Women and Wal-Mart

This post contains some information about the Dukes v Wal-Mart case and my suggestions to Wal-Mart executives when thinking about women in the future.

Wal-Mart is one of the most polarizing global corporations in existence. Many business people and investors lionize Wal-Mart as a supply-chain marvel and an innovator in business. Customers flock to the outlets seeing Wal-Mart as a stalwart low price outlet and an overall creator of value. Suppliers largely view Wal-Mart ambivalently as a great single-stop venue for their merchandise as well as a constant pressure on their profit margins. Small retailers fear Wal-Mart for their advantages in economies of scale and aggressive business tactics. Opponents despise Wal-Mart for destroying small businesses, blighting community aesthetics, and driving suppliers to outsource jobs. Regardless of your personal position, Wal-Mart and its business practices are a force to be reckoned and a reality for the foreseeable future.

Because it is the single largest US employer, Wal-Mart faces some personnel challenges. The entire Wal-Mart business model rests on their low-price leader position, so they constantly seek to trim costs. Employee costs are the largest expenses of most employers and Wal-Mart is no exception. As a large retailer, most Wal-Mart employees are low-wage, low-skill positions such as cashiers, clerks, administrative personnel, and warehouse personnel. For years a tension has developed between Wal-Mart’s corporate goals and the employees’ desire for adequate compensation. This tension has resulted in increased public scrutiny, suppression of unionization efforts, boycotts, and recent litigation. Continue reading

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19 JIT Kune Do

The following topic will be addressed in this post:

What are the pro’s and con’s of JIT inventory control?

Empty your mind. Be formless, shapeless, like water. Now, you put water into a cup, it becomes the cup. You put water into a bottle, it becomes the bottle. You put it in a teapot, it becomes the teapot. Now water can flow or it can crash. Be water, my friend.- Bruce Lee in a Longstreet TV episode

In some ways, Just in Time (JIT) inventory control follows Mr. Lee’s advice. Since time immemorial, firms have needed to manage their inventories so they could have the correct products for their customers. For almost as long, firms have managed inventories by warehousing large quantities of products. With the advent of things like powerful computer systems, enterprise resource planning (ERP), six sigma quality control, and rapid transportation, however, firms are able to take a leaner and more nimble approach to their inventory management. One of these lean business approaches is JIT.

JIT allows businesses to greatly reduce their need to maintain and manage large inventories. But all is not wine and roses. Like any business process, JIT has positive features and potential pitfalls for the firm and the customer. Continue reading

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Collaborative Negotiation

This post will focus on using a collaborative strategy in negotiations. The post will discuss a tool for proceeding in a collaborative fashion and some of the potential problems that can arise.

Do not repeat the tactics that have gained you one victory, but let your methods be regulated by the infinite variety of circumstances–Sun Tzu (Giles).

When discussing negotiation, people typically recognize four types of strategies: competing, collaborating, accommodating, and avoiding. This post will focus on collaborative negotiation techniques, which attempt to maximize results and relationships. On the other hand, collaborative negotiations are complex and some possible negative factors to collaborative negotiation will also be mentioned.

Regardless of strategy, all negotiators should conduct as much advance preparation as possible. One tool that can be used to guide the preparation process is the “Negotiation Checklist” outlined by Simons and Tripp. The Negotiation Checklist provides a good framework for negotiators to consider specific aspects of the pending negotiation, such as personnel in the different parties, aims of the negotiation, results of previous negotiations, and deciding about the BATNA. An important aspect of the checklist is developing a table with points assigned to each issue by importance and identifying resistance points. The experienced negotiator employs this process to ponder each issue and decide where to concentrate time and effort. Also, the resistance points act as guides for the negotiator, and they are devices for probing the other party or suspending negotiations to gather further information from constituents (Simons and Tripp). Many novice negotiators want to keep things simple and focused. As a result, they have experience with price negotiations only. While price is important, having a range of negotiating issues more often leads to innovative and equitable solutions. Moreover, negotiating many issues leads to less likelihood of miscommunication when drafting the written contract (Simons and Tripp). Continue reading

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13. 14. & 17. I’ll Gladly Pay You Tuesday…

The following topics will be addressed in this post:

How does the extensive use of credit cards by their customers affect small businesses? Describe three methods for limiting the risk for a company that extends credit to its customer? Explain the four C’s of credit. Which is the most important and why?

“Cash is King” vs. “The World Takes Visa”

The first phrase has dominated business transactions throughout known experience. In most societies and across the globe, some form of hard currency has been the transaction medium for commerce. The second phrase, however, is becoming more prevalent. Indeed, the world now revolves on revolving credit.

As customers use credit cards more frequently, businesses must adapt to new situations. Among the new realities, businesses need modern equipment and services to process credit transactions that increase convenience as well as costs. Also, customers do not have to physically come to the business location, so out-of-state and international transactions are easier. Now, credit cards help the continuity of cash flows because the banks are extending consumer credit rather than the businesses. On the other hand, electronic crime increases so businesses must maintain secure databases as well as verify identities to prevent loss due to chargebacks. These are just of few of the many business considerations in the new age of credit cards. Continue reading

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Food and Beverage: Clarence Otis, Jr. and Indra Nooyi

Clarence Otis, Jr. (Darden Restaurants, NYSE: DRI)

Clarence Otis, Jr. was born in Mississippi in 1956 but soon moved to the Watts neighborhood of Los Angeles. Always a standout student, Mr. Otis graduated from Williams College, Massachusetts with honors and took a law degree from Stanford. Mr. Otis began a career in corporate law but found finance more exciting, so he moved through a few management positions in banking. In 1995, Darden hired Mr. Otis as treasurer and he became CEO in 2004 (JRank).

When interviewed about leadership for the New York Times, Mr. Otis said his early involvement with theater helped him understand teamwork and many other leaders helped him recognize the importance of putting others first (Bryant). During a 2009 commencement address at his alma mater Williams College, Mr. Otis identified sustained curiosity, the ability to dream big dreams, and meaningful expertise as the methods for effective leadership and advised people to have fun in their work (Otis). When hiring, Mr. Otis seeks drive, passion, and comfort with unpredictable circumstances (Bryant). Mr. Otis recognizes that written business communications are more functional and less artful than his law background, but he is circumspect about how he communicates orally with people in order to better focus, inspire, and direct people (Bryant). Continue reading

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12. C’mon, Man!

The following topic will be addressed in this post:

Explain the scope of fraud and why it impacts small businesses to a greater extent than large businesses. What should the owners or managers do to prevent fraud from occurring in the first place?

Unfortunately, criminal behavior exists in business. Among the various classes of criminality we have fraud. In legalese, fraud is defined as “the intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right” (Law.com). This definition is broad and includes many activities, but the most important aspect is conscious deceptive action.

According to fraud investigator Tracy Coenen:

“It’s no secret that on-the-job fraud is expensive, costing American businesses an estimated $652 billion each year. The typical occupational fraud will cost a company between $10,000 and $500,000. But this represents only the money taken by the thief, not the other costs that can quickly mount. Continue reading

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Let’s Talk

This post will discuss some general aspects of negotiation in business.

If the enemy leaves a door open, you must rush in – Sun Tzu (Giles).

Negotiation is a fundamental aspect of business. In fact, people use negotiation techniques naturally in their daily lives, often in combination. Therefore, negotiators should realize they are proficient in the techniques and feel confident while using them. Also, negotiators should be able to recognize what techniques other parties are employing, especially because most negotiators use competitive negotiation strategies.

In a recent study by Wolfe and McGinn, research subjects participated in mock job interview negotiation sessions. Prior to the interview, subjects were provided information about the relative power of the other party. The research results indicated that when negotiating parties perceived that they had equal power they tended to share more  information and “integrative” results occurred, results that grew the pie. Dr. McGinn cautions against simply giving up power in negotiations to create equality. But, if you create an authentically equal situation, Dr. McGinn contends that “you’re increasing the likelihood that you and your negotiation partner will create value in the negotiation” (Stark). Continue reading

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9. & 10. The New Frontier

The following topics will be addressed in this post:

Why is environmental scanning a management concept, NOT an entrepreneurial concept, and what process do entrepreneurs practice which takes its place?

What are the pros and cons of doing business entirely online without a physical storefront or presence? Consider this question from the perspective of selling a tangible product.

Traditionally, management is divided into four major functional categories: planning, organizing, leading, and controlling. Here, I will discuss controlling, which can be defined as monitoring performance and making needed changes. Specifically, I will focus on two issues of controlling: environmental scanning and using a completely on-line presence. I place these in controlling because I take the perspective that the firm is currently operating.

Firms exist in highly competitive business environments. The world is constantly changing. New competitors arise daily. Technology improvements are creating new processes and functionalities. All of these factors and more create uncertain and tumultuous business environments. Consequently, firms must overcome or at least adapt to the uncertainty by using techniques like environmental scanning. Continue reading

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List of Books for Understanding the 2008 Financial Meltdown

This post will mention some of the books that I have encountered and recommend for anyone who is serious about understanding the financial crisis of 2008 and the associated recession. Who were the important personalities? What institutions were involved? What types of investments helped create the conditions? This list is by no means exhaustive, but I offer you this list of books by reputable authors to help you begin your studies.

The Quants by Scott Patterson

Mr. Patterson investigates the trend in financial investing to use mathematical stratagems to make money. Mr. Patterson follows the careers of several of the mathematical geniuses called “quants” who prowl Wall Street investment houses. Mr. Patterson touches on the original quants of Long Term Capital Management, but his focus is on the newer generation of quants operating within the last two decades. Two things were of especial interest to me. First, people built different algorithms, so obviously there are many ways to dissect the market and world commerce. Second, the algorithms often function on super-computers with little daily human oversight, so things can deteriorate with alarming speed.

The Big Short by Michael Lewis

An outstanding writer upon many subjects, Mr. Lewis returns to his original turf in the financial realm. For four years, Mr. Lewis was an investment banker at Solomon Brothers and his first book Liar’s Poker described some of his experiences in high finance. In this book, he follows a few individuals and teams. Some of these people worked for large Wall Street firms and some started boutique firms and funds of their own. The common denominator here is that all of these people accurately forecast the U.S. housing crisis based upon poor lending practices. They all attempted to capitalize on their assessment by finding vehicles to short American mortgage backed investment products. Continue reading

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6. & 7. Passing the Baton

The following topics will be addressed in this post:

Discuss the advantages and disadvantages of buying a business as opposed to starting one from scratch. What two ways can one buy a business and which is preferable ? Why?

Is there such a concept as “good will” in reality and is it transferable? Why or why not? Give an example.

Ladies and gentlemen, step right up and get your existing business here! We have all sizes and shapes to suit! We have small ones and large ones! We have retail, wholesale, service, and more! Yes, indeed, get your existing business with positive cash flows, an established client base, oodles of goodwill, and an owner willing to assist your financing! Don’t miss this opportunity!

The preceding hawker’s cry is not entirely in jest. Not every entrepreneur needs to start from scratch. Plenty of businesses change hands daily. Buying a business can be a great way to avoid start-up hassles and get right into the business of doing business. With Greatest Generationers and and now Baby Boomers retiring daily, acquiring an existing business might become the normal transfer model during the next couple of decades. Continue reading

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