Do Businesses Have Social Responsibilities?

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There are many arguments out there today doubting the importance of being socially responsible for companies. In any case, when a business makes any decision it definitely has some kind of responsibility behind it, because its actions affect human lives, every aspect of it, in one way or another. These actions affect the quality of human life as well. Then we want to ask ourselves – “Should the companies be accountable for their actions?” These actions not only affect said human lives but also the community as a whole along with the environment.

In many cases today we hear that yes, companies do have some responsibility before the people, community, and the environment they are doing business in. This kind of responsibility is known to be called the Corporate Social Responsibility (CSR). And this whole idea has faced a lot of arguments as to whether or not CSR is good or bad. There are a variety of arguments for and against it.

Some of the arguments supporting the CSR idea are as following: CSR corrects problems that are caused by businesses, it promotes long-term profits for businesses, improves business’ value and reputation and so on. All of these arguments force companies to continue to invest a lot of money into CSR endeavors.. One example is Nike where they actually recycle worn shoes and build track fields and other sports floors from it. Another example could be a cigarette company advertising that smoking is bad for your health. So, the main point is that all of these “socially responsible” corporations want to show the public that they care about the environment and the people living in it.

However, even though it all looks nice and sweet, there are many arguments explaining why CSR should not be followed. The main one is probably that it lowers the economic efficiency and profit of a corporation. And it makes sense, why would you try to invest money in a fund that supports the idea that, say, smoking is bad for you when you are actually a cigarette company. It does not make sense from an economic standpoint as explained above. To many, it may be a much better idea not to give away that money but instead to give it to the employees that work for you. As many people claim, social responsibility starts from within the corporation, from its heart – its employees.

This is a very controversial subject. What are your views on it? Please share your thoughts.


Emotional Intelligence – being smart with your emotions.

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I was first introduced to the idea of Emotional Intelligence in my “Leadership and Ethics” MBA class this past fall semester at the University of Nevada, Reno. For all that I learned about this concept I have to give huge credit to a wonderful professor that taught the class – Dr. Rafik Beekun. He is truly an expert in this field and all that I am going to talk about in this blog post is a direct outcome of Dr. Beekun’s teachings.

Throughout my life, I always wondered about why people behave the way they do. I tried to understand why they say certain things and why they act in one way or another. I looked at the way people behaved in their personal lives, athletics and in a work setting. Some people could be very nice in a social setting but extremely competitive when they play sports or are tasked with a project at work. Some people would be completely calm in all three areas whereas others could be very outgoing in their personal lives but shy and not comfortable in a work setting and so the list goes. There was not a universal trend in which people would act in the same way regardless of the setting they were in.

When I learned what Emotional Intelligence was all about my questions were answered right away! It became very clear why people act the way they do. It became even more clear why two people act differently in the exact same setting.

And the reason for that laid in the simple fact that – Emotional intelligence is not about being emotional – It is about being smart with your emotions.

I think Emotional Intelligence makes very effective business leaders because it improves communication in the workplace, makes less conflict situations, and increases the likelihood that a given person would make a good leader. Moreover, it does not just apply to work environment – it also applies to the overall development of a person.

Ultimately, I stand by the fact that everyone should have a goal to become very good at being smart with his/her emotions.


Sustainability examples at Amazon.com

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As mentioned in my first post, one of the purposes for this blog is to write about sustainable business practices. One of the great examples of a company who has been great in this area is Amazon.com.

Sustainability has been a fast-growing trend over the last decade. The concept behind it is what’s called “the tripple bottomline” – this basically means that any decision a company makes has a three-fold impact on the following: the economy, the environment and the society as a whole.

Below I am going to share some of the examples that you can find on Amazon.com’s Investor Relations page. This is public information.

  • Amazon.com has launched AmazonGreen (http://www.amazon.com/green), a cross-category program that includes a list of products that customers have selected as the best green products offered by Amazon.com and a place for customers to discover Amazon’s entire green product selection.
  • Frustration-Free Packaging, launched in November 2008 with 19 best-selling items from leading manufacturers including Fisher-Price, Mattel, Microsoft and electronics manufacturer Transcend, Amazon Frustration-Free Packaging, eliminates hard plastic “clamshell” cases and plastic-coated wire ties, commonly used in toy packaging.
  • Amazon has developed a software program that determines the “right-sized” box for any given item to be shipped to a customer, based on that item’s dimensions and weight. As a result, the number of packages shipped in a wrong-sized box has decreased dramatically, significantly reducing packaging waste and transportation costs. In 2008, Amazon also sent 35% of its larger-sized packages to customers without any additional packaging, further reducing packaging waste and transportation costs.
  • Not only does Amazon work on reducing waste in its packaging, but it also works on making the packaging more environmentally friendly. For example, most Amazon.com orders are shipped in corrugated containers which on average contain 43% recovered fiber content. Once used, these containers are 100% recyclable for use in the manufacture of other paper products.
  • Environmentally conscious Amazonians work together to implement environmental and energy initiatives across all parts of the company. Composed of hundreds of Amazonians, this group is known as “Earth Kaizens,” from the Japanese term meaning “change for the better.” Amazon employees at all levels dive deep into every nook and cranny of a process to identify waste and design alternative solutions that are more energy efficient.
  • Amazon’s technologies offer simple and effective ways for nonprofit organizations to raise awareness, collect needed supplies, and solicit funds.
  • A love of reading and an appreciation for the people who create great books is part of Amazon’s culture. It is one of the reasons why Amazon.com offers grants and sponsorships for nonprofit author and publisher groups that share the same obsession with fostering the creation, discussion, and publication of books.
  • As the CEO Jeff Bezos stated in his 1997 Letter to Shareholders, “A fundamental measure of our success will be the shareholder value we create over the long term.”
  • Amazon strongly believes that the long-term interests of shareholders are tightly linked to the interests of the customers. If the company does the job right, today’s customers will buy more tomorrow, more customers will be added in the process, and it will all add up to more cash flow and more long-term value for the shareholders.

Company’s slogan is: “Work Hard, Have Fun, Make History.”

I am a firm believer that we are in the era where companies have to be accountable for their actions in regards to the environment, social responsibility, and economic impact. For this reason, I argue that the more companies that act in the way Amazon.com has, the better we, as a society at large, will become in the long term.


7 ways to get your start up noticed by the media

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Sun Microsystems wrote a very interesting article which I am featuring in this blog post.

One common mistake that a start up company could make is putting insufficient trust in the power of the social media and all the great tools online by which the company can attract potential customers.

This article provides a great insight into how to get noticed by the media. There are basically 7 strategies you can use:

  1. Make your press release stand out but don’t use excessive verbiage.
  2. Make sure your website gives users tools to research the company. Here is where you want to be very detail-oriented as you never know what kind of information will attract a reporter’s eyes.
  3. If you scheduled an interview with a media person, always keep it. Respect the reporter’s time and they will respect yours.
  4. Always provide prep material to press before the meeting, so the writer can be as well prepared as possible.
  5. During the meeting, make sure the reporter has a chance to get the information he or she needs for the story.
  6. Always research a reporter to get a feel for their tone. Consult with your PR person on advice before the interview.
  7. If you notice any discrepancies after the story is published, politely contact that reporter and bring this to his or her attention.

It is very hard to get your start up noticed by the media and that is why it is very important to develop a good, long-lasting relationship with a reporter.

For more information please visit the original article at: http://blogs.sun.com/sun4startups/entry/seven_ways_to_get_your


Differences in leadership styles. My personal take

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Being from Russia, I can certainly relate to the fact that culture and gender play a key role in determining the leadership style of an individual. I have been working in the US for over two years now, and I can definitely say that there are substantial gender and culture differences in leadership styles between men and women when comparing the two countries – Russia and USA.

I have noticed that the Americans tend to be quick to the point and like to “seal the deal” if it makes perfect financial sense, whereas if you are doing business in Russia people like to take time to get to know the other party first before committing to the final agreement. Even though this example is more about the differences in negotiating techniques, it does have an effect on the leadership style. I would say that Russian leaders tend to be in a healthy medium between being autocratic and participative. We do enjoy having the authority, but we also like to establish long-term relationships with our employees, whereas from what I can tell after having worked in the US it is not always the case.

In order to advance the theoretical framework of gender and culture differences in leadership styles, I believe that the academia needs to spend more efforts in researching the cultural impacts on leadership so as to get a better understanding why there are so many differences in leadership behaviors between men and women. The differences cannot be explained by the style of leadership or gender alone, where the people are coming from in terms of their country of origin and its unique cultural characteristics needs to be taken into account as well.

I’d like to comment that this is just my own opinion and it might not be true in every case. I am just sharing my personal experiences that I formed while living in both Russia and the United States.


How shall we live?

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I believe that a person should always stand up for what he or she believes in. Anyone has its own set of core personal values and these should be the guiding principles by which to make life decisions.

I will live my life and make decision in accordance to my personal values:

Goal-orientation. I believe that any person today in business world, and not even in business, but in life in general, has to be goal-directed. I say so because when you have a goal, then you know what exactly you want to do in your life and it is, hence, easier to reach that goal. I want to be a successful person in life and I believe goal-seeking is a means to assist me to become one.

Integrity. I believe that a person should be honest in any aspect of his or her own life. Wherever life takes you and under any circumstances the level of your integrity will allow you to make the right choice and become a better person in the long term.

Trust. I respect people that I can trust and in turn they can trust me. I believe success can only come when you and your business partner or friend are on the same page, where everything is clear and there is no room for uncertainty and craftiness. I will live my life always trying to find people I can trust.

Commitment. Even though I think it is crucial to have a goal in life it does not do you any good unless you are truly committed to it. When someone has a goal, he or she needs to be committed to it 100% – this is the only way to achieve that goal. I live by this assumption.

Creativity. It is an important personal value because when you have a goal and you are committed to it, you still need to be able to figure out how you will achieve that goal. In today’s growing business world it is especially substantial to be creative. You have to go after your goal by whatever it takes as long as it is ethical and does not make any one else’s life worse.

This is just my personal take on the importance of personal values. I encourage anyone to share their thoughts on the points mentioned above.


Corporate codes of ethics: necessary but not sufficient

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In today’s business world most large companies all over the globe have a code of ethics; however, the number of cases recorded that involved ethical misconduct among some of these companies does not seem to be decreasing. In order to understand the reasons behind such a trend we need to look at how ethical theory applies to business practice.

When we talk about ethical theory and business practice we are always asking ourselves questions like: Can business organizations be just? Should the main obligation of businesses be to maximize the profits at all costs possible? Do international business organizations have the obligation to protect human rights wherever they do business?

It has been proposed that if a company is legal then it is also moral. If this is the case then why should the business world even concern itself with ethics? Instead, should businesses only be concerned with maximizing the bottomline just like Milton Friedman suggested in his theories? He had two main arguments to support his position. He saw stockholders as the primarily owners of the company and hence all of the profits that the company made would belong to them. He would also see the managers of the company as agents of the stockholders; hence, the managers would be morally obligated to manage the firm in the best interests of the stockholders – i.e. to maximize profits, or stockholders’ wealth. The second argument that Friedman made was that everyone who worked for the company and assisted it in making profits would get paid in the form of wages – this seemed fair – you helped in maximizing stockholders’ wealth, you got rewarded.

However, history has shown that soley trying to maximize profits can cause many negative outcomes. A good example is Enron. It was the corporation that did have a code of ethics and also claimed that it based its operations on core ethical values. But it did not stop Enron executives from making unethical accounting decisions and the company which took 16 years to go from $10 billion to $65 billion in assets went bankrupt in 24 days.

Everybody understands that the purpose of corporations is to maximize profits, but it needs to be done in the best ethical manner as possible. Writing up a code of ethics for the only sake of having one will not be sufficient. There needs to be constant training of employees at all levels of organizations so that everyone is aligned and everyone knows what the ethical policy truly means.

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