are some tools that can be used more effectively when associated to different levels of risk. Diversification in risk management spreads out your investments so that the overall performance in your total portfolio is positive. Not all your investments will go south; in other words, you dont put all of your eggs in one basket. In Level 1, there is little, if any, risk and virtually no uncertainty. There is no need for risk management. Note that diversification may be used for reasons other than risk management. Hedging helps to manage risk by selecting paired investments that offset each other. When one investment fails or goes negative, the offsetting investment will perform in a positive return on yield. Insurance is the process of risk management by which one is able to target investments for worst-case scenarios. When assessing risk, it is best to count your potential losses before you count your potential profits. Dont count your chickens before they hatch, dont bargain for fish that are still in the water. Dont depend on others to
put your interest first. We run the risk of governmental reprisal for writing this book. In our opinion, this is an acceptable risk in comparison to the value we have created. According to Sun Tzu, Tenet 5, Strategic Force/Strategic Business Strengths: To excel at warfare, one must seek victory through the strategic configuration of force and power. Relying solely on men is an unacceptable risk to be avoided at all costs. Only then may one select the men he chooses and employ proper strategic configuration of force and power.
The art in accepting risk is in knowing how much risk to take.

According to Sun Tzu, Tenet 5, Strategic Force: When one contemplates the engagement of battle, it is with the conventional, the orthodox, the common that one considers first; however, it is with the employment of the unconventional, the unorthodox, the uncommon that one achieves certain victory. THOUGHTS and QUOTATIONS: Self-confidence is the result of a successfully survived risk. Jack Gibb. This country was not built by men who relied on somebody else to take care of them. It was built by men who relied on themselves, who dared to shape their own lives, who had enough courage to blaze new trails -- enough confidence themselves to take the necessary risks. J. Ollie Edmunds.
Change. It has the power to uplift, to heal, to stimulate, surprise, open new doors, bring fresh experience and create excitement in life. Certainly it is worth the risk. Leo Buscaglia.
Chapter 23
Fatigue
According to Sun Tzu, Tenet 11, Nine Situations of Terrains: When in fertile lands, the armies must forage and plunder to acquire enough food and provisions to sustain their requirements of food and sustenance. The competent general nurtures his army. He does not allow them to become fatigued from overwork. In this way their Chi will be focused and their strengths will be maximized. Fatigue, according to Websters, means extreme weariness from prolonged exertion or stress. You expend energy when you work. The harder you work, the more energy is required. Like a battery in a car, when you have used up the stored energy, you must recharge. Both the mind and body require recharging after extended periods of energy use. Stress, according to Websters, means importance or emphasis; a force that tends to strain or deform; mental, emotional, or physical tension, strain, or distress. When the mind is under pressure, troubled by internal and/or external forces, we refer to this condition as stress. You become all stressed out.
The mind can become undercharged, weary from exertion, consumed with issues that demand attention. The mind becomes overworked and experiences fatigue. These stressful situations can sap our strength, both physically and mentally, and the mind is forced to work even harder to overcome exhaustion. The body can overcome fatigue caused by physical work simply by resting. A good meal, a hot bath, and a few hours sleep, and you are as good as new. But the mind, which is charged with issues that require immediate, constant, and/or continuing concentration, cannot just stop its thought processes. The mind continues to work when the body is at rest. Even during sleep, the mind will experience thoughts in the form of unfocused dreams. These dreams are actions of subconscious thought. When we awaken, it is back to work, and the mind is required to focus on specific matters of importance and struggle to resolve the issues at hand. As a long distance runner must learn to pace himself if he wishes to go the distance, the individual must learn to recognize the symptoms of mental fatigue and either take action to slow the pace of exertive thought or suffer a breakdown. You must learn to recognize this or you may experience a complete stoppage of productive mental activities. Correct the situation as soon as possible. An individual who is fatigued is not capable of operating at peak performance levels. A businessperson who is fatigued is prone to making mistakes. Making mistakes in business can result in loss of time and profits. Inaccuracies and oversights can result in having to do the same job more than once, which is twice the work for half the production. When you are overly tired, you have a tendency to fall. Our greatest glory is not in never falling, but in rising every time we fall. Confucius.
The art of overcoming fatigue is knowing yourself and recognizing when it is time to take a break and allow the
mind and body to rest and recharge.

According to Sun Tzu, Tenet 9, ManeuversSteering the Company/Corporation: Men who stand about resting on their weapons exhibit signs of hunger; thirsty men will drink before they assist in gathering water. If the opportunity to seize a potential advantage, treasure, or gain is ignored, the army is fatigued. THOUGHTS and QUOTATIONS: Men and nations behave wisely once they have exhausted all other alternatives. Abba Eban. When two people are under the influence of the most violent, most insane, most delusive, and most transient of passions, they are required to swear that they will remain in that excited, abnormal, and exhausting condition continuously until death do them part. George Bernard Shaw.
Chapter 24
Chaos or Complexity
According to Sun Tzu, Tenet 10, Configurations of Terrain: When the general (and higher officers) lack authority because of weakness, when orders are not distinct and clearly understood, when officers and troops are not kept busy with chores (duties), when rank and file are assembled in a manner of disarray, this is termed chaos. Chaos, according to Websters, means total disorder. Complex, according to Websters, means consisting of composite parts; intricate. Synonyms are complicated, elaborate, involved. People in business are involved in and participate in the activities required to make a profit. They have (hopefully) developed a plan of what to do and when and how to do it. Many times, the plans people make are elaborate, complicated, and complex, but at least they have a plan. Businesses and people doing business without a plan run the risk of becoming disordered. If left in a disordered state, they are inviting chaos. Both complexity and chaos will drive you crazy. A question that sometimes drives me hazy: am I or are the others crazy? Albert Einstein. Entropy, according to Websters, means a measure of a system's capacity to undergo spontaneous change; a measure of the disorder or randomness in a system. If left to random chance, an ordered system will degrade to disorder.
All things degrade over a period of time. Some metals will rust or oxidize, flowers will wilt, and without the maintenance of a cold environment the crystalline structure of ice will degrade and the ice will melt. If they are not maintained properly, it is the natural tendency of all things to degrade and fail. This natural tendency is measured in terms of entropy. As mountains will crumble into the sea, so will businesses cease to function properly and fail. Without proper care, without the maintenance of order, it is the nature of all things that exist in the real world in which we live to be reduced to chaos. Complicated or complex things require more care, more maintenance, than simple things. That is the nature of complexity. Some businesses are simple, requiring minimal care and maintenance. This is not the rule, but the exception. Businesses have many components that must be maintained, cared for, treated with respect, and serviced on a regular and timely basis. You need not be afraid of complications and complexity; just maintain a healthy respect for them. Chaos, however, is something to fear. A new business is like a new car. Change the oil every 3,000 miles or risk damaging the engine. An older car that has been driven and properly maintained by competent service people will still function properly. A seasoned business that has been run properly and serviced on a regular and timely basis will run properly. The system of business may look complicated or complex, but that is until you examine the individual components of the business one at a time. Like a newly born baby, a new motor in a car must be cared for in a special way. You cannot treat them too rough or they will react in a negative way. A motor that has been broken in properly will run better than when it was new. An automobile is a complicated piece of equipment with many complexities contained within the entire automotive system. If you examine its individual components one at a time, however, the system becomes understandable. All of the components may be examined on an individual basis and understood individually. If you take the time to investigate and examine the individual components of any system you will
discover simplicity. Not everyone knows the reason for or the function of every component of a car, but, for the most part, we understand that if we keep to a schedule of regular maintenance the vehicle will continue to run properly. A business that has been properly broken in and continually cared for will operate efficiently, better than when it was new, but it needs continuing proper care to grow and prosper. An individual who has taken the time to examine the individual components of a business will stand a better chance of understanding the system of business and be better qualified to maintain and care for the business properly. According to Sun Tzu, Tenet 5, Strategic ForceStrategic Business Strengths: Simulated confusion and chaos originate from clarity and control. The illusion of, or feigned display of, fear is generated from the possession of courage. The false appearance of weakness is a result of strength. Order and disorder are a matter of the interpretation of the numbers as they appear to the observer. Courage and fear are a matter concerned with the strategic configuration of power and strength. Strength and weakness are a matter concerned with the deployment of forces. Therefore, to enable ones forces to move the enemy (competitors), one must deploy in a configuration to which the enemy must respond in a predicted manner, one that offers tangible values the enemy requires, that the enemy must seize. Entice the enemy with treasure/profit and wait with the foundation of proper configuration of strategic force and power.
Chaos is art gone wild, running amok; complexity is only complicated art.
According to Sun Tzu, Tenet 5, Strategic Force: In a battle, the observers see chaos intermixed with specific actions taking place. There are confusion and turbulence and disorder intermingled with precise movements and well-timed maneuvers. There is a relationship
between the ordered and the disordered. The ordered use of chaos and discipline are circular in nature, like the yin and yang . They support each other, and when used in tandem correctly, they cannot be defeated. THOUGHTS and QUOTATIONS: Perfection of means and confusion of ends seem to characterize our age. Albert Einstein. I have deep faith that the principle of the universe will be beautiful and simple. Albert Einstein.
ACT IV DECISIONS
Chapter 25
Wealth
Part I What It Is
Wealth, according to Websters, means abundance of riches, resources, or valuable possessions; an abundant amount <wealth of information; all goods, property, and resources having monetary value. Wealthy, according to Websters, means having much wealth: affluent; richly supplied: abundant. Rich, according to Websters, means having great wealth; having great value or abundance; magnificent: luxurious; abounding; extremely productive. Money, according to Websters, means something, as paper or metal currency that is officially established as being exchangeable for goods and services; currency officially issued by a government; wealth considered in terms of its monetary value. Money is a tool. It is used by persons or groups to help accomplish a given task, reach certain goals, and measure a value. It is used to measure the value of a given product or service. It is used to measure the degree of profit or loss incurred during any given transaction or series of transactions. In many cases, the act of acquiring money is the desired prime goal of people, groups, corporations, organizations, etc. The actions of people in the use of leverage in relation to physical or mental work may facilitate a gain or profit; this is their ability to make money. Many people seem to have the illusion that working hard rather than working smart will generate the kind of money necessary to provide the
type of comfort and security desired by all and possessed by the very few. For some, maybe this is true. Some may consider the wages or income that they receive as adequate. Truly smart people allow money to work for them. Having acquired any amount of money, it is possible to leverage that amount into a larger amount. One of the tools used by the people to make or acquire money is "the deal." It has been said the money is the root of all evil. This is as foolish a notion as saying an inanimate object such as a gun or a knife kills. The person using an invention for the purpose of accomplishing a given task is the act of using the leveraged power of the tool to achieve a desired goal regardless if the goal is considered good or evil. The real evil is unscrupulous people trying to take money away from you. I want money, that is what I want. The California Kid. Power, according to Websters, means the capacity or ability to do or accomplish something; a particular ability, capability, or skill; strength, force, or might; forceful impact: effectiveness; the authority of ability to control others; one having great authority or influence; physical force or energy; the measure rate of time at which work is done or energy is transferred; a large number or amount. The power of money (the tool) is derived from the use of leverage of the mind effectively putting the tool to work. Currency, according to Websters, means money in circulation as a medium of exchange; general use or acceptance. Money in the form of currency is exchangeable. For example, U.S. dollars can be exchanged for Japanese yen, British pounds, Eurodollars. In a wide range of currencies, the only difference is the value of each currency in relation to another. The value of each currency is in a constant state of flux. The values change second by second, minute by minute, around the globe as currency markets open and close. The currencies being traded start with an opening value when the market opens and trade all day until closing when the last
trade is made, hence, the closing value. As times are different around the world, when one market opens another is closing. If you are dealing in one market, the value of your holding may change overnight when you are not in a position to buy or sell. Buyers and sellers constantly monitor the floating values of currencies and make decisions to buy, sell, or hold their position in the market as the values fluctuate up and down. In terms of investment, this is liquid. It is cash. Although it is not cash in ones pocket, it is nevertheless cash. At any time during business hours, the owners of these currency-accounts may withdraw all or part of the monies from their accounts and use them for whatever purpose they wish. A simple telephone call, e-mail message, or other approved form of communication call to ones currency broker, and the account is adjusted as per instructions. Unlike real estate, or other less liquid assets, currency is usable immediately. Cash is king. Some currencies have little or no value, however, depending on the state of the economy in which that particular legal tender, the coin of the realm exists. It is governments that make a currency legal. They print paper currency and stamp or strike metal coins. For the most part coins, are not exchangeable across national boundaries, and paper currency must be exchanged at official or authorized exchange shops or banks. Corporations also print currency. American Express and Thomas Cooke produce travelers cheques. These financial instruments are quite useful because they are guaranteed against theft or loss and replaceable when verified with the issuing company. They are also quite liquid, in that they are acceptable the world over, but possibly not as well accepted as actual government currency in remote places. But they are certainly safer in places where the risk of theft is high and the inconvenience of replacing lost cash is great. Note that the value of these instruments is different from government issued currency. You are paying for the security. This type of currency was a wonderful invention for the inventor. If people purchase these cheques from the company and never spend them, the company has
made pure profit rather than just the service fee. Gold In the case of coins, gold is universally acceptable. Gold coins have a value that floats the same way the value of currency floats on the international market. What is the price of gold today? What will it be tomorrow? Gold comes in many sizes and shapes: British sovereigns, South African krugerands, Mexican pesos oros, American eagles. These coins are usually priced slightly higher than the price of bullion. There are also pure gold ingots, teals (this is the gold that jewelry is made from and is readily sold for the price of gold on any given day in certain areas of the world),) and tolas, notably, Chinese, Swiss, French, South African, and many others, which are salable or tradable on a daily basis for the price of gold in any particular place at any particular time. Because it does not fluctuate as rapidly as currencies or shares of stocks, gold is an excellent investment or vehicle in which to hold value. It does not degrade or tarnish. It maintains a luster and is so desirable that men and women will kill for it. However, it has been known to cause fever. Gold is an excellent hedge against inflation, as the value of gold rises with the cost of inflation. In time of war, the value of gold appreciates. Currencies may be regulated or devalued, but gold is gold is gold, regardless of which national government issued the gold or what form the gold is in. It is, however, regulated and transport-restricted based on what country you are in and to what country you are going. Gold is also very heavy, much heaver than paper currency. Certificates of gold are held on deposit in repositories of gold bullion. Gold is sold by the gram or by troy ounce), kilo, or ton. It is also sold by its purity, as pure gold (.999 or .9999). These percentages of purity are the standard by which pure gold is bought and sold. Gold is also widely used in jewelry. Is also very soft and can be bent and its shape readily changed. It can be melted down and cast into different shapes. It can be mixed with other metals to change its color or
malleability. This is where we get into the karat, which refers to the purity of the gold. Twenty-four karat gold is pure gold, 12 K is fifty percent, 18 K is 75% pure. Remember the Golden Rule: He that has the Gold makes the Rules. The California Kid. Jewelry gold is usually 14 K, 18 K, 22 K, or 24 K, depending what type of jewelry setting it is to be made into. In order to achieve these karat values, pure gold is melted into liquid form and mixed with other metals, usually copper, silver, or platinum, to change the color (shades red to white) or malleability (to give the soft gold more stiffness or strength). Thanks to the value added in workmanship, or other added components such as gemstones, gold jewelry may be worth more than the same weight or mass of pure gold. The real secret of gold is how do you get your hands on it and keep it. As Ian Flemings master spy, James Bonds, arch villain, Goldfinger, put it: I love only gold.
Money is a tool, and the art in money is in knowing when, where, and how to use it, but, most importantly, how to keep it.
According to Sun Tzu, Tenet 7, Combat: In order to be maintained in true moral and spirit, troops the army of the masses must be allowed to profit from their actions. Therefore, when one conquers then plunders, the troops must be allowed to share in the profits. The wealth is now possessed by the victorious.
Part II Cash Flow

Cash flow is the regular and timely passage of money through an organization or individual's possession. It is certainly the number one concern in any business, as operating expenses, such as purchases, salaries and wages, utilities, insurance, etc., must be paid on time. Therefore, beneficial cash flow is extremely important to a business. Two types of cash flow exist: positive and negative. Positive cash flow comes in and negative cash flow goes out. Without positive cash flow, a business cannot operate; with an excess of negative cash flow, a business will go broke. Whether you need daily, weekly, or monthly cash flow depends on the nature of your situation and of your business. The nature and structure of the business dictate the needs of the business. The donut shop makes donuts all night long and is prepared for early sales to the early risers, people going to work in the early morning. The coffee is hot and the presentation of the different shapes, colors, and flavors of the donuts make for a difficult choice for the hungry customer. By the end of the morning, most of the donuts have been sold. Transactions have been completed and money exchanged. This is cash flow. The donut maker will go to the food service supply store and buy more supplies: flour, sugar, jelly filling, napkins, cups, spoons, etc. The money he is spending becomes the cash flow of the food service supply store, which, in turn, will order more supplies from the wholesale distributor that services the supply store. The distributor now also has cash flow. Profits are made and expenses are paid. Positive cash flow is as essential to business as blood flow is to the body. Whatever an individual must do to maintain positive cash flow must be done. Individuals and businesses without positive cash flow cannot and do not survive. In the case of some businesses they must borrow. In the case of some individuals they revert to the acceptance of charity and are reduced to begging.
It is not uncommon for the owners of new businesses to hold one or more jobs to supplement their new businesss cash flow. They finance their growing business with the money they make from working as an employee of some other company and work at their own business in their spare time until the business is healthy enough to support itself (pay for all expenses: rent, employee wages, supplies, utilities, etc.). At some point in time, if the business has grown and is successful, the owner of the business may decide to quit his job and devote more time to running the business, especially if the business is making more money than the job. People have a need for cash flow in all aspects of their lives. In addition to positive and negative cash flow, two other types of cash flow exist, one-off cash flow and residual cash flow. One-off cash flow is cash that you work for and are paid for, on a onetime basis. Your job pays you for the number of hours you work. Work for one week, that is, and get paid for one weeks work. Buy a house and live in it for two years and sell it for a profit. Purchase an older car and fix it up and sell it for a profit. Buy wholesale goods and sell them for retail prices. These are one-off investments. In your job, you invested your time and were paid. You were paid one time for the hours you invested. If you bought a house and paid your mortgage for two years and (hopefully) the property value went up, then you sold it, you made profit on the appreciated value of the property, minus the down payment, mortgage payments, and maintenance. When you invested your money in a classic automobile that was in distress and refurbished it and sold it, you made a profit on the resale of a desirable, beautiful classic automobile. Residual cash flow is cash flow that happens when you acquire the rights to continually collect monies from your acquisitions. Ownership of the investment is not relinquished. Shares of stock that pay dividends allow you to realize cash flow while maintaining your principle investment. Owning rental property, such as an apartment building or warehouse, allows you to collect monthly rents while the real property investment is
able to appreciate over the long term. Purchase of a recreational vehicle, such as a motor home that you rent out to vacationers, can be rented over and over again, and you can still use it whenever you wish. Ownership of intellectual property rights, such as patents on inventions and copyrights on books and music, will pay royalties. These are the vehicles of residual cash flow. Also remember that some investments have negative cash flow. Take, for instance, your family home. Although it is necessary for your survival to have a place to live, and you live in your home, you will be required to pay the monthly mortgage. It will be necessary for you to have an alternative positive cash flow available to pay the monthly payments. In all of your actions, it is very important to realize which direction the cash will flowinto your pocket or out. Like blood flow through the body, positive cash flow through a business is required; however, it does not work properly if it is flowing in the wrong direction.
Maintaining a positive flow of cash is a real work of art.

THOUGHTS and QUOTATIONS: Wine maketh merry: but money answereth all things. Ecclesiastes 10:19. In its famous paradox, the equation of money and excrement, psychoanalysis becomes the first science to state what common sense and the poets have long known - that the essence of money is in its absolute worthlessness. Norman O. Brown. Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent. Be careful lest you let other people spend it for you. Carl Sandburg.
Wealth unused might as well not exist. Aesop.
Chapter 26
Knowledge
Part I Stupidity, Ignorance, and the Idiot
The first thing you have to realize about knowledge is that you are not born with any. The second thing is that the state of the absence of knowledge is known as ignorance. Ignore, according to Websters, means to pay no attention to: disregard. When you ignore your responsibility for learning, you maintain your position of ignorance. Facts do not cease to exist because they are ignored. Aldous Huxley. Ignorant, according to Websters, means lacking or displaying a lack of education or knowledge; not aware: uninformed. Ignorance is the noun of the adjective ignorant. Until you start to learn you are ignorant; after you start you are on the road to wisdom. The California Kid. Not understanding your customer's requests and not recognizing your customer's desires is IGNORANT. You must use your ability to effectively communicate with your customers, suppliers, associates, and peers. Your
ability to clarify a customer's request, a suppliers offer, an associates questions, or your peers impression of you or your business is an absolute necessity. You must exhibit an understanding of any situation or seek clarification yourself. Idiot, according to Websters, means a mentally deficient person with intelligence in the lowest measurable range; a stupid person. Word history: The development of the pejorative senses of idiot occurred in ancient Greek; although the meaning of a mentally deficient person is a more modern refinement. Greek idiots, the source of idiot, is derived from idios, private, and originally meant a private citizen in contrast to public official. It seems ironic that in todays world these roles have been reversed. The California Kid. It is better to have people believe you are an idiot than to open your mouth and remove all doubt. Stupid, according to Websters, means slow to understand: dull; showing or resulting from a lack of intelligence. If you do something for the first time and get it wrong, you have failed because you did not know the correct method of completing the task. You are guilty of ignorance. You were uninformed and needed to learn the correct method of completing the task. However, after you find out the right way to do something and still do it wrong, you are guilty of committing an act of stupidity. An idiot is ignorant to the fact that he is stupid. Diane Taren. Stupidity has no place in business, unless, of course you enjoy losing money, wasting your time, and displaying your foolishness to people who witness your idiocy. On the bright side, you might make a friend who likes simple-minded people. You should think about what you are doing and get
it right. Do the job the right way every time you do it, or at least learn from your mistakes, correct your methods and techniques, and get it right the next time you attempt to do something. Repeating your mistakes is sheer stupidity. Diane Taren. In business, we are expected to be aware of what we are doing. We are expected to show a level of intelligence commensurate with our position in the business. We are expected to be proficient in our work, competent in performing our duties. Our customers will expect to receive high-quality products and efficient service. They will expect timely deliveries and a sympathetic response to their needs and wants. It is the obligation of every businessperson to do his or her best to satisfy the customer. "The customer is always right." It may not be easy, but it is the right thing to do. Any businessperson who does not recognize these facts is stupid. According to Sun Tzu, Tenet 9, Maneuvers: Officers who exhibit a change in behavior toward the masses, from one of cruelty or brutality to that of fear, they are consumed with and have reached the pinnacle of stupidity. Stupid is as stupid does. Sane, according to Websters, means of sound mind; having or showing sound judgment: reasonable. Sanity is the noun to the adjective sane.
Hanging out with ignorant or stupid people will test your sanity. The California Kid. Insane, according to Websters, means afflicted with a serious mental disorder impairing a persons ability to function; typical of, used by, or for
the insane; very foolish or irrational: absurd. Synonyms: Batty, crazy, gaga, loony, lunatic, mad, nuts, screwy. Insanity is the noun to the adjective insane. Insanity: doing the same thing over and over again and expecting different results. Albert Einstein.
Ignorance is not understanding the art you are looking at; stupidity is not recognizing art when you are standing in the Louvre.
THOUGHTS and QUOTATIONS: When a person has lived properly and acted generously, he grasps the way things are. He is not dependent on attachments; he is free from anger and aversions; what he does becomes perfect action. The pureness of perfectly balanced action based on seeing the way things are--this is freedom and the ending of ignorance. Sutta Nipata. Only two things are infinite, the universe and human stupidity, and I'm not sure about the former. Albert Einstein. Only the wisest and stupidest of men never change. Confucius. With fame I become more and more stupid, which of course is a very common phenomenon. Albert Einstein.
Part II Acquisition of Knowledge

Know that it is better to have specific knowledge rather than general knowledge; the more that you know about a particular subject the better
you are prepared to conduct your affairs in regards to that particular subject. Acquire specific knowledge; work to acquire more than just general knowledge on any subject that you are interested in knowing more about. Business bestows larger rewards on those with more specific knowledge than those with only general knowledge; become an expert. Instinct, according to Websters, means the innate, complex, and normally adaptive aspect of animal behavior; a strong impulse or motivation; a natural talent: aptitude. The word instinct implies that some degree of knowledge has been acquired by the act of birth. This is a falsehood, as all knowledge is acquired after birth. We work to acquire knowledge just as we work to acquire anything of value. We all have gut feelings, feelings we just know are right even though there may be no evidence to support our feelings. These feelings are not instincts. They are conscious or unconscious formations of thought. Sometimes we dont know how we arrived at these thoughts, and we incorrectly refer to these thoughts as instincts, gut feelings, hunches, and whims. In many cases, our instincts or gut feelings are wrong. On the other hand, sometimes we get lucky. Most people believe in luck, but more so, we find that the harder and smarter we work the luckier we get. The California Kid. According to Sun Tzu, Tenet 7, Combat: Know your enemy. Know his disposition by the order of his formation. Do not engage well-ordered flags, do not attack formations that march with precision. A victorious army will control and adapt to the changes that occur over the passage of time. Know, according to Websters, means to perceive directly with the mind or senses; to believe to be true; to have understanding or experience of; to be subjected to; to recognize or be familiar with. Synonyms are apprehend, comprehend, fathom, grasp, understand.
To get to know a country, you must have direct contact with the earth. It's futile to gaze at the world through a car window. Albert Einstein. In order to do continually good business, you must absolutely know what you are doing. I want to know God's thoughts ... the rest are details. Albert Einstein. Comprehend, according to Websters, means to perceive or understand; to include: comprise. Comprehend this. Learn more, acquire more knowledge, understand everything about your business if you wish to succeed and become rich and wealthy. The California Kid. Comprehensible, according to Websters, means able to be understood. The most incomprehensible thing about the world is that it is comprehensible. Albert Einstein. Knowledge, according to Websters, means the fact or state of knowing; understanding acquired through experience; the total or range of what has been perceived or learned; education, erudition, instruction, learning, scholarship. Knowledge is a commodity that is bought and sold. It is extremely valuable and desired by all, except the fool. It has been said that a little knowledge is dangerous. This is quite true. It is much safer to have a lot of knowledge. Not knowing what you are doing can lead to serious
consequences. We know nothing at all. All our knowledge is but the knowledge of schoolchildren. The real nature of things we shall never know. Albert Einstein. Intellect, according to Websters, means the capacity for understanding and knowledge; the ability to think abstractly or profoundly; a person of notable intellect. Intellectuals solve problems; geniuses prevent them. Albert Einstein. Intelligence, according to Websters, means the capacity to learn and to solve problems and difficulties; superior mental powers; news: information; secret information, especially about an enemy; the gathering of this information. Any intelligent fool can make things bigger and more complex... It takes a touch of genius --- and a lot of courage to move in the opposite direction. Albert Einstein. Information, according to Websters, means the act of informing or state of being informed; facts learned, as about current or past events: data. Information bombardment is keeping you from gaining knowledge and money. You must learn what to eliminate, how to disregard any information that does not help you reach your goal. Just because you have access to information does not mean you have to spend all of your time trying to comprehend it all. Be selective in what you choose to absorb. Learn, according to Websters, means to acquire knowledge, understanding, or mastery (of) by study or experience; to memorize; to become informed of: discover. Word history: The adjective learned is the same word as the past participle of the verb learn. In Old English, learn
has always meant to gain knowledge, but in Middle English it also meant to teach, although this sense is no longer current in standard Modern English. In Middle English, the past participle learned has the sense taught, and it has survived as an adjective, especially with the meaning erudite. Learning, according to Websters, means knowledge and especially erudition. Learn from yesterday, live for today, hope for tomorrow. The important thing is to not stop questioning. Albert Einstein. Contrary to what some people will have you believe, people are animals. We are more intelligent than our furry, four-footed, winged, and scaly earthly co-inhabitants, but we are nonetheless animals. We are not born with countless generations of accumulated knowledge, the wisdom of the ages, stored in our genetic makeup, except maybe the act of sucking. Everything else, we must learn by our actions of consciously and unconsciously acquiring knowledge. For the most part, our number one learning tool is trial and error. We try something, and if it doesnt work as well as we expect, we modify our actions and try again. "Try, try, again. I think and think for months and years, ninety-nine times, the conclusion is false. The hundredth time I am right. Albert Einstein. Education, according to Websters, means the process of educating or of being educated; the knowledge obtained through learning; the field of teaching and learning. Get an education because in business you will need it. Be selective in how you educate yourself. You are capable of learning what you need to know and desire to learn. It is the mark of an educated mind to be able to entertain a thought without accepting it. Aristotle.
Curious, according to Websters, means eager to acquire knowledge; inquisitive: prying; strange: singular. Curiosity is the noun to the adjective curious. The important thing is not to stop questioning. Curiosity has its own reason for existing. Albert Einstein. Curiosity killed the cat, but you are not a cat. I am neither especially clever nor especially gifted. I am only very, very curious. Albert Einstein. Err (pronounced ER, not air), according to Websters, means to make a mistake; to sin. To err is human, to forgive is divine. Erring is not a desirable action; however, it serves to teach a lesson. All people learn by trial and error. When we do the wrong thing, we have failed to achieve success. We have failed to reach a goal, and in the act of failing we are able to observe the effects of our actions and correct them in subsequent attempts. In modern schools, we are taught to read and write. Academic skills are a good method of learning because they use both sides of the brain. The left side of the brain is largely verbal, whereas the right side works with images and feelings. Our capability of seeing, our visual perception, is controlled by the right half of our brain, and our ability to read out loud is controlled by the other half of our brain. When we write that visually acquired information on a piece of paper, we are using our brain's ability to recall stored information from our memory. Then we exert effort to use our motor skills to coordinate our hand movements. Throughout our lives, we continually learn. Passively, we gain knowledge by way of simple, unintended observations. We also acquire knowledge, actively, by way of our conscious efforts, by performing deliberate actions such as reading, recalling, and writing, and by our primary learning tool, trial and
error. Anyone who has never made a mistake has never tried anything new. Albert Einstein. Too many schools do not encourage trial and error, but attempt to have students acquire knowledge strictly by academic methods. This academic method restricts the students ability to learn. Students should be encouraged to try to do things. If they fail, they should be encouraged to try again, again, and again. We are all students, and we should be trying to learn something new every day. The acquisition of knowledge is a primary function of life. As individuals capable of conscious thought and capable of acting, we are free to use all of our collective knowledge to accomplish desired and/or undesired tasks. We are allowed to leverage our mental abilities. Or we can, if we wish, accept and go along with our instincts, our gut feelings, as our emotional whims. Alternatively, we can consciously use our accumulated and stored bank of knowledge to make a calculated decision to act. By using this conscious method, we will have exerted energy in the form of work, mental evaluation, and also leveraged by our actions of memory recall and conscious analysis. In the world of business, we accomplish our goals by way of conscious thinking and deliberate action rather than by way of acting upon our emotional feelings, even if we sometimes do get lucky. Some good advice is to use your acquired resources, your gained knowledge, rather than depending on your passive "knee-jerk" emotional response. Try to think about your intended actions. Don't just settle for "feeling" that your actions will be correct. Some organizations want you to feel. They want you to be passionate about your feelings. They want you to be emotionally charged into caring about political issues and charitable causes. These types of institutions don't make money. Business people want you to be aware of what you are doing in business. We want you to think!
An individual's natural talent, the basic desire to learn, is the art of one's ability to think for oneself.
Part III Experience

Experience, according to Websters, means something done, seen, or taken part in; the events lived through by an individual or group; participation or observation leading to knowledge or skill; the knowledge or skill acquired; to participate in personally. An individual or a group of individuals accumulates knowledge. You cannot learn for your friends; they must learn for themselves. You may teach your friends what you have learned, and they can teach you their acquired knowledge. But learning, the act of knowledge acquisition is an action taken by an individual. Life is full of experiences, some good and some bad, and some that fall somewhere in between. For the most part, experience is a good thing. Trial and error learning is based on experience. As we become more experienced, we become more capable of doing the "right thing" on our first attempt. We are not just trying to do something. We are actually doing it. Experience is not what happens to a man; it is what a man does with what happens to him. Aldous Huxley. The world of business is a classroom in which businesspeople are constantly learning new ways, methods, and techniques of doing business. We try to learn ways of creating products and services. We deliberately make a mental or physical observation, perform a conscious analysis, make efforts to generate a calculated set of options from which to choose. Then we make our decisions. We enact our decision-making process. Finally, we
take action based on the decisions we have made. If our actions do not result in the satisfactory completion of the task, we try again. Hopefully, we will have learned from our experience. These acts of learning are our collective experiences. Whether specifically in regard to performing an action, developing a new method or technique, acquiring a certain motor skill or a mental capability, we actively pursue experience. What we know and how we know it is based on our experience. We go out of our way to experience new things. We try different foods and drinks to experience new tastes. We try new forms of entertainment to experience the enjoyment. We travel to distant locations to experience new cultures. Life is a learning experience. Your experiences will serve you well. You are punished by failure and rewarded by success. Everyone has ideas and thoughts on how to do different things; I trust people that have experience more than those without it. The California Kid.
Go to a museum and experience the "art of ages."

According to Sun Tzu, Tenet 5, Strategic Force: The five notes of music may be fully heard; however, the scale of the combinations of these five notes can never be fully exhausted. The five colors may be fully seen; however, the spectrum of the combinations of these five can never be fully displayed. The five flavors may be fully tasted, but the variety of the combinations of these five can never be fully experienced.
Part IV Teaching
Kung Fu: the basic meaning of this term is mastery. In our attempts to gain valuable knowledge, we employ the trial and error method. We can also learn from others. In school we have teachers who have acquired and possess large amounts of accumulated knowledge that they may teach others. A teacher who has acquired a large amount of knowledge on one or many subjects is referred to as a "master." The student is an individual who wishes to possess a greater degree of knowledge on a particular subject and seeks the assistance of the master in order to acquire some or all of the master's accumulated knowledge. Sometimes a master is willing to teach, but the student is unwilling to learn, and sometimes the student is not sufficiently prepared to understand what the master has to teach. The relationship between a student and a master is a give and take situation. The master must be willing to give and the student must be willing to receive. After prolonged study of the master's teachings, the student will have learned, to some degree, the masters accumulated knowledge and skills. As often happens, at some point in time the student begins to acquire confidence in his own acquisition of knowledge, even to the point that the student exceeds the skills of the master. It is commendable that the student had the willingness to learn and dedication to work hard. Example isn't another way to teach, it is the only way to teach. Albert Einstein. The student can also become overconfident, and may come to believe that he or she has learned everything the master knows. An old story tells of the student challenging the master in a test of skills and knowledge. The student is extremely confident of his superior competence and engages the master, only to be bested by the master. The master, with a look of pride,
says to the student, "I am pleased that you have learned so very well. However, although I have taught you everything that you have come to know, I have not taught you everything that I know." You teach me baseball and I'll teach you relativity... No we must not; you will learn about relativity faster than I learn baseball. Albert Einstein.
The same relationship exists between the master and his or her own teacher, the original master. We are all students, regardless of the degree or the amount of accumulated knowledge that we currently possess. We learn something, or hopefully try to learn something every day of our lives. Teaching should be such that what is offered is perceived as a valuable gift and not as a hard duty. Albert Einstein. Some organizations and individuals attempt to create situations in which they install themselves in the position of the master and relegate the people under their control to be students to be taught a lesson. Be aware that a true master who actually does possess the wisdom of the ages and is willing to teach a student will never attempt to control his students by coercive means. True masters desire to convey knowledge to a student who is willing to learn.
The union of master and student is the art of giving and receiving.
According to Sun Tzu, Tenet 2, Action in War: Armies value being victorious. They do not value protracted battle campaigns. The general who possesses a profound understanding of warfare and the objectives of battle will rule his immediate world. He will
become the master of his own fate. He is the champion of the people and exulted hero of the nation. He is the ruler of a nations security and well being.
Part V Knowledge Management

The importance of knowledge management is best understood in the context of the performance of a business within its environment. Inkpen (1996) suggests (prophesizes), that A failure to create knowledge and manage it as a critical organizational asset may account for the declining performance of many well-established firms. This appears to be true, because in recent years knowledge has become a very important resource to the success of many organizations. Drucker (1993) argues that in todays environment knowledge is not just another resource alongside other resources. Toffler (1990) proclaims that knowledge is the source of the highest quality power and key to the power-shifts that lie ahead. Quinn (1992) agrees with Drucker and Toffler, noting that the economic and producing power of a modern organization lies more in its intellectual and service capabilities than in its hard assets. He states that the value of most products and services depends primarily on knowledgebased intangibles like technological know-how, intelligent product design, and personal creativity and innovation. We conclude that the world has entered into new era called the Knowledge Era. Tangible assets are things that you can see and touch. Intangible assets are the things that you cannot see and touch, but which still hold value that the company possesses, such as a workers ability, his dedication and sincerity, his knowledge. In order to become acclimated into this new era, we need to understand what is meant by knowledge. Wit and Meyer (1998) define knowledge as the whole of rules (know-how, know-what, know-where, know-when and know-why) that will help make sense of information. They have pointed
out examples of knowledge that organizations can posses such as market insight, competitive intelligence, technological expertise, and understanding of political and economic development. From this definition we can understand that knowledge is not information; as putting information together is useless if we do not know how to benefit from it; and be able to make the staff of an organization aware of the knowledge. Knowledge is divided by Nonaka and Takeuchi (1995) into two types: Explicit knowledge is a systematic formal language that can be expressed in words and numbers, stored in a computer, and shared throughout the organization. This knowledge can easily be transformed into procedures and policies. Tacit knowledge is the real knowledge, which is very personal and not visible or expressible. It is hard to formalize and difficult to share with others. This type of knowledge can be found in the individuals experience, values, and emotions. Nonaka and Takeuchi consider explicit knowledge to be only the tip of the iceberg. Nonaka and Takeuchi have also suggested that knowledge is created through four different modes: 1) Socialization, which involves conversion from tacit knowledge to tacit knowledge, 2) Externalization, which involves conversion from tacit knowledge to explicit knowledge, 3) Combination, which involves conversion from explicit knowledge to explicit knowledge, and 4) Internationalization, which involves conversion from explicit knowledge to tacit knowledge. The question is, how do we create knowledge? Hauschile, Licht and Stein (2001) argue, based on their research, that successful organizations reward employees for seeking, sharing and creating knowledge. They have come up with what they call knowledge pull. This factor encourages the desire among employees to tap into their organizations intellectual resources and establish clear goals that promote knowledge pull to
encourage other employees to use all available resources. They have found that granting financial and other incentives to reward employees who pull knowledge from inside and outside resources and who contribute their own knowledge to the corporation, has been successful. Senge (1990) introduced the learning organization. He argues that the learning organization has the capacity for both generative learning and adaptive learning as a sustainable source for competitive advantage. He suggests that managers must do the following in order to build a learning organization: 1) Adopt systems thinking 2) Encourage personal mastery of their own lives 3) Bring prevailing mental models to the surface and challenge them 4) Build a shared-vision 5) Facilitate team learning. A resource-based concept is another approach that encourages organizations to use their resources, such as financial, physical, and individual attributes, in order to enable them to compete in the changing environment. Proponents of this view, including Prahalad and Hamel (1990), focus on corporation-wide technologies and production skills to define the core competence. Stalk, Evan and Shulman (1992) focus on business processes in defining capabilities. This definition, as argued by Nonaka and Takeuchi, left us with an unclear distinction between core competence and capabilities. Having studied some theorists arguments and views of knowledge, information, and core competences, we will turn to knowledge creation and management as demonstrated by a large commercial bank operating in Bahrain. This bank has twenty-four branches and was licensed to operate in 1957. It has a large customer base that aspires to conduct their investments and financial transactions on the lines of the Bahrain monetary rules and regulations. The bank has approximately sixty-five employees in its main office and about a hundred employees working in its branches outside
Bahrain. These employees are composed of different nationalities and possess different kinds of experiences. An appraisal of these kinds of knowledge to determine if there is any evidence of this banks lack of strategic management of knowledge will tell us if Inkpens prophecy has come true. Please find Mckinzey 7-S framework for analyzing organizational factors such as: Structure, systems, style, staff, skills and strategy interact with each other in order to achieve shared values; and goals, has been implemented within this study. There are different levels of strategies, corporate strategy, which is developed by top management for the whole organization, includes purpose, vision and mission; the business strategy of the strategic business unit (SBU). While the strategy developed by senior management at the business divisions includes more specific visions and plans. Operational strategy is concerned with how to make resources, people and their skills effectively achieve the corporate and business level strategic goals. Johnson and Scholes (1999) identified strategy as the direction and scope of an organization over the long term which achieves advantage for the organization in a changing environment to meet the needs of the market and fulfill stakeholders expectations. Mintsbuerg (1994) argued that strategy could be any or all combinations of: Plan, the course of action, guidelines, direction into the future; Patterns that are consistent in behavior over time (realized strategy); Position is the determination of particular products within particular markets; Perspective, the organizations way of doing things, and the way the managers see themselves and the world around them. By looking at the banks strategy, top management identified the purpose of the bank, as to provide unique, Islamic banking products and
services. Their vision is to be a leading and a diversified international Islamic bank offering a wide range of quality products and services and forming strategic alliances for a competitive edge. Also, they identified their mission to be a premier, regional, Islamic bank dedicated to the economic and social development of its target markets, maximizing its clients and shareholder values, and focusing on the human resource developments in an environment of creativity and innovation. Both vision and mission were nicely written in the banks profile booklet, but top management did not adopt any long-term strategy to fulfill the stakeholders expectations, nor have they shown any sign as to why, after all these years, the bank is still not offering a wider range of quality products and services, has no strategic alliances, no high return for clients and shareholders, and neglects the development of human resources needed to create and innovate. This appears to be because the mission and the vision have been kept in the booklet, not shared with the employees, departments, and top management. They have not allocated the banks resources to come up with identified and shared goals. The importance of structure is to determine the divisions between line and staff employees, the degree and type of specialization, the span of control, the hierarchy of authority, and the sizes of the departments. Structure also defines the job of each person and to whom each person reports within the organization. Gregory and Ricky (1989) identify an organizations structure as a system of tasks and reporting and authority relationships within which the work of organization is done. It is the form and function of an organizations activities and how the parts of an organization fit together. The banks structure is still not well defined in terms of reporting responsibilities and relationships between departments and divisions. This makes departments and divisions conservative in terms of shared knowledge. The lack of coordination between the departments is one of the barriers that prevent sharing tacit knowledge, which is needed in a creative and innovative environment. Also, the bank is bureaucratically centralized
in its decision-making. This may work well when conditions are stable and routine, but it will not work when quick decisions are required in a fastmoving environment. Systems are processes and procedures used in an organization to achieve its goals. Systems are very important to the management of an organization to monitor and control performance. Some think that systems will prevent people from being creative, but without systems any organization will be in chaos. To this day, the bank has no written procedures, manuals, or documented codes to transform explicit knowledge to tacit knowledge or allow for the transfer of explicit knowledge to other members of the bank. Its staff is the most valuable resource an organization has. Therefore, most successful organizations concentrate on human resource development to attract, recruit, reward, and retain talent at all levels of the organization. They try to recruit the right people in the right place at the right time and to determine what type of knowledge they posses and what benefits will be reflected on the organization. The organization should describe the important categories of personnel. Unfortunately, this bank has suffered from recruiting inexperienced and untalented people who have been placed in the wrong positions. This has negatively affected creativity and innovation. The bank should be trying to build on the quality of knowledge it has imported from outside; however, over the years when qualified, experienced personnel left the bank, their knowledge and experience left with them and have not been replaced. Style focuses on the attitudes of top management and how they behave in achieving the organizations goals. Do they use a reward system to encourage employees to gain knowledge? Style is also about the culture of the organization, its behavior, values, and benefits, which shape the way people behave and the way things get done. The banks culture arises from the community in which it operates, in this case an Islamic community. The beliefs and attitudes of brotherhood
and forgiveness among employees and management are misused in the bank because Islamic rules provide for reward and punishment for certain behaviors. People must be rewarded for sharing their knowledge in and between departments and punished for not doing so. Because the existence of the bank is dependent on the continuous creation of knowledge, the banks culture needs to be shaped accordingly. Skills are the distinctive capabilities of key personal within the organization. Skills are the core competencies that make any organization successful and enable it to deliver competitive advantages in order to be distinct from its competitors. These skills should be clearly identified. When we look at the bank, we can easily recognize its core competence, which is its long experience in Islamic banking. This core competence was never successfully used and or recorded, let lone shared or transferred to new generations. To achieve successful interaction between the 7-S factors and gain shared value of subordinate goals, the bank must create and share both kinds of knowledge, explicit and tacit. Explicit knowledge should be stored in the banks process systems; tacit knowledge, which is stored in the employees brain and experience, must be allowed to flow freely. The bank can do so by adopting the unfreeze-change-refreeze approach, as developed by Lewin (1952). This approach makes the organization unlearn its existing strategy, allowing change and the institutionalization of the new strategy. The banks management should evaluate the importance of knowledge and protect this valuable resource to achieve competitive advantage. This would enable the bank to survive and successfully compete in the future and help it deal with situations and perform complex task and activities. Because the bank is suffering from bureaucratic-hierarchymanagement, it must adopt downsizing or de-layering to reduce the levels of hierarchy, and encourage team-working and sharing tacit knowledge among the members of the team. The banks core competence is providing Islamic banking services, which are difficult to imitate. This asset should
be retained and built upon. They may accomplish this by improving the decision-making management system, which will improve performance. The bank needs to create a desire for knowledge sharing within the staff. It should explain to them the importance of gaining and sharing updated knowledge to improve performance. It should explain how the bank will be badly affected if creating knowledge is neglected. Rewards may accomplish this task. The bank needs to create a knowledge culture. Knowledge should be made accessible to employees via internal procedures, manuals, video, and software, which represent explicit knowledge. This will help to bring employees together across functional hierarchies. Who should be involved in knowledge creation? Everyone in the organization should be a knowledge creator. With middle-up-down, Nonaka and Takeuchi put more responsibility on the middle manager. They argue that top management creates a vision from which middle managers can develop concepts that front-line employees can understand. Middle managers must try to solve the contradiction between what top management wants and what actually exists in the real world. Foote, Mation and Rudd (2001) argue whether appointing a chief knowledge officer (CKO) is a good idea to manage the creation of knowledge. They state that the CKOs success depends on two things. First is the ability of top management to agree about what it hopes to gain from managing knowledge and from creating a performance culture that raises the staffs demand for knowledge. Second is how well the CKO develops and executes a knowledge management agenda. With its bureaucratic hierarchy and with no knowledge creation culture, the bank would benefit by appointing a CKO. Adopting Nonaka and Takeuchis middle-up-down management process will be useful for this situation. In conclusion, creating knowledge and managing it are not easy tasks. What is required is a desire for change in the culture of people as well as the organization. Creating a database is not enough if we do not know how
to use it. Therefore, if the organization does not consider the creation and management of knowledge as its lifeblood, then Inkpens prophecy will be fulfilled.
In the Knowledge Era, we must practice smart art.

According to Sun Tzu, Tenet 11, Nine Situations of Terrains: The competent general is always capable of maintaining his composure, tranquility, and obscurity. He maintains his own discipline and stands upright at all times. He is a mystery to both officers and troops, controlling both eyes and ears of all. He keeps them totally ignorant and in the dark with regard to all affairs. He changes his management style and alters his strategies to prevent others from understanding or recognizing any pattern to his intentions.
Part VI Core Logic

Reason, according to Websters, means the motive or basis for an action, decision, feeling, or belief; an underlying cause or fact that gives logical justification; the ability or capacity for rational thought; mental balance; sanity; to use reason: think logically; talk or discuss logically; to decide or determine by logical thinking. Fact, according to Websters, means something put forth as objectively real; something objectively verified; something real, demonstrable existence: actuality. The great tragedy of science -- the slaying of a beautiful hypothesis by an ugly fact. Thomas Huxley. Logic, according to Websters, means the scientific study of the
principles of reasoning, especially of the method and validity of deductive reasoning; valid reasoning; a particular system or method of reasoning.
When you observe a good business you can see the logic, and the logical actions they perform; when you observe the actions of governments you wonder where the logic went. The California Kid. Core logic is the most basic logical thought and reasoning. It is simplicity to the highest degree of functionality. As business is the repository of all accumulated knowledge, businesses inherently attempt to create order out of chaos. Businesses and individuals strive for efficiency. They work hard to create better, faster, less expensive products and methods of production. Their methods of conducting their business are improved all the time. Core logic is perfection. At one time radios were made with vacuum tubes, to be later replaced by transistors. Today they are built on silicon chips; semi-conductor transistor technology allows pathways and connections on which electrons move at the speed of light. Efficiency has reached its perfection. Good businesses and good business people strive to achieve core-logic. The California Kid.
Logical art makes dollars and sense.

THOUGHTS and QUOTATIONS: Logic is the beginning of wisdom; not the end. Spock, Star Trek VI: The Final Frontier. When the solution is simple, God is answering. Albert Einstein. Everything should be made as simple as possible, but not simpler.
Albert Einstein. Make it simple then everyone will simply understand. Diane Taren.
Part VII Wisdom

According to Sun Tzu, Tenet 13, Using Spies: What facilitates enlightened rulers and wise and sagacious generals to move and conquer others, those that are able to transcend the masses, will do so through the acquisition of advanced knowledge. Wisdom, according to Websters, means insightful understanding of what is true, right, or enduring; native good judgment; the amassed learning of philosophers, scientists, and scholars. To be considered wise, one must not have mere intelligence but also good sense or common sense. If you wish to be considered truly wise in business, you must acquire the right kinds of knowledge. One of the most important types of knowledge you can possess is financial knowledge. Learn everything you can about financial instruments, financial transactions, operations, financial matters in general. This type of knowledge will not only help you to make more money and acquire more assets, but it will also help you keep them.
Wisdom is the art of truly understanding.
For the most part, I read only books that were written more than fifty years ago, some as many as 2,500 years ago. Watching TV and reading newspapers will not make you any money; they are useless and a waste of time, save for keeping up on the chaos. The California Kid. THOUGHTS and QUOTATIONS: All men by nature desire knowledge. Aristotle. We cannot learn without pain. Aristotle.
I see no wisdom in saving up indignation for a rainy day. Heywood Broun. Information isn't wisdom. Information isn't learning. If information were learning, you could be educated by memorizing the world almanac. If you did that, you wouldn't be educated. You'd be weird. David McCullough. By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest. Confucius. The wisdom of life consists in the elimination of nonessentials. Lin Yutang. Humility is the only true wisdom by which we prepare our minds for all the possible changes of life. George Arliss. Every now and again, take a good look at something not made with hands, a mountain, a star, the turn of a stream. There will come to you wisdom and patience and solace and, above all, the assurance that you
are not alone in the world. Sidney Lovett. The plainest sign of wisdom is a continual cheerfulness: her state is like that of things in the regions above the moon, always clear and serene. Michel de Montaigne. A chief event of life is the day in which we have encountered a mind that startled us. Ralph Waldo Emerson. The road must be trod, but it will be very hard. And neither strength nor wisdom will carry us far upon it. This quest may be attempted by the weak with as much hope as the strong. Yet such is oft the course of deeds that move the wheels of the world: small hands do them because they must, while the eyes of the great are elsewhere. J.R.R. Tolkien, The Fellowship of the Ring. We judge of man's wisdom by his hope. Ralph Waldo Emerson. Wisdom is not a product of schooling but of the life-long attempt to acquire it. Albert Einstein. It takes humility to seek feedback. It takes wisdom to understand it, analyze it, and appropriately act on it. Stephen R. Covey, First Things First. Age doesn't always bring wisdom. Sometimes age comes alone. Unknown. We thought, because we had power, we had wisdom. Stephen Vincent Benet. One's first step in wisdom is to question everything and one's last is
to come to terms with everything. Georg Christoph Lichtenberg. To act with common sense according to the moment, is the best wisdom I know and the best philosophy is to do one's duties, take the world as it comes submit respectfully to one's lot; bless the goodness that has given us so much happiness with it, whatever it is; and despise affectation. Horace Walpole. A man doesn't begin to attain wisdom until he recognizes that he is no longer indispensable. Admiral Richard E. Byrd. The biggest difficulty with mankind today is that our knowledge has increased so much faster than our wisdom. Frank Whitmore. Women and cats will do as they please, and men and dogs should relax and get used to the idea. Robert A. Heinlein. More wisdom is latent in things as they are than in all the words men use. Antoine de Saint-Exupery. Wisdom is the supreme part of happiness. Sophocles. Let us rise up and be thankful, for if we didn't learn a lot today, at least we learned a little, and if we didn't learn a little, at least we didn't get sick, and if we got sick, at least we didn't die; so, let us all be thankful. The Buddha. According to Sun Tzu, Tenet 6, Weakness of Vacuity and Strength of Substance: You must accurately analyze the enemy to know the estimations of gain and loss. You must force the enemy to move so you may know the patterns of his movements and stoppage. You must determine the disposition of the enemy to know what terrain is tenable and what terrain is
fatal. You must explore, investigate the enemy to know the locations of his excesses and insufficiencies. When the disposition of the enemy is known, we may impose our strengths, our measures upon him at the time and location of our choosing to insure victory. The enemy will not be able to understand our choices and methods of achieving success. The enemy can know our disposition by which we accomplish victory, but he cannot know the configuration by which we direct control of the victory. According to Sun Tzu, Tenet 7. Combat (Business Actions): Seek to control your enemy by the knowledge you possess. Avoid being controlled by the knowledge you can possess; therefore, do not charge up mountains, do not attack well defended hill formations, be wary of retreats, be they just a ruse. Highly activated troops should be avoided. Profits left for bait should not entice the well-ordered army. Actual retreat by the enemy should be allowed to proceed, save when they become desperate and fight to the death with all their power under heaven. These are the military strategies of the victorious. A general who does not know the plans of the enemy cannot prepare alliances in advance. One who is not knowledgeable of the terrain, the mountains and forests, valleys and ravines, rivers and wetlands cannot effectively maneuver the army. In this case, it is necessary to employ the services of a local guide to gain advantage of the terrain. The general (CEO, business owner, etc.) who does not know the value of these factors is not qualified, nor is he in a position to command the army of a dominator, a hegemonist, a true ruler.
Chapter 27
Conventional and Unconventional

Conventional, according to Websters, means conforming to established practice or custom; ordinary: commonplace. Conventional and unconventional, orthodox and unorthodox thought stand side by side in the world of business. Conventional or basic business practices are self-evident. Everyone is exposed to normal business practices every day. We go to the store and make purchases, we have our cars washed and pay an individual or company for the service rendered. Also essential in the world of business are the unconventional actions of business people, unorthodox actions that can make any business unique and special. Developing a new product, new package designs, or some new idea that makes a product stand out in a crowd are examples of the unorthodox. The superior man bends his attention to what is radical. That being established, all practical courses naturally grow up. Confucius. A new marketing strategy or different sales techniques or special packaging that catches the customers eyethese are examples of unconventional thinking. People are different from each other. Everyone has an individual personality. We all have special qualities that make us unique individuals. We use our individuality when we develop new ideas
from what we see all around us. We all see the same things in the world around us, but through our individual perceptions we develop different trains of thought, different concepts of what we perceive. You may lead or you may follow, as long as you stay out of my way, because I am coming through on my own chosen path. The California Kid. Being conventional is following the crowd, taking the easy route. Business is not easy; if it were, everyone would be in business. Being unconventional is what makes a great business. At one time, the way McDonalds's hamburgers were made and sold was a new concept. Now it is the norm. All fast-food outlets saw what McDonalds's was doing and how well they were succeeding. McDonald's techniques and methods were copied and reproduced. The unconventional way of making hamburgers (the production-line method) became the most conventional fast-food process that the world has ever known. All great advances came about by means of unconventional interpretations of traditional perceptions and traditional values. Were Henry Ford and his method of building automobiles unconventional? You bet they were. Are his methods the conventional standard of all industry today? Absolutely. I believe in standardizing automobiles, not human beings. Albert Einstein. Walt Disney called the work that his animators performed imagineering. Imagination is the source of unconventional thought; it is the source of unorthodox thinking. When you think, try to be different, try to be imaginative. Imagination is better than knowledge. Albert Einstein.
According to Sun Tzu, Tenet 5, Strategic Force: It is the nature of knowing both the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon that allows an army (company/corporation) to enter into the military (business) engagement of warfare (business projects) and withstand the enemy (competition) without being defeated. When understanding these factors, the army that employees the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon is like a stone thrown against an egg. In this context, we are dealing with the substantial and the vacuous, the considerable versus the emptiness (the nonexistent, the desolate). When one contemplates the engagement of battle, it is with the conventional, the orthodox, that one considers first; however, it is with the employment of the unconventional, the unorthodox, that one achieves certain victory. Those who employ the unconventional, the unorthodox, with a very high degree of efficiency are inexhaustible in their strengths. They are as limitless as the waters of greatest rivers. As the sun and moon are fixed in a perpetual cycle of day and night, as the seasons are in a cycle of constant repetition, the cycle of birth, life, death, and rebirth. Such is the limitlessness of the tandem use of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon. The five notes of music may be fully heard; however, the scale of the combinations of these five notes can never be fully exhausted. The five colors may be fully seen; however, the spectrum of the combinations of these five can never be fully displayed. The five flavors may be fully tasted, but the variety of the combinations of these five can never be fully experienced. In warfare (business), the strategic configurations of power and strength do not outnumber the potential combinations of the conventional and the unconventional, the orthodox and the unorthodox, the common and
the uncommon. The nature of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon is such as one produces the other in a never-ending cycle. Who can ever perceive all of the combinations possible?
Unconventional art becomes conventional over time. The highest valued "works of art" are conventional, unconventional, and at times controversial.
THOUGHTS and QUOTATIONS: Doing something in an unconventional manner, we are suddenly looked at as being unique. Diane Taren. Conformity is the jailer of freedom and the enemy of growth. John Fitzgerald Kennedy. I do not find in orthodox Christianity one redeeming feature. Thomas Jefferson. Friends have all things in common. Plato. Stupidity. With fame I become more and more stupid, which of course is a very common phenomenon. Albert Einstein. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something. Franklin D. Roosevelt. Common sense and a sense of humor are the same thing, moving at different speeds. A sense of humor is just common sense, dancing. Clive James.
Falling in love consists merely in uncorking the imagination and bottling the common sense. Helen Rowland. Happiness for the average person may be said to flow largely from common sense -- adapting one-self to circumstancesand a sense of humor. --Beatrice Lillie. Le sens commun n'est pas si commun (common sense is not so common). Voltaire (Francois-Marie Arouet). Not all of us have to possess earthshaking talent Just common sense and love will do. Myrtle Auvil. Common sense is the measure of the possible; it is composed of experience and prevision; it is calculation applied to life. HenriFrederic Amiel. Life is not a static thing. The only people who do not change their minds are incompetents in asylums, and those in cemeteries. Everett McKinley Dirksen. [W]e must believe in ourselves or no one else will believe in us; we must match our aspirations with the competence, courage and determination to succeed. Rosalyn Sussman Yalow. A king, realizing his incompetence, can either delegate or abdicate his duties. A father can do neither. Marlene Dietrich. Skill and confidence are an unconquered army. George Herbert. You gain strength, experience and confidence by every experience where you really stop to look fear in the face. You must do the thing you
cannot do. Eleanor Roosevelt.
Chapter 28
Leverage
Leverage, according to Websters, means the power to act effectively. It is necessary to consider that most people will never become rich because they have chosen not to become rich. They have chosen to do things that will never make them rich. They have chosen not to take advantage of opportunities that lend themselves to the acquisition of large amounts of value. They do not use leverage to assist in the acquisition of large amounts of value. As leverage is power, using power effectively is adding the force of leverage to one's actions. When a child is born, it is dependent on the care of another to develop. When the mind of the child develops, the child naturally begins to use the power of the mind to control the actions of its body. This is leverage of the mind. According to Sun Tzu, Tenet 5, Strategic Force: When considering of the strategic configuration of power and force, we consider the sudden release of a great flood that carries large stones along its rushing currents as is visible to the observer. A threat or the threat of the use of force or of power is the constraint, the illustration of force and power. As a bird of prey dives to catch its prey, the immediate action of catching and crushing the prey in its beak and talons is the release of the power affecting the kill, the action of release of the constraint, the timing of the release.
In incremental steps the child learns to sit up, stand up, and walk. The power of the mind has been leveraged to assist the body to act more effectively. The same is true when a person learns to run, propelling the body at a higher rate of travel than walking. The use of tools to assists a person to move faster is also the act of using leverage to make one's actions more effective and efficient. The invention of the bicycle enabled people to travel a greater distance at a higher rate of speed than running. In addition, the smooth action of the wheels rolling along caused less stress on the bones of the body, which in the runner were constantly pounding against the earth. By the use of gears, the bicycle was able to go even faster with less energy being expended by the body. All of this is the use of leverage, both the leverage of the mind, in its invention and development of the bike, the wheels, frame, tires, handlebars, right on through to the completion of the finished product, the bicycle itself, and the leverage of the tools that man created to help in becoming more efficient at accomplishing a task. The use of leverage did not stop there. By using the invention process, a person was able to overcome the physical limits of the body and propel himself at a far more rapid pace. Furthering this basic concept, the invention of the car, which traveled faster than the bicycle, the train, which carried more cargo than the car, the airplane, which defied gravity, the rocket, which carried man and cargo to previously before unattainable heights. All are the use of leverage. All such creations and inventions have assisted mankind in going farther, faster while using less physical energy. Being able to do things better than they were done in the past should be the goal of all businesspeople. All things require using mental leverage and physical leverage to accomplish more difficult task with greater ease. Yes, leverage is power used by man for the betterment of mankind, hence, PROGRESS. In the age-old basic struggle to survive, both man and beast realized the consumption of nutrients was vital to sustain life. The acquisition of food and water, the first basic needs of man, the acts of hunting and
gathering, became a natural part of life itself. Man realized that certain foods were either hunted or gathered with greater ease than others. Take fish, for example. Man caught fish with his bare hands until such time as he leveraged the abilities of the mind to create tools that aided him in catching more fish. Man invented the net, the spear, the hook and pole, the boat, even harnessed the natural ability of animals, the cormorant, for instance, which is a large aquatic bird that catches fish. All of this was accomplished by leveraging the power of the mind to achieve a desired goal, the acquisition of nutrients, the need to sustain the life of the body, the act of survival. The computer revolution changed the way people and financial institutions do business. People used to carry their money with them wherever they went. Stagecoaches transported money, ships carried treasure across the oceans. Now electronic bank transfers are routine. Today, huge sums of money are transferred in seconds simply by sliding a credit or debit card through a machine on a store's countertop. The powers harnessed by man in the use of mental and physical leverage have changed the way business is done today. Leverage is a very important tool to be used by all people in business and in all facets of their lives.
The art of leverage is in knowing what to do, knowing how to do it, and then being able to do it.
To be successful, you must first learn to leverage your natural talents. After that using leverage will become easer in everything you do in life. The California Kid.
Chapter 29
ECONOMY
Part I Economy
According to Sun Tzu, Tenet 1, Estimations: Laws and order are concerned with military organization, chain of command, discipline, regulation, the way of command, and management of logistics, control over expenses. Economy, according to Websters, means careful or thrifty management of resources. A reduction in expenses; a system for the management of resources and production of goods and services. The creation of a system of control is one of the ways governments control "their" resources. Governments regard all people, places, and things in "their territory as "their resources." The national economy of any country is controlled by the creation of a system of rules and regulations, and/or agencies that create rules and regulations, such as economic ministries. This system is known as the game." The California Kid. Government agencies are tasked to ensure that the economy does not get "out of control." These agencies must regulate the practices of business
so that the government is seen to have supported or directed or influenced the economy in a positive way. In the United States of America, the Federal Reserve Board (the Fed) is headed by Allan Greenspan, who is one of the most powerful players in the game. This agency of the U.S government monitors and sets the interest rate which all lending and banking institutions follow. In times of prosperity, the Fed raises the interest rate; when the economy is in a downturn, the Fed lowers the interest rate. This is meant to be perceived as a way to control inflation or the basic cost of the economy. In good times, people have more money to spend, so naturally the cost of goods and services goes up. In not-so-good times, when consumers have less money to spend, the cost of goods and services goes down and discounts are offered. In all societies, people who work for their money want to protect it, save it, and if possible, make it grow. This is the pursuit of prosperity. Grow and prosper, and may God multiply the likes of you. Normally, people protect and save their money by putting it in a bank. The bank pays interest on the money that is deposited with the bank. As the Fed raised the interest rate, the prime or best rate at which a lending institution will loan money to another lending institution, people's deposits with these savings and lending institutions grow accordingly. But their money does earn at the best rate, but at a lesser rate set by the institution, a rate calculated to make the institution money. As the Fed lowers the interest rate, the growth of the deposits is slowed in relation to the rate of interest being offered. The interest rate also affects the amount of money invested in the economy. The more money invested in the economy, the more the economy is able to grow. One of the prime investment arenas in any economy is the stock market, which controls the sale of a company's shares of stock that are readily available for purchase by the general public. In good economic times, people are more willing to invest their money in shares of stock. They "play the market," just like gambling in a casino. Playing the market is playing the game." It is gambling on a company's
stock going up or down, either gaining or losing value relative to the price at which the buyer purchased the stock. P=VZC Note: when playing the market you are only purchasing or selling shares of stock that have already been sold and purchased by someone else. Buying & Selling are functions of harmony, yin & yang, one person's desire to sell is in harmony with another's desire to acquire. P=VZC In slower economic times, people are more conservative with their investment capital. They prefer to keep it safe in a bank (low risk investment) gathering interest. This is when the Fed lowers the interest rate in an effort to stimulate the economy. Thus, there is not as much incentive in keep money in a low or lower interest-bearing saving account. People naturally gravitate back toward higher risk investments, hoping to grow their investment capital at a higher rate in a shorter period of time. While the stock market offers a chance at better returns on invested money, it also offers a better chance of losing money (higher risk). When a company offers stock to the public for the first time, this is called an Initial Public Offering (IPO). But it is not the company making the offering to the public; it is an investment bank that has underwritten or paid the company for the stock that is being offered. An example would be for company XYZ to offer one million shares to the bank at $10 per share. The bank agrees to this transaction and the company receives ten million dollars. Then the bank offers the shares to the public, and on the day of sale, as the shares are being offered to the public, and people starts to purchase these shares, the value of the shares goes up, $12, $15, $30 $50 more per share, depending on the demand. The law of supply and demand has entered the game. So now we have x number of shares that have been sold for more than the original $10 per share, all the way to $50 more per share. The investor public sees that the value of the shares has risen and assumes that the company now has a lot of money with which to grow. The $50 per share times a million shares is equal to fifty million dollars at the valued stock selling price of $50 dollars per share. The investing public now expects the
company to experience a rate of growth relative to the amount of the value of the stock that the company has sold, when, in fact, the company has only received the original $10 million from the investment bank. The investment bank received the additional $40 million. When the company is not able to grow at a rate perceived by the public as relative to the $50 million dollars, the stock has been sold for, the value of the stock goes down, not having reached its expected level of performance. This is the game," controlled and manipulated by the Fed and the investment banks. Money has been played, the investment banks have won. The value of stocks go down, the economy slows down, the Fed lowers the interest rate and people continue to play the market as, once again, there is little incentive to maintain low-interest-bearing bank accounts. Banks make money on underwriting stock offers. They also make money on servicing the low risk depositors. The underlying effect of the Fed's decision to raise or lower interest rates is to keep the general public's investment money coming in at a steady, regulated pace. The government's benevolence is admirable, or so it would seem. They would not like to see the general public lose too much money when the economy is on a downturn, nor do they want the public to make to much money when the economy has risen, as this is seen to be the cause of inflation (the rising cost of goods and service due to the fact that more money is available). People always wish to ensure that their money is safe and protected while it is in the care of others, such as banks that pay interest and guarantee that the depositors money is safe (Federally insured banks). A bank's interest rate fluctuates as the Fed dictates, a fairly risk-free concept. While investing in the stock market may offer the chance to increase one's investment more rapidly than a low interest bearing bank account, there is more risk involved, as stock prices fluctuate up and down on a daily basis. So in good economic times the Fed keeps the interest rate high, thus stifling the economy to some extent and making personal economic survival more difficult.
Economies grow in direct relationship to successful growth of business. They do not grow as a result of the growth of government, and they certainly do grow as the result of the growth of charity. As everyone wishes to live, grow, and prosper, to live their lives in the pursuit of happiness, it is the duty of government to assist the people to achieve their goals, to keep the economy healthy. It is not their job to restrict the growth of the economy, which results in the restricted growth of individuals. As businesspeople and businesses are the only value producers, the ones that produce products and services that are bought and sold, business is the essence of economy. Therefore, it is the governments duty to assist businesses to grow. This helps the people to grow and prosper in the peoples pursuit of happiness.
Part II INFLATION
Etiolog, according to Websters. means the study of causes or origins; the cause. Inflation, according to Websters, means the act of inflating or state of being inflated; a sharp rise in the prices of goods and services. This is not quite true. The sharp rise in prices is a result of an increase in the money supply. The government creates the surplus money by printing it without having real or substantial value to back it. The banks create money in the form of credit, but the Fed regulates the credit market. The government is able to control what the banks do to some extent. Governments then justify what they have done through the use of government-instigated media spin. Governments must hide what they are doing through the use of subterfuge. People become ritualized over time by the constant bombardment of government media spin. Inflation erodes the value of money. What is the price of a loaf of bread today? What did it used to be? Inflation, taxation, welfare payments, military spending, debt, deficits are all causes of a societys economic deterioration. The California Kid. You are losing to inflation, whether you realize it or not. If you wish to win, you must study economics carefully, with respect, with trepidation. Study this subject with reverence. Inflation is a government monopoly. Governments create money using a printing press. Evil is the root of all funny money. Governments print money to be used in circulation throughout the population; however, that money does not have a basis in real property. There is no real value associated to this funny money.
Inflation is being caused and it is destroying our society. Who benefits from inflation? Politicians and scoundrels benefit from inflation. Sorry, I have repeated myself. The California Kid. Most likely, you have been so busy planning and saving for your retirement that you forgot to make any real money. You are living in survival mode. You have a survival attitude. You need to change your attitude into a wealth-creating attitude. Survival attitudes cause poverty in the people of the world. Remember, you only have to get rich once. Once you have become rich, your money will make money for you through your investments, rents, leases (residual income for good debt investments), and dividends. You need to understand only one subject very well: pragmatic economics with a special emphasis on inflation. Rent, according to Websters, means periodic payment made by someone in return for the right to occupy or use anothers property; to obtain occupancy or use of (anothers property) in return for periodic payments; to grant occupancy or use of (ones own property) in return for rent. Lease, according to Websters, means a contract for the use or occupation of real estate or other physical property, usually for a given period (of time) in exchange for rent; to grant by lease; to use or occupy under a lease. Dividend, according to Websters, means a number that is to be divided; a share of profits paid to a stockholder; a share of a surplus: bonus. Swiss bankers believe that economics can often be a very dry and boring subject, but money is invariably interesting to everyone. Inflation throughout history follows a common pattern. 1. It begins when government starts intervening in a nations economy through its willingness to better society and by
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performing more and more socialistic functions. But they are only trying to be helpful, right? The addition of these added socialistic functions cost increasingly more money, money that the government needs to operate with. This causes a need for increased taxes. Tax levels are maximized, which the public finds difficult to accept, levels the government finds difficult to exceed, as if governments ever think they are taking too much taxes. At that point, the government finds it necessary to abandon gold and silver coins. It issues base metal coins and/or paper money, which is not backed by precious metals. All of this is done to pay for the added expenditures created by the increased functions the government has undertaken. It is trying to create a need for its own existence. When the additional unbacked money has had time to work its way through the economy, it initially stimulates business; however, wages and the cost of materials lag behind or rise at a slower pace than prices received for goods that business produces. When prices normalize throughout the society, costs and wages begin to catch up. This has a negative effect on business activities. Thus activities decline, thanks to the help from government. At this time, the government must act to counteract the decline in business. Its remedy is to issue still more unbacked paper money. They fire up the printing presses again. With the infusion of more money through the issuance of government contracts, businesses experience an upturn. Once again, costs and wages lag behind temporarily. The cycle is repeated as production costs and wages catch up and business production slows down again. As people begin to recognize the repeating cycle of money infusion, price increases, wage and cost stabilization, they start to anticipate the effects of increased money creation. Now
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understanding this pattern, the people factor increased pricing into their business decisions. Inflation continues, which is recognized by the people. They take measures to acquire and hoard items of real value. They seek safe havens for their cash. Gold is the traditional hedge against inflation. They then spend freely, increasing their personal debt. When inflation gets so bad that people start complaining, the government attempts to justify inflation by placing the blame on the people who are hoarding real-value items and people who are spending freely, and borrowing recklessly. The government then passes laws to control gold and institutes price controls. The institution of price controls leads to rationing. Government regulations have the effect of causing distortions within the economy. The resulting rationing becomes extremely unpopular. Then it becomes necessary to lift price controls, as the people are complaining loudly. Once price controls are lifted, prices must rise again, this time at an even steeper rate than in previous cycles. Lending institutions are hesitant to loan money. Business production is interfered with once again. When markets become highly disrupted, only speculators are able to profit. When profits are scarce, people lose their incentive to work. Peoples savings are lost to inflation. Speculation becomes the most attractive activity in society. Saving becomes more uncommon. The inability to borrow suddenly puts a premium on savings. Cash becomes king. Business production declines, and we have the government to thank for helping us. This time, when production levels fall, inflation has the effect of lowering the standard of living, especially of the elderly and the lower income producers. The percentage of unemployment rises.
The government is forced to support the unemployed. The insidious spread of socialism has begun. 21. Higher rates of unemployment cause increasingly larger government welfare obligations. The few remaining value producers are then burdened with paying for these increased social obligations. 22. At this time, value producers make conscious decisions on what they should do with their capital. It makes more business sense to loan money out at very high interest rates than to put their money into new machinery and capital goods. Lower production levels of value and valuables are caused by the decline of business activities. 23. Stock markets fluctuate in an erratic fashion, moving wildly up and down, and this has the effect of destroying whatever capital is invested in it. 24. Bonds decline in value, causing still larger losses. 25. A large increase in bankruptcies is experienced throughout society. 26. Lending intuitions pull in the welcome mat. The credit markets break down. There is no money available for borrowers at any price, as borrowers are now incapable of loan repayment. 27. Financial panic ensues. A period of economic stagnation results, along with still further unemployment. 28. Politicians become frightened. However, they put on a brave face, turn up the rhetoric, and fire up the printing presses again, hoping that this artificial stimulation will solve their problems. 29. Realizing what is happening, people abandon cash for anything of real value. Commodities become extremely valuable, and the commodity markets soar. This new funny money infusion is spread randomly throughout the economy. This time it fails to stimulate business. Bankruptcies are unpreventable and chaos follows.
In time, prices begin to normalize, the funny money is finally renounced by the public and then by the government. Currency is devalued, which has the effect of creating a new currency. Past debts are extinguished. Eventually business returns to normal. But a loaf of bread now costs considerably more than it used to. Unfortunately, the politicians and the people fail to learn anything from the experience, as this inflationary cycle may take place over decades. However, in some countries, the cycle progresses at a faster rate of speed. There is rampant inflation. They have no clue as to how they can prevent the inflationary process from happening again. The California Kid.
The world economy and all individual economies derive their art from the fact that all people in any society voluntarily participate in the struggle for economic survival.
THOUGHTS and QUOTATIONS: The last thing they want is a revitalized economy now. I'm not saying the Democrats don't want a strong economy now. Don't misunderstand. They just don't want it now. Rush Limbaugh. If an economic recovery happens, the Democrats are S.O.L., politically. Now, what does that tell about you their politics and their economics? Rush Limbaugh. There are three kinds of liars ... men, women, and statistics! College Economics Professor. Note: its also possible that Mark Twain said this.
Most writers regard truth as their most valuable possession, and therefore are most economical in its use. Mark Twain. In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms. The first is freedom of speech and expression--everywhere in the world. The second is freedom of every person to worship God in his own way--everywhere in the world. The third is freedom from want--which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants--everywhere in the world. The fourth is freedom from fear--which, translated into world terms, means a worldwide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor--anywhere in the world. Franklin D. Roosevelt.
Chapter 30
Benefit and Loss

Benefit, according to Websters, means an advantage; aid: help; a payment or series of payments to one in need; a public performance to raise funds. Benefited, according to Websters, means to be helpful or advantageous to; to profit. According to Sun Tzu, Tenet 2, Action in War: Battles (operations) that are long in coming will have a detrimental effect on both equipment and troops. When you attack cities, your strength will become exhausted. Long campaigns will consume your resources. Proper analysis on the part of your enemy will reveal your weakness, and he will take advantage and counterattack. Under these conditions, even the wisest generals will not be able to achieve success. Therefore, even though your speed may not be optimum, avoid lengthy campaigns. No state or army has ever benefited from long, drawn-out warfare. Benevolence, according to Websters, means an inclination to do charitable or kind acts; an act of charity. Lose, according to Websters, means to fail to find in a customary place: mislay; to fail to sustain or keep; to be deprived of; to fail to win; to fail to use: to get rid of; to stray from. Loss, according to Websters, means the damage or suffering that is caused by losing; one that is lost; losses: killed, wounded, or captured persons, especially solders: casualties.
Individuals and groups go into business with the specific intention of making a profit, financially benefiting from their actions and work. Buyers of products benefit from the purchase, or for what other reason would they have made the purchase? They exchanged money for a product or service that held a certain amount of value they wish to possess. People are not predisposed to spend money on things that do not benefit themselves or others who they hold with some degree of benevolence. P=VZC Sellers benefit from the sale of products or services and derive some degree of benefit from the completion of the transaction, or for what other reason would they have made the sale? They have decided to sell something. No one forced them into selling their possessions. Even their ability to work or perform a service for the buyer is a voluntary choice. Their decision was based on the opportunity to gain a benefit. In general, businesspeople we know and have known are benevolent. Many donate time, money, and other resources to the community in which they conduct their business. This is a quality possessed by businesspeople the world over. As business is the only section of any society that creates value and valuables, businesspeople are the first to profit from their business actions, the first to acquire the resources that governments will tax, the first to possess the resources that enable them to be charitable. Governments and charitable organizations must acquire money so they can operate. They require that ownership of values and valuables be transferred to them. They require the transfer of wealth from the creators and possessors of wealth, the values and valuables produced by the businesspeople in their society. Therefore, it is the businesspeople who afford governments and other giving-organizations the opportunity to be benevolent and charitable to members of their society. All transfers of money or benefits from a government or charitable organization are done with the money or values they have obtained, directly or indirectly, from businesses. It is the altruistic notion that it is necessary to demonstrate to your peers and others who observe your actions your desire and ability to help
others by giving what you possess to them. You will be told the opposite, not being willing to give to others, hurts others. This is important to understand, because keeping the benefits that you have acquired is as important as the actual action of acquisition. Who says that you have to give away something that you worked to acquire? Certainly not I. The California Kid. When people wish to know which side you are on, your answer should be, I am on my own side. However, there are risks involved with being so honest. Others will wish to know what side you are on so they can determine if you are a risk to them. Is there or will there be danger in associating with you? An outwardly benevolent person will instill trust in others. Businesses are based on trust. "I trust that you will not cheat me. I trust your word." "I trust you." Business without trust is negative business and, eventually, a business without benefits. In God we trust; all others please pay cash. Every businessperson is in the business of making money, of acquiring benefits. Please take note that other people, some in business and some not in business, are also concerned with acquiring benefits. In many cases, less than honest people will covet your possessions and wealth, the benefits you have worked to acquire. Dishonest people will wish to acquire your benefits any way they can. Always be on your guard. Protect what is yours or what you possess. If you do not, you may lose it.
All of our lives are enriched and benefit from the existence of art, but works of art are often lost to decay and dishonesty.
According to Sun Tzu, Tenet 6, Weakness of Vacuity and Strength of Substance: You must accurately analyze the enemy to know the estimations of gain and loss. You must force the enemy to move by provoking him so you
may know the patterns of his movements and stoppage. You must determine the disposition of the enemy to know which terrain is tenable and which terrain is fatal, where life may be sustained and where death may be found. You must explore and investigate the enemy to know the locations of his excesses and insufficiencies, probe him to determine his weaknesses and strengths. THOUGHTS and QUOTATIONS: Neither fire nor wind, birth nor death can erase our good deeds. The Buddha. A candle loses nothing by lighting another candle. Erin Majors. Why did I want to win? Because I didn't want to lose! Max Schmelling. A time to seek, and a time to lose; A time to keep, and a time to throw away Ecclesiastes 3:1-8. If you haven't attained true clear vision, this causes you to lapse into extremes, so that you lose contact with reality. Zen Master Yuanwu. Our doubts are traitors, and make us lose the good that we oft may win, By fearing to attempt. William Shakespeare.
Win together, lose together, play together, stay together. Debra Mancuso. A committee is a group that keeps minutes and loses hours. Milton Berle. A wise man never loses anything, if he has himself. Michel de
Montaigne. There are as many nights as days, and the one is just as long as the other in the year's course. Even a happy life cannot be without a measure of darkness, and the word happy would lose its meaning if it were not balanced by sadness. Carl Jung. For what profit is it to a man if he gains the whole world, and lose his own soul? Matthew 16:26. Strength and courage aren't always measured in medals and victories. They are measured in the struggles they overcome. The strongest people aren't always the people who win, but the people who don't give up when they lose. Ashley Hodgeson. Saint Patrick was a gentleman...Who through strategy and stealth...Drove all the snakes from Ireland...Here's a drinkee to his health! But not too many drinkees...Lest we lose ourselves and then...Forget the good Saint Patrick...And see them snakes again! Unknown. A man loses his sense of direction after four drinks; a woman loses hers after four kisses. H.L. Mencken. People can be unreliable and disloyal; possessions can lose their value; jobs that once stimulated you can become boring. But principles remain steady through it all. Nido Qubein. Lost time is never found again. Benjamin Franklin. The gain in self-confidence of having accomplished a tiresome labor is immense. Thomas Arnold Bennett.
If you nurture your mind, body, and spirit, your time will expand. You will gain a new perspective that will allow you to accomplish much more. Brian Koslow. If I give all I possess to the poor and surrender my body to the flames, but have not love I gain nothing Love is patient, love is kind. It does not envy, it does not boast, it is not proud. 1 Corinthians 13:1-8, 13. You gain strength, experience and confidence by every experience where you really stop to look fear in the face. You must do the thing you cannot do. Eleanor Roosevelt.
Chapter 31
Investments
Part I Rating System
Rating. According to Websters, means a position assigned on a scale: standing; an evaluation of financial status. We rate our chances of success. We evaluate our financial status on a personal and business level. We want to know where we stand in relation to other people and other things. We perform an analysis and evaluate the data in order to assign a degree of value, and or risk as related to any situation we find ourselves in. According to Sun Tzu, Tenet 1, Estimations: Before the battle is to begin, analyze all factors to determine your odds of victory. If the odds are in your favor, your chances are good; if you determine that the odds are not in your favor, rethink your plans for action. In regard to the stock market, there are rating organizations, such as the Standard and Poors (S and P) 500 and Moody's that routinely assign degrees of value to different companies and countries. These are statistical evaluations that enable individuals and groups to quickly grasp the financial position of an individual company or country's economy. They base these ratings on the average of a number of similarly rated companies. If the average is up, the Dow is up. This does not, however, give a true picture of an individual company in the rating system. It is only
an overview of the general economic health of the "social economy" in which these businesses operate. The economy is up, or we are experiencing a sluggish economy; it is extremely important for individuals to learn how to perform a proper analysis of data. As the science of statistics is a tool used to analyze numerical data, using only statistical means is sometimes dangerous. There are three types of lies; lies, damn lies, and statistics. Benjamin Disraeli. Do not become dependent on statistical data and the conclusions drawn from them. Statistics is only a tool, not God. Money is counted, products are sold and the number of sales is recorded. If you want to rate your chances of success, you must be able to read and understand the numbers and do the math yourself. Other things can also be rated. Information can be rated as verified, verifiable, good source, just a rumor. Consumer Reports and the Underwriters Laboratory (UL) rate products and services. In life, we all must make choices based on our analysis of the available data. It is a good idea to develop a rating system that you can use comfortably. That helps you understand the position you or your business are in when compared to other people and other businesses. Be able to recognize the trends, which way is the economic wind blowing. You have to learn to rate what is important in your life and business. Learn to rate your chances of success in any investment opportunity.
We hope the reader will favorably rate this study "On the Art of Business"
Scientists were rated as great heretics by the church, but they were truly religious men because of their faith in the orderliness of the universe. Albert Einstein.
Do not overrate what you have received, nor envy others. He who envies others does not obtain peace of mind. The Buddha. If you want to increase your success rate, double your failure rate. Thomas Watson, Sr. The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise. F. Scott Fitzgerald.
Part II Investment
Invest, according to Websters, means to put (money) into something, as stocks or property, in order to obtain profit or interest; to use for future benefit; to furnish with authority or power. Investment, according to Websters, means the act of investing; an amount invested; a possession acquired and kept for future benefit; investiture. Opportunity, according to Websters, means a favorable combination of circumstances; a chance for advancement. According to Sun Tzu, Tenet 1, Estimations: Entice the enemy by showing them treasure; causing disorder in their ranks creates opportunity for seizure. Opportunist, according to Websters, means one who takes advantage of circumstances for self-serving purposes. In business you are in business to help yourself first. After that, you help yourself by helping others. The reason people invest is to acquire more money, more riches, more
wealth. You can invest your time in working for a living and/or you can invest your assets in something that will provide you with return on your investment. Few people will ever acquire real wealth by working for a living, saving the monies they are paid, and hoping their savings will be enough to live comfortably in their later years. However, by investing your assets into wealth-producing opportunities, you stand a much better chance of actually becoming rich or wealthy. Allow your assets to work for you rather than you working for your assets. The California Kid. Equity, according to Websters, means the quality of being just or impartial: fairness; the value of property beyond a mortgage or liability; law; a system of jurisprudence supplementing the common law; justice applied in circumstances not covered by law. Asset, according to Websters, means a valuable possession or quality: resource. Assets: all the property of a person or a business that can be applied to cover liabilities. For the purpose of this book we would like to suggest that you actively attempt to acquire assets. There three types of assets: Real Property: cash, precious metals and gems, real estate, and tangible goods (equipment, vehicles, machinery, goods, etc.). Paper Assets: Financial instruments, such as stocks and bonds, patents, copyrights, insurance policies, annuities, childrens educational funds, agencies, distributorships, leases on property, contracts, etc. Note: Shares of stock are actually ownership certificates of real businesses. Business Assets: Ownership of a business and the possessions of that business. Liable, according to Websters, means legally obligated: responsible; subject; apt: likely; <liable to be angry.
Liability, according to Websters, means the state of being liable; something owed to another: debt; a handicap: disadvantage; a tendency: likelihood. Exploit, according to Websters, means a notable deed or act; to use to the best advantage; to make use of selfishly or unethically < exploiting low paid farm workers. People actively search for good investments. Their reasoning for their search is that they wish to gain a profit from the investment of their money into whatever vehicle they ultimately select. The problem resides in knowing what is a really good investment. It is equally important to know what is an unacceptable risk associated with any investment. Most people invest their money in real estate, or, better said, they borrow money from a financial institution in order to invest in real estate. They buy a house, but they do not own that investment until the financial institutions loan is repaid. They must pay off the mortgage, they have incurred a liability, they are liable for the repayment of the loan. The profit in this type of investment is in the potential equity, the possible appreciation of the value of the property over time or by improvements made to the property. The improvements are further investments in the property. The disadvantage associated with this type of investment is that it is a nonliquid asset; you cannot readily or quickly get your money out of the investment. There are many types of real estate investments: land with or without buildings. A raw piece of land that than can be developed may be very valuable, but land that cannot be developed may not be worth the investment. Development of a piece of land can also take different forms. Land situated in good climate can be developed into a farm and land containing minerals can be turned into a mining operation. You can build structures (houses, apartment complexes, warehouses, commercial buildings, etc.) on land located near population centers. As populations grow, land becomes scarce and therefore more valuable. This is the law of supply and demand.
One consideration you should think about is the duration of your investment. Are you investing in the long term or the short term? Do you want to be able to realize your profits now or later, in minutes, hours, days, weeks, months or years? A wager on a crap table in casino can make a profit in seconds. A bet is a high risk investment, usually a 5050, win or lose chance to profit. Investments in the foreign exchange market (FOREX) can make profit in minutes. Investments in the stock market can make profits in hours, certainly before the end of the business day. However, all of these types of investments are associated with high risk. You can lose some or all of your investment in the same amount of time as it would have taken you to profit. Please note that it is a rule of thumb that the faster the possible return of profit, the higher the risk associated with the investment. I shall never believe that God plays dice with the world. Albert Einstein. Some investments are designed to generate a returns on investment (ROI) in a relatively short period of time. They generate cash flow. A rental property like a house will return monies to the investor every time the rent is paid. You borrow money from the bank, and the renters will be repaying your loan. You will have effectively acquired a real property asset that is being paid for by someone else. Although you are liable for the debt, you physically possess the asset, which provides ROI on a regular basis. If you purchase an apartment building, you will be able to collect rents from each unit that you rent or lease. Rents are one time payments, day to day, week to week, month to month, where as a lease is a longer term contract, year to year, two years, five years, ten years, or longer. You can even live in one of the units, thus providing yourself with a home that the other renters are paying for. You would also be providing yourself with positive cash flow, and all the while the property stands the chance of appreciating in value over time. This type of investment is both long-term and short-term, as you realize ROI as soon as you can rent a unit to
someone. Residual, according to Websters, means of, relating to, or left over as a residue; an amount remaining: residue; a payment made to a performer for each repeat showing of a recorded television show. Residual income is monies that you receive on a regular basis. Monthly rents on your rental properties, dividends paid on shares of a companys stock you own are examples, as are royalties paid to you every time a song is played if you own the copyright to the song. Note the difference between the real property asset in the apartment building, the paper asset in the shares of stock, and the intellectual asset. The intellectual asset is also a paper asset whose value is contained in the patent, copyright, registered trademark, logo, and slogans. You can also invest in a business. A business asset is an investment that will continually or residually provide you with ROI every time you sell a product or provide a service. Income, according to Websters, means money or its equivalent received in return for work, from a business, or as profit from investment. Residual income investments can be described as investments that you make one time. You purchase the building once, you buy the stock once, you write the song once, yet all of these investments will provide you with ROI on a continual or residual basis. After your initial investment, your cash flow will be in a positive direction, unlike the purchase of a house that you do not rent or lease out to others and that you must continually make payments on. The money you borrowed from the bank requires you to repay plus any interest associated with the loan. You are continually required to provide residual income to the bank. Debt, according to Websters, means something owed, as money or goods; the condition of indebtedness. There are good debts and bad debts. A bad debt owed to you is a debt you cannot collect; a bad debt that you owe is a debt that you are continually paying for. A good debt owed to you is a debt that poses no problem in collection; a good debt that you owe is a debt that continually provides you with ROI. Yes, you invest in debt when you purchase a house
or apartment building. One you continually pay for, and the other continually pays you. Your short-term positions on both purchases are opposite. One you pay, the other pays you; one is negative, the other is positive. Over the long term, however, on both purchases are positive, as the likelihood of value appreciation is the same on both investments. When you invest your time in a job, you are being paid for work you perform, skills you posses, your code of ethics, honesty, integrity, dependability, reliability, and dedication to your job. This type of investment is called a one-off investment, or a one-off asset. The job is an asset you posses. You will receive one days pay for one days work. There are no residual income factors in this type of investment. You must continually work to receive benefits. When you stop working, you stop getting paid. To become rich and wealthy, you must learn to acquire residual income assets. Residual income assets that you acquire will continually give you the opportunity to collect monies from your acquisitions. Ownership of the asset is not relinquished. Shares of stock pay dividends. Bonds, treasury bills, life insurance policies, annuities and savings accounts will pay interest. Income real estate will pay residual ROI. You must allow your investment assets to work for you. You must be vigilant in your search for investment opportunities that will provide you with residual ROI. Always remember that some investment assets have negative cash flows. A bad debt that you owe requires you to continually take money out of your pocket and give it to someone else. The home that you purchased on mortgage held by the bank requires you to continually take money out of your pocket and give it to the bank. In all of your investment activities, it is very important that you realize in which direction the cash will be flowing: into your pocket or into someone elses pocket. Liquid, according to Websters, means a substance that flows readily and is difficult to compress; easily converted into or being cash. Liquidate, according to Websters, means to repay (e.g., a debt): settle; to close down (e.g., a business firm) by settling accounts and dividing up
assets; put and end to, especially to kill. The liquidity of an investment asset is also very important. Should it become necessary for you to sell your asset or liquidate your investment, what degree of difficulty will you will encounter? Cash is a form of a liquid asset, whereas a house in not very liquid. Houses can be difficult to sell. You may need money in a hurry and will have to settle for less than the true value when you instigate a quick sale. Shares of company stock can be very liquid as shares of a publicly held company can be sold during any business day. Shares of a private company may not be as easily sold. When you invested in or purchased the shares of the company, you were hoping that the value of the stock would increase. When you go to liquidate or sell those shares, you hope that the selling price is not below the price you paid. Bonds are not as liquid as shares of stock, in that you must wait for them to mature or suffer loss for premature redemption; however, they afford the investor a more secure, less risky form of investment, that is, if you trust the issuer. Unlike the value of shares of stock, the value doesn't change on a daily basis. Real estate has always been good investment, as land values tend to rise rather than fall, but are difficult to turn into quick cash. Gold is very liquid, as it can be readily sold or traded for its actual value on any given day. Also, gold can appreciate, especially in times of uncertainty, conflict, or war. Gold is a very good hedge against inflation. Gemstones are not as liquid, in that there may be disagreements as to their value or buyers may not be available. Cash is normally kept in interestbearing accounts at banks, savings and loans, credit unions or in non interest-bearing facilities like safes, locked or unlocked bedroom drawers, under the mattress. Cash possesses the highest degree of liquidity and is readily exchangeable for items of value. Foreign Exchange is currency that is bought and sold worldwide. You can have any amount of money in any national currency that you choose. The values of the different currencies will change in relation to each other
on a daily basis. You can choose to purchase a basket of currencies, which is a combination of several currencies; dollars, pounds, euros, yen, marks, etc. They hedge each other; therefore, they maintain their original value or appreciate in value, you hope. Jewelry and ornamental gold are a personal choice investment. If you can sell them for what they are worth, they have definite value. As investments go, the stock market is one of the most popular investments. The idea of investing in a publicly traded company or corporation is meant to instill a degree of confidence in the investment. A limited amount of risk is meant to be perceived; however, public companies are subject to many factors that may be unknown to the investor. The values of stocks may go up, down, or up and downall in the same day, same hour, same minute. They are highly volatile investments. Blue chip stocks are good long-term investments; these are shares of stock in companies that have long-time proven track records of stability and steady growth. The recent Enron/Andersen/WorldCom scandals have rocked the business world. Their stocks went down overnight. People were not able to sell them fast enough. It would appear that the corporate heads knew problems existed and sold their shares before the public was informed of the problems. Thousands of investors lost their life savings. The fallout is that the investing public does not believe what companies are telling them. When the general public does not trust the system, the public does not invest in the system. The underlying reason for the public's mistrust is the lack of honesty surrounding the system. The system puts forth its lawyers and accountants to reassure the public, which is the same as putting the fox in charge of the henhouse. In many cases, the lawyers and accounts must come before the public and apologize. In order to qualify their position, they will tell you that they are only the messengers of bad news. They will say, Dont kill the messenger. Possibly it would be better to kill the messenger and send a message that honesty cannot be manipulated. "Dear Sirs: Please do not
attempt to spin the truth. Just be honest or face the consequences." As we have said, you should have nothing to do with lawyers, if it can in any way be avoided. They are taught to lie and manipulate the truth as part of their contrived responsibility. Have nothing to do with any individual or groups that insist on the use of lawyers in the communication process; you cannot trust them. You will be risking your investments on the words of admitted liars. Honesty is not contained in their code of ethics. Their job description is manipulator. They manipulate the truth and manipulate the law to serve their own interests and the interests of their clients. After the fact of their complicity in theft and or involvement with thieves, they will assume a position of justification. They will take no responsibility for any corruption, even though they have, in proxy, perpetrated the crime and expected to benefit from their dishonesty. The tens of thousand of individuals who will lose their jobs, their savings, and their expectation of the future are of no consequence to these dogs of the system. I trust no lawyer, except of course my own, on a short leash -The California Kid Bonds are financial instruments that ensure that you cannot get your money out when you need it. They have been called guaranteed certificates of confiscation. Government bonds are tax-free instruments, which means that the politicians will steal your money twiceonce before you buy the bond and once after. When you buy a bond, you are loaning money to the government, which cannot operate without taxing you to death. It can only print more funny money. There is no real value associated with the government. Who really owns government bonds? It is not the government, businesses, or the elite wealthy class. It is the middle class. The governments plan is to destroy the middle class that owns all the bond wealth in the country by eroding the entire wealth base through inflation.
The destruction of the people will come about according to a carefully contrived plan devised by the government. They can get away with this because, as the old saying goes, There is another sucker born every minute. Insurance companies are not really in the insurance business. They are in the loan business. They get your money and loan it out at a higher rate of interest than they pay you. Annuities are basically the same. You pay good money now and receive money eroded by inflation later. Other financial instruments that you hear about are commercial paper, money-market funds, certificates of deposit, treasury bills, all-saver certificates, etc. These are all forms of IOUs. You have loaned your money to someone and they have promised to pay you back. The time frame of payback is usually three months to three years. You purchase these instruments through your bank or stockbroker for a nominal fee. What is not fair is that the small people get much less interest than the large corporations that loan money in these forms. This is done by laws passed by politicians in government. Once again, inflation is eating away at the money that you have let someone else use because you did not know what to do with it yourself.
Yesterday is history, tomorrow is mystery. By definition, an investment is for future benefit. Good investing is an art. Knowing what to invest in is the mystery.
The beauty of the soul shines out when a man bears with composure one heavy mischance after another, not because he does not feel them, but because he is a man of high and heroic temper. Aristotle.
Part III Retirement

Your best investment vehicle is yourself. You are the one who can make a difference that matters to you. Your best resource is your time. You have the time to make a difference that matters in a positive way. You may have a job that earns you income. This is earned income. You may have a portfolio that holds your acquired investments, stocks, bonds, moneymarket funds and other paper assets, but you need to start making passive money. These are investments that make money by themselves, that spend all of their time making money. You are the one that can make a difference simply by thinking about what you want for the future. Think about the good life and shape your world today so it looks like your vision of the future of tomorrow. What will your retirement years look like? Will you have the kind of income that will afford you the ability to live like you do today? Retirement does not mean retiring from work. It means not having to work if you dont want to. Being retired means that you have the time to do the things you want to do. Being retired in style means being able to afford to do the things you wish to do. To retire in style means that you must acquire a great deal of money and assets, or you have to acquire residual income investment assets that keep paying you after you retire from your normal occupation. You say that you have a 401(k). So what? This retirement vehicle is tied to the economy and to the inflation that goes along with the economy. A 401 (k) plan is monies invested in such things as shares of stock or paper assets like money-market accounts. If the economy fails, so does your retirement nest egg. What happens if your bad-debt real property, your mortgaged house, does not appreciate in value? What if the neighborhood suffers from a criminal element? What if environmental elements change and cause unfavorable situations to occur? Are you willing to take the chance, to run the risk that you will be unable to retire on these types of
retirement vehicles? What are the speeds of your investments? Do you have crawling investments, walking investments, running investments, or cycling, driving, or flying investments? Do you have slow investments, like saving money, or do you have fast investments, like residual cash flow properties? Real estate, real intellectual property, real business property? You need to think about how you will acquire real residual cash flow income property. You need to look around, observe what you really see, integrate your thoughts into a plan of action. You need to make the right decision as to how you will invest your resources, then make your move. Take your available time and produce some value. Shape your investment world of today into your luxury world of tomorrow. Realize that your earned and saved income will erode with time or inflation. You need to acquire quality investment that will outpace inflation and taxation. Quality investments are investments that afford you the opportunity to live a better life. Residual income investments that are working to make money even when you are not working are the best and fastest investments you can have. You have to communicate your desire to acquire these types of investments, first to yourself, then to others. What is the difference between making money on an investment when you buy and making money on an investment when you sell? The difference is the speed of the investment. P=VZC. Fast investments are investments that pay you now, when you buy, rather than later when you sell. Buy a house and lose money every month. This is negative cash flow. You have incurred a bad debt just so you can make money later when you sell. This is not a fast investment. It is more like a crawling or walking investment. An apartment or rental property that pays you now, positive cash flow income from the rents you collect, and pays you later when you sell is like having a walking and driving investment all rolled into one. Debt is good if you know how to control it. How many years will it take you, working at your job, to make one million dollars? How many years will it take you to save one million dollars? How long will it take you
to borrow one million dollars? How much profit will you make if you borrow one million dollars worth of investments that make you twenty-five percent per year profit and you only have to pay twelve percent per year interest? If you work all your life, invest wisely, and save the money you make and the assets you acquire, and then retire, you will have retired on the equity of your assets. You will have retired on your own money. If you borrow wisely and accumulate good debt, debt that pays you now and will pay you at some time in the future, your good debt turns into equity when you retire. You will have retired on other peoples money. Remember that it is easer to borrow good debt of a million dollars than to save enough assets and equity to equal one million dollars. You can buy a business from someone who wishes to retire. The seller may even hold paper (holding paper is holding the loan documents, holding your IOU). You will borrow a million dollars from the seller and paying interest on the money you borrowed. You will also be repaying the principal amount you borrowed. You will know the business is profitable because you can inspect the accounts before you buy and judge for yourself how good is the business by watching how many customers make purchases every day. You could be making profits from the day you purchase the business. You will have acquired a good debt that is a vehicle of fast residual income, a positive cash flow vehicle. The seller of the business will enjoy holding your IOU because you will be paying interest and principal to him on a regular basis; if you do not, he will repossess the business. Your investment in the debt is like an airplane investment. Your investment will travel at the speed of flight. Good debt/bad debt. When you borrow, borrow for things that will make you rich, not things that will make you poor. When you work hard at your job and make more money, you get taxed more. However, when you borrow to make money you get taxed less. When you borrow, you control the value of the money or asset you have borrowed for. The more money or assets you control, the more leverage you will have. The more leverage you
have, the more money you can make. The more money you make, the more freedom you will have. The more freedom you have, the happier you will be. Make a list of your good and bad debts. If your bad debts outnumber your good debts, then you should rethink your debt investment strategy. Your investment in a business will afford you many advantages, things you must purchase for your business that you will also be able to use in your personal life. A car you purchase for the business can be used to take you kids to the park on Saturday. A computer you purchase for the business can also be used to write a book. A customer you take to business lunch allows you to eat, and the business pays for the lunch. Gasoline you put in the company car will be paid for by the company, even if you use the car to go to the market. If you personally had to pay for all of the things that the business pays for, how much of the money you made working at your job would you be able to save? Owing your own business is the best investment of all, for you will be practicing integration. What were the prices of your investments? What did they cost you to acquire? What is their value to you now? What will they be worth to you at some time in the future? P=VZC.
The art of retirement is having enough money to enjoy it in style.
Part IV Speculation
Speculate, according to Websters, means to think deeply: reflect; to engage in a business venture offering the possibility of a large profit but entailing risk. Of the Latin speculari, which means to observe, spy or look ahead. Another way to say this is to see into the future. Nobody can make you
rich; however, you can make yourself rich by means of speculation. Advance knowledge is foresight. Any knowledge is power. Decrease your wants or increase your income. Socrates. Advertising creates artificial needs and wants. Most people are the victims of the need to have the crutch of external objects and gadgets. Time is the most precious luxury of all. In order to become rich, you must become sophisticated, knowledgeable, experienced, and wise. Develop the objective of living well and retiring rich. Being rich is a question of aesthetics and art, the art of living. If you wish to become rich, first you must desire to become rich; second, you have to know that it is possible for you to become rich, that you are actually capable of achieving riches; third, you must understand inflation, both thoroughly and technically. Think positive. Do not lament today or the future. Do not become pessimistic about the problems of the world. Pessimism, according to Websters, means a tendency to take the least hopeful view, as of a situation, or to anticipate the worst. Optimism, according to Websters, means a disposition to expect the best possible outcome or to emphasize the most positive aspects of a situation; the doctrine that this world is the best of all possible worlds. Optimism is the basic energy of civilization. Positive thinking is the bankers approach to life. Pragmatism, according to Websters, means the theory that actions and beliefs must be judged by their practical results; the use of practical means to solve problems. Separate events are interconnected. Solutions to problems are developed through the use of thought as a guide to taking action. Bend reality to your will, shape reality as you desire it to be. The California Kid.
Time. There are periods of great change and great opportunity and great danger looming on the horizon. Risk takers can get rich in times of change and chaos. The California Kid. Benevolent optimism based in reality is the Swiss way, and they have one of the best economies in the world today. Optimists believe that all problems are definable and solvable. Some people will place the blame for all the worlds problems on greedy corporations and labor unions, the perennially poor and their state of permanent welfare, on the greed of oil companies, on Madison Avenue advertising, on the Pentagon, on politicians, on overpopulation. Different things mean different things to different people as to what is wrong with the world at large. Once again, optimists believe that all problems are definable and solvable. The ingredients of making money are desire, hard work, intelligence, luck, and the ability to look in to the future. Observation, analysis, interpretation of data turned into concepts (choices), decision, and action are the tools that, if used correctly, can make you rich. There are clouds of mass hysteria looming ahead. Sell short. Had you known about Enron in advance, you could have borrowed Enron stock from a broker, sold short, and repaid the broker after the stock price dropped and you repurchased at the lowest price. Stand back from the crowd. Are you a pawn, being moved by forces beyond your control? Farsighted individuals use hard times to get rich. What is the real root of the problems confronting the world of today? First, overspending by government and their panacea of creating inflation, which covers up their mismanagement. Second, reality and those that
refuse to recognize it for what it is and resist it. People are the source of all real power, but only when you are able to make intelligent economic decisions regarding the choices available to you. Cycles of inflation include deflation; these are two sides of the same coin. The word deflation is used to scare people, as it brings back visions of breadlines and soup kitchens, and beggars selling apples and pencils. It is the word that conjures up visions of hard times. Remember that the fear of hard times leads to inflating the money supply, which eventually leads back to hard times. Speculators are the only ones who profit from the chaos of an inflationary super-cycle. The knowledgeable shifting of your investments during times of rapid change of price is your vehicle of success and wealth. Speculation differs from investment, as it is closer to gambling in the odds it commands. But speculators only gamble when the odds are highly in their favor. Investors try to preserve their purchasing power. They try not to take unacceptable risk; they are satisfied with small profits. Speculators want big profits. Some speculator traits are listed as follows: Speculators, unlike gamblers, do not take their losses personally. They move on to the next deal. They learn from their mistakes and try again. Speculators look for big profits, and big profits do not appear in normal investment activities. The crowd that follows traditional investment strategies is not speculators. Real profits are made in the future. Any investment that has already caught the publics attention has already been discounted; only small profits remain. Big profits happen as a matter of change. Speculators look for future change and are prepared for and have planned for any opportunity that may arise. Unlike investors, who will often invest on impulse without a proper plan of action and without being totally prepared, speculators are already prepared with a plan before opportunities arise. In many cases, speculators are so prepared that they assume very little risk. Speculators are flexible. They think with youthful exuberance.
Speculators maintain an open mind in all of their activities. Speculators use their conscious mind to think through the opportunities they are considering. They practice strategies in preparation for opportunities. Speculators think for themselves. They do not trust the judgment of others. Speculators accept responsibility for their actions. They hold themselves accountable, but never punish themselves for failure. They have a healthy respect for failure and learn from failure, their own and the failures of others. Speculators define a situation and look for the solution within it. They find the right key to open the door to profits. Speculators do not act on emotions. They never act on feelings or whims. They act on conscious reasonable thought, only in the cold clear light of knowledge. Speculators anticipate change. They do not follow a change that has already occurred. If a trend exists, they will look ahead for the change that will occur next. Speculators do not regret their actions. They do not ponder the past except to learn from the lessons of the past.
Speculators make their own choices based on their own conscious thought process. They do not readily accept the suggestions or decisions of others. Speculators are masters of secrecy, never telling what they are thinking. In this way, they never have to justify a failure to others. Speculators control their money. They know how much money they have and where their money is at all times. Speculators possess knowledge. In specific areas of interest, they are extremely knowledgeable. Speculators know when to quit. They do not waste time when a project
takes a turn for the worst. Speculators develop a master plan. They are continually adding newly acquired pieces of knowledge to that plan. Speculators are optimistic in regard to their actions and their ability to succeed. Speculators stand alone. They know when the odds are in their favor. They know what the general public is doing and distance themselves from the crowd. They stand on their own two feet. Speculators are true individualists. Speculators work to acquire a stake, which they use to speculate. Speculators work to acquire knowledge. Speculators possess intestinal fortitude. If you can develop these character traits, you are more than half way to winning. Speculators know that the biggest risk is not taking a risk. They put fear aside and concentrate on the task at hand. They are prepared for contingencies and accept that unforeseen events may occur. Remember, that not taking a risk, by doing nothing, you are allowing your money to erode through inflation. Being too careful and not taking the chance is only maintaining the status quo, which is a losing proposition. Governments call the printing of valueless currency economic stimulus. Politicians vote to enact stimulus packages to revive the economy. If you believe this is a solution, then we have a bridge for sale. -The California Kid Speculators have always realized that the world is constantly changing; therefore, there are always new opportunities becoming available. One way to understand change is to realize what is good for the government. The powers that be will always cause the winds of change to blow in the governments direction. Governments thrive on inflation; therefore, expect more inflation. Politicians thrive on chaos; therefore, expect more chaos. The combined wind is called inflationary chaos.
Inflation is cyclic. Just because it appears that governments have changed their ways and are acting in a fiscally responsible manner, it only means that they are catching their breath for a new onslaught of inflation and chaos. They ask that you have patience because the good times are just ahead. Inflation is tied to the growth in the supply of money, usually by an eighteen to twenty-four-month interval, the time for the new money to filter through the economic system. You can gauge the growth in money supply by contacting the Federal Reserve Bank for a publication called Monetary Trends. If you know the growth rate of the money supply, you can make money on the upcoming degree of inflation that will follow in the upcoming eighteen to twenty-four months; this is foresight. This is knowing what the change will be. Please note that there will be a one percent loss of money, in that the system will absorb that much in the filtration process. You can determine the current rate of inflation by consulting the Consumer Price Index. This index is available from the Bureau of Labor Statistics. When the money supply is disproportionate to current inflation, then you will be able to calculate the upcoming change. What do you do with this calculated foresight is buy houses, commodities, stocks, and financial futures. Thats what you can do to make money. The timing of the change is what you must practice to thoroughly understand. Acting too soon can be as bad as not acting at all. Big inflation comes out of periods of severe recession, when unemployment causes the government to start the printing press. You must understand that inflation will continue. It is in the governments interest that it continue. You can use the fact that you know that inflation will not end, but only slow or turn into recession in the inflationary cycle. Therefore, you can always make money by being able to forecast the inflationary future. Speculation is the only way to overcome the ravages of inflation. The future will erode any savings you currently have or will be able to acquire.
You must acquire speculator traits if you wish to participate in the inflationary moneymaking game. Speculation requires that you have some money and the necessary knowledge, and that you have the guts to act on your consciously calculated course of action. The future will dictate that you take a risk or sit idly by and watch what you have acquired erode away to nothing. The old rules of investment will also erode with the progress of inflation. You will be required to manage your money by yourself, or you will lose what you have. You will have to develop your sense of timing. Practice, practice, practice. You do not have to invest or gamble while you are practicing, but you do have to calculate and check your results. Practice, practice, practice. Use the money supply growth (MSG) or inflation growth (IG) formula to calculate the amount and time of change. MSG 1% = IG in eighteen to twenty-four months. Use your newly acquired character traits to meet the challenge and make a profit. Although government politicians believe that they will always be able to tax and redistribute the created wealth of the producers, there may come a time when the producers are fed up and stop producing or they are physically run out of business. Governments never know when it is time to stop the damage being done to businesses. If you believe that lowering taxes will solve all the problems, think again. That is the problem with debt. That problem will also have to be faced. As we said, governments create money by printing it, but the banks create credit, and credit is debt. Debt is compounded by the governments ongoing spending policies based on their rationale of having to protect you from all the evils in the world. People will go to desperate measures to protect themselves. Start protecting yourself from ignorance and the negative forces of your environment. The California Kid. Working at your job will never make you rich. The money you make from your job must to be used to speculate during these highly inflationary
cycles. During these inflationary times, it will become necessary for you to become a speculator if you wish to become rich. Remember that people will oppose you in your efforts to become wealthy, but you only have to become rich once.
The fine art of speculation; learn to use it.

THOUGHTS and QUOTATIONS: Our favorite holding period is forever. --Warren Buffet. Investing is a form of gambling. Sometimes you win and sometimes you lose. Practice in this case does not make perfect. Diane Taren.
Chapter 32
Banking
Part I Banking
Bank, according to Websters, means an establishment that performs financial transactions such as receiving, investing, and lending money; a supply of or storage place for something desired or needed; to transact business with a bank. Banks count your money as theirs after you have given it to them. Not everything that can be counted counts, and not everything that counts can be counted. Albert Einstein. Banks can be your friends, and sometimes not. Banks are in the business of making money. As long as your transactions with the bank help the bank make money, the bank is happy to work with you. However, when banks loan money, they expect to make money on the transactions in the form of the interest you are required to pay along with repaying the principal. In the United States, the government has enacted laws that require banks to disclose your personal financial information to the government. If you deposit too much money in the bank, the bank notifies the government; withdraw too much, and the government is informed. The government does not want people to have large sums of cash because they do not know what
you will do with it. They are afraid you will make money and either avoid or evade your tax-paying responsibilities (avoidance is legal, evasion is not). The government wants to know where and how much money you have. It does not want you to keep secrets. Offshore banking, which takes place in many countries, is one way to maintain a high degree of financial secrecy. These offshore banks will accept deposits and give you the assurance that your personal financial information will not be disclosed to anyone. Switzerland has for many years made secrecy its understated policy; however, governments have now instigated an attack on the industry of banking in general and on individual banks policies of secrecy. The government threatens these institutions with economic punishment for not complying with the government's request for disclosure. September 11, and the so-called "war on terror have compelled many banks worldwide to comply with the U.S.'s investigative disclosure demands. Many banking institutions in Caribbean countries practicing offshore banking and nondisclosure are also under attack. Governments actively wish to have funds being protected in these countries returned to the depositors home countries and back under the control of more disclosure friendly governmental lap-dog banks. The Persian Gulf countries of Bahrain and the United Arab Emirates have experienced healthy growth in their banking sectors because they have refused to comply with outside governmental pressures. Unlike other safe havens, these petrol-rich Gulf countries are not dependent on banking or tourism to support their national economies. Because their degree of commercial and economic freedom is rated nearly the highest in the world, they naturally attract international business-oriented individuals and groups. Please note, rumor has it, that banks operating in the Persian Gulf countries are in much better shape than their Western counterparts because banks in this region practice Islamic banking. Western banks operating in this mode are also in better shape because they must cooperate with Islamic
banks. However, with all that we have said, please note that banks are a necessity in business. Companies need to save their money (principal and profits) and pay their bills. Companies need to have checking accounts in order to issue payments, and credit cards to provide convenience in conducting transactions. For the most part, banks are there to help you. Be good to your bank, and your bank will be good to you. We hope.
Part II Security
According to Sun Tzu, Tenet 12, Fire/Incendiary Attacks: [T]he ruler who is enlightened exhibits discretion. The good general exhibits caution. In matters of concern regarding the safety and security of the state and the preservation of the armies, this is the Tao. Bank accounts are not safe investments because the banks have no real money. They only have computer accounts to produce account statements. If the computer goes down, who is to prove that you actually had any money in the bank in the first place? Try to argue with a bank teller about a discrepancy and see who they believe, you or the computer. Banks make unsafe loans to underdeveloped countries because governments want them to. They have no way to fight the government, so they concede to its wishes. The new loans are made so that the underdeveloped country can make interest payments to the banks, which is good money after bad. Underdeveloped countries default on their loan all the time. That is your money that has been loaned out. If a bank collapses, so do you, and there is nothing you can do about it. Most banks are in very sad positions today. As long as depositors do not demand their money back and the U.S. dollar does not weaken or foreigners decide to convert their dollar holdings abroad, banks will still be able to operate. However, none of these factors are assured.
The times, they are a-changing. Bob Dylan. Banks are able to hide their mismanagement of your money because the Federal Reserve (in the case of the U.S.A.) has enacted legislation that protects them from disclosure of bad debt. Banks claim maturity transformation, which is putting off disclosure until the end of the term of the bad debt rather than immediately, when the bad debt is realized. Bankers no longer go bankrupt. They are spared this embarrassing situation by government intervention and encouraged to continue with the same practices that got them into trouble in the first place. Other regulations allow banks to carry bonds and mortgages on their book at par value, even if these financial instruments have been devalued by forty to fifty percent. Many banks and savings and loans actually have a negative net worth. Financial trickery is rampant within the banking industry. Their money was wiped out long ago, and yet they are allowed to continue practicing their black art to keep the secret safe. If you think that your deposits are protected, then please note that the Federal Deposit Insurance Corporation is a hundred times more underfunded than actual bank deposits. When banks do go down, they will all go down, along with all of your money. If you are lucky enough to be covered and paid, you will be paid in funny money. A bank that claims to have billions of dollars is saying they have your money, as long as you never decide to take it out of the bank. Banks are controlled by the Federal Reserve of any country. Your savings are not really insured, but you are allowed to listen to government propaganda and rhetoric that tells you it is. The standard banking policy is to borrow short and lend long, which means they are not liquid. In order to maintain what liquidity they do have, they have borrowed short and loaned long, which is a classic recipe for bankruptcy. Banks support an enormous number of questionable loans because they have become greedy. They did this in the beginning to maximize profits and now they do it to maintain
temporary survival. Banks have gotten themselves in this horrible mess because governments have forced them to purchase government bonds and support government spending policies. Banks make bad loans because it is not their money. It is your money, and they only wish to make profits without the risk of lending their own money. In fact, a large part of the money they lend does not exist, as the banks have created it in the form of credit. Their reasoning is the smaller the equity, the larger the profit. They are obsessed with profit rather then sound balance sheets. Savings and loans are in the same boat as the banks, only more so, as their base is largely in real property, which is less liquid than minimal cash. The only thing holding this house of cards together is consumer/depositor confidence in the government. What you really want is to live rich and retire richer; however, be careful, because people will take care of their own interest before they will be concerned with your interest.
The art of banking is a secret guarded by the bankers; the reason for the secret is obvious.
When the famous bank robber, Willie Sutton, was asked why he robbed banks, he replied, "Because that's where the money is." THOUGHTS and QUOTATIONS: A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain. Robert Frost.
Chapter 33
Contracts and Agreements

Contract, according to Websters, means a formal agreement between two or more parties: covenant. Agree, according to Websters, means to grant consent: assent; to be in accord: match; to come to an understanding or to terms; to be appropriate or beneficial; correspond in gender, number, case, or person. Agreement, according to Websters, means harmony of opinion: accord; covenant: treaty; correspond in gender, number, case, or person. There are many types of contracts formally written by individuals and the real dogs of the system, lawyers. As governments have created the laws, lawyers have assumed the self-appointed position of discussing, interpreting, and executing the law on behalf of their clients and the public. They call it the "practice of law," as they hardly ever get it right. They continually practice, hoping that one day they will become competent, as incompetence seems to be a prerequisite within this profession. These professional incompetents are adept at the creation of complication and chaos. They call their association the bar; one would think that is because worthlessness is associated with drunken bums. You aint nothing but a hound dog. written by Jerry Leiber and Mike Stoll and performed by Elvis Presley.
As the old story goes, an engineer and a lawyer we arguing as to which was the first profession. The engineer said that because engineers had to build society out of the chaos that they were the first professionals. The lawyer disagreed and said, "But who do you think created the chaos?" Agreeing to contracts between trusting individuals and groups based on a person's good word and a handshake has been accepted since the dawn of civilized society. Sales and purchase contracts are executed under standard terms and conditions agreed to by all parties involved. Service contracts detail what actions will be performed and how payment will be made. Marriage contracts are "sealed with a kiss." In essence, a contract spells out the exact details of an agreement. When you apply for a credit card, you agree to the terms and conditions of the formal contractual agreement, which specifies interest rates and late penalty provisions. Indentured servants signed agreements with their benefactors to perform years of servitude for the chance to travel to new lands and a chance to build new lives. Negotiate, according to Websters, means to meet and discuss with another in order to reach an agreement; to settle by meeting and discussing; to transfer title to or ownership of, to another in exchange for equivalent value; to accomplish or cope with successfully. Anyone competent in the eyes of the law can make an agreement with anyone else competent in the eyes of the law, as long as all parties to the contract come to an understanding of the terms and satisfaction is reached. Anyone can write a contract. It does not require a lawyer. The most important aspect of any agreement or contract is its understandability, the clarity of the meaning of the individual components or clauses. A contract should be unambiguous, perfectly clear. Read the fine print, just above the line that says Sign Right Here. The California Kid. It is very important that you understand the terms and conditions
contained in a contract or agreement. You must thoroughly read and understand all of the terms and conditions of any contract or agreement before you formally agree or put your signature to these documents. Dishonest people will use legal contracts to entrap you. They will use sweet words to convince you that you will benefit from the agreement or contract. Always be on your guard when considering entering into any agreement or contract. If any agreement or contract is too complicated for you to understand, then ask why.
The art of any agreement or contract is in the negotiation that takes place between the parties as to what is being agreed to, the terms and conditions contained in the contract, and the successful arrival at satisfaction between the parties to the agreement.
According to Sun Tzu, Tenet 11, Nine Situations of Terrains: [A]lthough the general does not instruct the troops, they will be prepared. They will be cooperative and work as one. They will work together as a unit though they are not bound together by covenants, contracts, or orders. Although no orders have been issued, the troops will be dependable, they may be relied upon. Omens and myths are to be prohibited, doubts are to be eliminated. In this way, the troops will fight to the death and die, if bested, without distraction THOUGHTS and QUOTATIONS: What we call reality is an agreement that people have arrived at to make life more livable. Louise Nevelson. Honest disagreement is often a good sign of progress. Mahatma Gandhi.
Friendship is the only thing in this world, the usefulness of which all mankind are in agreement. Marcus Tullius Cicero. Work - other people's work - is an intolerable idea to a cat. Can you picture cats herding sheep or agreeing to pull a cart? They will not inconvenience themselves to the slightest degree. Dr. Louis J. Camuti.
ACT V DO IT
Chapter 34
Action
Anything and everything you do in life requires action; some things require more action than others. The California Kid. Action, according to Websters, means the process of acting or doing. Activity, according to Websters, means the state of being active; energetic action, as in education or recreation. Active, according to Websters, means in action: moving; capable of functioning; causing action or change; participating: marked by energy. Busy, according to Websters, means engaged in action: occupied; full of activity. You will notice that business and busy have a common beginning. Energy, according to Websters, means capacity for working or acting: vigor; strength: force; vitality of expression; the work that a physical system is capable of doing. Businesspeople perform actions, they maintain activity, they are active, they are busy people, and all of this is due to the fact that they possess energy. These qualities are essential to every good businessperson. Without these qualities, people will gravitate toward and become susceptible to the disease of laziness. Thinking, observing, thinking again, and planning are the first actions performed by businesspeople. They take the time to research and evaluate the physical actions they are about to take. Good business requires the completion of many activities to complete the deal, realize the profit, to
satisfactorily conclude the money making activity. Potential, or stored energy has value in that it is readily available for use. Kinetic energy is the stored energy being used. In business, thinking about and planning actions are like potential energy. The actions of thought and planning have value in that they are conscious actions, mental activities. The person now knows what physical actions are possible, what activities they can perform. Physical action is kinetic energy, energy being used. You can think about a deal all you want; however, no profit is made until the activities have been put into action. The action that is required to close or complete the deal. Until the actions have been completed, nothing is accomplished. Thinking must be turned into action. As the NIKE slogan tells us, "Just do it." With regard to your business activities, it is a good idea to integrate certain activities, like the operations of an assembly line. If you complete similar activities at the same time, you will be able to complete all of your activities in a shorter period of time and you will have consumed less of your resources in the integration process of completing the activities. If you are typing a letter to one customer, store the letter in a file and continually return to that letter to draft other similar letters, such as thank-you letters, late-payment notices, or requests for quotations and samples. Anything that makes you more efficient is better than having to repeat your actions and expend more energy. Concentrate on doing the things that you are qualified to do, the things that you naturally do well. Do the things that you have been trained to do and do more of them in a shorter period of time by the process of integration. These are preferred actions, actions that accomplish the most. All people do certain things better than other things. Focus on doing the things that you do best. Practice doing things you wish to do better. In time, you will become competent at doing these newly learned activities and you will be able to add these to the list of the things that you do well. Saving time is the most important action you can take, as all other resources are renewable. Time is not renewable. You cannot get back
wasted time. Being late for a deadline can spoil a deal. Being late to pay your expenses can spoil your credit and credibility. Think about your actions, be conscious of your actions, and turn your stored energy into kinetic energy, and, in a timely fashion, Just do it."
Action is art in motion.

According to Sun Tzu, Tenet 1, Estimations: If you have evaluated your chances of victory and defeat correctly, if you have completed many calculation, if you find that the majority of factors are in your favor, with proper implementation of actions you will be victorious. THOUGHTS and QUOTATIONS: We have to do the best we can. This is our sacred human responsibility. Albert Einstein. The artist is nothing without the gift, but the gift is nothing without work. Emile Zola. Courage is not the lack of fear. It is acting in spite of it. Mark Twain. Let your light shine before men, that they may see your good works, and glorify your-Father, which is in heaven. Matthew 5:16. The great end of life is not knowledge but action. Thomas Henry Huxley. The energy of the mind is the essence of life. Aristotle. The pursuit of truth and beauty is a sphere of activity in which we are permitted to remain children all our lives. Albert Einstein. To know what is right and not do it is the worst cowardice.
Confucius. A man is the sum of his actions, of what he has done, of what he can do, nothing else. Andr Malraux.
Chapter 35
Strategy
Part I
Strategy, according to Websters, means the science or art of military command as applied to the general planning and conduct of full-scale combat operations; a plan of action, especially for attaining a goal. Know that strategic planning is essential to success, and work to create strategies that are faultless. Haphazard plans will only cause delays and negative results. Pursue perfection in your planning. In the event that your plans do not result in success, do not be discouraged; try, try, try again, using the experience of your failures to achieve success. Never give up trying. Maintain persistence above all. Strategy in business is concerned with the long-term direction and scope of an organization, the advantages achieved by means of a company's use of resources within the changing operational environment, as related to the market. The expectations of the stakeholders must be taken into consideration and weighed against the company's resources and the environment in which the company operates. The use of strategy in warfare is meant to reduce the risk. It is meant to win the war. It does not matter what side you are on. Both or all sides have the desire to win, and they develop their strategies to attain their goals. The price paid by loss in war is death. Strategy in business is can have the same effect as it does in war: you can win and reach your goal, or in extreme situations you and your company can lose and maybe die.
Are you saying that if someone doesnt make a sale, losing that sale will kill him? If so, why are so many used-car salesmen still alive? -Editor's note. Strategy in business Strategy in business is concerned with the characteristics of strategic decisions you will make in your effort to achieve some advantage for the organization. The scope of an organization's activities, all units of the group, and decisions related to each must be considered in the overall strategy of the organization. On the nature of strategy The different characteristics related to strategy must be considered as a set of strategic factors: The long-term direction of the company and its effects on the shortterm operational decisions that will be made are the essence of the reason for strategic planning. What you plan for in the future affects what you will do today. The advantages that you wish to acquire as a result of the decisions you make are what strategy is all about. We are in business to make money. We use any and all advantages we are capable of acquiring. We work smart to gain advantage. The scope of the organization, as related to all its unit parts and the activities of each, is the broad view of the organization. What does it consist of? What does it do to make money? What decisions will it make and what actions will it take? The environment in which the organization operates is made up of commercial, economic, political, technological, cultural, and social factors. It is necessary to understand these factors in relation to past, present, and changes that may take place in the future of the environment in which the organization operates. These are considered in relation to the complexity of variables that give rise to threats and opportunities. Therefore, the organization is concerned with the environment in which it will operate and concerns encompassing the activities of the
organization in that environment. This is known as the "strategic fit" of the organization. The ability of an organization to fill and stretch its self-set boundaries is determined by the resources and competence possessed by the organization. Companies set operational boundaries in which they are comfortable, such as a local market versus national or international markets or limited product lines versus a wide range of diversified products and services. These boundaries are meant to protect the business from going too far afield from the best operational or profitable areas of business. However, a business must be able to fill its boundaries, and the boundaries must be able to stretch to give the business the best chance to make more money and a better profit. Once the boundaries have been stretched, the company may look at expansion and the reestablishment of larger boundaries. The required resources and the possible need to change or acquire additional resources must be carefully considered. What do you have in the way of resources today? What resources will you need to add, change, or acquire in order to implement your short and long term strategies? Operational decisions will be affected by the overall strategic decisions that will be made. What you plan to do in the future affects what you do today and tomorrow. Try not to develop strategies that will have an adverse affect on day-to-day operations, as this may have detrimental affects on near-term profits and the ability to implement long-term strategic decisions. The overall purpose for a company to develop a strategy is to make more money, more profit. The values and expectations of the stakeholders are of prime concern. Strategies must be developed to satisfy the people that have the most to lose. The complexity of strategic decisions is an individual choice made by the business. Complex strategies tend to be more expensive and timeconsuming and require more resources; however, they are often the most rewarding.
It is easy to make decisions when you are in possession of all the facts and have a reasonably good idea of what is happening or going to happen. However, some decisions need to be made in times of uncertainty; these are perhaps the most important decisions and require the most serious considerations. When you use an integrated approach with regard to the management of an organization, you will achieve greater efficiency. Integration concerns both the internal workings of the company and the outside concerns of the organization, such as its suppliers, distributors, and customers, as well as the environmental atmosphere, social and ethnic trends, availability of financial resources, etc. In business, we plan for the future. We take into consideration changes that occur in the near term and those that will occur in the future. Levels of strategy Overall business strategy, which is the strategy concerned with the purpose and scope of the organization required to achieve stakeholders expectations while adding value to all units of the organization, is the master plan. The unit strategies of the individual units of the company, its strategic business units (SBUs) regarding the market and the advantages the individual SBU wishes to achieve, exist in a relationship that is complementary to the master plan. The operation of the organization as a whole is dependent on the operations of the SBUs. The operational strategy, which is concerned with resources, processes, and people and skills required to achieve the desired direction at the SBU level, are the everyday operational plans. Operational strategy is of great importance because it affects the day-to-day decisions and the implementation of those decisions. Strategic words and meanings It is necessary to communicate clearly with people in business. The use of the correct words, the vocabulary of strategy, is important.
Mission is the overall expression of the purpose of the organization. Vision or strategic intent is the desired state of the organization in the future. Goal is concerned with the overall mission. Objective is a more precise aim consistent with the goal Competencies are related to the ability of an organization to achieve an advantage in terms of activities, skills and know-how, which provide value to the customers and distinguish the organization from its competitors. The combination of an organization's resources, competencies, and processes that have a bearing on the actions to be taken and task to be completed is known as the strategic architecture. Strategic control is concerned with monitoring actions as to their effectiveness in achieving the desired goals and objectives. Strategic Management Strategic analysis, strategic choice, and strategic implementations make up the overall process of strategic management. Strategic management is a complex process. The individual must be able to understand individual issues related to overall management of the organization. Strategic analysis is concerned with understanding the strategic position of an organization regarding its operations within the external environment, the resources and competence of the organization, and the expectations and influences of the stakeholders. Your analysis must be concerned with both the present and future wellbeing of the organization, what opportunities may arise within the operational environment, what overall competencies the organization possesses, and what it will be required to acquire in the future. An organization's resources and competencies make up the organizations strategic capability. What does the organization do well? What does it not do so well? What are its strengths and weaknesses? The purpose and expectations of the organization's stakeholders, along with the environmental and capability factors, make up the basis for the
strategic analysis. All of these factors have bearing on the desired good governance" of the organization. Strategic choice is concerned with the options available to the organization regarding the actions that will be taken. In order to better identify the strategic choices available to an organization, you must consider the positions of the stakeholders. This should be reflected in the strategic mission and intent. What are the competitive advantages possessed by the organization? Parenting is concerned with balancing the portfolio of SBUs and the overall financial strategy within the organization. What methods or courses of action are used to achieving strategic direction? What actions were most effective in the past, and what methods will be used in the future? These questions can be considered in the generation of strategic options. Organizations make decisions. They analyze and evaluate the strategic options available to them. This is done to determine the best strategic choices. The assessment of suitability, feasibility to the organization, and acceptability by the stakeholders all factor into the decisions that will be made. Strategic implementation is concerned with putting the choices into effect. Factors affecting the implementation of the strategic choices that have been made include organizational structure and design, the systems needed to manage the organization, resource planning, and management of strategic change. What are the key tasks that need to be carried out in order to implement the strategic choices? These factors are viewed in relation to the mechanisms of implementation. Strategic "Fit" and "Stretch" All businesses must fit their operational environment. They must desire
to grow, to stretch the company's resources and competence. Companies stretch by adapting their resources to take advantage of opportunities and trying to achieve competitive advantage. A good strategy of a small business can make great profits. The California Kid. Small businesses, having limited number of products, normally operate in local markets and are not subject to the broad range of complexities associated with a large business. Usually the owner or senior management will be tasked with the duty of strategic planning. The same factors exist in planning for a large business as for a small business. Businesses that have a special product or service and limited competition do not require a high level of strategic planning. They do, however, have a great need to strategically plan their day-to-day operations. They must also give much consideration to their competitive strategy.
According to Sun Tzu, Tenet 11, Nine Situations of Terrains: When first commissioned to take up command and mobilize forces (when war is declared), you must close all points of access (borders) into your state, destroy all tallies and passports of travel, and prevent their emissaries from passing through and coming and going. Call the general staff together for the purpose of strategic planning intended to affect your own course of action.
Part II The Thirty-Six Strategies of Ancient China

Note: the use of the term enemy can be replaced by competitor,
competition, or rival in any business situation. 1. Hide the forest with the trees. When you are operating in the darkness, when your actions are carried out in isolated places or hidden away from view, peoples suspicions will arise. In order to cause your enemy to drop their guard, you must learn to conduct your activities in the open. Hide your true intentions under the guise of the common, the normal. You must hide in plain sight. 2. Sleep with eyes wide open. When faced with a superior force or when direct confrontation is ill advised, you must attack something that the enemy holds dear. Understand that he cannot be superior in all things. There are areas he cannot defend, points at which he is vulnerable. You must find a weakness that you can attack successfully. 3. Slay with the enemys hand. When you do not have the capability or means to attack your enemy directly, you must find a way to attack indirectly. You may use the strength of another. Through the use of subterfuge, you must convince an ally that it is in their best interest to attack the common enemy. You can use the promise of profit to turn a traitor and use the enemys own strengths to affect defeat against him. 4. Hurry to wait. In order to select the time and place of battle you must plan. The enemy is disadvantaged by his lack of knowledge of when and where. Entice him with bait to follow. Rest while he hurries to catch you. Encourage him to tire himself with futile tasks while you conserve your strength. Attack an exhausted foe in earnest. 5. Kill the dead.
When your enemys house is in chaos, when he is troubled by internal conflict, when sickness and hunger consume the masses, when crime and corruptions rule the day, he cannot defend against an outside attack. Know that this is the time to achieve victory. 6. The flower and the sword. Secrecy and strategy give birth to surprise. The unexpected is the weapon of victory. Attack the enemy where he least expects. Use a ruse to gain attention and distract the observant. When the enemy is preoccupied with the flower, he will not notice the sword. 7. Turn ice into diamonds. The use of a ruse to draw an enemy out is well known. To use the same ruse twice is like playing with an intelligent child. He will not be fooled by the third attempt. He will assume that you are only playing games. His lack of interest to play the same game causes apathy. Catch him when his guard has been lowered. This is the time for the reality of battle. 8. Walk in the sunshine, run in the darkness. When you are prepared to engage the enemy and he is prepared to engage you, your direct assault will be obvious. The secret to victory lies with the indirect. A second assault at the last minute from an unseen quarter will cause division within the enemy. Confusion leads to disaster. 9. Watching the work of others. Delay your engagement in battle until the time is right. When others are fighting, let them; when others are exhausted, seize them. Allow others to defeat themselves, then claim the spoils for yourself. 10. The smile of defeat. Hide your true intentions behind benevolence. Work to gain trust before you drive the dagger home. Know victory through secrecy and deceit.
11. Sell the child to raise the man. There are times when you must surrender one for the benefit of the other. The purposeful loss of an advantage, which is made to gain ultimate victory, is the sacrificing of the small to acquire the large. 12. The rope and the sheep. Carry a rope so you can steal a lamb. Be prepared to take advantage of any opportunity, no matter how small. Conform to any situation. Seize any profit, no matter how little. 13. Make noise to awaken the child. When you do not know the plans of the enemy, mount a brief assault. Observe the reaction of their forces. By this method you may know their plans. 14. Steal the dead to own the living. There are old and forgotten values that can be acquired for nothing. Be observant to gain possession of things that can be of use to you. Revive the hungry with a good meal. Just because an item of value has been discarded by one person does not mean that it does not still possess value to another. Technology, ideas, and methods of the past can be brought back to life and sold again. 15 Bait the lion. When an enemy is strong and secure, do not attack. Lead him out into the open with promise of treasure. Separate the enemy from his strengths and security. By this method you may know victory.
16. Free the dog to make a stew. A cornered enemy will do battle with all his strength. He will fight to the death. Offer a chance of freedom to lure him into false hope. When you
once again snatch away his liberty, he will surrender in despair without a fight. 17. Drop a coin to pick up a teal. Enemies are defeated by means of cunning. Prepare a trap baited with treasure. Bait in war is the illusionary opportunity to acquire profit and advantage; bait in life is the illusionary opportunity to acquire wealth, power, and sex. 18. Lead a bull by the nose. When enemy forces are bound to the army and the general by only money or threats, you may conquer by killing the general. If, however, the enemy is bound by loyalty to the general, beware; the forces may continue to fight after the death of the general out of a sense of revenge. 19. Blow out the candle. If an enemy is too powerful to conquer directly, you must defeat him by weakening his strengths. Chip away at the foundation of his strengths. Attack his source of power. 20. Shake the bottle. Distraction of the enemy is advantageous. An enemy in confusion is distracted and thereby vulnerable. Use the uncommon, the unorthodox, and the unusual to startle and arouse suspicion. Disrupt his train of thought. 21. Change your robe. When you are in danger of defeat, it is necessary to change your circumstance. Escape and regroup by means of an illusion. When the enemy is focused on the illusion, effect your get-away, leaving only the illusion to be captured. 22. Gold in the hand.
When the enemy may be completely defeated, then by all means do so. Bring the battle and the war to a quick and final conclusion. When you allow the enemy to escape, you feed his desire for future engagement. However, should an enemy actually escape your clutches, beware about giving hurried chase. 23. The near and far. Know that nations that neighbor each other will have more disagreements than nations that are distanced and separated by obstacles. When you are the strongest in one field, your greatest threat will come from the second strongest in the same field, not from the strongest in a different field. 24. Borrow a sword. Use the borrowed strength of an ally to defeat a common foe. Once defeat has been accomplished, slay the ally with his own sword. 25. Termites in the house. An enemy is only effective when he is in good order. Disrupt his systems and methods of operation. Change the rules by which he normally plays. Subject his union to uncertainty. By these means, you eliminate his pillars of support and you remove the cord that binds him together. 26. Peel the orange to cut the pear. Control and discipline are affected by means of deceit. Spread lies, rumors, and innuendo without naming names. Others will be powerless to retort lest they reveal their complicity. 27. Wise as the fool. Trickery goes hand in hand with victory. Feign madness while maintaining your balance. Hide your true abilities under incompetence, and when your enemy becomes overconfident and drops his guard, strike in
earnest. 28. Steal the shoes. Lure your enemy into treacherous terrain by the use of bait and deceit, then cut off his supply and communication lines and avenues of escape. In order to save himself, he will be forced to fight not only your forces but also the elements of nature. 29. Ribbon on the empty box. Give the illusion that nothing is something, that no value is valuable. Use disguise and artifice to convince that no threat is a threat, that the useless is usable. 30. Changing places. Infiltrate the enemy. Use the guise of surrender and negotiations of peace; feign cooperation to gain access to his camp. Discover his weakness and strengths, lull him into false security and when he relaxes, strike at the core of his strength. 31. Beguile with beauty. Introduce beautiful women to your enemys house. There are three levels of strategy being employed: a) Their rulers will seek to enjoy the fruits and neglect their duties. Soften their vigilance. b) Aggressive competition will develop between rival men, inflaming small differences and undermining cooperation. c) Jealousy will be born in other women of the house. Envy nurtures intrigue, which serves to further complicate the situation. 32. Open arms. When a superior force is in position to over run your situation, feign overwhelming confidence and cease hurried preparations of defense. If the
enemy is not aware of your true situation, he may be dissuaded from attacking because of suspicions and by your show of bravado. 33. Seeds of the thorn. An enemys ability to fight can be undermined by means of internal discontent, causing discord between officers and men, allies and friends, advisors, families, and the general population. This affects an armys ability to attack and defend. 34. Fall on your knife. By feigning injury, you can lull your enemy into false security. Presented with the notion that you are less than completely healthy and strong, the enemy will not consider you an immediate threat and will let down his guard. Use deceit to convince him you have been injured by a rival foe. Attempt to effect an alliance for means of common security. 35. Plan of the many. Employ multiple strategies at the same time. Use different tactics simultaneously. Balance your overall operations to accommodate the combination of strategies. In this way, if one plan fails to yield the desired results, you are in a position to proceed immediately with alternative actions. 36. The swift shall live. Retreat is the only option available to those about to be defeated. If all else fails, run away and regroup. In conclusion, we wish to once again remind the reader that this book has been produced in an effort to promote successful GOOD BUSINESS. We do not condone dishonesty in any way, shape, or form. However, dishonesty does exist in the world of business and is practiced by many dishonest business people. Be on your guard. By knowing strategies of war
(deceit and trickery), you may be able to defend against the dishonest actions and attempted dishonest actions of less than honest people.
Chapter 36
Start-up
A journey of a thousand miles begins with a single step. Confucius. To start a business, you must first have the desire to be in business. Second, you must make a plan of what you would like to do, a plan of something you know how to do, or are willing to learn about. Step 1. Observe the environment around you; perceive what you are observing. Your observations are all the data available to you by the use of your senses. Step 2. Analyze your observations. Think about what it is that you actually observed. Step 3. Form an idea of what is possible based on your analysis of the data. Make a list of the possible options available to you. This is your creativity stage. Step 4. Choose one or more of the available options to start with. Step 5. Act on your decision. Implement your chosen actions. Keep one idea in mind. It is easier to do something you enjoy than something that you do not enjoy. However, in business, the object is to make money, and sometimes we must do things we do not like to do. We recognize the potential profit, put our pride aside, and do the work the best we can. When you have made a list of possible business activities you are
interested in pursuing, do some research into each of your choices. Use books and magazines, the Internet, the telephone book to contact companies and ask for information regarding the business activity that you are interested in. Learn everything you can about your desired business activity, for the more knowledge you acquire, the better prepared you will be to make money. If we knew what it was we were doing, it would not be called research, would it? Albert Einstein. Take an accounting of the resources you possess. How much money do you have? What skills do you possess? What knowledge do you have? What influence will you be able to count on? What tools and equipment do you own? How much time will be available to you? Evaluate the activity you intend to become involved in and compare your resources to the proposed business activities. You need to get an idea of what additional resources you will need to acquire. What are the total resources that will actually be needed to physically bring a product or service to market? Feasible, according to Websters, means able to be accomplished: possible; appropriate: suitable; likely. After your observations and analysis have been completed and you have arrived at your concept or idea, or more likely your concepts and ideas, you must make a choice of which concepts and/or ideas are the best ones to act upon. A great idea that cannot be acted upon is not a good idea. Your rational thinking will tell you if an idea or concept is feasible. You must take into consideration your resources and the availability of necessary components that will be required to complete the production of the product or service that you have conceptualized. What tools, equipment, and machinery will you need to complete production of the product or service? Do you have enough resources to produce one or more than one product? If you can produce only one, then it will be necessary to produce the first one and sell if for profit. The profits
of this sale will allow you to finance the production of the second one. These are the processes necessary for an individual to create a product of value, make a sale, and realize a profit. For those of you who have difficulties in observing, analyzing, and forming ideas and concepts, a good idea is to use someone elses ideas and concepts. The world of business is full of people and business that actively seek conscious individuals to assist in the process of marketing and sales. You may choose to become a sales or manufacturers representative, a sales or manufacturers agent, a distributors representative or agent, a service companys marketing representative or agent. You will be performing a useful and profitable service for someone who was capable of producing a product or service. You will have become an independent contractor. You will own your own business and provide a service to someone else. By assisting someone else, you will be assisting yourself. By helping someone else to make a profit, you will make a profit for yourself. Dont be afraid to make a decision, whether to do something or not. What are you interested in doing? Is it possible for you to do it? It may not be feasible. It may be too expensive. It may require technology you are incapable of acquiring. Do not just decide to do something without consciously thinking about whether it is possible, with or without help. Take into account the value of what you wish to produce, the need for that product or service within your community. Just because you can do something you like to do does not mean it will have value, or at least enough value to be sold in the community in which you will operate. Just because you can make a great hamburger does not mean you can be successful when you have McDonalds, Wendys, Burger King and five other burger places already saturating the market. Do your research. Do it well. Your success will depend on it. The California Kid. Do the work. Produce your product or service and test it. If your
product or service performs poorly in your test, then reevaluate your situation, redesign the product or service, reproduce it, and retest it. When your product passes the performance test, you are ready to go into production. After you produce your product, you may go to the market and sell it. You can now be called the proud producer of a product of value that can be sold for profit. You will have become a value producer. Once you have sold your product and realized your profit, you will be in possession of what is known as gross profit. You must subtract all of your expenses. These are all the costs you have incurred: monies you spent in the research phase, design phase, testing phase, retesting phase, production phase, sales and marketing phases, the financial phase of your operation. What are the banking costs? Did you have to borrow money? Subtract all expenses from your gross profit. The remainder is your net profit. Enjoy it. Do not forget, however, that out of your net profits you have to be able to repeat the whole process, from A to Z, over and over and over again. You may have to repeat the process many times before you have actually covered your initial start-up cost, but at some point you will be, as they say, in the black. Oh, don't forget, how much will the government demand as their share? Now go out and ENJOY. As there are so many types of businesses, the resources that you posses or need to acquire are varied. If you have enough financial capital, whether saved or borrowed, you may be able to purchase an existing business or franchise, or even buy into an existing company in the form of a partnership or working shareholder. In some cases, even if you can afford to purchase an entire, profitable business, you may not possess the expertise to run or operate that particular type of business. It may be necessary for you to acquire on-the-job training prior to taking over the responsibility of labor and/or management. If you only have enough money to purchase an unprofitable business but you have the expertise to correct the deficiencies, this may be the direction you should be considering. Whatever you do, start at the beginning. Observe, analyze, and identify
your feasible options. Make your decision and choose an option. Do the work. Low-budget start-ups are readily available. Information on home businesses or small businesses are easily found in newspapers, magazines, and on the Internet. Use your imagination. Think of what you want to do, then go do the research. Find out everything you can about what you want to do. Some home-based or small-business companies will supply you with everything you will need as long as you work through their organization or network. Maybe you will want to start your own network of small businesses. Many companies will assist you. They will sell you a complete turnkey operation. Selling anything is a business; never forget that. Independent sales representatives can make a lot of money. Go to trade shows and talk to people in business. We have always found that businesspeople are helpful. It is in their interest to be helpful, because being helpful is the best way to do business. It is the best way get customers to purchase your products. From the businessperson's point of view, everyone is a potential customer, either directly or through their network of contacts, associations, friends, and peers. In many states and countries it will be necessary to obtain a business license, which is the government's way of attempting to maintain control over the business community, as a whole. However, with the advent of the Internet and the World Wide Web, millions of people are producing and selling their products to customers, worldwide, without being bothered by governmental interference. However, do check the laws in the area where you will operate. As is so often the case, business and technology move at a rate of speed governments cannot equal. As governments attempt to enact legislation designed to control and regulate businesses, business owners use their creative conscious minds to develop solutions that will enable them to maintain their freedom from governmental interference and intervention. We are not advocating that anyone do anything that is against the law (the law of the land, the law of nature, or the law of good business
practices). But beware; governments have methods of coercion and punishment meant to make an example of you and further discourage other business owners from seeking greater levels of independence and freedom. Wheresoever you go, go with all your heart. Confucius.
Start your own art.

According to Sun Tzu, Tenet 7, Combat: Your objective is to control the movements of the enemy. Entice and bait them with profit and advantage in order to make them follow. While you may have started out later than the enemy, you will arrive at your desired destination before him. THOUGHTS and QUOTATIONS: It was a pleasant cafe, warm and clean and friendly, and I hung up my old water-proof on the coat rack to dry and put my worn and weathered felt hat on the rack above the bench and ordered a cafe au lait. The waiter brought it and I took out a notebook from the pocket of the coat and a pencil and started to write. Ernest Hemingway. The day that you stop learning is the day that you start decreasing your rewards and start suffering from frustration and lower levels of satisfaction. Brian Tracy. HELP: The feature that assists in generating more questions. When the Help feature is used correctly, users are able to navigate through a series of Help screens and end up where they started from without learning a damn thing. Computer Definitions. Motivation is what gets you started. Habit is what keeps you going. Unknown. Do not wait; the time will never be ''just right.'' Start where you
stand, and work with whatever tools you may have at your command, and better tools will be found as you go along. Napoleon Hill. God would be pleased if you were to take one last look in the mirror before you start your day and say, 'God loves you . . . and so do I.' Zig Ziglar. One way to become enthusiastic is to look for the plus sign. To make progress in any difficult situation, you have to start with what's right about it and build on that. Norman Vincent Peale.
Chapter 37
Manufacturing, Production, and Service

Manufacturing, according to Websters, means to make from raw materials, especially with the use of industrial machines; to concoct: fabricate; the act, craft, or process of manufacturing; an industry. Produce, according to Websters, means to bring forth by a natural process: yield; to bring about: create; to make by a special process: manufacturing; to cause to exist: give rise to. Product, according to Websters, means something produced by nature or by human or mechanical effort. Production, according to Websters, means the act or process of producing; something produced, as a play or film. Adjective < Productively. Adverb < Productivity. Serve, according to Websters, means to be a servant (to); to prepare and offer to; to supply service to: wait on; to be of assistance to: benefit; to be used profitably by. Service, according to Websters, means the occupation of a servant; employment; work or duties performed for others; assistance: benefit. According to Sun Tzu, Tenet 7, Combat: A ruler (general) who does not know the plans of the enemy cannot prepare and secure alliances in advance. One who is not knowledgeable of the terrain, the mountains and forests, valleys and ravines, rivers and
wetlands cannot effectively maneuver the army. In this case, it is necessary to employ the services of a local guide to gain advantage of the terrain, the advantages of earth. The general who does not know the value of these factors is not qualified, nor in a position to command the army of a dominator, a hegemonist, a true ruler. Servicing, according to Websters, means to adjust, repair, or maintain; to provide or furnish a service to. Businesses create things of value, goods for sale, products and services. For the most part, the idea of what businesses will create comes from individuals observation of the environment and his analysis of the observation and the fact that he has noticed what is in demand or short supply. The reasoning behind this work is the desire to make a profit. It is high time that the ideal of success should be replaced by the ideal of service. Albert Einstein. Ideas and concepts have value. They are created by the process of imaginative thinking. They are created by individuals who have consciously observed and perceived their environment, methodically analyzed their observations and perceptions and integrated their thoughts into a concept. They have created an idea. The products that governments create are corruption and chaos; the products that businesses create are values and valuables. The California Kid.
Manufacturing, production, and service are the values that grow on the tree of art.
THOUGHTS and QUOTATIONS: Almost all quality improvement comes via simplification of design,
manufacturing, layout, processes, and procedures. Tom Peters. It's a poor workman who blames his tools. Unknown Art produces ugly things which frequently become beautiful with time. Fashion, on the other hand, produces beautiful things which always become ugly with time. Jean Cocteau. Art is not living. It is a use of living. The artist has the ability to take that living and use it in a certain way, and produce art. Audre Lorde. You have to learn to treat people as a resource .you have to ask not what do they cost, but what is the yield, what can they produce? Peter F. Drucker. Often I have found that the one thing that can save is the thing which appears most to threaten ... one has to go down into what one most fears and that process ... comes a saving flicker of light and energy that, even if it does not produce the courage of a hero, at any rate enables a trembling mortal to take one step further. --Laurens Van Der Post. Dreams pass into the reality of action. From the action stems the dream again, and this inter-dependence produces the highest form of living. Anais Nin. The way to develop the best that is in a man is by appreciation and encouragement. Charles Schwab. Freedom is man's capacity to take a hand in his own development. It is our capacity to mold ourselves. Rollo May. Develop a passion for learning. If you do, you will never cease to
grow. Anthony J. D'Angelo, The College Blue Book. Many of life's circumstances are created by three basic choices: the disciplines you choose to keep, the people you choose to be with; and, the laws you choose to obey. Charles Millhuff. To fulfill a dream, to be allowed to sweat over lonely labor, to be given a chance to create, is the meat and potatoes of life. The money is the gravy. Bette Davis.
Chapter 38
Marketing
Market, according to Websters, means a public gathering for purchasing and selling merchandise; a place where such a gathering takes place; a store or shop that sells a particular type of goods; a geographic region regarded as a place for sales; a category of a population considered as buyers, as in the teen market. Advertise, according to Websters, means to call public attention to, especially to increase sales; to make generally known. Advertising, according to Websters, means the business of the preparation and distribution of advertisements; advertisements as a whole. In business, it is a good idea to create the widest forum as possible for your products. The more potential customers you reach, the more potential sales you can make. Television and radio are excellent forms of advertising, although they are also very expensive. By comparison, advertisements in the yellow pages of your local telephone book are quite reasonable and the books are given away free to everyone who has a telephone. Products and services are listed by category, so it is easy for people to find what they want. As the phone company says, "Let your fingers do the walking." Develop an easily recognizable logo and slogan that will stick in people's memory. Use color. Red is the most recognizable, or red on white, like Marlboro and Budweiser. Shocking or fluorescent pink also catches the eye in an instant. At trade shows, the buyers walk up and down the aisles looking at all the different products. A ten foot by ten foot (three meter by three meter) booth is a very small as it fronts on the aisle where
the customers will pass by. Rarely do people go down the same aisle twice, so you only have a few seconds to grab the attention of the customer. The use of lights, sound, and movement will attract more attention than a static picture or an inanimate object sitting on a table. We have always enjoyed going to trade shows because there are so many beautiful people hawking the company's wares. The use of people who naturally attract attention to themselves is an excellent way to attract customers. Not only to they present the product to the customers, but they are also in a position to give a personal explanation or describe the products features and advantages. Qualified people are the most powerful marketing and sales tools any company can possess. In business, you are not only selling your products. You are also selling yourself. People do not buy products and services simply because they have a need or desire to possess the product or require the service. They decide to purchase from a particular store or an individual with whom they enjoy doing business. Wal-Mart, the world's largest retailer, enjoys customer confidence. They advertise products that they have for sale, and they also promote the company's reputation and dedication to customer satisfaction. They reinforce the idea of after sale service. "Your satisfaction is guaranteed." In times of good business, businesspeople advertise; in times of not-sogood business, advertising is even more important. You must make every effort to draw people's attention to your product. Unless you have a product that is unique and you are monopoly, you will be faced with competition. Companies that produce similar products to yours will be out in the market fighting for customers, fighting to capture market share. You must be prepared to get into the market and fight for your own customers and market share. According to Sun Tzu, Tenet 7, Combat Business Actions: Make drums to be heard, make flags on long poles to be seen. When armies are thus united, they will maintain the presence of order. Neither
will the brave proceed alone nor will the cowards run in the face of battle. The sights and sounds of the drums and flags will hold mens eyes and ears in concert with each other. By these means, large numbers of troops may be controlled. By day, use flags and banners, trumpets and drums; by night, use fires and drums. Hold mens eyes and ears by day and night. This will change them to trust their leadership.
The art of marketing is in the competence and sincerity of the marketer.

THOUGHTS and QUOTATIONS: A market is never saturated with a good product, but it is very quickly saturated with a bad one. Henry Ford. Exposure plus 95 cents might buy you a decent cup of coffee. The key is to position yourself in your market as the expert, the resource, the only person your prospect would ever even THINK of doing business with, or referring to others. Bob Burg. Life is pain, princess. Anyone who says differently is selling something. Wesley, The Princess Bride. Early to bed, early to rise, Work like hell and advertise. Ted Turner. Most business plans fail. Obviously, success is not a realistic goal. But the people who manage the most spectacular failures get promoted because of their experience. Dogbert.
Chapter 39
Deals
Deal, according to Websters, means to apportion: distribute; to administer: deliver; to give out among player in a game; to take action in response to something; to conduct business: trade. "What's the deal?" everybody asks. This is as commonly found in daily conversation as "hello, how are you." Deals are made, deals are found, deals happen by accident. Opportunities are deals yet to be made or completed. Good deals happen all the time. Getting up in the morning is a good deal in relation to not being able to get up at all. Millions of people are starving, so having breakfast is a damn good deal. The "real deal" meal is fast food at its best, whatever that best may be. A deal may be a single action or a series of sets of opportunities and/or actions. Buyers, Sellers, and Products Transact, according to Websters, means to do, perform, carry out, manage, or conduct (e.g., business). Transaction, according to Websters, means the act of transacting or the fact of being transacted; something transacted; the proceedings, as of a convention. A product is anything capable of being bought or sold. A service is a product of an individual's or group's labors, their work preformed to benefit others and themselves. Businesspeople are in business to make a profit. They realize that they must have a sellable product to make a profit. They know that it is necessary to acquire a value or valuable that can be sold or
traded to someone else for some other value or valuable by means of a transaction In business there are three parts of any deal: the seller, the buyer, and the product. All three are essential to all business deals. In fact, business can only exist when all three components are brought together, as fire requires the presence of heat, fuel, and oxygen. If you take any one of the three components of a deal away, you cease to have business; you cease to have a deal. If you produce a product that costs 10 to make, sells for $1.00, and is disposable and addictive, you will become fabulously rich, wealthy beyond your dreams. Think of Coca-Cola, coffee, tea, and cigarettes. The mechanisms of a deal vary, as deals are individual in nature. Some deals, when satisfactorily completed, are finished, and the businessperson's activities may cease with regard to that particular deal. Many deals are ongoing and require after-sale service or maintenance. Many factors have a bearing on deals: strategies for success, analysis of the components of the deal, choice of strategic options, implementation of the choices, completion of all the chosen actions. It doesn't necessarily mean that all parties to the deal will be satisfied with the outcome of the deal. Buying a hat or a new car can be classified as a deal, as long as the either the buyer or seller is satisfied with the outcome. You can buy a car for $10,000 and sell the same car for $1,000 and be satisfied with both deals or you can be upset because you paid too much when buying and received too little when selling. It is only a matter of individual interpretation, or the relativity of the situation. P=VZC. According to Sun Tzu, Tenet 2, Action in War: The general will not raise or move troops and people more than once. Equipment and stocks will not be transported repeatedly. Time will not be wasted due to the lack of oversight. Local content will be used. An army will gather provisions from the enemy by seizure in war, and local purchases will be expensive, as no good will exists.
There are good deals, not-so-good deals, not-so-bad deals, and bad deals. Describe your deals, as this will help you to better understand the concept. Be content with your lot; one cannot be first in everything. Aesop.
Recognizing an opportunity is the first step in making a deal. Buy low, sell high; take advantage of future events (predictable and envisioned) at bargain basement prices. Corporations, organizations, institutions, and individuals generate business in the form of deals. They have ideas and develop them into business plans. They leverage the power of their individual and collective minds to produce new inventions, new technology, new products and new services. They copy other peoples ideas and develop them into businesses of their own. The world is full of extremely capable people who do research and develop ideas, then turn the ideas into tangible values and valuables. These people create the products of deals. Individuals wishing to get into business and those already in business must be vigilant. They must be prepared to seize an opportunity when that opportunity appears. See the opportunity; recognize the opportunity for what potential value the opportunity holds. The California Kid. Businesspeople consider both the quantity and quality of deals. In business, many small, successfully completed deals are good deals. A single large deal can also be a good deal, the "deal of a lifetime." Small deals that can be completed very rapidly and, in quantity provide positive cash flow. Larger, more cumbersome deals require constant maintenance over long periods of time. They require a continuous infusion of money and resources; this leads to negative cash flow. Businesspeople continually
work, sometimes for many years, on trying to further deals. Buyers are not forced to buy, sellers not forced to sell, products and price are negotiated, deals are made between buyers and sellers. The California Kid.
I would love to defer to Donald Trump and his wonderful work, The Art of the Deal; unfortunately, I never read it.
THOUGHTS and QUOTATIONS: Deals come and deals go. Remember the saying, "Don't put all your eggs into one basket." I've heard many people say, "I lost all my time and money on a deal that went bad." So if your money didn't come, then you will be the one to go. And life goes on to the next deal. Always keep some money in the cookie jar to get you through to the next deal. Try, try again. Don't give up. Learn from your mistakes and study why the deal went wrong. Don't just do it again, do it right. Diane Taren.
Chapter 40
Distribution
Distribute, according to Websters, means to divide and dispense in portions; to deliver or give out; to supply to retailers; to classify. Distribution in business is physically getting the product to the customers, delivering the goods. More than that, a distributor or the distribution division of any company must be concerned with inventory: how many products are available to be delivered. Have the products been damaged in handling? Will a broken product or damaged package be sent to the customer, only to be returned at a cost to the company? Who will do the actual delivery? Will your company maintain its own fleet of delivery vehicles, or will you use the delivery services of professional couriers? If you mail the product, were you able to collect payment in advance, or have you extended credit to the customer? Delivery services such as United Parcel Service (UPS) are capable of collecting payment at time of delivery (COD). This saves you the trouble of trying to collect a bad debt. When shipping internationally, availing yourself of the service of a good shipping agent and customs broker will prove invaluable. Will you insure your products with Cargo, Insurance and Freight (CIF) delivery, or will you forgo the additional cost of insurance and simply ship C and F? Your customers may wish to undertake the responsibility of delivery themselves in order to gain additional savings on the price of the products they purchase. This is called Free On Board (FOB) shipping, where the seller is responsible only for delivery to the shipping company. The shipping company issues a certificate of receipt or bill of lading, the shipping documents, to the seller. The seller takes the shipping documents and the letter of credit (LC) to the bank and negotiates payment. When letters of credit are used for payment, the seller may take the
shipping documents to the bank and negotiate the LC and receive payment. The payment is guaranteed by the LC. The issuers (buyers) bank guarantees the sellers bank the payment of delivered products. If your customers trust you, they may simply issue a telegraphic transfer of funds, bank to bank, you receive cash in advance. This is good for the seller, but there is an element of risk assumed by the buyer. What if the seller delays or never makes a shipment? Sellers and buyers are also concerned with the speed of delivery, ground or sea transportation versus airfreight. The former is more cost effective, whereas the latter costs more but ensures faster delivery of the goods. Some products are perishable. You would not want to eat seafood that took days or weeks to arrive at its destination, unless the shipper uses proper refrigeration. Lobsters are routinely shipped by airfreight worldwide. In addition, airfreight companies have the advantage of being able to track their shipments. You can know exactly where your products are at any given time. Try asking the government post office where your package is or exactly when it will be delivered. Remember that packages can get lost in the mail. If you are a manufacturer, it would be a good idea to take advantage of the services provided by an agent or distributor located in the local market in which you wish to sell your products. A local agent or distributor may already have an established customer base primed for your products. This would be like "killing two birds with one stone," sales and distribution at the same time by someone who is more qualified than you are in that particular market. In many cases, the agents or distributors will purchase the products from you or guarantee the purchase of an agreed minimum volume of product every month or every year, sometimes with the provision that you do not allow your products to be sold in the territory by anyone else. These are known as exclusive or sole agencies and master distributorships. These exclusive or sole agents and master distributors may be in
positions to appoint subagents or subdistributors who are capable of serving a greater territory and a greater potential customer population. This leaves you free to concentrate on development and production of your products. Some companies appoint agents and distributors in every country on earth, allowing themselves to access to the total population of the world. Coca-Cola, Marlboro, Kodak, and Xerox are examples. You can even go both ways and become an agent for a line of products and subcontract the sales duties out to subagents of your own. In this case, you would be responsible to ensure that the manufacturer makes deliveries in a timely fashion and to coordinates with your sub's sales activities. Once you establish a network of sub-sales agents, you can increase your product line by acquiring more agencies. You may also wish to be appointed as a representative of more manufacturers. You can integrate your sales network to handle more varieties of products without having to establish a new network of sales professionals. You can devote more time and effort to developing better working relationships with your existing sales network. You may devote your time working to improve the sales techniques of your sales force. In fact, many manufacturers will provide you with all of the sales tools and sales aids necessary to assist you in your sales activities. As a manufacturers representative, you may be using their product catalogues, brochures, video presentations, corporate Internet web sites, and other such aids. These are excellent sales tools that normally cost you nothing. Your use of them demonstrates the professionalism of the manufacturer and yourself to your potential customers. These sales aids also give the customer a sense of the quality of the products. If you are just starting out in business or thinking about getting into business, you may wish to become an agent or representative of a company desiring to acquire your services. These jobs are usually based on commissions, and you get paid upon sales and receipt of payment by the company from the customer. Some companies will offer you a minimum subsidy. This is done in order so that you can maintain a local sales office
and support the sales effort more effectively. This is a very economical way to start or get involved in business, as you have no costly factory to build and none the headaches associated with R & D and production. The government's favorite product to distribute is your money. However, to their credit, charitable organizations do distribute donated food, clothes, and such to the needy.
The system of efficient distribution is an art.

According to Sun Tzu, Tenet 2, Action in War: The state or nation can be drained of resources, and impoverished when provisions or goods are transported to exceedingly distant destinations or when the cost of goods is exceedingly expensive and disproportionate to the cost of local acquisition. THOUGHTS and QUOTATIONS: So an ancient once said, "Accept the anxieties and difficulties of this life." Don't expect your practice to be clear of obstacles. Without hindrances, the mind that seeks enlightenment may be burnt out. So an ancient once said, "Attain deliverance in disturbances". Zen Master Kyong Ho.
Chapter 41
Cosmetics
Cosmetic, according to Websters, means serving to beautify the body; superficial: insignificant. According to Sun Tzu, Tenet 1, Estimations: Warfare is based on and is the way of deception. In war it is your duty to deceive the enemy. When capable, display incapability; when committed to action, show inactivity as a ruse; when your goal is near, show a priority to gain a distant goal; when your goal is far, show a priority to obtain a close and convenient goal in contrast to the desired distant goal. Businesses have a face and a body. The face is exposed for all to see; the body, however, is concealed to some extent. Just as people wear clothes to cover their bodies for reasons of protection, warmth, and modesty, we must protect our business and keep them warm. What we see affects what we think. Beauty is in the eye and mind of the beholder. Some beauty is on the outside and some is on the inside. A painted face is superficial and insignificant as compared to the beauty of the mind and soul of the individual. We all wish to appear beautiful. We can paint our face and apply lotions to make our skin smooth, but that does not take care of our inner self. A healthy business is a beautiful thing, something to be proud of, and something that gives the owner bragging rights. A small business operated out of a very small office, with worn furniture, ragged curtains, and outdated equipment that maintains a healthy bottom-line and makes a good profit is a beautiful business. It is what is on the inside that counts the most. The superficial adornments, the things that we do in order to make a
good impression are important, but not as important as the things we do that maintain our health. It is said that you only get one chance to make a first impression. Try to make it a good impression. People in business, for the most part, are not shallow people. We understand the ongoing work of a project, a transaction, or a deal. We understand that work causes wear and tear on equipment and individuals. We expect to have difficulty and understand when others are having difficulty. The fact that an individual makes a conscious effort to maintain both the exterior and interior of their business speaks volumes about the competence, confidence, and integrity of that individual. Empathy, according to Websters, means identification with and understanding of the thoughts or feelings of another. Your personal presentation is as important as the way you present your products, services and your business in general. A beautiful presentation will go a long way to complete a transaction, finalize a contract, and close a deal. The cosmetics of presentation are as varied as the individuals on earth. Be an individual. Present yourself and your products and services with confidence and pride. Be conscious of how others will see you, your products and services. Try to see yourself, your products and services from your customers point of view. Although many people who operate good businesses do not react to feelings and emotions, it is necessary to understand that not all people will act or react using the mechanisms of conscious thought. Many people still rely on their feelings and emotions, on their non-existent instincts and whims to guide them through life. Sympathy, according to Websters, means a relationship between individuals in which whatever affects one affects the other in a similar way; mutual affection or understanding; the capacity to share another's feelings; a feeling or expression of sorrow for another's distress or loss; favor: accord. A sympathetic person displays compassion and affection and understands another persons situation. In business, you must be able to sympathize with your customers, understand and show concern for their
situation and their wants and needs. Looking at any given situation from the other person's point of view and being ready, willing, and able to offer assistance is a good business practice. Once again, use your conscious mind to understand any given situation. Be sympathetic, but be sincere or do not bother with sympathy. If a customer comes to you and wishes to purchase a particular item that you do not carry in your product line or that you are temporally out of stock, offer to direct them to an alternative source, one of your competitors. Assist the customer. Help them to complete their purchase. Your customer will recognize your positive efforts for what they are. You will have committed a beautiful gesture. What goes around comes around.
The beauty in any art is in the eye of the beholder.

THOUGHTS and QUOTATIONS: Appearances often are deceiving. Aesop. When his wife asked him to change clothes to meet the German ambassador: they want to see me, here I am. If they want to see my clothes, open my closet and show them my suits. Albert Einstein. Beauty is all very well at first sight; but who ever looks at it when it has been in the house three days? George Bernard Shaw. The future belongs to those who believe in the beauty of their dreams. Eleanor Roosevelt. I offer you peace. I offer you love. I offer you friendship. I see your beauty. I hear your need. I feel your feeling; my wisdom flows from the Highest Source. I salute that Source in you. Let us work together for unity and love. Mahatma Gandhi. Beauty is an ecstasy; it is as simple as hunger. There is really
nothing to be said about it. It is like the perfume of a rose: you can smell it and that is all. W. Somerset Maugham.
Chapter 42
Secrecy
Secret, according to Websters, means to hide away; conceal. According to Sun Tzu, Tenet 1, Estimations: Victory is achieved when you follow these ways. They (the ways) must be kept secret. Under these analytical conditions, it will be obvious as to the outcome of the battle. By these means, you can observe, analyze, choose options, decide actions, and know victory or recognize defeat. Secrecy, according to Websters, means the state of being secret; the practice of keeping secrets. Keep your mouth shut. Think before you speak. Your business is your business. Secrecy is self-control, both in not revealing sensitive information and in knowing what is sensitive. According to Sun Tzu Tenet 6, Weakness of Vacuity and Strength of Substance: Our objectives of attack must be kept secret from the enemy; this will force him to defend many locations. There is nobody in business who absolutely needs to know your plans. When you are being pressured to reveal secrets, treat the person pressuring
you like a mushroom: keep them in the dark, and feed them manure. To keep your secret is wisdom; to expect others to keep it is folly. Samuel Johnson. The importance of secrecy is paramount. We have devoted more than one page to the explanation of the art of secrecy.
The art of secrecy is as follows:
Epilogue
According to Sun Tzu, Tenet 11, Nine Situations of Terrains: The competent general who truly commands an army has transformed the many into one and leads the one by the hand. The one cannot help but follow. If you have gotten anything out of this book, we hope that you now consciously think for yourself. We also would hope that you will always strive to do your best and continually try to improve on your best until you reach core logic. When you become confident and competent as an individual and a businessperson, you should always try to lead as your own conscious mind tells you that you should. The reader will note that we in business prefer to think rather than allow our feelings to control any given situation; however. All people have emotions that will be affected by or will affect others. The ability to control our emotions is what is at stake in the strategic leadership relationship The major qualities possessed by a leader are as follows: Courage. Unwavering courage to succeed. Courage that is based on your knowledge, confidence, competence. Know that leaders lead; they do not dominate. Justice to all. Leaders are fair in their dealings with all who follow them and all with whom they come into contact. Leaders must develop plans for success. They must follow their plans. Leaders are not haphazard in this capacity. Leaders make decisions. When decisions must be made, leaders use their knowledge to make correct decisions. Leaders stick to the decisions
they make. Leaders do not change their minds in a wishy-washy fashion. Leaders are in control of people because they have the capacity to command respect. They are not careless in their appearance, manners, or personality. Attention to detail. Leaders must know every facet of what they are doing and must exhibit the ability to accomplish whatever they start. They are not forgetful of the little things that are the mark of perfection. Leaders must instill the spirit of cooperation within the group. Leaders must possess the ability to work with individuals and groups. They must display cooperation and set an example for all who follow them. Leaders assume responsibility for their actions. Whether the results are positive or negative, a leader does not evade or avoid responsibility. Leaders are sympathetic and understanding. Leaders use empathy to understand the factors that affect the individuals who follow them. Leaders do more rather than less. They know what must be done without having to be told and accomplish the tasks they undertake. Their work is exemplary rather than merely satisfactory. Above all, leaders are in control of themselves. They possess selfcontrol. Followers will emulate the leader who sets and practices the highest standards necessary to achieve success. Common causes of failure in leadership are as follows: A leader who fears that his followers may become superior in ability and replace him is not a true leader. Leaders encourage followers to achieve greatness and become leaders themselves. Leaders expect to get paid for what they accomplish and what they inspire other to accomplish, but not for the simple act of having others follow them. Inefficiency. This is not a trait possessed by leaders. Leaders demand of themselves the ability to accomplish all tasks required for success in any given situation. Leaders are not afraid to do the things they would ask others to do. They exhibit the willingness and ability to do the work they would have
others do. Leaders are not selfish. They are generous and willing to reward others for a job well done. Leaders know it is the followers who accomplish the task at hand. They are prepared to elevate the group above the leader him or herself. Leaders must encourage others to do their best by means of inspiration, not by threat of force or coercion. The simple act of being authorized to lead does not necessarily inspire others to follow or do their best. The leader who is competent needs no title. He knows what must be done and is ready, willing and able to accomplish the task without the incentive of personal reward. Leaders do not lack imagination. They are keen to create solutions to every problem. They consciously know the value of imaginative concepts and ideas. Lack of personal moderation in all things. Bad habits and vices will signal that a leader is not in control of his or her own self. Above all, loyalty. A leader who is disloyal is not a leader. A leader must be trustworthy. A display of disloyalty will fragment followers and breed contempt in others. Disloyalty is a fatal trait and cannot be tolerated. STRATEGIC LEADERSHIP Task: critically evaluate your own approach to leadership in an organizational context and use this to draw up a plan to further develop your leadership capability. Introduction Every businessperson knows a story about a highly intelligent, highly skilled executive who was promoted into a leadership position, only to fail at the job. They also know a story about someone with solid, but not extraordinary, intellectual abilities and technical skills who was promoted and soared. Such anecdotes support the widespread belief that identifying
individuals with the "right stuff" to be leaders is more art than science. After all, the personal styles of superb leaders vary. Some leaders are subdued and analytical, whereas others shout their manifestos from the mountaintops. Different situations call for different types of leadership. Most mergers need a sensitive negotiator at the helm, whereas many turnarounds require a more forceful authority. However, an essential part of management is coordinating the activities of people and directing their efforts toward the goals and objectives of the organization. This involves the process of leadership and the choice of an appropriate form of behavior. Leadership is a central feature of organizational behavior. The manager must understand the nature of leadership and the factors that determine the effectiveness of the leadership relationship. Emotional Intelligence The most effective leaders are alike in one crucial way: they all have a high degree of what has come to be known as emotional intelligence. This is the sine qua non of leadership (sine qua non: without which, an indispensable condition). Without it, a person can have the best training in the world, an incisive, analytical mind, and an endless supply of smart ideas, but he still won't make a great leader. Emotional intelligence is associated with effective performance, especially in leaders. It shows itself on the job. The following are components of emotional intelligence that are recognizable as leadership style. The five components of emotional intelligence are self-awareness, selfregulation, motivation, empathy, and social skill. 1. Self-Awareness. This is the ability to recognize and understand your moods, emotions, and drives, as well as their effects on others. The hallmarks of such a component are self-confidence, realistic self-assessment, and a self-deprecating sense of humor. 2. Self-Regulation. This is the ability to control or redirect disruptive
impulses and moods, the propensity to suspend judgment and think before acting. The hallmarks of such a component are trustworthiness and integrity, comfort with ambiguity, and openness to change. 3. Motivation. This is a passion to work for reasons that go beyond money or status, a propensity to pursue goals with energy and persistence. The hallmarks of such a component are a strong drive to achieve optimism, even in the face of failure. Motivation is also related to organizational commitment. 4. Empathy. This is the ability to understand the emotional makeup of other people, also the skill in treating people according to their emotional reactions. The hallmarks of such a component are expertise in building and retaining talent, cross-cultural sensitivity, and better service to clients and customers. 5. Social Skill. This is proficiency in managing relationships and building networks, an ability to find common ground and build rapport. The hallmarks of this component are effectiveness in leading change, having persuasiveness qualities, and expertise in building and leading teams. Self-awareness Self-awareness is the first component of emotional intelligence. It means having a deep understanding of one's emotions, strengths, weaknesses, needs, and drives. It is believed that people with strong selfawareness are neither overly critical nor unrealistically hopeful. Rather, they are honest with themselves and with others. People with a high degree of self-awareness recognize how their feelings affect themselves, other people, and their job performance. Thus, I am a self-aware person who knows that tight deadlines bring out the worst in me, my plans, and my time. They can affect my carefulness and my ability to get my work done well in advance. A person with high selfawareness will be able to work with a demanding client. He/she will
understand the client's impact on his/her moods and the deeper reasons for his/her frustration. "The clients trivial demands take us away from the real work that needs to be done." He/she will go one step further and turn his/her anger into something constructive. Self-awareness extends to a persons understanding of his/her values and goals. Since I am a person who is highly self-aware, I know where I am heading and why; for example, I am able to be firm in turning down a job offer that is tempting financially but does not fit with my principles or long-term goals. A person who lacks self-awareness is apt to make decisions that bring on inner turmoil by treading on buried values. "The money looked good, so I signed on," someone might say two years into a job, "but the work means so little to me that I am always bored." The decisions of self-aware people mesh with their values; consequently, they often find work to be energizing. The strength in this issue is that if you were asked to describe a time when you got carried away by your feelings and did something, only to regret your actions at a later time. Being a self-aware person, you must be frank in admitting to failure and you often tell your tales with a smile. One of the hallmarks of self-awareness is a self-deprecating sense of humor. On the other hand, when invited to sit in on a strategy meeting with the companys top executives and being one of the juniors in the room, do not sit there quietly and listen in awestruck or fearful silence. If you know you have a head for clear logic and the skill to present ideas persuasively, then do so. Offer cogent suggestions about the companys strategy. At the same time, be self-aware. Stop short of wandering into territory where you know you are weak. Further, you may be constantly required to make judgment calls that require a candid assessment of capabilities, both your own and those of others. Challenging areas are, does my company have the management expertise to acquire a competitor or can my company launch a new product within six months? People who assess themselves honestly, that is to say, self-aware people, are well suited to do the same for the organization they
run. Self-regulation Biological impulses drive our emotions. We cannot do away with them, but we can do much to manage them. Self-regulation, which is like an ongoing inner conversation, is the component of emotional intelligence that frees us from being prisoners of our feelings. People engaged in such conversation feel bad moods and emotional impulses just as everyone else does, but they find ways to control them and even channel them in useful ways. Imagine an executive who has just watched a team of his employee present a botched analysis to the companys board of directors. In the gloom that follows, the executive might find himself tempted to pound on the table in anger or kick over a chair. He could leap up and scream at the group. He might maintain a grim silence, glaring at everyone before stalking off. If you are self-regulating and you were in his shoes, would you choose a different approach? Would you pick your words carefully, acknowledging the teams poor performance without rushing to any hasty judgment? Would you then step back to consider the reasons for failure? Are they personal, based on a lack of effort? Are there mitigating factors? What was your role in the debacle? After considering these questions, you could the call the team together, lay out the incidents consequences, and offer feedback. Present your analysis of the problem and a well-considered solution. The possession of self-regulation matters very much for leaders because people who are in control of their feelings and impulses are people who can be reasonable. They are able to create an environment of trust and fairness. It should be noted that in such an environment, politics and infighting are sharply reduced and productivity is routinely higher. Talented people will flock to the organization and are not tempted to leave. Self-regulation has a trickle-down effect. No one wants to be known as a hothead when the boss is known for his/her calm approach. Fewer bad
moods at the top mean fewer throughout organization. Self-regulation is important for competitive reasons. Everyone knows that business today is rife with ambiguity and change. Companies merge and break apart regularly. Technology transforms work at dizzying pace. People who have mastered their emotions are able to roll with changes. When a new program is announced, they dont panic; instead, they are able to suspend judgment, seek information, and listen to executives explain the changes. As the initiative moves forward, they are able to move with it. An example that we have come across at our work is the software program we have used for five years. The program drove how we collected and reported data and how we thought about the companys strategy. One day, senior executives announced that a new program was to be installed that would radically change how information was gathered and assessed within the organization. While many people in the company complained bitterly about how disruptive the change would be, we mulled over the reasons for the new program and were convinced of its potential to improve performance. We eagerly attended training sessions, although some of our colleagues refused to do. We eventually were promoted to run several divisions, in part because we used the new technology so effectively. We want to push the importance of self-regulation as it relates to leadership even further and make the case that it enhances integrity, which is not only a personal virtue but also an organizational strength. Many of the bad things that happen in companies are a function of impulsive behavior. Like self-awareness, self-regulation often does not get its due. People who can master their emotions are sometimes seen as cold fish; their considered responses are taken as a lack of passion. People with fiery temperaments are frequently thought of as classic leaders; their outbursts are considered hallmarks of charisma and power. But when such people make it to the top, their impulsiveness often works against them. Experience tells us that extreme displays of negative emotion have never
emerged as a driver of good leadership. Motivation If there is one trait that virtually all effective leaders have, it is motivation. They are driven to achieve beyond expectations, their own and everyone elses. The key word here is achieve. Plenty of people are motivated by external factors, such as a big salary or the status that comes from having an impressive title or being part of a prestigious company. By contrast, those with leadership potential are motivated by a deeply embedded desire to achieve for the sake of achievement. When we search for leaders, we can identify such people by looking for people who are motivated by the drive to achieve rather than by external rewards. We should look for people who seek out creative challenges, who love to learn and take great pride in a job well done. These people also display an unflagging energy to do things better. People with such energy often seem restless with the status quo. They are persistent with their questions about why things are done one way rather than another. They are eager to explore new approaches to their work. In the company, for example, we were frustrated that we had to wait two weeks to get sales results from our people in the field. We finally tracked down an automated phone system that would beep each of the salespeople at 5 p.m. everyday. An automated message then prompted them to punch in their numbers, how many calls and sales they had made that day. The system shortened the feedback time on sales results from weeks to hours. This illustrates two other common traits of people who are driven to achieve. It shows that the performance bar is rising and the keen interest to keep score. People with high motivation remain optimistic even when the score is against them. In such cases, self-regulation combines with motivation to overcome the frustration and depression that come after a setback or failure. Take the case of the portfolio manager in the company. After several successful years, his fund tumbled for three consecutive quarters, leading three large
institutional clients to shift their business elsewhere. Some executives would have blamed the nosedive on circumstances outside their control; others might have seen the setback as evidence of personal failure. This portfolio manager, however, saw an opportunity to improve performance; he could lead a turnaround. Two years later, when he was promoted to a very senior level in the company, he described the experience as the best thing that ever happened to me. I learned so much from it. Empathy Of all the dimensions of emotional intelligence, empathy is the most easily recognized. We have all felt the empathy of a sensitive teacher or friend and we have all been struck by its absence in an unfeeling coach or boss. But when it comes to business, we rarely hear people praised, let alone rewarded, for their empathy. The very word seems unbusinesslike, out of place in the tough realities of the marketplace. But empathy doesnt mean a kind of Im okay, youre okay mushiness. For a leader, it doesnt mean adopting other peoples emotions as ones own and trying to please everybody. That would be a nightmare; it would make action impossible. Rather, empathy means thoughtfully considering employees feelings, along with other factors in the process of making intelligent decisions. For an example of empathy in action, consider what happened when two giant brokerage companies merged, creating redundant jobs in all their divisions. One division manager called his people together and gave a gloomy speech that emphasized the number of people who would soon be laid off. The manager of another division gave his people a different kind of speech. He was upfront about his own worry and confusion, and he promised to keep people informed and to treat everyone fairly. The difference between these two managers was empathy. The first manager was too worried about his own fate to consider the feelings of his anxiety-stricken colleagues. The second knew intuitively what his people were feeling and acknowledged their fears with his words. Is it any surprise that the first manager saw his division sink as many demoralized people,
especially the most talented, departed? By contrast, the second manager continued to be a strong leader. His best people stayed and his division remained as productive as ever. Empathy is particularly important today as a component of leadership for at least three reasons: the increasing use of teams, the rapid pace of globalization, and the growing need to retain talent. It should be noted that empathy doesnt get much respect in business. People wonder how leaders can make hard decisions if they are feeling for all the people who will be affected. But leaders with empathy do more than sympathize with people around them; they use their knowledge to improve their companies in subtle but important ways. Social Skill The first three components of emotional intelligence are all selfmanagement skills. The last two, empathy and social skill, concern a persons ability to manage relationships with others. As a component of emotional intelligence, social skill is not as simple as it sounds. Its not just a matter of friendliness, although people with high levels of social skill are rarely mean-spirited. Social skill is friendliness with a purpose, moving people in the direction you desire, whether thats an agreement on a new marketing strategy or enthusiasm about a new product. Social skill is the culmination of the other dimensions of emotional intelligence. People tend to be very effective at managing relationships when they can understand and control their own emotions and can emphasize with the feelings of others. Even motivation contributes to social skill. Remember that people who are driven to achieve tend to be optimistic, even in the face of setbacks or failure. When people are upbeat, their glow is cast upon conversations and other social encounters. They are popular, and for good reason. Because it is the outcome of the other dimensions of emotional intelligence, it is social skill that is recognizable on the job. In many ways that will by now sound familiar; socially skilled people are adept at
managing teams. Thats their empathy at work. Likewise, they are expert persuaders, which is a manifestation of self-awareness, self-regulation, and empathy combined. Given those skills, good persuaders know when to make an emotional plea, and when an appeal to reason will work better. Motivation, when publicly visible, makes such people excellent collaborators. Their passion for the work spreads to others and they are driven to find solutions. Sometimes social skill shows itself in ways that the other emotional intelligence components do not. For example, socially skilled people may at times appear not to be working while at work. They seem to be idly schmoozing-chatting in the hallways with colleagues or joking around with people who are not even connected to their real jobs. Socially skilled people, however, dont think it makes sense to arbitrarily limit the scope of their relationships. They build bonds widely because they know that in these fluid times they may need help someday from people they are just getting to know today. Dont get caught playing around, but dont lose opportunities to bond with others. In conclusion Truly conscious people could conclude that it would be foolish to assert that good-old-fashioned I.Q. and technical ability are not important ingredients in strong leadership, but the recipe would not be complete without emotional intelligence. It was once thought that the components of emotional intelligence were nice to have in business leaders. But now we know that these are ingredients that leaders need to have. It is fortunate that emotional intelligence can be learned. The process is not easy. It takes time and, most of all, commitment. But the benefits that come from having a well-developed emotional intelligence, both for the individual and for the organization, make it worth the effort. Leadership is a matter of having people look at you and gain confidence, seeing how you react. If you're in control, they're in control. Tom Landry.
Success depends above all, upon people. Build relationships, teams, partnerships and motivate people to contribute. Cultivate leadership, creativity, excellence. Listen; seek new ideas and advice. Ruth Scott. Superior leaders get things done with very little motion. They impart instruction not through many words, but through a few deeds. They keep informed about everything but interfere hardly at all. They are catalysts, and though things would not get done as well if they were not there, when they succeed they take no credit. And, because they take no credit, credit never leaves them. Lao-Tzu. A good objective of leadership is to help those who are doing poorly to do well and to help those who are doing well to do even better. Jim Rohn. Outstanding leaders go out of the way to boost the self-esteem of their personnel. If people believe in themselves, it's amazing what they can accomplish. Sam Walton. Management works in the system. Leadership works on the system. Stephen R. Covey. The final test of a leader is that he leaves behind him in other men the conviction to carry on. Walter Lippmann. Leadership is doing what is right when no one is watching George Van Valkenburg.
The art of being a leader is in being able to lead yourself.

According to Sun Tzu, Tenet 11, Nine Situations of Terrains: When a general truly commands, at the moment of command in battle,
the troops will achieve the heights as if they have climbed ladders and then abandoned their support, their boats have been burned, and the cooking pots smashed. The general continues to lead and penetrate the enemy, releasing the trigger at the precise moment. His forces respond as if they were a flock of sheep, herded this way and that without knowing the where or why of their movements. The art of good business is relative to the art of war. The California Kid. According to Sun Tzu,Tenet 5, Strategic Force: The nature of the conventional and the unconventional, the orthodox and the unorthodox, the common and the uncommon is such as one produces the other in a never-ending cycle. Who can ever perceive and comprehend all of the combinations possible? When one contemplates the engagement of battle, it is with the conventional, the orthodox, the common that one considers first; however, it is with the employment of the unconventional, the unorthodox, the uncommon that one achieves certain victory.
I pledge allegiance to myself To the individual I have become To the artful ideas that I conceive To the decisions that I make To the actions that I take Dedicated to the proposition, that one day all people
will think for themselves The California Kid
References
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2 Abdul Wahab Alfalaij & James Howard Merkel

On The Art f Business

FOOD FOR THOUGHT Production

"Its the road you are on"

3 Abdul Wahab Alfalaij & James Howard Merkel

4 Abdul Wahab Alfalaij & James Howard Merkel

5 Abdul Wahab Alfalaij & James Howard Merkel

1.) The War, Peace, and Business linear mathematical relationship.

-1___________________0_________________+1 WAR PEACE BUSINESS

2.) The War, Peace, and Business triangular mathematical relationship.

6 Abdul Wahab Alfalaij & James Howard Merkel

4.) The Urgency Scale

The Urgency Scale

The Ability / Availability Scale

On The Art of Business

7 Abdul Wahab Alfalaij & James Howard Merkel

8 Abdul Wahab Alfalaij & James Howard Merkel

9 Abdul Wahab Alfalaij & James Howard Merkel

10 Abdul Wahab Alfalaij & James Howard Merkel

11 Abdul Wahab Alfalaij & James Howard Merkel

12 Abdul Wahab Alfalaij & James Howard Merkel

13 Abdul Wahab Alfalaij & James Howard Merkel

14 Abdul Wahab Alfalaij & James Howard Merkel

15 Abdul Wahab Alfalaij & James Howard Merkel

Foreword & Acknowledgements

16 Abdul Wahab Alfalaij & James Howard Merkel

17 Abdul Wahab Alfalaij & James Howard Merkel

18 Abdul Wahab Alfalaij & James Howard Merkel

19 Abdul Wahab Alfalaij & James Howard Merkel

20 Abdul Wahab Alfalaij & James Howard Merkel

21 Abdul Wahab Alfalaij & James Howard Merkel

22 Abdul Wahab Alfalaij & James Howard Merkel

23 Abdul Wahab Alfalaij & James Howard Merkel

24 Abdul Wahab Alfalaij & James Howard Merkel

25 Abdul Wahab Alfalaij & James Howard Merkel

26 Abdul Wahab Alfalaij & James Howard Merkel

27 Abdul Wahab Alfalaij & James Howard Merkel

28 Abdul Wahab Alfalaij & James Howard Merkel

29 Abdul Wahab Alfalaij & James Howard Merkel

30 Abdul Wahab Alfalaij & James Howard Merkel

31 Abdul Wahab Alfalaij & James Howard Merkel

32 Abdul Wahab Alfalaij & James Howard Merkel

33 Abdul Wahab Alfalaij & James Howard Merkel

34 Abdul Wahab Alfalaij & James Howard Merkel

35 Abdul Wahab Alfalaij & James Howard Merkel

36 Abdul Wahab Alfalaij & James Howard Merkel

Do Not Let Anyone Control You!

37 Abdul Wahab Alfalaij & James Howard Merkel

38 Abdul Wahab Alfalaij & James Howard Merkel

39 Abdul Wahab Alfalaij & James Howard Merkel

40 Abdul Wahab Alfalaij & James Howard Merkel

41 Abdul Wahab Alfalaij & James Howard Merkel

42 Abdul Wahab Alfalaij & James Howard Merkel

Part II Sun Tzu Art of War

43 Abdul Wahab Alfalaij & James Howard Merkel

44 Abdul Wahab Alfalaij & James Howard Merkel

45 Abdul Wahab Alfalaij & James Howard Merkel

46 Abdul Wahab Alfalaij & James Howard Merkel

47 Abdul Wahab Alfalaij & James Howard Merkel

48 Abdul Wahab Alfalaij & James Howard Merkel

-1___0_+1 WAR PEACE BUSINESS