The application of big data technology to business has had revolutionary impacts on management, operation and decision-making. Collecting and analyzing data enables companies to run in a considerably more efficient and controllable way. While big data drives business development, it also brings a new problem that has disturbed many corporations – data management.

     Flooded data center

Allied Building Products Corporation is one of the many companies that suffered a big loss from a failure to manage its data. In October, 2012, two of its data centers were destroyed by Hurricane Sandy. And the companies spent nearly 40 hours getting the systems and data back up and running. According to Scott Fischer, information technology director for Allied, it was the failure to build up enough backup data centers that resulted in this disaster.

Allied Building product Corp.’s lesson reminds me that successfully applying big data technology into business is far more difficult than I thought. There are many important factors a manager should consider when collecting and analyzing data. For example, what kind of data should be collected? It is no longer true to say that the more the better when collecting data because more data means more work to do and more cost for storage. In addition, a manager should also think about how to analyze the data. This is because for different purposes, they should use different methods, which may lead to distinguished results.

Sources:

http://www.theglobeandmail.com/report-on-business/careers/leadership-lab/are-you-letting-data-drive-your-decisions/article20836228/

http://www.cioinsight.com/it-news-trends/allied-building-products-rethinks-dr-strategy.html

http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/leadership/taming-the-data-monster-is-a-growing-challenge/article14964625/

Since 1945, the United Nations has devoted tens of millions of donations to mitigating global problems like poverty, homelessness and famine. In the short term, those financial supports have indeed alleviated some urgent problems; however, in the long term, the problems still exist because the essence of the problems does not change. Donations, no matter how much, could only have limited impacts on the issues and might even deteriorate the current situation if the recipients do not know how to utilize them in an efficient way.

Arc Initiative and social entrepreneurs provide us with a new and more effective way to solve the global problems. Arc Initiative shares essential business toolkits and experience with people who want to start their own business but do not have enough knowledge about entrepreneurship. On the other hand, social entrepreneurs create shared value to help the local community attain sustainable development. For example, Grameen Bank, run by Muhammad Yunus, provides micro-loan to poor people who do not have enough credits to borrow money from big banks to start their business. With this assistant, those entrepreneurs find a way to get rid of poverty. In turn, the development of those small businesses increases employment opportunities in the local community, which propels the local economy to grow in the long-run.

The key point of the two methodologies is to help people how to help themselves. So when we want to help people to achieve sustainable development in the future, this should be a key thing that we need to consider.

source:

http://skollworldforum.org/about/what-is-social-entrepreneurship/

http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative/About_ARC

Blog Link:  https://blogs.ubc.ca/amywu/2014/11/10/thepowerofhashtagsinbusiness/

I found Amy Wu’s blog post on the companies’ uses of hashtags on Twitter for marketing purpose very interesting. I totally agree with her that a company can enhance engagement with consumers and increase its brand recognition by using hashtag in an appropriate way. As opportunities and risks always go together, it intrigued me to explore cases where this “social-media-strategy” fails. I did some research and here are a couple of examples:

• Last year, Tesco, UK’s leading supermarket, failed to update its auto-tweets when it was involved in the horse meat scandal. The pre-scheduled tweet read: “It’s sleepy time so we’re off to hit the hay. See you at 8am for more #TescoTweets.” This generated thousands of complaints since people thought Tesco was trying to dodge the topic.
• In September this year, DiGiorno Pizza abused the “#WhyIStay” hashtag, which was originally used for 9-11 anniversary conversation, as an advertisement. And the tweet read: “#WhyIStayed  I have pizza.” This aroused public anger and complaints.

Social media like Twitter provides companies with a convenient interaction platform where they can engage with customers and convey their values more effectively. However, this closer engagement also makes the meltdown more catastrophic when things go wrong. Therefore, although the development of social media brings new opportunities in business, companies should be extremely careful when using it to avoid unnecessary social media disasters.

Source:

http://marketingland.com/john-oliver-corporations-dont-belong-twitter-conversations-99950

http://www.businessinsider.com/the-top-10-corporate-social-media-disasters-2013-11

picture from The Economist

Recently, I watched a TED speech “The Future of Business Is the Mesh”, given by Lisa Gansky. In the video, Gansky predicts that mesh economy (also called “sharing economy”) will play a more important role in the future business. By giving examples about car-sharing companies, she explains that because of the advances in information technology, people are able to create new platforms which make access to get goods and services more convenient and less costly in many cases than owing them. Thus, mesh economy can benefit the society as a whole.

One of the key words in sharing economy is “collaborative consumption”, a peer-to-peer business model where people can rent their assets (like houses, cars) to others when they are not using them. I was inspired by this brilliant idea. I think this is a good exercise of creating shared value since it allows companies to earn profits by reducing unused value of resources, which benefits individuals, business and the community. 

The concept “collaborative consumption” inspires me to think about “collaborative service”. The “collaborative service” I am thinking about is that different companies in an industry or even cross industries collaborate to build facilities that are high-cost but will benefit the whole industry. For example, in electronic-car industry, power stations play an essential role in popularizing electronic vehicles. However, building up appropriate number of stations across the country is very costly for single company. Then, companies in this industry like Tesla, BMW could cooperate to split the cost so that they could invest the money that saved from collaboration to improve their points of difference. Meanwhile, the standardized power station enables consumers charge their cars more conveniently. I agree with Gansky that sharing economy will be a new trend and probably a core value in many industries in the future because it creates shared value satisfying both companies and societies.

Sources:

Video Link: http://www.ted.com/talks/lisa_gansky_the_future_of_business_is_the_mesh?language=en#t-869193

http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy

Andrew McAfee

Blog Link:  https://hbr.org/2014/07/the-kind-of-work-humans-still-do-better-than-robots/

As the technology advances rapidly, will human workers eventually be replaced by robots? What kind of work do humans still do better than robots? According to Andrew McAfee, at least for now, humans exceed robots in fields that requires innovation, aesthetic and emotional response.In his blog, McAfee also expresses an implicit concern that as technology races ahead, how people continue to add value in production.

This is a thoroughly inspired article which leads me to have a further thought on the relationship between humans and robots in business world. I do not think the fact that robots are gradually replacing human labor is something to be worried about. Instead, this trend will bring positive impact in manufacturing industry. In the long run, the cost of high-tech machines will decrease and the cost of labor will increase. Using robots in factories enables companies to lower cost to produce the same amount of products, which maximizes their profits. Meanwhile, this also benefits the society as a whole. I concede that the trend of robots replacing human labor may lead to a cyclical unemployment. However, in the long run, human workers will eventually switch to the third industry to seek new opportunities. In this sense, popularizing robots in manufacturing industry actually frees people to do work that we are innately good at, such as creative, innovative and interactive tasks. Therefore, there is no need to worry that robots may replace humans in some domains. After all, we just treat robots as tools to help companies to be more efficient.

To develop a successful business strategy, the management should not only carefully analyze internal resources and industry factors, but also have a great insight into the external macro-economic factors. And social factor is one of the most important aspects. According to a report from Vancouver Sun, the Northern Gateway project (an oil transmission project run by Enbridge) has encountered a strong resistance by six first nations. And the Nak’azdli , one of the six first nations, has swore that they will not let the pipeline enter their territory. It is not a surprise to see first nation’s opposition against this project. A great concern is that the oil spill will severely affect the fishing activity which is an important source of food and income for the community. In addition, the traditional territory has profound meaning for aboriginal groups. It is part of their culture, history and lifestyle. They don’t want it to be destroyed by those steel tubes. These social factors will pose some significant impacts on this oil transmission business that the management cannot ignore. First, it will directly affect the profit. To persuade the first nations to sign on the equity sharing agreement, Enbridge has to pay considerable amount of money to first nations for compensation, which actually increases the cost and reduce the profit. Another important thing to consider is that it may have long-term effects on the business. If the pipeline were built, as the environmental degradation become more and more serious, there would be more and more complaints about the project. This might influence the political factors that may have negative feedback on the business. For example, to eliminate the unrest among the first nations, the government will probably impose more tax on energy companies like Enbridge to compensate first nations.

Reference:

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

Trent Abraham’s post’s link:  https://blogs.ubc.ca/tabraham/2014/09/10/protecting-your-privacy-on-the-new-facebook/

While I was reading blogs from my classmates, Trent’s post “Protect Your Privacy on the New Facebook” caught my eyes. In his post, Trent concisely summarizes an article whose topic is the privacy updates implemented by facebook. And he claims that it is ethical of facebook to use users’ information to make profit under the law. I would like to bring a different point of view on this issue. I agree with him on the point that there is nothing wrong with using users’s information to make profit. However, in my view, whether it is ethical depends on how far facebook goes on this track. If facebook use the privacy information just to help companies to allocate advertisements so that the commercials could be more effective and more targeted, then it will be totally fine. But if it uses the information to help other companies manipulate consumers’ behavior (which they have already had the capacity to do it), there will be a serious problem. Since this will be actually controlling consumers — a type of aggressive selling, which is totally different from normal commercials. This seems like a paranoid imagination. But according to the assumption that  companies will do whatever they take to maximize their profit, I think the concern is reasonable and necessary.

The time when there is no laws to regulate is the time when companies should consider business ethics. Unfortunately, improvement of laws can never keep up with development of technology. So it is especially important for IT firms to take ethics into consideration so that the society as a whole could be better off.

Once again, GM is recalling its vehicles. 524000 cars has been called back due to a defect about airbags. Recently, another big automaker Toyota also recalled a substantial amount of cars, which is resulted from a safety problem as well. In recent years, it seems that the big scale of car recalling has become a common phenomenon in auto industry. It looks like the quality of their products is decreasing. However, this is not the case. According to Craig Trudell, Yuki Hagiwara and Ma Jie, three main factors lie behind this increase of recalls: more complex technology, heightened regulatory scrutiny and increasing use of standardized parts that can be commonly used in different models. (“Toyota-GM Seen Ushering Era of Big Recalls”) I totally agree with them. And as the carmakers are continuously creating new models and the technology is never perfect, I believe that recalls will be likely still inevitable in the future. So the question now is what those automakers could do to minimize the loss of recalls. In my view, the most important thing is to keep good communication with customers. Clearly telling customers what happened and what they should do helps companies eliminate customers’ feeling of doubt and worries. Thus it can keep firms from losing their “points of parity”, such as safety and reliability. And sometimes, carmakers might be able to improve their reputations by having an effective communication with customers because it could be a good chance to convey the company’s values to customers.

web links:

http://www.bloomberg.com/news/2014-04-09/toyota-gm-seen-ushering-in-era-of-big-recalls-as-scrutiny-mounts.html

http://money.cnn.com/2014/10/03/autos/gm-recall/index.html?iid=HP_Highlight

In Tuesday’s lecture, when I first heard that Starbucks basically has the same operational strategy as Toyota, I was astonished —- how could two companies from totally different industries have the same operational pattern? This question intrigued me to do some research on this topic. During my research, I learnt an interesting concept called “lean manufacturing”, which was primarily developed by the automaker Toyota in 1990s. And there are a couple of my ideas about “lean manufacturing” that I would like to share.

• Does “lean manufacturing” impair the quality?

According to the definition of “lean manufacturing”, a company should only cut off the expenditure which doesn’t contribute to value-added of the product. In this sense, “lean manufacturing” will not reduce the product quality, but it may likely help the producer to improve the quality of its product. Because to successfully implement “lean manufacturing”, a producer has to figure out what kind of value that added to the product actually satisfies customers’ demand. This helps producers to rethink their operational systems and forces them to have a closer relationship with customers so that they can make a strategy that can lean the cost and maximize profit at the same time.

• Does “lean manufacturing” apply service industry?

Compared to manufacturing industry, service industry has a shorter history. So it makes sense that servicing companies like Starbucks could learn some operational techniques from manufacturers. However, service industry and manufacturing industry are quite different. The former offer the customers unique human-involved services that require face-to-face interactions whereas the later provides customers with just standard products. Once the service is regulated as a streamline, it tends to become robotic and rigid. Because of this, companies in service industry should be extremely careful when employing “lean manufacturing” techniques. Take Starbucks as an example. According to Starbucks’ CEO Howard Schultz, “lean manufacturing” can help the barista spend less time on making coffee and more time in connecting with the customer. Theoretically, this could be true. However, just as Larry Dignan concerned in his article “Starbucks eyes lean manufacturing techniques”: “Can Starbucks employ lean manufacturing techniques used by fast-food rivals without becoming a fast-food joint itself?” If Starbucks focuses too much on increasing customer flow and efficiency, it may probably blur its value proposition and lose customers.

Reference:

http://cmuscm.blogspot.ca/2013/02/will-starbucks-scrap-lean-manufacturing.html

http://online.wsj.com/articles/SB124933474023402611

http://www.shmula.com/starbucks-why-lean-why-now/5639/

http://blog.newsystemsthinking.com/the-wall-street-journals-story-on-starbucks-and-lean/

http://www.qualitydigest.com/inside/twitter-ed/Starbucks-lean-ruins-experience.html

http://www.smartplanet.com/blog/smart-takes/starbucks-eyes-lean-manufacturing-techniques/

During the process of pursuing maximum profit, stakeholders should take business ethics into great consideration as it is the bottom line which should never be overstepped. This is even more significant in the age of big data.

Facebook, the social media giant at present, has been reported that it used users’ likeness in advertisements without their permissions. In addition, it has also said that facebook got involved in the activity called “like” Fraud, where it sold pages with a huge number of “likes” to companies who want to build substantial social following.

Facebook’s misconducts have aroused public fury and growing concerns about data privacy. If facebook continues to secretly use the users’ information for business purposes, it will likely lose a large part of its users and seriously hurt its revenue in the long-run. Business is founded on the mutual trust among stakeholders. If the foundation of this trust collapses, the whole business will be destroyed as well. In the age of big data, companies have the capacity to track tens thousands of choices and decisions customers made online. And they can use the data to help them make marketing decisions and even manipulate customers’ conducts. Moreover, the regulation of the online market is not perfect yet. Therefore, business ethics are more required to keep the market in order. With the help of technology, companies have far more power to maximize their profits. However, rather than focus on what they can do, companies should consider more about what they should do while pursuing their benefits.

Reference:

• James Brusseau, Ph.D.   “Facebook and the Unavoidability of Business Ethics”

“The Business Ethics Workshop” (online)

http://toddbacile.wordpress.com/2014/01/21/facebook-and-business-ethics-five-questions-         to-ponder/

• Todd Bacile, Ph.D.  “Five Ethics Questions about the Social Giant” Jan. 21 ,2014

http://2012books.lardbucket.org/books/business-ethics/s05-04-facebook-and-the-unavoidabilit.html

• Robert Klitzman, M.D. “Why Facebook Should Follow Ethical Standards — Like Everybody Else”

Huffington Post  07/07/2014

http://www.huffingtonpost.com/robert-klitzman-md/why-facebook-needs-to-fol_b_5557862.html