September 2014

Blackberry Commits Corporate Suicide

Blackberry Ltd. has unveiled its first device in just about two years: the Passport. Blackberry’s business decisions have long since stopped making sense to me (and I’ve been a follower of Blackberry for as long as I can remember), but their decision to release this particular phone, at this particular time was downright confounding.

AFP PHOTO / CARL COURT

Their announcement of the Passport comes only a few weeks after a major product launch by dominant competitor, Apple Inc. These competitor devices will effectively dilute Blackberry’s market share, and because a substitute device is available, sales of the Passbook. While release dates may not be entirely controllable by Blackberry, Apple has historically followed a consistent, predictable release pattern, and had Blackberry anticipated this and unveiled their devices just a month or two earlier, Blackberry would have likely sold more products, thus mitigating this issue.

Blackberry’s Passport retains the original Blackberry DNA that has historically allowed Blackberry to dominate the mobile phone industry. However, consumer tastes have since shifted. Blackberry’s signature physical keyboard, is appealing only to the legacy users, who have become accustomed to the feel. The square design of the screen, however slick, is unappealing to media consumers who would prefer the more standard 16:9 aspect ratio. Blackberry is effectively diminishing its customer segments by sticking to outdated value propositions.

CEO John Chen claims that Blackberry is still “very much alive”, I am inclined to disagree. Blackberry is wasting away on a hospital bed, in decline.

Natural Gas vs. Diesel

I recently came across an article that piqued my interest. Being a critical reader, I first examined it holistically. The footnote caught my attention; it essentially denoted the article is an ad. Putting this aside for the time being, I delved into the contents. I quickly discovered that the subject of the piece is the adoption of natural gas powered generators in the petroleum industry: a paradigm shift from traditional diesel powered generators. The article noted that natural gas generators are more “environmentally friendly” than their diesel counterparts. This sounded great! It appeared mining companies are taking into account R. Edward Freeman’s “stakeholder theory” by giving due regard to the environment, and by extension, the community.

R. Edward Freeman's Stakeholder Theory suggests that all the stakeholders of a company (e.g. customers, suppliers, communities and financiers) are equally as important. This image is in the public domain.
R. Edward Freeman’s Stakeholder Theory suggests that all the stakeholders of a company (e.g. customers, suppliers, communities and financiers) are equally as important.

  Deeper in the article, however, I discovered that running natural gas is also 80% more cost-efficient than running diesel. I realized that this would create the perfect set of circumstances for contractors to utilize the “cloak of social responsibility” as described by Milton Friedman. The executives of these companies are able to appear “socially responsible” (by creating the visage that they’re “eco-friendly”) in a way that does not undermine their primary (and according to Friedman, their sole) responsibility, which is to their employers:  increasing returns by way of lower costs.

Milton Friedman believes that the sole responsibility of a corporate executive is to his employers (usually shareholders) and that unless social interests align with the employers' interests, executives should not actively pursue "social responsibility".
Milton Friedman believes that the sole responsibility of a corporate executive is to his employers (usually shareholders) and that unless social interests align with the employers’ interests, executives should not actively pursue “social responsibility”.

Although in theory, this “window-dressing” may be detrimental to a free society, its consistency with stakeholder theory leads me to believe that this is a step in the right direction.