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WEEK 7: ALCOHOL INDUSTRY ALBERTA & ONTARIO LIQUOR BOARDS Alberta chose to privatize its liquor board while Ontario opted to modernize its public Commented [RO1]: To privatize means to transfer...

WEEK 7: ALCOHOL INDUSTRY ALBERTA & ONTARIO LIQUOR BOARDS Alberta chose to privatize its liquor board while Ontario opted to modernize its public Commented [RO1]: To privatize means to transfer ownership or control of a business, service, or asset from system. What’s interesting is that both decisions were made by Conservative governments the government (public sector) to private individuals or during periods of economic hardship, yet the outcomes couldn’t be more different. To set companies (private sector). Privatization often involves selling government-owned enterprises, outsourcing the stage, in 1993, Albertas Conservative government under Ralph Klein decided to services, or leasing assets to private entities. privatize the Alberta Liquor Control Board ALCB. Meanwhile, Ontario’s Conservative government under Mike Harris chose to retain the Liquor Control Board of Ontario LCBO as a public monopoly and invested heavily in its modernization. Both provinces were facing similar economic challenges— recessions, high unemployment, and significant deficits. Alberta had a $2.3 billion deficit and an unemployment rate of around 10%, while Ontario’s deficit in 1996 was $9 billion, with unemployment at 8.9%. Despite these similarities, the paths taken were completely different. In Ontario, the LCBO focused on selling higher-value products, which increased per-visit spending without necessarily increasing alcohol consumption. They even launched the Food and Drink magazine, which cleverly reframed alcohol as part of a sophisticated, middle-class lifestyle. Albertas privatized system offers consumers more stores, longer hours, and greater convenience. In contrast, Ontario’s LCBO delivers a premium shopping experience, with well-trained staff and high-quality store environments. Interestingly, there’s little difference in alcohol prices between the two provinces. Taxes, rather than distribution models, are the primary driver of costs. The key takeaway is that local context—history, culture, and political landscape—shapes policy decisions far more than ideology alone. While Albertas approach reflects its entrepreneurial and populist spirit, Ontario’s decision to retain and modernize the LCBO highlights its preference for state-led solutions that maximize public revenue. SCOTCH WHISKY ASSOCIATION - LOBBYING AND LITIGATION (1945-1990). The SWA helps globalize Scotch Whiskey to the masses, protecting them from misuse and regulatory threats, securing authenticity, and maintaining control over how it is marketed and sold, as well as dealing with logistics to prevent getting copied, giving them recognition they deserve, and ensuring quality control. The history of the Scotch Whiskey Association is most importantly renowned for the acts of 1933 and 1969. The 1933 Act was the first to provide a broad definition of Scotch whiskey, making essential guidelines to protect the industry by verifying that only whiskey produced in Scotland could hold its title. Nearly 40 years later, the 1969 Act came along to further solidify legal definitions and protections to reinforce the requirement of embracing its origins. Known for its distinctive production methods and cultural heritage, the Scotch whisky industry is not only a part of the whisky family but also a cultural symbol. And reflection of Scotland's traditions and craftsmanship, which adds to its global appeal and consumer loyalty. The struggle to legally define and protect the term Scotch had direct negative implication for the brand's reputation on a global standpoint as consumers encountered inferior products marketed as Scotch and the overall perception of the brand suffered severely. WEEK 8: TRAVEL AND TOURISM OUR DOLLARS ARE CELEBRITIES ABROAD. In the late forties through the sixties, as the US entered a period of colder tensions and post war recovery, American tourists traveling abroad, it carried more than just their wallets. It promoted US culture and ideals. As I mentioned previously, this form of soft power transformed US tourism into an economic and diplomatic weapon, especially in the continent of Europe, where souvenir shopping and spending were seen as a way of supporting local economies and strengthening international ties. In 1944 at the Bretton Woods Conference, the US dollar was linked to gold, making it a key currency. However, the dollar gap posed a threat to the system. As a result, the Marshall Commented [RO2]: the economic challenge European countries faced in attracting U.S. dollars to help rebuild Plan was implemented, and traveling was heavily promoted to American tourists to their economies. After the war, Europe was struggling with strengthen European economies. As tourists spent money on European goods, they would depleted foreign exchange reserves, and U.S. dollars were in high demand because the dollar was the dominant help rebuild war torn countries, promote goodwill, and boost global economy. By 1960, international currency. American lawmakers reported a $7,000,000,000 net loss in foreign currency over the previous 2 years. They began to see that increased spending by American tourists was contributing significantly to this deficit. Lawmakers and economists blamed the travel deficit on US policies that promoted international travel without encouraging foreign tourists to come visit the US. So, these are some adaptive strategies for the tourism industry during COVID. Firstly, we have extended stay programs. Countries like the Barbados introduced visas to attract foreign workers to stay while they work remotely, and this provides stable tourism revenue and adapts to new trends caused by the pandemic. Secondly, we have targeting high net worth visitors, destinations like the Seychelles, targeted travelers who could afford private travel and this bring their revenue and maintain safe tourism. Sustainable tourism investments. Countries such as Turkey, for example, saw a significant rise in its tourism sector with a large increase in international tourists arriving despite the ongoing financial crisis. And because of this, Turkey was able to rapidly recover from the crisis and benefit from tourism. So, business leaders during the recession were faced with various challenges regarding their economy. WHY LATIN AMERICA EMBRACED ECOTOURISM. In 1983, Mexican architect Hector Ceballos Lascurain popularized the term “ecotourism.” He defined it as “traveling to relatively undisturbed or uncontaminated natural areas with the specific objectives of studying, admiring, and enjoying the scenery and its wild plants and animals, as well as any existing cultural manifestations (both past and present) found in these areas. The author raises 4 major issues in using ecotourism for conservation and community development. 1st, balancing conservation and economic development is complex. Ecotourism aims to protect biodiversity and support local economies but achieving both goals is challenging. In places like the Galapagos, tourism helps fund conservation, yet increased human presence and resource use threaten the fragile ecosystems. 2nd, overtourism and environmental degradation are concerns. In areas like Amazon, the rapid rise in ecotourism can deplete natural resources, increase waste, and introduce invasive species, undermining sustainability. 3rd, there's misuse of ecotourism label. Some ventures claim to support cons conservation but fail to benefit the environment or local communities, reducing ecotourism to just another form of mass tourism. And 4th, issues of the indigenous and local participation are noted. While some partnerships in the Amazon empower communities, others exploit local cultures. In regions where there are elevated levels of corruption in the government or there are setbacks due to political violence, the tourism sector can suffer greatly. The example given in the article is Nicaragua, which faced significant setbacks for political violence and authoritarian governance. The author argues that while ecotourism has the potential to support conservation efforts and empower local communities, it also faces significant challenges. This is shown by supporting evidence as the article discusses how in places like the Galapagos Islands, ecotourism has funded conservation efforts, but it has also Ecotourism contributed to environmental degradation illustrating the dual nature of its impact. The next point would be mislabeling and variability of ecotourism. The author argues that the term ecotourism is often misused with many tourism ventures failing to provide genuine benefits for conservation or local communities. Supporting evidence would be the author points out that not all nature-based tourism can qualify as ecotourism. True ecotourism should generate net benefits for conservation and local communities whereas many marked tourism experiences do not meet these criteria. Next would be the importance of local community engagement. This is a particularly important argument as engaging indigenous and local communities in ecotourism planning and management helps the community have a stake in tourism ventures and is more likely to benefit and contribute positively to conservation efforts. Regions with stable governance and economic support tend to have thriving ecotourism, while areas with political instability or corruption struggle. With careful management, adaptability and true sustainability practices, ecotourism can continue to contribute to conservation and community development. Trends like increasing domestic tourism aim to reduce carbon footprints and over tourism, suggesting hopeful pathways for improvement. The author also argues that ecotourism plays a crucial role in biodiversity conservation. As an alternative to harmful industries like mining or agriculture, ecotourism can protect vital ecosystems. The example from the Amazon and Costa Rica illustrates how it supports biodiversity and promotes responsible land use, proving its value as a conservation tool. Building on an earlier history of safari hunting in the region, ecotourism potential in the Brazilian, Ecuadorian, and Peruvian Amazon drew attention in the 1980s, in the wake of the Brundtland Report. Early satellite imagery revealed the destruction under way across the Amazon. The Indigenous rights movement was also garnering increasing international support. Many public and nongovernmental institutions promoted ecotourism as a win-win for Amazonian biological and cultural diversity. Costa Rica may be the country most associated with the phenomenon of ecotourism. Long before then-President Jose Figueres announced that it ´ would be “offering itself to the world as a ‘laboratory’ for this new [sustainable] development paradigm” in 1997, the “Green Republic” had been at the forefront of ecotourism development. Nowhere is the value of ecotourism better demonstrated than on the Osa Peninsula, home of the country’s biodiversity jewel, Corcovado National Park. There, ecotourism has not only helped reduce deforestation, but its presence is also associated with reforestation in several places. Though it is hard to imagine, given its current reputation, Costa Rica had one of the highest rates of deforestation of any country in Latin America heading into the mid-1980s. With the 1995 opening of Liberia airport in the Guanacaste Peninsula, the northern Pacific region underwent extensive multinational resort development. This raised concerns that the country was jeopardizing the small-scale ecotourism industry on which its international reputation had been built. By 2012, plans for a large airport in the Osa Peninsula raised fears that the region was headed down a similar path of overtourism. Mobilization of the ecotourism, conservation, and scientific communities in opposition to such an airport has helped Osa avoid that path for the time being. Small-scale boutique operations—an increasing number of which are owned and operated by Costa Ricans—continue to support a mosaic of public and private protected areas across the Osa Peninsula region and livelihoods for dozens of rural communities. Although ecotourism can provide net benefits for communities and conservation, it cannot overcome the effects of poverty, corruption, and authoritarian rule. There are limits to what ecotourism can accomplish, as Nicaragua demonstrates. Yet this is not evidence of a defect in the idea of ecotourism, or an indictment of its record to date, but rather a testament to all that ecotourism is up against across Latin America—and its potential value to the region. WEEK 9: FINANCE THE HISTORY OF BLACK MANAGEMENT REVEALS AN OVERLOOKED FORM OF CAPITALISM The issues discussed in the article include systemic racism, lack of recognition, and underrepresentation. The article further discusses how resilience, innovation, the importance of community support, and learning from history helps in addressing racial inequalities. One of the issues discussed in the article is systemic racism. This issue has been one of the main reasons for creating barriers for black professionals in corporate leadership roles. Additionally, there has been underrepresentation of black professionals, whether that be in the workplace or even in the history curriculum that is taught in schools. It is treating a lack of recognition of the contributions made by black professionals and the dominance of white perspectives in the field. The author in this article argues that the history of black management offers crucial yet overlooked insights into effective management practices that are deeply relevant today. This history is characterized by resilience and innovation in the face of systematic racism and how it showcases how black entrepreneurs and leaders such as Madam CJ Walker and Charles spa Charles Spalding have historically emphasized community, cooperation, and social responsibility. These leaders have thrived by fostering strong community ties and adopting cooperative strategies demonstrating that a business can prosper by prioritizing the welfare of a community they serve. Their success stories provide a stark contrast to the traditional competitive business models that dominate current management teachings, and which are often known as individualism and profit maximization. The Greenwood Bank, a digital only bank, was founded on October 9, 2020, in Atlanta, Georgia by Andrew Young, who was formerly Atlanta mayor, Michael Reinder, who's a rapper, businessman, and activist, and Ryan Glover, who's an entrepreneur. This company serves to empower black and Latino communities economically inspired by the historic Greenwood District in Tulsa, Oklahoma, which is referred to as the Black Wall Street. It had been an economic hub for black people, which had a great amount of success, and had many businesses, banks, and financial institutions. But sadly, the area was tragically destroyed in 1921. It was a Tulsa race massacre, and the racial wealth gap which followed is the motivation for the creation of the Greenwood Bank. The Greenwood Bank faced challenges in gaining trust from black and Latino communities when asked to search from traditional banks as they were already financially insecure. Many of these small businesses lacked the resources and networks necessary to thrive through this economic crisis, which made the process an uphill battle to say the least. Consequently, innovation became the key to success in these times. Majority embraced ecommerce and use social media to engage their customers and essentially rebuild a loyal community. The rise of the buy black movement free to support and encourage customers to seek out and buy from black owned businesses. The link of diversity in virtual capitals isn't just accommodations. It is ruling the system balance and the limited assets to the key networks. Essentially, it creates a virtual cycling. Without, connections or representations, the black entrepreneurs don't often miss out to the crucial fundings. It keeps the cycling and their funding going. But there's the good news. Things are starting to change. Organizations like Black Whizzy and Black, Argentine Touch Funds are step on in a big way. They are focused on bringing to more black professionals into virtual capital and providing funds the opportunities for the black entrepreneurs. The Green Book was created by Victor Hugo Greem and it highlighted places where African Americans could eat, sleep and refuel. The challenges of African Americans faced along with what the Green Book faced can be broken down into 3 main categories, which was the restriction of black Americans' human rights and access to necessities. By distributing the green book at Esso stations, green could reach people across the country, creating a reliable and crowdsourced guide that empowered travelers while supporting black owned businesses. Phipps and Prieto, who are married, are both from Trinidad and Tobago. They first met as undergraduate students at Claflin University, a historically Black college in Orangeburg, South Carolina. There they noticed an oddity that would hold true throughout their academic careers: In the textbooks they read, all of the management gurus that informed their views of organizational culture, financing, strategy, or the purpose of a company, were Caucasian, says Phipps, now an associate professor of management at Middle Georgia State University’s School of Business. The best antidote to the systemic racism that has blunted the careers of Black entrepreneurs and left corporate America overwhelmingly run by white managers and CEOs, may be in rejecting capitalism in its current form, the professors say, and reclaiming a more Afrocentric philosophy rooted in communitarianism and cooperative economics. The first figure the duo studied extensively was Charles Clinton Spaulding, who led North Carolina Mutual Life Insurance Company, the largest African American life insurance company of the times, for 50 years until his death in 1952. To his mind, the eight fundamentals of operations that demanded a leader’s attention were: cooperating and teamwork. authority and responsibility. division of labor. adequate manpower. adequate capital. feasibility analysis. advertising budget. and conflict resolution. Spaulding’s devotion to a collective style of working and to corporate social responsibility was not an isolated case of the era. Nor did it materialize strictly as a response to the times, the pair assert. Rather, they hypothesize that the cooperative model that was popular among Black businesses then—and which infused the way free-market enterprises operated in the Black Wall Streets of Durham and other American cities like Tulsa, Oklahoma—grew out of a much older African philosophy called Ubuntu, a Nguni Bantu word meaning humanity, derived from an idiom that’s sometimes translated as “I am because we are” or “a person is a person through other persons.” Ubuntu as a world view that stresses our interconnectedness was popularized globally in the 1960s, primarily by Desmond Tutu, the South African archbishop emeritus and Nobel Peace Prize-winning human rights activist. An ethos of ubuntu in business could create “a cooperative advantage.” Prieto and Phipps have further developed the concept, finding evidence of the cooperative advantage in Spaulding’s achievements and that of other former corporate leaders. Spaulding, a true visionary, “saw the importance of employee ‘perks’ as a way to increase motivation within the Mutual family. People typically want what is best for their family, and the good old Mutual spirit reflected this convention.”’ And then there’s Maggie Lena Walker, the historical leader whose writings left the professors most awestruck and electrified. Born in 1864 to a former slave in Richmond, Virginia, Walker grew up in poverty, but she would become the first woman in the United States to start a bank, the St. Luke Penny Savings Bank, in 1903. “White supremacists, anytime they had an opportunity to label Black citizens un- American, they took it. Phipps and Prieto believe that, as Trinidadians in the US, they had an insider-outsider vantage point from which to begin filling this void in management culture, and to be among the few scholars attempting to decolonize American business-school curricula, an effort that’s been more pronounced in South Africa and in the UK. “There is a term from the Akan people of Ghana known as Sankofa, which means, ‘go back and get it.’ It embodies the importance of reflecting on African philosophies from the past in order to reclaim the future,” Prieto and Phipps write in the introduction to their book. CITIBANK The Great Depression was from 1929 to 1939. The reason that it occurred was because the price of a lot of items was very high, and the market price was above the real value of these goods. So, on Black Thursday, there was a huge stock crash. And as a result, there's a lot of fear among consumers, and that created issues for banks. As a result of these issues, many individuals lost faith within banks and started withdrawing their money. Banks mainly make their revenue by using those deposits that consumers put down to loan out to other clients, whether that be businesses or individuals. And because of the huge lineup of individuals who wanted their cash back, a lot of banks did not have that liquidity. Because banks were starting to fail, people were not trusting the system, and the economy entered a depression where there was high unemployment, no economic growth. President Roosevelt in 1933 enforced the New Deals Act. Two of the laws that I want to Commented [RO3]: b) Stabilizing the economy by capping interest and deposit rates focus on that were mostly state regulated was the cap on interest rates as well as deposit rates. So, states did not want banks to compete on different offerings for deposit rates, and they also did not want banks to take on a huge risk by paying these deposit rates, so they put a cap on it. In addition to the effects of these policies on low profitability for banks, corporate clients also realized that they could get higher returns by investing in the stock markets, so many corporate clients left large banks. As a result, banks had to pivot their strategy, and they started selling bank cards. The goal of this was to cross sell their products to clients and offer these clients loans. However, later was seen as a critical component of revenue. So, the first two bank cards that emerged were BankAmericard (Visa) and Mastercharge (Mastercard). Credit card adoption quickly grew, and within 2 years, the amount of credit card users increased 6 times. However, the same state limits that were on loans stayed true for credit cards. And once again, because of the high transaction costs for credit cards, a lot of banks were suffering from profitability. So, there were 2 cases where banks added service fees. The first instance is Marquette, and when they added their service fee, they lost 40% of cardholders. And the second instance is Citibank. And after they enforced them, they had 3 credit cardholders sue them. And as a result, Citibank had to return all the collected fees. It's important to note that all these limits were up to the discretion of the state. So different states had different interest rate limits. In 1978, the US Supreme Court overruled the interest rate charges and emphasized the term located. So, the term located meant that banks could charge and follow regulations of where they were chartered. As a result of this lawsuit, there was a loophole, and this is what Citibank took advantage of. They were based out in New York, which had lower state limits of interest rates. However, they started exploring other states and found South Dakota, which had lenient rules and were open to having new banks be chartered there. As a result, Citibank moved to South Dakota. They got chartered there, and as a result, they were able to issue new interest rates to all the different branches that they had across the USA. The first issue is state level loopholes as these had their own regulations regarding the credit card industry and South Dakota's elimination of usury laws prompted Citibank's relocation. Next, consumer debt starts to skyrocket when credit cards became increasingly available, and interest rates were left uncapped due to usury laws being eliminated. South Dakota's decision to lift the usury laws allowed Citibank to bypass interest rate Commented [RO4]: Usury laws set the maximum interest rate that lenders can charge on various types of caps with some rates reaching nearly 30%. This move led other banks to relocate to loans, including real estate financing, consumer loans, states with similarly lacks rules, weakening consumer protections and favoring corporate payday loans, and business loans. The limits vary by jurisdiction and depend on factors like the loan amount, profit over consumer welfare. Vonetta also claims this deregulation trend fostered a culture type of loan, and the loan agreement's terms. of high interest lending nationwide, leaving consumers increasingly vulnerable. Average interest rates rose to 18 to 20%, trapping many in cycles of debt to cover essentials like groceries and utilities. He provides real life examples of families relying on credit for food and a woman burdened by medical expenses to show that consumers underestimated the risks, worsening their financial troubles in a deregulated environment. Vanatta describes a race to the bottom. As states competed to attract banks by reducing regulations. Delaware and others followed South Dakota's example, dropping usury limits and weakening consumer protections nationwide. He notes that states like Nevada and Montana also adopted similar measures giving banks more power and creating inconsistent protections across the country. Vanatta claims high interest credit cards foster their dependence on credit with nearly 40% of US households carrying credit card debt. He argues this reliance disproportionately affects low-income households who face an increased risk of bankruptcy. Vanatta also claims these predatory lending practices widen economic disparities, trapping vulnerable populations in cycles of debt and financial instability. WEEK 10: TEXTILE INDUSTRY. ZARA-INDITEX AND THE GROWTH OF FAST FASHION Fast fashion was pioneered by reclusive entrepreneur Amancio Ortega Gaona and his companies Zara and Inditex (Industria de Diseño Textil) in Galicia, Spain. This model has changed the fashion industry. In the 1960s, Ortega’s company was a local, privately held business with annual sales of $30 million. In 2006, Inditex is the second-largest fashion company in the world, operates over 2,700 stores in over sixty countries, and is a publicly held company valued at $24 billion, with sales of $8 billion. 1 As Inditex grows, many companies are copying its unique business model. The main area of focus in this article is Inditex's new and creative business model, which can be referred to as the fast fashion model. This model involves rapid response to market demands, vertical integration, and making fashion widely accessible. With this new model, Inditex has disrupted and challenged traditional fashion models by moving away from seasonal trends and moving towards constant supply adjustments based on direct and up to date consumer feedback. In terms of the time, the article stems from the late 1970s to the early 2000s. Throughout this period, the comeback of globalization in the late 1980s opened more markets and reduced trade barriers, which increased competition amongst low cost developing countries and introduced a more trade friendly world. With the Inditex model of rapid response to fashion trends and less outsourcing of production, they were able to stay competitive with affordable prices, but also be the quickest when it came to keeping up with trends and overall have fast turnaround times. Also, the IPO in 2,001 allowed Inditex to Commented [RO5]: An IPO, or initial public offering, is the term for the first time that a private company sells grow to new heights as they became public. shares of its stock to the public on a stock exchange. The first was inflexible supply in the fashion industry. Brands previously focused on churning out new collections seasonally. This maintained the same inventory over extended periods of time. In doing so, brands failed to maximize interest in themselves as consumers quickly became used to the products being sold, many of which quickly became app style and yet remained on shelves. Secondly, high cost of production and operation. Paying subcontractors for production of goods causes the fashion industry to have higher cost of production than ideal. Due to this, fashion companies often choose to employ low- cost labor in other countries, which negatively impacts the quality of the goods produced. And thirdly, low efficiency in the fashion industry. Each stage in production of fashion products tends to be outsourced to multiple subcontractors, leading to significantly higher costs of production and higher production time. This further hinders the fashion industry's already inflexible supply and often leads to overproduction issues as the contract system makes it difficult for firms to change their production in the short run. Seasonal collections that were kept on store shelves for a long period of time were the primary focus of the traditional fashion industry model, which led to products that quickly became out of date. The authors believe that the ongoing participation of designers who adjust to changing market trends are how Zara Inditex overcomes this problem. This strategy increased client interest and urgency to buy more products by allowing Zara to maintain a diverse product line and react quickly to shifting the customer demands to match current trends. Low efficiency in the fashion industry, Zara Inditex presents its just in time model production with vertical integration. This would enable Zara to be more cost effective by Commented [RO6]: Vertical integration happens when a company decides to own and produce in-house one of the keeping any critical capital-intensive product in house and outsource any labor intensive steps in its supply chain. and less critical production stages. It allows the company to maintain a fast design and retail cycle by adjusting the volume produced based on real time sales variation in demand to prevent overproduction and maintain supply chains. High cost of production operations. For firms to rely heavily on subcontractors in the traditional fashion industry leads to high production costs. Zara spends limited amounts on advertising at 0.3% of revenue, while its closest rivals spend 3 to 5% since it relies on price allocations and word-of-mouth to attract consumers. The strategic reduction in advertising expense combined with the efficient internal operations enables Zara to remain competitive in prices while maintaining high profit margins. Inditex makes every effort to reduce its design-to-retail cycle. These efforts include vertically integrating design and manufacturing far more than its competitors, using mostly local subcontractors, and developing with Toyota “just in time” production lines that can be modified based on demand. While the standard design-to-retail cycle in the industry is five to six months, Inditex’s cycle is only five weeks. The innovative Spanish producer believes that changing its offerings quickly gives them scarcity value, leading customers to visit their stores more often. As Carlos Herreros de las Cuevas describes it, “customers who enter a Zara store and see something they like, know they have to buy it straight away, because it probably won’t be there next week. THE INDIAN FASHION INDUSTRY AND TRADITIONAL INDIAN CRAFTS The leading centers of fashion in the world were found only in Western cities—Paris, London, New York, and Milan—until the addition of Tokyo in recent years. The fashion industry in each city has assumed its own distinct identity. In this article, I describe the emergence (in the mid-1980s) and evolution of the high-end fashion industry in India. By 2005, Indian fashion had developed a clear identity and had evolved into a well established, functioning industry, earning revenues of approximately 2 billion Indian rupees (INRs) (the equivalent of USD 61.5 million) and made up of least two hundred individuals who self-identified as designers and were members of the industry trade association. The article highlighted the role of entrepreneurs and their impact on shaping the Indian industry's identity and the overall impact of cultural, social, and economic factors. Additionally, the article touches on the hardships of navigating a healthy balance between traditional Indian craftsmanship and cultural heritage with modern demands in globalization. There are multiple issues raised by Karen in the article. One of which is the challenge of balancing culture identity alongside adapting the need to globalize. Throughout the article, it is adamant that designers from India have been met with the struggle of appealing to both domestic and international markets as well as keeping cultural identity apparent in their work. Contrastingly, this challenge is also met with a constant change and veering to more westernized preference in clothing within the country. Another issue which we found insightful was the lack of empathy towards designers within the community. Firstly, with the challenge of balancing cultural identity with the need for globalization. The author agrees that it's important to maintain traditionality of the clothing. However, it's an aspect that hinders the progress and growth of the luxury Indian fashion industry. As something that comes up quite often within the article, it is obvious that the identity of the fashion industry in India is extremely unique and directly established by only Indian influences, traditions, and heritage. It can also be a setback for designers as domestic nature of the industry does not appeal to other cultures. As mentioned in the second issue, consumers within the industry have often failed to accept these specific products as luxury goods, therefore not acknowledging both the human capital and monetary capital that goes into this craftsmanship. The lack of this Commented [RO7]: artesanias understanding created a resistance to pay what is demanded by suppliers and the setback for an industry's financial growth, as well as the artists who made a living off of this, which can directly impact the economic growth of the fashion industry in India. This growth is important to create jobs, increase GDP, and legitimize the industry on an international stage. India has a strong tradition of weaving diverse textiles and embellishing fabrics by dyeing, printing, embroidering, and ornamenting them with beads, mirrors, and precious metals, such as gold, silver, and semiprecious stones.In fact, textiles and fabrics constituted a major portion of India’s ancient trade with other civilizations. Each geographic region within India has evolved its own unique style of weaving and decorating textiles.15 But British rule brought with it mill-made cloth, which soon threatened to destroy traditional handloom centers. Supporting the handicrafts industries in India was also seen as a way to increase employment and incomes in rural areas without uprooting villagers from their familiar surroundings. Simultaneously, however, India was pursuing a policy of encouraging industrialization, which allowed it to export huge amounts of cheap manufactured cotton apparel, some surplus of which found its way into Indian stores.20 Nevertheless, most Indian women did not buy garments produced in mills for export, since these tended to be Western clothes, such as shirts, trousers, and skirts. As in most Asian and other developing countries with distinctive indigenous styles of dressing, Indian men had adopted Western- style clothing on a larger scale, and earlier, than Indian women had done. Westernization has been a key factor for Indian’s craftsman to start losing the demand of their customers. However, the wearing of Western clothes, especially by a married woman, was often perceived as an indicator of wayward and rebellious behavior. What was the primary influence behind the establishment of the National Institute of Fashion Technology (NIFT) in 1986? The need to train individuals for India’s apparel export industry. The CEO of Ensemble recalled in an interview: “Women would walk into our store, look at one of the ensembles, and cost it out as if they had to get it tailored—say, two meters of fabric, tailoring, a certain amount of embroidery or beadwork would, they knew, cost them Rs. X—and demand to know why we had priced it so much higher!”65 Similarly, designers were perceived as not much more than “glorified tailors” in the early days, not only by customers but also by their friends and parents. Commented [RO8]: Indian customers undervalued their work and treated them as glorified tailors (sastres). The sociopolitical environment also contributed to the slow development of the fashion industry. The fi rst government in independent India (after 1947) adopted a centrally planned approach to economic development, in which the state played a large role. The thinking of the members of both the government and the Planning Commission (which created the “Five-Year Plans” for economic development) was heavily influenced by Gandhian principles of self-reliance and equality of outcomes. Starting with these designers, an industry and broader field of fashion was built gradually. The fashion field, consisting of educational institutes, magazines, and specialized retailers (multidesigner outlets, or MDOs), emerged and evolved with the fashion industry itself. They provided a place for multidesigners under one roof. What was a key feature of the Fashion Design Council of India (FDCI) when it was established in 1999? It modeled itself after international organizations like CFDA and Chambre Syndicale. WEEK 11: OIL AND GAS INDUSTRY THE BRITISH PETROLEUM COMPANY Founded in 1909 as the Anglo Persian Oil Company, British Petroleum (William Knox Darcy) has grown into one of the world's largest oil and gas corporations by the 1990s. Its history reflects resilience and adaptability in the face of major challenges, including the nationalization of its Iranian assets, global oil price shocks, and evolving environmental concerns. BP has consistently reinvented itself, diversifying into chemicals, plastics, and petrochemicals while implementing internal changes like project 1990 to streamline operations and cut costs. Its global presence with operations and regions like the Middle East, North America, and Asia has solidified its role as a leader in energy exploration, production, refining, and distribution. Through strategic restructuring and a commitment to innovation, BP's evolution highlights its ability to navigate the complexities of a dynamic and competitive industry over a century. The key issues that the author raises in the article relate to the big picture of how nationalism was an issue that resulted from the response of foreign controls over oil resources. The aftermath of World War 1 and the interwar period saw the rise of innovative ideas surrounding sovereignty, with colonies increasingly seeking economic self sufficiency. For the company, the long-standing reliance on oil rich nations like Iran, Libya, and Iraq put it in a vulnerable position by failing to anticipate the rise of nationalism and the changing political landscape. The first issue that the company saw came from the growth of Persian nationalism. In 1925, Reza Khan was determined to reverse foreign domination of the country's political and economic affairs with the British. The Anglo Persian Oil Company at the time had come to symbolize British imperialism in the eyes of many Iranians. As Iran's resentment grew, particularly over declining royal payments for the British Petroleum Company during the Great Depression, tensions mounted. Commented [RO9]: Reza Khan wanted to end foreign domination, especially for oil market, so tensions with the By 1932, the Persian government took drastic action canceling British Petroleum BP arised and the company was seen as a dominant empire for many Persians, creating more tensions during Company's oil concession as a part of a broader push to assert national control over the Great Depression. its resources. Fast forward to the 1970s, and the British Petroleum Company faced another blow. The oil crisis and nationalizations across the globe, especially in countries like Libya in 1971 and Nigeria in 1979 deprived of the British Petroleum Company of direct access to key oil supplies. The British Petroleum Company's experience in the Middle East and beyond, highlights how shifting ideas of sovereignty and nationalism reshaped the global oil industry, forcing even Commented [RO10]: supreme power or authority: the most established companies to reckon with new political realities. The company's challenges highlight a broader argument about the dangers faced by multinational corporations when they fail to anticipate or adapt to shifts in political and economic ideologies in the regions where they operate. Nationalist movements and demands for sovereignty challenged Western dominance over the resources. British Petroleum, then Anglo Persian Oil, struggled to adapt, leading to setbacks like the loss of concessions in Iran, political risks, and the dependence on foreign assets. Iran's nationalism, led by Reza Khan, targeted BP as a symbol of imperialism. Declining Commented [RO11]: policy of extending a country's power and influence through diplomacy or military force: royalties and public resentment accumulated in the cancellation of BP's concession in 1932, highlighting BP's failure to adapt the rising sovereignty demands. This oil crisis in countries like Libya and Nigeria underscored BP's inability to counter rising nationalism. Losses of access to OPEC crude revealed BP's strategic missteps in understanding the push for resource control. BP's failure to adapt to nationalism and sovereignty left it vulnerable to political and economic shifts. Beforehand, the US consortium Arabian American Oil Co. (Amco) had controlled the industry. However, the Saudi government wanted to have full control over its most profitable industry again. They set out to gain power over their own resources and engage in negotiations over the takeover of the company. After peaceful and constructive negotiations, Saudi Arabia had regained control of the industry and in 1973 moved to purchase all the remaining shares Americans had in the company. The deal is estimated to have totaled more than $2,000,000,000 and the oil industry was changed. Saudi Arabia faced the challenge of an economy that was missing its biggest piece. As a country with large oil deposits and many natural resources, Saudi was losing out on the most lucrative industry it could take part in and eventually realized that an investment would not only rid them of the concessions they paid but also allow them to control and set the price of their own resource. The issue was the American consortium had major control and purchasing the rights would not only be expensive but also require intensive negotiations in finding a way to show the Americans that they would benefit from this as well. For those Americans, they had a hard deal to face. The Americans also faced political pressure as Iran was knocking on the door militarily. The Americans could either sell their majority share and have Saudi drill in and find the oil or enter a political stalemate that could end up causing warlike activities. The Arabians were successful in nationalizing their largest resource and making sure control was never in the hands of political enemies such as Iran. Nationalization of a country's resources can be incredibly valuable if done correctly. The backing of a country comes with monetary and political influence and therefore brings an extra layer to any negotiation. It also ensures that the industry will stay afloat because the government now not only has the influence but also the responsibility to make a profit off. In the case of the British Petroleum Company, the British government invested because they had a need for expansion of that industry, in the same way that Saudi Arabia invested because they wanted to recapture their economy. A purposeful and well negotiated nationalization is effective. On that note, the other major takeaway comes in the fact that takeovers, especially on a political scale, do not need to lead to disputes. Mr. Yamani understood that constructive negotiations could yield not only the results they wanted but also keep strong relationships with the people involved. In the case of BP, a violent coup was needed in 1953 to reach agreements, a type of incident that was avoided. The intersection of the oil industry and political power is strikingly evident in the histories of British Petroleum Company and the Saudi Aramco takeover, where government involvement and strategic interests play pivotal roles in both. BP's early success depended heavily on British government funding, driven by both economic and military motives to secure a reliable energy source. The company's early years also faced mounting pressure from Iranian officials to nationalize oil resources, a struggle shaped by Iran's desire to reclaim control over its natural assets. Though Iran faced prolonged challenges in reclaiming these assets, eventually securing control over BP operations, Saudi Arabia approached nationalization differently, demonstrating a more accelerated path. When Saudi Arabia moved to nationalize Iranco, its government pursued a systematic and politically savvy approach. This allowed Saudi leaders to achieve full ownership of Aramco in under a decade, largely avoiding the drawn-out conflicts seen in an Iranian context. The contrast between these two cases highlights that while the nationalization of oil resources is deeply politicized, the path to achieving it can vary widely with outcomes shaped by local strategies and government leverage. What event significantly contributed to BP's growth during World War I? Naval oil demand. What percentage of Aramco did Saudi Arabia first acquire in 1972? 51% The late 1980s saw considerable changes at BP. In October 1987 the government under Prime Minister Margaret Thatcher sold its remaining shares in the company as part of a privatization program. The timing of the share issue was particularly unfortunate, as the world's stock markets collapsed between the opening and closing of the offer. BPs history reflects the complex interplay of global business, sovereignty movements, and geopolitics. Nationalization Examples: Iran: Lengthy conflict over resource control. Saudi Arabia: Systematic and peaceful reclamation of oil resources. ENERGY POLICIES IN CANADA AND THE US SINCE THE SHALE REVOLUTION The US and Canada share a long history of collaboration in energy production and trade. Their oil and gas industries have been deeply interconnected for over a century, with cross- border hydrocarbon deposits like the Bakken and Utica shale plays and shared Commented [RO12]: 1.soft, finely stratified sedimentary rock that formed from consolidated infrastructure, such as pipelines. Historically, Canada has been a secure and dependable mud or clay and can be split easily into fragile slabs. supplier of oil to the US, helping to reduce Americas dependence on OPEC nations. However, since 2008, their energy policies have diverged significantly. The United States has prioritized energy independence and rapid production growth, while Canada has El esquisto, o shale, es una formación sedimentaria que struggled with environmental concerns and regulatory challenges that have stalled its contiene petróleo y gas. progress. This divergence stems from the transformative effects of the shale revolution. The first successful commercial oilwells in North America were drilled in Oil Springs, Commented [RO13]: Stopped running Ontario, in 1858, then in Oil Creek near Titusville, Pennsylvania, the following year. The shale revolution began around 2008 and completely changed the game for oil and gas markets. It was driven by two technological innovations: hydraulic fracturing and horizontal drilling. These technologies made it possible to extract oil and gas from previously inaccessible shale formations, unlocking vast reserves. In the United States, this led to a dramatic increase in domestic production. Between 2008 and 2018, US oil output more than doubled, rising from 5 million barrels per day to over 12 million barrels per day. This surge in production allowed the US to significantly reduce its reliance on imported oil. In contrast, while Canada also increased its oil production by 84% during the same period, the majority of this growth came from oil sands, which faced higher environmental and political scrutiny. For decades, the US was highly dependent on foreign oil, consuming over 20 million barrels per day but producing far less. This dependence made the US vulnerable to geopolitical events, such as the 1973 OPEC oil embargo and the Iranian Revolution of 1979. In response, the US made energy security a priority, implementing policies to reduce reliance on foreign suppliers. The shale revolution was perfectly timed to support this goal. By doubling its production and building over 77,000 kilometers of new pipelines since 2010, the US made significant strides toward energy independence. In Canada, the situation was different. With a smaller population and abundant natural resources, Canada never faced the same strategic imperative for energy security. Instead, its policies have been shaped by environmental concerns, regulatory complexities, and its reliance on the US as a primary export market. Canada holds the third-largest proven oil reserves in the world, with 97% of these reserves concentrated in oil sands. However, accessing international markets has been a persistent challenge. Political opposition and regulatory delays have stalled major pipeline projects, limiting Canadas ability to diversify its exports. Historically, the US and Canada have worked together to build an integrated energy market. For example, the Canada–US Free Trade Agreement in 1988 guaranteed American access to Canadian oil and gas while giving Canada greater access to US markets. This partnership was beneficial for decades. However, the shale revolution disrupted this dynamic. As the US ramped up its domestic production, its need for Canadian imports decreased. This shift is perhaps best illustrated by the Keystone XL pipeline saga. Proposed in 2008, Keystone XL was designed to transport Canadian heavy crude to Gulf Coast refineries. Despite its potential economic benefits, the project faced strong opposition from environmental groups and political leaders in the US, including President Obama, who rejected the pipeline in 2015. Although President Trump later revived the project, it remained mired in legal challenges and was never completed. The divergence between US and Canadian energy policies can be summarized in three key points. First, the US has focused on energy independence by increasing domestic production and reducing reliance on imports. Second, Canada has prioritized environmental sustainability and Indigenous rights, often at the expense of expanding its oil and gas infrastructure. Third, the US has taken a unified approach to energy policy, while Canada has faced fragmentation due to differing federal and provincial priorities. While the US leveraged this revolution to achieve greater energy security and economic growth, Canada has struggled to navigate the complex intersection of environmental, political, and economic concerns. Which US president first advocated for incorporating Canadian oil into the American energy market? Richard Nixon What environmental disaster raised public opposition to pipelines like Keystone XL? Kalamazoo and Exxon valdez oil spills MEDIO DIFICIL WEEK 12: THE SERVICE INDUSTRY ARE YOU IN THIS COUNTRY? HOW “LOCAL” SOCIAL RELATIONS CAN LIMIT THE “GLOBALISATION” OF CUSTOMER SERVICES SUPPLY CHAINS This article is based on the context that globalization is now playing a massive role in the business world as fields such as telecommunications, finance, and retail services begin to become much more globalized. Beginning in the late 1990s into the early 21st century, companies for the purpose of reducing operational costs have begun outsourcing customer service functions to offshore call centers. These call centers are in countries with lower labor costs such as India, the Philippines, and many countries in Eastern Europe. Given the lower labor costs, this is where the operational costs are reduced. This entire process began its action to create global supply chains where customer service could be delivered cost effectively to any part of the world from any part of the world. This means that the article is relevant to our modern business history and into the future as globalization is a process that continues to develop with time as we speak. Issues goes far to discuss legal barriers to international data exchange, wage disparities, work conditions, and other potential areas for explosion while also discussing issues as simple as language and accent barriers impacting the customer service quality of the call centers. Bankco’s offshoring of customer service to India revealed significant challenges in transferring roles that depend on cultural and interpersonal skills, underscoring key limitations in the globalized service model. While technical processes were easily replicated, the adviser's unfamiliarity with British accents, dialects, and cultural nuances made it difficult to deliver the enacted sociability essential to customer service. This cultural gap left customers feeling disconnected and dissatisfied, sparking backlash over perceived declines in service quality and UK job losses. Some complaints even took on a racial tone, with customers demanding to speak only with UK based representatives. As dissatisfaction grew, Bankco 's brand reputation and customer loyalty were at risk, demonstrating that some call customer facing roles requiring cultural alignment are better suited to onshore management. The author argues that while globalization and offshoring offer cost saving benefits, these are limited for customer facing roles that require cultural alignment and interpersonal skills. Complex interactions, like those in Bankco's call center, depend on the adviser's ability to understand, and relate to customers' cultural norms, which are often specific to local context and difficult to transfer abroad. Offshoring such roles can lower service quality, lead to customer dissatisfaction, and risk brand loyalty. To address this, the author suggests a strategic best shoring approach. Rather than a blanket offshoring strategy, companies should carefully decide which roles are suitable for offshore locations and which should remain local. For customer service roles involving complex interactions across selling, keeping these onshore may be worth the higher cost to protect service quality and brand reputation. LineCall's experience demonstrates that balancing cost savings with quality assurance is crucial as poor offshoring decisions can impact customer satisfaction and loyalty. Cost-saving benefits of globalization and offshoring are not universal. Roles requiring cultural alignment and interpersonal skills (e.g., customer service) are challenging to offshore. Companies need to adopt a nuanced approach to offshoring, balancing cost savings with service quality and cultural alignment. The work shares some of the characteristics of other forms of customer services work which require generic social and “aesthetic” skills, which includes social, interpersonal and communications skills, along with the ability to identify with and invest in the product or service being sold. It also includes the ability to produce an enacted performance of “sociability” to present to the customer emotions that they do not necessarily feel, such as friendliness, while concealing others, such as anger and frustration. WALMART GOES TO GERMANY Walmart is the largest multinational retail corporation by revenue with approximately 10,000 stores worldwide. Known for its slogan: "Everyday low prices." Operates across primary, secondary, and tertiary sectors, integrating supply chain efficiencies and customer service to keep costs low: o Primary sector: Sources agricultural products directly from farms for freshness and affordability. o Secondary sector: Purchases manufactured goods (electronics, clothing) at negotiated low prices and runs its own factories. o Tertiary sector: Provides logistics, warehousing, shipping, and e-commerce services. In 1997 Walmart entered the German market, the article tries to explain Walmart's failure in Germany as a corporation's blatant failure to understand culture as one of the keys to a society's view of efficiency. It was a brutal of the fact that efficiency is absolute, something corporations must understand when wanting to expand abroad. The article is based on political economics, the area of study from which political science and economics are split off from. Walmart entered Germany in 1997 by acquiring spare stores and attracted by the country's large population and robust retail sector. So what's the challenge that they faced? German consumers were loyal to local low cost retailers like Aldi, so Walmart had a lot of competition. The US style strategies did not align with German consumers. So Walmart incurred a $1,000,000,000 loss, and in 2006, they exited the German market. Walmart's attempt to replicate its American blueprint in Germany backfired. Practices like aggressive price cutting, a strong customer service orientation, and specific employee management techniques clashed with German consumer preferences. Globalization theories that assume a one size fits all model where universally best practices apply across markets. A quote that fits perfectly with Walmart's misaligned practices is efficiency is not absolute, but rather context specific and socially constructed. Efficiency is not a one size fit model. It depends on the situation and the societal values and priorities. So what is the universal strategy fail? Walmart's corporate culture did not consider the German culture like strict ethics code, which received a negative backlash by German employees and customers. German consumers also found the emphasis on customer service at discount stores wasteful and unnecessary. The imposed ritual Walmart cheer was seen as wasteful, and the company's German staff felt really embarrassed to implement the strategy of customer service orientation. The first constraint is the regulatory challenges and market constraints, in terms of zoning laws and shopping hours. German strict zoning laws and limited store hours hindered Walmart's ability to operate large scale stores with extended hours, which was a key component of its cost leadership strategy. Second, is the cultural misalignment of business practices in terms of the supplier relationships. Walmart's confrontational approach with suppliers demanding access to their operation clashed with the German norm of having a good relationship with your suppliers. So, this led to a lot of contract cancellations by major brands like Adidas and Puma. Walmart's big box low-cost model, which was successful in the US, did not resonate with German consumers who already were accustomed to low prices. And third is the labor relations and union involvement. Germany has a strong tradition of labor unions that are integrated into the wage negotiation process. So, Walmart's refusal to join this negotiation process had them have negative backlash. In Germany, the service sector, which also includes retail, plays a significant role in the GDP. So, understanding this composition helps businesses like Walmart gauge the importance of retail in the overall economy. Second is outsourcing. What is outsourcing? Outsourcing is a business practice in which companies use external providers to carry out business practices that would otherwise be handled internally. So, what was the issue in terms of supply chain management? So, what was Walmart's original approach? In the US, Walmart's outsourcing strategies focused on leveraging external suppliers to optimize costs, enforce strict terms, and gain control over its supply chain. But they couldn't implement that in Germany, so what was the challenge? German suppliers were already accustomed to long term collaborative outsourcing relationships. Second is cultural and regulatory mismatch in outsourcing. German companies view outsourcing partners as strategic allies, whereas Walmart cheated them more like transactional vendors and focus solely on cost and not relationship. The cultural expectation in Germany is that outsourcing relationships should be mutually beneficial by both parties. Germany's stringent labor laws impacted Walmart's ability to influence their lower costs as they were used in other markets. German antitrust laws limited how Walmart could use its outsourcing strategies to gain a competitive edge. Offshoring is the action or process of moving or basing a business operation abroad. So, what was their cost reduction strategy? Walmart's traditional approach is using offshoring to cut costs by muse moving manufacturing to other countries with cheap labor like in China. But in Germany, consumers have a strong preference for high quality, locally sourced products, making it difficult to for Walmart to incorporate this. German consumers valued local craftsmanship and were skeptical of imported low-cost goods. This hurts Walmart's brand reputation. So, what can all businesses learn from Walmart's failure in Germany? They can learn that, yes, offshoring and outsourcing can be an effective cost reduction strategy, but it needs to be, adapted to align with the consumer's priorities, values, expectations, and the regulatory environment, and understanding that will help their business succeed. And now to wrap up, Walmart's failure in Germany highlighted the importance of adapting to local markets. Its American style cost cutting approach clashed with Germany's preferences for stricter labor laws, unique shopping experiences, and stakeholder focused capitalism. This shows us that exporting a business model, even as renowned as Walmart, can cause failure if they do not consider the local norms. Although companies like IKEA and McDonald's have succeeded by tailoring their strategies to the local markets. Again, proving the value of adaptability in these global markets.