Month: September 2012

Source:

http://www.thestar.com/business/article/1263970–crown-says-nortel-execs-monkeyed-with-numbers

Nortel’s former executives manipulated the balance sheet to create a profitable scenario so that they can earn bonus as rewards.

The difficulties in financial statement, a negative income, is covered up by the accruals. This money are kept for future usage, which is different from the revenue. The executives are experienced business men, so they knew how to make it looks correct. This trial shows the false usage of the business knowledge.

Bonus is a money that is given to members of the business to reward good performances. However, in this case, it encourages the criminal action. The huge number of bonus creates a strong attraction. So it is important for a firm to decide what is an appropriate amount of bonus it should give. Controls by the executives is needed for the firm to run properly, but in this case, the executives are the ones that break the law.

External monitoring is needed to avoid the manipulation of the financial statements. Finance organizations should behave as a supervisor to the firms in terms of its financial statement to avoid actions against law. Regular check on the financial statements is needed within the business too.

Article Source:

http://www.themoscowtimes.com/business/business_for_business/article/advertising-and-marketing-medicines-how-does-one-adhere-to-the-law/468298.html

The restrictions on Medicine advertisement strongly limit differentiation that the firms use in positioning their products. Medicine producers are restricted in the usage of comparative advertising, plus that only the advertisement of non-prescribed medicine is promoted. So the variety of products is limited and they have many similarities, and only unified information overload happens.

However, is the restriction always bad? Legalistic restrict the firm to use any guaranty. This does limit the firms to induce demand in consumers, but at the same time, it helps the firms to avoid any problems later if the medicine does not work as it is guarantied in the advertisements. The requirement of warnings of side effects on the advertisements may reduce the information that the firm can communicate with the public; However at the same time, it may help the firm to build a good image of concerning the welfare of consumers.

So what can the firms do to promote their products?They can invent new products and try to occupy the first position in the market. The followers and relate to the popular firms. Also, naming with function is helpful in medical product. For example: Coldrex, Enlive!, and  Benefix.

8.29 mining accident killed 45 people, due to high density of gas and over underground population. The mine manager ignored the alarm and kept on the production process.

Though safety checks are done and unsafe mines were shut down, death due to mining accidents in China is still 10 times that of USA(1,973 in last year). Small, private mine owners are more concerned about their profit rather than lives, and the investment in improvements are delayed. Some mines operate illegally after being shut.

As China’s economy is more centralized, the roll of government is crustal. Even thought the government realizes that modern and mechanized production should take over the high-risk labour production, punishments sometimes is inefficient due to corruption. Also, workers in small mines are uneducated and unskilled, so they rather take risks than being starved.

The government sent leaders for training in Logan Country, Virginia after this accident. Education is important for both improving the safety of mining, and widening the job selection for people.