The Importance of Tolerance

I admittedly frequently take tolerance for granted. I grew up in Singapore, a cosmopolitan and mostly harmonious city populated with a web of people of different colours and backgrounds. Growing up in such an environment has made it easy for a young Singaporean such as myself to forget that my country once struggled to achieve racial harmony as well – which is why I am often shocked by the level of prejudice there is all around us. 

Take the recent attacks in Norway for example. On July 22^nd, anti-Islamist Anders Behring Breivik set off a car bomb in Oslo and proceeded to murder 69 people attending a summer camp on a nearby island. Although horrific on a multitude of levels, the sad thing is that the event was simply one of the many that has occurred over the history of humankind that showed that in spite of the human ability to love, much narrow-mindedness and hate exists in the world.

Although Singapore is a peaceful city, upon closer examination, we too are often guilty of intolerance (though no one has gone on a killing spree because of it). For instance, Singaporeans kicked up a massive ruckus over the building of a temporary dorm for foreign workers near a residential estate. As much as we like to proclaim that we believe in racial harmony and what not, a lot of underlying feelings of xenophobia were exposed during that episode.

We are now living in a shrunken world, where huge distances no longer have the same meaning as they did in the past. Air travel has allowed millions to criss-cross the globe and experience a variety of cultures. Countless businesses have operations in various countries, and it has become ever more imperative that we express tolerance and build acceptance to build strong working relationships with overseas clients.  

So the next time that you experience a negative feeling towards someone else because of a superficial quality such as the colour of his skin, or the sound of his accent, take a step back and rethink it - because the world could use a little more tolerance.

Is it time for a new superpower?

Frankly speaking, I love the US. I have been there quite a few times before the financial crisis and the vibe of the country is amazing. The sheer expanse of land and the call of “FREEDOM!” in the air is almost intoxicating. Seeing as the American economy is an economic powerhouse that wholly embraces consumerism, I have always been content in having Americans “run the world”. However, several recent events have led me to reconsider and seriously question that.

In what can only be described as a display of American control over the world economy, a liquidity shortage in the US banking system sparked off the worst financial crisis since the Great Depression. The havoc that it caused is common knowledge – bailouts, bankruptcy, unemployment and uncertainty dominated the news. Countries struggled to pull their economies together. While some, such as China, managed to ride the crisis unscathed, others like Iceland were not so lucky. The crisis was of such an epic proportion that it spawned a debt crisis in the Euro zone that leaders are now struggling to contain.

Few predicted the widespread damage the greed of Wall Street caused. However, even as America is in the midst of trying to revive its stubbornly bleak economy, the antics and rigid bureaucracy of the White House threatens to engulf the economy in yet another crisis. This time, the repercussions are a lot clearer.

On 2^nd August, America will run out of funds and will have to default on payments to one of its debtors. Instead of focusing on the problem at hand, however, the Democrats and Republicans have managed to embroil themselves in a deep argument with little room for compromise. If they do not reach an agreement soon, it is likely that many will lose confidence in the dollar and cause a slew of other problems for the world economy.

This entire fiasco has made me question how sensible it is for the world to let America lead things. The insatiability and excesses of Wall Street has already dealt a heavy blow to the foundations of the world economy. The Democrats and Republicans are deeply divided over almost every issue. Even when it threatens the livelihoods of their people, they are unable to put aside their differences to come to an agreement. With obstinately high unemployment rates, deepening debt and not to mention a war that is hemorrhaging money, America seems ill positioned to lead the world out of darker times.

Perhaps it is time for a new leader to be handed the reins. Any takers?

Football and beer - a winning combination?

I participated recently at a football tournament which took place inside Beer fest Asia 2011 in Singapore. What struck me was that it has become such easy an association - beer and football. A strange mix of a healthy option of playing sports, while on the other hand associated with alcohol that is a root cause of illnesses.  Let’s take a step back and think about this strange association!

In which way does the association go? It is widely agreed that beer companies target football viewers. The three most popular beer brands in Singapore, Heineken, Carlsberg and Tiger, all target the male football fan as an important part of their advertising campaign. However, to a lesser extent, sports clubs bring newcomers to their clubs by offering alcohol. An example hereof is a certain organization in the US which wants to make football -or for them ‘soccer’- popular by associating the product more with the sport by offering “soccer newbies” free beer while introducing them to the sport.

Should we allow such a strong connection between alcohol and football? Is it justified that large beer companies sponsor sports events and major leagues? It is clear to see that their advertisements encourage people to consume more beer. A similar case to this one existed between F1 and cigarette companies. Even though, through public pressure, an advertisement ban has been imposed on this sponsorship, F1 still found other willing backers. In France there is already such a law which bans most alcohol advertising.  

The association of beer and football has become an easily made association and it is interesting to think about its implications. Should beer manufacturers be more conscious in how they channel their advertisement or should we take our own responsibility in what we consume? Where is the line between a healthy and responsible state and a nanny-state?

Oracle vs HP and the consequences of this battle

Decisions have consequences. The more you wield, the larger the impact your decisions have on the people around you. This is especially true for Oracle or HP.

Oracle’s decision to stop making new versions of its database software based on the Itanium chip has severe consequences for HP, which had planned a future for its servers running on Itanium technology. HP also claim it was an illegal move performed by Oracle, forcing HP’s Itanium customers to switch to Sun servers, a company which was purchased by Oracle last year. Furthermore they claim that Oracle terminated a long term contract in the development of Itanium technology with HP. Therefore, HP has filed a lawsuit against Oracle. It is important to review the consequences of these industry changes.

As for HP’s server division, if their lawsuit turns out to be unsuccessful, the consequence consists in shifting focus away from Itanium technology servers towards different technologies. This also has consequences on selecting their industry partners to effectively support this new roadmap. Next to this, HP will have to encourage their existing Itanium customers in changing their Itanium server for different technology servers. This might result in a potential loss of customers and damage to its brand name.

Do you think Oracle’s actions are to be considered unethically or do they have valid arguments to state their recent decisions?  

The dispute between these two large companies has consequences for thousands of companies and governments far beyond their own industry and is a good example of the importance of competitive intelligence. Does your company have the processes in place to  keep you up to date with the latest insights on the market environment? Do you understand your competitors, customers, suppliers, regulators and distributors?

Balancing trust and innovation in the internet industry

During the last few months we have seen several security breaches into large companies’ online networks. Does this call for more regulation for internet companies? During the eG8 Forum in Paris last month, internet leaders and government regulators had the opportunity to exchange ideas concerning the future of the internet and whether it should be further regulated. The main discussion point is the boundaryless freedom enjoyed by internet companies and the huge amount of customer info captured in their databases that include both personal and financial details.

On the one side we have European telecom companies such as Vodafone and several national government bodies, arguing that there is too much at stake and that therefore trust, privacy and copyrights have to be guaranteed. Also from a fair practice viewpoint, telecom giants urge for regulation; why should internet companies be excluded from regulation when companies in all other industries aren’t?

Meanwhile the other side, including companies such as Google and Facebook, argue that innovation should be maintained. A McKinsey study revealed that the internet contributed during the last 5 years 21% of growth in mature economies. By imposing regulation on internet companies, they claim, this growth will level off. Furthermore, they argue, self-governing processes are present in many internet companies, such as eBay and Amazon.

Is there a middle ground between trust and innovation? Is it possible to implement a set of laws which prevents data misuse and enforces consumer rights, but at the same time allows for the internet industry to realize its full potential within a legal framework? Next to this, regulation often lags behind innovation. Basel III, for example, is a set of laws responding to those invented financial products which have caused the financial crisis of 2008. Should we be proactive or reactive when dealing with the new possibilities of the internet?

New legislation required for future online transactions?

In the last weeks of April, the largest cyber attack ever took place when criminals successfully hacked into Sony's two online gaming networks, PSN and Sony Online Entertainment. Financial details of millions of online customers worldwide were extracted during the cyber attack.

As an immediate outcome of this disaster, Sony faced several lawsuits. Also on a broader level, this disaster has provoked drastic consequences. In the US, Republican Mary Bono Mack, who heads the Commerce Committee's Consumer Protection Panel, said she would introduce a new bill. According to her and others, the existing legislation falls short in obligating companies to secure sensitive information and to timely inform clients about such security breaches. Because more and more people become active online purchasers, large online companies such as Amazon, Sony and Apple contain vital financial information of an increasing amount of people, to such an extent that legislation should become updated to make companies safeguard this valuable information. Not only is an increased security needed, but also concerns about privacy and the potential trade in personal data should be considered.

Does this security breach mean that online consumers should doubt the security of their online transactions on all e-platforms? Are iPhone users OK with the fact that Apple can track their users? This matter can also be applied for companies; should companies which purchase online services such as cloud computing also be worried?

Conflicts of interest and how to deal with them

There is seldom a case when conflicts of interest do not occur. These are situations in which an individual is involved in multiple interests, mostly a personal interest which does not align with his professional responsibilities.  Such a situation corrupts the actor’s decision making and arises in many fields such as politics and business. A high profile example of the last century is the Arthur Andersen – Enron story.  Or, a recent one is the accusation of Rajaratnam of insider trading, who made an illicit 63.8 million US dollars over the last years by trading on illegal insider tips.

The next example tells you that conflicts of interest arise in diverse contexts. Surgeons, having years of experience in their proper practice, are regarded as the best innovators in medical devices. And so they often engage in entrepreneurial activities and commercialise their own developed devices. Their reward: royalties on the amount of devices sold. Consequently this remuneration model encourages surgeons to sell as many of these devices as possible. Their personal gain of selling devices (royalties) conflicts with their interest as a surgeon, which exists in offering the best possible health solutions.

Conflicts of interest can be complex legal situations and, if handled incorrectly, they can have negative outcomes for the people involved. Companies have gained experience in coping with conflicts of interests and the following highlights practices to avoid or deal with conflicts of interest.

Avoidance of decision making

The best way to deal with a conflict of interest is removing them immediately once they are discovered. A recently elected politician might sell all his corporate stocks and resign from any corporate boards in order to remain neutral in his political judgement. This, however, is often easier said than done. A better way is to abstain oneself from making any decisions when one finds oneself in a situation of conflict of interest. A situation in which a manager does not participate in the decision-making of which legal advisory firm to hire because a family member of his is a senior member of a potential legal contractor, can be considered as way of avoiding such a situation of conflict.

Code of Ethics

Every company should have a Code of Ethics in which, among other sections, some important guidelines and imperatives of how a situation of conflict of interests should be addressed. This section should include topics such as the hiring and supervising of family members and in which way corporate gifts should be offered or accepted. Corporate gifts should be considered as a sign of commitment between two cooperating companies, not as a bribe. Therefore companies should offer these gifts publicly and with a broad audience.

Legal advice

When in doubt of how to act, companies can always seek legal advice, demonstrating transparency.

Corporate culture

The culture present in the company also plays an important role in how employees or board members act in a situation of conflict of interest. An open, transparant culture should be established which promotes individual responsibility and which is intolerant against conflicts of interest.

Over the course of the years companies have refined their social policies into a robust Corporate Social Responsibility, covering not only conflicts of interest but also environmental issues, health programs, community support etc. Even though some industries are more prone to conflicts of interest and companies will have their own emphasis on how to cope with them, the basic guidelines are in all present. “Prevention is better than Cure” is such one next to keeping things transparent and acting along one’s best intentions.