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When we think about a social good, we tend to think nice things that we do for our community, whether it is by giving to charities or participating in a local food drive. All of these things are admirable, but they sometimes lack the necessary funding to keep the social good last long.

How do we combat this problem ?

Simple.

We create products and services that create a social good but is financially sustainable.  Like one of my earlier posts of Grameen Bank, which has created a social good by lifting impoverished people out of financial dire and creating more jobs and making a sustainable business model.  Initiatives like Arc Initiative help people in Africa and other parts of the world to make their businesses more sound and create a social good.  An example of this is the Fresh Milk Seller visited by the Arc Initiative. The owner has tapped into a market which is very profitable. Because there are no milk delivery system to the cities, her shop is the only one selling fresh milk.

The impact this has created is very large, from the person selling the milk, they can earn more to eat and buy things. From the person who delivers the milk to the city, he too earns a lot of money from this, and the owner, that earns modest revenues from this enterprise.

So we can see that this model is sustainable in the long term, and creates a social good for all the people in the chain of supply.

Sustainability. It’s a frequently used  term by most media outlets, environmental organizations, governments and businesses alike. But what does it mean ? Some words may be diluted in their meaning so as to cater to the public, thereby reducing the message contained in it.

Simply put, sustainability or to sustain is (according to Merriam Webster’s Dictionary) a method or process to harvest a resource so as not to inflict permanent damage and permanent depletion. One could argue that sustainability cannot be directed only to the process of getting the resource, but how we, as humans on this earth, use dwindling resources carefully and prolong the existence of such resources for our children.

So, by using this terminology, we can make statements that:

– Humans on the earth contribute to the damage and depletion of natural resources

– If this trend continues, we will have no more resources and spiral into an ecological disaster

-Businesses and Governments alike must align their businesses and operating procedures in a sustainable manner

Often, the path to buying local and being sustainable is very hard. Considering all the costs of producing locally sourced goods tend to have higher prices than store bought goods. In response to that, however,  think of how much emissions will be reduced if we buy local, or switch to vegetarian foods, which require less land to graze cattle and raise corn for the feed of the cattle itself.

It will be a better, more sound decision.

“Water has become a highly precious resource. There are some places where a barrel of water costs more than a barrel of oil.“

Many companies, that are facing global economic recession may have to cut down on their costs.  One variable cost that can be saved is the yearly bonuses.  Strikingly enough, one company still gives out bonuses to it’s employees.

Canada Post is one of those companies.  The news story is here.  This is a blog reply to one of our own COMM 101 classmate, Joey Cheung.  He is puzzled why Canada Post is willing to shell out tonnes of money to their employees.  The problem is with the morale of the company. Many companies are not doing so well because their employees are not getting the remuneration they deserve and so, making the overall productivity of the company to go down.  Impacts of such a decreased productivity may result in a loss of customers and loss of market share.  CEOs must know that there is also a human side to selling stuff, not just the stuff itself.

And by doing so, Canada Post’s books may not be so great, but what matters is that the people enjoy and respect the company they’re working in. And that in it self is better than random numbers on a spreadsheet.

Hurricane Sandy is a weather system that is converging on the east coast of the United States. Forecasters warned that the New York City region could face the worst of Hurricane Sandy as it picked up strength and turned toward the U.S. East Coast’s largest cities Monday, forcing the shutdown of financial markets and mass transit, sending coastal residents fleeing and threatening high winds, rain and a wall of water up to 3.35 metres tall. It could endanger up to 50 million people for days on end.

Sandy strengthened before dawn and stayed on a predicted path toward New York, Washington, Baltimore and Philadelphia — putting it on a collision course with two other weather systems that would create a superstorm with the potential for havoc over 1,280 kilometres from the East Coast to the Great Lakes. Up to 90 cm of snow were even forecast for mountainous parts of West Virginia.

The New York Stock Exchange, probably the largest in the world, has decided to close during the hurricane’s downpour over New York City. “Leave immediately. Conditions are deteriorating very rapidly, and the window for you getting out safely is closing,” New York Mayor Michael Bloomberg told those in low-lying areas. Water was splashing over the seawalls at the southern tip of Manhattan.

We don’t know what will happen to the low-lying Manhattan Island, but one thing is for sure.  Many global businesses have headquarters in NYC, major accounting, rating and capital investment firms also have offices in NYC.  With the ever present danger nearing the city, it is expected that many people will be told not to go to work.  This could potentially stall the global market trade and influence a myriad of other things.

Dell Computers, or just plain Dell is a company whose business model makes it’s turnover, the fastest in the industry. Less than a week  in inventory which equals a very large number !  Well, how did they get to this staggering amount of numbers ?

Their reason is Buying Direct/Direct Business Model (DBM) .DBM is a model which enables the supplier (Dell) to bypass retailers who will charge them for renting space and others,  and connect with the consumer  more directly.  The upside of this model is a lot of things, as mentioned by Mahesh Nagarajan, PhD:

1. Double Margin = Cutting our the middle men –> getting higher margins, the easier process to manage

2. Stronger Customer Relationship –> beter information and customer behavior is better captured

3. Reducing Variability/ Risk.

4. Customization –> giving customers what they want, builds loyalty and differentiation and therefore more revenue for the company.

In the end, this is what has made Dell more profitable in the long run, by using the model they are able to cut costs and increase their revenue.

Grameen Bank, which was founded by Muhammad Yunus, had humble beginnings. What was then a scheme to pull debt-ridden people with loans without interest, won Yunus the Nobel Peace Prize. But how did it become to a large, social venture ?

First of all, we need to differentiate what is charity and social venture/social entrepreneur. A charity works by giving out money. This is good, but it isn’t financially sustainable in the long run. There is so much amount of money that can be showered to people, whereas Social enterprises are entities/companies that help to solve problems such as poverty and healthcare, but possess a sustainable business model that is sound and long-term. This is what Grameen Bank has done.  It has become a problem solver for debt ridden people in Bangladesh and it has done so in a sustainable manner.  This helps the bank to operate on a day-to-day basis.

A part of how the bank can sustain in the long run is the amount of loans it gives to people and the rate of return.  The bank gives small amounts of loans along the course of the year, rather than one big amount of money which can be wasted on a single blow.  The plus of doing this is that the lendee can plan their spending or their investments so that they can pay back the bank in the allotted time frame.

By giving loans to these people, the bank has given people capital to start their own businesses and make their own money, so that they can provide for themselves and their families, and in turn, rise out of poverty.

A quote summarizes my blog post today,

“Give man a fish, then he can eat for a day. Teach a man to fish, then he will never be hungry ever again”

China, the global superpower which has stunned the world with it’s stellar performance in the global economic downturn has recently been showing signs of aging. According to the Globe and Mail, China’s growth which was capped at  7.7 per cent in 2012 – a figure leaps and bounds beyond developed Western economies – it had forecast an 8.2 per cent growth rate in May. Chinese GDP grew 10.4 per cent in 2010 and 9.3 per cent in 2011, the World Bank said.

“China’s slowdown this year has been significant, and some fear it could still accelerate,” the World Bank wrote in its East Asia and Pacific Data Monitor. The reason for this slow down is “lacklustre recovery in the United States and recession in Europe,” according to the World Bank.

The World Bank said that with the exception of Vietnam and China, which posted only 1 per cent year-over-year in July, all of the other major economies in the region saw a decline in exports. This was, the banks said, “a sharp change from the 15-20 per cent export growth rates recorded in 2011.”

Still, a slowing China is bad news for a Canada that’s “vulnerable to a further slowdown,” as BMO Nesbitt Burns Inc. chief economist Sherry Cooper noted Friday, in comments published before the World bank forecast was issued.

In addition to risks from “an overvalued currency, tighter credit conditions and the prospect of higher interest rates,” Ms. Cooper said, “commodity demand might weaken further as growth prospects in China, India and Brazil have dimmed and Europe is still mired in austerity induced recession and debt overload.”

Automobiles–or cars has revolutionized the way people move. It is a significant mode of transportation, offering the convenience and comfort that an airplane offers but with unrivaled flexibility.  Cars are essential to everyday life, from getting places, transporting goods, connecting far-away places.  The question arises when the reliability and the safety of the car comes into question.  A sample of this problem made it self known when Toyota car mats were interfering with the gas pedal, potentially harmful to the passengers and pedestrian on the road.  According to another Sauder blogger, that goes by the name Ryan Taggart, Toyota‘s recalls had been a problem since 2005, and was recalling more vehicles than it was selling. It had even got to the point where in 2007 Consumer Reports magazine halted recommendations on their car models.

According to my analysis, Toyota has to improve their products by better quality control and better manufacturing processes. The mistakes that are made can resonate more loudly if the problem is widespread.  I agree with Ryan’s view on the matter, he said “Toyota handled the mechanical issues very ethically and directed the blame to themselves as a company, and fixed the issues on every car, free of charge.” In my opinion this is the way to go for Toyota. They need to realize that the damage has been done and often the best defense is just explain and take full responsibility for the matter.

Amidst the global economic downturn, there seems to be no consolation for companies. Plummeting share prices, deepening debt and increasingly dependent workers are one of the main reasons that companies are declaring themselves bankrupt.  There seems to be an industry that hasn’t been affected that significantly by the global recession. That industry is Transportation and Logistics.

People depend on these services to whisk them away to some far off place in hours. Just like a company needs their supplier send them raw goods to be processed.  There is a understanding that without transportation, we wouldn’t be able to survive.

Garuda Indonesia is an Indonesian based Airline with 28,6 % of the domestic market share. Compared to it’s competitors, Garuda Indonesia has the highest growth with up to 10% difference.  Garuda Indonesia has also undergone specific refurbishments as to accommodate the ever growing demand for air travel.

The newest expansion is the re-opening of US and European markets.  After a string of crashes back in 2007, Garuda Indonesia was blacklisted by the EU and that hit the blow with the airline.  In 2009, after deliberations from the EU, Garuda was taken off the black list. And in 2010, Garuda launched it’s first maiden flight–after the hiatus–back to Amsterdam.

The question remains if the expansion that Garuda Indonesia is conducting viable in the long run or will it cause Garuda to go back into recession. Whatever the answer, Garuda is a testament that an airline–or company–can be at the top of their game if they have a sound business plan and by actually sticking up to those plans.

While most other companies are doing their businesses in a clean manner, Wal-Mart seems to be doing it in a slightly less clean manner.  An article from The New York Times  reports that Wal-Mart Mexico has been bribing officials to get their building licenses.

Wal-Mart is a very large company, encompassing 8,970 stores around the world and expanding more and more. Wal-Mart Mexico is it’s largest subsidiary outside the US.  The problem arises when a senior Wal-Mart lawyer received an alarming e-mail from a former executive. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.

Wal-Mart dispatched investigators to Mexico City, and within days they found evidence of widespread bribery. They found a paper trail of hundreds of suspected payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark.

In my opinion, the main issue in this article is the fact that Wal-Mart de Mexico has gone to such lengths to hide the evidence of their infarction.  Bribery is also a breach of business ethics. Businesses, should run in a clean, respectable and reputable manner in which all parties can be accounted for their actions. This news story has showed us how businesses can easily get what they want, whenever they want. Moreover, many competitors who do not use bribes to get government approval may be at a losing side. Wal-Mart could potentially run a monopoly on the supermarket scene in Mexico if this continues.

In the end, There are many companies that pride themselves in their correct business ethics, but in this competitive world, they are becoming very few and far between.