Blog 10: Sports Direct Bah Humbug

Sports Direct and owner Mike Ashley have had a very difficult year with bad reports in the media, loosing sales and share price falling, it's safe to say Sports Direct have had better reports. Mike Ashley is willing to change this and not being a 'Scrooge' this Christmas.
His employees have had the worst of it, with there 0 hour contracts, minimum wage and poor working conditions. Mike Ashley has promised to improve working conditions which I believe is very important and I believe his sales will rise because of this. Employees work better when they feel comfortable in there working environment, this will improve customer service - increasing sales evidentially.
He is going to introduce a special share scheme for workers which allows employees to receive shares at a cheaper price. When I worked at Morrisons they did something similar, I wasn't specifically interested myself but I know fellow colleagues who worked there full time took advantage of this and it gave there financial situation a little boost which helps improve they're relationship with the company as it's a bonus we got.
Along with this announcement Mike Ashley also bought a private company jet for he more executive employees to travel around, which is very over the top and Mike Ashley style. Gestures like this please employees and help build positive relationships which is extremely import for  business to work.
This article also mentions about the slight dip in sales Sports Direct have had. The graph bellows shows competitors JD Sports have outsold Sports Direct in the past year, but I feel confident with the changes to the company Mike Ashley has made for 2017 it should be a more promising year for the company.

Inside the Bank that ran out of money

For this weeks blog I had to watch a documentary about the 2008 crisis when the royal bank of Scotland nearly came to a collapse. RBS managed to loose a record corporate loss of 24.1 billion pounds, this damaged the reputation of the well respected bank and the trustworthy financial industry Scotland had as a whole.

It started when the very stubborn Fred Goodwin didn't comply with  'risk management' and bought into a lot of companies that failed loosing billions of pounds. I believe he was too over confident and the power of CEO went to his head, just because he was very successful in the past for many years it shows the swings and round about the financial market can have.
His biggest mistake was not investigating into ABM AMRO's (This was, at the time, the largest rights issue in British corporate history) financial state, this amazed me as Fred Goodwin was recognised for being thorough, good credit record and reducing as much risk as he could with any investment, did he just not care as much anymore and rely on his experience in the market? RBS invested 10 billion pounds into a company they knew little about, for me this is madness with extremely high risk which isn't what shareholders like to hear, some argue 'prefers size over shareholder value'. Once they secured this deal they paid in cash leaving them very vulnerable to any problems that may occur, which of course they did.

Its hard to say how this may affect me? I feel as if I'm a sympathetic person and I really feel for those hard working people who put away their money into these banks as small investment or just an icer to keep them secure. When someone like Fred Goodwin and his egotistic investments puts peoples money on the line with very high risk which of course backfired and made a loss of £24.1 billion it makes me think how he can sleep at night?

This documentary shows two sides of the spectrum, RBS splashing the cash and owning the title as one of the worlds biggest banks. It shows the success RBS made over many years and how much there profits grew. But it also shows how one big mistake can cause the crash of profits and rise in debt. When dealing with such large investments of billions of pounds, you must be 100% sure that there's least risk as possible and it should return profits, RBS did not do this and unfortanely lost billions of ounds. Hopefully they learn from mistakes and nothing like this happens again in the future.

Blog 8 - Olympus 1.7 Billion Dollar Fraud

In this weeks blog I watched a documentary recommended by my university called the 'Olympus 1.7 Billion Dollar Fraud' about a mystifying corporate scandal in Japan that made news worldwide. As a brief summary, Olympus was a huge multi million dollar technology company in Japan and were exposed for fraud for 1.7 billion dollars. There was two heads of the company - Michael Woodford the president and Kikukawa the CEO who had very different loyalties and views.

Apparently irregular payments for acquisitions had resulted in very significant amounts of money in the company's accounts, which was then exposed in an article in the Japanese financial magazine FACTA and had come to Woodford's attention.

Kikukawa would lay very subtle hints to Woodford that he was boss and in charge. For example at a board meeting all executives received a full meal of sushi and Woodford received a tuna sandwich. What this implies to me is that even though woodford was high up in the chain of command within the company he was not respected and treat as equally as others, maybe because he was the only British person in this Japanese organisation  or he just had different views on how a company should be ran. It shows he is down the pecking order when it comes to the food chain and respect of other colleagues. Woodford felt out of place and as if something weird was going on. I believe equality in the workplace is vey important as it creates a nice working environment and no bad relationships with colleagues allowing them to work to there full potential.
The suspicions in fraud started when there was 3 payments of $700 million and Woodford did not understand the reason why these companies were bought. Fellow colleagues were sheepish to explain to Michael the reasons why, it became apparent to him there was something not right. I feel disappointed that in todays workplace people use there power to over rule unfairly and I feel like they have ganged up on Woodford even though he has a prestigious position in the company to not tell him what's going on maybe on his race or the fact he has loyalties and not corrupt as they know he would show them for what they are.
Woodford came to the decision to resign and go public to expose Olympus for there corruptness. He was worried for his safety as people have been killed for a lot less as he held the documents that showed evidence off this fraud. He met with a journalist he knew so he could reveal the documents and make this story to go public. I personally feel this is the correct way to approach this situation as his safety will be secured and he can now tackle this situation in a legal and professional manner to help bring Kakukawa and everyone involved down and to be prosecuted.
This story went worldwide and was the hot topic of every media institution around the world, this portrayed the Japanese business market to be corrupt and raised a lot of alarm bells. There was one country with very little media coverage - which was Japan itself. My thoughts on this are that a Japan didn't want to put there business market in a bad light and brushed it under the carpet, this makes me feel uneasy as it shows the power the media has in portrayal and how they want the public to perceive things, brainwashing comes to mind...
In the end the company were exposed, it stated they were concealing for losses in previous years due to the Wall Street crash and the change in inflation rates. This fraud landed Kakukawa with a 3 year sentence. From my point of view it's clear Olympus ruled out any ethical and legal implications and to reduce the risk of this happening in the future I believe the education of finance and laws should be drilled into people so they understand the legal implications behind money and finance and how much of an effect it can have on peoples lives.
A future ambition of mine is to be involved in finance and business investing and this proves to me how important it is to be legal, ethical and professional as it is such a serious matter in the world of today.

General Leadership and Management Movies : Sir Alex Ferguson Secrets to Sucess

Sir Alex Ferguson is regarded by many players, managers and analysts to be one of the greatest and most successful managers of all time. So it's very clear he has excellent leadership and management skills. At the start of this documentary Ryan Giggs mentions Fergusons 'relentless need for success and his desire to do better', this is an aspect of a great leader as he is always trying to do better than he has before and feels he hasn't accomplished anything until he is successful and will always do his best.

The question asked at the London school of business is 'What does it take to be a great leader?' where Sir Alex Ferguson answered and explained his reasons to being a great leader. His first answer was 'Assert control and expose discipline': In my opinion discipline is essential to achieve any objective otherwise anarchy would break out and become impossible to manage. He explains that little things such as uniform and behaving yourself off the pitch were just as important as anything else as everything contributes. He ensures equality is important which i think is key within any organisation whether it be a business or a football team because everyone should be treat as fair as each other but some people treat differently based on there personality as he knew he could get the potential out of everyone in the long term.
Making tough decisions is very important for being a good leader. in Sir Alex Fergusons case it was buying and selling players, for example he sold Roy Keane one of Man United's best as he disrespected the club. This showed nobody was bigger than the club and I believe this made everyone feel scared and threatened and kept on their toes.

Morrett one of the worlds most successful business men who invested in Apple, PayPal and Google backed sir Alex as he knew he was different and had an eye for business not just football. He saw Sir Alex's leadership skills were universal. It's clear to me he must be one of the best leaderships if he is in the same categories as these.
Sir Alex says he loves lecturing young entrepreneurs on leadership skills. I find this very aspiring, once I finish my degree I want to be a young entrepreneur and the thought of have someone as successful as Sir Alex telling me experiences and the best advice on how to be a leader really gives me the drive and ambition to follow my dreams.
Sir Alex believes giving job recognition and being sociable with everybody throughout Manchester United from the pitch to the dinner lady's was very important as it helped build a strong club and a family orientated feeling about it. I believe this helped him gain trust and could impact on everyone if he wanted as it shows he takes an interest and cares about everyone at the club. Last year when I worked at Morrisons and my manager used to say well done or nice work it made me feel appreciated and motivate me to maintain this standard.
Sir Alex's states to be a successful leader you must be able to challenge the existing culture and change it to adapt to the new way that it should operate for it to be successful. I believe this must be quite difficult to do as people may disagree with you and cause conflict but you must grind through it and prove the positive results in the end to show why you made these changes. This is very important for me to keep in mind if I ever come across a similar situation in the future I must follow what I believe in and not be influenced by anyone else.

Personally, I believe the most important assets of a leader are-
Passion - An effective leader is a person with a passion for a cause that is larger than they are
Control, Motivation and team work were also crucial to Fergusons success. I believe Motivation is important because it provides the drive for people to accomplish their goals, maintain their responsibilities or solve problems. Also a team that works well together understands the strengths and weaknesses of each team member and in terms of football this is very important.

Blog 6 : How business can put women in the boardroom

In todays day and age we are seeing more and more powerful women in the business and mainly political industry, for example 'Theresa May as UK prime minister, Hillary Clinton running for the US presidency, Angela Merkel as German chancellor: more and more'. It's clear political positions are being taken but unfortunately executive roles in business rent quite the same. Female representation in business is a very big thing for me because I agree with equality in the work place and that everyone should have the same chance based on their skills and assets, not their gender.

One thing that tarnishes the representation of women in the work place is the media as in recent years they have been portrayed as housewives and reliant on their man when this simply isn't the case. "There has been progress: in the past five years, the number of women on the boards of the FTSE 100 top UK quoted companies has more than doubled to nearly 27 per cent. But this is not good enough; for women to truly be represented in business they need to be in the most senior executive positions." so it's clear that the number of women are rising to the more executive positions. I believe this is excellent as for one it creates a gender equality but it brings a more diverse working environment working within company's. Men and also myself are categorized as egotistic, alpha male and not always thoroughly thinking about decisions made. In comparison with women who are known to be more organized, level headed and take a slightly more cautious approach when completing tasks set for them, proving that they are suitable for the workplace.


Unfortunately women receive fewer opportunity at shots at senior roles; often facing discrimination if they want children; and, even when they are happy in work, in many cases earning less than men doing the same work. I find this an absolute disgrace and it really upsets for someone is has been brought up in a modern where discrimination is at it's all time low, so to read that a human being is paid for doing the same job based on there gender shocks me and I cant help but feel as if we are going back in time...

In conclusion to this article its very clear to me that having women on boards is not just good for women; it is good for business and shows these sexist bigots who believe only men can be executives to come to the reality that it's 2016 and everyone has different skills that work effectively. Even though women in the world of business is rising it's not quite where I would like it to be, woman need support and given as many opportunity as they can to help progress  in there career, if I ever became a manager of a business I would not discriminate against women I would encourage them to be powerful leaders and work they're way up the business.

The Inside Job : Storyville

This documentary was about the global economic crisis of 2008. It begins by examining how Iceland was highly deregulated in 2000 and the privatization of its banks. When Lehman Brothers went bankrupt and AIG collapsed, Iceland and the rest of the world went into a global recession. 

I found it overwhelming how selfish and corrupt the banking and political organizations in the United States were back in 2008. Very respected and trustworthy members of Wall street took advantage of their situation as being influential in the economic market and scammed many Americans into billions of dollars so they could take the money for themselves and treat themselves to multi million pound yachts, jets houses etc. This had a huge multiplier effect on the economy and resulting into a worldwide recession. Unfortunately, this left countries in up to $20 trillion worth of debt which I believe is an absolute disgrace as the poorer countries could not handle there circumstances.

The blame of this crisis is put down to the deregulation of Iceland back in the early 2000's. Deregulation is the removal of regulations or restrictions, especially in a particular industry which in this case was were financial institution such as banks and geothermal energy companies. In my opinion Iceland did not need to apply deregulation as it was a stable democracy with a high standard of living. The government privatised Iceland's 3 largest banks and finance took over and 'wrecked' Iceland as they managed to borrow 120 Billion dollars that they spent on own personal gain. The financial institutions took advantage of this situation and started fixing things that would favour them.  This then caused corruption within the public causing protest and upset resulting in Iceland facing a downhill spiral. In my opinion I'm disappointed that Iceland could screw over there own people the way they did as banks are supposed to be trustworthy when holding your earnings but once the banks collapsed and went bust a lot of people lost there whole life savings.


Now I will explain how Wall Street were involved, The term Wall Street is used as a collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms, and big businesses. This is how they can have such a large influence because they control so many different financial markets. This documentary showed me how selfish and addicted to money people can become. This was aligned with banks who were taking huge risks who evidently could not afford to take and this is why it ended in such a disaster. As a quick summary 4 of the largest banks in America and several insurance companies allied with each other to deregulate loan company allowing them to invest depositors money. They seen this as a gap in the market, they took advantage of public losses for there own personal gains.
The corruption started in 1981 by large companies such as Merrel Lynch. By the end of the 1980's hundreds of saving in loan company's had failed, people were sentenced to jail in these corporations but also some were adopted by presidency and are still there today, so it's very clear to me where the problem lies... and it makes me feel as if the problem has not been solved. It shows these big leaders such as CEO's of big corporations and even political figures care more about themselves. When it all goes down hill it doesn't cross my mind for two seconds that they care about the peoples money they risk!

They're were many documents and statements made by very reliable sources throughout the years that were dismissed and not even got a second look at which were all warning signs of the corruption that was happening. For example in 2005 the chief economist of IMF wrote how firms are not acting as normal and taking far too much risk which will highly result in them destroying there companies. Also the FBI were highly alerted about fraud in mortgage companies, reported in inflated appraisal. They argued they looked into these cases but people thought this was nonsense and I can only but feel they were brainwashed and turning a blind eye to these cases.

The reality of this is, the people who suffered the most were genuine members of society who lost life earnings when they couldn't even protect themselves from the horror these greedy so called 'leaders' and 'traders' put them in, by outright scamming them for own personal gain by taking they're money and risking it all on the very slight chance it would return. I have gathered there is too much political power in America over ruling the public.

Blog 4 - McDonald’s third-quarter sales top expectations

All-day breakfast and healthier food options boost burger chain’s US performance. McDonald’s is the world’s largest restaurant chain with more than 34,000 restaurants worldwide and employing 1.8million people, so any change on its menu will have an effect worldwide.
This year, McDonalds have decided to introduce an 'All day breakfast' to there menu. I am a massive fan of breakfast food such as sausage, bacon and egg but I'm never usually hungry in the mornings, I wouldn't be able to eat a full meal. Now its 'all day' makes it a lot more flexible for me as I can eat it around my time and when I'm hungry rather than before 10:30 like McDonalds used to offer. It helps the customer enjoy the experience and there's no restrictions on what they can order as McDonalds priority is too please the customer at all times. Chief executive Steve Easterbrook said "Customers today are more informed and demand greater choice and variety when they dine out. That’s why we’re evolving the McDonald’s experience to provide more high quality, affordable food and beverage options and convenient solutions for customers on the go”. By McDonalds thinking in this way it allows them to explore more options and build there menu to it's full potential.

I would class myself as a healthy person and will always try and eat my 5 fruit and vegetables per day. The problem when making meals is they can take quite a lot of time to make which is a struggle to fit into my busy schedule. I'm very conscious about what I eat so I tend to stay away from fast food restaurants but, McDonalds state they "removed artificial preservatives from a number of menu items to win back consumers looking for less processed, healthier food." I'm very happy about this as I can pick up a healthy meal within 5 minutes saving me more time in my day and without the stress of cooking it myself. I believe McDonalds have done this to target customers such as myself who need a quick, cheap meal that's healthy at any time of the day, this will attract more customers and engage with a wider audience.
A suggestion I could make to their menu is introducing healthier meals rather than removing artificial preservatives, this would help attract more customers and not promote McDonalds as just a fast food restaurant. 

Here is a graph to show the evidence of the growth in sales since McDonalds introduced the all day breakfast and healthier options to their menu. I believe the reason there sales risen was because it targets a wider audience, especially with the healthier foods for vegetarians, people on diets or people who fancy a healthy snack. In the future to help McDonalds maximise their profits they should start introducing more recipes to there menus, I have a family member who is celiac and there is not many options on the menu for him as he can only eat gluten free food and the majority of there food comes in bread or containing some sort of wheat. An estimated 1 in 133 Americans are celiac which is about 1% of the population, this could open doors to a lot of potential customers and that I believe something McDonalds should consider.