Finger-Pointing Asian Crisis Provides Easy Scapegoat For Corporate Missteps

Has your company been messing up lately?

Don’t sweat it. Instead of pointing the finger at yourself, blame it on Asia.

That, more or less, is what executives are doing at some U.S. corporations amid a wave of disappointing earnings reports and financial projections.

Of course, many vibrant American businesses are being genuinely pinched by the gyrations of the Asian currencies and financial markets over recent months, as announcements out last week from the likes of Motorola Inc. and Intel Corp. attest.

But other companies appear to be using the Asian crisis as a smoke screen to fool others, or even themselves, about what’s really happening. Sort of like the way weather forecasters blame everything on El Nino.

“It’s camouflage on demand,” said Chicago-area software industry analyst Byron Miller, one of the business observers noticing the trend. For companies with problems that needed explaining, he said, the Asian crisis “was an issue that was ripe for the picking.”

With a torrent of year-end corporate financial reports due in coming weeks, analysts said, the fibbing and fudging are likely to pile up.

“I’m sure companies will use this as a rationale for all sorts of things that aren’t related to Asia,” said Bruce Steinberg, chief economist of Merrill Lynch & Co. in New York.

Analysts already have pointed to such corporate giants as Nike Inc., the sneaker and sports apparel company, and Oracle Corp., the world’s No. 2 software company, as using Asian upheaval as at least somewhat of a scapegoat.

This is a time-honored practice. Even in supposedly sophisticated financial circles, placing the blame on someone else is a common ploy.

“The French always blame the U.S. for currency fluctuations,” said John Train, an author who has written about financial calamities and shenanigans. “Whether (exchange rates) go up or down, they blame Wall Street.”

Much the same goes for American corporate managers, said Robert A. Olstein, president of an investment fund based in Purchase, N.Y. Olstein, who specializes in digging up issues hidden in corporate financial reports, said managers always try “to put their best foot forward and when they fail, they’re always blaming some outside influence.”

Take Nike. Last month it reported a 20 percent decline in profits in its fiscal second quarter. The company also said its revenue will fall below previous expectations over the rest of its fiscal year. One of the key reasons spelled out in Nike’s news release: “uncertainties in the Asian markets.”

But blaming Asian business conditions for tripping up in the sneaker and apparel business seems like a lot of hooey to Kurt Barnard, a retailing consultant in Scotch Plains, N.J. He said Nike’s main problem is that the up-and-down athletic footwear business “is not what it used to be.”

“The business has oversupply and insufficient demand. Lots of athletic footwear people have been caught with their shoes off and pants down, and are not doing too well,” Barnard added.