Thinking Out Loud

Coming into business, most people understand that a hand shake is needed when you first meet someone. I think I have shaken more hands since being at Sauder than I have in my whole life. Comm 299 even has a portion of the class that teaches students how to give an effective handshake “try to see the colour of their eyes and join web to web” – Philippe Desrochers. Everyone tells us how important a strong, firm handshake is but when do we ever see the effects of a hand well shaken?

I saw them today.

After not getting into housing, I must now face the tedious task of looking for apartments to rent. I lined up a ‘handful’ of viewings today and arrived at one of them, shook the guy’s hand as protocol and preceded to look around the place. We got into conversation and he said “So you’re a student here? At Sauder right?” I was taken aback and naturally asked how he knew which faculty I was in. It was then that he blushed, laughed a little and admitted that he figured it out from my handshake. I knew someone could tell a lot about a person by their handshake, but the fact that my handshake automatically told this guy that I was in Sauder really surprised me.

I just got a call from him telling me that the place is mine if I want it. His exact words…”we have had a lot of interest but I figured that anyone who could give a handshake like that would be responsible and look after this place like a good tenant.”

A handshake has far more power than simply preventing an awkward introduction between two people.

When social media is loosely and inaccurately defined as ‘using the internet to raise awareness about a company or product’ it is very easy to confuse it with online advertising. This is what happened in class.

Social media is interactive communication, that companies can use as a tool to spread the word about their product or service. Companies can create their own chat forum that allows current and potential customers to interact and discuss the companies products. This allows the company to see which products the consumers like and which need improvement, and it promotes the product through the most effective form of marketing – peer recommendations. Companies can also use tools such as Facebook and Twitter to connect with current and potential customers but this is where the grey area appears.

When a company creates a facebook group or a fan page, and consumers are able to respond, post messages and give opinions. That is fair game social media. But then advertisements appear on the side of a facebook page and constant messages are sent out informing group members of promotions and discounts. Yes the company is still using a social media tool, but this is not social media, this is advertising.

Online advertising is everywhere and is undoubtedly becoming very annoying with all the spam messages and promotion links that appear. A company needs to be extremely careful that when they venture out into the social media world, interaction and communication is what they achieve, not just another annoying advertising campaign.

Social Media can be extremely effective when used well – i.e hitting the target market.

The question was asked in class “will companies need social media to be successful?” and after a brief discussion the concluded answer was ” YES. A select few companies are using social media as a competitive advantage and unless other companies include it in their marketing campaign, they will not be able to compete.”

All companies? Do ALL companies need social media?

Social media reaches the addicted internet users, aged 15-30, and for companies for which that age range is their target market then yes, social media should definitely be considered.But what about companies that sell pension plans or ‘over 50’ car insurance? If a company’s target market is not an avid internet user then social media would be a waste of effort and money. Facebook, twitter and blogs are not going to be an effective way of reaching the older generations.

Not all companies need social media!

The world’s most powerful companies are undoubtedly the richest. But did the success create the money or did the money create the success? More to the point, can a company with an infinite amount of money be successful?

The instinctive answer would be ‘YES’. The best of the best can be hired with wages through the roof, the highest quality product can be manufactured and sold for cheap (who cares about profits when you’re an infinite-illionaire?), the fastest and most efficient distribution system can be implemented, the marketing team can spray paint the company’s logo across the face of the moon (paying off any protesters that try to stand in their way) and the finance department can just go crazy investing in whatever they feel like. The only ones who may not have too much fun are the accountants who have to deal with all those extra zeros.

If money were the only limitation then yes, a company with an infinite amount of money can be successful and have lots of fun doing it. But there are other limits to consider when running a business. Information; information that no amount of money can buy because it hasn’t even been created yet.

This is the case for the fashion world.

For a fashion company, logistics needs specific information about a product and its quantity as early as possible in order to outsource in time to meet the trends. Marketing and design, however, don’t get that information about season trends until logistics are purple with anger and impatience. Two departments of the company with completely opposing needs.

No amount of money can help this situation. Money can’t predict the trends that are going to sell and those that are going to appear on the worst dressed list.

Sorry, but being an infinite-illionaire won’t help you out in the fashion industry.

Supply Chain Management has to be the most important, overlooked, aspect of any major manufacturing business. Most students are aware of Finance, Accounting and Marketing before even entering their commerce degree, but Supply Chain Management, known at Sauder as the Transportation and Logistics option, is that silent strength supporting the entire manufacturing process with minimal acknowledgement.

A box of cheerios has been manufactured. The finance, accounting and marketing departments, along with executives, are busy working away at their important duties but without the supply chain department, that box of cheerios would just be sitting there in the factory earning no revenue and becoming evermore-stale with each day that passes.

The supply chain, or distribution, department must create the most effective and efficient system to transport the thousands of boxes of cheerios to the many Safeways, Walmarts and other grocery stores of the area. This department must consider the compromise between speed and cost – the faster the system, chances are, the higher the costs – and it must also constantly create new methods to keep inventories low and distribution systems as efficient as possible in this ever changing competitive economy.

Starbucks is a well-known company that has developed a negative reputation simply by being a major corporation. However, the Starbucks website and an Economics and Business Week article provide detailed information on its ethical sourcing practices in developing countries.

Starbucks’ most recent initiative with small-scale coffee farmers in Africa, Asia and South America is the increase in its loan program. Starbucks, previously offering $12.5 million in loans to its coffee suppliers, has now partnered with Fairtrade Labeling Organizations and TransFair USA to increase that amount to $20 million by 2015. The loans will help farmers improve the quality and harvest of their coffee, allowing them to charge more competitive prices.

As well as the loans, Starbucks has implemented Farmer Support Centers in various communities. These centers provide trained agronomists who work with the farmers to help improve their coffee growing practices.

Starbucks’ Ethical sourcing is a win-win situation. Starbucks can ensure that the coffee they buy is of good quality while contributing to the development of third world businesses. Starbucks is just one example of how making profits doesn’t always have to involve unethical shortcuts; success requires creative ideas to establish win-win situations.

Some individuals are naturally business minded; they have that cut-throat, profit driven personality. But for those of us that don’t think we do, will we succeed?

After reading this Globe and Mail article, I had a slightly different opinion on the issue than fellow classmates. As a class of commerce students, undoubtedly many read this and instantly thought of the profits that vodka companies could potentially reap from the increased prices, or of the marketing concerns if the government also restricts advertising outlets. I, however, read this article and thought “increasing the price of vodka is only going to generate higher crime rates as alcoholics find the financial means to facilitate their addiction. Alcohol isn’t the cause of alcoholism; the Russian government should be implementing counselling and treatment plans to address the root causes.” Just because profits didn’t enter my mind, does that mean business isn’t for me?

Quite the contrary. Taking my view of social issues, with people not just profits in mind, and combining that with the business tools and techniques that Sauder will provide, will allow me to bring ethics and social responsibility to the business world, and maybe even do a little bit of good.