• Zero-sum budgeting

    The basic idea of a zero-sum budget is this: The total amount of expenses possible is known and capped. Spending cannot go over this cap, so if one expense goes up, another has to go down. It is a great tool for cost-containment at the business and personal level. It can be particularly useful for those whose income fluctuates from month to month.

    Here is basically how it works:

    • take your net income from last month as your starting point
    • prepare a budget where the expenses total that income
    • one of the first "expenses" you can put aside is your savings
    • of course you have to plan for your monthly costs of rent, insurances, utilities, and basic nutritional and personal expenses
    • your discretionary dollars are easy to pin-point because those are the dollars that haven't been identified

    Why this works:

    • you are dealing with numbers that you know, not a projection of your hopes about how much money you will have coming in
    • you can think about your business and personal goals, rather than worrying about the cash flow: you have budgeted for the cash you HAVE
    • you can see the money you have to spend, and you can make realistic savings goals
    • you are ahead of the game, instead of behind

    The drawback not mentioned in the article? For this to work, you really have to start with the sum of cash that equals your expenses for a month on this plan. It might take a few months of saving--or a directed use of a tax refund--to have a good starting point. But according to those who have tried it, it works.

    Source: "How and why to use a zero-sum-budget," by Holly Johnson, The Simple Dollar, November 2, 2014, and in Club Thrifty on January 29, 2015.

    Follow up

    • Use the zero-sum budget system for two months and document your results.
    • Research how businesses use zero-sum budgeting, and describe their pro and cons for the business and for managers.
  • Yahoo "Spinco"s Alibaba shares worth $39.5 billion

    Just when everyone had almost forgotten about Yahoo, they make headlines...and stand to make a lot of money.

    Here is the chain of events:

    • In 2005, Yahoo bought 1.046 billion shares of Alibaba for $1 billion--just over $1 per share.
    • In September 2012, Yahoo sold 523 million of those shares back to Alibaba for $13 per share. This would sound like a fabulous business deal, except what happened two years later.
    • In September, 2014, Alibaba had a successful IPO on the NYSE [trading name: BABA]. Stock price: $68 per share, which immediately rose to over $93 per share.
    • At the time of the IPO, Yahoo sold over 120 million of its Alibaba shares for over $57 per share, leaving it with 401 million shares, a 15.4% stake
    • This week Yahoo's CEO, Marissa Mayer, said Yahoo would sell off its stake, worth $39.5 billion, by creating a new company called "SpinCo." They would then sell these shares.

    This is a strange kind of business formation--what does it mean in substance? Matt Levine of Bloomberg View is quoted in the article linked below:

    Spinco is an utterly pointless beast. It is a one-stock mutual fund. Wouldn’t you rather have the stock? Yes, you would rather have the stock. Alibaba, similarly, would rather get rid of Spinco ‒ a weird alternative vehicle confusing its investors and fragmenting its liquidity ‒ especially if it can do so at a discount. So everyone will be better off when Alibaba buys Spinco. So you’d expect that to happen, as soon as it can.”

    Source: "Yahoo’s Alibaba Split," by Sydney Ember, Morning Agenda in the New York Times, January 28, 2015.

    Follow up:

    • Why did Yahoo decide to sell its Alibaba stake now?
    • How does this change Yahoo? What should they plan to do next?
  • Less inebriating ways to socialize without losing your business demeanor



    From advertisement via palmersmarket.wordpress.com

    Too much alcohol can be a problem for many--particularly in business situations. Some new products have arrived to fill this market niche: lower-alcohol and healthier versions of alcoholic drinks. Some of these include:

    Morningstar's director of consumer equity research, Adam Fleck, has said that the low-alcohol beverage market a growth segment.


    Image from Katherinesacks.com

    More importantly for business students, maybe, is the possibility of moderation.  Kombrewcha's motto, "Get tickled, not pickled," might appeal to a young businessperson who wishes to maintain control of his or her faculties at a business event, a work lunch, or with potential clients. Barry J. Nalebuff (of Kombrewcha, Honest Tea, and the Yale School of Management) agrees:

    It’s a problem: You’d like something to drink but you don’t want to get inebriated. What could you enjoy, be a part of the party with, but still be able to function afterward, be able to work out or do emails? It’s an alcoholic beverage you don’t have to feel guilty about.”

    Something to consider...

    Source: "From Gluten-Free Beer to Kombucha, Alcohol Options for Health-Conscious Drinkers" by Rebecca R. Ruiz, the New York Times, January 20, 2015.

    Follow up:

    • Have you ever sent an email you've regretted when you were "under the influence"? Has alcohol affected your business or school performance in any other way? Missed a class or missed work? Said something you wish you hadn't? Made a minor fool of yourself? Describe the situation, your feelings about it in retrospect, and any consequences.
    • Which of the products mentioned in this article seems as though it will be successful? Comment on the lack of success for Tequiza or Stampede Light Plus as part of your answer.
    • Cultural literacy in business question: What does Morningstar do?

  • Graduates not ready for jobs, employers say

    A 2014 study done by Hart Research for the Association of American Colleges & Universities surveyed 400 employers and 613 college students. The findings boiled down to this:

    "Employers say that when hiring, they place the greatest value on demonstrated proficiency in skills and knowledge that cut across all majors. The learning outcomes they rate the most important include:

    • written and oral communication skills
    • teamwork skills
    • ethical decision-making
    • critical thinking
    • the ability to apply knowledge in real-world settings."

    But, unfortunately, "...employers feel that today's college graduates are not particularly well prepared to achieve the learning outcomes that they view as important."

    As delineated in the chart above, students view their skill-sets more positively, which possibly could lead to some dissonance in the workplace.

    Sources: " Quiz: Not as ready as they think they are" by Dan Hill, Marketplace-American Public Media, January 22, 2015.

    "Falling Short? College Learning and Career Success," Hart Research Associates, for the Association of American Colleges & Universities, January 20, 2015.

    Follow up:

    • According to the article, which is more important to employers: gaining cross-cutting skills and knowledge or field-specific skills and knowledge? Give examples from your own education of which courses promoted each skill set.
    • What courses or experiences would you add to your educational resume to help enhance the skills that employers deem more valuable?
    • How might your approach to an individual class might change, given the results of this survey?
  • Twitter and Marketing efficiency

    Twitter has not only provided the business world with a new advertising platform, it has developed a matrix to help businesses target their customers and get better value for their advertising dollar.

    First, businesses can set an objective, which can be:

    • Followers
    • Clicks
    • Re-tweets
    • Replies
    • a "favorite" designation
    • Producing a sale
    • Producing a website visit
    • Installing an app
    • Generating a lead

    Ad fees kick in when objectives are met. Although this might make the ad more expensive than on other social media (which might charge per "conversion" or "click-through"), it works because the advertiser is actually getting what they want. Sixty-one percent of American companies use Twitter to advertise (eMarketer data), and Twitter's ad revenue in 2014 was more than $1 billion.

    Small businesses use ads to get leads, build a customer base and generate sales. Alex Bowman, the former head of marketing for ChoreMonster, said that he would stay away from targeting followers of huge celebrity accounts, because “Following those with a smaller audience gives a better return.” He also said that Twitter's suggestions were "surprisingly spot on."

    Source: "On Twitter, Best Advertising Practices Include Narrow Targets, Videos and Brevity," by Eileen Zimmerman, the New York Times, January 21, 2015.

    Follow up:

    • Have you ever bought something because of a Tweet?  Was it a product or a service, and who sent it?
    • Relate your experience to the principles and observations in this article.
    • What are the definitions of the following as they relate to Twitter advertising?: Objective, Conversion, Click, Re-tweet, Follower, Promoted Tweet, Hashtag, Handle.

  • Embezzlement in Pasadena


    The Rose Bowl logo from the City of Pasadena 

    The residents of the Rose Bowl city of Pasadena are pretty riled up. It seems that a city employee--who was also the pastor of a church--has embezzled over $6 million dollars. Not only are residents angry at the alleged perpetrator--they are also angry at the city manager, Michael Beck.

    Big Four auditor KPMG uncovered "296 fraudulent invoices had been turned in resulting in 189 checks being issued."
     
    Allegedly, Danny Wooten was the perpetrator. He was a management analyst who worked in the Public Works Department from 2003 to 2014. Two others have been implicated in the embezzlement scheme: Tyrone Collins and Melody Jenkins. Apparently, small invoices that slipped under the radar of the internal control that was in place allowed these thefts to occur.
     
    This is a lesson for businesses as well. Those who are knowledgable about what can slip below the threshold of concern can set up transactions that can go undetected for years. This is why the City Manager is being held accountable as well. It is also important to note the importance of external auditors in uncovering this type of transgression.

    According to the Pasadena Weekly,

    "KPMG made 42 recommendations to fix the city’s problems. The recommendations include maintaining a document chain of custody, establishing dollar thresholds that would require the review of invoices before processing, maintaining a master list of vendors currently doing business with the city, vetting new vendors and providing evidence of document review on all invoices before they are paid. KPMG also recommended that the city require W-9 tax forms from all vendors, a fairly standard practice among businesses that use contractors."

    Source: "Follow the Money," by Andre Coleman, Pasadena Weekly, January 8, 2015.

    Follow up:

    • Why do you think this has generated so much outrage?
    • What are the issues in white collar crime that are different from street crime?
  • The Starbucks of Nail Salons


    pictured: MiniLuxe officials, from left: John Hamel, general partner at Cue Ball;
    Sue Thirlwall, chief executive of MiniLuxe; and Tony Tjan, chief executive of Cue Ball.
    photo by Gretchen Ertl for the NYT from article linked below.

    "Don't re-invent the wheel"

    This is good advice for business developers, as "time is money." So when John Hamel, Tony Tian and Sue Thirlwall did a business plan for a chain of nail salons, they used Starbucks as a model. Here were some of the problems they wanted to address:

    • Fluorescent lighting
    • Smelly acrylics
    • Hygiene issues
    • Scheduling management

    How did this team change things?

    • Trade-marked names for nail shapes
    • Developed their own line of "nearly toxin free" polish
    • Implemented hospital-grade hygiene practices
    • Offered 24/7 online appointment booking
    • Installed sophisticated point-of-sale systems
    • Developed data analysis to map the effect of weather and time of day on demand to solve scheduling problems
    • Raised $23 million in venture capital
    • Opened eight salons in the Boston area
    • Made plans to open eight more salons in 2015, expanding nationally

    The name of their chain is MiniLuxe, and the headline on their website is "More than Beauty...Self Care."

    Like Starbucks, they plan to create a need. MiniLuxe will do this by re-imagining the nail salon concept and experience. Also like Starbucks, they think this new need will support higher prices. Cue Ball (a "venture firm based on human capital") brought its experience developing businesses to this project. So far, it's working.

    Source: "Rethinking the Nail Salon by Glancing at the Starbucks Model," by Sarah Max, the New York Times, January 14, 2015

    Follow up:

    • Did you ever have your nails done in a salon? If so, in what ways does the MiniLuxe model address any issue you might have had there?
    • What other business model needs to be re-tooled?

  • Pay for sick days: win or lose for businesses?


    from USA Today on YouTube

    The Healthy Families Act is the newest executive order on the horizon. It proposes to require employers to provide one hour of sick leave for every thirty hours worked--up to seven days per year. The initiative would apply to all companies with 15 or more employees. Workers and employers disagree about the impact of this plan. Nevertheless, most developed countries have sick leave policies in place.

    The United States is the exception, with only 61% of workers with paid sick leave. Only 12% of U.S. workers have paid family leave.

    Businesses are objecting to the possible costs of this proposal. But it is even more expensive to offer sick leave to highly paid managers, and this perk is offered as a common practice.

    I've never owned a business, but I did offer my kids (when they were in middle school and high school), one "mental health day" per semester in addition to any bona-fide physical illness sick days. I figured this would cut down on faking symptoms to stay out of school, and I suspected that most young people sometimes need a day to get centered and relax without having to deal with the hundreds of interactions at school. It seemed to work out really well. One day was a scarce and valued resource for them, and it kept them more mindful about their productivity and their options. 

    A sick employee (or an employee with a newborn) is probably not going to be a productive employee. A sick employee will probably get others sick as well, compounding the problem. Also, companies that manufacture products include some allowance for materials that cannot be used when they cost out their product. Paid sick leave could be built into the labor component as well.

    We all need a day off sometimes.  But should our employers pay us for those days?

    Sources: "The economics of the sick day," by Amy Scott, Marketplace-Americian Public Media, January 15, 2015.

    "Obama Proposes To Cut Everyone's Pay With Paid Sick Leave," by Tim Worstall, Forbes magazine, January 15, 2015.

    Follow up:

    • Have you ever worked at a job where you had sick days? How did you use them?
    • If your parents worked when you were a kid, how were things managed when you or your siblings were sick?
    • Read both linked articles above before you answer: Do you think it is fair to require employers to provide sick leave? Should small businesses get a tax credit to reimburse them?
  • Dodd-Frank under attack


    image from website: Barney Frank and Christopher Dodd.

    Wall Street and its lobbyists have a plan to attack and defeat the 2010 Dodd-Frank Act one provision at a time. "The strategy on Dodd-Grank is death by a thousand cuts," says the policy director of Americans for Financial Reform, Marcus Stanley.

    Dodd-Frank was put in place to regulate and make more transparent the valuation and trading of securities. This was intended to prevent the kinds of problems that caused the financial crisis and recession of 2008. Nevertheless, legislation was introduced on day one of the new House of Representatives, and a bill that passed the House this week gives banks two additional years to divest itself of "bundled debt," which were at the root of many of the inflated financial statements of investment banks when the crisis hit.

    Why is this legislation achieving success? First, the financial industry on Wall Street is dedicated to eliminating the Act. Their experts draft complicated and technical legislation that Republicans and a few Democrats seem willing to sign onto. Then, they try to combine the legislation as an add-on to bigger bills to avoid a veto, all the while claiming that the few Democratic votes give it "bipartisan" support. Of course, the lobbying dollars really make a difference. As of November 16, the spending by Wall Street on lobbying and campaign contributions for 2014 was $1.2 billion dollars. Perhaps that buys a lot of votes.

    Because Dodd-Frank has broad-based voter support, some observers are noting that lobbying for deregulation is not helping the public image of the big banks and Wall Street.  According to Arthur Wilmarth, a professor of law at George Washington University, "Wall Street's determined lobbying on Section 716 provides compelling evidence that Wall Street's business model depends on the ability of large financial conglomerates to keep exploiting the cheap funding provided by their 'too big to fail' subsidies. Shame on Congress if it allows megabanks to continue to pursue the same business strategy that brought us the financial crisis."

    The whole situation provides an opportunity for business students to not only learn about how different very large financial businesses are from small businesses and manufacturers, it also provides a template for studying marketing techniques and incrementalism.

    Sources: "In New Congress, Wall St. Pushes to Undermine Dodd-Frank Reform," by Jonathan Weissman and Eric Lipton, New York Times, January 13, 2015.

    "Why Citi May Soon Regret Its Big Victory on Capitol Hill," by Rob Blackwell, American Banker, December 11, 2014.

    Follow up:

    • What is Section 716 of the Dodd Frank Act, and why do big banks want to get rid of it?
    • List the strategies that are used to market deregulation legislation to members of Congress.
    • What is "bundled debt" as it is used in this context?
  • Sales dollars and falling prices: misleading numbers


    image courtesy of Adam Berry, Getty Images

    What do things REALLY cost? Is it the number of products sold or the dollar value that counts? These are questions for consumers as well as wholesalers and retailers.

    When "the numbers" came out for December, it looked as though spending was down. But further analysis shows that more goods were sold...but at a bargain price.

    How do we incorporate this information so that it makes sense in terms of analyzing the business environment so that businesses can plan their production and sales? Demand is up...but maybe only because of reduced prices. Low gas prices could mean a boon for everyone--lower costs for businesses, and more money to spend on other goods in the retail marketplace. Should businesses increase their output?

    Observers also point out that the consumer retail numbers leave out an important and growing piece of the U.S. economy: SERVICES--including restaurant spending. Incorporating these numbers into the big picture could make for a better analytic model.

    Source: "As consumer prices fall, we may be buying more with less," by Dan Bobkoff, Marketplace-American Public Media, January 14, 2015.

    Follow up:

    • According to the radio article, the World Bank referred to the U.S. in what quoted comment?  What does this mean in terms of the global business environment?
    • Can you relate your personal spending habits to the nationwide trends? Are you spending more money on retail goods because gas prices are lower?  Restaurants? Other services?
  • How should white collar crime be punished?


    image from www.legalweek.com

    Deterrence is often cited as a reason for punishment. But many observers feel that crimes of desperation or passion--often violent--are unaffected by any element of deterrence.

    White collar crimes are different. They take time, planning, deliberation. They are almost always premeditated. They can ruin the lives of hundreds or thousands of people. But they do not carry the serious punishments (lifetime imprisonment; the death penalty) that are often mandated for crimes of violence. But it is ironic that the "thoughtfulness" that goes into planning white collar crimes also means that it is possible that serious mandated punishments would be more likely to be a deterrent.

    Ironically, sometimes low-level white collar crimes (inflating revenue on financial statements) are punished more severely than the felony of hiding millions of dollars of revenue in a Swiss bank account (25 years in prison vs. probation).

    There are sentencing guidelines but no mandatory sentences for white collar crimes. According to the NYT, "The guidelines’ provision for economic crimes has been a particularly contentious point of debate. It relies on calculating the amount of a defendant’s gain from the crime or the losses inflicted on others in order to determine how much time a defendant should serve in prison." 

    But the numbers are vague and sometimes the economic crimes can produce losses to third parties. For example, punishment for accounting fraud can produce severe stock declines that affect stockholders at publicly traded companies--people who were not involved in the fraud. The American Bar Association (ABA) appointed a task force to develop sentencing guidelines. Meanwhile, the Dodd-Frank Act set up a federal sentencing commission to honor  “the need for an effective deterrent and appropriate punishment to prevent the offenses.”

    Last week, the sentencing commission released a compromise:

    • The defendant's gain from fraud would be the sentencing starting point.
    • The range for punishment would be three to nine years, depending on the defendants involvement, motive, and personal profit.

    In light of those guidelines, it is ironic that Bob McConnell, the former Virginia governor sentenced last week for corruption, was only given 2 years.

    Source: 'Elusive Middle Ground in Punishment of White-Collar Criminals," by Peter J. Henning, New York Times, January 12, 2015

    Follow up: What are your thoughts about sentencing guidelines for white collar crime?

  • Tough times for most businesses and most workers

    ...Illustrations/infographics by Mattias Mackler​, in Mother Jones; data from source cited below

    Really good times for the super wealthy (1%) did not bode well for anyone in 1929, before the market crash that began the Great Depression. So far in 2012 and beyond, the 1% are still doing well. Those in investment banking, and corporations that are among the super-wealthy international conglomerates have opportunities that are predictable and sure-fire--much better than the opportunities for small businesses and all levels of employees and investors.

    Large pension plans used to be substantial enough to invest at the top levels, but business failures and underfunding of pensions (allowed by accounting rules and actuarial calculations in times of bull markets) has produced pension shortfalls. The resulting erosion of trust in pension providers (both public and private) has lessened the clout of large pensions in the investment world--and the unions and wage or salary-earners for which the pensions were provided.

    Lack of access to capital and favorable financing opportunities available to the super-rich hurts medium-sized and small businesses. Only the ephemeral arenas of social media "product"--with their possibility of a viral app that will be super profitable holds promise for the small businessperson. 

    A business environment of scarcity--much like feudal times--perpetuates the expansion of wealth in the hands of a few, and limits the opportunities for many. The value of security and safety for the majority of individuals is being ignored in the business environment. Business ethicists point out that scarcity enhances the likelihood that ethical failures will occur, and many believe that the inequalities are permanent. Nevertheless, business education that includes ethics courses may provide the knowledge and practice needed to make course corrections in this trend.

    Source: "Chart: It's Never Been a Better Time to Be Rich," by Dave Wilson, Mother Jones, September 25, 2014.

    Follow up:

    • What is a bull market? How can it exacerbate the differences between extremely wealthy entities and regular investors?
    • Check out the links above. Who believes that wealth and opportunity inequalities may be permanent, and why? How will this effect the careers of students currently in business school?

  • Morgan Stanley fires employee for stealing data

     a promotional video by Morgan Staney to attract young employees...Galen Marsh was hired in 2014

    Morgan Stanley has fired Galen Marsh, a 30-year old employee, for stealing private information from 900 customers.  Forbes magazine also said that "the bank discovered the data on a file sharing site called Pastebin and believes Marsh was looking to sell the client data to those who peddle in identity theft."

    However, Robert C Gottlieb, an attorney for Forbes, said this in an official email announcement: “To be clear, Mr. Marsh did not sell or ever intend to sell any account information to anyone.  He did not post the information on-line, he did not share any account information with anyone or use it for any personal financial gain." 

    Maybe someone is telling the truth.

    At any rate, it is not surprising that business professionals are behaving unethically in the workplace--it is a continuation of how they behaved when they were students. According to a study done by Rutgers professor Donald McCabe, 56% of MBA students admitted to cheating within the last year. He says that a recent follow-up study shows that often students perform cheating behaviors but do not even recognize it as cheating.

    What do you understand about your own behaviors?

    Sources: "Morgan Stanley Fires Rogue Employee After Customer Data Leak," by Antoine ["I cover the good, the bad and the ugly of finance."] Gara, Forbes, January 5, 2015.

    "Think Cheating Is Down at B-Schools? Researcher Says ‘Don’t Believe It’," by Patrick Clark, Bloomberg Businessweek, April 24, 2014.

    Follow up: What constitutes unethical behavior in the following arenas? How do you (or others) justify unethical behavior and why?:

    • Completing assigned homework
    • Cutting and pasting online resources into answers in online threaded discussions for class credit
    • Going out with (or going further with) someone other than your partner when you are vacationing out of town
    • Exaggerating your accomplishments at a party
    • Exaggerating your accomplishments on your resume
    • Taking credit for a project at work done by someone else
    • Speeding when no police car is around
    • Inflating income when applying for a loan
    • Not reporting income on your tax return
    • Taking office supplies from work
    • Taking customer data from work to use to start your own business
    • Doing what everyone else is doing--even your boss--even though it is technically against company policy
    • Covering up wrongdoing in an official public announcement as part of your job, even though you know you are not telling the truth
  • Manure: a way to make money

    Why not make money from a product that most people think is garbage?  "Cash for carbon."

    Manure. Liquid manure. 80,000 gallons of manure go to a pit. to harvest manure. It is funneled to a generator. The generator can burn manure to make electricity to make energy. The methane that would otherwise be emitted into the atmosphere becomes usable energy.

    For every ton of methane, that would be emitted gradually into the atmosphere, is used for energy. In addition, for every ton, they can trade the credits--or sell them to polluters as carbon credits. 

    The "climate trust" in Portland, Oregon is a major broker in this new market.

    Rice farmers are part of the growing market in reducing emissions.

    The carbon markets allow polluters to pay someone else to to reduce emissions so they don't have to...for now. But all they are doing is buying time--also, they can't postpone more than 8% of carbon emissions.

    Source: "Entrepreneurs Find Ways To Make Money From Carbon Emissions," by Christopher Joyce, National Public Radio, January 5, 2015.

    Dairy waste as green energy

    Follow up:

    • What are some of the issues regarding the "recycling" of manure? 
    • What are the pros and cons of manure as a fuel?

  • Grimm (ethics violator) refuses to resign as a U.S. Representative


    from YouTube

    Michael Grimm, a Republican from Brooklyn, NY,  may be an elected official, but he is still an ethics violator. He falsified a tax return: basically he did not report $900,000 in income, and he paid several employees "off the books." He faces a maximum of three years in prison.

    Still, he refuses to resign as a Representative to the  U.S. House.

    Prosecutors also accused Grimm of "hiring illegal immigrants, paying staffers under the table and under-reporting how much he spent in wages."

    Sigh.
    Who do you want to represent YOU?

    Source: "Grimm will not resign after pleading guilty to tax fraud," editorial piece by the Daily Herald, December 23, 2014.

    Follow up: Should elected officials be allowed to serve if they have been guilty of a felony, or any major crime? Why or why not?

  • Ethical relativism

    Many of us think that our business selves or social selves are separate than our personal selves (the "self" we would like to be known to our loved ones and family members). We justify our actions in different situations by conjuring up some sort of rationale that may be based on absolutely no moral imperative whatsoever. This is ethical relativism.

    If it can be justified as being acceptable to others within whatever framework one can concoct--a fraternity, a classroom of peers (all trying to get an "A" grade), a group of finance professionals trying to make the most money possible, or a CFO trying to maximize corporate earnings--then it is "OK."

    Or is it?

    Understanding ethics is a developmental process. Young children cannot process what young adults are capable of understanding...and not every young adult is willing to open their minds to the ideas of others.

    This is a necessary step in understanding ethical relativism (into which one can sink without much mindfulness) and a real ethical choice.

    Where are you on this spectrum?

    Source: Ethical relativism cartoon

    Follow up:

    • What do you think of the "blue" character's position in the cartoon?
    • What else comes to mind? For you, do "objective" moral standards exist? "Categorical imperatives"? Why are they important? Or irrelevant?
    • Check out these links and comment on what you find:
  • Internet freedom vs. global business


    image from blogs.worldbank.org

    More and more, commerce is conducted on the internet. Therefore, a "free market" cannot exist without a free internet as well. However, between the U.S. government threatening to allow steep differences in cost for internet access, and censorship of the Internet of the internet by foreign governments, it remains to be seen how internet access affects global commerce.

    Particularly at issue internationally is censorship in Russia and Turkey. A new personal data law in Russia will require the storage of data about Russian users on Russian computers. This follows a demand that Facebook eliminate information about a rally (which had the unintended consequence of arousing more interest in what was forbidden information). Work-arounds abound in the Internet Age.  Twitter and YouTube blockages have also produced heightened interest in censored material.

    Because Facebook and Twitter house their storage information in the U.S., it is unlikely that they can or will comply with the edict to create special storage centers in Russia. The law goes into effect in September, so it remains to be seen how this plays out.

    Because Facebook accesses who-know-what databases to target advertising in order to remain profitable, it does not seem likely that they will comply with restrictive laws. Remaining "one step ahead" seems to be part of its business plan...and they have not made major inroads to the Russian market, so they have little to lose.

    Nevertheless, business is all about growth, and accessing markets has always been a frontier of major capitalists. In prior eras, it was shipping by seas or by rail or trucks. Now, the medium of commerce is the internet, and the market is potentially global.

    It remains to be seen whether Russia and other governments can successfully rein in internet martketing over the long term.

    Source: "Web Freedom Is Seen as a Growing Global Issue," by Vindu Goel and Andrew E. Kramer, the New York Times, January 1, 2015.

    Follow up:

    • Think about the marketing of, for example, a new smartphone from a U.S. manufacturer with totally global web connectivity utilizing a new transmission source that was available at every location on the planet. What would be the consequences for the U.S. manufacturer of China (or Canada for that matter) blocking this connectivity?
    • If there are multi-tiered internet access costs and capabilities (some of which might only then be available to large businesses), what might be the consequences for (small) business growth? Should there be controls in place to level the playing field?
    • Google several topics that are not in your usual purview of internet searches ("exotic cats" or "arthritis" for example). Then, if you have a Facebook account, be attentive to the ads that appear when you access your Facebook account. Any overlap with the "new interest" in your searching profile?  What are the possible consequences of this trend, both on a personal level and internationally (if there is censorship)?