Germany Has Built Clean Energy Economy U.S. Rejected in 80s

The Fukushima nuclear disaster, following the earthquake and tsunami on March, 2011, in Japan warned the whole word the danger of nuclear energy. Many governments reacted by seeking for a cleaner and more sustained energy sources. German is one of the pioneers in the new trend by using renewable energy sources such as solar, wind, and tide, etc. and gradually stops ultilizing fossil fuels and nuclear power. They planed that renewable power will account for 80 percent of the amount of energy usage in German in 2050. This plan is fully supported by citizens because about 80 percent of Germans are now against nuclear power.

However, this shift in energy did not go smoothly in the U.S. since the economy has led by giant oil and coal multinational companies although the U.S. was the leader in research and production of renewable energy 30 years ago. One of the government's big achievements is substituting coal for natural gas, which leads to release less pollutants such as noxious smoke, fumes and fine particles into the atmosphere. Recently, there are some positive signals. For example, on May, 2012 President Obama went to Iowa to promote clean and renewable energy technologies and planned for a bigger tax credits to encourage investments from American companies. One month later, Former President Bill Clinton attended energy summit in Las Vegas to push clean energy legislation and jobs.

In Texas, Mayor Parker announced a project of development friendly and energy-efficient homes. These houses will be powered by 100 percent natural gas. She promised that home¬owners won’t pay utility bills for at least a decade and they even can sell excess electricity to other energy companies. Of course, the price of these special houses is not cheap, range from $200,000 to $225,000. This is a lot higher than the average home value in this area, usually only about $60,000. But the good news is that homeowners can enjoy discounts on property insurance and tax.

Since many national governments have reinforced regulations and laws to cut the pollution from manufacturing and daily activities. It is necessary and important for firms to change their energy utility system. It is not about saving and using energy economically but looks for a new and cleaner source to meet these requirements. The cost to upgrade the plants, and educate employees surely will be very expensive and can put many companies under financial pressure and difficulties. Firms need to plan, research and evaluate energy reform thoroughly to have a better chance of success. These changes are not only corporate social responsibility but also a potential opportunity to produce efficiently and effectively .

References

Davidson, Osha G. (2012). Germany Has Built Clean Energy Economy U.S. Rejected in 80s. Bloomberg. [Available at http://www.bloomberg.com/news/2012-11-13/germany-has-built-clean-energy-economy-u-s-rejected-in-80s.html]

Kever, Jeannie. (2012). High-tech, energy-efficient homes will be in historic neighborhoods. Fuelfix. [Available at http://fuelfix.com/blog/2012/11/30/high-tech-energy-efficient-homes-will-be-in-historic-neighborhoods/]

Obama to push clean energy technologies in Iowa. (2012). Businessweek. [Available at http://www.businessweek.com/ap/2012-05-22/obama-to-push-clean-energy-technologies-in-iowa.] 

DIGITAL, especially ONLINE ADVERTISING's FUTURE

"Today's advertisers don't have to worry about campaigns running amok like this elephant in 1932 - but they do need to chase digital engagement" ("Going digital: the future of advertising" by Andy Hart, BBC News Business April 19th, 2012). Today, thanks to the technological development, digital users or customers can experience new products via many digital channels such as internet or other web-browsers on computer or smartphones. And, online advertising is one of trend for digital advertisers or planners. As in the article "'Like' it or not, online ads are getting personal" of Adam Ostrow on the CNN Tech site, "Is the future of online advertising one of incredibly targeted advertising based on your interests, online activities and Facebook "likes," or is it one dictated by robust privacy controls that keep those details out of the hands of marketers?" In this article, it mentions that marketing planners or advertisers can get perspective customers by collecting internet users through cookies or web-browsers history. For example, Facebook apps called Sponsored Stories this is one type of advertisement when a user interacts with a brand on Facebook, his friends can do the same thing. A reference from a global study "Context matters" (2010) is that the morning is the time for social network activities and the evening is the time for entertainments on the internet, and users tend to open ads when they are surfing or searching information on the internet. It opens the new idea about exploring advertising that can get the attention of brands from internet users, especially in the current situation of "Do not track" consideration. 

"One thing we know for sure is that offline principles still apply online: never lose sight of your audience, simplicity wins and creativity rules" and "Advertisers can't rely on users to just watch them anymore", it is about the creative idea being the star rather than the technology.  (Andy Hart, Microsoft). Continually this thought, "brands need to rethink their online advertising", why? As in an aforementioned survey, from the results of about 65% of the responders say that they are not very likely to view an online advertising. About the sex configuration, this number is about 70%. For the social network ads such as on Facebook, this woman responders number is about 60%. A comment from this article says that it is because of the irrelevant of the ads. 

There are some suggestions of the author that I also think that they probably useful for brand managers or brand marketers are as followed. First, testing online advertising. Then, customizing the ads to relevant customers. Online advertising will be more "personalised, contextual, relevant and useful".

 However, how to reach the right person and show him the right thing he wants to know is not an easy question to answer. 

References: 

http://www.cnn.com/2011/TECH/social.media/01/28/personal.advertising/index.html?iref=allsearch

http://www.forbes.com/sites/marketshare/2012/09/25/why-brands-need-to-rethink-their-online-advertising-strategy/

http://www.bbc.co.uk/news/business-17764117

LIQUIFIED NATURAL GAS A SOURCE OF NORTH AMERICAN DOMINANCE FOR COMING YEARS

LIQUIFIED NATURAL GAS A SOURCE OF NORTH AMERICAN DOMINANCE FOR COMING YEARS

Five years ago, the United States and Canada were not relevant powers in the world market for liquefied natural gas (LNG) production and exportation.  When advanced drilling technologies allowed to access to huge gas sources that had been previously unavailable because they were located in shale, the global power in liquefied natural gas production and export shifted radically.  Production facilities are now being planned throughout the United States and Canada to meet global demand for natural gas in the coming years.

Locally, Texas and Louisiana stand ready to capitalize on the recent glut of gas production.  Liquefaction plants along the Gulf Coast of these states already exist, and plants originally built to receive natural gas tanker shipments are being refitted to produce LNG.  Additionally, several LNG projects are planned along the Texas and Louisiana coasts and awaiting Department of Energy approval to begin construction.  One of the largest is the South Texas LNG Export Project.  Located in Ingleside near Corpus Christi, this facility hopes to by functional by 2018 and capable of exporting 8 million metric tons of LNG each year.

The development of LNG facilities is only a portion of the coming benefit of these recent discoveries in shale.  Over more than twenty years, a complex global transport network was built to reduce the cost of international oil transport.  That same level of infrastructure development will be needed to produce distribution economies for LNG.  The U.S. and Canada currently have facilities planned to produce and liquefy the largest amount of LNG in the world.

Countries like Japan, the largest importer of LNG, which gets its product from more than fifteen countries, and China, the fastest growing consumer of fossil fuels, are sure to provide immense demand on the global supply of LNG in the coming decades. 

For managers of gas drilling firms, LNG facilities, commercial construction companies, ship builders and shipping companies the opportunities in the coming years to prosper from exporting LNG are enormous.  Forward looking firms will need to prepare for increased governmental regulation with the current administration, but proper planning will ensure they are players in a lucrative LNG economy for many years.

Simpson, Scott. "Ramped-up Global LNG Market Confronts Possible Local Producers: Waning B.C. liquefied natural gas royalties would get boost from export boom." Vancouver Sun 01 Dec. 2012, weekend n. pag. Web. 1 Dec. 2012. <http://www.vancouversun.com/business/Ramped global market confronts possible local producers/7638824/story.html>.

Dlouhy, Jennifer. "LNG export plant sought in Corpus Christi area." Houston Chronicle 30 Nov. 2012, D3. Print.

"LNG: A Liquid Market." Economist. 14 2012: n. page. Web. 1 Dec. 2012. <http://www.economist.com/node/21558456>.

Current event: Siemens’ Cost Cutting Plan Impresses, But There’s More to Do

After a decade of restructuring, Siemens AG still works on a plan to promote growth and reduce costs by implementing more efficient operation and manufacturing processes, eliminating redundant functions and laggard units. In effort to cut cost, Siemens laid off a total number of 615 workers in Iowa, Kansas, and Florida on September, 2012 because tax credit for wind energy was not renewed by the Government. The Republican Party was fighting whether or not to continue the tax credit program. During the recent five years period, the wind energy industry is facing a substantial decrease in demand. As a result, Siemens must find ways to adjust the manufacturing, planning project on wind power to survive. Siemens will cut about 8,000 positions at the end of 2012 globally.  On the other hand, Peter Loescher, Chief Executive Officer of Siemens AG, announced on September that he will dispose the operation of solar thermal energy and photo-voltaic, just three years after acquisitions.

According to him, there have been two distinct phases to push the success of Siemens: the cost reduction phase from 2008 to 2011 which was view as a big success. However, since 2011 a transition to a growth phase has faced many difficulties. Nicholas Heymann, an analyst at William Blair in New York, said that Siemens currently is under a critical transformation. Cost cutting and more aggressive in selling peripheral businesses may not enough to be successful, but doing fewer things on a truly global scale.

With the efficiency program, CEO Loescher hoped that Siemens AG can reach the industrial earnings margin before interest at least 12%, compare with 9.5% last year. However, some economics experts stated that this financial target is far from ambitious because the market’s expectation on 2014 is 11.5%. On November 8, 2012, Siemens AG made an announcement of a €6 billion savings plan, which is significantly above market expectations, assets sales and a more generous dividend policy. However, according to analyst Peter Reilly, restructuring charges and weak prices will partially offset the gains.

To prepare for these outcomes, Siemens middle managers should do a better job in managing human resources and manufacturing processes. It is important to calm current employees down and to guarantee a stable future since cutting labor has been the big threat for every employee. Besides, they need to encourage and reward employees with creative and practical ideas of producing effectively.

References

Pitt, David. (2012). Siemens to lay off 615 in Iowa, Kansas, Florida. Businessweek. [Available at http://www.businessweek.com/ap/2012-09-18/siemens-to-lay-off-615-in-iowa-kansas-florida ]

Weiss, Richard. (2012). Siemens Scaling Back Creates Chance to Reload Leadership. Bloomberg. [Available at http://www.bloomberg.com/news/2012-11-07/siemens-scaling-back-gives-loescher-chance-to-reload-leadership.html ]

Geiger, Friedrich. (2012). Siemens’ Cost Cutting Plan Impresses, But There’s More to Do. The Wall street journal. [Available at http://blogs.wsj.com/source/2012/11/08/siemens-cost-cutting-plan-impresses-but-theres-more-to-do/?KEYWORDS=siemens] 

A transatlantic free-trade agreement should be a priority

A transatlantic free-trade agreement should be a priority and that economists hope it will bring positive changes for current crisis. All three articles on The New York Times, the Bloomberg.com, and the EurActiv.com mention the new hopes from this free-trade agreement.

For years, U.S and Europeans are the biggest market of foreign trade.

“In 2011, Europeans bought three times more U.S. goods ($286.1 billion) than did the Chinese, and Europeans sold about twice as much merchandise to the U.S. ($368 billion) as they did to China.” (Bloomberg.com)

“While China has dominated the political debate in the United States, U.S. trade with Europe is much larger, totaling $485 billion in goods in the first nine months of this year, compared with $390 billion in trade with China.”  (Jack Ewing, The New York Times)

A free-trade agreement or lower/non-tariff agreement for both sides might bring to the U.S and European some great benefits. For example, it might help raise the GDP for the U.S by 0.3 percent and for the European by 0.7 percent because it helps companies more competitive on both markets. Or, it hopes to “create millions of jobs”.

Free-trade will influence on industries and firms such as Daimler might not need to “obtain multiple certifications” whenever it wants to offer a new Mercedes engine to the markets. Or the pharmaceutical industry does not need to have new treatments in both markets. In contrast, some industries also are doubt about free-trade deal such as restrictions of EU for some corn and soy products. A harmonize agreement on what needs to regulate made the process takes so long. But it is still continuing for a commitment soon because of its perspectives. For managers, they need to put their eyes on this process and prepare their plans in doing businesses on both sides (expected affections, reacts of the firms, changes if needed, etc.)

References:

“EU-U.S. Free Trade Deal Offers Painless Stimulus for Both” published June 17, 2012 on www.Bloomberg.com

 

“EU, US trade agreement is a top priority” published October 08, 2012 on www.EurActiv.com

“Trade Deal Between U.S. and Europe May Come to the Forefront” by Jack Ewing, published November 25, 2012 on www.nytimes.com

Theory testing - Does CSR Reduce Firm Risk? Evidence from Controversial Industry Sectors

Theory Testing Post

Does CSR Reduce Firm Risk? Evidence from Controversial Industry Sectors

The purpose of this article is to test if a relationship exists between corporate social responsibility (CSR) investment and overall risk reduction for controversial industry sectors such as tobacco, gambling and alcohol.  If a relationship can be established, firms in these industry segments can determine whether to develop strategic approaches to CSR management.  The article proposed two hypotheses:

1. “Under the risk-reduction hypothesis, we predict a negative association between CSR engagement of controversial industry firms and firm risk” and

2.  “Under the window-dressing hypothesis, we predict a positive (or at best insignificant) association between CSR engagement of controversial industry firms and firm risk.”

The research conducted for this article included data from 513 firms engaged in businesses seen as controversial, including alcohol, tobacco, gambling, oil, cement and biotech.  Risk reduction in these firms was then compared to over 18000 firm-years of similar data for non-controversial firms.  The research supported hypothesis number one as opposed to number two.  Controversial industries proved to decrease overall risk by engaging in CSR strategies.

This research is broadly based and relevant for strategic managers involved in controversial industries.  Developing a strategic investment approach in CSR is essential for lowering risk in these firms.  Further, the results of this testing showed a stronger negative correlation between hypothesis number 1 and controversial industry firms than those in non-controversial industries.  This is a valid point for consideration by executives in those non-controversial industries to consider with respect to the level of strategic CSR investment strategies compared to long-term risk reduction.  

Developing Theory Article - “Managing Corporate Reputation in Times of Global Changes and Turbulence — A Strategy for Competitiveness”.

“ManagingCorporate Reputation in Times of Global Changes and Turbulence — A Strategy forCompetitiveness”.

By: Claudia Ogrean, Mihaela Herciu, Lucian Belascu, Journal of Modern Accounting and Auditing, ISSN 1548-6583 July 2011, Vol. 7, No. 7, 726-733.

This is an article about how a company can take advantage from any opportunities as well as minimize all of the threads thanks to managerial frameworks in such global business. And the main point or important component for this framework is corporate’s reputation. To authors, reputation of corporate is a tangible asset. It is one of the competitive advantages. It is not easy to build but easy to lose. Nowadays, doing business doesn’t mean producing and selling. It becomes suggesting the best products or services solutions for a selected market segment to take as much as market shares that company can. And, players now are facing more and more competitors from international. In this situation, invisible assets in which reputation is an important factor because it is hard to imitate have more interest. And, reputation have important role in improving company image, rising competitive advantage, getting more attention from customers about company products, may accessing cheaper capital, etc.

There are different theories how corporation reputation become a strategic factor. Now, it is related to signals that company gives to public and the congruence between signals and what company actually does. Or we can have the idea that it includes internal reputation (comes from company stakeholders such as managers, workers, customers, suppliers, etc.) and external reputation (comes from external or society stakeholders).

Because of the important of corporate reputation, Fortune magazine as well as Reputation Institute have different surveys that publish the most admired companies in the world based on reputation attributes such as human resources management, assets management, financial management, global competitiveness, social responsibility, innovation, etc. Next, customers from 24 countries rate companies’ reputation for 54 highest-rated companies based on seven dimensions of reputation. They are “performance, products/services, innovation, workplace, governance, citizenship and leadership” from four perceptions of emotions “esteem, admire, trust, feeling”. From the Reputation Institute result, in 2010 Google, Sony, The Walt Disney Company, BMW, and Daimler (Mercedes-Benz) are the top-five highest reputation companies. By global reputation industry, it is “consumer products, food manufacturing, retail food, industrial products, computer, electrical & electronics, retail general, beverage, automotive”, etc., respectively.

In conclusion, from different studies and their results authors say that corporate reputation is an essential element for company success. However, it is needed to have knowledge about its transformations. For example: time, space, points of view. And, in this “crisis time” business environment changes every day, each company is facing more risks and uncertainty situations that can affect to its reputation and its competitiveness as well, a flexible and more adaptable strategy with crisis is a good strategic management for company. I think this is a good article for managers who are looking for a general knowledge about the corporate reputation and its factors. From different points of view mentioned in the article, they may have their own opinions about the managerial frameworks for their corporation in this global recession.