The horrific Bangladesh factory disaster has highlighted a number of business issues and proved a stark reminder of the global effects our purchasing decisions may or may not have on people halfway around the world. Tom White has already put up a blog with some initial thoughts; I thought I’d pose some further questions and examine some of the issues raised in that post.
A great starting point would be to listen to the ever-reliable Business Daily, from the BBC World Service. Their programme In the Balance invites guests to debate a topical business issue, and this week, the Rana Plaza disaster was under discussion.
One of the first questions to ask is to examine the extent to which firms which are supplied by such factories are responsible. There were more immediate causes, of course, such as the owner’s actions and the culpability of local regulation and enforcement (or lack of). But this is not the first time there have been such disasters, nor are the poor conditions in such factories surprising. So is it right that chains such as Primark continue to use such suppliers? Isn’t it their fault, with their demands for low prices and increased flexibility to meet the needs of the fast fashion market? Do they have a responsibility to ensure fair and safe working practices in factories they don’t own and which they are merely customers of? A lot of people would argue that yes, they do. But isn’t that the same as arguing we as consumers should audit the supply chains of the shops which we buy from? Primark is as much a customer as we are.
This is a really useful two-minute video snippet of a conference presentation by Procter & Gamble's CEO Bob McDonald.
He explains that the aim of Procter & Gamble is to move to a zero waste production environment. He makes a clear link between sustainability and productivity. If P&G's factories can operate more efficiently with substantially reduced waste, then it ought to be a win-win arrangement for both shareholders and society stakeholders.
P&G is a multinational manufacturer of a diverse portfolio of product ranges including personal care, household cleaning, laundry detergents, prescription drugs and disposable nappies.read more...»
When I was young, I loved having those rulers where the picture changed depending on what angle you looked at it - I remember both a dinosaur and a football version! I'm not sure whether they used the same "lenticular printing technology" as this billboard but the message and the method is a very powerful one.read more...»
This was written by Ryan Cook, a superb and extremely well written blog that is BUSS4 gold
'Traditionally concerned with the demographic make-up of society and the resulting diversity in traditions, beliefs and norms the concept of multi-culturalism appears to have an ever increasing relevance to the world of business and resulting corporate performance.
Never has this been truer than in the last week where once again the banking industry and all its ills were again on show for us all to see and no doubt criticise. Personally I struggle to remember a time when banking scandal, high profile blunders and apparent managerial felonies didn’t dominate the headlines. The latest instalment of which broke last week, firstly with the publication of the ‘Salz Review’ which reported on the working practices at Barclays (http://www.bbc.co.uk/news/business-22012261) was then followed by the Banking Standards Commission’s (BSC) report into the 2008 collapse of HBOS http://www.bbc.co.uk/news/business-22045930). The conclusion of both of these reports was that business practices had been dominated by a single-minded culture of ‘win at all costs’ and that both organisations require transformational change.
As a cultural case study things don’t get much better. Breezing through the two articles signposted in this blog is more than sufficient to enrich your studies and provide an excellent opportunity for demonstrating a sound understanding of cultural management (or lack of) and the complexities and challenges posed by organisational change in the forthcoming buss4 exam. However the real opportunity doesn’t end there. The real value of this case study (and hopefully this blog) is the opportunity to deduce themes for evaluation. Let me continue.
Neither the Salz review nor the report by the BSC take any prisoners when condemning the actions, practices and ethos of the two organisations who’s contribution to the financial Armageddon in the UK is unquestionable. Banks often cite the global nature of the credit-crunch as their primary line of defence for failure and the fact that much of the problem can be traced back to the United States. Although the author does not question the fact that financial systems are irreversibly inter-connected or the notion that ‘when America sneezes the world gets a cold’ this line of defence does not justify the actions and choices of
The internal working practices of Barclays and HBOS were ‘built on uncertain foundations’ had an ‘over-emphasis on short-term financial performance’ and ‘neglected the interests of traditional customers and clients’. Collectively these claims point to a situation where ‘winning at all costs’ in pursuit of bonuses and personal reward was simply rife, penetrating the entire
organisation and its practices to the very core. It may be suggested that all cultural paradigms exhibit a sense of organisational selfishness and that it is exactly this feature, in part, which drives competitive spirit and optimum performance. After all ‘the business of business is business.’ However, organisational paradigms are usually multi-faceted and any element of organisational self-interest is usually tempered, restrained or counteracted by other equally salient values or norms. Not in banking. The lack of a dynamic multi-cultural perspective where different organisational values exist (other than simply profit) and other stakeholder groups are genuinely valued and served produced cultural tunnel vision pre-occupied with, and consumed by, profit. Indeed, the very suggestion from an employee that banks should be even remotely concerned with anything other than profit-making activities is likely to have resulted in being culturally ostracized and ejected from the bank accompanied by the tag
‘he doesn’t fit in’. The cultural practices of banks wasn’t simply something they were doing it was something they were, part of the DNA and something which radiated, un-interrupted, from
each and every banking employee. The mis-selling of PPI and the fixing of the Libor rate are further manifestations of a culture devoid of any sense of responsibility or justice.
This is of course not the first time that cultural tunnel vision, and a failure to operate a multi-cultural perspective, has produced a high profile corporate demise. Back in 2001 Enron, an energy trading firm, collapsed following allegations of insider-trading and inaccurate
performing staff, some 10-15% a year were fired following an assessment of their financial performance. The so called ‘Rank and Yank’ method was a major tool in Skilling’s pursuit of market leadership via an aggressive and no-nonsense culture. Skilling’s questionable endeavours in relation to insider trader and financial window dressing landed him a 24 year prison sentence. Evidence that perhaps in extreme cases if left unmanaged organisational cultures, characterised by greed and self-interests, can evolve from the un-ethical to the criminal.
All of these examples share some common characteristics:
- All were financial institutions
- All had leaders with very clear perceptions of
how to win (Diamond, Crosby, Hornby & Stevenson and Skilling) and refused
to deviate from their vision.
- All enjoyed short / medium term financial
- All cultures were allowed to gather momentum and
consume the ‘architects’ who constructed it
- All CEOs have now ‘stepped aside’
- All businesses adopted the shareholder
perspective rather than a more balanced stakeholder model
- All were in markets where little buyer power
exists, barriers to entry are low and few competitors exist. This perhaps generated the ‘we can do
whatever we want attitude’.
- All cultures were single-minded and devoid of a
- All businesses failed!
So there you have it proof that businesses can benefit from multi-culturalism? Perhaps. The downside of this multi-cultural approach is that it can result in ill-defined strategy, brittle consensus and indecision and a situation where numerous sub-cultures damage performance. That, however, is a conversation for another day!'
You may not want to dwell on this topic, which is so terrible that I am sure your first reaction to what has happened will have been highly emotionally charged. The scale of the tragedy only seems to grow, with the situation perhaps made worse by the realisation that these events are very typical of working conditions in many countries.
I've been putting together some links to encourage a bit of reflection on what, if anything, we can learn.read more...»
Step up to AQA A2 Business Studies is a resource-packed CPD course aimed specifically at providing a huge boost for colleagues and departments delivering BUSS3 and BUSS4 from the UK’s most popular A level specification.
This CPD course focuses exclusively on BUSS3 and BUSS4 and brings together a whole host of resources, techniques and teaching and learning strategies to enable you to deliver A2 with renewed confidence and vigour whether you are new to delivering BUSS3 and BUSS4 or an experienced practitioner.
During the day, we will be looking at some of the following key areas:
• Strategies for improving student’s exam technique, a major challenge for many students when they move from AS to A2
• Teaching tough topics. We will be looking at teaching and learning strategies which focus on some of the more challenging areas of A2 such as Critical Path Analysis, Balance Sheets, Investment Appraisal and the Economic Environment among others
• Taking an integrated approach to managing the BUSS4 Section A research theme and covering core remaining topics for Section B
As with all of our CPD events, you will be provided with a range of teaching and learning resources which can be taken back to the classroom and used immediately with your students as well as detailed schemes of work for both A2 units.complete this online form
or contact Janet Cahill in the tutor2u office with your requirements
TBBLE - which stands for The Best Business Lesson Ever is the business CPD course designed for all business studies teachers...a day packed full with fresh approaches and resources for the business classroom. It's a no-hold barred, activity-intensive jamboree of brand new business studies teaching resources.
The feedback from the TBBLE 2013 courses run so far this academic year has been superb and we've still got more three courses available for you or your colleagues to attend.read more...»
Pedal power has been around for a while. But are turbo-charged eBikes the way forward? The specifications of electric bikes are impressive - but will the price put potential customers off?read more...»
A terrific video here from Jonathan Moules, the Enterprise Editor of the FT, which showcases some creative choices of business location in London.
This would make a great stimulus piece for a lesson on startup business location - what are the attractions of some of the unusual locations featured?read more...»
I’ve come across a great article and video clip about the problems faced by a company whose business boomed overnight. A nice problem to have, and an interesting problem too!read more...»
Can You Connect is a bellwork/ starter activity desgined to further develop students exam skills. Crucial as we approach the exam season but even more crucially, as we move towards a linear approach in GCSE and A Level where it is essential that students get it right first time.
Can You Connect involves giving students 4 or 5 key concepts from different functional areas and asking students if they can connect each one. It is ideal for weaker students who struggle to make steps in their answer and therefore miss out on achieving good analysis. So, a typical Can You Connect activity might involve the following being written on the board as the students enter the classroom:
Can You Connnect?
- Labour Productivity
- Unit Costs
- Price Elasticity of Demand
Here, we can see we have a people concept, an operations concept and two marketing concepts. Can students connect these 4 areas?
Simply, an increase in labour productivity can result in reduced unit costs because............... A reduction in unit costs could allow the business to reduce its price, enabling the business to become more competitive. However, the decision to reduce the price would depend on the products price elasticity of demand etc.
The 4 concepts act as a scaffold allowing students to see links and develop good analysis
You could even provide a 5th concept, profit, therefore introducing a finance topic.
Certainly worth a try
Both I and my student have been hard at work today creating some 'Quizlets' for the various sections of Edexcel GCSE Business Studies.
Our Bank holiday weekend edition of the Biz Quiz is now live!
Well, what can I say? Loads!
The tutor2u team have just returned from 5 fabulous days in Dubai delivering a wide range of CPD to a group of fantastic teachers from a wide range of places including Dubai, Doha, Muskat and Hong Kong to name but a few.
Over the course of the 5 days we delivered TBBLE (The Best Business Lesson Ever), Making Finance Fun, WOW Economics and the Effective use of ICT in Business and Economics.
During our time in Dubia we covered a range of teaching and learning strategies to:
- Inspire and Engage students
- Deliver essential Business and Economics Content
- Develop students exam skills
- Test students understanding
What made the days so special was the level of interaction amongst the teachers who were extremely willing to get involved and try out the resources first hand as well as give their input on how these strategies could be developed further. We also showcased some resources and activities that we have just been developed with the aim of receiving some first hand feedback on how these could be developed further to enhance teaching and learning within the classroom.
I have very fond memories of my time over there and I am sure this wont be the last time we visit Dubai.
For Sony's CEO Kazou Hirai - a promise is a promise.
Back in April 2012, when Kazou Hirai took over as CEO from Sir Howard Stringer, he pledged to restore Sony's troubled Consumer Electronics division to profitability within one year.
In a significant programme of retrenchment, Sony has shed over 10,000 jobs (about 6% of the workforce), sold off major property assets and substantially cut production at the heavily loss-making Sony Television business (which is a significant part of the Consumer Electronics division). The result is expected to be Sony's first corporate profit for five years when it reports final result for the year to 31 March 2013 in May. However, the Consumer Electronics division remains unprofitable - Sony has not met its objective.
The reaction by Hirai? It is reported that forty of Sony’s top executives, including Hirai, are to give up bonuses worth between 30 and 50 per cent of their pay. The decision will save Sony around $10m, which is not particularly significant in financial terms.read more...»
Here is a terrific blog curated by enthusiastic and knowledgeable Year 10 GCSE studies from Dubai British School- it is full of regularly updated entries and showing great enthusiasm for a fast-moving subject. I expect them to do really well in their exams!
Their Business Studies Society blog can be found by clicking this link
Everybody who has been with the tutor2u team in Dubai this week has been so friendly and supportive - we have had a great time!
Consumers around the world are falling in love with mobile devices, notably smartphones and tablets. However, as this excellent short FT video explains, many businesses (including leading brands) are struggling to adapt to the migration of consumers from desktops and laptops to mobile devices.read more...»
How & Why. These are the two important words for students preparing for BUSS4 and as they practice their essay technique.
So, why is that? And how can they be used?
The source of their importance lies in the skill of analysis…read more...»
Seeking a way to make costs, revenue and profits interesting for my business students and get them digging deep into the reality of cost control, revenue generation I developed the "Shocker or Cracker?" activity.
This requires students to conduct independent research within the classroom using their own electronic devices (laptop, tablet or samrtphone) and helps to generate a healthy sense of competition.
There has been increasing debate about the merits of adopting a Bring Your Own Device (BYOD) policy within schools and colleges so I thought I'd give it a go...read more...»
Expect lots of coverage this week about the growth strategy being pursued by Whitbread plc.
Whitbread used to have a pretty diverse product portfolio including the brewing of beer and the operation of David Lloyd health clubs. However, in recent years Whitbread had rationalised its portfolio of businesses to focus on two markets where it believes it can achieve sustainable and high sales and profit growth. And it has backed that strategic focus with heavy investment. If only other UK firms would do that!read more...»
Here is an updated revision presentation on aspects of the economic environment for UK businesses in the late spring of 2013.read more...»
Whenever you are investigating a firm’s accounts – perhaps using ratio analysis – you quickly realise that the answers you’re generating only really make sense when you compare them against something, like last year’s figures, or those of a rival.
My students are looking at a case study (OCR F297) in which a firm is making a return on capital of approximately 11%. We were wondering if that was a ‘good’ return or not. I’ve come across an article that directly answers that question, and raises some other points that offer a revealing insight into the health of Britain’s businesses.read more...»
Many thanks to Joe Corcoran from Greenhead College for this superb advice on BUSS4 essay writing. Well worth putting these tips into practice!
Don't forget that Mark Mitchell, Joe's teaching colleague at Greenhead, has recently written a comprehensive guide to BUSS4 essay writing - which is now also available in a full-colour printed edition from the tutor2u online store! We have a couple of boxes left, so order one soon if you would like a copy in good time for the BUSS4 exam.read more...»
10 more questions on the business news from the last seven days. We think these are a little harder than normal - do you agree?
Some interesting finance news here, since Apple don’t plan to spend their famous cash mountain on a conventional purchase. Instead, they plan to raise dividends and buy back their own shares. Why?read more...»
‘Feel free to browse’ often strikes me as an odd sign in many shop windows. Why wouldn’t I feel free to do so? Well, the answer should have struck me by now. Apparently, many ‘bricks and mortar’ retailers are feeling the pressure from ‘showrooming’ – when people see something they wanted in a shop, try it, check the price online on their smartphone, find it’s cheaper, and walk out.
I’ve just been reading about the phenomenon and was reminded of the sign I’ve used to illustrate this blog, which appeared in a shop window after the British camera chain went into administration. "The staff at Jessops would like to thank you for shopping with Amazon". (I think any discussion of tax avoidance can be saved for another occasion).read more...»
It is often claimed that the organisational culture of a business is formed and developed in the "shadow of the leader". And perhaps nowhere is this more true than the organisational culture of Ikea which was founded by Ingvar Kamprad.
Here is a some evidence which helps explain the concept and also tells us more about the core values that have been used to build the Ikea business.read more...»
Let's face it. Nearly all of us associate Ikea with flatpack, affordable furniture. The Ikea brand has become a global success and, as we reported on the business blog recently, the Ikea format is well-positioned to achieve further success in key emerging markets.
However, Ikea's business portfolio is not just about furniture retailing.
In March 2013, Ikea announced that it is to partner with Marriott International to open a chain of three-star hotels. The chosen brand name for this joint venture between Marriott and Ikea is Moxy Hotels.read more...»
A superb article here from Reuters which examines the challenges facing Ikea as it accelerates its expansion into key emerging markets, notably China and India.
On the one hand, Ikea aims to exploit its global brand by applying the core retailing concept (epitomized by the store racetrack layout, flatpack goods etc) and core values that have enabled to it to become the world's largest furniture retailer.
However, Ikea also needs to be sensitive to the specific customer needs and wants in each national market if it is to meet customer expectations and compete effectively.read more...»
Kazou Hirai took over as CEO of Sony on 1 April 2012 replacing Howard Stringer. Hirai inherited a business with many problems and experiencing heavy losses. What has he done in his first year?read more...»
Lots of great information from Schultz here and insights into his business strategy. Many insights too into Schultz's personal background and his views on what it takes to be a successful entrepreneur.
Put simply, this interview has everything! Organisational culture; entrepreneurship; CSR; emerging markets; retrenchment; ethics.read more...»
Another fascinating interview with a tech CEO here. Some great insights into how technological change is providing opportunities for his business.read more...»
A simply stunning video here from the FT which is perfect for students wishing to gather some evidence on industries, firms and brands that have thrived despite the prolonged economic downturn in developed economies.read more...»
Many thanks for Graham Prior and Jon Clark who have produced this brand new version of Thinking Skills Bingo which is specifically designed to support student revision for AQA GCSE Business Studies.
This engaging lesson activity is ready-to-use. Just add students!read more...»
A fantastic teaching opportunity has arisen at GSAL which we've also added to the Economics Blog here for those of you who may be interested.
We have now completed our planning for our popular exam-preparation workshops for the 2014 Academic Year to take account of the move to linear exams and the withdrawal of January units for students located in England.
We have made an important change to the way in which bookings are processed for these workshops.
As you may be aware, many of our recently workshops were heavily over-subscribed and we reluctantly had to refuse places for schools and colleges that were not able to confirm their provisional bookings before the cinema screen capacity was filled. We have also experienced many problems where provisional bookings are withdrawn at the last moment.
The changes to the format of the workshops and booking process are explained in more detail below.read more...»
Has Nokia got a problem with its product portfolio? The market seems to think so. Nokia's shares down 13% today on news of disappointing sales for the first three months of 2013.
Nokia has enjoyed some recent success with its Lumia smartphone range. However, sales of its traditional more basic feature phones are very weak and facing intense competition in emerging markets against low-cost competitors.
So, Nokia's smartphones are doing well, but Nokia has only a small market share in a fast-growing market. If we were applying this to the Boston Matrix, Nokia's smartphones would probably be considered to be "problem children" or "question marks".
What about Nokia's feature phones. A falling market share (once the market leader) but in a low-growth market. That looks like a "Dog" in the Boston Matrix - or at least on the way to becoming a dog (maybe a puppy?).
The Biz Quiz returns from the Easter break for the first quiz of a busy summer term! Good luck everyone!
I remember the first time I had to resign from a job. I was really nervous. But here's a great way of resigning and plugging the business that you intend to leave in order to run as well. It's also packed full of great content for Unit 1 Edexcel GCSE Business and AQA AS Business BUSS1.
That might seem an odd question to pose on a day when UK unemployment figures rose over 2.5m. Yet many of those people live in the ‘wrong’ place, or have the ‘wrong’ skills (and most, hopefully, will not be unemployed for over 6 months). So here’s a blog post to get you thinking along PEST analysis lines – such as how firms are affected by this economic problem. But there’s another interesting point if you’re thinking about social trends too…
Have you guessed where all these extra workers we need might come from?read more...»
Here is one of my all-time favourite video clips for business studies, featuring one of my business heroes - Herb Kelleher.
You might not have heard of Herb Kelleher. However, I highly recommend that you take a little time to find out more about him and the business he founded - Southwest Airlines. It is a fantastic example of a business which has identified organisational culture as a source of sustainable competitive advantage.
Kelleher identified the need for an employee-centered culture at Southwest as the way in which his airline could deliver outstanding customer service. Put simply, Herb believes that the "business of business is people".
In this short, five minute video, Herb explains why putting employees at the centre of Southwest's culture is so important to him.
About a minute into the video, Herb demonstrates a superb example of "analysis" using a logical chain of argument. The argument goes something like this:
...If the employees come first, then they’re happy…. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders.
A simply stunning video, that stands the test of time.read more...»
The organisational structure and organisational culture at John Lewis Partnership, based around employee ownership, is distinctive and highly successful. But why? What is it about the "partnership" model at JLP which drives sales and customer service so high?
In these JLP videos, the partners themselves explain their perspectives on the business benefits of partnership in a highly competitive retail environment. The business benefits of the model are examined in more detail in the second video.
Some fantastic insights into culture here as well as the motivational impact of employee ownership.read more...»
This revision quiz tests knowledge of the role of product trial and gaining repeat purchase. The questions are particularly suitable for GCSE or other Level 2 students.
Try this revision quiz with 10 questions covering the basics of the Boston Matrix model. The questions are particularly suitable for GCSE or other Level 2 students.
A new revision quiz here with 10 multiple-choice questions on branding and product differentiation, with the questions particularly suitable for GCSE or other Level 2 students.
This revision quiz has 10 multiple-choice questions on the product life cycle, with the questions particularly suitable for GCSE or other Level 2 students.
What happens when we pop our digital clogs?
I'd like to think that my collection of Tweets and Blogs might be acquired by the British Museum and placed in a special room that you could all visit. My collection of fascinating photos on Facebook are surely destined to become a national treasure - possibly.
Or possibly not.
But what happens to everything you do online once you've passed to a different kind of social network in the cloud?
There are an increasing number of businesses who spot an opportunity here. And now Google has decided that it has the ability to offer services to help people manage their "Digital Afterlife".read more...»
A great video to share here with your students and pose the question - can a fast food chain based on healthy eating succeed?
Students at tutor2u's EntrepreneurLIVE 2012 events met Vincent McKevitt, the entrepreneur behind Tossed, a healthy-eating fast food chain based in London.
It looks like Vincent might soon be facing some competition from an ambitious Canadian startup Freshii which is also testing the idea that fast food can be healthy by building a chain of healthy fast-food restaurants in the U.S. and around the world.
Can the concept work? Why not? But what will it take to encourage more of us to switch from the instant satisfaction of a burger or fried chicken.
And can businesses like Freshii and Tossed compete with established multinational fast food giants like McDonalds and Subway who may simply alter their product offering if significant numbers of customers decide to start looking for a healthy-eating alternative?read more...»
Terrific insights here from Andy Street, the CEO of John Lewis Partnership, about how the concept of trust is so important in business success. Some short, sharp points here which help identify elements of the organisational culture at John Lewis Partnership and perhaps point to some of the reasons why JLP has been so successful in recent years despite the economic downturn. Essentially Andy Street sees trust as a source of competitive advantage. But it is hard won, and easily lost! Businesses - take note!read more...»
The effect of the economic downturn on small retailers, and how they are adapting, is explored in the powerful video below from the FT.
First up is a bespoke tailor trying to survive in a poor area that has been significantly affected by government spending cuts to welfare payments.
In the same location is a retailer of sporting goods. His business has changed dramatically in recent years, with demand much less predictable. Cash flow management has become much harder, so he has responded by cutting stocks and repositioning his retail product range. Can he survive against the likes of Sports Direct?
Finally, we see the effect on a furniture retailer of the emergence of pawnbrokers and other loan shops.
For these retailers, costs are rising but sales are falling. The future for these high street retailers looks bleak. Can they survive? And if so, how?read more...»