Monthly Archives: October 2014

Against Wall Street analysts’ expectations, IBM reported unusually low quarterly profits and sales this Monday, October 20^th. But what was even more surprising was the reaction of Virginia M. Rometty, IBM’s CEO, as she openly talked about the reasons for IBM’s let down that caused the company to abandon their financial targets for the next year.

The major cause of the weak numbers is IBM’s transition from a traditional manufacturer of technical devices to a high-tech software firm comparable to Google or Microsoft. This change does not only have a tremendous impact on internal issues like management, operations and organizational structure, but also on external issues such as public relations, positioning in a new target market and IBM’s image in general.

But thanks to IBM’s successful intrapreneurs, repositioning or development are not the biggest problems IBM has to face – it is the rapidly changing market that causes the company to struggle despite major joint ventures with SAP or Apple. Especially the high-tech software market IBM is about to enter with new solutions for data bases and clouds attracts new firms due to its high flexibility and as a result, the competition is relentless, as companies can come up with disruptive innovations any time and out of nowhere. Apparently, a traditional, established and thus inflexible company like IBM does not really fit into this kind of market and the question arises, if it really was the best idea to bet all its money on one, very unpredictable horse.

References:

http://www.nytimes.com/2014/10/21/business/amid-a-shift-in-strategy-ibm-reports-weak-earnings.html?src=me&_r=0

http://cdn-static.zdnet.com/i/story/70/00/034689/ibm-10tb-cartridge-keeps-tape-in-the-game.jpg

“Our people say that we were put here to look after this part of the earth. And we take that seriously.” (Elder Tina Erickson)

How seriously the Tsilhqot’in people take their duty of preserving their unique natural environment near at the BC Pacific coast, was revealed when Enbridge came up with their controversial concept of building an oil pipeline straight across Canada and the First Nations’ lands. Among a few other Indigenous people, the Tsilhqot’in rejected this idea from the beginning, as the project is not only likely to extinguish endangered species but also threatens First Nations’ cultures and traditions.

As the government already approved the construction of the pipeline regardless of the Indigenous Peoples’ opinion and therefore supports Enbridge’s strategy of “buying” their consent by offering them profit participation, the Tsilhqot’in and other West coast peoples find themselves being by-passed and utilized once more and subsequently try to form alliances to fight for the protection of their precious lands.

Thus, the question arises if conciliation can ever be achieved between the profit-driven oil industry and the traditional and preserving First Nations when it comes to sacrificing natural habitats in order to implement new projects. Not surprisingly, Norway could serve as a role model on that domain: The Norwegian government managed to create a balance between the sustainable oil industry and the interests of Indigenous People through establishing a Parliament dedicated to their needs.

Fortunately, the Supreme Court of Canada already made the first step in this direction by officially adjudicating their land to the Tsilhqot’in people.

References:

http://www.cbc.ca/news/canada/background-the-indian-act-1.1056988

http://thetyee.ca/Opinion/2014/07/26/Tsilhqotin-With-Gloves/

http://thetyee.ca/News/2014/06/17/First-Nations-Say-No-Gateway/

http://thetyee.ca/Opinion/2014/06/19/Norway-And-Northern-Gateway/

http://www.vancouversun.com/news/There+will+pipeline/10122968/story.html

In 2013, Heinrich Staudinger, the innovative and socially committed CEO of GEA shoes, had to experience how differently the boarders of grey areas in financial statements can be perceived: While the Austrian government is perfectly fine with Red Bull’s claiming their engagement and related expenditures in Formula 1 and other sports as “marketing expenses” and therefore evading the tax for several million Euros, GEA shoes was sewed, when they tried to imitate Red Bull’s trick.
Surprisingly, all that Heinrich Staudinger did was trying to support the single moms employed in his business through a program he called “Formula Z” that is organized like one of Red Bull’s Formula 1 teams. The only differences are that “Formula Z” does not subsidize famous racing drivers, but the children of the single moms with 1000€ per year, and the vehicles used are tricycles instead of racing cars.

For me it is shocking that the present legal situation on Austria does not reward social engagement shown by entrepreneurs like Heinrich Staudinger and even penalizes them for their reasonable actions. If GEA added the 1000€ to the single moms’ annual salaries “legally”, the moms would receive only half of the amount due to taxation and the firm would have to pay one third more for social security, while the government would pocket more than the single moms.

References:

http://kurier.at/chronik/niederoesterreich/schuhrebell-heini-staudinger-formel-z-als-neuer-steuer-trick/23.688.365

http://images02.kurier.at/23684926-46-57101626/620×340/23.684.929