Knowledge Centre:
News Digests

Stay abreast of what’s happening internationally with developments in corporate public affairs. Here is news that you may find useful and interesting:

Marketing to rural ChinaND

Max Magni, Harvard Business Review, 7 December 2010

While foreign and local marketers have begun expanding into smaller cities in China, few have moved in rural areas as they feel it would not be a wise business choice. Primarily, concerns about moving into rural China arise from the fact that there are few modern stores, as well as the fact that many of the roads in rural areas remain unpaved thus creating difficult transport situations. There are however ways of overcoming these difficulties to allow marketers to profit from rural China, such as setting up franchises to increase the number of stores, taking advantage of subsidies for rural consumers, and using existing sales and after-sales networks. Marketers looking to rural China should take care to tailor their products and prices to the rural market. For more information see

Four myths about business ethicsND

Chris MacDonald, CSR-NEWS, 6 December 2010

Four major myths about business ethics have been identified and debunked. The first is that the term ‘business ethics’ is an oxymoron. This is incorrect, as commerce is quite literally impossible without ethics. Every single commercial transaction requires some level of trust, which requires a shared commitment to ethical behaviour. The second myth addressed is the idea that ethics is ‘just a matter of opinion’. In fact, on many ethical issues there are actually better and worse answers which need to be talked through. The third myth is that there’s no such thing as ‘business’ ethics, as ethics should be consistent everywhere. In fact, business has unique characteristics, such as the fact that large companies have the potential to do significant harm to stakeholders and the environment. The final myth addressed is the perception that business ethics is just a matter of regulation. The reality is that there are behaviours that are legal but unethical, and also those that are illegal but ethically okay. For more information see

As wages rise, time to leave China?ND

Joe Manget and Pierre Mercier, Bloomberg Businessweek, 1 December 2010

The advantage for companies in basing their manufacturing operations in China is disappearing with the advent of rising wages, currency inflation and high fuel costs. Although searching for nations with cheaper wages provides a solution, this would only be short term as wages are rising around the world. Staying in China provides companies with the opportunity to rethink their approach to global production to stimulate greater productivity gains, as well as giving them the advantage of tapping in to the growing domestic consumer market. Additionally, companies have the option of moving their manufacturing capabilities closer to their consumers, for example American companies developing factories in Mexico. For more information see

China’s culture of secrecy brands research as spyingND

James T. Areddy, The Wall Street Journal, 1 December 2010

Foreigners conducting business in China are increasingly falling foul of laws that classify espionage as what most of the world would consider market research. The culture of secrecy in China, emerging primarily because of the strong relationship between government and business, makes foreigners cautious about engaging in business ventures in China, as well as being at odds with China’s desire to modernise its business sector through the involvement of foreign business. For more information see

Beyond paid media: Marketing’s new vocabularyND

David Edelman and Brian Salsberg, McKinsey Quarterly, November 2010

Traditional paid media used to be the only option business had when it came to marketing, yet today there are many more alternative forms of media that business can exploit. These expanding media forms reflect the way consumers perceive and absorb marketing messages. Marketers should view the expanding media options not only as a challenge but also as a way for readers to share content and even create their own content. Media can be ‘earned’ where the quality or uniqueness of a company’s product or content compels consumers to promote the company at no cost to itself. The diverse range of options has also increased the chance of being ‘hijacked’ and people quickly voicing concern over company operations. This provides a scary and significant reversal of the control traditionally maintained by marketers, therefore many are responding by encouraging satisfied customers to post online and replying to negative comments in a prompt and professional manner. For more information see

Emissions control efforts bring business opportunitiesND

China Daily, 25 November 2010

The Chinese government is demonstrating strong support for China’s new energy market, accelerating the construction of solar, hydropower, nuclear and wind capacities by investing in new materials and technologies. Chinese businesses are recognising the government’s commitment to developing clean energy, and are thus seizing the opportunity to invest in new energies, as well as beginning to adopt cleaner practices in their own operations. For more information see

Secrets to an engaging CEO videoND

Haig Simonian, Financial Times, 25 November 2010

CEO videos are emerging as a trend in business communications, with companies increasingly taking advantage of the ease and low cost of production techniques to deliver fresh and engaging messages. While CEO videos can be an effective way of communicating, there are certain things to be aware of, such as the need to use different angles instead of a single shot and to deliver using a natural, clear and uncomplicated style. Additionally, techniques such as wearing an open-necked shirt and exposing production equipment can be used to create a sense of credibility. For more information see

A good cause: China’s grapple with charitable givingND

Knowledge @ Wharton, 24 November 2010

In China, there is a certain tension surrounding charitable giving, largely because of the lack of transparency and management of NGOs in China. The difficult legislative and regulatory environment surrounding NGO registration contributes to this problem, with many NGOs choosing to register as a business to avoid such obstacles, thus meaning their activities are largely unregulated and unsupervised. While there has been a recent increase in private foundations established by Chinese tycoons as well as overall awareness of the need for charitable giving arising from the Sichuan earthquake, much needs to be done to improve the attitudes surrounding charitable organisations in China. For more information see

Building reputational intelligence ND

William G. Margaritis, Bloomberg Businessweek, 23 November 2010

The key to building reputational intelligence is to identify your company’s vulnerabilities, and to engage in strategic planning by building an authentic culture and making your organisation’s values known to the public, a role that is best managed by the chief communications officer. Although this will not mean that your company avoids crises, it will however mean that your organisation is more likely to get the benefit of the doubt when a crisis occurs. Some strategies for fostering leadership and communication include ensuring that there are constant risk assessments carried out at every level of the organisation, and ensuring that the chief communications officer has a strong strategic understanding of the business. For more information see

Improving corporate community involvement through a human rights based approachND

Michelle Brown, CSR Asia, 17 November 2010

Community involvement focuses on the way in which a company interacts and contributes to the long-term prosperity of communities, rather than the charitable operations that a company engages with. Social responsibility involves social investment in key areas such as education and skills development programmes, and according to the ISO 26000 guidelines is defined by the core principles of accountability, ethical behaviour, transparency, respect for the rule of law, respect for international norms and behaviours and respect for human rights. While there are a number of problems with corporate community involvement in Asia, a human-rights approach to community involvement facilitates long-term and sustainable value creation. For more information see

Increasing costs worry business managersND

Yang Ning, China Daily, 16 November 2010

A survey conducted by the China Entrepreneurs Survey System has revealed that about 75 per cent of Chinese entrepreneurs consider the rising price of labour and raw materials as their biggest challenge. Other concerns raised in the survey include the heavy burden of tax, social security and financial strains, as well as an overall lack of talent. The survey also demonstrated that most entrepreneurs are cautiously optimistic about the nation’s future economic trend, with some consequently recognising the need to upgrade industries and invest more in innovation. For more information see

Damage control tips and tricks for QantasND

M. Mcnamara, Business Review Australia, 15 November 2010

Qantas’ recent air troubles have illustrated the need for strong public relations techniques in the face of crises so as to preserve the brand. Firstly, it is important for a company to post news releases on their website that update the public of the situation and correct any false statements. Additionally, companies need to communicate openly with the media, as well as issuing internal statements to their employees so that they can also engage in damage control. Focusing on the company’s strengths in the face of the crisis is also a useful technique, as is using multiple channels to communicate with the public, such as YouTube and Facebook. Depending on how a company deals with a crisis, it can provide an opportunity to define and strengthen the brand name. For more information see

Tools to help companies manage their social mediaND

Tanzina Vega, The New York Times, 14 November 2010

Companies are increasingly harnessing the potential of social media, but are realising that the inability to control their online presence can raise significant problems. Accordingly, software companies are developing new technologies that help companies to manage their social media presence, by archiving business communications or managing individual employees’ posts on social networking sites. This technology is useful for companies both in terms of protecting themselves in the event of future lawsuits as well as to ensure regulatory compliance in some industries. For more information see

Leadership skills for driving innovationND

John Ryan, BusinessWeek, 12 November 2010

A recent IBM survey of global CEOs found that creativity and the ability to nurture it is the most important leadership skill for the future. This article suggests how leaders can foster innovation within their own companies. First, they have to commit the fundamental resources of people, time, money, and intellectual property. Second, intelligent risk-taking is a second and absolutely necessary key for spurring innovation. Third, they need to complement business thinking with innovative thinking, which imagines a desired future state and figures out how to get there. Finally, beyond establishing the right structures, leaders need to nurture and reward innovation in talented individuals at every level of the organisation. For more information see

Management dilemma: The rule of 98/2ND

Harold L. Sirkin, Bloomberg Businessweek, 12 November 2010

Devising management policies is a difficult process, with leaders faced with the issue of whether to direct their policies at the 2 per cent of employees that are unreliable and unproductive, or to focus their policies on the 98 per cent of employees that are reliable, positive assets to the company. In the end, it is better to focus on devising policies to focus on the productive 98 per cent of employees as this fosters a happier, more productive workplace and consequently minimises the number of unreliable employees. Instead of implementing unnecessary rules and restrictions that lower employee morale, it is ultimately more profitable to treat employees as partners, hence earning their respect and cooperation. For more information see

Getting your employees on the social media bandwagonND

Kirsten Watson, Business Week, 10 November 2010

For companies who wish to increase or build their social media initiatives, the most common source used are internal staff. Surveys have shown that employee buy-in is vital to ensure success of the initiatives. Holding brainstorming sessions can foster ideas for content and employee participation. Management should be aware of ‘champions’ that actively encourage and promote social media usage. These employees and others should feel valued for their contributions and employee visibility online will motivate engagement with social media. For more information see

Rare earth conflicts to continueND

Jianjun Tu, Asia Times Online, 10 November 2010

The term ‘rare earths’ refers to several strategically important commodities that are used to manufacture defence and commercially high value-added applications. Currently, China, the worlds’ leading rare earths producer, has been tightening export restrictions particularly on rare earth oxide, with China’s stockpile representing 97 per cent of the world’s total supply of rare earth oxide. If China is able to meet its planned export restrictions, it will further its competitive advantage over other suppliers; with the ultimate aim of exhausting all external stockpiles of rare earth oxide. In the long term, China’s monopoly over rare earths will not only result in increased prices, but also provides a valued political bargaining chip for the country. For more information see

PepsiCo and GE are innovating IndiaND

Navi Radjou and Jaideep Prabhu, Bloomberg Businessweek, 9 November 2010

Although multinationals traditionally use emerging markets to source new products and services, some companies like PepsiCo and General Electric are using emerging markets to try out disruptive business models. PepsiCo, for example, is developing partnerships in India with universities and other companies to develop eco-friendly technology as well as a range of health products, thus expanding its market. Similarly, General Electric developed partner networks in India to introduce its technology-based solutions to healthcare, which it provides to Indian hospitals at a sustainable and affordable rate. Emerging markets are described as ‘learning labs’, allowing companies to develop and deliver innovative products. For more information see

After decades of war, Sri Lanka bounces backND

Frederik Balfour, Bloomberg Businessweek, 4 November 2010

Sri Lanka is poised for economic growth following the end of the civil war, with the Asian Development Bank expecting the nation’s economy to grow as much as 8 per cent this year and next. The Sri Lankan government expects tourism, IT outsourcing and agricultural exports to be the three sectors that will fuel economic growth, reducing reliance on the garment industry and low-end manufacturing. While Sri Lanka is experiencing renewed foreign investment, these investments are happening slowly, with many raising concerns about corruption and the nation’s human rights track record. For more information see

Corporate India finds greener pastures — in Africa ND

Mehul Srivastava and Subramaniam Sharma, Bloomsberg Businessweek, 4 November 2010

In the midst of increasing competition, growth and a shortage of access to land, Indian companies are directing their sight towards Africa for investment and growth. For many Indian companies, Africa represents India as it was 15 years ago, allowing low-cost, high-efficiency business models as well as providing companies with a new consumer market. As such, companies are spending huge amounts in Africa, with the continent attracting large Indian companies such as Airtel, as well as other Indian companies who are making various smaller acquisitions. For more information see

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