As the trend-conscious young woman that I am, I have recently outsourced my “Cleaning Department” to Maria, our new cleaning lady, and I don’t think anyone at my house was particularly upset about having lost their bath and kitchen cleaning duties. However, outsourcing and especially offshoring is being severely criticised for (allegedly) damaging local labour markets. Many people put out of work that way feel (quite understandably) like their skills were not appreciated and completely replaceable.

While there is probably not much one can say to contradict this, economists (and company owners, obviously) are calling on people to look at the bigger picture: If every country were free to produce and trade those items for which it had the competitive advantage (i.e. for which it is the cheapest producer) on a world-economic scale, prices would fall. (Although I’m not entirely convinced that’s true…)

But (as harsh and heartless as it may sound) jobs lost somewhere are jobs created somewhere else. With the US and many EU countries outsourcing their IT departments to India, the subcontinent’s IT industry is booming. Some economists are even expecting Indian IT outsourcing majors like Tata Consultancy Services (TCS) or Infosys to overtake IT giants like IBM, Accenture and EDS by 2011! And even the film industry has started to expand its special effects operations to India.

If you’re interested in knowing more about the topic, check out the Offshoring Times!

As a matter of fact, it’s not easy for (even the biggest) companies to expand into foreign markets. American companies for instance face huge problems when trying to enter the European market, let alone the Asian one. It has become so difficult, that businesses like Results.com were set up, specialising in helping international companies to successfully expand into the European market.

Why is it so difficult? Well, because even though globalization has slowly started to mix up and blend the world’s cultures and mindsets, some huge cultural, socio-economic and political differences (may) remain. Therefore, multinational businesses wanting to expand their operations to a new country, must choose between a) going with their original business strategy and running the risk of not being accepted into the new country, or b) adapting their strategies to suit the host country’s cultural, socio-economic and political environment, even if that obviously raises the economic cost of the venture.

This decision-making is of particular importance in the Food Industry, since differences in food and eating habits may be huge between and even across countries. In Australia for instance, people like to have beetroot on their burgers (gross, I know!), so McDonald’s has the McOz which has beetroot on it. In China, NIVEA had to adapt their product range to the local market by selling “skin bleaching lotion” instead of tanning creme (see photo), etc.

So there, next time you go somewhere, have a closer look at the local products, even if at first glance they seem oh-so familiar! 

Everything customer-oriented has to be localized, but also your management has to be locally present, with natives on board, so that you become a topic at the breakfast table, on TV shows, in the local magazines. Otherwise you’re the big, bad wolf, the outsider that everyone hopes will lose.                                  – Ola Ahlvarsson (chairman of Results.com)

People studying Behavioural Economics have since wondered why Kyle was able to always get something worth more than what he originally had. It seems way too selfless and altruistic to work! Then again, if the trade was not only about the actual value of the item, but maybe about things like publicity, excitement or just helping out the underdog..?

Check out this interview from the ABC with Kyle MacDonald to find out more:

This new type of presentation technique literally meaning “random chatter” in Japanese is the art of capturing an audience’s interest and getting your message across in 6:40 minutes. A presenter is allowed 20 picture slides, each shown for 20 seconds – that’s it! Make your point and leave! Devised in 2003 by Astrid Klein and Mark Dytham, so-called “Pecha Kucha Nights” are now being held regularly all over the globe. Originally thought up as a way for young and up-coming designers to present their ideas and network amongst eachother, this event has taken up such dimensions that professionals from more and more areas are finding together to “chat”.

Check out this (much more detailed) description of Pecha Kucha by communications designer Ben Ullman I found on YouTube:

And here’s how it works: someone might have an idea for something and posts it on the site. Then someone else who just happens to look through other people’s ideas might have an idea on how to improve someone’s initial idea and posts it, and so on. That way, many people’s ideas together can generate one big, brilliant idea. On top of it, Cisco WebEx makes a donation to “Teachers Without Borders” for every idea or improvement that is posted or rated. If you want to find out more about this project, I suggest you watch this video.

But then I discussed my brilliant new discovery with my flatmate and she said that if she ever had an idea that she thought was worth telling, she’d keep it to herself and try to make it happen on her own. Hmmm… And it’s true, it doesn’t really say who gets what out of having had a good idea… What do you think?

I had never really thought about this, but it seems to be a huge problem companies are facing when trying to think up global advertising campaigns and slogans. Firstly, not all people speak English well enough to understand the subtleties of the language and the slogan may be misunderstood or not understood at all. Secondly, when trying to adapt the slogan by translating it, it’s possible that it suddenly means something completely different. And thirdly, what may be acceptable to be said in one country/culture may be totally taboo somewhere else, which makes it even harder to find a universally valid slogan that will guarantee brand recognition no matter what country you’re in and what cultural background you’re from.

And for those of you who think that this problem only affects the lesser known companies because surely something like this could not happen to any well known brand, take a look at these examples of ads gone wrong:

13 unfortunate translations that harmed brand reputation

In its 2007 report, the US Institute of Policy Innovation (IPI) has put forward an estimated cost of sound recording piracy to the US economy – a whopping 12.5 billion US$! This cost does not only include estimated sales losses, but the IPI furthermore expects a long-term loss of approx. 71,000 jobs due to music piracy.

However, these figures are highly controversial, with many people claiming them to be very unrealistic and accusing the IPI of lobbying for the music industry. One of the “flaws” of the report is said to be the IPI’s assumption that if people were no longer able to download music illegally, they would of course buy it. (Now I’m no market research analyst, but I highly doubt that!) A “counter-study” published by the Journal of Political Economy even goes so far as to say that the effect of file-sharing on the “legal” music industry is pretty much zero.

And besides, what if music piracy actually sparked creativity within the music industry? Some bands such as Radiohead have already adapted to the new situation and have now bypassed the physical market by releasing their last album In Rainbows online and without the help of their label. Anyone downloading this album was able to choose how much he’s willing to pay for it. (It seems like it’s no longer online though and that the band is back in the studio to record their next album.) Many bands are expanding their product range, by not just counting on CD sales, but rather shifting their focus to revenues from tours, multi-media material like interviews and discographies as well as fan articles such as posters, T-shirts, etc.

The music can be given away for free as long as its popularity draws money in other areas. If music videos were ads for albums, then maybe albums are becoming ads for the artists themselves.

Alex Cummings (doctoral candidate in history at Columbia University)

I don’t know whether this development is good or bad, but I think that industries have to be dynamic and creative enough to adapt to changes caused by technological improvements. And anyway, video didn’t kill the radio star, so why should the internet?

Despite equal chances of education, women face discrimination in their working careers making it very hard to reach top positions in public or private hierarchies. On the webpage of the “Nürnberger Resolution” which is an initiative to increase the percentage of woman in leading positions in the economy, I read that out of 1100 board of directors members of German stock market listed companies, only 3% are women. Now, I’m far from being a raving feminist but 3% seems extremely unfair to me, considering that I’m doing a business degree in a class consisting of 80% women..!

In his campaign for this year’s election, the leader of the SPD, Franz Müntefering, says that he wants to make a quota of 40% women compulsory in Germany’s boards of directors (which is exactly what the “Nürnberger Resolution” is asking for). Women perform – men lead, does it seem fair to you?

In a time, where we want our needs and wishes to be met instantly and with the least amount of effort possible, it seems as though the Japanese have taken it to a new level. With a vending machine density of approx. 23 machines per citizen, this country seems to be “convenience heaven”. Over there, buying eggs, batteries, phone cards, rice, toilet paper, kids toys, flowers and even live animals like rhinoceros beetles doesn’t take more time than buying a metro ticket. And even things like pornography and used school girl underwear (?!) can be conveniently bought on any street corner.

The Japanese vending machine company APEX Corporation wants to take customer satisfaction even further, by installing vending machines with built in LCD displays for easy preference adjusting as well as to watch the product preparation, advertisements or play games to make the waiting time more bearable. Go figure…

Egg vending machine