Stefan Topfer’s blog post on the effects of fraud provides an excellent understanding on the importance of fraud prevention. Main points from the post that I’d like to point out is how fraud is growing at an alarming 5%, how it takes a victim of fraud 500 days on average to realize that they are even a victim, and how most businesses are subject to CV misrepresentation from applicants.

This post relates to some concepts of financial accounting that we learned in class 9, particularly the ones related to Financial Statement Fraud and the Generally Accepted Accounting Principles. I took two accounting courses in high school and although the importance of following GAAP procedures in order to prevent fraud was highlighted when it was first taught, the rest of the course was entirely focused on learning accounting concepts themselves. In a way, it felt like GAAP was pushed to the side and that it was just something that we needed to memorize.

References:

http://sme-blog.com/business-advice-2/know-who-your-business-is-dealing-with

http://www.enlawyers.com/wp-content/uploads/2012/02/fraud.jpg

In Stella Choi’s blog about Yahoo adopting Microsoft’s heavily criticized method of firing employees through using a bell curve, an interesting insight is given on the different ways performance can be driven amongst the employees of a company. However, this bell curve has caused increased competitiveness, resulting in bitterness and suspicion between employees, which may ultimately decrease productivity.

Although it is necessary for a business to drop its poorly performing workers in order to stay profitable, Yahoo could do so using another method. For example, instead of grading and constantly reminding employees that they would be fired if they produced less satisfactory results compared to their colleagues, management could determine who to fire by simply observing who produces the worst results without the employees knowing. This way, without the pressure constantly pushing the employees, workers would be able to cooperate and take more risks.

This article can also relate to the concepts of business ethics that we learnt in class 3. Motivating employees for maximum performance through fear is not sustainable in the long term nor is it ethical towards the employees; it is crucial for a business to treat its employees well.

References:

https://blogs.ubc.ca/seokyungchoi/2013/11/17/yahoo-adopted-one-of-microsofts-worst-ideas-just-as-microsoft-killed-it-off/

http://watchurmouth.com/wp-content/uploads/2012/06/Fired.jpg

Alexander Cai’s blog on the development of oil fracking technology clearly portrays the uncertainties of environmental sustainability of this technology despite the benefits gained from using it. Although a company’s main goal is to maximize profits, I believe that the negative effects of using this technology to obtain outweigh the benefits. Oil fracking releases immense volumes of greenhouse gases into the atmosphere, as well as erode the landscape significantly, creating possible earthquakes.

Using this technology to extract oil has become extremely popular in developing countries as well. Because of the lower standards of living, firms tend to be more indifferent towards environmental sustainability as making a profit is of larger concern.

Although it is more profitable for a company in the short term to use oil fracking practices as it lowers costs significantly, companies need to be aware that it may be detrimental towards its profits in the long term. It is plausible that society will become increasingly aware of the environment as it continues to worsen and resources continue to to deplete, and the reputation of these companies will be affected.

References:

https://blogs.ubc.ca/alexandercai/2013/11/16/fracking-pros-and-cons/

http://motherboard-assets.s3.amazonaws.com/content-images/article/oil-companies-are-fracking-the-seabed-off-the-california-coast/dd1985635f12dfc31517961d52c23a17_vice_630x420.jpg

Every night, approximately 150 airplanes arrive at Memphis International Airport and depart before the sun comes up. These jets have no passengers nor seats, only cargo. With all these cargo planes coming through its airport moving 1.5 million packages overnight, Fedex-based Memphis is the world’s second busiest airport in terms of cargo volume. Nearby Louisville also has a similar industry as the airport alone accounts for a whopping 9% of employment in the city. Both Fedex and UPS have picked to locate their headquarters in these cities as a result of its geographic location – they’re central have a plethora of connections including rail lines, river ports, and interstate freeways.

Since a company’s main goal is to maximize profits, an immense number of firms have relocated their head offices to these shipping hubs in order to reduce massive costs. This way, companies will be able to add significantly shorter shipping times to its value proposition. Over 150 businesses, including online retailers, health care firms, and custom clothing companies have relocated to Louisville since 1993. With rapid growth in e-commerce and online shopping over the past few years, these cities will only continue create employment and grow as “aerotropolises”.

References:

http://www.economist.com/news/business/21588923-fedex-and-ups-have-turned-memphis-and-louisville-aerotropolises-cabin-fever

http://mig.s3.amazonaws.com/images/blog/memphis-airport.png

In October, activists in Switzerland acquired over 125 000 signatures, which is enough to initiate a referendum, on providing a monthly income of approximately $2 800 USD to every person regardless age and current wealth. Supporters of this proposal say that providing a monthly income would eliminate poverty almost entirely and release the entrepreneurial and creative qualities of the workforce; if people did not have to worry about putting food on the table at the end of the day, they would pursue careers and ideas that they actually enjoy rather than doing something just to survive.

8 million coins were poured in front of the Swiss parliament building, one for every citizen.

Personally, I partially agree with the fact that providing a monthly income to everyone would act as an incentive for creativity and ambition. However, for a country as large as Switzerland, there would be more people that would abuse this benefit by being lazy, as was the case with communism. Also, providing such a benefit to everybody would be unsustainable for the country unless the money spent on providing monthly incomes would generate enough returns through increased tax revenue as a result of the newly inspired entrepreneurial motivation, which is highly unlikely.

According to a report released by Deloitte Canada, our country’s tourism industry has been falling consistently throughout the past 13 years. As the global tourism industry continues to flourish as a result of the standard of living increasing steadily, Canada’s number of tourists has decreased by 20% since 2000, and the country is now the 18th most popular tourist destination, falling from 2nd place in 1970. Canada’s economy has taken a massive hit from this industry shrinkage, missing out on at least a potential $4 billion if the industry kept up with the growth of the US tourism industry.

It is speculated that this stunt in growth of the tourism industry was a result of the expensive Canadian dollar and increased competitiveness from rapidly developing countries. However, I have noticed recently that there has been a growing number of complaints regarding the rudeness of the customs officers. Also, Canada boasts one of the most expensive travel visas in the world – approximately $100. With the relative expensiveness of our currency, hotel rates are reaching prices of luxury accommodations in more exotic destinations in Europe and Asia. All these elements may be significant factors of why Canada may seem like just an overall less attractive tourist destination.

References:

http://www.theglobeandmail.com/report-on-business/economy/tourism-boom-misses-canada/article15429047/

http://www.businessreviewcanada.ca/money_matters/Canada%20-%20Alberta%20-%20Moraine%20Lake.jpg

Being one of the most anticipated initial public offerings since Facebook, social-networking phenomenon Twitter has recently revealed its plans to focus on expanding internationally rather than just catering to its users in the United States. An outstanding 77% of its active users in the past three months were from outside the US, and many potential investors and analysts see great potential in its international growth. However, Twitter’s advertisement system is still largely undeveloped compared to its social-networking rival Facebook. This revenue stream holds the tremendous potential at the moment and if Twitter is not careful in developing it then the company could end up like Facebook on the stock exchange. Twitter will need to evolve and adapt its development strategies in order to accommodate the different countries around the world it’s targeting.

Countries with authoritarian governments like China have become a large obstacle for Twitter. Its massive potential market for social networking services has already turned over to other its own solutions such as Weibo, Wechat, and Whatsapp as websites such as Facebook, Youtube, and Twitter have been banned. China, emerging as an economic super-giant holds great influence in social media as there are already a significant number of users using these websites in the neighbouring countries of China and even North America. Twitter will need to work extremely carefully with marketers in order to successfully expand overseas.

References:

http://www.nytimes.com/2013/10/05/business/twitters-ipo-plan-has-an-international-focus.html?ref=media

https://si0.twimg.com/profile_images/2284174690/kg15c0qobqp5op14zcp1.png

Underwear manufacturing giant, Fruit of the Loom, has recently launched a strange but unique promotional campaign, “Fresh Gigs”,  aimed towards 25 000 lucky users on LinkedIn. As part of its goal to highlight the importance of putting on a properly fitting pair of underwear at the beginning of the day, a handful of business professionals who have recently changed their employment status will receive a free pair of underwear as well as a $5 discount for a multi pack from Fruit of the Loom. Underwear recipients will then be requested to share their gift via LinkedIn, Facebook, and Twitter in an attempt to promote the company’s philosophy of how having a good pair of underwear can have a positive impact on new starts in life, and in this case, starting a new job.

In today’s incredibly fast-paced and competitive business world, creativity and originality is crucial when competing in marketing campaigns. Fruit of the Loom spent a whopping $34.9 million in advertising in 2012 and they don’t plan on slowing down with its new “Start Happy” campaign and witty actor-based commercials. They continue to focus and promote its company’s ideology on how vital it is to start off the day with a clean, fresh, and properly-fitting pair of underwear as a poorly manufactured, ill-fitting pair of boxers can derail one’s entire day.

References:

http://www.nytimes.com/2013/10/04/business/media/fruit-of-the-loom-sees-workers-in-their-underwear.html?ref=media

http://graphics8.nytimes.com/images/2013/10/04/business/Adco2/Adco2-popup.jpg

Self-proclaimed “Chinese Warren Buffett”, Weizhen Tang was sentenced to six years in prison with a $2.8 million fine in February for raising a whopping $50 million from clueless investors fraudulently. This Toronto-based “Financial-Businessman” and Mayoral Candidate was caught with an overflow of evidence showing falsified account statements and proof of him using investments from newer clients to make payments to earlier investors. Weizhen Tang “invested” his clients’ money into risky trades in foreign currencies when they were promised security and stability through investment in government bonds. These investors were primarily middle-class Chinese-Canadians living in Toronto and had made large commitments into Tang’s Oversea Chinese Fund, as many had poured out their life savings, borrowed money, and mortgaged their homes in order to finance the investment.

In Class 9, one of the major focuses of the class was Financial Statement Fraud in Financial Accounting. The importance of being literate with financial statements was highlighted during the class as similar cases are bound to happen to everyone in the future. This article only reinforces the fact that one must be able to analyse and interpret financial statements to at least a basic level in order to succeed in the business world regardless how accomplished they are in other areas.

References:

http://www.theglobeandmail.com/report-on-business/osc-files-new-allegations-against-self-proclaimed-chinese-warren-buffett/article14663864/

http://www.sunnewsnetwork.ca/archives/sunnews/canada/media/2012/10/20121031-190415-g.jpg

It has become increasingly popular in North America for pain prescription drug recipients to replace their daily dosages with cheaper, illegally-obtained drugs in order to sell and profit off of their highly-valued prescription drugs. In order determine which drugs patients have and have not been taking, urine testing has recently become an extremely popular method for doctors to monitor drug abuse. Despite the large amounts of improper pharmaceutical drug use that urine testing has detected (one third of Ameritox’s 500 000 urine tests reported failure to detect the prescribed drug in the patient), the more popular and cheaper method of urine testing, qualitative testing, has been reported to be inaccurate and inconsistent.

However, doctors have been taking advantage of this and using these unreliable urine tests as an excuse to “fire” patients, instead of referring them to addiction treatment and pain management programs. This issue has raised large controversy as many have deemed this to be “unconstitutional”, since people are being denied from basic human services, namely health care. As long as the patients do not pose any danger to the doctor and are paying sufficient amounts for the service, doctors have no right to deny treatment of the patient, just like how every other business should operate.

..

Also, it was revealed that urine screening companies have been marketing their services extremely aggressively to doctors. Urine testing company, Liberty Diagnostics of Pasadena California, advertises by mailing brochures that read “Average $400 Profit per Screen” to doctors. It also states that a doctor can make at least $155 000 annually by just conducting 10 urine tests a week, and if that isn’t enough, an additional $133 000 can be made by reviewing the results and consulting the patient. Instead of investing in research & development to increase accuracy and reliability, urine testing companies and doctors have used this method to rake in profit.

Original Article: http://www.nytimes.com/2013/08/02/business/increase-in-urine-testing-raises-ethical-questions.html?pagewanted=all

Picture 1: http://www.medical-horizons.net/uploads/posts/image/190.jpg

Picture 2: http://i2.pcimg.org/news/u/2012/04/Study-Urine-Test-Detects-One-Third-of-Autism-Cases-SS.jpg