https://www.ft.com/content/d096c04e-b5a4-11e7-a398-73d59db9e399?mhq5j=e7

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(Image from BBC.com/news/business: EU officials inspected the Munich offices this week)

Over last weekend, there was a piece of news article making me think deeply about the relations between corporate social responsibility and business development strategy.

According to Financial Times, Europe Union officials made a search at BMW headquarter office in Munich because they suspected the allegations that BMW and other German carmakers have been doing business cartel for decades since 1990 by limiting car prices and emission technology development spendings mutually. If that is a true case, BMW, by definition, will certainly violate anti-trust laws of Europe Union. Particularly, it was alleged that those carmakers agreed mutually to adopt lower-cost components and suppliers, which sacrifices higher emissions as a result.

For responses, BMW said governments should make a clear distinction between anti-trust laws, and manipulations of gas emission. At the moment, BMW has only been accused of anti-trust violations, but not manipulations of gas emissions.

Financial Times announces further that major car companies from Germany often make partnerships together to cooperate and set up standards in order to make automobile industry as an entirety move further, which is the strategic business development for economic growth at a macroscopic level. On the one hand, common standards can not only make suppliers’ jobs much easier but also benefit large consumer bodies more conveniently. On the other hand, the boundaries between cartels and partnerships are often blurry and hard to tell.

Certainly, I totally understand there is no way for managers at such super larger organizations as BMW to do jobs easily. It’s often just one step away from jail once a manager is in charge of a large multinational corporation. However, as an upright citizen with strong beliefs in corporate social responsibility, I really don’t like BMW’s crafty response or even excuse: because they are not accused of manipulations of gas emissions, they should be free from violation claims for adopting lower-cost components with higher gas emissions.

Environment protection should always be the sustainability goals of every citizen and every company for this planet; furthermore, BMW and other major German car companies who exert huge influences on environments even use the commercial power to mutually adopt components with higher gas emissions because of lower costs and higher profitability. Such actions should be strongly criticized although they are not qualified to be legal violations.

Business partnership for strategic development is always important and mutually beneficial; however, besides the monetary factors in company budgets, companies should always take environmental and social effects into consideration when doing decision makings. There is no clear separation between partnership and cartel; meanwhile, I would like to say, there is also no clear separation between business strategy and corporate social responsibility. Why not make a great balance together?

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(Jason Franson/Canadian Press): Suncor is focused on cost-cutting to in order to increase profits and remain competitive.

Today, I’ve read an article called “Canadian oil producers alter strategies in face of oil supply certainty” from CBC news, which invoked my deep thoughts of business strategy.

In summary, massive industrial productions largely drive up the surplus of oil supply nowadays; therefore, oil prices overall become more and more limited or even lower. Many investors are scared away from oil and gas industries due to the volatility of energy prices and fading margins. Steve Reynish, executive vice-president of strategy and corporate development at Suncor Energy Inc, made a saying at a conference in Alberta to express the company’s shift of strategy focus on cost-cutting of oil production in order to increase margins and stay competitive in financial markets. Due to lack of enough pipeline spaces for most of Canadian oil producers and suppliers, Canadian oil companies typically often choose railway transportations which cost significantly higher than pipelines do. Suncor, one of the major Canadian oil producers, will probably be one of the first oil companies to slow down and sacrifice growth in order to cut down long-term transportation costs and keep up profit margins.

Although the article mentions that recent rise of U.S. dollar price to Canadian dollar is expected to hurt Canadian oil producers’ oil and gas prices, I don’t think they will get affected too much as long as they trade in Canadian domestic oil markets and employ Forex Asset Department to keep track of asset values affected by volatility in international currency, which is what large international corporations do typically. I really like how Suncor assesses its internal and external contexts in detail and serves as the first Canadian oil producers to take the initiative for long-term cost-cutting strategy development.

Recently in COMM 101 lectures, we just learned financial accounting, managerial accounting, and business strategy, and I feel they are all interconnected somehow in a corporate organization both internally and externally. For example, in this piece of news article, initially, Suncor wants to increase the financial performance in cash flow statements and fund markets in order to better attract investors, which is the perspective of financial accounting; then, Suncor made plans to particularly sacrifice short-term growth to exchange long-term limited transportation costs, or known as period costs in managerial accounting, which is an internal decision-making accounting perspective. The entire proposal processes of long-term strategies and short-term tactics are just what we call “Strategic Decision Making”, including strategies, tactics, situation analysis, and initiatives; situation analysis includes both internal and external strategic assessments, which is highly bond to both managerial accounting and financial accounting together.

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