What business students can learn from how businesses have handled the recession

The actions taken by successful businesses during the UK recession provide a rich source of guidance for students wishing to improve their analysis and evaluation skills. 

The gentle touch in city finance

Far be it from me to criticise male dominance of the City of London but it seems that, ever since the start of the financial crisis that led to the recession, there has been a series of reports suggesting that if there were more women in positions of power in the city institutions that lost control of their lending, this would never have happened. A committee of MP’s (which includes only one woman) which is currently studying the role of women in the City has been told by a (male) professor from the London School of Economics that a more cautious approach, rather than an “alpha male” one, would be beneficial. Professor Charles Goodhart explained that the more cautious and long-term outlook of women could prove to be a more positive trait than the more aggressive risk-taking stance of men. However, another LSE professor told the committee of MPs that there is a need for a change of culture in the City before this can happen - too many deals have been sealed in lap-dancing clubs for female employees to feel that the working environment will suit them. It seems that women are well-represented on the boards of the FTSE top 250 companies, but very under-represented on the boards of the FTSE 100. How is this best solved? In Norway there is a quota system; 40% of board members must be female. Clare Dobie, of the City Women’s Network told the committee that recruiters could do much to help the problem which her organisation sees as an issue of too little demand rather than a shortage of supply of women who are good enough for the job. A report last month from the Equality and Human Rights Commission found that women working in the city are paid on average 39% less than men doing the same job. Women start on a lower salary and never make up the difference. They also earn bonuses which are up to five times smaller than those earned by their male colleagues - on average, women get bonuses of £2,875 compared with £14,554 for men. The message must be very clear: that men are valued more highly.

However the gender pay gap should be addressed there does remain a practical difficulty though: John Cridland, deputy director general of business group the CBI, said “As in many other areas of business, women applying for the top jobs need more flexibility with hours and childcare responsibilities” .  How long will it remain the case that it is the women who need this flexibility, and not the men? 

The Changing Face of Human Resources

The HR function has probably undergone more changes than any other over the last half century. Many of those areas that were once considered to be the responsibility of HR Managers (or Personnel Managers as the majority were called before the turn of the 21st Century) have been transferred to line managers, leaving HR Managers to (in theory!) concentrate on matters of more strategic importance. 

Motivation in practice - how not to do it - lessons from Britain’s bosses

The recession of 2009 has put bosses and managers under great strain.  And it seems that one result is an increasingly de-motivated workforce.  That’s not surprising if the actions of some of Britain’s bosses are being repeated across the land…

Fantasy Football hit by the weakness of sterling

Imagine, for a moment, that you are a top European footballer, perhaps from Italy, Spain or Portugal – something like Cristiano Ronaldo but better looking and more modest. Now imagine that two years ago you signed for a top Premiership club, perhaps Chelsea or Manchester United, for a transfer fee of around £25million plus a weekly salary of £100,000 – a reasonable and modest sum, given the quality of your football. When you started to play in the UK the top rate of tax was 40%, so after the first week when you benefitted from the lower tax rates on the first £40,000 or so of your annual pay, you have paid £40,000 income tax per week. But next April the top rate is set to rise to 50%, so your net (or take-home) pay will fall by a further £10,000 per week. Will you have to start watching your spending a bit more carefully?

How to improve profitability? - give customers a “staff appraisal”

Mike Southon is essential reading in the FT on a Saturday and his latest entry makes some really useful points for business students…

Q&A - Outline the main costs and benefits of inflation

Inflation has many important costs and consequences for both society and business. However a stable and low level of inflation also provides some upsides for business.

Work For Free?  Or Pie In The Sky?

How many students would go to work for free?

Well bosses of British Airways will be hoping that non-financial motivation exists, as they have asked staff to volunteer to work for free (or take unpaid leave) for up to a month, in an attempt to ensure that the firm can win the fight for survival.

This BBC article could be tied in with two topics on the new Edexcel Specifications:

A stunning example of how wage costs can differ for the same job

A very interesting and potentially explosive article in The Times today highlights the problems faced by British Airways as it seeks to reduce its operating costs…

Q&A - What are the main drawbacks to an entrepreneur of starting a business

There are many potential drawbacks to being an entrepreneur.