Tag Archives: COMM 101

Business Ethics / CSR

Re: Why Businesses that Profit Off the Culture of others are Not Socially Responsible

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"Promotional material from Ungava's Facebook page." Image Source: Huffington Post
“Promotional material from Ungava’s Facebook page.”
Image Source: Huffington Post

The use of cultural appropriation in marketing and branding is becoming a trend among businesses as stated in Karina’s blog post2. Her post discusses Ungava and Urban Outfitter’s usage of the cultural appropriation of North American First Nations. Ungava, a Canadian gin company from southern Quebec, has drawn themes into its marketing from the Inuit First Nations in Quebec. Ungava has used “Asian women dressed in skimpy parkas” as a way of advertising for the gin, along with a random, meaningless mix of Inuktitut syllabics, and Inuit imagery. The vice-president for economic development at Makivik Corp (who represents Quebec’s Inuit), Andy Moorhouse, stated that he was offended by Ungava’s usage of Inuit cultural appropriation.1 Meanwhile, in 2012, Urban Outfitters has been using the Navajo Nation’s name to brand a whole line of products, leading to a lawsuit that the Navajo Nation filed against Urban Outfitters. Although the Indian Arts and Crafts Act and federal trademarks still stand, the court ruled in favour of Urban Outfitters stating that the use of Navajo is a “descriptor of style rather than origin”, therefore not an infringement.4

I totally agree with Karina’s point2 that this kind of cultural appropriation could result in false stereotypes of a culture and is profoundly disrespectful to the culture. As Porter has mentioned, companies that create economic and societal value have a competitive advantage.3 Ungava’s indiscriminate usage of Inuit themes wrecks not only the societal value that the company is supposed to have with the Inuit communities, but also the trust between the company and the Inuit communities. With Urban Outfitter’s case, the firm might create a totally different, unrealistic image of the Navajo Nation. I believe that the inappropriate exploitation of cultural appropriation is not only no socially responsible, but also unethical. I see this as a way for companies to exploit a segment’s disadvantage of not knowing a particular culture. Governments should have a way of regulating this because the values within the traditions and themes in culture could easily be forgotten and be replaced with the value the marketers re-attached with the traditions and themes. The new portrayals may also create negative connotations to that particular culture, turning a good image to an evil image, or a serious image to an indiscriminate image.

Word Count: 377

 

References

Hamilton, Graeme. “Inuit Say Gin Maker Needs to Compensate for Appropriating Culture.” National Post, 2 Oct. 2016, news.nationalpost.com/news/canada/inuit-say-gin-maker-needs-to-compensate-for-appropriating-culture. Accessed 13 Nov. 2016.

Kong, Karina. “Why Businesses That Profit off the Culture of Others Are Not Socially Responsible.” Karina Kong’s Blog, UBC Blogs, 30 Oct. 2016, blogs.ubc.ca/kkong/2016/10/30/why-businesses-that-profit-off-the-culture-of-others-are-not-socially-responsible/. Accessed 13 Nov. 2016.

Porter, Michael E., and Mark R. Kramer. “Creating Shared Value.” Harvard Business Review, PDF ed., 2011, pp. 62-77.

Randolph, Imani. “Fashion’s Appropriation of Navajo Culture Has Been Deemed Legal.” Fader, 15 July 2016, www.thefader.com/2016/07/15/urban-outfitters-navajo-nation. Accessed 13 Nov. 2016.

Image Source

“Promotional Material from Ungava’s Facebook Page.” Huffington Post, 15 Sept. 2016, www.huffingtonpost.ca/2016/09/15/ungava-gin-inuit-cultural-appropriation_n_12017002.html. Accessed 13 Nov. 2016.

 

Business Ethics / CSR

Re: Catalytic Philanthropy: Innovating Where Markets Won’t and Governments Can’t

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Source: Gatesnotes
Image Source: Gatesnotes

In his blog post, Catalytic Philanthropy: Innovating Where Markets Won’t and Governments Can’t, Bill Gates discusses the idea of catalytic philanthropy, an interesting concept which correlates with a number of topics in business. The practices of catalytic philanthropy goes further than “just writing a cheque”. Gates describes catalytic philanthropy as investing into new innovations and technologies that bring massive returns to people in need or to the society. He describes that catalytic philanthropy lies in a gap between the government and the private sector because governments are in a position such that a justification for bringing innovations into countries outside of their own is very hard to develop and because the returns for the innovator are too low for the private sector to even consider.1

I find that the idea of catalytic philanthropy ties in with corporate social responsibility and creating shared value 2. Gates mentioned in his post, not enough is being accomplished and the potential is far greater than what we have seen.1 As Michael Porter has mentioned in his article, Creating Shared Value, the mainstream practices of corporate social responsibility does not seem to create enough shared value.2 However, innovation is a key component of catalytic philanthropy and that this innovation creates more shared value between companies (or governments or individuals), charities, and the community. I believe that for corporations, creating value should not only be profit driven. Without innovation, the contributions which we make to charities will not be as effective and society as a whole may not receive the maximum benefits from the donation. The innovation that is generated from catalytic philanthropy can potentially create more sustaining value.

Source: Realdania
Image Source: Realdania

I do not think that it is just wealthy individuals and charities who should practice catalytic philanthropy; governments and companies should also integrate the practices of catalytic philanthropy as one of the core values which all of the bodies that encompasses that entity needs to have their activities aligned with. Our current society does not have a system that is effective enough in providing innovative solutions to our greatest issues. The co-operation between different bodies seem too limited to resolve issues on a global scale and in the long run. Catalytic philanthropy seems to be a way of providing better incentives and collaborating resources more effectively towards engineering solutions to deal with our issues.

Word Count: 387

 

References

1 Gates, Bill. “Catalytic Philanthropy: Innovating Where Markets Won’t and Governments Can’t.” Gatesnotes, 27 Mar. 2014, www.gatesnotes.com/About-Bill-Gates/Catalytic-Philanthropy-Innovating-Where-Markets-Wont. Accessed 12 Nov. 2016.

2 Porter, Michael E., and Mark R. Kramer. “Creating Shared Value.” Harvard Business Review, PDF ed., 2011, pp. 62-77.

Image Source

Catalytic Philanthropy. Gatesnotes, 19 Sept. 2012, www.gatesnotes.com/About-Bill-Gates/The-Power-of-Catalytic-Philanthropy. Accessed 12 Nov. 2016.

“Catalytic Philanthropy.” Realdania, www.realdania.org/nyheder/catalytic-philantrophy. Accessed 12 Nov. 2016.

Markets and Finance

Re: Blackberry – Transition from Hardware to Software

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The new Blackberry Classic smartphone is shown during a display at the launch event in New York, December 17, 2014. REUTERS/Brendan McDermid
Blackberry Classic smartphone REUTERS/Brendan McDermid

As Mikayla3 has mentioned in her post, Blackberry Ltd. has decided to terminate production on hardware and to invest its capital on software development. Instead, Blackbery will outsource hardware from an Indonesian firm, BB Merah Putih.2 Mikayla his indicated that this pivot is related to Blackberry’s strategy on the playing field. She claims Blackberry’s past strategy has been based off of Michael Porter’s5 concept of sustaining competitive advantage; however, Blackberry is beginning to shift to strategies based on Rita McGrath’s4 transient advantage.

Mikayla does have a point on Blackberry’s change in strategy as the company has disengaged with hardware and is beginning to launch and ramp up advantages in its improved line of software.3 However, Blackberry’s transition from a mix of hardware and software products to just software products seems more than just a strategy changing from sustaining competitive advantage to transient advantage. Blackberry’s decision is also a financial and accounting decision. As their income statement1 indicates a decline in revenue for hardware and an incline in revenue for software, it would be wise for Blackberry to invest all its capital into software. Since managers are supposed to create value through their decisions6, it seems that Blackberry is pivoting to a solely software based company because Blackberry is losing the value created in their hardware and that it is too late to invest into more research and design in their hardware.

Mikayla states that the switch over will improve the operational effectiveness of Blackberry because it will help Blackberry with its “forward movement towards the productivity frontier curve” as Blackberry will be able to demonstrate “inherently reliable, controlled, and secured” applications.3 However this is not the only factor that will improve the operation effectiveness of Blackberry. Because Blackberry is in a state of decline, specializing in one area will help the company simplify itself so that it will be able to know which direction to head off for the future for potential growth. Staying in one field seems to enable Blackberry to reduce costs and save resources as the company will not have to worry as much for the hardware.

Word Count: 350

References

1 Blackberry. “Investor_presentation_Q2_FY16_(Sep).” PDF file, Sept. 2015.

2 Evans, Pete. “Blackberry to Outsource Smartphone Manufacturing from Now On.” CBC News, CBC, 28 Sept. 2016, www.cbc.ca/news/business/blackberry-hardware-loss-1.3781876. Accessed 29 Oct. 2016.

3 Mikayla Trang. “Blackberry – Transition from Hardware to Software.” Mikayla Le’s Blog, UBC Blogs, 1 Oct. 2016, blogs.ubc.ca/mikaylatrangle/. Accessed 29 Oct. 2016.

4 McGrath, Rita Gunther. “Transient Advantage.” Harvard Business Review, PDF ed., 2013, pp. 62-70.

5 Porter, Michael E. “What Is Strategy?” Harvard Business Review, PDF ed., 1996, pp. 61-78.

6 Walther, Larry. “Planning, Directing, and Controlling.” PrinciplesofAccounting.com, 2016, www.principlesofaccounting.com/chapter-17/planning/. Accessed 29 Oct. 2016.

Image Source

McDermid, Brendan. “The New Blackberry Classic Smartphone Is Shown during a Display at the Launch Event in New York, December 17, 2014.” Reuters, 5 June 2016, www.reuters.com/article/uk-blackberry-strategy-idUSKCN0ZL1JF. Accessed 29 Oct. 2016.

Markets and Finance

‘Tinderization of retail’: Another Effect of Our Dynamic and Fragmented Markets

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Andreas Rentz/Getty Images Source url: http://www.businessinsider.com/tinder-culture-is-hurting-retailers-2016-10
Andreas Rentz/Getty Images
Image Source: Business Insider

Swipe left to reject, swipe right to show you’re interest; then another profile comes up because maybe, just maybe this guy is better than the last. However, it seems as if Tinderization is not only affecting dating, but also the way we shop in today’s globalized, diverse, and dynamic market environments. Just like with Tinder, where will always be a brand that shows up right after you swipe right. With so many choices, shoppers are constantly faced with the sense of a possibility of a better deal, leading “to a sharp decline in brand loyalty”3. The attention span of consumers shorten and consumers now prefer to purchase goods at a time of need or want rather than in event cycles.3

I believe the ‘Tinderization of retail’3 brings a greater importance to the positioning of a company or product and to the comprehension of a company’s positioning within the market. Al Ries and Jack Trout4 has already stated that getting into a customer’s mind is very important. Being first will give a company a greater advantage4. Because our markets are now so dynamic and that consumers have a shortening attention span, I think companies will need to find more effective ways to constantly change their marketing techniques. The life-span of certain competitive advantages which a company attains in terms of marketing and promotion may be shortening as consumers will get bored of new promotions faster with their shorter attention span. Companies need to consider Transient Advantage2, and they will have to launch competitive cycles quite frequently.

Getty Images Source url: http://www.businessinsider.com/tinder-culture-is-hurting-retailers-2016-10
Getty Images
Image Source: Business Insider

Tinderization has probably been a big factor to the shift of customer behavior and decision making from the Tunnel Analogy to a more cyclic model (like the McKinsey model1). Because new, and potentially better, options are constantly being introduced to the consumer, the number of companies that the consumer considers is constantly changing until the consumer decides on one brand, but even after purchase, the consumer’s evaluation of a brand is still ongoing as the consumer creates expectations with the vast amount of new information he or she receives after purchase. However, Tinderization seems to be beginning to lead consumers away from the loyalty route and bring them back to the active evaluation phase of the McKinsey Model. Because trends, news, and preferences are changing at an increasing rate, the expectations consumers create after purchase may not match the company’s brands unless the company modifies its brands to be able to chase consumer’s metamorphosing needs. Points of parity and points of differences must be assessed carefully within a company in order to sustain consumer loyalty.

Word Count: 430

 

References

1 Court, David, et al. “The Consumer Decision Journey.” McKinsey & Company, June 2009, www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey. Accessed 15 Oct. 2016.

2 McGrath, Rita Gunther. “Transient Advantage.” Harvard Business Review, PDF ed., 2013, pp. 62-70.

3 Peterson, Hayley. “Tinder Culture Has Taken Over, and Now It’s Killing Retail.” Business Insider, 15 Oct. 2016, www.businessinsider.com/tinder-culture-is-hurting-retailers-2016-10. Accessed 15 Oct. 2016.

4 “Product Positioning.” Quick MBA, International Centre for Management and Business Administration, 2010, www.quickmba.com/marketing/ries-trout/positioning/. Accessed 15 Oct. 2016.

Image Source

“Getty Images.” Business Insider, 15 Oct. 2016, www.businessinsider.com/tinder-culture-is-hurting-retailers-2016-10. Accessed 15 Oct. 2016.

Rentz, Andreas. “Andreas Rentz/Getty Images.” Business Insider, 15 Oct. 2016, www.businessinsider.com/tinder-culture-is-hurting-retailers-2016-10. Accessed 15 Oct. 2016.

Markets and Finance

Commerzbank to change their strategy in the financial arena; are their decisions the right ones?

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The headquarters of Germany's Commerzbank are photographed behind the Euro sign in Frankfurt, Germany, September 30, 2016. REUTERS/Kai Pfaffenbach
“The headquarters of Germany’s Commerzbank are photographed behind the Euro sign in Frankfurt, Germany, September 30, 2016.” REUTERS/Kai Pfaffenbach

In hopes of coping with negative interest rates, Commerzbank, Germany’s second largest bank, recently announced a massive restructuring. The process will last until 2020, cutting 9,600 jobs and costing €1.1 billion. The bank will merge its major units and to focus on two customer segments: corporate clients and small-businesses. There will be a suspension of dividends after 2016 payments.2 The bank is expecting “a small net profit” for 2016. Through restructuring, Commerzbank aims to reduce operation costs and create a cost-effective structure by simplifying the structure of the bank and by reducing trade activities, to “[evolve] into a digital enterprise” by investing in digitalization, and to raise market shares.1

Commerzbank’s new strategy seems promising as they use their new strategy to overcome the threats of the sharply fluctuating markets and weaknesses within their cost structure. In the idea of Transient Advantage, a successful company “must be willing to honestly assess whether current advantages are at risk”.3 In Commerzbank’s case, they see that their cost-structure as a competitive advantage is at risk, therefore they are calling to restructure to simplify their cost-structure. It is important for Commerzbank to refocus their key activities through the disengagement3 of certain products to better deliver their value propositions. Porter mentioned in his article, What is Strategy, “operational strategy and effectiveness are both essential to superior performance”.5 Commerzbank’s simplification may allow for better operational effectiveness, while they try to launch, ramp-up, and exploit3 new advantages allow for better operational strategy. Because the competition for banks in Germany is extremely fierce at the moment2, Commerzbank made the right decision to work on their competitive strategy.

Stakeholders at risk of the restructuring of Commerzbank may include customers and clients, shareholders, and employees. The employees will be affected the most as many will lose their jobs. The massive job cuts may pose an ethics issue. A large group of people will now be unemployed and with the banking industry’s instability and sharp fluctuations4, there may be some difficulty for these people to find jobs afterwards; however, conversely if Commerzbank continues with an inefficient cost-structure and decreasing revenues, the bank may fall into trouble, resulting in possibly jeopardizing even more employees.

Word Count: 361

References

1 Commerzbank. “Commerzbank 4.0.” PDF file, 30 Sept. 2016.

2 Henning, Eyk, and Ulrike Dauer. “Commerzbank to Slash Jobs, Scrap Dividend in Broad Revamp.” The Wall Street Journal, 29 Sept. 2016, www.wsj.com/articles/commerzbank-to-slash-jobs-scrap-dividend-in-broad-revamp-1475139832. Accessed 2 Oct. 2016.

3 McGrath, Rita Gunther. “Transient Advantage.” Harvard Business Review, PDF ed., 2013, pp. 62-70.

4 Melby, Caleb, and Angela Cullen. “Fines, Withdrawals, Job Cuts. It Was an Ugly Day for Global Banks.” Bloomberg, 29 Sept. 2016, www.bloomberg.com/news/articles/2016-09-29/from-deutsche-bank-to-wells-fargo-a-bad-run-for-giant-lenders. Accessed 2 Oct. 2016.

5 Porter, Michael E. “What Is Strategy?” Harvard Business Review, PDF ed., 1996, pp. 61-78.

Image Source

Pfaffenbach, Kai. “The Headquarters of Germany’s Commerzbank Are Photographed behind the Euro Sign in Frankfurt, Germany.” Reuters, 30 Sept. 2016, www.reuters.com/article/us-commerzbank-restructuring-idUSKCN11Z13T. Accessed 2 Oct. 2016.

Business Ethics / CSR

Volkswagen Emissions Scandal

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Image Source: http://www.schoolphotoproject.com/cars-motorbikes/volkswagen-logo-photo2.html
Volkswagen.  Source

In September of 2015, Volkswagen admitted to the installation of a software that may be used to cheat on emissions tests in 11 million diesel cars worldwide. The software detected when the car’s emissions were being tested and modified the amount of nitrogen oxide exhausted. When not being tested, the car emits up to 40 times the maximum amount of nitrogen oxide permitted, although the car seemed to have better fuel economy and better performance. The nitrogen oxide exhausted is a potential threat to the health of the citizens and the environment.1 The executives at Volkswagen are not sincerely acting in general social interest. To be socially responsible, they needed to have put more money towards designing and making cars that actually meet emission standards since social responsibility is acting for “a general social interest”.3

Although Volkswagen’s executives seemed to balance the interests of most stakeholders, they exploited the trust between them and their customers by deceiving them through false advertising and tried to bypass the laws on emission limits set by the government. The failure to fulfill their social responsibility led to the deterrence of customer motivation to buy their product, leading to the losses of the shareholders as their stock value significantly decreased.3 Volkswagen announced that their profit would drop significantly over the next year and many of their models will no longer be sold in North America.1 Volkswagen’s losses can be explained through the Stakeholders’ Theory, where a successful company needs to “create value” for its stakeholders.2 In Volkswagen’s case there was an imbalance of value generally between the shareholders and the community – more of the value was created for the shareholders.

The company stated it would put aside $7.3 billion to make the cars satisfy the pollution standards, and were willing to work with officials to investigate deeper into the programming of the vehicles. CEO, Martin Winterkorn was pressured to take responsibility and to resign.1 Though the executives at Volkswagen did make a serious mistake, they are not entirely socially irresponsible as they have made steps towards correcting their error.

Word Count: 369

References

1 Ewing, Jack. “Volkswagen Says 11 Million Cars Worldwide Are Affected in Diesel Deception.” The New York Times, 22 Sept. 2015, www.nytimes.com/2015/09/23/business/international/volkswagen-diesel-car-scandal.html.

2 “What is Stakeholder Theory? – R. Edward Freeman.” Youtube, 1 Oct. 2009, www.youtube.com/embed/bIRUaLcvPe8. Accessed 11 Sept. 2016.

3 Zimmerli, Walther C., et al. Corporate Ethics and Corporate Governance. Springer, 2007. ProQuest ebrary, site.ebrary.com/lib/ubc/detail.action?docID=10187339. Accessed 11 Sept. 2016.

Image Source

“Car Brand Photo: Shiny Volkswagen Logo.” School Photo Project, Visually Delicious, 2016, www.schoolphotoproject.com/cars-motorbikes/volkswagen-logo-photo2.html. Accessed 11 Sept. 2016.