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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.


  • Managing Up vs. Managing Down: two different skill sets

    Kim Bowers of CST Brands: image from the New York Times article linked below Kim Bowers is the CEO of CST Brands , a large "corner store" retailer (they are a spin-off from the gas station company Valero ). She was recently featured in the NYT "Corner Office " article area, focusing on her views about management and human resources. Ms. Bowers indicated that over time, she has become "less tolerant of bad attitudes," and is quicker to sense when investing in an employee would be a waste of time and resources. She also has strong views about "managing up" (knowing how to communicate effectively with your boss) versus "managing down" (leading or inspiring the employees who report to you). Kim Bowers says: " I put people into two different categories: people who manage up really well and people who manage down really well, and I love the latter. If I find someone whose team would walk across hot coals for them, that’s the person I want to work with because I know there is authenticity there, and they are supporting their teams and vice versa. It’s the folks who manage up really well but have this underlying storm all the time who concern me because you don’t know if they’re just trying to charm to cover up. " Both skills need to be developed for an employee to be able to adapt to different types of leadership. Here are some guidelines from a different source: graphic from sochal.wordpress.com Ms. Bowers also has some advice for college students: " Make sure not to set your expectations too low for what you can do, and recognize that at every twist and turn you’re going to have opportunities to expand your horizons, and you should take those. You shouldn’t be looking just to climb the ladder, but be open to opportunities that let you climb that ladder ." Sources: " Kim Bowers of CST Brands on Managing Up vs. Managing Down ," by Kim Bowers, the New York Times, April 5, 2014. F ollow up: What was Kim Bowers' "CIA story"? Has fate ever intervened for you in a big decision? Do you think Ms. Bowers' early management experience shaped the views she holds today? Do you think her family position (birth order) influenced how she manages? Give examples. Do you do better at Managing Up or Managing Down? Why? What is hardest for you in the area where you are weaker?
  • SAT scores wanted by employers in hiring process

    chart published in the Wall Street Journal Did you think that once you got into the college of your choice that you could forget about your SAT scores? As it turns out, they might follow you from job search to job search. What employers are looking at these scores? McKinsey & Company , Bain & Company , Goldman Sachs . Even though performance on ACHIEVEMENT tests rather than APTITUDE tests (like the SAT) is a better predictor of success, the differences aren't enough to make employers develop their own tests. It is easier for employers getting thousands of applications to use the usually-available SAT test score to weed out candidates from these large applicant pools. And according to the NYT article, the SAT " measures what psychologists call 'g,' or general mental ability — how well a person might respond to an unspecified challenge. In this age of rapidly changing technology and constantly upgraded skills, 'g' may be a better predictor of success than expertise in a specific software package . " Sources: " How Businesses Use Your SATs ," by Shaila Dewan, the New York Times , March 29, 2014. F ollow up: What do you think about the pros and cons of using SAT scores to weed out candidates for employment? What did the article say were reasons that some employers do NOT use SAT scores in their hiring decisions?
  • Too late for Obamacare?

    image from healthcare.gov website Many individuals who have not been lucky enough to have parent-sponsored or employer-sponsored health care--as well as uninsured individuals--procrastinated when it came to signing up for insurance under the Affordable Care Act (Obamacare). Some of the hesitation was due to the technology failures, but some of it was due to a mis-perception about where one might land in the pie-chart below. The big fear, of course, is that one would be unable to get a good deal on new insurance, and would fall into the 3% "potential losers" category. In any event, the "deadline" for enrollment was March 31, 2014. But there might be ways for those who did not manage to obtain coverage to still be enrolled, according to an Associated Press article. image from offeringhope.org Here are some possibilities to obtain a second chance to sign up, or avoid a fine for being uninsured: TAKE ADVANTAGE OF THE GRACE PERIOD : If you started to enroll by March 31, but couldn't finish, have until April 15th to complete an online application or until April 7th to turn in a paper application. USE A SPECIAL ENROLLMENT PERIOD : Special 60-day enrollment periods are being considered by the federal call center (800) 318-2596 and by the state marketplaces. Some of the special extension are being granted for emergency hardships, for example: bad weather, domestic abuse, illness, errors by advisors and insurance companies. These special enrollment periods also open up throughout the year for life events (job changes, marriage, divorce, parenthood). SIGN UP FOR MEDICAID : There is no deadline for those eligible for Medicaid to sign up--and now Medicaid is open to adults making less than $16,100 per year, as well as families with children. BUY INSURANCE OUTSIDE THE GOVERNMENT MARKETPLACES : Even if you can't get the government subsidies this year, you can still buy insurance privately. Obamacare means you can't be refused for pre-existing conditions, so it will be more "worth it" than it was before. PLAN AHEAD FOR THE NEXT ENROLLMENT PERIOD : It starts November 15, 2014 and it runs for 3 months. Do your research early! Sources: " Putting Rate Shock Into Perspective ," by Joan McCarter, The Daily Kos , October 31, 2013. " It's STILL not too late to sign up for Obamacare ," by The Associated Press via blackamericaweb.com , April 1, 2014. Follow up: What is one of the hurdles that people wanting to take advance of the grace period or special enrollment periods have to jump through? Will proof be required, or is it on the "honor system"? Explain the pros and cons of this. In an ideal world, how would health insurance be handled? Do some research and provide support for your answer.
  • 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?
  • 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.
  • Unpaid Internships cartoon: Not Funny

    part of a graphic story by Matt Bors, published by Upworthy Here is another story about unpaid internships. It seems as though unpaid internships have gotten out of hand. In 1992, 17% of post-college positions were unpaid; now it is 50%. Many interns do work that for-profit businesses usually need to pay people to do. They are profiting from unpaid labor. The argument made by corporations (and sometimes college counselors) is that an unpaid internship can lead to a job. But, check out these statistics: worked an unpaid internship....and got a job: 37% did NO internship....and got a job: 35% worked a PAID internship...and got a job: 63% So, it looks as though the employers willing to pay are more willing to employ. An organization now working to end unpaid internships is FairPay Campaign . Source: " Half Of Interns Are Victims Of This Illegal Act After College. It's Really Not OK .," by Matt Bors, edited by Joseph Lamour, Upworthy , posted on Facebook , March, 2014. Follow up: What is the elephant in the room regarding economic class and unpaid internships? What are the far-reaching consequences of the increase in unpaid internships related to this issue?
  • Toyota criminal penalties: Are fines a real punishment? Why isn't Toyota in jail?

    image (of a Prius that had accelerated to 90 mph on a mountain road) from the Colorado State Patrol, published in the Los Angeles Times Toyota recently entered into an agreement to pay a multi-billion dollar settlement as a result of a known problem that caused deaths. The documented problem was that of sudden, unexplained acceleration. Last week, Toyota settled a criminal case brought against it by the Justice Department. Various lawsuits remain, but costs to this point include: $1.6 billion settlement of civil claims in a class-action lawsuit on this issue a $1.2 billion payment to the Justice Department, a criminal penalty, relating to wire fraud issues National Highway Traffic Safety Administration fine, which is capped by law at $35 million an agreement that Toyota will not be allowed to deduct its criminal penalty on its tax returns, which means that the American taxpayer will not lose out because of this settlement Part of the Justice Department agreement also stated that no individual executives will be prosecuted for these injuries and deaths related to the sudden acceleration problem. “The rules of evidence sometimes do not allow you to use certain kinds of evidence and certain documents against individuals, although they might be admissible against the company itself. Although there is an admission that they were individuals who engaged in conduct which provides for a basis to bring a case against the company, they are not charged here,” explained Preet Bharara, the U.S. attorney for the southern district of New York. Toyota can afford these penalties, as its current year profits total about $19 billion. If an individual person had committed these crimes, it is unlikely that they would get off without any jail time. Here are some mandatory minimum sentencing guidelines for individuals: Mandatory sentencing guidelines, Federal, from Wikipedia But Toyota is still allowed to operate. Toyota's stockholders continue to make money. According to the doctrine of " Corporate Personhood ," corporations have many of the rights as individuals. But if a corporation has the benefits of a person, should it also not be subject to the same criminal penalties? Source: "T oyota sudden-acceleration suit is ratified ," by Tina Susman and David Hirsch, The Los Angeles Times , March 20, 2014. " Toyota admits deceiving consumers; $1.2-billion penalty is record, " by Jerry Hirsch, The Los Angeles , Times, March 19, 2014. Follow up: What do you think? Is manufacturing a car when you know a defective part will cause deaths a punishable crime? Is it better to charge money penalties or to give the corporation the same penalty a "person" would receive: inability to work for a time period. What are the pros and cons of shutting down a corporation the same way an individual would have his or her business life shut down by incarceration? Should individual executives be prosecuted? Discuss the pros and cons. Comment on the agreement that Toyota cannot deduct its penalties from its taxes. Can individuals deduct fines such as parking tickets on their tax returns? Discuss the reasons for tax deductions and how criminal penalties fit into that logic.
  • 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?
  • Jobs added in February: what does it mean?

    [View:http://community.cengage.com/GECResource/themes/ gew/utility/ :550:0] Link to video from Bloomberg , via LA Times. How can the number of jobs increase by 175,000 in the last month...at the same time the unemployment rate ALSO goes up by .1%? And is this news good or bad? Part of analyzing labor reports is looking at what had been predicted...so since 150,000 new jobs had been predicted by economists, the increase of 25,000 more than had been predicted is a positive outcome. 162,000 of the new jobs were private sector jobs and 13,000 of the new jobs were government jobs. The unemployment rate was expected to stay flat at 6.6%, but it did increase to 6.7%. Is this because more people than were expected to look for work were entering the job market? Is it because the bad weather decreased job opportunities or eliminated some part time jobs? The Labor Report is filled with statistics, but not many answers. Other factors measured include: The percentage of people in the workforce The length of the average workweek in hours Average hourly earnings (which were at $24.31/hr in February) Source: " Economy adds 175,000 jobs in February; unemployment rate up to 6.7% " by Jim Puzzangherra, Los Angeles Times , March 7, 2014. Follow up: How much has the bad weather affected the employment rates, according to the video? What employment sector LOST jobs in February? How would you explain this loss?
  • Substance vs. form: who you are versus how you look

    image from www.bubblews.com Which is more important: Who you ARE? or How you LOOK? What you CAN do? or What other people THINK you can do? Whether personal gain influences the decisions you make for others? or Whether it looks as though you could benefit financially from the decisions you make for others? In the current social environment of Twitter and Instagram--where one picture or fewer than 140 characters can communicate information in isolation--without context or the opportunity for rebuttal or additional information, it seems as though "form" may have the upper hand. One bad review on Yelp can unfairly effect the reputation and revenue stream of a restaurant. When it comes to making life choices--about where to live, what to own, who to hang out with, and where to work--form and substance can guide your decision-making process in very different ways. Choices based on how things look to others might bring you a different kind of security of satisfaction than choices based on how you feel and what is important to you--regardless of the opinions of others. According to Peter Vadja , " Substance is the inner you. Substance is your true, authentic self. It's the 'you' who shows up with the conscious intention of doing and being the very best you can be in every area of your life... Substance focuses on truth-telling, not elaborate stories, rationalizations and excuses for avoiding the truth. Substance focuses on integrity, not tap-dancing around honesty, sincerity and self-responsibility. Substance focuses on conscious self-management, not on controlling others ." Peter Vadja is the author of " Becoming a Better You: Who You Are vs. Who You Think You Are ." The issue of substance vs. form also arises in accounting and auditing relationships and in determining whether certain investments are properly held when political figures are part of decisions that affect the profit margins of companies in which investments may be held. Source: " Substance vs. Form, " by Peter Vadja, Management Issues.com, October 21, 2013. Follow up: Pick an arena (for example--choosing a person to "date"--but don't pick this one, pick your own). What factors influence your choice of who to "date" in substance? What factors influence your choice in form? (That is, how does the person look to you and to others.) How do you decide which to value? How do issues of form and substance affect hiring decisions? What about discrimination issue, in various Human Resources decisions? How do issues of form and substance affect performance reviews and management decisions?
  • "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?
  • Corporations push 401(k) benefit toward a slippery slope

    image from Vanguard The slippery slope of pension benefit "norms"...here we go again. Forty, thirty, twenty--even ten years ago in many industries, the standard for pension benefits was a "Defined Benefit" plan. Corporations would set up plans to fund retirement benefits that were usually based on a formula valuing time-on-the-job and salary. For example, a typical benefit might be 2% of final salary x the number of years employed. Someone who had worked at one company for 30 years, and who retired with a salary of $100,000 would get 100,000 x 2% x 30 or $60,000 per year as a defined benefit pension. Now the standard has moved to the "Defined Contribution" plan, exemplified by the 401(k). In a typical scenario with a 401(k), the employee contributes a a pre-determined "defined" amount out of each paycheck and the employer matches that amount, or a percentage of that amount. The contributions are invested until the employee retires, and the benefit received in retirement is dependent on the success of the investments over time. (No guarantee.) But with all pension plans, a key factor is "the time value of money." Most employers contribute their portion at the same time the employee contributes: at each payday: However, lately, big employers have been shifting their policy to a "lump-sum" contribution. AOL was making this this shift during its recent privacy kerfuffle. As you can see from the graph above, waiting till the end of the year to make the payments means that the company has the use of the money for longer...and employees lose out on investment earnings. In addition, if employees change jobs mid-year, they lose the employer side of the contribution entirely--again saving the employer money. Employee compensation is a combination of salary, paid time off, reimbursed expenses, health benefits, retirement benefits, and other factors. Although it may be easiest to focus only on salary, all factors must be evaluated over the long term to really know what an individual employee is being paid. Sources: " Beware the End-of-Year 401(k) Match ," by Ron Lieber, New York Times, February 14, 2014. " Making Retirements Less Secure ," by the NYT Editorial Board, New York Times, February 14, 2014 Follow up: Read the article. What is the lifetime differential mentioned in the Vanguard analysis presented therein, based on typical job-changing events that would be likely to occur over an individual's working life? If you were looking for a job, what type of pension benefit would you look for? Would this be a major or minor factor in your job decision, assuming you had multiple offers? How might your decision change if you were in your 40's or 50's?
  • We hear another apology coming: Business swag for women in computer science

    1. What did Goldman Sachs decide to put in its "swag" bags when it sponsored a WEcode event for women in computer science at Harvard last week? a. a read/write CD? b. a 32-gigabyte thumb-drive keychain? c. a copy of Multivariate Analysis in Management, Engineering and the Sciences ? d. 1 share of Netflix stock? e. a nail file and a cosmetic mirror? Answer: image from the Marketplace website. 2. Were the nail files and cosmetic mirrors: a. Classy? b. A great idea? c. Out of touch? d. Just plain sexist? e. Just another opportunity for a corporate apology? Maybe Goldman Sachs should have taken a hint from Google : Source: " In Which Goldman Sachs Screws Up ," by Kai Ryssdal, Marketplace, American Public Media, February 12, 2014. " Goldman Handed Out Cosmetic Mirrors and Nail Files at Women's Coding Event, " by William Alden, New York Times Dealbook, February 11, 2014. Follow up: What is "swag"? From where did the term originate? What do you think of this addition to the swag bag? If you are male, have you ever received a grooming item as part of a corporate gift at a technical conference? Just sayin'.
  • A social network just for college students...sound familiar?

    image of Evan Rosenbaum, Akash Nigam and Matt Geige of Blend. It's " deja vu all over again." Blend is a social networking site that is for college students only. This might sound familiar because that is how Facebook started, on Harvard's campus. I remember my students telling me...back in 2006...that they could "get me onto Facebook" because I had an email address that ended in .edu, but that most "grown-ups" were excluded. Now the demographics of Facebook have shifted. According to iStrategyBlabs , 3 million young people (under 25) have left Facebook within the last three years...while the number of users over 55 years old have increased by 80%. Does this sound like a "party" you'd like to be at as a college student? Here is how Blend works: A theme is posted each day, such as "Tailgate Saturday, Library Shenanigans or My Pet Is Better Than Yours." Users post photos relevant to the themes. Other users can "snap" the photos they "like." Photo-posters can earn points based on the number of snaps received to be redeemed as gift cards for Blend advertisers. Ads are inserted between every six photos. Blend has set up 4 seasonal campaigns a benchmarks for advertisers. Student "influencers" approve potential advertisers, and act as their representatives on each campus. Observers have tracked steady growth for Blend. Where will it be 3 years from now? Source: " A Social Network That’s Just for College Students ," by Eileen Zimmerman, the New York Times--You're the Boss, February 6, 2014. Follow up: How much do you use Facebook? How about other social networking sites? Make a pie chart showing the relative amounts of time you spend on various sites. What is your reaction to Blend ? What do you think of its motto: "Share, snap, score"? Evaluate its business and monetization strategies. What are some indicators of Blend's future success or failure? To whom is the phrase "it's deja vu all over again" attributed, and why is it funny?
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