Justin Woo's Blog

Henry Mintzberg, a professor of Management Studies at McGill University, shared his unique opinion on the cause of the recession in the newest edition of the Economist.  To sum up his perspective simply, poorly run companies caused the recession.  He goes on to state that no amount of economic intervention can end the recession; rather, change must come from the source, when corporate America cleans up its act.

Mintzberg places substantial blame on CEOs whom he believes run companies recklessly.  Essentially, the CEOs get bonuses based on an increase of share prices.  He goes on to explain that their are two ways that this may be done.  One way, the ethical way, would be to raise share prices by conducting better research, improving products, and offering better service.  The other way, which Mintzberg accuses the CEOs of, is raising stock prices through depreciating the brand, cutting investments in research, and confusing customers by deceptive pricing.  This, he argues, raises prices long enough for CEOs to collect their bonus and leave.

There is more that Mintzberg has to say on the reasons why enterprises trashed the economy which can be found in the article link below.

http://www.economist.com/blogs/freeexchange/2010/12/management

Compared to my parents generation, young people, such as myself, take a very different approach to saving and budgeting.  Instead of saving for a family, a house, and financial security in general right after coming out of university, young people tend to have a different set of goals which they save for.  Many university students and recent graduates save for big trips to places like Europe or Africa or for other short-term goals that make life fulfilling by setting aside some money from every pay cheque.

One possible explanation for this change, when looking at Maslow’s Hierarchy, is that the fact that our parents had much different needs than we do.  Whereas my parents were in the baby boomer generation which tended to be more concerned about security and safety, young people today grow up in quite an affluent society where self-fulfillment is more sought after; self-fulfillment being higher up in Maslow’s hierarchy.

It’s all about balance.  Eventually, most young people plan on settling down, having a family, and saving for retirement.  However, there is less sense of urgency.  Personally, I hope to be able to do some humanitarian work in Africa before I graduate, but that depends on how well I save and budget my money.

http://www.financialpost.com/personal-finance/Student+money+Save+stress+budget/3906321/story.html

In the past year, the EU has spent copious amounts of money on bailouts in Iceland, Greece, and most currently, the €85 billion bailout for Ireland.  All these events have caused the Euro to fail, bringing the surplus European countries, namely Germany, down with it.

The main issue is whether Germany can continue to live under the Euro. Currently, they are fed up with the inefficiency of the aided countries and  they fear that the European Central Bank will inflate away the debt.

So, should the Euro be broken up?  The economist suggests that it might happen.  It goes on to suggest that there are two ways that the currency could be split.  One is that the weaker countries may choose to leave to devalue their currency, the other option could be that Germany could leave with the Netherlands and Austria and restore the D-mark.  Either way, it would be very costly.  However, this may be the reality in the near future.

http://www.economist.com/node/17629661

One of the most successful entrepreneurial companies is Mary Kay Inc. which was founded by Mary Kay Ash in 1963. This is a company that sells skin care and cosmetic products. Largely considered as American’s leading female entrepreneur, Mary Kay Ash started the company with $5000 loan. Now the company now does several billion dollars of sales a year.  It was because of Mary Kay’s dedication and hard work that the company became  a success.  Behind the business is a strong ethical foundation. Mary Kay Ash claims that the foundation of the company was built on the Golden Rule, that is, “treat others as you would want them to treat you”, to which she accredits much of the company’s success.  She also creates a great work environment for employees by encouraging them to live a balanced life.  She lives by motto “God first, family second, career third.”

http://www.college-startup.com/college/15-successful-entrepreneurs-who-didnt-need-college/