Digveer's Blog

Of late I’ve read and heard a great deal of appreciation and acclamation for the sector of Micro-finance, more specifically Micro-credit. This new concept of lending small sums of money at low interest to people in developing countries, has helped them start of small scale businesses in an effort to improve their financial prospects. This model in theory, sounds great but there are certain negatives about it. The article I read brings forth these drawbacks of this radical new model.

The article focusses on the effect micro-credit has had in South Africa. Post apartheid (1994) micro-credit was introduced in the country with the expectations of raising income, living standards, employment etc. The result however was quite the opposite ; very few people in South Africa have a secure income stream and therefore face huge problems in trying to pay back the loans they took. They either need to take more loans to pay back the initial one or  they have to sell of household assets, this therefore has caused more unemployment today than what it was during the apartheid. [1]

Also micro-credit since its inception within the country has not significantly changed anything. The growth has not been sustainable and the small scale informal businesses that existed in the black townships during apartheid are quite similar to the businesses that have opened up by the backing of micro-finance. So the question that arises is, What’s changed?

Developing further on this issue, micro-finance has created a large opportunity cost. Scare resources that could have been channeled towards SME (  Private Small and Medium size enterprises) [2] development have been given to micro-credit institutions and banks whose primary aim is to make money for themselves at the cost of South Africa’s poor citizens, and then leave the industry when they have made the profits they required.

To end, I would like to state that I am not against the concept of micro-credit, I think it is a great way to empower the poor; but it is also important to understand the negatives of this initiative so that moving forward countries can mend the mistakes that are being conducted to make a more well rounded action plan. This blog entry provides those negatives to work towards betterment, and not to discredit this initiative.

Works Cited :

[1] http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster

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What role would social enterprise play if the United Nations itself could provide as much financial support needed by developing countries ? This is the question I hope to answer through this blog entry.

The United Nations works towards fostering international development through its numerous member agencies. It works towards uplifting poor or backward nations socially, economically and politically. Now if the United Nations were fully funded you would think that development for these poor countries would be so much easier because they would now have the financial backing to move out of poverty. The situation however is a bit more complicated. Take Africa for example, more than 500 billion dollars of foreign aid was provided to the region between 1967 and 1990 [1]. That is an enormous amount of money and still the continent remains among the poorest of areas in the world. Why? the answer to that question is, aid is helpful only if its process of distribution is streamlined and controlled. The number one problem in all developing countries is corruption, when money pours into the country it first reaches the pockets of the powerful, and finally the small remainder trickles down to the people who actually need it. Another problem is citizens of poor countries do not know how to make use of the money they have received simply because they are uneducated. We need arc initiatives and social enterprise to not only control this process of money distribution but to also educate people about their financial prospects. When Fitih Tesfaye visited the Sauder School of Business Arc Initiative she discovered a market within the  food industry she could enter, to expand her small food business. This is why we need such programs, the United Nations is a very large body it can provide the groundwork for improvement but the job of actually setting the processes into motion lies with the hands of these programs.

To conclude, even if the United Nations were fully funded we would still require Social Enterprise to provide the platform for the poor to harness their talents and financial prospects.

Works Cited:

[1] http://www.cato.org/publications/economic-development-bulletin/african-perspectives-aid-foreign-assistance-will-not-pull-africa-out-poverty

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Being from a developing country myself, where the rights of people are put second to the firms objective of gaining profits, Crispin’s blog titled ” Business is about the people” caught my eye. He brings forth the importance of sustainable development and how it is a firms obligation to conduct business in socially ethical ways.

In his blog he presents an example of Starbucks who offer fair trade coffee to University Students, and how this educates the youth to develop into individuals who care for society. After reading his blog, one concept that struck me immediately was that of “The Triple Bottom Line”. Triple Bottom line is an accounting framework that includes “environmental and social dimensions” [1] It links the performance of a business to the three P’s of Profits, People and Planet. [2]. What that means is businesses through the use of this concept should function in a way that “people” and the”planet” are not compromised in an effort to raise”profits”; all these three dimensions should move parallel to one an another.

Crispin in his blog concludes that businesses need to be more than “profit maximisers”. The solution to that I believe is by using this concept of the triple bottom line. Firms will look to maximise profits, which is fine because that is the primary objective of a company. The future however is where firms can maximise their profits while also being socially ethical. It is tough but it is the only option, because those firms who continue to exploit the environment for the sake of profits might cut costs but will be driven out due to negative customer perception. You’ve got to to remember the “customer is always right” and his needs must be put in front of everything else.

Works Cited:

[1] http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

[2] http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

In today’s day and age Digital Video has become one of the most important mediums through which companies market their products. However there are many myths associated with this marketing technique. The article I read uncovers these myths and brings to light how the success rate of a marketing campaign through digital video can be improved. I today will focus on four of the myths highlighted by Nicole Fallon, the writer of “5 Ways Marketers Get Digital Video Wrong”

Myth No 1: Marketers believe that view count is the only metric that matters :  Everyone is fixated on finding ways to make a video go “viral” , however this is only a part of the story. What really matters is what change your video is driving? are people visiting your site after watching your video? Are they  finding out more about your brand? Only when these questions are answered can the true success of the campaign be measured, not by just calculating the number of views.

Myth No 2: The content is secondary as long as the video looks good : Matt Heimen, Co- founder and CEO of online video production company, says “Content is first and most important” [1]. There are a million products being sold out in the market. The only way you will convince people to buy your product from among the plethora of others is by telling them what’s different about it, you need to educate them about your value proposition and not just focus on making a “nice looking” video.

Myth No 3: The annotations in a video do not matter:  The annotations can play a huge role in increasing sales. By adding a link to your website at the side of the video you will make it easier for the customer to get access to your product (Heimen). Immediate action is crucial in the business of sales and annotations can provide that.

Myth No 4: Marketing online should be similar to the method used to market on television: When advertising through channels such as youtube companies need to make the advertising process more engaging. They have more time on youtube than they do on television and they therefore should take advantage of this. Lisa green, head of industry for fashion and luxury at Google says using the medium of digital video companies can have a “conversation” with their customers as opposed to just sending “a one way message.”

If companies can do away with these myths the success of their marketing campaign can certainly be improved.

Works Cited:

[1] http://www.businessnewsdaily.com/7422-video-marketing-myths.html

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Robert Cialdini’s, “Influence: The Psychology of Persuasion” has changed the methods of online marketing. For those of you who have not read this book; it talks about the psychology of why people say yes and about the principles of persuasion. Businesses have now begun to incorporate these principles within their marketing approach in an effort to raise sales.

Anand Kansal’s blog focusses on how Cialdini’s principles and A/B testing methods help improve the sales of a company, in an attempt to raise revenue.

Today, I will talk about the top four principles highlighted in Anand Kansal’s blog which in my opinion can help catapult company sales.

The first principle highlighted by Cialdini is Reciprocity. This method focusses on the value of giving back to the customer. For example by giving away free samples, the customer feels his contribution to the company has been acknowledged and thereby increases customer loyalty.

The second principle is Social Proof. It is human nature for people to follow what others do. Businesses take advantage of this behaviour by showing the customer on their websites what other people are buying, or what’s “cool”. By creating this sort of bandwagon effect people follow others and go ahead and buy the product; raising sales.

The third principle is Scarcity. Salesman are sure to say at the end of their pitch that the discounts will last only for a “limited period of time”. By creating this sense of urgency within the customer they are instigated to take action quicker because it is human nature to consume something if its limited, even if they don’t have much need for it.

The fourth principle is Liking. Customers are more likely to buy your product if they can relate to the person selling it. Its for this reason a makeup brand would most probably ask a top female celebrity to endorse for them as opposed to say a sportsperson. The point is create a persona around your product that people will like and connect to.

The above four of Cialdini’s principles I think are great ways for  businesses to shift public opinion in favour of their product, and work towards raising their sales and company revenues.

What is more important ? Generating clean and sustainable energy for Industries? or protecting the ancestral fishing grounds of the First Nations people? This dilemma of weighing the demands of businesses to that of the aboriginal people is one that has sparked of a range of debates, and has done so once again in the case of the BC Hydo’s hydroelectric project. The dam they propose to build will encroach upon, and flood 83 kilometres of Peace River Valley; an area that has since long ago been used by the First Nations people for fishing and ceremonial purposes.

As per BC Law businesses are obligated to “consult” and “accommodate” First Nations on any land or resource issues that will affect them(1). Businesses therefore have to convince the aboriginals on letting them build on their land. Giving them a share in the revenues or sharing profits isn’t enough. Such an approach might work in a developing country where the percentage of poor is quite high, but in a developed nation such as Canada, you need a bargaining chip other than money. All the First Nations want is the business community to appreciate and respect the love they possess for their ancestral land, and businesses need to understand that. You want to convince them don’t bully, rather listen to them.

Yes, a hyrdo power project will have economic benefits and it will create employment, but it also creates a large opportunity cost of ignoring the rights of an integral community. Businesses need to Co-exist. They cant always use their monetary strength and size to lure opinion in their favour. There is more than one river in BC! therefore rather than wasting resources in fighting court cases they are most likely to loose, they should go find alternatives to their ideas.

Works Cited:

(1) http://www2.gov.bc.ca/gov/topic.page?id=8CF98F756A984198AFD80AEA0E472F05

http://www.vancouversun.com/news/First+Nation+chiefs+stage+Site+showdown/10215965/story.html

The second I saw the title ” Why the rich stay rich” my attention immediately focussed onto this article. Who doesn’t want to know, what the rich do so different that makes them better from the rest? The article I read offers an insight into this very question.

The key to becoming a successful entrepreneur is having the courage and ability to take risks. Risks that could make or break your career. I don’t know about you, but from what Ive seen in movies, one of the primary ways people double/triple their money is by going and investing in the stock market. Don’t get me wrong, Im not saying the rich don’t do that, they do, but what they do different is that they invest in places people would usually be discouraged to invest in. For example real estate, paintings, or cars. The problem with these investments is that there not very liquid, and they take time to generate profits, and people usually aren’t patient enough to wait. But no one becomes a millionaire in one night, you’ve got to go through the gruel. Another key investment prospect for the rich is by buying of other businesses. This may seem a very risky option, but if you want to make it big, you’ve got to dream big !

The point is the successful businessman invest in areas a common man wouldn’t. So you’ve got to do something different to make more money !

Mahesh Nandwani’s blog on the importance of a business having a Unique Selling Point, I found quite interesting, and thought why not comment on it ! The first thing an entrepreneur thinks about when he starts of is- What am I selling ? What makes my business unique? However even though its the first question that comes to his mind, I feel the answer to this question is never truly found.

The reason I say this is, a lot of the time people believe , something as broad or vague as ” Our business gets the product to the customer on time” is a USP. A USP as Mahesh points out is something that “differentiates” the product from the competition. Getting the product to the customer on time isn’t revolutionary different. Pizza Hut and Dominoes are just as fast as getting Pizza to the customer, it doesn’t make them Unique, it just means there efficient. To be unique, you have to have something the competition doesn’t have. Apple is Unique because it provided the world with computers and products they had never seen before. The USP is something that needs to revolutionise the game, just like Steve Jobs did.

Any business whose Value Proposition is something that will benefit the customer, and has never been seen before will work! As Mahesh emphasizes business just need to conduct research to find it.

Business culture and methods of work are changing in todays day and age, as the ageing population numbers are rising and their respective places are being taken up by younger individuals in the workplace. The article I read highlights the reasons behind this change, and validates why its not a bad idea for businesses to adapt to the change rather than oppose it.

A few years back, workers were expected to adapt to the particular business environment and work in relation with its specific norms. Today however, the situation is slightly different. The modern workforce as per the article has less loyalty towards their companies because the degree and number of jobs they change is quite high. If you dictate rules and regulations to the employee, the probability of him wilfully leaving would be much higher as compared to a few years back. The article explains that millennials want freedom to “redefine the way they work”. They may not want to come and work from 8 to 6, because they rather go for an early morning run, or they may not want to do a group project sitting in the office, rather do it over face-time. The point is organisations should set down the task to the employee and let him get it done the way he/she desires, as long as its done on time.

To conclude, it is important for management to shift from their authoritative and autocratic approach to a more democratic/bordering on laissez-faire approach, if they want to create an environment that is more welcoming to the employee as opposed to threatening.

However all said and done, the type of good and situation of the business, also play a key role in determining the approach of the manager to this changing business culture.

How important is it to teach business students the importance of ethics in a business? Businesses already have training programs for new employees to get them acquainted with the do’s and dont’s of the organisation, so how would a business ethics degree help? The answer to these questions is what the article I read offers. “Ethics” as simple as it may sound is one of the most difficult concepts to grasp and truly understand. The reason being , like finance, marketing or accounting it cant be taught by simply opening up a textbook. The article underlines that everyone has an ethical decision to make sometime in their career, for some the degree of importance the decision holds may vary but the concept is still the same. At such a time, how do you approach a problem? It is for this reason that teaching ethics to business students is imperative for Universities.

In order to make students better grasp the concept, Universities have started recreating scenarios in a class room setting, and making the experience more real and practical. They have also started appointing MBA students on the strategic leadership projects of companies to make the experience and subject even better.

To conclude, no matter how well you know your job, or however high you’re on the ranking scale, one wrong/un-ethical decision, is enough to bring down everything.