Kosher Technology

This article, "Kosher Phone Merges Technology, Faith", discusses a new mobile phone that was launched last year by an Israeli subsidiary of Motorola. The kosher phone was created in order to satisfy the demand of conservative Jewish consumers in Israel who felt that modern cell phones offered "worldly temptations" on a silver platter. According to the article, "this phone is an example of demand leading the way for supply". This phone is basically a simplified version of the mobile phone; it serves the same purpose as a regular household landline, only it is cellular. The phone only makes and receives phone calls - it has none of the capabilities of modern cell phones :

• No SMS (text messaging)
• No internet access
• No cameras
• No access to dating services and/or hotlines of that nature
  

Therefore, the phone is believed to prevent religious Jewish consumers of being tempted into sinful acts, which they believe is possible with modern cell phones available in the market.

This article may be analyzed using Baron's Four I's of the Non-Market Environment:

1. Issues: are defined by Baron as "the basic unit of analysis and the focus of nonmarket action". In this case, there is an issue of the Jewish religious belief system. The main issue addressed by this kosher phone is that of religious sanctity, which conservative Jewish consumers feel is being violated by "worldly temptations" that are being offered by the modern cell phone.

2. Interests: Baron describes interests as, "the individuals and groups with preferences about, or a stake in, the issue". The interest groups in this case are Jewish consumers that are concerned with abiding by their belief system's rules, as well as other conservative consumers that are mentioned in the article, such as Muslim consumers. These consumers have a shared value system in terms of conservatism and the demand for a cell phone that they feel isn't sinful.

3. Institutions: According to Baron, institutions "include government entities... As well as nongovernmental institutions". The article mentions the Israeli religious authorities, who have certified the kosher phone as acceptable for pious Jewish consumers. The religious authorities are a nongovernmental institution that was formed in order to perserve the Jewish faith and its rules, as well as to guide people by interpretations of the Jewish holy text (Torah/Tanakh).

4. Information: Baron states that information "refers to what the interested parties know or believe about the issues and the forces affecting their development". Any articles (including this one), advertisements, websites, and word-of-mouth surrounding this phone serve as sources of information regarding the issue. The kosher phone is seen as a solution to the issue of perserving sanctity in a world of modern phones that are perceived as sinful. The information that is available about this product on any media will inform people of the issue and its solution. Considering that the kosher phone will be released internationally by the end of this year, the information surrounding it will most likely become magnetized as it leaves Israel and enters the international market.

I believe this to be a clear example of the effect of Non-Market Environment issues (Baron) on product differentitation. Motorola's subsidiary was able to tap into a niche market in Israel, which was overlooked by other technological companies. I find it particularly interesting that these "kosher" cell phones that are in demand by conservative Jewish consumers are simply unmodified versions of their first cell phones. They serve the functions that cell phones are primarily supposed to fulfill... That is a concept of such simplicity that it was overlooked by other competitors in the telecommunications industry.

This brings me to wonder about the possibilities of other technological programs/products that also cater to specific, otherwise neglected niches. Quite possibly, computer programs that function similarly to parental guidance programs, only marketed to specific religious groups, may be successful in environments such as Israel... The same niche market attratced to kosher phones would most likely be interested in other kosher-versions of modern technology. Who knows what the future holds!

Mickey Under the Lens

The article, "Disney to Probe Labor Claims in China Factory" intrigued me because of the subject matter; a corporate giant being reprimanded for mistreating its employees. My last blog was concerned with the same topic only in Qatar, not China. To me, this subject is important because I think it is a disgrace for companies to mistreat their employees, regardless of their position in the organization. I am a firm believer in employee empowerment and its benefits to not only the company but to society in general.

This article falls under Baron's Four I's of the Non-Market Environment:

1. Issues: are defined by Baron as "the basic unit of analysis and the focus of nonmarket action". In this case, the issue at hand is the mistreatment of the Disney's labor force at Chinese factories. The issues are related to "unsafe [working] conditions" at the factories, wages that fall below the legal minimum wage, and long hours (10-13 hours per working day).

2. Interests: Baron describes interests as, "the individuals and groups with preferences about, or a stake in, the issue". The interests in this case are the labor rights advocacy group that made the claims concerning the issue, the National Labor Committee in New York, the laborers that are being mistreated, as well as Disney and its Chinese factories. They are all interests because they have a stake in the issue. The labor rights advocacy group and the National Labor Committee in New York have an interest in shedding light on the mistreatment of laborers, whilst the laborers themselves are interested in their welfare and future treatment at these factories. Disney and its Chinese factories, on the other hand, are interested in the outcomes of these claims, and correcting the issue in time to improve Disney's image and regain consumers' goodwill.

3. Institutions: According to Baron, institutions "include government entities... As well as nongovernmental institutions". In this article, the government is an institution, as well as the media and public sentiment. The government's Ministry of Labor in China should be concerned with this issue since it involves the disempowerment of the Chinese labor force. The ministry has the power to enforce the laws regarding working hours/minimum wage by penalizing Disney's Chinese factories and thereby forcing them to adhere to the law. The media, as presented by the article, plays a role in publicisizing this issue and informing the general public of the details regarding its progress. As a result, public sentiment is swayed by the media's portrayal of the events, either siding for or against Disney on its role in the issue.

4. Information: Baron states that information "refers to what the interested parties know or believe about the issues and the forces affecting their development". In this case, the article itself illustrates the role of information regarding the issue of Disney's mistreatment of its labor force in Chinese factories. The labor rights advocacy group and the National Labor Committee in New York have highlighted the issue and how it has affected the Chinese laborers. The general public has become aware of the magnitude of the problem through the media, that has covered the issue, and through the National Labor Committee's videotape of the "dangerous conditions" that laborers at Disney's Chinese factories faced.

Personally, I think that Disney should admit to its mistakes, implement a new strategy to correct those problems, and heavily invest in publicizing the changes it makes. To me, Disney's attempt to shrug off the claims by hiring Verite, the non-profit firm, to investigate on their behalf is pointless. Generally speaking, the public tend to be suspicious of global companies' denial of wrongdoings. In this day and age, the public are much more aware and cautious of companies' ruses. Therefore, an approach to admitting and resolving the problem is, in my opinion, a far more honest one than attempting to deny the claims.

Qatari Firms' Hall of Shame

The article "Qatari Firms Blacklisted for Woeful Treatment of Indians" describes the Indian embassy's efforts in protecting its expat citizens in Qatar. Due to the mistreatment of Indian employees in Qatar, the Indian embassy has blacklisted 11 Qatari firms whilst putting a further 35 firms on its watchlist for the same purpose. This illustrates the power of Baron's Four I's, Hamel's coalitions and suppliers, Barney's Question of Value, and Porter's Government Policy.

Baron's Four I's apply to this article as follows:

1. Issues: as defined by Baron, issues are "the basic unit of analysis and the focus of nonmarket action. In this case, the issue at hand is the treatment of Indian employees as well as the standards that aren't being upheld by Qatari firms.
2. Interests: "include the indidivudals and groups with preferences about, or a stake in, the issue". The Indian embassy, Indian employees in Qatar, and Qatari firms hiring Indian employees are all interests in this issue.
3. Institutions: the Indian embassy and the media are governmental and non-governmental entities that have a stake in this issue.
4. Information: Baron defines information as "what the interested parties know or believe about the issues and the forces affecting their development". This article displays a source of information regarding the issue of the mistreated Indian labor force in Qatar. The Indian embassy's course for future action is another part of information, because it shows that the Indian embassy is giving Qatari firms an opportunity to improve their treatment in order to regain the Indian embassy's trust.
   

Hamel's Coalitions and Suppliers apply to this article as well:

Coalitions: although this article does not go into detail about labor unions, I have derived that Indian employees have formed coalitions in order to gain the Indian embassy's concern and assistance in this regard. Without coalitions, the Indian embassy may not have been aware of the issue. This illustrates the power of coalitions in establishing rules.

Suppliers: in this case, India acts as a supplier of manpower to Qatari firms. The fact that the Indian embassy has blacklisted 11 Qatari firms, and is keeping an eye on 35 others, shows the power of suppliers over firms in changing policies.

Barney's Question of Value:

"Do a firm's resources and capabilities enable the firm to respond to environmental threats and weaknesses?"

In this case, I believe that the 11 Qatari firms that were blacklisted, as well as the 35 on the watchlist, have all failed to respond to environmental threats regarding their treatment of their labor force. Had they maintained a proactive outlook on their market enivornment, they would have been able to respond to the changing environment's expectations of how labor standards were to be met and achieved. That would have enabled them to avoid destroying goodwill with not only their employees, but with the Indian embassy as well. Therefore, I believe that the firms' resources and capabilities did NOT enable them to respond to environmental threats in this regard.

Porter's Government Policy:

The fact that the Indian embassy in Qatar stepped in and imposed policies that blacklist 11 Qatari firms with 35 others on a watchlist illustrates the power of government policy. This policy is creating a "barrier to entry" in a sense that Qatari firms will have to invest more in their Indian labor force, raise and uphold standards, and generally work harder in order to regain the Indian embassy's goodwill.

As a Qatari citizen, I have been aware of horror stories regarding Qatari firms' controversial mistreatment of their employees, namely employees from less-priviledged backgrounds. This form of exploitation disgusts me. It is a form of using the firms' strength and power in order to manipulate those whose voices are unlikely to be heard. Having read this article, I am relieved that the Indian embassy is stepping up and taking responsibility for it's labor force. While I resent that this action hasn't been taken on years ago, I look forward to improvements in the future. It is inevitable that Qatari firms will be forced to uphold standards when it comes to their treatment of the labor force because the Indian labor force is one of the least costly ones. Switching costs, in this case, are high for Qatari firms. I foresee similar policies being taken on by other countries such as Sri Lanka and Bangaldesh in order to protect their nationals that are working abroad in countries like Qatar as well.

No Act is Truly Selfless

Peter Brown's article, "Selfishness Has Its Value to the Economy" (2006), illustrates Baron's "Four I's" of the Nonmarket Environment. Brown challenges the beliefs and intentions that are held by New Yorkers regarding Wal-Mart. He uses the results from a survey conducted by Quinnipiac University of New York City residents in order to highlight that whilst the majority of New Yorkers believe that Wal-Mart is anti-union, yet up to 63% of union household surveys indicated that they "would shop there if they could".

Baron's "Four I's" are issues, interests, institutions and information. Each of these "I's" represent different (yet interrelated) characteristics of the Nonmarket Environment. Baron defines issues as, "the basic unit of analysis and the focus of nonmarket action". In Brown's article, the issues discussed are unions (the Coalition of Labor), community groups, and civil rights. Those groups all represent "issues" regarding Wal-Mart's nonmarket environment. The issues are union workers' rights and their demands, community groups' fear for their local, small business, and the civil rights of all American citizens, which are held in order to protect citizens. In this case, all of the issues are from groups that are concerned with Wal-Mart's power and its affect on their businesses/jobs.

The second "I" stands for interests, which "include those who have an economic stake in an issue". There are organized and unorganized interests. In this case, the organized interests are those held by the Coalition of Labor as well as community groups. Those groups are organized in order to protect the interests of their members. The Coalition of Labor is concerned with protecting the interests of union employees from being underpaid and/or laid off by Wal-Mart, and community groups work in order protect small business that are threatened by Wal-Mart. Consumers are part of an unorganized interest. This article illustrates how members of an organized group (such as the Coalition of Labor) are still part of an unorganized group (of consumers, in this case). Consumers' interests are having a wide variety of products/services available to them and enough competition in order to stimulate the improvement of products/services, as well as lowering of prices.

The third "I" represents institutions, governmental, nongovernmental, private or public. This article points out the effect of public sentiment, which Baron states is an example of a nongovernmental institution. New Yorkers' public sentiment regarding Wal-Mart is a mixed one, best described by Brown as a "love/hate relationship". Whilst New Yorkers, as employees, despise Wal-Mart as a threat to their jobs and local businesses, they treasure it for its low prices, as consumers.

Finally, the fourth "I" is information which refers to the interests of institutions and the information those members have about the possible outcomes of different courses of action. Baron states a crucial point, which I believe relates directly to Brown's article; "issues are often contested because interests have conflicting preferences regarding their resolution". These "conflicting preferences" are, indeed, the case when it comes to New Yorkers' sentiment towards Wal-Mart. The information that they have regarding Wal-Mart's policies towards employees and towards cutting costs/prices resulting in "conflicting preferences", because these New Yorkers will suffer as employees yet benefit as consumers.

This article reminds me of the philosophical discussion surrounding selfless acts, which leads one to conclude that no act is truly selfless. It has been a long held belief of mine that no one individual is completely selfless because, even when conducting the most seemingly altruist act, one is left with (at the very least) a feeling of satisfaction. The New Yorkers that were surveyed by Quinnipiac University strike me as honest rather than "selfish". Whilst union workers fully comprehend that the minimal wages and cost-cutting approach that is taking on by Wal-Mart will be detrimental to their futures as employees, they are also aware of their benefits, from those same policies no less, as consumers. As employees of Wal-Mart or of smaller rivals of Wal-Mart, union workers would suffer from Wal-Mart's policies. However, as consumers, the same union workers would find the policies beneficial as they lower the prices of their household goods. Therefore, the New Yorkers surveyed in this case were honest in illustrating their "love/hate" (Brown, 2006) relationship with Wal-Mart, and Brown portrayed that relationship very clearly.

Application of Hamel to the Danish Boycott in the KSA

The article "Effects of Danish Boycott Patchy" illustrates the power of Saudi grocery stores' "customer interface". According to Hamel, one of the core elements of the customer interface is "fulfillment and support". "Fulfillment and support" refers to the means through which a company reachs to it's customers, including the channels, customer support, and services. In the article, Saudi grocery chains such as Panda cleared their shelves from Danish products. This is a form of adapting to customers' desires through supporting their stand in the Danish controversy. I believe that falls under the umbrella of "fulfillment and support" because it shows companies' customer support, and it may be considered a customer service because the Saudi stores are standing behind the boycott (which is deemed valuable by local customers in that region).

Another element of Hamel's customer interface is "information and insight". Information and insight includes all of the information that a firm gathers and uses on behalf of its customers. This is evident in the Saudi stores that emptied their shelves of Danish products based on the information that they gained from their customers. Since the customers were boycotting Danish products and held strong convictions regarding the issue, the stores protected themselves from being boycotted and maintained goodwill of their customers by utilizing that information; they joined the boycott (or atleast appeared to do so by unshelving the Danish products). Information and insight utiliziation is also evident in SADAFCO's marketing campaign. Having gathered information about customers' perceptions of SADAFCO as being linked with Denmark, and customers' disapproval of that, SADAFCO used that information and insight in order to rescue their firm and restructure the company's image.

I am skeptical as to the true intent of these stores to "boycott" Danish products. It may be a powerful marketing strategy to unshelve the products, however I assume that these stores may have plans to sell their inventory to other stores that are carrying the products (possibly outside of Saudi). My assumption may be incorrect, however, I will be the devil's advocate for the purpose of linking Saudi stores to Hamel's theory. If, indeed, the Saudi stores are only taking part in boycotting Danish products on the surface, and are in fact selling Danish products in other regions, that would fall under Hamel's "core strategy", more specifically, under the element of "product/market scope". That would entail that Saudi stores are strategically aware of their product segments in different geographical areas, and they sell different products according to the different segment. That means that the stores would unshelve Danish products in areas where boycotting is demanded by customers, however, Danish products would be available in geographical areas where customers were accepting of them.

This article shows the power of customers, as well as the power that companies gain by analyzing information external to the company, and utilizing it in order to better suit changing customer demands. It also shows the volatility of customer perceptions, which underscores the importance of companies to be fully aware of the external environment and to act in a timely fashion.

Chinese Government's Barrier to Entry

Lipscomb's article, "The Real Cost of Google's Sellout", illustrates one of Porter's Five Forces; government barriers to entry. The Chinese government’s policies present major barriers to entry for Google.com. Google must comply with the Chinese government’s censorship regulations in order to gain market share in China. Considering that the Chinese government’s filters on Google.com have made the search engine devastatingly slow in China, Google was left with no choice but to comply with the regulations in order to gain control of the booming Chinese Internet market. The barrier to entry is apparent in the Chinese government’s control of the entrants in the Internet search engine market.

The censorship requirements in China present Google with a dilemma. On one hand, if Google does not comply with the Chinese government’s censorship standards, it will lose access to the second largest Internet market in the world (Lipscomb, 2006). On the other hand, if Google adheres to censorship, it will be breaching several principles that it was thought to uphold. That might lead to consumer activist groups protesting against the suppression of people in China, furthermore, it may harm the company’s image.

Based on Google’s reaction to “resist” online pornography legislation in the United States, it seems contradictory for Google to “sellout” to Chinese authorities. In my opinion, fighting for people’s rights to information, publications, and aiding individuals on their quest for “the truth” is a far more noble cause than a fight for online pornography privacy. It seems hypocritical to me that Google would protect consumers’ rights in the United States while depriving consumers’ rights to information and freedom in China.

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