Author Archives: SophieEndl

With an operating budget of over 5.5 billion dollar provided by 193 member states, the United Nations try to maintain and reestablish international peace and securitysecurity, promote human rights and provide humanitarian aid. Still, some economic and social development role ms cannot be tackled by the world’s most popular organization due to financial reasons and limited capacity. Thus, social enterprises dedicated to filling the gaps between the UN projects and the unsolved social and economic problems in certain areas evolved throughout the last decades.

Would the world need those social enterprises, tough, if the UN was fully funded and expanded their capacity?

The answer to this question is yes, in my opinion, as there will always be very specific problems that the international community is not aware of and that require specific solutions. Moreover, the bigger an organisation like the United Nations gets, the less flexible it is and the harder it gets to adjust to rapidly changing problems in developing countries. Therefore, it useful to found smaller and more efficient organisations like social enterprises that are tailored to tackle one problem and to support one specific group of people in order to improve the overall situation.

References:

http://www.un.org/en/aboutun/index.shtml

According to Bill Fotsch’s blog post from October 27^th, 2014, the business community is facing a new addictive trend comparable to the sudden popularity of quality in the 1990s: “the customer experience movement”. Although feedback from their clients is crucial for all kinds of improvements concerning marketing, product design or even operations, companies tend to take results of surveys and other opinion polling way to serious nowadays. Customer feedback has become so important that some firms even encourage their employees financially to implement suggestions of improvements in processes made by clients.

The problem is, tough, that companies run the risk of neglecting key financial indicators while trying to content every single customer, which leads to a conflict of the firm’s performance – customer satisfaction – and its very purpose – profit.
Therefore, the key is to relate these two seemingly opposite ideas and to attach a touch of finance to customer services.

Nonetheless, it is debateable if every employee should be involved in as serious decisions and processes as the implementation of improvements based on customer feedback, as Bill Fotsch thinks it is best, or if employees should just collect feedback and let management evaluate and decide align with the company’s principles, values and strategy.

References:

https://hbr.org/2014/10/track-customer-experience-but-dont-forget-the-financials/

http://www.axiall.com/uploadedImages/CustomerService.jpg?n=8038

Although Berlin Wall came down 25 years ago and the German government has invested billions in the economic and social transformation of Eastern Germany, the Eastern German economy can barely keep pace with the tremendous economic growth in Western Germany. Against the most logical assumption, the transformation from a communist market system into free-marketism is not the reason for the lack of growth and business infrastructure. Indeed, the economic strength of Western Germany causes businesses and skilled workers to move to the more industrialized and more popular venues in the West and therefore a lack of leading firms that stimulate innovation and growth.

Nevertheless, Eastern Germany has a lot of potential – not least because of the booming chemical and optical industry. Berlin is a ray of hope, too, as the buzzing German capital is known for disruptive innovation as well as uniquely new approaches to business problems considered as unsolvable and the problem of unequal growth can most likely be tackled with successful entrepreneurship.

Now the question arises, how it can be made more attractive for Eastern Germans to open up their own businesses or for Western entrepreneurs to move west. One factor is definitely the currently extremely low interest rate level in Europe, which forces savers (that Eastern Germans tend to be) to find new ways to invest their money and allows entrepreneurs to get cheap business loans. Still, the German government will have to create some form of (financial) incentive for Eastern German start-ups and try to move more state-owned corporations west as role models in order to bring the unequal German siblings to a common level again.

References:

http://www.economist.com/news/business/21631048-few-big-companies-have-headquarters-east-germanys-old-internal-border-still-not-over-wall

http://upload.wikimedia.org/wikipedia/commons/5/5d/Berlinermauer.jpg

Recognizing problems, finding solutions and changing the world – although the key activities of Non-For-Profit organizations sound like the job description of any superhero, businesses in the non-for-profit sector often find themselves forced to stop after a successful search for a solution. The reason for this abrupt disruption of the world changing process usually is the confrontation of non-for-profit ideas with actually-for-profit business reality.

An example for a non-for-profit organization facing particularly disruptive confrontations with CFO on a daily basis is Greencare, an organization aiming at making health care environmentally friendlier through recycling clinical waste, reducing energy consumption in hospitals and introducing a more responsible handling of water. Greencare’s three main concerns directly affect the environment of health care facilities and play a crucial role regarding the population’s overall health. Moreover, Greencare’s propositions for hospitals are cheap to implement taking into account their benefits. Nevertheless, CFOs of hospitals reject Greencare’s offers more often than they take them, as the health care industry suffers from immense financial pressure and the reallocation of money that is spent on patient care often seems irrational in the short run. Unfortunately, CFOs often ignore the long run consequences of their decisions and accept environmental damage as well as negative effects on public health.

References:

https://www.colourbox.com/preview/2955355-170466-light-bulb-with-leaves-inside.jpg

While other clothing companies try to lure their (primarily female) customers into buying more and more clothes, the outdoor clothing brand Patagonia tries to convey a completely contradictory message: Their slogan “Don’t buy this jacket” combined with a picture of one of their own products relates to a new campaign aiming at reducing, repairing, reusing and recycling.

As Emily analyzed in her blog post from October 5^th, Patagonia tries to create shared value by broaching the environmental concerns of their target group, as customers are asked to think twice before buying clothes in order to reduce waste and environmentally unfriendly cloth production.

Besides the strong relationship that Patagonia builds with its target segment as Emily outlined, their campaign could also be seen as strategic marketing, since advertisements as bizarre and unconventional as Patagonia’s latest launch definitely win the “battle over customer’s mind” and therefore spreads brand awareness among potential customers.

Nevertheless, it is admirable how Patagonia connects taking over corporate social responsibility and creating shared value with increasing sales and building an even more reliable customer base.

References:

http://jaredlatigo.com/wp-content/uploads/2014/03/patagonia-ad.png

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

When the high tech world stood still for a single moment on September 19^th for fully focusing on the release of the newest member of the Apple Family – the already notorious iPhone 6 –, BlackBerry seized the chance to enter the market with their brand new BlackBerry Passport “by the back door” successfully. The main reason for this success might not only be the innovative technology Blackberry users awaited in vain over the last couple of years, but also the failure of the iPhone 6 in withstanding the “pressure” of users’ pockets, as Lucas outlined in his blog post.

Thanks to Lucas’ careful analysis of potential consequences for Apple and the company’s reputation in the marketplace, the question arose for me why Apple did not avoid this now rather awkward debate from the beginning. Supposing that it took more than a year to develop the iPhone 6 and Apple is known for landmark innovation through careful analysis and tests, it is unimaginable that they just did not think of the consequences of using aluminum as basic material. So why did they take this risk? Were they just too confident in their market leadership? Or did they actually seek the public’s attention?

While these questions will probably remain unanswered, BlackBerry tries to take over parts of Apple’s market share by simply exploiting Apple’s failure to satisfy consumers’ needs. Nevertheless, this could not only be a unique opportunity for the struggling company to broaden their customer segments, but also a threat to their unique selling proposition in the market for business phones.

Still, the consumer will make the final decision who just bends their phones and who is actually brought to their knees in this battle.

References:

http://www.theglobeandmail.com/report-on-business/passport-sales-bode-well-for-blackberry-analyst-says/article20838923/

http://www.theglobeandmail.com/technology/technology-video/video-will-it-bend-we-see-if-the-blackberry-passport-is-stronger-than-an-iphone-6/article20801006/

Principles, integrity, law, profit and social responsibility – all these words occurred in my head when I did my research for this blog post and after 5 minutes of brainstorming, my thoughts were closer to an intricate ball of wool than to a thread through my developing blog post.

Fortunately, I am not the first business person finding herself confronted with the buzz word “business ethics” and I could inspire myself with the ideas of great thinkers like Milton Friedman, R. Edward Freeman and Peter F. Drucker. Especially Peter Drucker’s opinion on social responsibility of businesses sparked my interest, as he distinguishes between social impacts and social problems – in other words, he looks at the problem from two different sides: On the one hand, he considers what businesses do to society and on the other hand, he reflects what businesses do for society. In doing so, he expects companies to take over responsibility when it comes to social impacts and clearly states that it is not a firm’s duty to solve social problems such as unequal income distribution. He justifies his point of view with a definition of responsibility: Someone is only responsible for problems in areas, where he or she has power of decision.

Therefore, I asked myself some questions: Do businesses have the competence to make decisions on social issues? Do we want businesses to have this competence? Who has the power to solve social problems? How are businesses affected by social problems and what can they do?

References:

www.ssireview.org/blog/entry/the_first_rule_of_corporate_social_responsibility_is_not_what_you_think

http://blogs.hbr.org/2010/06/how-did-peter-drucker-see-corp/