Roll out driverless vehicles or put on the brakes?

In “Transformation for Transit”, Ingrid explains the future of transit in Switzerland.  In 2016, Switzerland will begin using driverless transit buses to reach regions previously not serviced.  As Ingrid expresses, “the public will have mixed reviews towards this project” and I am one of the citizens against the idea of driverless buses.

Interior of a Driverless bus being tested in Trikala, Greece.

Ignoring the safety concerns, Ingrid indicates that the new project will allow the government to “save money on wages”.  Although the article states that the innovation is “not meant to replace drivers entirely”, the project will decrease the jobs available.  An example of technology increasing unemployment is the self-serve pay station at the grocery store.  In recent years, grocery stores have decreased the number of cashier positions and replaced them with self-serve pay stations.  Although the stations still have cashiers on hand, there is only one cashier for about eight registers.  While cashiers are still needed, the innovation has eliminated jobs from many others.  The implementation of the new technology parallels the roll out of driverless buses in Switzerland.  Although the driverless buses may be able to reach regions previously not serviced by public transportation, I don’t believe that the economic cost of buying the new technology and eliminating jobs is a beneficial venture.

I am also against the project for a variety of safety concerns.  As Google continues to test its driverless car in California, many inquiries have been made and one particular article stuck with me, “Computers could decide who lives and dies in a car crash.”  Unlike people who must make quick and instinctual decisions in a “do-or-die” situation, a computer controlled car must be programmed to make the difficult decisions beforehand.  Driverless vehicles are faced with the “driver vs. pedestrian dilemma”.  In the event of an unavoidable accident, the computer must be pre-programmed to decide whether to severely injure the pedestrians or perhaps attempt to avoid them while putting its passengers’ safety at risk.  This ethical question becomes even more challenging when children and seniors are added to the equation.  I am personally uncomfortable knowing the outcome prior to being faced with the unfortunate situation and am unsure of how the programmers will be able to reach a conclusion.  Should driverless vehicles be programmed to at all times protect its passengers, or should the idea of saving the greater good persist in all cases?

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Venti Starbucks App with a shot of Added Feature

As summed up in Kexin’s post “Technology is the Future of Retail Stores”, Starbucks is adding a feature to their popular app that will allow users to pre-order and pre-pay for their drink.  I understand that there are many concerns with the added feature; however, by developing adequate accompanying systems and procedures, the added feature will positively impact Starbucks’ brand.

The innnovative Starbucks app allows users to connect their rewards to their phone and use it to pay in stores. The added feature to the app will allow users to pre-pay and pre-order their drinks.

Starbucks has demonstrated its differentiation by allowing users to connect their Starbucks cards to their phones and pay with them in-store.  By adding the feature of pre-ordering and pre-paying, Starbucks further differentiates by increasing the speed of service and allowing their customers to skip the long and dreaded line.  Although customers ordering through the app may receive their orders quicker, Kexin states that there are concerns over the product’s quality.  A part of the Starbucks’ value proposition is the timely preparation of customized specialty drinks; however, with customers ordering through the app, baristas may be unable to accurately prepare the pre-ordered drink in time for the customer.  Rather than serving a hot drink, the customer’s drink may be cold and as an effect, the barista may have to remake the drink, leading to an inefficient system.  If Starbucks develops efficient in-store systems and procedures, this obstacle may be overcome and the pre-order feature will enhance the customer’s experience.   Kexin also expressed how Starbucks may not need to hire as many baristas to take orders; however, I disagree.  Although the physical line at Starbucks may be shorter, through the app, Starbucks should receive an equal number of orders, if not more.  To maintain Starbucks’ valued service, stores must ensure that both the in-store customers and the pre-order customers are both efficiently served high quality drinks.  Starbucks demonstrates the value of technology to improve customer service and differentiate itself from its competitors.

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One for One or One for None?

Toms’ One for One Business Model has been widely criticized for its “unintended consequences”.  As advertised on Toms’ website, “with every product you purchase, Toms will help a person in need.  One for One.”  I support the ‘one for one’ business model as a starting point for a socially responsible model which can be further innovated and improved.

Blake Mycoskie is the founder of Toms Shoes and the creator of the ‘one for one’ business model.

Critics have argued that the ‘one for one’ eradicates the demand for local businesses by providing a product for free rather than having the citizens buy it from their local provider.  I believe that although local businesses may be hurt, in the short run, the ‘one for one’ model offers an easy remedy for a complex problem.  By giving a pair of shoes to someone who may not have the opportunity to buy it themselves, Toms improves the individual’s quality of life.  That individual is now less likely to succumb to diseases or easily-prevented injuries and infections by simply having shoes on their feet and may now be able to walk further to provide for their family.  While critics explain that by providing products for free, Toms is “foster[ing] poor self-image”, I believe that by helping those in need, the recipients may feel the kind wishes and intentions of the consumers (donors) and the subsequently Toms.  Often, individuals only need to know that someone cares enough to help them and in return, it may boost their morale and lead to further positive changes in their life.  Although many have criticized the ‘one for one’ model, I believe it is an effective short-term attempt to improve a society.  Adopting the ‘one for one’ model is a great plan to begin to “treat symptoms”; however, it can be further improved by adopting models that provide long-term remedies to problems societies face.  Toms has already begun to innovate and improve their model by providing safe water, “the gift of safe birth” and “the gift of kindness”, all of which do not detract from local businesses and lead to per

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BlackBerry, where are they now?

Canadian company BlackBerry was once one of the most popular smart phones with their qwerty keyboard; however, in 2007, it lost its position as number one to Apple’s touch screen phone.  In the rapidly changing industry of technology, companies need to constantly innovate and invest into research and development.  Apple exemplifies the success attached to investing in research and development, with their increasing number of patents and continuing release of new devices.  In an attempt to maintain competition and revive its sales, BlackBerry has released several new phones in the past two years; however, none have been successful.  In a final attempt to maintain its position in the hardware industry, BlackBerry will be releasing the BlackBerry Priv.  Although sales in the hardware business have proven to be challenging, the multi-billion dollar company still has $3-billion in cash to invest.

Prior to losing its number one position in 2007, the BlackBerry Curve and the BlackBerry Pearl were among the most frequented smartphones 

Rather than having the cash remain static, BlackBerry “has made five acquisitions” hoping to “diversify into enterprise software“.  Through the acquisitions, BlackBerry is exploring an opportunity to abandon its low position in the hardware business and investing into the innovation of software.  The newly acquired companies expand and shift BlackBerry’s value proposition and key activities from the once loved qwerty keyboards; however, using its brand name, BlackBerry hopes to grow from their failing phone sales and become number one in the enterprise software industry.  Although BlackBerry was once positioned at the top of the smartphone industry, its decision to shift its focus to a new industry after witnessing continuous failings is a strong strategic decision.  The company’s acquisitions demonstrates how companies turn a threat into a partner, in addition to the value of acquisitions and research and development.

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Blog Post Title taken from Oprah’s series Where are they now? 

Will Price be a winner on the Price is Right?

What is the price for employees’ happiness?

After a conversation with Haley, a 32-year-old employee in late 2011, Dan Price, founder of Gravity Payments made a decision to decrease the gap between his CEO salary and that of his workers.  This past April, Price announced that all 120 of his employees will receive a minimum wage of $70,000.  Price’s plan arose after Haley accused him of “ripping [her] off” and restricting her from “not making enough money to lead a decent life”.

Is Price right in raising the minimum wage of his employees to $70,000? Skeptics will have to wait a few years to determine whether The Dan Price Pay Experiment is a sustainable strategy.

 

With an increase wages for his low-level employees, Price strives to increase his employees’ happiness, thus translating to more motivated employees who add value to the company and are more accountable as leaders.  By evaluating Price’s plan with Ron Conway’s startup guidelines, Price addresses two of the three ideas entrepreneurs must consider.  His decision to increase the minimum wage of his employees addresses “know[ing] your why” and “be[ing] intentional with culture”.  As an entrepreneur, Price values purpose, impact and service.  Through his decision, he hopes to demonstrate that Gravity Payments “stands for more than just profits”.   He portrays corporate social responsibility by valuing “doing good” and focusing on his employees’ well-being.  Although his plan had a limited connection to business, Gravity Payments has recorded both an increase in profit and retention rate.  While Gravity Payments reflects aspects of corporate social responsibility, how can they take it further and create shared value?

“I really think we’re ready to move on to this next phase in business where we see that we can actually benefit by serving.” – Dan Price

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Monopoly in the beer industry?

In recent business news, SABMiller has agreed to a “takeover offer from rival Anheuser-Busch InBev”.  After four previous attempts, the top two biggest beer companies will combine and produce around 30% of the world’s beer, while controlling 31% of the global beer market.  While Anheurser-Busch InBev is focused in the Americas and Europe, its merge with SABMiller will encompass African brands which expand the company’s market by increasing its consumer base.

Beer giant Anheuser-Busch InBev will grow to encompass SABMiller

With the merge of the companies, one of Porter’s Five Forces is presented.  Anheurser-Busch InBev will now own more of the global market share, thus leading to an increase in entry barriers in the beer industry.  The merge increases the entry barriers because the new firm has greater control over the market and therefore has the opportunity to impact the price of beer.  The elimination of one of their main rivals also encompasses the idea that companies often take a threat and turn them into a partner.  SABMiller is one of Anheuser-Busch InBev’s biggest rivals therefore by merging the two companies together, Anheuser-Busch grew their company to encompass the strengths of their once rival.  With Anheusuer-Busch InBev positioned at the top of the ladder, the future merged firm will create a business that has larger customer segments (with the appeal of African brands) and an updated value proposition (increased branding).

Will the major deal create a beer monopoly?

 

 

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Constant road blocks in Uber’s expansion

Uber is a growing business that offers a “controversial car-sharing service” across sixty countries.  By eliminating the dispatcher, Uber provides a quick and convenient mobile app that allows users to book a driver and make cashless payments.  Uber has seen significant growth within its first few years of operation; however, it has also seen many challenges with taxi uproars and government intervention.  Although the car sharing service becomes increasingly more popular, many major cities (Vancouver included) have banned the convenient alternative to taxis.  Should Uber be banned from major cities?

 

Uber’s aggressive strategy to “shoot first [and] argue later” has been highly criticized.  While its market valuation is $50 billion, the future of the company remains unknown.  The highly valued company has sparked outrage from taxi drivers for bending the regulations and avoiding the costly taxi licenses; however, the unclear regulations surrounding its services are the root of the controversy.  Uber should be allowed to remain in operation in all countries because as demonstrated with many other businesses, when no competition is present, companies often monopolize the market.  Uber’s customers are frustrated with the unreliable and expensive taxis; therefore, Uber provides a cheaper alternative to the traditional taxi service.  While there are many questions surrounding the legality of Uber, the company should partner with the government to provide clear and defined regulations that will allow their company to speed down the highway while eliminating the legal challenges.  As learned in class, by taking a threat and turning it into your partner, a more sustainable business can be created.  Although Uber presents significant competition to the taxi business, I believe that it is a legal and valid business and should remain in operation while the government’s work to provide more defined laws.

Uber hopes to expand into #VancUBER

Uber hopes to expand into #VancUBER

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Are six hour working days the new ten hours?

In February 2015, a Swedish retirement home piloted an experiment that witnessed a switch from an eight-hour to a six-hour working day.  While maintaining the same wage, the experiment investigated the improvement in quality and efficiency of care within the retirement home, and the Svartedalens experiment has demonstrated successful results.  A shorter work day has allowed workers to “increase productivity while reducing staff turnover”.  As previously discussed in our tutorial, one of the highest and least recognized costs for a company is the staff turnover; therefore, this shift in working days helps reduce the company’s cost.  Although the cost for staff turnover is decreased, do the savings outweigh the cost for the employment of more staff needed to accommodate the extra shifts?

 

Cost, revenue and subsequently profit are all key figures that affect a company’s success; however, how do the employees’ wellbeing and the standard of service affect a company?  Both wellbeing and service are unquantifiable, so how does a company weigh the benefits of the improvements in service and employee wellbeing against the cost of the additional employees?  Although they may be unquantifiable, Toyota has correlated an increase in profits of 25% with staff making fewer mistakes.  While the Svartedalens experiment witnessed success in the health care sector in Sweden, there are many challenges that may arise with a decrease in monthly income.  To prevent a decrease in salary, one must compensate by adding another working day to their week; therefore, the benefits of a shorter working day may not take effect.  While there are many benefits associated with a shorter working day, I believe that it may not always be a beneficial option in all sectors of work.

 

Referred to Article: Efficiency Up, turnover down: Sweden experiments with six-hour working day

Dinner is served

Bringing the topic of business ethics to life, I brought the Nestle debate to my father; however, little to my surprise, my father argued that Nestle is conducting an ethical business.  From his perspective, he claims that “that’s the nature of business” – a company’s goal is to retrieve their inputs at the lowest possible costs to maximize their profit while abiding by all rules and regulations.  As we discussed the issue, I reasoned that Nestle is acting unethically by abusing the community and not paying for the resources it’s removing; however, he states that water is a renewable resource and therefore, it is perfectly ethical for the company to withdraw an unregulated amount of water at no cost.  What got me thinking was when he compared the question of ethics surrounding Nestle to “scalpers” (people who swiftly resell tickets).  Is it ethical for someone to buy an event ticket with the intention of reselling it at a higher price?  Initially, I saw no connection and found that scalpers are completely ethical because they are still paying a reasonable price for the ticket and that they make a living by reselling the tickets at a higher price; however, after further discussion, I realized there are many similarities between the two cases.  The ethics surrounding a scalper is smaller in scale; however, the same question arises… “Is it ethical for a business to buy its input items (tickets) at a significantly lower price than its resale price (without adding value to the original input)?”  As long as all employees, animals and communities are responsibly treated, does the company’s profit relate to business ethics?  Should there be a limit on the percentage of profit a company can gain from their product?

Bringing the business ethics debate to the dinner table

Bringing the business ethics debate to the dinner table

Cartoon courtesy of: ClipArtHut 

Business Ethics vs Social Responsibility

Growing up as a student in “Beautiful British Columbia”, the ever-growing issue of climate change and pollution lies at the top of my mind.  In support of Milton Friedman’s definition of social responsibility, I strongly believe that every person, every company and every country has an ethical responsibility to protect the environment.  What are ethics?  Ethics are a set of rules based off of one’s morals.  After experiencing a particularly dry summer, the scarcity of fresh water was illuminated and I believe that Nestlé Waters Canada is not satisfying its ethical responsibility to provide value to the community, nor is it following its social responsibility of protecting the environment.

Freshwater is a "precious natural resource"

Freshwater is a “precious natural resource”

Legally, Nestlé Waters Canada’s withdrawal of hundreds of millions of litres of water is not violating any rules and regulations; however, morally, is it ethical for Nestlé to be withdrawing a community’s precious natural resource at no cost to sell back for profit?  As Friedman argues, the social responsibility of a company is to “increase profits”; therefore, Nestlé is fulfilling its ethical responsibility while not violating its business ethics; however, if Freeman’s Stakeholder Theory holds true, Nestlé is violating its social responsibility by not providing value to its customers (making profit off of something it received for free) or the community (withdrawing without compensation).  The main question is: is Nestlé Waters Canada ethically responsible to pay for the natural resource it is withdrawing from the community?

Business ethics: increase profits while not violating any rules and regulations (Friedman)

Social responsibility (of a corporate executive): provide employment, eliminate discrimination and avoid pollution (Friedman)

Referred article: http://www.theglobeandmail.com/news/british-columbia/water-is-a-precious-commodity-but-bc-is-just-giving-it-away/article25422194/

Further reading: http://www.timescolonist.com/news/local/wild-west-of-groundwater-billion-dollar-nestl%C3%A9-extracting-b-c-s-drinking-water-for-free-1.587568