Month: November 2013

11. Financial LITERACY and its IMPORTANCE

Financial literacy, according to Mbazigwe ‘s Canadian Youth Business Foundation blog post, is the ability to comprehend how to perform financial management, investment, expenditure and revenue generation. It is significant to be financially literate since it aids entrepreneurs with maintaining “financially balanced, sustainable, ethical [and] responsible” business.

From the previous blog post, IKEA has invested in a wind farm to practice sustainable business. Would it have been possible to invest in the wind farm without seeing the great future financial value in sustainable practices? Probably not. The manager is not only responsible for acquiring greater profit for its stakeholders, but is also responsible for leading the firm to the direction where the firm can grow. Without being financially literate, it is impossible to be a “good manager” no matter how great the ideas are because the implementation should be realistic, feasible, and hopeful – that is, acquiring financial profits. The investment would also have not been successful if IKEA was not able to afford the great costs of the wind farm. Therefore, financial literacy not only enables the manger to make the right decision for the future, but also helps them review the current financial circumstance of the firm.

————————————————————————————————————————————————————

References:

1. Picture:

http://finance.dpi.wi.gov/

2. External Blog:

Christiana Mbazigwe’s blog post: The meaning of financial literacy and its importance

http://www.cybf.ca/2013/meaning-financial-literacy/

10. IKEA and 20-Turbine Wind Farm: Good Choice?

 

Referring to Tiffany Chen’s blog post, IKEA Canada purchased a 20-turbine wind farm near Pincher Creek and Southern Alberta, intending to be the socially responsible and sustainable firm. Although it is a highly costly investment for the firm, it is the “key to success in the future of business” and is “relevant in consumers’ hearts”.  

IKEA did not only purchase a wind farm to meet the environmental needs by reducing its dependence on fossil fuels, but also had other practices to meet the social and economic needs. For instance, IKEA redefined productivity in the value chain by reducing the distance between factory and distribution centre to the store, and built supportive industry clusters by cooperating with suppliers of wood on more sustainable forestry practices.

The combination of sustainable practices and the investment on wind farm will lead IKEA to the success due to its decreased cost of production, which can increase the profit for IKEA. Furthermore, the customers can also be benefited from these practices since the prices of the goods can be reduced due to decreased production cost. IKEA then may build a competitive advantage by offering cheaper products through sustainable practices; that is, sustainability is not pursued just to enhance a brand image, but it is rather a win-win strategy for the firm, the environment, and the customers.

 

 

References:

1. Picture by DyeCoo

http://www.dyecoo.com/ikea-greentech-venture-capital-invests-in-innovative-waterless-textile-dyeing-system/

2. Articles:

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/ikea-eyes-low-carbon-future-with-alberta-wind-energy-project/article15436596/

http://globalnews.ca/news/970814/ikea-buys-wind-farm-near-pincher-creek/

3.Blog post

Tiffany Chen’s Blog post: IKEA setting sustainability as the core of its business strategy

https://blogs.ubc.ca/tiffanyc/2013/11/17/ikea-setting-sustainability-as-the-core-of-its-business-strategy/

 

09. Kindle and Printed Books

 

According to Miranda Zhu’s blog post, Kindle provides an inexpensive and convenient reading experience to the customers with the development of technology. Selling Kindle devices at the bookstore was described as “inviting hungry foxes into the henhouse” as it harms the printed-book business.

It is true that offering Kindle reduces the demands for printed books. However, there is a significant difference between e-books and printed books; the readers cannot turn the physical pages, smell or feel the e-books. This is probably the reason why 81% of the parents suggest that reading printed books is very significant. Lowering price may help increase the demand for printed books, but it does not effectively create a competitive advantage. Furthermore, this will discourage the authors to publish printed books since they may have to be paid less, otherwise the cost should be reduced by lowering the quality of the papers. Rather, it is better to emphasize on the point of difference – the physical texture that e-books do not have – in order to compete against e-books.  Furthermore, e-book market is not as big as the printed book market yet, which implies that e-books have limited variety of books. In my opinion, Kindle is not as threatening as the book sellers think in the short term. Nevertheless, the book sellers must be ready for the battle for the future since the e-book market continues growing.

———————————————————————————————————————————————————————–

References:

Pictures:

http://ebookfriendly.com/kindle-book-vs-print-book-picture/

Articles:

http://www.bbc.co.uk/news/technology-24868137

http://www.huffingtonpost.com/cate-pane/why-i-dont-read-digital-books-to-my-kids_b_4179144.html

Blog:

Miranda Z. (Kindle VS. Printed Books: A Challenge To Traditional Reading Habit)

https://blogs.ubc.ca/miranda8/2013/11/10/e-book-vs-printed-book-a-challenge-to-traditional-reading-habit/

08. How Social Entrepreneurship Changes the World : Khan Academy

Watch a video: Khan Academy Vision and Social Return

“A FREE WORLD-CLASS EDUCATION FOR ANYONE ANYWHERE”

-Khan Academy Mission Statement

                These days, we perceive business as a mechanism to be a “rich”- to earn money. The business’s objective was to maximize profit, and the stakeholders were interested in the profit and the returns. Doubtlessly, profit is significant in maintaining the business. However, should maximizing profit be the only objective of the business?

Khan Academy, offering approximately 3,100 short videos and 138 million free lessons to the customers, solves the social problem by providing learning opportunities to students whom cannot afford private tutors. Although all of its lessons and videos are free, it generated total revenue of $11,845,812 in 2011. This indicates that social entrepreneurship is fully capable of generating revenue while positively affecting the society (by providing learning resources).

Other than profit, Khan Academy shows us the reason why the firm should be socially responsible: without the customers, the firm is unable to deliver its value proposition. Since the customers enable the company to deliver value proposition and thus generate revenue, the firm should return benefits and values to the customers. This is an ethical standard that any firm should meet.

Khan Academy is an important example of social entrepreneurship that successfully integrates business and technology to fulfill the social needs. The business that only pursues the profit without returning values to the customers is a flower without bees or food without any taste; despite the great profit, it will no longer be able to respond to customer needs, and eventually encounter “death” of the business.

References:

1. Picture:

http://www.khanacademy.org/

2. Video:

https://www.youtube.com/watch?v=wRf6XiEZ_Y8&feature=player_embedded

3. Article:

https://www.openforum.com/articles/how-entrepreneurs-can-change-the-world/

4. Research:

http://www.guidestar.org/organizations/26-1544963/khan-academy.aspx#ctl00_phMainBody_divRevExp

07. L’Oreal and Management Information System

                According to the report released by Coveo− the Management Information System (MIS) − the productivity of L’Oreal is increased by being provided with information that helps decision making. Coveo, by sorting and organizing data, makes data analysis more convenient. Furthermore, since MIS provides the employees with effective and quick access to useful information that is significant in decision making, it enables L’Oreal to respond to new demands of the customers as soon as possible.

The importance of MIS in business is clearly outlined in the report; nevertheless, it is still questionable if IT is always efficient in business. For instance, how does the firm ensure that the provided information is always accurate and reliable? How does the technology ensure that the provided information is always relevant to the firm’s value proposition?

L’Oreal’s was a great example of an efficient MIS usage since it tried a demo-version in certain departments prior to implementation in the entire firm. This not only prevented the company from wasting IT investments, but also allowed the firm to ensure that this type of MIS is effective in decision making; for instance, L’Oreal uses IT for measurement – to collect data of consumers – and experimentation – to get insights into the effect of its products on consumers. The technology itself does not enhance the productivity of the firm; rather, it is the firm’s responsibility to wisely select and use the technology provided to effectively make their decisions.

References:

1. Pictures:

http://eofdreams.com/computer.html

2. Report

http://coveosc.coveo.com/~/media/Files/CaseStudies/LOreal-lifts-employee-productivity-with-Coveo.ashx

06. Workplace Bullies and Corporate Culture

Shown by Zappos, corporate culture is not only significant in motivating the employees, but also in corporate growth. Workplace bullying, which is not an uncommon phenomenon in South Korea, is in fact a serious problem that is not taken seriously enough.

In contrast to Zappos, where the employer did not own a corner office, a strict position and class (hierarchy) distinction among the Korean employees and employers exist. Furthermore, overwhelming working hours and the employers’ expectation to complete the jobs as soon as possible cause stress and inhibited communication among the employees. This not only results in a reduced productivity, but also slows down the process of developing its services and products in response to the customer needs. This eventually harms the potential growth of the company.

If developing corporate culture is essential for growth, why many Korean companies are reluctant to enhance the relationships among the employers? Developing and maintaining corporate culture may be costly since it requires spending funds and time on effective communication and working environment. It may be true that developing culture for a huge company is costly and rather difficult due to numerous branches, segments, and employees. However, it may be important to acknowledge that corporate culture is significantly related to the growth of company, and it is beneficial for the company in long-term; the company should strive to enhance its corporate culture.

——————————————————————————————————————————————————————

References:

1. Picture:

http://www.risktobusiness.com/workplace-bullying-update-april-2013/

2. Articles:

http://www.workplacebullying.org/2009/05/26/koreatimes/

http://www.forbes.com/sites/groupthink/2013/10/04/how-to-build-a-great-company-culture/

http://www.linkedin.com/groups/Korean-Working-Environment-Corporate-Culture-4032433.S.134570572

http://www.asiapundits.com/regions/korea/bullying-in-south-korea/

http://www.theaustralian.com.au/media/marketing/jon-wolske-tells-how-zappos-put-the-wow-into-its-corporate-culture/story-fna12mff-1226757780174#