November 17, 2013 · 8:31 pm

Controversy Looms as Keystone XL Pipeline Awaits U.S. Approval

In 2010 the Keystone Pipeline that stretches from Hardisty, Alberta to Patoka Illinois. The pipeline’s sole purpose is to transport crude oil from the oil sands in Alberta to refineries in the United States. Keystone XL on the other hand is a proposed extension of the initial Keystone Pipeline and it would extend the present pipeline from Nebraska down to larger oil refineries in Texas, where it would be able to be easily distributed to the rest of the United States and shipped worldwide. Those within both the Canadian and American governments tout the project for its economic potential, its potential to create jobs and to increase trade between the United States and Canada. However, on the other hand, given that the Keystone XL extension would increase usage of the pipeline there have been many environmental activists who staunchly oppose the extension.

It is their belief that the environmental hardships that would result with the creation of the extension, such as the increase in risk of oil spill as a result of increased usage as well as the ecosystems that will be damaged as a result of creation of the extension of the pipe, will not outweigh the highly touted potential economic benefits. At this point that calculus is what President Barack Obama must consider as he holds the power to finalize the agreement that would allow the creation of the Keystone XL extension. Canadian and American government officials expect him to approve the agreement, but given how long he has taken to make the decision there is still some question as to whether or not he’ll approve it.

Ultimately the decision comes down to environmental ethics and whether or not the potential to further hurt the environment should outweigh the potential economic benefits. There is those who argue for both sides, but given the current lingering state of despair that the U.S. finds itself in, it would seem that the opportunity of increased employment and trade is too good for the U.S. government to pass up.

Sources:
Globe & Mail – http://www.theglobeandmail.com/news/politics/us-senator-touts-keystone-xl-in-meeting-with-redford-but-obamas-stand-on-pipeline-elusive/article15401038/
TransCanada – http://www.transcanada.com/keystone.html

Picture Courtesy of Ankakay via Flickr

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November 15, 2013 · 2:04 pm

Motivating and Incentivizing Better Public School Teaching: Response to Madison (Maddie) Ladner’s Blog Post

In the past, incentivizing better public school teaching has been an issue as a result of the strength of teaching unions. Often pay-rate is standardized, benefits are standardized…almost all variables that are usually used for the purposes of incentivization are generally standardized for public school teachers. However, as Maddie Ladner wrote about in her blog post, the the Board of District of Columbia Boarding Schools (DCPS) is trying to change the way teachers are evaluated with something called IMPACT. Through IMPACT, teachers will be evaluated not only on the grades of their students, but more so on how well students understand what is being taught as well as the teachers’ involvement in the school and overall professionalism.

The new system represents a stark contrast from both the previous system within the DCPS as well as the generally accepted norms for public schools across North America. As Maddie mentioned, as a result of the introduction of the new system teachers who are generally thought less of are choosing to quit as they expect to be fired as a result of the new system. In that way the system is seeing immediate results through the loss of some of the lesser teachers.

What makes the IMPACT initiative so interesting is not necessarily that it’s revolutionary in terms of incentivization of workers on the whole, but instead that it’s applying business motivation tactics to teachers. That is something that has not been previously explored in North American public schools. As has been discussed in class in terms of organizational culture, motivation is key. There is no benefit to having an absentee workforce, which is why companies are constantly trying to find new and better ways to motivate their employees. Now that same process can be applied to the public school system and increase education on the whole.

Sources:
Maddie Ladner’s Blog – https://blogs.ubc.ca/maddieladner/2013/11/15/teacher-evaluations/
Standford News – http://news.stanford.edu/news/2013/october/dee-teacher-assessments-101713.html

Picture Courtesy of www.audio-luci-store.it via Flickr

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November 14, 2013 · 4:46 pm

U.S. GDP Growth Might Be On the Decline: Response to a Business Insider Blog Post

In a blog for Business Insider, Matthew Boesler went over the state of the U.S. economy, both now and going forward. Based on research, the current economic projection for the United States economy is certainly that of a declining GDP growth rate, but there is some question as to the credibility of that projection. Economists cannot seem to agree on whether or not the residual effects of the global economic crash should be accounted for in projection. Essentially, whether or not the residual effects are now part of the U.S. economy going forward or whether they will be something that will go away. The effects that Boesler references are poor technological implementation, unsuitable labour matches, and an overall absence of business investment. Some researches believe that the U.S. economy should be able to quickly revert itself back to its former structure, but others believe that the aforementioned problems might be recurring  themes for the foreseeable future.

As someone on the outside it’s nearly impossible to tell where exactly the U.S. economy will fall. However, one can still look at the feasibility of the economic concerns as a whole. With that said, as Boesler seemed to indicate at the end of his piece, the faults of the current U.S. economy are not eternal. As we know, in business, nothing is stagnant…the markets will rise and they will fall. The same can be said for the projected U.S. GDP. The projections were fairly rosy prior to the economic collapse and are only pessimistic now as a result of fear in the market, fear to spend. As we move on from the economic collapse that fear should subside and the markets will adjust themselves accordingly.

Sources:
Business Insider – http://www.businessinsider.com/is-us-potential-gdp-in-structural-decline-2013-11

Picture Courtesy of Ben Schueddekopf via Flickr

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November 13, 2013 · 3:08 pm

Bitcoins’ Growing Popularity Becoming Increasingly Evident

Bitcoin, an online ‘cryptocurrency’ that was launched in late 2008 has recently been growing in popularity; as evidenced by Canadian mining company Alix Resources Corp. agreeing to pay contractor Ridge Resources Ltd. in Bitcoins as opposed to any other traditional currency such as the Canadian or American dollar. Alix Resources Corp.’s CEO noted that his company has been accumulating Bitcoins as the online currency has become more popular and in turn raised in value. If this first test operation goes successfully then Alix may make a permanent switch to Bitcoins as a means of payment. There has been a lot of skepticism with regards to this transaction, both on part of Alix as an accumulator of the currency and Ridge as an acceptor of the currency; many still don’t trust the stability of Bitcoins on the whole.

Despite the skepticism, there is still those who see a lot of opportunity in the online currency. Just last week a Bitcoin ATM opened up in downtown Vancouver, where one can use a debit or credit card to purchase Bitcoins for their online wallet. As well, two Toronto entrepreneurs are working to make Bitcoins available as an accepted form of currency in retail stores across North America through use of their new ‘digital wallets’ for retailers, Coinkite.

The chart below is the price of Bitcoins in Canadian Dollars over the past 6 months.

Chart Courtesy of Bitcoin Charts via Creative Commons

As the chart shows, just over the last month Bitcoins have more than doubled in value and while some who are in the know are still skeptical, others expect the online currency to continue to rise with this new rise in popularity.

The Bitcoin situation is rather unique as it’s quite a bit more open source than anything the banking world has seen in the past and therefore has substantially lower transaction costs. Though the open source-ness of the currency is also concerning to some in the mainstream. That mainstream criticism will be hard for Bitcoin to overcome, but with so many innovators backing it it’s certainly possible. It looks like it may come down to how all these new Bitcoin related products will be marketed to the general public and whether the general  public will be accepting of them.

Sources:
National Post – http://business.financialpost.com/2013/11/13/canadian-miner-to-pay-contractor-in-bitcoins/
National Post – http://business.financialpost.com/2013/10/28/bitcoin-atm-canada-this-week/?__lsa=177a-cca5
Toronto Star – http://www.thestar.com/news/gta/2013/11/12/bitcoin_entrepreneurs_want_to_put_virtual_coins_in_your_wallet.html
Coinkite – https://coinkite.com

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November 12, 2013 · 11:08 pm

U.S. Government Comes to Terms with Airline Merger

Early in 2013, two of the world’s largest airlines, U.S. Airways and American Airlines, came to terms on a merger deal that would combine the two to create a “premiere global airline“. The merger between the two U.S. companies would make their combined airline the largest in the world. The merger was expected to be completed in early September, but on August 13th the United States Justice Department filed a lawsuit set to block the proposed merger on the basis of anti-trust and the higher airline ticket prices that they expected to come with it; as per the lawsuit. On November 12th, the U.S. Department of Justice and the U.S. Airways/American merger came to terms that would allow the completion of the merger, but would force the merged airline to give up “take off and landing slots and gates at seven U.S. airports“. The Department of Justice stated a good level of satisfaction with what was ultimately agreed upon between the two parties citing that the agreement adequately addressed their antitrust concerns. The belief on part of the U.S. government, is that the vacated spots at those seven U.S. airports will be able to be filled with lower ‘budget’ airlines thereby counteracting the overall effect of the merger on the U.S. airline ticket price market.

As we’ve learned, each and every piece of the larger market has an effect on the strength and pricing of the market as a whole as in business no one move is isolated from the rest of the business world. Will the agreement that the U.S. government and the merger have come to solve the government’s earlier issues with the merger? Perhaps, but there’s also those who argue that the government did not get enough back to justify allowing the merger to go through and for the two merged airlines to combine into the world’s largest airline. There’s multiple angles to the merger itself as well as this new agreement and only time will tell how the airline market will be effected.

Sources:
Reuters – http://www.reuters.com/article/2013/11/13/us-usa-antitrust-airlines-idUSBRE9AC02120131113
USA Today – http://www.usatoday.com/story/travel/news/2013/08/13/justice-american-us-airways/2647545/
U.S. Airways – http://www.usairways.com/en-US/aboutus/pressroom/newamerican.html?c=glmus_21132&re=1
The Globe & Mail – http://www.theglobeandmail.com/report-on-business/international-business/us-business/in-us-airline-antitrust-spat-lobbyists-come-out-on-top/article15397996/

Photo Courtesy of James Willamor via Flickr and Creative Commons

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October 16, 2013 · 1:14 pm

Gender Equality On The Executive Level: Response to Jennie Yan’s Blog Post

 

In today’s society we often like to think that we have progressed and are progressing towards gender equality on many fronts, but especially in the workforce. As Jennie Yan pointed out in her blog post RE: the Ontario Teachers’ Pension Plan’s suggestion that the Ontario Securities Commission introduce a regulation mandating that  requires all companies who are traded publicly to have at least three women on their executive boards, one of the above statements is not necessarily true. While gender equality in business has progressed in a general sense, on the executive level women have accounted for 11% of executive members for a while now. The expectation on part of the OTPP is that the increased ‘equality’ on the executive level will have a trickle down effect on the rest of the company.

While the premise of the OTPP’s suggestion is notable, in practice it may not necessarily work as intended. For example, by allotting a certain number of spots to any one section of society, be it women or otherwise, it restricts the hiring abilities of companies.

That’s not to say that equality in the workforce should not be elevated, but perhaps through different means. Instead of allotting a certain number of board of directors positions for women, why not empower women in business and push them to attain that level on their own terms? By mandating a certain number of spots that a company MUST fill it would seem that a company would easily be able to find a loophole to prevent the intended purposes of the regulation. Rather than mandating job quantities, companies should be mandated to do more to empower women, to decrease sexual harassment, and to promote equality in the workplace on an individual level by teaching.

Sources:
Jennie Yan’s Blog – https://blogs.ubc.ca/jennieyan/2013/10/07/gender-equality-in-the-osc/
The Globe & Mail – http://www.theglobeandmail.com/report-on-business/companies-should-have-3-women-directors-or-face-delisting-teachers/article14721742/

Picture Courtesy of Entrepreneur Magazine

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October 8, 2013 · 1:52 am

Airbus Strikes a Deal with Japan Airlines and Cuts into Boeing’s Market

For decades Boeing has held a majority of the commercial airliner market with their ever popular 700 series of planes. However, most recently Japan Airlines, Japan’s oldest airline, struck a $9.5 billion dollar deal with Airbus, Boeing’s main competitor, to provide them with new large commercial airliners. This new order of planes will replace the Boeing 777s that Japan Airlines had previously been using. While Japan Airlines is only a section of the worldwide market, there is those who hypothesize that this might start a larger trend which would obviously be a lot more detrimental to Boeing’s worldwide operation.. Those same people also attribute this most recent loss of a part of Boeing’s customer base to a lack of innovation on Boeing’s part. While semi-recently Boeing did introduce the Boeing 787 Dreamliner there have been many unaddressed problems associated with it such as battery problems and time consuming errors. At the same time Boeing hasn’t produced much that could contribute to a new fleet with their smaller aircrafts either. Because of that airlines that had previously been loyal to the Boeing brand are beginning to look at other options; such as the new Airbus fleet. This situation is somewhat of a microcosm for the way in which a number of modern, big-name companies have gone in their lack of innovation or adjustment to the field in which they are in. Brand loyalty is a good thing to have, but it can only take a company so far when there’s other, potentially better, options out there waiting for each and every chance that they have to cut into the market.

Sources:

Japan Airlines Deal with Airbus is Blow in Boeing Stronghold

Photo Courtesy of Ken Mist via Flickr

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· 12:00 am

Blackberry Creates a Potential Bidding War for Assets

Following Fairfax Financial Holding’s preliminary bid early last week to buy out Blackberry Ltd, the public has seen a number of other big names getting involved in the bidding process for Blackberry Ltd. Some of those companies include SAP, Google, LG, Samsung, Intel, and Cisco as well as other private equity firms like Cerberus Capital Management. Despite BBRY’s recent degradation, companies are still intrigued by Blackberry’s still relatively large brand value and more importantly; their patents. Back in 2011 an analyst estimated the overall patents within Research in Motion to be worth $2.5 billion. That includes patents like that of the secured BBM network as well as the many other unique features within Blackberry devices. However there is concern from interested parties about the value of certain Blackberry assets (people have disputed the 2011 figure of $2.5 billion regarding the value of Blackberry Ltd. patents) and supposed misrepresentation from Blackberry executives. While this bidding process is ongoing there is also a class action lawsuit against Blackberry where stockholders claim to have lost money based on false statements from executives as a result of unsold Blackberry 10 devices. In terms of Blackberry’s process throughout this situation, it seems to be reasonably effective. Despite poor numbers and what some have called a lost cause the company has produced continued interest in what little they have left; their assets; patents, mainly. As well they’ve done so amid concern from outside analysts. Of course it helps when a Canadian billionaire is willing to start off the bidding with a $4.7 billion “bail out”, but even then Blackberry has effectively built on the interest that was started by Fairfax Financial Holdings. The rising interest has even increased stock prices over 4%.

Sources:
BlackBerry Ltd in talks with Cisco, Google and SAP about sale of parts or whole: sources
Sources say Fairfax has submitted draft of takeover offer but Cerberus not part of consortium, raising possibility of another offer”>Fairfax submits draft BlackBerry offer as spectre of rival bid looms
Research In Motion Patents Worth Just $2.5B, Analyst Says

 

Photo Courtesy of arrayexception via Flickr

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October 6, 2013 · 12:50 am

Twitter Releases IPO, But Not Without a Few Questions

On October 4th, Twitter released their Initial Public Offering on the backing of quite a bit of hype after weeks of anticipation. With their IPO, Twitter released their $1 billion plan. The plan showed some rather unappealing financial numbers that Twitter had previously kept private. This includes a $13 billion dollar self-evaluation based on assets and projected share prices, but it also included confirmation of the fact that Twitter has yet to produce any positive revenue in a single fiscal year. However, they have been progressing and slowly increasing towards the break-even point from year to year. Some see the rise as a positive, but most others find major concern in the lack of revenues and the resulting evaluation. As it was with a company like Facebook, analysts question whether or not Twitter’s platform and business model will ultimately lend itself to further profits and in turn whether or not Twitter can, overall, be a profitable company. Twitter itself has emphasized it’s increasing ad platform and notes that during the first two years of their platform there was little to no attention paid to advertising; meaning Twitter has only had major advertising for a few years. Again, analysts question whether or not Twitter will be able to optimize their advertising platform to a point of profitability. As it stands a large portion of Twitter’s users use a mobile device as their main means of connecting to the platform and mobile ads, where one is limited to a small space and no videos, can be very tricky to sell. One thing that Twitter does have going for it is it’s increasing user base as well as it’s predictable peak periods. As is the case in television, companies pay more for ads that they know will be played during “Prime Time”; during sporting events, during popular shows, during prime general T.V. watching hours. The same can be said for Twitter. Twitter has become the most used companion to major television and in-person events where users tweet about their own experiences while also interacting with others who are doing the same thing as them. While not as predictable, the same effect occurs during major breaking news as Twitter has become a large platform for news. Lastly, as Bloomberg’s Nick Thompson mentioned Twitter has another source of potential revenue in data sales. Because Twitter is all about trends and topics, large companies and organizations have and will be interested in the data that Twitter can provide such that the companies and organizations can conduct their own analyses. Overall despite concerns about profitability, Twitter has been able to raise a substantial amount of money in their IPO and has a constantly growing user base. As more users come to Twitter and embrace all that it offers, Twitter will have ample opportunity to become profitable assuming they are able to optimize their advertising to some extent.

Sources:

Twitter IPO Falls Between Zynga, Facebook: Thompson – Bloomberg

The short message from Twitter’s IPO? #SlowingGrowth – Globe & Mail

Twitter Reveals $1 Billion IPO Plan – Wall Street Journal

Photo Courtesy of Josh Semans

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September 11, 2013 · 8:26 pm

The Ethics of a “Pay by Weight” System for Airline Ticket Pricing

On April 2nd, Samoa Air, a small airline in the South-West Pacific announced their ‘pay by weight’ system. The system charges passengers a flat rate in addition to a per kg charge for the combined weight of the passenger and their bags.

Those supporting the system point to the rising costs of fuel as well as the potential revenue to be gained. However, the ‘pay by weight’ system can also be seen as discrimination. Some justify the decision based on the premise that one’s weight is a completely controllable thing, but that’s also not entirely true. In response pieces multiple writers noted the flaws in that methodology including the idea of muscle vs. fat, the effects of height, and the effects of certain medical conditions.

By introducing the ‘pay by weight’ pricing Samoa Air took a risk and stepped into a questionable area. Being that they are small they didn’t get the same pushback that a much larger company would get. At the same time  by starting the trend their methodology may just carry on to some of the world’s elite airlines, a path that could be a slippery slope towards ethical issues far worse than that of Samoa Air’s.

Sources:
Samoa Air defends ‘pay-as-you-weigh’ pricing – Al Jazeera
Is fare by weight fair? – Canadian Business Magazine
On Samoa Air, Fatter People Pay More to Fly: Good Business or Bad Customer Relations – Knowledge@Wharton

Samoa Air’s Official Website – http://samoaair.ws

Picture Courtesy of Public Domain Photos via Flickr

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