Month: September 2013

I was looking at a classmates blog, and found his post about the organizational structure of the company Valve very interesting. Basically, Valve is a successful video-game company with no managers. Everyone chooses their work and workers are paid according to peer rankings. It is a very unique flat organizational structure. Workers even have desks and chairs on wheels so that they have the freedom to move floors.

Though my classmate believes this model is very risky and inefficient, I think this model works well for the video game industry. Projects at Valve have to reach a “critical mass” of support before it is possible to truly carry out an idea and manufacture the game. While this allows a huge range of creativity, it also encourages teamwork in a field where people might be inclined to hoard ideas so that they can claim intellectual rights. The peer ranking payment system also encourages people to work together – the entire company a true team.

However, I agree that there are risks. Valve needs to be very careful in choosing employees that will positively contribute to the corporate culture or the structure could fall apart.  Individuals should not need to be told to work because they are self-motivated and innovative.

Picture: http://www.bbc.co.uk/news/technology-24205497

Facebook recently has been facing Federal Trade Commission Inquiry because of their new privacy policy. Some points of concern are that users are required to “grant the company wide permission to use their personal information in advertising”, and that “Facebook automatically assumes that the parents of teenagers using the service have given permission for their names and images to be used in Facebook advertising.”

How much of what we post on social media is being used in advertising? Facebook actually provides businesses with the locations, genders, ages, interests, and connections of its users so that businesses can target their customers better. For businesses, this helps them use their advertising more effectively and is a great tool for marketing.

One blogger however, suggests that ads on Facebook are usually ignored because the users are focused on socializing. She goes on to say that ads have no place on Facebook, and only help to isolate people.

So should Facebook remove ads? I don’t think so. It’s a major source of revenue for Facebook and an excellent tool for businesses to reach out to consumers and communities. By using Facebook, you are declaring to the world who you are – I see targeted advertising as just a consequence of that.

The music industry is in a flux as music becomes more an more accessible through the internet. While some artists values the internet as a marketing tool, pirating and free music has made people question the true value of music and what kind of compensation the musicians are getting for their work. One such musician in a blog post shares how he makes much less money from online streaming than radio.

Another side to this issue is that online music subscription services such as Pandora and Spotify have not been profitable because they cannot make enough revenue from subscriptions and advertising to pay royalty fees. Most recently, Pandora won a lawsuit against the American Society of Composers, Authors and Publishers (ASCAP), who where trying to prevent Pandora from licensing songs so that they could renegotiate higher royalty fees. So far, Pandora has focused on increasing the revenue by allowing for more advertising. However, I think this is a short term solution, and they will have to alter their business model in order to counter the higher royalty fees once their contract with ASCAP expires and they renegotiate.

“Court Gives a Victory to Pandora Over Licensing Streaming Music,” New York Times, accessed Sept. 20, 2013, http://www.nytimes.com/2013/09/19/business/media/court-gives-a-victory-to-pandora-over-licensing-streaming-music.html

“Pandora and Spotify Rake In the Money and Then Send It Off in Royalties,” New York Times, accessed Sept. 20, 2013, http://mediadecoder.blogs.nytimes.com/2012/08/24/pandora-and-spotify-rake-in-the-money-and-then-send-it-off-in-royalties/?_r=0

Picture: “Internet Music – How Are You Listening?” Compete.com, accessed Sept. 20, 2013, https://blog.compete.com/2012/04/12/internet-music-how-are-you-listening/

As seen at Starbucks, corporate social responsibility can help to distinguish a company from its competitors, strengthen the brand’s image, and attract customers. However, it can increase costs that have to be passed on to the customer. For example, Starbucks has to raise their prices to account for the fact that by buy fair trade coffee. Corporate social responsibility can also make Starbucks a target for customers who are lobbying for social change. For example, the National Gun Victims Action Council once “called for a boycott of Starbucks for allowing people to carry guns in stores” (Seattle Times), which is a customer practice outside of Starbucks’ control. People hold the company’s conduct to a higher standard and expect the company to be more responsive to the customers’ ideologies and advocacy efforts.

Personally, I do think that businesses should make sure their practices are ethical (internal), but I don’t know to what extent businesses should support community initiatives and charities at the cost of profit (external).

“Starbucks’ socially responsible image cuts both ways,” last modified March 21 2012, http://seattletimes.com/html/businesstechnology/2017800974_starbucks21.html.

Picture: “Interview with Deb Trevino, Director of Corporate Communications at Starbucks (Part II)”, last modified January 27 2011, http://mrahmey.com/2011/01/27/interview-starbucks-part-ii/.

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