Leisureplanet.com: organization and HRM in the new economy.

Methodology

The first author served as the senior HR manager of Leisureplanet.com during its last, and critical, phase of evolvement. Through the lens of his role we present events of which he had first-hand experience. We also make use of official business plans and documentation which are in the public domain since the company went into receivership. The second author interviewed in person five key members of the organization (though not the founder and CEO, Pierre Kleinhans, who remains uncontactable). We wrote this report with the benefit (and bias) of hindsight, some 18 months after the company collapsed. Our account was read and approved by two former employees of the company.

A Brief History of Leisureplanet.com Founding Phase (1992-1995)

Leisureplanet dates back to December 1991, when it was established in Belleville (Cape Town), South-Africa by Pierre Kleinhans. (1) The company started as an electronic publisher of multimedia hotel information for the travel industry. Leisureplan, as it was then known, was born in a consumer society with a keen appetite for leisure and travel. It was among the first to the market with a multimedia CD-ROM "aimed to assist travel professionals and individuals in the selection and booking of hotels and other travel products." (2)

Leisureplan's business model was founded on its key asset, a hotel database; however, for hotels to be willing to pay for a listing in a CD-ROM publication, it had to have a large distribution segmented to different customer groups. In turn, for customers to be willing to access the database, it had to have a wide and attractive selection of hotels. Hence, the only way to convince hotels and customers alike to step into this (ad)venture was by selling upfront something that was not quite there yet. This inbuilt paradox of business startup, by itself not unique to the new economy, echoes what characterized the dot.com boom of the late 1990s. It also became the blueprint for Leisureplanet.

Profits were therefore non-existent "because (the company) has been engaged in developing the software, human resources, systems, and processes which form the asset base..., Leisureplan's financial records reflect a period of major investment with no overall profits having been produced." (3)

Second Phase (1995-1997)

By 1995, the expanding capabilities of the Internet and its lure to investors started to become evident. The physical CD-ROM was gradually moved to become an Internet site (launched in April 1996), though its key asset remained the database, and the core activity still focused on the acquisition of content (participating hotels) rather than actively engaging customers. Thomas Cook and Philips Multimedia invested US$4.7 million during this period.

The company, headquartered in Cape Town, had a European operation base in Belgium and altogether employed 45 persons.

Third Phase (1997-1999)

Moving from a passive database to an interactive Web site marked the onset of global ambitions for the now-renamed Leisureplanet--ambitions fuelled by the NASDAQ "bubble" and the rapidly unfolding new technology, the now-renamed Leisureplanet marking this change. Whereas earlier on, real customers and advertisement revenues defined growth projections, potential realization now became the hallmark. Growth rates soared to triple-digit figures (nearing 200 percent per annum), funding leapfrogged, creating a spending frenzy, requiring in turn ever-bigger business plans. The activity hype during that period led to global reach through partnerships with the flagship companies of the Internet and media: Yahoo!, Lycos, and CNN, investing in total some US$50,000,000 in cash and partnerships. (4)

The significant departure from measuring potential customers to counting potential hits (site visits)--a common measure for the first wave of dot.coms--signaled increasing detachment from reality testing and the veracity of the marketplace.

At this stage the company numbered 80 employees operating from Cape Town and Leuven in Belgium, seat of its headquarters since March 1999.

Fourth (Final) Phase (2000-)

By now the company reached the pinnacle of virtuality. From an interactive platform, Leisureplanet.com was to transform into a "global village" of leisure travelers (5) and the key performance measure became the number of active community members, defined as actual contributors to the domain (much in the same way Amazon.com readers, for example, provide book reviews for the benefit of other potential customers). Whereas previously, annual business plans ranged from US$20 million to US$50 million, the 2000/1 business plan assumed an additional investment of US$250 million. (6)

There were now 231 employees operating from three sites: Leuven, Cape Town, and London, and the need for a formal operating structure and binding organizational procedures became pressing, heralding the appointment of the first author. (7)

The burst of the NASDAQ "bubble" in March 2000 triggered an immediate funding crisis and an abrupt slowdown. Until that moment, growth and momentum had been the only tangible and the slowdown meant the breakdown of the company. Collective dismissal and bankruptcy caused the company to cease operations on August 28, 2000. Its realizable assets (the databases) amounted to no more than US$'/2 million (out of a total investment of some US$70 million).

Virtuality

Virtual corporation: A temporary network of independent companies, suppliers, and customers, linked by information technology to share skills, costs, and access to one another's markets.

Virtual Office: Simulated by communication links between dispersed employees and freelancers.

Virtual Company: Has been used in the sense of both virtual office and virtual corporation.

--The Oxford Dictionary of New Words (1997)

Virtuality as Habitus

We wish to evoke here a notable thinker of the late 20th Century, Marshall McLuhan (1911-1980). McLuhan, the guru of communications ("the medium is the message"), foresaw globalization and the explosion of communication technologies and coined one of the key phrases of the new era - global village: "'Time' has ceased, 'space' has vanished. We now live in a global village...a simultaneous happening" (McLuhan, 1967, 63).

McLuhan believed that the use of electricity extends our central nervous system to affect a universal connectivity that transcends the individual: "We live mythically and integrally...In the electric age, when our central nervous system is technologically extended to involve the whole of mankind and to incorporate the whole of mankind in us, we necessarily participate... in the consequences of our every action" (1964, 4). His mysticism, anchored in religious belief, was influenced by the Catholic philosopher Pierre Teilhard de Chardin, which, notes Wolf (1996) "...led him to hope, as had Teilhard, that electronic civilization would prove a spiritual leap forward and put humankind in closer contact with God" (1996, 125), though later he reversed himself, calling the electronic universe "an unholy impostor...a blatant manifestation of the Anti-Christ" (op. cit.).

Hence "electronic civilization": IT and the World Wide Web is the Savior and Satan incarnated in one. Belief has played an important role in our case and religious mysticism has molded the idea of virtuality, to produce a habitus. (8)

The Business Context

The business context in which the first wave of dot.com organizations operated was critical to virtuality becoming an organizational building block, the equivalent to bricks & mortar of the old economy, which, at their time, shaped organizational structures and processes.

By the late 1990s, NASDAQ -- the fountain, engine, and temple of the new economy, had been on a spiraling rise over several consecutive years, growing by an astonishing 250 percent in 15 months, peaking in early 2000 at an all-time high of over 5,000 points. The market mood was unquestionably "bullish" and it followed from the premise that the new economy was not supposed to abide by standard economic rules. Whereas in traditional stocks, market value was linked to a company's actual performance, material assets, and future prospects, most values listed on NASDAQ had no real assets to underpin their speculative growth. Market capitalization of up to 1,000 times a company's (future) assets was not unusual in NASDAQ's boom days, underlying the spectacular belief in the future of the Internet and its spawned organizations, the dot.coms.

They seemed to be defying conventions and basic organizing principles. This new breed of organization -- the dot.com -- has been replacing the machinery of sales apparatus, distribution networks, and storage facilities with the computer screen and the wizardry of a new technology, which eclipses time and space and does away with brick-and-mortar infrastructures. The critical novel feature of dot.coms was their real-time connectivity to whomever and wherever.

The Industry Context

The particular business sector in which Leisureplanet.com operated added its own contribution to Leisureplanet's virtuality habitus.

The travel industry, the second largest consumer market in the world, comprises two main activity areas: business and leisure, corresponding to business-to-business and business-to-consumer markets. It was the latter that Leisureplanet.com was to attempt. "Leisure travel comprises about 50% of the overall travel turnover, with the rest shared mainly among corporate travel, conference and incentive travel, and unmanaged business travel." (9) Whereas one of the key drivers for business travel customers is efficiency and reliability, the main buying trigger for most of the leisure travel is information pertinent to what is labeled as the "dream industry." The "dream" factor is omnipresent in glossy brochures, seductive posters, romantic TV commercials, and branded travel agencies.

The availability of digitized information, together with the convergence of communication channels, have had a profound impact on the way that travel is marketed, sold, and delivered, because "the real business behind travel is information." Within the travel industry the traditional "old economy" players are the incumbent "barons": airlines, hotel chains, car rental companies, tour operators, travel agents. Access to these main providers has long been the realm of the specialists, assisted by pre-Internet connectivity. One of the first EDI (electronic data interchange) systems (forerunners of the e-business platforms) was created in the early 1970s by a consortium of airlines, and the GDS (global distribution system) for airplane seat booking was a prototype of Internet booking platforms, having extended to hotel reservations and car rentals.

Unplugged

If it works, it's obsolete.

Marshall McLuhan

Suspended in Space

Another building block of the dot.com organization is its unplugged propensity -- "unpluggedness" contrasting with "embeddedness" (Granovetter, 1985). An illustration may help at this point. When the HR department was formed in the last quarter of 1999, the incumbent manager "discovered" a Belgian employee, who was a U.S. national and had been working there for eight months, drawing a monthly salary (in cash), yet without work permit, no Social Security registration (either in the United States or in Belgium), without a permanent address, and listed in the payroll under a different name.

That was not a deliberate attempt to defraud: It was a blatant disregard of elementary employment law, emanating from a desperate need for skilled personnel, lack of organizational structures and procedures, and sheer ignorance. It was as if Leisureplanet was suspended somewhere in space, without actually relating to the physical environment in which it was located.

This stands in stark contrast to multinational companies, which according to Hu (1992) are but "national companies with international operations" because they are legally incorporated and fiscally accountable to a national jurisdiction. Indeed, the hallmarks of successful MNCs are their being locally embedded and respectful of local conventions (Rosenzweig & Noria, 1994).

Local embedding, at least in Leuven and London, was practically nonexistent. Leisureplanet was not part of any local business institution, professional society, or trade federation; it did not source with local suppliers and hardly tapped into the local labor market. Most of the recruitment was done abroad, funding was sourced in the United States and London, all communication was in English, and tele-working was at the very heart of virtual office operations. This lack of relating to the immediate environment added to the "unplugged" nature of the company: Whether bankers, lawyers, investors, consultants, most of them were accessible over mail and phone (if not the Internet) and required no physical presence. Indeed face-to-face contact with external agents was almost frowned upon, as it seemed to militate against the values of the company, which advocated virtual interaction, speed, and global reach. (10)

Cementing It All Together

Suspended reality, the "unplugged" propensity discussed previously, poses something of a paradox. Here we have an organization pursuing an idea that has yet to be proven to work, hence entirely future-oriented, with no past nor present; without any tangible outputs to its credit, with neither an operational structure nor laid-down work procedures. How does it work? What "cement" holds all this together?

Two layers of "cement" were in place to make Leisureplanet tick. One was impersonated in the charismatic figure of the CEO, Pierre Kleinhans: pioneer, creator, and overlord of Leisureplanet. His vision could be compared to Columbus' belief, against all odds, that he would find the west passage to India. The strength of Kleinhans' vision was to be the sole base for navigating Leisureplanet through the uncharted waters of the World Wide Web frenzy. The importance of the father figure, the founding entrepreneur, has already been highlighted in "cementing" the communal organization (Francfort, et al., 1995), which shares many characteristics of the dot.com organization. His (and sometimes it's hers) particular significance is in providing a protective and "sense-making" value to the members of the community. Arguably, in an "unplugged" organization, this role is even more pronounced.

The only reality checks on Kleinhans' vision were the tense periods of fund raising. Each time the CEO pulled it off and raised another pile of cash, this quasi-miraculous achievement (making money out of nothing) and, by extension, the backing of the blue-chip companies providing the funds, seemed to confirm the validity of the vision and reinforced confidence in the adventure." Apart from that, there was only Kleinhans' dream to carry the company forward. His faith engulfed the enterprise and as a true believer he was convinced that he had a rendezvous with destiny: The delivery of Leisureplanet "to become the world's leading leisure ravel e-commerce company.' (12)

This belief manifested itself as trust in individuals to go and make things happen. This was not a case of "empowering" people; rather, huge vacuums, unplanned and unorganized, were there to be filled. Almost everyone, at all levels, was entitled to do what they felt had to be done. There was hardly any control on the effort and resources spent, on the direction taken (as long as it seemed to move in the same general direction) and on the desired outputs. Consequently, a lot of people did what they wanted and what they liked, which made them happy and hard-working employees, though not necessarily productive ones. For the question of strategy and its action derivatives, of overall productivity and efficiency, had never been raised.

The CEO, Pierre Kleinhans, was busy developing the business and negotiating with investors. During non-funding periods he was hardly present in the company; in the latter phase, he was around, but the staff meetings he held focused on business development rather than on day-today operations. These operations were almost entirely led by the COO, Bart Goedseels, and later Maurice Firman. Department heads led their departments according to their understanding of the overall vision, without a detailed or specified brief on objectives or resourcing. At a given moment at the end of 1999, the COO appointed a program manager to coordinate all projects (some 100 in all). The stress was on delivery and coordination of timetables, not on resource planning and efficiency.

Age and experience were important relevant factors. The median employee age in 1999 was 26; and in 2000, after recruiting more experienced staff, it was only 28. Most employees held not more than one previous job and for many it was their first real work experience. The latter had nothing to compare Leisureplanet with, while the others, as a self-selective group, bought into the axiomatic notion that the standards of "normal" enterprises do not apply here. After all, wasn't that what stockbrokers and analysts were saying day in and day out? The result was the reverse belief of what Stinchcombe (1965) termed "the liability of newness," almost to the extent that the less baggage of experience one carried, the more one was likely to make it in the unfolding new brave world. Indeed, this reflected a certain reality of acute labor shortage, but also recognition that there were no clearly identifiable requisite skills for succeeding in a dot.com (see following discussion of recruitment).

The second layer of "cement," then, was the camaraderie that enveloped all those engaged in the Leisureplanet adventure. Even at the distance of time, the interviews revealed a strong sense of belonging and commitment to the idea and to the people involved. (13) The atmosphere at work was described as "fun and excitement," and because working hours were fluid, there was no firm boundary between work and non-work. No one seemed to keep to a 9-to-S routine; and communal celebrations and after-hours partying was common. Of course this may not be unique to a dot.com working environment; however, recall the euphoric atmosphere surrounding the dot.coms up to April 2000. The unsavory mix of fundamental uncertainty (emanating from the speed of business developments, the ever-changing technology, and the expectations accompanying both) and hero status (glorified by institutional investors, the media, and the public at large), marked these mostly young and inexperienced persons as special and different; hence, their ne ed for bonding together was rather immediate and pressing. And while there was no past to dwell on, there was, however, a future to bask in, because more than ever before dot.coms advanced the concept of profit share, through the allocation of stock options. (14) In Leisureplanet as elsewhere in dot.com land, it was the daily morning ritual to study the latest market valuations and calculate one's current options' worth. Here was a source of commonality not often found in old-economy enterprises. And of course "unpluggedness" added its weight to creating and maintaining a boundary between the outside world and the inside, reinforcing the communal spirit of Leisureplanet members, many of whom were recruited internationally and had no local roots (hence, the company was their principal source of social support). By 2000, Leisureplanet counted 25 nationalities amongst its 200+ workforce. (15)

From Nihil to Organization

By the third quarter of 1999, after a period of chaotic and uncontrolled growth, the need for organizing, initially in the financial area, followed by HR, became apparent.

Up to then, a rather amateur financial function managed mostly treasury and registered in/outgoing funds. Its main activity was the development of and contribution to the different versions of the ever-expanding business plans. A South-African couple filled the financial and HR roles, both new to the company, with no knowledge of local (or European) regulations pertaining to accounting and employment. The HR coordinator (the accountant's spouse), an engineer by background and without HR or people-management experience, had no supporting staff. They were recruited by Pierre Kleinhans whose initial recruitment ground was the Dutch Reform Church, which served as his main spiritual home and social network. Kleinhans recruited "believers" or people his beliefs trusted. Thus, at one point, all staff had to be Israelis. Israel is indeed a hi-tech powerhouse, but the recruitment drive was inspired by Kleinhans' ideas about the Chosen People and the Promised Land.

At the end of the third quarter of 1999, a Belgian financial controller, with some 20 years of experience at CFO level in multinational corporations, moved in and started organizing the financial aspect of the company, introducing basic elements such as full tracking of expenditures, introduction of purchase orders and spending authorizations, basic controlling, and cost accounting.

Whereas financial accounting was introduced as a pragmatic measure to secure future investment, the HR function was reformed because of a resourcing crisis: The inability of department heads to recruit appropriate staff and in sufficient numbers. At the same time, an apparent need emerged for a more stable working environment, with appropriate contracts, job titles, a defined organization chart, a coherent compensation and benefits structure, etc. The pioneering spirit, which until then had kept the flame ablaze, now called for a different environment to kindle the fire.

Virtuality, Unpluggedness, and Human Resources

So what is the function of human resources in a virtual unplugged organization, and what are the emphases of the role? As indicated, human resources evolved out of necessity, not by design. Hence, it emerged as a tactical partner, not a strategic participant in the management of the company. All HR-related activity was initially handled by line management: the department heads. The need to create a dedicated HR department was fuelled by a huge backlog in even the most basic HR tasks, notably in recruitment.

Planning

As growth was essential to the company's business model and survival: to ensure new investments and global reach, the availability of the right personnel was crucial. Yet resource planning was somehow the most difficult part of the entire HR process. Planning semantically refers to organization and structure; in that sense, planning was almost an oxymoron in Leisureplanet. The traditional approach to resource planning: factoring in business and environmental needs, performing a gap analysis and job (re)design, and moving on to recruitment, proved impossible, as business plans could change, literally overnight. So recruitment had to be highly proactive and, paradoxically, well-planned. All the more so because qualified and experienced staff were almost unavailable: the Internet market's rapid evolvement and yet immaturity had not created a large enough pool of competencies and experience. Those with even the most rudimentary know-how were being chased by a legion of job offers.

Recruitment and Selection

The preceding factors combined called for the recruitment of potential, of versatility and flexibility. The main profile for recruitment was a young, bright graduate with international exposure, highly result-driven, a go-getter, willing to shift positions as soon as business models required adjustment in skills, and hence requiring minimum supervision (self-motivated) and the ability to be autodidactic. Ideally they would also be adventurous, risk takers, and "dreamers."

An important aspect of the recruitment process was speed. Speed was inherent to the growth of the Internet, (16) of expectations 01 investors in the NASDAQ boom days, and, indeed, to the fierce competition on qualified labor. This was corroborated by the character of the medium. The Internet is perceived -- and positioned -- as a highly reactive medium: The user expects an answer at a click of his or her mouse. By extension, users expect the same speed of processing and decision-making in recruitment.

Recruiting for a hypothetical profile, looking more for potential than for (unavailable) experience, had a major impact on the selection process and its outcomes. In the absence of a clear framework, of valid and stable job descriptions, the utilization of objective selection procedures was abandoned. The entire recruitment and selection process had to be portable, because quite often recruitment and selection had to be brought to the candidates -- scarcity and speed being the rationale. (17) So the selection process was comprised mostly of interviews, with the resultant low predictability. Psychometric testing was and still is unavailable for dot.coms, and reference checking proved hardly relevant. Moreover, the speed of development and the recruitment backlog created something of a "black hole," overriding criteria and concerns. Department heads, desperately in need of people, would not heed HR's attempts to streamline the inflow of newcomers and validate competencies.

One of the more difficult aspects of the recruitment and selection process was to establish and maintain some ethical standards in recruiting potential candidates. On the one hand, HR was tasked to fill vacancies rapidly, to attract bright and versatile persons, with a sense of adventure and a positive attitude to the dot.com dream. The challenge was how to effect this, without failing to mention the volatility of the sector and the high risk involved in working for it. This was rarely an issue in the hiring of young graduates, as it seemed that they have little to lose; but it was all the more pressing while recruiting experienced people with old-economy competencies and careers. One of the first recruits to HR's own staff was a payroll coordinator. The person hired left a 12-year seniority position in an U.S.-based company for an adventure that lasted for only five months, and left her bereft of any protection and Social Security. Eighteen months later, she was still unemployed.

Compensation and Benefits

Budgets were calculated as "total cost to company" (TCC) and drafted in US$, as were all other economic transactions; however, most labor costs were effected in Europe, in local currencies and thus highly susceptible to exchange-rate fluctuations: yet another feature of the "unpluggedness." During the first six months of 2000, the US dollar appreciated 21 percent against the European currencies. The increased reach and spread of the dollar value was not converted into additional resources, but merely handed over to employees. Linking staff costs to the local Euro instead of the US dollar was not seen as a priority.

From early on, Leisureplanet followed a cafeteria-based compensation package, with most international recruits free to structure their TCC envelope to suit their needs. This freedom resulted in a wide variety of expatriate configurations, contractor or split-salary agreements. But it was not confined to expatriates. One of the early tasks of the HR department was to streamline and consolidate employee contracts, to comply with local legislation, and produce some rationale encompassing role, seniority, and remuneration, while retaining the popular cafeteria concept as the main remuneration vehicle.

Two particularly sensitive issues during this streamlining process were the company car policy and the tax-efficiency schemes. Within the cafeteria compensation and benefits policy, everyone could negotiate a company car of his or her liking -- a constant issue of friction. As to taxation, everyone opted for the most tax-efficient schemes, even though their legality was questionable. Expatriate contracts, management consultancy agreements (mostly at off-shore locations), and split-salary arrangements were common, at all grades.

Stock options were an essential element of the compensation package. The logic, as in other dot.coms, was to involve staff in the dream and commit them to it, while at the same time reducing cash burn and deferring labor costs. Then again, attractiveness to shareholders diminishes as more and more people share in the virtual wealth to be created. Moreover, it focuses attention on the short term, as the immediate interest is to create value fast, perhaps at the expense of longer-term interests of the company. This added its impetus to the "speed" with which Leisureplanet conducted itself.

Performance Management

We already stressed the importance of expansion, the centrality of speed, the lack of job descriptions, the utterly rudimental control mechanisms. All those combined to create and sustain an organizational culture alien to the notion of performance management. Formal appraisals were non-existent and indeed irrelevant. By the time someone's performance would have come up for review, both function and role would have long changed.

The only real concern was delivery, getting there. But how, and by what means, was more often than not ignored. As late as August 1999, the CEO wrote: "I am concerned that many members of the company have not yet understood the business at a commercial level -- i.e., where people understand the economic effect of their actions or non-actions." (18) The only real compass was the "dream" -- becoming the world's leading leisure travel e-commerce company. But the parameters of the dream kept changing and offered little concrete guidance for accomplishing the tasks ahead.

As result of permanent growth and the limited inflow of experienced staff, everyone, including junior staff, moved rapidly from one position to another. For many new entrants, Leisureplanet (like other dot.coms) provided a career shortcut, projecting them after two to three years of professional experience to middle or even senior management. It was not before the beginning of 2000 that the hiring policy changed to favor more experienced senior staff from old-economy companies; hence, one of the challenges for HR was to cope with unrealistic career expectations. It was not unusual for people to consider six months in the same position as negative performance feedback and the cause for chasing opportunities elsewhere.

Concluding Remarks: Dream as Illusion

What are we to make of the story of Leisureplanet.com? What are the lessons; what is the moral? Is its failure a case of inexperienced management, of unchecked greed, of immature technology, or simply bad luck? It may well be any and all of these, and yet there is more to our story. Because at their core, the issues confronted by this enterprise are beyond individual capabilities, market fortunes, or business evolution. They are factored in the cosmology of the "Internet Galaxy" (Castells, 2001), which was the beginning and end, the raison d'etre and context, of Leisureplanet.com.

Working through a virtual idea and operating in a virtual mode, disconnected to locality (geography, legislation) beyond the laws of gravity (business modeling, profit forecasting, cost-benefit analysis, organizing imperatives) -- this is how Leisureplanet conducted itself on its way to creating a new concept of leisure defined by the Internet and globalization. We documented and listed the many oversights and shortcomings in management and organizing; however, this may be the easier part. The more difficult and challenging one would be to task the shape and governance principles for the new breed of enterprise that the dot.coms exemplify. For "the rules for success in the 'new' economy are extraordinarily similar to the rules for success in the 'old' economy" (Kay, 2000), but the means to achieve them will have to be different, because the medium and ethos, the "dream" that drives these enterprises and their people, are different. But then again, taking the perspective of the stock options and their rapid ap preciation in NASDAQ's heyday, one can only wonder for how many of Leisureplanet employees the main idea would have been to last long enough as a business, in order to sell the dream and cash in on the bubble. Looking at it from this perspective, one cannot escape the thought that Leisureplanet was not so much a dream as an engineered illusion with the main goal of creating wealth out of nothing: the Internet's very own philosopher's stone.

Another thought: Is history bound to repeat itself? Are all new ventures in new eras, by their very nature, subject to a Columbus-like leap of faith, against the prevailing wisdom, against all odds? One just might change the world, or else crash?! It is a sobering thought. Looking at the emerging lessons from the colossal failure of Enron, an old-economy company taken over by "new" e-business operators, it seems similar to our case here. We encounter a similar ambition, the same hubris, and a high-stake, high-risk culture, accolades from an admiring professional and business community, the unchecked greed, the breaking of all rules, the breathtaking speed of events (Bryce, 2002). But then again, isn't that what industry pioneers of the steam engine, of electricity, of the motorcar did at the dawn of new technologies? Isn't that the lifeblood of capitalism? Isn't it what our world is all about? Isn't it human nature? EXHIBIT 1 Leisureplanet.com History in Brief Chronology/ Key Products Key Figures (in m. U$) Phase Revenues Expen. Losses

OI Fund 1992 1 Database 0 0.1 1993 CD-ROM ? 1 (0.5) 1994 CD-ROM ? 1 (1.2) 1995 2 CD-ROM 0 4.7 (1.5) (1.5) 1996 Web site 1 (7.9) (8.4) 1997 3 Web site 2 (10.9) (17.3) 1998 Web sites 2 8 (14.1) (21.4) 1999 Web Sites 4 50 (19.5) (36.9) 2000 4 Community 9.7 98.5 (125.6) Chronology/ Value Staff Phase SA BE 1992 1 3 1993 6 2 1994 1.45 12 4 1995 2 2.35 25 5 1996 40 10 1997 3 55 8 1998 85 11 1999 58.15 74 42 2000 4 87 134 Note: The figures are our best guestimate (italics) or presented figures (in business Plans). The unpluggedness of the accounting practices makes it difficult to assess the reality of these figures. Key: OI Operational income Fund Funding provided over a given period Expen Expenditure Value Sales value as in business plan (proposed to investors) SA South Africa BE Belgium (incorporating London Staff)

Endnotes

(1.) Pierre Kleinhans, of Afrikaner origin, was born and grew up in South Africa, where he graduated with a LLB degree from the University of Stellenbosch in 1988. A member of the Dutch Reform Church, he is married with two children.

(2.) From the 21/09/1995 business plan, 13.

(3.) From the 21/09/1995 business plan, 46.

(4.) "...The company's shareholders include: Leisureplanet Holdings Ltd. (NASDAQ LPHL -- 57%, Europ@Web (25%), CNN (8%), and the Rembrandt Group (8%)...Key distribution partnerships with Yahoo! Europe, Lycos Europe. CNN, and Infospace" (May 2000 business plan, 3-4)

(5.) "Leisureplanet.com's overall strategy is to: establish a community of travellers and experts and comprehensive e-tailing operation, which will be globally distributed to the 30 major outbound markets before the end of 2000; develop and execute a strong branding campaign and effective product marketing campaigns to target key customer segments; develop an operation to facilitate a comprehensive range of b-t-b services to a global network of independent hotels on the back of its existing hotel business" (May 2000 business plan, 10).

(6.) The May 2000 business plan hardly refers to the past (and its accumulated losses of $36.909m). It forecasts revenues of $9.7 m for 2001, $43.63m. for 2002, $122.717m. for 2003 and $352.254m. for 2004. with a break-even in March 2003.

(7.) Internal mail of 20.12.1999. 5:45PM "Dear all, I have the pleasure to inform you that FV is joining Leisureplanet as HR Manager from 03 January. Frank and his team will initially focus on the recruitment of the over 50 vacant positions. In addition, they will set up the necessary processes for a smooth HR policy in our ever growing company,"

(8.) Habitus (from Latin): A cultural habitat that becomes internalized in the form of dispositions to feel, think, and act in certain ways generative capacities.. acquired, socially constituted dispositions..." (Bourdieu, 1990, 12), "...always oriented towards practical functions..." (Bourdieu, 1992, 53), "...more unconscious than conscious..." (Bourdieu, 1988, 91).

(9.) Leisureplanet.com business plan of May 2000, 6.

(10.) The company made extensive use of video-conferencing to communicate "life" with its stakeholders, most of whom never visited the company headquarters or sites.

(11.) There were several episodes of funding following up ever faster, in what amounted to a Skinnerian reinforcement schedule -- sufficiently dispersed and infrequent, yet not too long apart.

(12.) CEO Open Letter on Operational Status, August 1999.

(13.) Sebastien Ide, former web designer at Leisureplanet, testifies to the great solidarity among colleagues (even after the company's collapse!) in "Survivors of the e-Crash," Trends, February 1st, 2001, 46.

(14.) The human resources rationale of committing key employees to the company was underwritten by financial wizardry. Rather than accounting for these stock options as HR expenses and thereby increasing the bum-out ratio of funds, these appeared as "off-balance" liabilities as a footnote in the accounts.

(15.) They were from Belgium, France, Germany, the UK, Italy, Spain, the Netherlands, Ireland, Portugal, Sweden, the USA, Israel, South Africa, New Zealand, Argentina, Mexico, Canada, Poland, Malaysia, China, Serbia, Norway, Finland, Morocco, Algeria.

(16.) "At the end of 1995, the first year of widespread use of the worldwide-web, there were about 16 million users of computer communication networks in the world. In early 2001 there were over 400 million; reliable forecasts point to about I billion users in 2005, and we could be approaching the 2 billion mark by 2010" (Castells, 2001).

(17.) In most cases, recruitment used local or international job fairs One typical "recruitment road show" included Brussels on Thursday AM, Frankfurt on Thursday PM, Milan on Friday and Saturday, London on Sunday evening and Monday. Decisions bad to be almost immediate.

(18.) CEO Open Letter on Operational Status of August 1999.

References

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Bourdieu, P. (1990). In Oilier Words: Essays Towards a Reflexive Sociology. Stanford: Stanford University Press.

Bourdieu. P. (1992). The Logic of Practice. Oxford: Polity Press.

Bryce, R. (2002). Pipe Dreams: Greed, Ego and the Death of Enron. Oxford: PublicAffairs Ltd.

Castells, M. (2001). The Internet Galaxy. Oxford: Oxford University Press.

Francfort, I., Osty, F., Sainsaulieu, R., & Uhalde, M. (1995). Les Mondes Sociaux de l'Entreprise. Paris: DDB.

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McLuhan, M. (1964). Understanding Media. New York: Mentor.

McLuhan, M. & Fiore, Q. (1967). The Medium Is the Message. New York: Bantam.

Mintzberg, H. (1983). Structures in Fives: Designing Effective Organizations. Englewood Cliffs, NJ: Prentice-Hall International.

The Oxford Dictionary of New Words (1997). Oxford: Oxford University Press.

Rosenzweig, P.M. & Noria, N. (1994). "Influences on Human Resource Management in Multinational Corporations." Journal of International Business Studies, 7(2): 229-251.

Wolf, G. (1996). "Channeling McLuhan: The Wired Interview with the Magazine's Patron Saint." Wired Magazine, I, Issue 4-01, January. http://www.wired.com/wired/archive/4.01/channeling.html.

Biographical Sketches

Frank Verkinderen, a historian by training, has been working in the field of human resource management since 1987 -- first in the recruitment and training of sales engineers and since 1994 in call centers -- specializing in monitoring, performance management, and integrated call center training, including distance learning and Call Center Management Game[C]. He joined Brucall three years ago to manage the Center of Competence, providing added-value services in the areas of human resources and operational consulting, spanning Benelux, France, the United Kingdom, Poland, and the United States.

Yochanan Altman is a chartered psychologist and holds a doctorate in organizational anthropology. He is a research professor of international HRM and comparative management at London Metropolitan University and has held visiting professorships at HEC, Paris, Universite Paris IL Bocconi, Milan, IMC, Budapest, Hong Kong Baptist University, University of Ballarat, Victoria, Australia, Wiertschaftsuniversitaet Wien, and Universidad de Verano de Maspalomas. Yochanan is editor of the Journal of Managerial Psychology and the Journal of Management, Spirituality and Religion. He is co-author of five books and numerous articles in refereed and practitioner journals, research books, and textbooks. Yochanan consults in his areas of expertise: global HRM, international management, career development, and organizational change.