As we mentioned in Class 3 about business ethics, according to Milton Friedman, a company should not be responsible for the whole society since such kind of task is the main concern of the government; therefore, if an entrepreneur or a company decides to intervene in social welfare, ultra vires actually happen. However, can we imagine a world which is merely interest-driven—every single individual acts only based on their self-interests?

Indeed, social entreprise is a “freak” in a way—let us recall its definition first, different from normal firm’s goal of maximizing profit, social entreprise aims at maximizing improvements in human and environmental well-being. Social entreprises can be basically classified into two modes—social and investment approach. One may want to ask why there would be such “stupid” companies or individuals that regard businesses as philanthropies? The answer is clear; because the society needs social entreprises. Admittedly,we are living in a rapid developing society and our living standard is improving mariculously. However, there are always certain groups for people defined as marginalized people, no matter how prosperous the society is. If the society decides to follow majority rule and ignore marginalized people’s appeal, the gap between those two interest groups would become larger and larger. Accordingly, the existence of social entreprise magically relieves this nightmare. By operating social entreprises, vulnerable groups do get chances to realize their values; meanwhile, such activity builds up strong collaborations between social network and trans-border fields, pushing forward the establishment of social capital.

So if the United Nations was fully funded, do we still need social entreprises? Definitely yes, for social entreprises are not supplements in business world; instead, they are the vital ingredients which may conversely determine the whole market. Similarly, the concept could be applied to “Arc Initiative”. Taking what I talk about into consideration, would anyone consider the existence of social entreprises and Arc is redundant and they are “freaks” still? Probably no.

Works Cited:

1. Lorainne Lopez. “A New Platform for Social Enterprise Startups in the U.S.”. Huff Post. Oct.27, 2014
http://www.huffingtonpost.com/lorainne-lopez/a-new-platform-for-social_b_6044804.html

2. Ducan Thorp. “Social enterprises are changing our society”. The Scotsman. Nov.4, 2014
http://www.scotsman.com/news/social-enterprises-are-changing-our-society-1-3592826

3. Social Enterprise. Wikipedia.
http://en.wikipedia.org/wiki/Social_enterprise

4. “What is social entrepreneurship”. Skoll World Forum.
http://skollworldforum.org/about/what-is-social-entrepreneurship/

The original text link:
https://blogs.ubc.ca/tianyeguo/2014/10/28/ethics-social-responsibilities-market-research-toms/

As I read Tianye Guo’s blog, I realize that when people talk about Toms, the first thing comes to their mind must be its “Buy one, give one” slogan which is also regarded as a successful model of taking social responsibility. Obviously, it is true that TOMS does devote itself to charity based on the fact that it gives aid to numerous people during the past years. But looking at the gross profit in the past 3 years, we might want to ask: Is it really a good business model?

The definition of TOMS shown in Wiki uses the following description—a for-profit company. What the expression tells us is that the prior goal of TOMS is to maximize its profit instead of being a pioneer in philanthropy. Based on the recent market research, people’s passion for TOMS is plunging, gross profit decreasing accordingly. As we can see, the problem has nothing to do with TOMS’s ethical strategies; instead, the problem occurs since TOMS does not think highly of sustainability of its social responsibility. TOMS does not resonate or build social mission sense with its customers, thus failing to maintain clients.

We have learned that to maintain good performance in market, the best way is to create shared value(CSV); similarly, to maintain long-run social responsibility, CSV plays a vital role as well. For TOMS, only by integrating itself with customers can it expect long-term contract, which is also the fundamental of its long-run social responsibility.

Works Cited:

1. John Converse Townsend. “A Better Way to ‘Buy one, give one'”. Forbes. Oct 8, 2014
http://www.forbes.com/sites/ashoka/2014/10/08/a-better-way-to-buy-one-give-one/

2. Cheryl Davenport. “The Broken ‘Buy One, Give One’ Model: 3 Ways to Save TOMS Shoes”. Co.Exist. April 10, 2014
http://www.fastcoexist.com/1679628/the-broken-buy-one-give-one-model-three-ways-to-save-toms-shoes

3. TOMS shoes. Wikipedia.
http://en.wikipedia.org/wiki/Toms_Shoes

4. “Toms shoes: doing more harm than good?”
http://bizgovsociii.wordpress.com/2012/04/16/toms-shoes-doing-more-harm-than-good/

External blog link: There’s No Excuse for Avoiding Strategy

http://blogs.hbr.org/2014/10/theres-no-excuse-for-avoiding-strategy/

Let’s start with a famous remark put forward by Jack Welch, which is also generally recognized as the definition of Strategic Management–“Strategic Management is trying to understand where you will fit in tomorrow’s world and deciding where you want to be — an getting there. ” From my perspective, I entirely agree with Frank’s opinion, THERE’S NO EXCUSE FOR AVOIDING STRATEGY!

Some people might argue that the market is changing constantly, therefore, it is more practical to focus on the present. In a way, people holding this kind of opinions are true—at least the market does change constantly. However, they ignore a fact that focusing on current situation is also the application of one business strategy called transient strategy. Strategy is the tool that helps a firm succeed in dealing with the changing market. If a firm clearly knows about its SWOT and PEST before it implements a vital decision, it gains at least an across-the-board insight into the environment, even though the information might not be perfectly precise. Facing the market in a state of flux, by applying various strategies, all a firm needs to do is alter the conditions entered into the template. Moreover, strategies do provide a firm with a clear direction that it should move towards, since strategies align the mission and vision with operations.

Despite to the fact that scholars are still debating upon deliberate strategy VS emergent strategy(also Porter VS Mintzberg), strategies for top performers are always mixed and they will come to the most cogitative ones. Would corporates with impeccable strategies always win in the market? Probably not since they might ignore actual practical application. But I know that firms without reasonable strategies are bound to fail.

References:

1. The Importance of Strategy. Boundless
https://www.boundless.com/management/textbooks/boundless-management-textbook/strategic-management-12/strategic-management-86/the-importance-of-strategy-416-4340/

2. Andrew Latham. “The Strategic Importance of an Organization’s Corporate Strategy”. Demand Media.
http://smallbusiness.chron.com/strategic-importance-organizations-corporate-strategy-12246.html

3. Paul B. Brown. “Why Business Plans Are A Waste of Time”. Forbes. Aug 14, 2013
http://www.forbes.com/sites/actiontrumpseverything/2013/05/15/the-most-successful-people-take-small-smart-steps-toward-their-goals/

The original text link:
https://blogs.ubc.ca/yitingzhang/2014/09/27/merger-tax-inversion-save-costs/

When I read Yiting Zhang’s blog posted in late September talking about Burger King’s plan of merging Tim Horton and switching its headquarters to avoid high tax rate set in the US, I realized that things are going to a relatively different direction. On October 20^th, 2014, after the revision of regulation on Tax inversion trade, the American drug company AbbVie’s merging plan with the British pharmaceutical producer called Shire stopped abruptly. It cost AbbVie nearly 1.6 billion dollars as the default money. We might want to ask: Why?

In the past decades, the US government has been frustrated by tax inversion problem due to its powerful damage to economy and the whole business environment. By restricting such relocation, recently, the US government has increased the ownership change in tax inversion from 25% to 50%; moreover, despite of the merger, firms must keep their managing branch in USA. Let us look at the example we talk about. AbbVie does prepare a large amount of capital oversea, planning that once after the merger, it can draw upon the amount. However, according to the US new regulation, once AbbVie uses its oversea capital, it would be charged for considerable taxes, making the merger operation hard to continue. What we could read from the news the the latest tendency of tax inversion—it is no longer a profitable or practical way to avoid high tax burden in local. In addition, even though certain companies did succeed to relocate, the difficulties they faced exceed far beyond what they gained, Yiting criticized that Burger King might be more profitable in use of tax inversion, considering the factors I give above, I might have to say I disagree with this perspective.

We have to admit that government does play an important role in business world for it can alter laws and regulations. After all, Burger King’s merger plan might struggle.

Works Cited:

1.”Tax inversion”, Wikipedia
http://en.wikipedia.org/wiki/Tax_inversion

2. Yang Liu. “Burger King makes use of tax inversion, leading to disputes in the USA”. Finance Huanqiu. Aug 26, 2014
http://finance.huanqiu.com/view/2014-08/5118503.html

3. Richard Rubin. “Burger King Deal Advances Amid U.S. Inversion Crackdown”. Bloomberg. Sept 23, 2014
http://www.bloomberg.com/news/2014-09-23/lew-tries-to-limit-tax-cut-deals-with-inversion-crackdown.html

4. David Gelles. “After Tax Inversion Rules Change, AbbVie and Shire Agree to Terminate Their Deal”. NY Times. Oct 20, 2014
http://dealbook.nytimes.com/2014/10/20/abbvie-and-shire-agree-to-terminate-their-deal/?_php=true&_type=blogs&_r=0

http://www.google.ca/finance?q=NASDAQ:AMZN&fstype=ii

Amazon, the biggest Electronic commerce(E-commerce) company of the world, is known for its bad condition of earnings in the past few years. However, even though Amazon “does not look nice in its financial statement” year by year, when we look in the share price of Amazon in NASDAQ, it is not difficult to find out that the shares has a rising basic tendency. And we might want to ask——Why?

As known, the tendency of share price should accord with a firm’s financial situation reflected by its annual financial statement. However, the particularity of Amazon demonstrates another important index of evaluation which is slightly ignored by us in class, that is, cash flow. The customers trading on Amazon basically pay with their credit cards and Amazon would receive the amount of money almost simultaneously. Nevertheless, as a retailer, Amazon does not give the money to its wholesalers promptly; they pay 90 days after transaction. The negative operation circle simply means Amazon owns a large amount of calculating funds all the time. We know that it can operate as a bank or a finance company by investing the funds in hand. Obviously, what Amazon can earn by doing so won’t be shown in gross profit rate in its financial statement; what counts in this case is its considerable cash flow.

So it is not surprising that a company might not be able to repay loan even though “it looks nice on amazing profit”. And when we consider the situation of a firm, it is important for us to pay more attention on its performance on cash flow.

Reference:

1.Justin Fox.  “At Amazon, it’s all about cash flow.” HBR. Oct 20, 2014

http://blogs.hbr.org/2014/10/at-amazon-its-all-about-cash-flow/

2. Cash Flow Analysis of Amazon.

http://finance.yahoo.com/q/cf?s=AMZN+Cash+Flow&annual

3. Dana Blankenhorn. “Amazon Keeps Rolling on Cash Flow”. The Street. Oct 25, 2013

http://www.thestreet.com/story/12083041/1/amazon-keeps-rolling-on-cash-flow.html

http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html

The issue of First Nations stakeholder, one of the biggest topics throughout Canadian history, can also serve as a concern for corporation, as it might tightly restrain an organization’s model design as well as the development. The news shows that Tsilhqot’in people declared a vast expanse of land as their sovereign territory, which contains the site of the largely investitive New Prosperity mine. What made the company worry about is that Tsilhqot’in people did not allow huge-scale logging activities with concern of environmental problems. Undoubtedly, the certain situation Taseko faced turns out to be a disaster for it.

It is a bit hard to judge whether First Nations stakeholders display a political or a social impact on Taseko’s business. It is a political issue, for First Nations can be treated as “a special party” concerning the special protection granted by federal government—and it is the origin of the business problem. However, it is a social factor as well. It is the Tsilhqot’in people that ask for several environmental requirement in order to achieve sustainable development as well as biodiversity.

Clearly, we cannot categorically define First Nations stakeholder issue as one kind of external effects on the model since external effects always have multiple shocks in different fields—that is, the external influences of a business model take on complexity and overlap. For example, a regulation about financing involves both political and economic aspects; while a large amount of patents and professionals available are involved with social-cultural as well as technological areas. So is First Nations issue a political or social factor affecting business models? I would say both, as it is external.

Reference:
1. Tsilhqot’in Nation Government
http://www.tsilhqotin.ca/
2. “Tsilhqot’in First Nation granted B.C. title claim in Supreme Court ruling”. CBC News. June 26, 2014
http://www.cbc.ca/news/politics/tsilhqot-in-first-nation-granted-b-c-title-claim-in-supreme-court-ruling-1.2688332
3. Adams, Howard (1999). Tortured people, The Policies of Colonialism, Penticton, B.C.: Theytus Books.

When we quickly browse business news websites, we will surely find that one of the hottest issues is the launch of Alibaba(NYSE:BABA) in U.S. Stock. Not surprisingly, the share price of BABA soared on September 19-the first day of its launch. While most of the analysts and the shareholders focused on the closing price, however, an inflection point is worth attention as well.

We can see in the graph that at about 12:00 pm on Sept. 19, the share price once dropped to near 89 dollars, which is even lower than its opening price. The phenomenon catches my attention: why the price could not keep going up? Why it turned to be stable despite of obstructions? Firstly, we need to know about a mechanism of controlling stock prices called Greenshoe. As underwriters have access to strike price at low stage compared with issue price, they could actually control the high price by selling parts of their holdings as well as gaining profits. That’s why we can see a fall-back of BABA at about 12 o’clock. Similarly, they repurchased shares at a relatively low price to prevent an underpriced price.

Obviously, it is a complicated process of a launch in stock market, thus we have to lucubrate to get further analysis.

Citation:

1.”Greenshoe via Wikipedia”
http://en.wikipedia.org/wiki/Greenshoe

2.”The Market Value of BABA Exceeds 230 Billion Dollars “. Tech Sina. Sept 20, 2014
http://tech.sina.com.cn/i/2014-09-20/04189626968.shtml

Apple Mobile Payment was introduced to the public on Apple Event on Sept. 9 as an by-product(the main products are always the mobiles). Surprisingly, it is not difficult to find that the market expectation of Apple Pay exceeds that of mobiles or watch after browsing news websites. But why the market has such confidence on Apple Pay?

Let us recall the three core visions of payment and see how Apple Pay applys them. The first is zero risk. Apple Pay is a mobile payment method known as “card-not-present”. Compared with tradition online payments, Apple Pay allow users to trade by using fingerprint and device instead of account and password. This innovation immensely improve the security of transaction. The second comes to zero barrier. Apple Pay enables people to finish payments just in a few seconds, eliminating the head-achy payment barrier. The reconnaissance barrier is also wiped by Apple Pay since it uses mono-standard for payment access. The last one is zero rate. Apple is so influential that it could take advantage of its brand-power to drive commercial tenants to use the technology voluntarily, which means that Apple needn’t pay high B-side expenses.

Clearly, Apple Pay is worth high expectations.

Citation:

1.Maggie McGrath. “What Apple Pay Means For eBay And The Future Of Mobile Payments”. Forbes. Sept 9, 2014
http://www.forbes.com/sites/maggiemcgrath/2014/09/09/what-apple-pay-means-for-ebay-and-the-future-of-mobile-payments/

2.Stephen Lam. “The new iPhones handle nicely, but Apple Pay is why you should actually buy one”. QUARTZ. Sept 10, 2014
http://qz.com/262650/apple-iphone-pay-feature-is-why-to-buy-one/