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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.


  • "Why I love doing taxes": one man's story

    image of Bruce McFarland from Marketplace website link to radio story Bruce McFarland is the Missouri Tax Guy. He does tax returns and he loves it. He acknowledges that people sometimes have a poor attitude with respect to tax preparation. Nevertheless he sees taking one's business records to a tax professional as a haven of safety--where clients go (not unlike a spa) to be taken care of by an honest and knowledgeable person. I prepare my own taxes, with the help of an ever-morphing tax program whose "Easy Step" function becomes more cumbersome each year. Still, there is a certain satisfaction in knowing where all the money went--and also in seeing how much of a contributor I am to the functioning of the federal and state governments. Sources: " Why I love doing taxes ," by Kai Ryssdal and Bruce McFarland, Marketplace.com , April 15, 2014. F ollow up: It is after April 15th. Have you filed an extension? Did you do your taxes? What changes are you going to make this year in record-keeping strategies? What apps are you using to help yourself?
  • City airport bulldozed by angry activists

    image--AN APRIL FOOL JOKE--from article linked below Today--April Fool's Day--the headline in the local paper used humor to discuss a very divisive and high-stakes local issue--the pros and cons of an increasingly more active airport in the middle of a residential community. Humor is a communication tool that has both rewards and risks--it can take an extreme position (as this photo-shopped picture does)--and thereby put what some people might be thinking "on the table" so that it can be viewed in a less emotionally-charged way. Humor can also be misunderstood--and it may offend people. Someone who reacts to the article, believing it to be true, might feel as though they had been made a fool of. Making others feel foolish is not usually a good business communication strategy over the long term. Nevertheless, humor can be used gently and effectively to increase people's level of comfort in discussing difficult topics. Source: " Santa Monica Airport gets bulldozed by angry activists ," by Loco Crazy Simpson, Santa Monica Daily Press , April 1, 2014. Follow up: What are the risks of using humor--especially parody--to make a point? Check out the other articles in this issue of the Santa Monica Daily Press. Which do you think are the most successful? Are there any articles that, on first glance, you thought were NOT parodies?
  • SUCCESS

    Doesn't everyone want to be successful? However one measures success in one's own terms, the idea of achieving one's goals feels good. I like Winston Churchill's spin on things. Actually, I think it is the best advice ever. So many biographies of great leaders have been stories of failure upon failure, until success was achieved. Sometimes, even then--it is not the success imagined...but the results are a substantial improvement from the starting point. The article linked below has advice that can apply to everyone, but it is more in the mode of the "do this and you will succeed" model...it doesn't really address the back-tracking aspect of every success story. The cartoon below can tell my own story: image from mpmhspharmacystudents.blogspot.com Source: " 9 Soft Skills for Success, " by Sean Hewitt, Ask Men . Follow up: Actually, Winston Churchill is not quoted accurately in the image above. What did he really say? Does the paraphrasing mean the same thing? Describe a failure from your own life that led to a later success.
  • Reasonable compensation or crazy windfall?

    Coca-Cola recently sent out its annual report...and it seems that its executive compensation is excessive--much like the compensation of many U.S. corporations. image from the New York Times Coca-Cola disclosed that it planned to pay $13 billion over the next year to its top executives. This represents 14.2% of the value of the company. David Winters, an analyst at Wintergreen Adviser (and Coca Cola stockholder), who "wants to own Coca Cola stock forever," took exception to this proposed payment, and was surprised that Warren Buffett, who owns a 9.1% stake in Coca Cola, would tolerate this. Coca-Cola's response was inconclusive, but since the compensation package needs to be approved by the shareholders, it remains to be seen whether it flies. According to the article, " Mr. Winters’s analysis 'is misinformed and does not reflect the facts .'" The reality is that there are contingencies. Still, the upside is huge. What, really, is fair compensation? Source: " A Question of What’s a Reasonable Reward ," by Andrew Ross Sorkin, New York Times , March 24, 2013. Follow up: Research the ratio between lowest worker's compensation and the highest executive compensation as norms. Check out Japanese business norms, as well as historical (1970's) norms. How does this relate to the current levels Coca Cola is proposing?
  • Social media manipulates General Motors' reputation

    [View:http://community.cengage.com/GECResource/themes/gew/ utility/ :550:0] Mary Barra, CEO of General Motors talking to her employees about the vehicle recall in a recent video If video does not appear above, see link to video here . "Damage control" looks different in the modern age of social networking. General Motors' recent problems with the ignition switches of several of its vehicles has created a public relations problem. GM's response has utilized social media on at least three fronts. First, a video--supposedly a speech to GM employees--is available in the public domain. Second--the Facebook page of GM is responding to customer issues--maybe not always successfully: image from www.nytimes.com Third, GM is at least listening in to Twitter complaints...and responding. One Alaskan mother, Lauren Munhoven, tweeted a complaint. GM listened and helped her with her Saturn Ion by paying the ferry cost to get her car fixed, and getting her a rental car. Munhoven posted her thanks on Twitter. GM is also using old school methods of snail-mail notices of recalls, and call centers to help with customer problems. I found it quite compelling that part of the message was that the cars were safe to drive IF there were no other items attached to the keys--like no key ring. These apparently could be bumped or could weight the ignition switch in a way that the problems ensued. The mixed message--that there is an ignition problem but that the customer might be partly to blame because they use a key ring--might not be the best message to be putting out to the public. In this modern age of social media, customers who are outraged can "flame" GM's service--that is, negatively report their experience to as many others as might be tantalized by the customer message. It remains to be seen how this plays out in GM sales. By the way, there is another Facebook page called GM Recall Survivors . From what I've read on it, it seems more to be about those who have not survived. Source: " G.M. Uses Social Media to Manage Customers and Its Reputation ," by Vindu Goel, New York Times , March 23, 2013. Follow up: What effect would a text message from GM Customer Care have on your confidence level if you were a Cobalt owner? Evaluate Mary Barra's video as a communication vehicle to GM employees, and as as public relations piece "spinning" the defective part debacle.
  • Walmart's tax subsidies hurt taxpayers

    When a corporation publishes its annual financial report, they include income statements, balance sheets, statements of cash flow, other financial statement data, and footnotes to the financial statements. The footnotes are part of what used to be called "full disclosure," but is now referred to as "adequate disclosure." Wal-Mart's annual report for 2013 was forced to disclose factors beyond their control that could "materially affect financial performance." These included, " changes in the amount of payment made under the Supplemental Nutrition Assistance Plan (SNAP) and other public assistance plans (and) changes in the eligibility requirements of public assistance plans ." In other words, if public assistance plans to its employees were to be eliminated, Wal-Mart would either lose those employees, or have to pay them more to be able to afford food and housing without government assistance. This would decrease Wal-Mart profits. In other words, the American taxpayer is subsidizing Wal-Mart stockholders. "SNAP" is known in casual language as "food stamps," and the program has recently been reduced by Congress. $90 per month per family was cut in January...and $29 per month had already been cut in November 2013. Not only are many Wal-Mart employees subsidized by food stamp programs, many Wal-Mart shoppers get food stamps, so this cut in food stamps could mean a cut in revenue from this population. It is interesting to note that these cuts are so large that they might "materially" affect net revenues for Wal-Mart. How much has the American taxpayer been subsidizing Wal-Mart? / Source: " How Walmart Exploits Taxpayers ," by Michael Hiltzik, Los Angeles Times , March 26, 2014. Follow up: Research what income levels make an individual, and a family of four, eligible for food stamps.
  • How to Sell a Box of Frozen Seafood

    from article linked below, by Primary Hughes This is one person's story of his first job in Sales. The product? Boxes of seafood and steaks. The territory? Cold-call door-to-door sales in the San Francisco Bay area. The interview and training? Ride around with another salesperson in their truck until you had 6 sales in one day--then you get your own truck and got to work purely on commission. Here is a brief account of the young salesperson's experience: His first "trainer" was "high on confidence" even though he did not look the part of a successful salesman. He got to witness some failed attempts by his trainer; he had some failed attempts on his own. He witnessed his trainer's success when the trainer was smiling, relaxed and assertive. The trainer had sold everything in his truck, but the new salesperson had sold nothing. The trainer said, "You're a real college boy." Trainer #2 was charming, British, and got traction with customers by lying. The new salesperson managed to get qualified for his own truck with this trainer. Things went well for a few weeks, but in the subsequent weeks: 1)$250 of merchandise (taken home over the weekend) spoiled ; 2) The British salesperson sold the new salesperson a list of "sure things" for $300; and 3) the new salesperson brought home some shrimp and started an electrical fire in his landlady's kitchen when frying it. The new salesperson quit...turned in the truck and was $300 short of enough money to pay for the damage for the fire. He hit up his father for the damage. The young salesperson met up with Trainer #1 after he quit, and took a "big picture" view: Trainer #1 was having a good time...but the young salesperson had been dreading to go to work. What does this all mean? My guess is that "cold call" Sales are tough to finalize. Still--cold-call sales are where-it's-at in terms of drumming up new business, one of the keys to success. Would you have the grit to do this job? Source: " A Man, a Truck and a Load of Stuffed Shrimp ," by Matthew Sharpe, New York Times , March 15, 2013. Follow up: What did "high on confidence" really mean in terms of the sales day? How did this work out? What was the most successful technique? What do you think the "takeaway" is from this tale, regarding the Sales profession? Does the price of these goods compared to the price that could be obtained in a storefront impact your opinion? Comment on the story-form delivery system of this tale vis a vis a talk about Sales that might typically be held at a Sales convention. What does "cold call" mean?
  • "How to Rob A Bank" sung by Willy Porter

    [View:http://community.cengage.com/GECResource/themes /gew/utility/ :550:0] I was at a concert this past weekend at my local guitar shop. What a surprise it was to hear this song about the benefits of white collar crime over the "driver, a Nixon mask and a gun" version of bank robbery. Some of the song's narrator's suggestions for success: Secure a seat on the Board of Directors Run with the country club set Get a foundation to donate to his schemes Get Congress to subsidize any failing business Blackmail government by threatening layoffs Unchecked greed The benefits: Respect from family, who love receiving gifts Bonuses even when you've been accused of wrongdoing Lawyers to bail you out of trouble Of course the song is done for humor, but there is certainly truth in the message that "white collar crime" often does pay. Source: "How To Rob A Bank" by Willy Porter, YouTube, and live at McCabe's, March 8, 2013. Follow up: What is "white collar crime"? What recent legislation has tried to increase penalties for financial crimes? How successful has it been? What has been the response of the business community to this legislation?
  • Whistleblower gets shafted by agency shift

    from Chris Slane's cartoon portfolio In 2010, the Dodd-Frank law created 10% to 30% rewards for whistleblowers who filed complaints with the Securities and Exchange Commission (SEC). Under this law, a former mortgage underwriter filed a complaint against SunTrust, alleging that SunTrust did not disclose that "tens of billions" worth of loans sold to Fannie Mae and Freddie Mac "had fallen outside of the buyers’ quality guidelines." The complaint was filed in 2012, and the SEC did not take direct action on it. Instead, it passed the complaint on to the Justice Department. Under Dodd-Frank, the whistleblower can't collect if the complaint is not resolved within the SEC. Congress probably did not anticipate this loophole when they passed the law. The attorney for the whistleblower is arguing that the Justice Department action is based on the evidence in the original complaint filed with the SEC, but it remains to be seen whether the substance of the whistleblower's actions will be rewarded at all. The intent of the Dodd-Frank legislation was to uncover and prevent events that led up to the financial collapse triggered by over-valued mortgage instruments in 2008, and it seems as though the government got the benefit of the inside knowledge, but has proceeded in a way that will probably side-step the anticipated compensation. Source: " A Whistle That's Lost in the Crowd " by Gretchen Morgenson, New York Times, March 8, 2014. Follow up: Have you ever been in a situation where you witnessed wrongdoing by those who ranked above you at work? Describe the situation and the courses of action you considered. What are the risks associated with being a whistleblower? Are there any rewards other than monetary rewards? Would you bring a complaint to the SEC, knowing what happened in this case? Should Congress take action to amend the law?
  • GM auto defects ignored for years; deaths mounted

    Kelly Ruddy's Chevy Cobalt from the NYT article linked below Here is the problem with several low-to-mid-priced General Motors (GM) cars: suddenly--even at freeway speeds--the car stalls out, totally losing power to the engine, steering, power-assisted brakes, and air bags. When did GM first become aware of these problems? Since 2003 an average of two complaints per month have been filed with the National Highway Traffic Safety Agency (NHTSA) about these random "shut-downs." Who knows how many complaints were lodged with GM, but didn't make it as far as the NHTSA? What was done? Even when former Congressman Barney Frank intervened on consumers' behalf in 2010, the NHSA responded: “ At this time, there is insufficient evidence to warrant opening a safety defect investigation .” By this time, there had been at least 78 deaths and over 1500 injuries due to the sudden ignition failure problem. The NYT analysis shows that the NHTSA as well as General Motors seemed to ignore data relating to this problem. The vehicle recall now in place involves 1.6 million vehicles. Source: " Auto Regulators Dismissed defect tied to 13 Deaths " by Hilary Stout, Danielle Ivory and Matthew L Wald, New York Times, March 8, 2014. Follow up: With whom does the responsibility for car defects lie? The manufacturer? Government regulators? The consumer who buys the less-than-top-of-the-line car? Who should "pay" for damages and why? Do you think that government regulation takes the responsibility off the shoulders of the manufacturer? When a manufacturer becomes aware of a defect, what communication, financial, production, and legal procedures should kick into place? Are the issues only "civil" or are they possibly "criminal"?
  • Picture this (in one photo): your own small business

    Perma-Link to slideshow at NYT.com Capturing the soul of a small business in one photo The Small Business blog arm of the New York Times , "You're The Boss," asked readers a while back to submit photos of their small businesses. These photos were to capture something meaningful and over-reaching about the essence of their business, or the rewards or heart-aches involved in building the business. The short slideshow linked on this page illustrates five central images from five different businesses: Pumbaa, a "very lucky pig" from the WhyNotFarm business in Snow Creek, North Carolina Digging out from a snowstorm at Perrault Spring and Equipment (fifth generation family business in Connecticut) Dozens of boxes in a warehouse waiting to be shipped during the high season at Lowrider Sunglasses in Exeter, CA Dedicated--and multi-tasking--service people at DC Home Buzz, a real estate brokerage A blank wall at Ugallery.com an online art gallery in San Francisco. Maybe these photos can inspire you to take a photo with a similar "core" feeling about whatever it is that is of primary importance in your life right now. Maybe it is a business or a new job. Or your accounting class.... Source: " Capturing the Soul of A Business in a Single Photograph " by You're The Boss Editors, New York Times, March 13, 2013. Follow up: Really: What does capture most of your attention right now? Can you boil it down to its essence--a single photograph? Pick five to ten photos and mull them over for a few days, then post (in whatever medium you see fit) the photo that really captures the essence your "life's work" at this point in time. Which of the images in the slideshow speaks to you the most--both in terms of communicating the essence of a business, or inspiring you to want to know more about (or have dealings with) that business)?
  • The Samsung Selfie

    [View:http://community.cengage.com/GECResource/themes/gew /utility/ :550:0] video of original selfie from YouTube One of Oscar host Ellen DeGeneres' trademarks is her ability to make everything look casual, impromptu, and unplanned--as though the next event was just an outgrowth of her natural curiosity. But it seems as though the "impromptu" selfie that was taken at the March 2nd Academy Awards was planned...and the smartphone that Ellen handed to Bradley Cooper (which he used to take the photo) was no accident. According to the Wall Street Journal , and as reported in US Weekly , "As part of its sponsorship and ad pact for the Oscars with ABC, the TV network airing the show, Samsung and its media buying firm Starcom MediaVest negotiated to have its Galaxy smartphone integrated into the show." Samsung also arranged for a group of young film makers who were touring Disney as part of the Oscar broadcast to have Samsung phones. In addition, Samsung trained Ellen in how to use the phone prior to the broadcast. Samsung had placed at least $18 million of ads in this year's telecast. image from phandroid.com Sources: " Ellen DeGeneres' Oscar Selfie Part of Samsung Phone Product Placement: Report ," by Rachel Mcrady, US Magazine Weekly , March 7, 2014. Follow us: @usweekly on Twitter | usweekly on Facebook " Behind the Pre-planned Oscar Selfie: Samsung's Ad Strategy; Marketer Spent Nearly $20 Million on Ad Time and Got Product Placement of Galaxy Phone ," by Samantha Vranica, Wall Street Journal , March 3, 2014. Follow up: Did you watch the Oscar broadcast? Were you aware of the Samsung Galaxy Note during the broadcast? What effect has the subsequent social media reaction and press had on your awareness of this product?
  • Bank Fraud and Seniors

    image from www.exploitationelderly.com A study done by the Pew Research Center and evaluated by Go Banking Rates has determined that senior citizens are not getting the discounts available to others or advertised as being available for them. In addition, they are being exploited in other ways by banks, primarily through excessive fees or unneeded services. For example, a $25 account maintenance fee was established at one bank for accounts with balances under $1500. For seniors, however, a balance of $5,000 had to be maintained to avoid this fee. I recently had a questionable experience with a bank I will call "Seaside Bank" in Florida. In the course of their dealings with my step-parents (who are ailing and aged 83 and 94), the bank told my parents "someone" had been writing improper checks out of their account, pressured my parents to fire their attorney of more than 20 years, and attempted to have my parents assign check-writing authority to the bank's designee, which was going to cost "a pretty penny" according to my stepfather. But when clear action was taken in defense of these seniors, the bank was quick to back down. This perhaps provides a cautionary tale to those who might be laissez-faire regarding oversight of bank transactions. Source: " Study: More than One Fifth of Banks Ripping off Senior Citizens " by PR Web, PRWeB.com, October 3, 2012. Follow up: Have you ever had a situation where the bank made an error which you found and brought to their attention? How were things resolved? If there was an explanation provided for how the situation arose, what was it? What other demographic group do you think may be targeted by banks for exploitation? Why? How can this be overcome?
  • Blackfish: whistleblowing ethics and animal welfare

    image from www.examiner.com What do the bands Heart, Willie Nelson, and Barenaked Ladies have in common? It seems that all of them have dropped out of commitments to play at SeaWorld due to the " Blackfish " scandal. Animal welfare is a hot-button topic that can polarize fans and radically influence events. If you aren't up on this particular scandal, here are the particulars: "Blackfish" is a documentary, directed by Gabriela Cowperthwaite , that is critical of the treatment of whales in captivity. It is currently available on Netflix . Controversy surrounding the leaking of documents relating to the 2010 fatal attack by a killer whale named Tilikum on Dawn Brancheau, a SeaWorld trainer, is a major part of the current issue. SeaWorld has pursued an aggressive campaign to deny harm to killer whales in captivity and to block certain OSHA officers from oversight of their facilities while the whole issue is under review. According to the NYT article, " Whether the film and a subsequent debate about the propriety of orca captivity have taken a toll on SeaWorld’s business — a publicly traded company with a stock market value of more than $3 billion — remains an open question ." Whether relevant or not..."Blackfish"--once considered a contender for the 2013 Best Documentary Oscar--was not nominated. It seems that SeaWorld's pushback against what may or may not have been unfair ethical complaints has had some influence in at least the small community of Academy voters. It remains to be seen what effects accusations--true or untrue--may have on the SeaWorld business model for years to come. Source: " Seaworld Questions Ethics of Blackfish Investigator ," by Michael Cieply, New York Times, February 28, 2014. Follow up: What effect do animal rights issues have on you and your business decisions? Do you eat meat? Wear fur? Wear leather shoes or belts? How do these issues affect your peer group? Are there any broader issues that influence your decisions? What are your thoughts about misplaced indignation and the effects it can have on legitimate business operations? What should the penalties, if any, be for this type of breach? What should the standards of proof or business harm be for damages? Have you seen "Blackfish"? What are your thoughts?
  • "Old Economy Steve" meme-- Millenials comment on parental advantages

    This meme started with a picture of a young adult, circa 1970. Economic conditions, business environment, and opportunities were pretty different in the 1970's (although I do remember a pretty profound recession and extreme competition for jobs and grad schools when I graduated from college in 1975...of course, that was a peak baby boomer year). Although it is not "hot" right now, the meme had its "15 minutes of fame" on Reddit . So--what is the "New Normal" in terms of skills and life-style opportunities for young adults today? In my own family, it doesn't look as though there is a "normal" set of expectations--everyone seems to be carving out their own lives, in ways that work for them. The big difference that I see in general is the disparity between the very rich and the majority of Americans. The "middle class" lifestyle seems to be more difficult to obtain, and there seems to be less of an interest in sharing the wealth by progressive taxation. How are economic conditions affecting you? Source: " Old Economy Steve: a Meme for Frustrated Millenials ,"by Daryl Paranada, Marketplace, American Public Media, May 28, 2013. Follow up: Search the internet Images of the Old Economy Steve meme. Find one that speaks to you. What about the economic inequity can you change, or work with others to change? Would it be worth it? Explain. What about the meme you picked is totally out of everyone's control? Are there any advantages for people in their 20's in today's economy...compared with conditions in the early 1970's? What are they?
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