Tag Archives: ethics

I Hate You, Groupon! Sincerely, Business

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The other day, I came across this video of a small business owner who used Groupon to expose her business. In short, Groupon ripped her off, there were multiple instances of fraud, the deal happened late, her business rankings sank, she was unable to pay her employees, and she lost $10,000. The owner has since written a very popular article on her experience.

If Groupon is a beacon for new age, “no-cost” marketing techniques, why did this happen to her?

  1. Volume skyrocketed: The business was unable to cope with huge lines of demanding customers, and employees, rankings, and loyalty all suffered.
  2. The small business was ill prepared: with no computer, few employees, and little training (Groupon only sent her a short video), it was hard for the business to catch its breath.
  3. The deal went too far: Groupon, in an attempt to make as much money as it could, spread the business owner too thin by making a profitable deal for her unachievable.

However, Groupon doesn’t always destroy business (see next post). But, if a business is too small, ill prepared, and susceptible to “slimy” profiteering techniques, it should consider if this “no cost” marketing technique really costs nothing at all.

The British Assault on Poor Ethics

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When the fog cleared during the months following the depths of the recession, governments, watchdogs, and experts determined that “the system” had taken advantage of the everyday person. Investment banks made miserable investments, and failed – on the backs of people entirely uninvolved.

The British, following similar measures taken by the Swiss, are close to the right solution.  On the morning of September 12, the government-created Independent Commission on Banking released a final report on banking reformation. The report proposed a separation (“ring-fence”) between retail banking and investment banking. Due to loose regulations, the two had previously been perilously intertwined.

ICB Members

ICB Members, left to right: Clair Spottiswood, Bill Winters, Sir John Vickers (Chair), Martin Taylor, Martin Wolf. Source: The Telegraph

This is, in simplicity, a response to bad business ethics. Though it isn’t inherently evil that banks use depositor money, it is irresponsible and unjust for the burden of terrible investments – investments on sub-prime mortgage “packages,” otherwise known as CDO’s – to be placed on people who had no decision in the matter. It is even more unjust for investment bankers to be relatively unhurt and to receive large bonuses, while the average person faces an unstable and constricted economy and job market.

The British and Swiss are setting a precedent for responsibility.

(Original Article Here)