Doing well by doing good: The case of Costco

ABC News: Costco CEO Finds Decency Is Compatible With Profitability

Note, too, that CEO Jim Sinegal's salary of $350,000 is about 12x what the rank-and-file employees earn; the average in the US today is at about 500x that of employees. This doesn't consign him to poverty; Sinegal is also a major stockholder in a very profitable, growing company.

Your thoughts?

Janitors' Drive in Texas Gives Hope to Unions - New York Times

Read this story from the New York Times, then watch the 60 Minutes segment entitled "Living Large" (3d story down). Am I the only one who sees a major disconnect here?

Your thoughts?

2005 APEC Economic Leaders Meeting in Korea

At each APEC conference, the last official photograph of the attendees is in the country's national costume.

WalMart and Health Insurance

For those of you who have been following the controversy over WalMart and health care......

For the rest of you. The controversy here is over WalMart and how their workers are receiving health care. Although WalMart does provide health insurance for its workers, critics claim that WalMart makes coverage unaffordable for rank-and-file employees, forcing their folks to rely on publicly-funded plans such as TennCare. There are anecdodal accounts of WalMart management actually coaching employees on how to go about reciving public benefits. The Maryland legislature passed legislation earlier this year to basically force WalMart to provide affordable coverage or contribute to the state's costs (rather than sticking the state and taxpayers with the cost) , but the act was vetoed by the governor.

Md. Passes Rules on Wal-Mart Insurance

Now, it's a question of whether or not the legislature has the votes to override the veto.

Wal-Mart Girds for Battle on Md. Bill

Stay tuned for further developments....

Your thoughts ???????

Peter F. Drucker: In Memoriam

Renowned management writer Peter F. Drucker died Saturday at the age of 95.

Management is doing things right; leadership is doing the right
things.

-- Peter Drucker

Peter F. Drucker, a Pioneer in Social and Management Theory, Is Dead at 95

The Drucker Archives

Grey Market Prescriptions -- A Losing Battle

For the international business folks -- you'll recall this was our #1 example of grey marketing. Also, from a public policy standpoint, does reimporting druigs from Canada really solve anything? In essence, we in the US are unwilling to put pressure on the pharmaceutical companies to lower costs, so we're outsourcing that task to Canada. Basically, it's as though I don't want to yell at a class, so I get someone else to do it for me.

Your thoughts?

Study: U.S. Can't Keep Illegal Meds Out

Time catching up to World War I veterans

Not relevant to our classes, but interesting.

AP Wire 11/10/2005 Time catching up to World War I veterans

Hong Kong Disney Opening -- Not 100% Smooth

Although, as the Disney spokesperson points out, any opening will have problems.

USATODAY.com - Miscues mar opening of Hong Kong Disney

September Trade Deficit Numbers -- Not Good

U.S. September Trade Deficit Widens to Record $66.1 Billion

The various analysts and company spokespersons quoted in this article don't seem to be especially worried; they attribute the "record" deficits to one-time events, such as the Boeing strike and the September hurricanes. Ok, the Boeing strike is settled, and planes are shipping again, but the impact of the hurricanes isn't going to just vanish overnight.

ALso, the administration is trying to put pressure on China to (1) limit clothing exports to the US and (2) allow the yuan to float (a floating yuan will make Chinese exports more expensive in the US, and should reduce our trade deficit with China). Maybe I'm a professional pessimist, but this doesn't exactly cheer me up.

Incidentally, what's driving that $20 billion + traded eficit with China??? According to the US Census Buraeu (who tracks this information), we're buying "primarily toys, games, and sporting goods; TV’s and VCR’s; stereo equipment; and computers."

Your thoughts ?

Some interesting points about Alva Vanderbilt

Ok. Tonight in Leadership Seminar, we saw a film on the Vanderbilts. You'd think the focus would be on Cornelius ("The Commodore," founder of the family fortune) or William (son of Cornelius, who greatly added to the Vanderbilt wealthj). To me, the interesting one was neither of these two, but William's wife, Alva Erskine Smith Vanderbilt Belmont. There's a bit more to her than we saw -- she was truly dedicated to the women's suffrage movement, and the divorce from Vanderbilt was suspiciously quickly followed by her marriage to Oliver Bemont.

Long Island History: LI's Rebels With a Cause

WTO Hong Kong Meeting: Setting the Bar Low

Following arecent meeting of the trade / commerce ministers from the US, EU, Brazil, India and Japan, a general consensus was reached -- that the December meetings of the WTO in Hong Kong will likely not result in much in the way of new agreements. The issue of US / EU agricultural subsidies will be on the agenda, but is unlikely to be resolved, while the richer nations will proabably ask for concessions from the lesser developed countries in areas such as access to markets.

Trade ministers dampen down expectations

The question is, though -- is this necessarily a Bad Thing? One's automatic reaction is to say, yes, that we want diplomatic talks (be they military, political or economic) to move towards resolution of conflict.

However. WTO / GATT negotiating rounds have been on a more-or-less continouius basis for over 50 years now, and there's no question but that progress has been made. The trade barriers we saw prior to WWII just aren't there any more.

[We'll leave out here the deeper philosophical issues over whether free trade is a Good Thing].

Ok. So GATT / WTO has moved slowly, yet continued to make progress. But I'd also make the argument that the issues being negotiated are important ones (the US agricultural subsidies have been around since the 1930's; the EU's agricultural subsidies are driven, by part, from famine expereinces in WWI and WWII). If these are important issues, doesn't it make some sense to move slowly, so that whatever solution is ultimately arrived at is one that all parties concerned can live with? The ag subsidies are an important issue. But, are they such an important issue that we need to rush to settle the issue or is it so important that we need to move slowly, so that whatever answer we reach is the best one?

Your thoughts????

Fujimori trying for a comeback?

Former Preuvian president Alberto Fujimori (1990 - 2000) is trying for a comeback !! He plans to run for president in Peru's 2006 election (although he's been formally banned from political participation until 2010). Current president Alejandro Toledo is not eligible for re-election (though with approval ratings hovering around the single digits, that's a moot point; see Peru: Administration in Crisis and Peru's Toledo Announces Plans to Shuffle Cabinet (Update2)).

Doesn't appear that there's any clear successor, although the former Finance Minister and current Prime Minister Pedro Pablo Kuczynski is rumored to be interested in the job.

Up until now, Fujimori's been conducting his campaign from the safety of Japan (Fujimori is of Japanese descent, holds Japapnese citizenship, and Japan has refused to extradite him to Peru). However, he was arrested today in Chile. It's unclear whether or not the Chileans will send him back to Peru.

BBC NEWS Americas Fujimori arrested on Chile visit

Corruption Perceptions Index 2005 Released

This is the index from Transparency International, which the folks from the international business class should recall.

And the winners this year.....

Bangladesh is, again, the most corrupt, followed by Chad. The three most honest -- Iceland in first place, with Finland and New Zealand tied for second. The US comes in at #17.

BBC NEWS: South Asia: Bangladesh tops most corrupt list

Transparency International

Economic growth vs. inflation in EU

Today's news is appropriate. The ECB (European Central Bank) is keeping interest rates steady, despite pressures to cut rates to stimulate the European economy (which is facing the same energy-related problems as the US). From Business Week:

European Central Bank leaves rate steady

The euro is not just maintaing its strength against the dollar, but continuing to gain. Venezuela is shifting its reserves from US gov't securities to dollar-denominated deposits and is looking to increase it's euro holdings; is this Chavez's paranoia or a Good Idea????

Your comments?

Bogus work excuses on the rise: 'God didn't wake me'

Bogus work excuses on the rise: 'God didn't wake me'

This is a Yahoo news item, so I don't know how long this link will work.

My favorite -- "The voices told me to clean the guns today."

What are yours?

Microsoft, Google, and Sun Microsystems

News today:

Google, Sun Challenge Microsoft's Office

Note in the 4th paragraph that Office is referred to Microsoft's "cash cow". This is a perfect example; Microsoft, of course, has the vast majority of market share and most people have an office package (so not a lot of market growth).

But the really interesting question is whether or not Sun & Google can displace Microsoft. [Note here that the 2 companies are hoping that their partnership will create synergy -- remember that concept? Some feel, though, that the big winner here will be Google, that "partnership" really isn't in the picture]

Microsoft has a big competitive advantage here. Its office suite is on most everyone's computer, meaning that:

1. Support and help (college & continuing ed classes, magazine articles, etc.) assume you're using Microsoft Office -- so if you go with a different product, where's the support?
2. Most companies and schools use MS Office -- if it's on the computer at school, you might as well have the same program at home.
3. Sharing files -- passing on a document to co-worker for editing, for example, is possible because everyone is on the same platform.

Here's the big if, though. We also said that competitive advantage had to be sustained, as well as created, and that sustainable competitive advantage depens on innovation. Ok. What Google and Sun are talking about is a competing way of distributing software.

Your comments???

Real Quick Comment for Tonight's Class (337)

Think strategy. Think SWOT.

Employment Discrimination in Sweden

This was on Yahoo's front page, so I thought it might be a good idea for me to note a few things. First, this case is in Sweden. As the International Business folks have gotten very tired of hearing, culture and laws differ. True, there have been employment discrimination cases in the US where height requirements and other physical requirements have been struck down (as I recall, some were on gender and others I think on ethnicity). However, in the US cases, the finding was that the requirement wasn't something actually needed for the job [Note 1]. From what was reported here, it sound as though the minimum height requirement was a job requirement -- if a US employer could establish that efficiency or safety really did require the minimum heights, the employer would, I think, probably win the suit.

[Note 1]. The interesting case was with firefighters. Traditional selection requirements for that job included the ability to lift, I think, 250 or 300 pounds. When this requirement was challenged, and a job analysis actually performed, what came out was that the ability to lift that amount of weight wasn't essential; what was essential was the ability to carry a lesser amount over a distance. In other words, endurance rather than strength. Women actually do better on endurence than men. That doesn't mean that many women will qualify as firefighters -- it's not office work. But, if you think through it, doesn't it make sense to take the time to find out what the job really requires, and find people who meet those qualifications?

Ukrainian President in deeper hot water

Seems that the Ukrainian Parliament is Not Happy with Mr. Yushchenko's recent reorganization of his government. I'm guessing [crystal ball on] we'll see Yulia Tymoshenko running things by next year [crystal ball off].

BBC NEWS: Europe: Ukraine PM rebuff deepens crisis

International Business Exam

Which Scandinavian country doesn't fit with the others?

Who still has Communist governments?

Fortune Global 500

A website with no discernable purpose.....

But you should visit anyways...

Cats in Sinks

Post a Comment !!

Post a comment -- for one point added to your final grade (one per customer, please)

WalMart and their overseas suppliers

According to this article ("Wal-Mart Accused of Denying Workers' Rights") in The Washington Post,

An American labor rights group filed a class action lawsuit today against Wal-Mart Stores Inc., alleging that suppliers in five foreign countries denied workers a minimum wage, overtime pay and the right to unionize.

The group is suing...

...on behalf of 15 foreign workers, who contend they were subjected to
illegal working conditions, and four California business owners, who argue
Wal-Mart's alleged conduct amounted to unfair business practices.

Should be interesting. Your comments? Both the HR and International folks should be interested in this.

Nowegian Election Results

As we discussed last night in International, Scandinavian values are a bit different from ours. Specifically, there's a very strong sense that nobody should be in need. The result -- a social safety net that includes free education, health care, etc [this is the article Ashley was referring to]

This is, in part, financed from Norway's oil revenues (they're the world's 3d largest exporter of oil), but you'll find the same philosophy and similar programs in the rest of Scandinavia. As we discussed last night, this is different. Not better, not worse, just different. Remember that this social welfare system is funded by tax revenues, and Norwegian tax rates are very high.

The election.

Centre-Left Bloc Wins Norway Poll

The right-center party, under Prime Minister Kjell Magne Bondevik, lost to the left-center Labor Party, led by Jens Stoltenberg. It wasn't an issue of safety-net vs. no safety-net, just how far the social welfare system should go

In the news coverage, pay attention to the references to "blocs" -- specifically, neither Labor nor the Christian People's Pary can form a government unless they form a coalition with one or more minority parties.

One factor that didn't come into the elections was EU membership; Norwegian voters have rejected membership, and there doesn't seem to be a lot of sentiment for joining. In fact, Norway gets a lot of the benefits of EU membership (more on that in a couple of weeks), withough having to give up control over fishing rights. A 2004 article from The Economist, though, sees the matter somewhat differently:

The Norwegian Option

Your thoughts?

Bush Suspends Pay Act In Areas Hit by Storm

The Davis-Bacon Act, Federal law since 1931:

"requires all contractors and subcontractors performing work on federal or District of Columbia construction contracts or federally assisted contracts in excess of $2,000 to pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits for corresponding classes of laborers and mechanics employed on similar projects in the area" (Department of Labor)

For Louisiana rates, see this DoL page (scroll down to Orleans County [yes, I know it's not "county," but "parish" -- you tell the Department of Labor]).

However, it is legal to suspend enforcement in a national emergency:

Bush Suspends Pay Act In Areas Hit by Storm

Your thoughts???

More on Disney Hong Kong

When Disney opened EuroDisney, there were problems stemming from Disney's lack of knowledge of local customs. Seems as though they're running into problems in Hong Kong as well, this time by adapting to local customs. Disney Hong Kong has added shark's fin soup to the menu, a popular Asian delicacy, but environmentalists protested the shark killings. Also, some are concerned that the Disney souvenirs are made using sweatshop labor. As you might expect, the LA Times has an excellent article on Disney's international trials and tribulations:

Translating Anaheim for Asia

Disney is also considering adding a park in Shanghai.......

Ukraine president sacks his cabinet

Just what we needed -- more depressing news. Incidentally, a lot of the background on this comes from an excellent paper written by one of this spring's graduating MBA students.

Earlier this year, the Ukrainian Orange Revolution gave us hope that not all of the former USSR was doomed to eternal corruption and tyranny (the Baltics excepted). A reform cadidate, Viktor Yushchenko, survived attempted poisoning and one rigged election to become the democratically elected president of Ukraine. (map and information) Yushchenko rose to power in part because he was seen to be highly competent -- his background was in finance and banking, and people believed that he could put the government's financial house in order and begin to eliminate corruption. In addition, Yushchnko was a good-looking, charismatic speaker (his present appearance owes a lot to the dioxin poisoning).

Fast-forward from January to September. The financial and corruption issues haven't really been addressed; according to the BBC, "infighting" among the Yushchenko administration has taken precedence over getting things done. So, yesterday, Yushchenko cleaned house; chief among the cleanees was Yulia Tymoshenko, the prime minister (head of state). Did Yushchenko want to get to work without political conflict among his top advisors? Did he want to dispose of a potential threat to his power? It's worth noting that Tymoshenko has been urged to form an opposition party or bloc. The defeated candidate for president, Viktor Yanukovich, is returing to Kiev and has "hinted he may cooperate with sacked PM Yulia Tymoshenko." Now, if you really want to go in for conspiracy theories, read this article from Pravda......

For complete coverage of this story and some background, see:

Ukraine President Sacks his Cabinet

Orange Revolution in Turmoil

Putin Still Bitter over Orange Revolution

Ukraine: Why The Road West Will Be Rocky

Hong Kong Disney to Open

Chinese Stars to Attend Disney Opening

Tonight's Exam (337)

It would be a Good Idea to go back over Mintzberg's management roles; it'll be a short-answer question.

Random thoughts about technolgy and Microsoft

Seems that the iPhone is now out; Apple and Motorola have developed a phone that will allow you to store and play 100 tunes.

Apple unveils iTunes phone

This I'd never have envisioned, but the entire point about major change is that it's something that we couldn't imagine in advance. Did any of us need a computer of our own before Bill Gates and Microsoft????

Speaking of Microsoft.......they filed another appeal today in the long-running battle between Microsoft and the EU over anti-trust issues. In this case, on of the major issues is whether or not Microsoft will have to open up its source code. We'll be talking bout this tonight in International; for the Principles folks, this is a good example of how any international involvement adds a huge amount of complexity to your external environment.

Microsoft Files Appeal Against EU Ruling

A One-Time Offer

1 extra credit point (added to final grade) for the first five people to add a comment to any of these posts !!!!!! (ok, it needs to be a semi-meaningful comment....). If you're in more than one class, tell me which class you want the point for.

Of Interest to both HR and International Business

This article from the New York Times deals with the efforts of workers, many of them immigrants, to organize labor unions in poultry processing plants.

Union Organizers at Poultry Plants in South Find Newly Sympathetic Ears

For the HR class -- as we discussed last week, there is a rationale for a low-cost HR strategy, such as in cases where jobs are low-skill and there's a lot of price pressure on the company (to deliver a low-cost product). What you want to think through is just how far should that strategy be followed? In other words, what are the ethical implications here?

Your thoughts?

China and Oil

Ok. The last question I asked you Monday night was this -- where is China going to get the oil needed to fuel (so to speak) its economic growth? They don't produce it themselves. There's oil in Iraq, there's oil in North Central Asia. But, there's lots of folks who want this oil -- the US and Europe, for one; India is also in the market.

China and India Vie for Kazakhstan Oil (8/16)
China Ups the Ante in Its Bid for Oil (8/22)
Uncertain Saudi Supplies Hold Key to China (8/23)

So, is everything gloom-and-doom? Not necessarily. One of the world's 5 most populous countries (China, India, Brazil, and the US being the others) has found an alternative.

Homegrown Fuel Supply Helps Brazil Breathe Easy (6/15)

Your thoughts ??????

China and intellectual property

Hi folks. For the International Business people, there's an interesting story concerning China and software piracy. Basically, the Chinese government is pledging to enforce already-existing rules about intellectual property protection (that is, software piracy). For more on intellectual property, see the WTO TRIPs page (Trade-Related Aspects of Intellectual Property Rights):

WTO - TRIPS

http://news.yahoo.com/s/ap/20050711/ap_on_bi_ge/china_us_trade;_ylt=Ao8SOYOrcqurw3ZfYE4UPnFvaA8F;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl