Monthly Archives: November 2014

The role of social enterprise

”If the United Nations was fully funded why would we need the Arc or social enterprise”?

The simple answer is because the UN as an organisation is limited in its political power; and as an international organisation is also broad in scope, which makes it good for idea-sharing and consensus-building but not ideal for actual fieldwork, which in many cases is dependent on smaller organisations like ARC and social enterprises.

Depending on one’s opinion on the purpose of the UN, it can be seen as a platform for discussion on mutual concerns of various countries, in which case I would argue that it’s quite effective, or it can be seen as a means to pool international resources, maintain peace physically and get things done in individual countries, in which case, it’s not so effective. Much of this is due to the UN’s nature as a partnership of most of the world’s countries and as such, it has no legal or political power over individual countries- a concept called sovereignty in which each country has power over and is responsible for its own policies and initiatives. Although the UN does have a number of affiliated organisations/bodies which do operate within individual countries, such as the UN peacekeepers, WHO, and UNICEF, a country’s consent is still necessary. This restricts the UN’s ability to operate and directly be involved in the internal affairs of every country because of potential friction with the countries that tend to dominate discussions over security and the use of UN resources (normally members of the G8 and those that pool the most money into the UN).

As a result, NGOs and other international or local organisations play a huge role in the sustainable development of countries and humanitarian responses and are critical. These organisations can bridge resources and can diversify and specialise much more effectively than a large body like the UN can; and they can also individualise the help needed to each particular sector they work in. This is important because social work is not just about what’s being done; it’s about building relationships and cultivating leadership and growth with the people who live in that area, and local businesses and organisations are almost always more effective in this than large ones like the UN.

In addition, initiatives like ARC are exceptionally crucial and different from plain social enterprises because they help local people get out of the poverty trap and encourage local citizens to build social enterprises for themselves; contributing to the sustainable development of a region and addressing more long-term underlying issues rather than food or shelter relief. Although I completely appreciate and respect the work the UN, UNICEF and the WHO does, and relief is definitely necessary in emergency events and temporarily while a country is undergoing unrest, ultimately, relief and donations are a short-term solution and is not ideal in producing a self-sustaining community. Providing local people with the tools and knowledge they need to create social enterprise and contribute to their community is much more effective and highly crucial in building a sustainable world.

As Lao Tsu said:

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Game Over for Sony?

Sony’s CEO Kazuo Hirai predicts the company won’t turn a profit until 2015. With a net loss of 136 billion yen in the past 3 months, the firm now forecasts a 230 billion yen full-year loss; a figure 4x greater than it forecast in September.

Since 2008, the giant Japanese electronics company has been unable to turn around profits, even after undergoing several changes in operations and marketing and after Kazuo Hirai became CEO in 2012, with a proposal to focus on game consoles, cameras, and mobile devices.

So what exactly is the reason for Sony’s unprofitability?

Vlad Savov from The Verge believes that Sony’s current strength is with is Android and PlayStation devices and speculates that Sony will not be able to compete on a focus differentiation model emphasising design or picture quality. Likewise BBC attributes Sony’s unprofitability to its strong competition; from apple and samsung for high value proposition phones from other firms like Huawei and Xiaomi for low-cost phones, and from Asian rivals for its TV unit. In China, Sony decided to reduce phone sales as it couldn’t compete with a Low Cost strategy in the face of competition, yet Sony is also not able to compete with Apple and Samsung on the higher end of smartphones and tablets.

Hiroko Tabuchi from The New York Times, on the other hand, believes it’s due to ineffective operations at Sony and the failure to take appropriate advantage of recent technological innovation. Since the breakthrough with the Walkman, Trinitron TV, and the acquisition of Columbia Pictures, Sony failed to innovate new products and keep up with its transient advantage; leading to a fading brand compared to companies which continued to innovate- like Apple, which came out with the iPod.

As I’m only a couple weeks into business school myself, I can’t say for sure what’s preventing Sony from making profit; but from my readings and knowledge thus far I think a potential weakness is Sony’s diversified products and inability to efficiently focus its resources on all of them, which leads to its domination in neither field. Not only does Sony produce several different types of products, like TV sets, game consoles, and mobile phones, they also produce multiple variations, neither of which are substantially different from the other and results in an over-saturation of products in the market and a confused value proposition and product offering. Hence I think Sony’s decision to restructure its firm by quitting businesses— they sold their Vaio brand and exited the PC business earlier this year, and are planning to use another 135 billion yen on restructuring ventures this year- is a step in the right direction. Not only should Sony select and change its focus in terms of products and focus on innovating great products in its strong field, it should also continue to work on the efficiency of its internal operations and ensure the corporate environment is healthy.

References:

“Japan’s Sony forecasts losses until 2015 after PC exit”. BBC News. 14 May 2014. http://www.bbc.com/news/business-27403887

“Sony reports a quarterly loss of $1.2bn”. BBC News. October 31 2014.
http://www.bbc.com/news/business-29844746

Alpeyev, P., Huang, G. and Amano, T. “Sony’s Loss Widens as Xperia Struggles Against IPhone”. Bloomberg News. October 31 2014
” http://www.bloomberg.com/news/2014-10-31/sony-posts-narrower-than-expected-loss-on-playstation-sensors.html

Huang, Grace and Nakamura, Yuji. “Sony Tumbles as $2.1 Billion Loss Limits Hirai’s Options”. Bloomberg News. Sept 17 2014. http://www.bloomberg.com/news/2014-09-17/sony-forecasts-wider-full-year-loss-on-smartphone-competition.html

Savov, Vlad. “Sony wants to Overhaul Unprofitable TV Division”. The Verge. August 2 2011.
http://www.theverge.com/2011/08/02/sony-wants-to-overhaul-unprofitable-tv-division

Tabuchi, Hiroko. “How the Tech Parade Passed Sony By”. The New York Times. April 14, 2012

Is the Unlimited Holiday a wise HR decision?

Richard Branson, boss of Virgin, recently implemented a policy which allows the employees on his personal staff to take as many holidays as they like, whenever they want, providing their leave does not detriment the business. Smart idea?

This move changes Virgin’s company culture, and on Adam’s blog, he acknowledges that it “hopes to encourage and develop a relationship of trust between the company and the employees, making the workplace more casual and less restrictive”. He also adds that it helps employees maintain greater focus on achievement and will increase efficiency since they are incentivised with potential holiday time. 

I, on the other hand, am not convinced that this is a wise HR decision. Yes, it may encourage greater efficiency from employees who are motivated by time off work, but will this come at the cost of quality?

Branson may be trying to follow suit with the idea of ‘flexible working’ from companies like Google and Apple, but his HR policy is highly different than that of Google’s, who’s corporate culture ensures employees are thoroughly invested in Google and maximises the time the employees stay there. Branson, on the other hand, is incentivising his employees by a motion to let them leave the company for as long as they’d like, provided they have achieved their work and are comfortable doing so. It is questionable whether motivating employees with the option of Unlimited Vacations is the best way to increase employee’s investments and passion for the company; as it only makes them want to finish duties as quickly as possible and this might not be a desirable mindset for a company that seeks to grow. So let’s say this increases productivity by a massive amounts and as a result employees are now taking large extended holidays. The company’s losing valuable time, and also security. How can it function when it’s best people are constantly trying to get away from the company, and it never knows when it’s employees are going to turn up for work?

Hence I disagree with Adam’s view that this will provide Virgin with a competitive edge; on the contrary I believe it will detract from building a strong Corporate Culture and detract from strong employee ties.

 

B Corps and Business Impact Management

Government and the nonprofit sector are necessary but insufficient to address society’s greatest challenges. Business, the most powerful man-made force on the planet, must create value for society, not just shareholders. B Corps

B Corps are the new fair trade or organic label, but for businesses who’ve met the standards for ‘social and environmental performance, accountability and transparency’ as set forth by the nonprofit organisation B Lab. This article from their blog talks about the different metrics used to assess and evaluate a company’s performance beyond the usual goal of making profit to also looking at social/environmental impact.

I found this super interesting because instead of the usual metrics used in performance management, B Corps uses metrics to highlight how effective the business is in choosing an impact business model and meeting the requirements. The top metrics that stood out to me were:

  1. The intent of the business: In order for a business to qualify for an Impact Business Model, they would have to show that their intended scheme is part of the business’ mission and isn’t just an offside or unintended outcome. This resonates with the concept of CSV as it ensures the social impact is central to the business itself rather than just a side scheme. (for example, a Workforce Development company would have to ‘utilise a certain percent of workers from chronically underemployed communities’)
  2. The reach of the program/ intervention: this includes who it reaches as well as how thoroughly it does so.
  3. Efficiacy: this looks at whether a company has reached its outcomes by looking at the goals they’ve set and if they’ve created targets and tried to measure themselves up against these.

 

 

 

 

The Everlasting Toothbrush

Toothbrushes are made to be tossed- the American Dental Association recommends we toss out our toothbrushes every three to four months for oral hygiene. Goodwell seeks to solve this problem with the tootbrush essentially intended to last a lifetime- made with detachable, biodegradable attachments including a toothbrush head, a flosser, and a tongue scrubber. It’s set to be sold for $69, or $79 if the consumer wants a toothbrush attachment to be mailed to them every month.

Sounds like an interesting idea, but I’m not sure the value proposition is high enough to be charging $69- then again, if it really lasts forever, maybe it isn’t too large of an investment to make.

Due to the way they’re marketing the product, I’d assume their target market would be the environmentally conscious or high class consumer. Additionally, they’re also targeting tech-oriented consumers with their open source technology that allows people to make their own attachments to the toothbrush.

Since the company’s just starting up I think the success of the startup will really be having a strong value proposition and explaining to consumers outside of the target market who wouldn’t be immediately drawn the importance of sustainability and how exactly Goodwell’s product achieves this.

Also I think adding more buyer options such as being able to buy single toothbrush head attachments would be extremely helpful.

Our mission is to create 100% natural, sustainable products, systems and technologies that raise environmental awareness and empower people to make choices that help protect and preserve the planet today.

http://www.fastcodesign.com/3038250/a-toothbrush-designed-to-last-a-lifetime

http://www.thegoodwellcompany.com/