“ENRON” … Fast and Falling

“ENRON” … Fast and Falling

 

Photo by http://brasslantern.org/enron/enron.gif

Background:

            Ken Lee is a man who came from plural life family, since he was young, he was dreaming about world business. Enron was a company of energy. It located in Houston, Texas, USA. It founded in 1985. It was growing fast to be one of the world class business in case of energy. It traded oil, electricity and natural gas. They created an interesting commercial to attract people. People attracted to this business, such as customer, shareholder partners or even politics. They made people believe that if they are not buying Enron stock, Enron would think that they are Enron’s enemies. Some said, they were smart, and there is an Enron documentary film called “The Smartest Guys In The Room”.

Problems:

            The main problem of Enron is “bankruptcy”, a company suddenly falling as fast as it grew, and a lot of employee lost their jobs. They are several reasons why this happened. It is believed that, it was because of business proactive and high risk. There were two kinds of Enron business which are investment and trade, and these two had common reason to help Enron was falling fast.

            Some of Enron’s investments, there were no connection to the main business which is energy business. It created unnecessary dept to them, and they trading were not sincere much to do business, because they did gambling with investment.

            Enron’s trading had a high risk. It had a great idea to be the lead of trading as a middleman for trading energy. It was true that it created a high revenue, but it was a direction to high dept and liabilities.

            The writer group of “The Smartest Guys In The Room” said, it was because of greed, which basically human tragic story.

Theories:

            According to J Brinkman (2003), “Enron executives' attention was clearly focused on profits, power, greed and influence”. Enron did a good job to gain a lot of money, but it showed that money was basically that they desire so much. It was not the company’s false, but it was human greed false.

            According to W. Bratton (2002), “Enron flew high when its stock price peaked at close to ninety dollars in August 2000, and it was America's seventh largest firm by market capitalization. Enron also came in number one when it fell.” Enron was success to get a lot of stock price, and it grew fast, but when it fell, it fell fast too.

Conclusion:

            To be concluding, Enron was falling fast, it was because of growing too fast. This business showed the bad idea of business idea is to get a lot of money. A lot of money always comes with the high risk. You need to plan and managing your plan to not make yourself effect with impact. To business, it needs to be faithful, Enron showed the bad attitude towards partnership. From the trust, it changed to be no trust. This is why, when they fell, they were falling fast.

Case 4: Swimming with Agreement :: THE CATFISH DISPUTE

Case 4: Swimming with Agreement

 ::

 THE CATFISH DISPUTE

 

Background:

                 Do you know catfish?... It is a type of fish which has think-skinned, whiskered and wide mouthed, it grew in muddy water, and it has strong smell, a lot of bone, and muddy. In the U.S., they called wild cat fish. Due to a developing of technology in farm, wild Cat fish is one of the U.S. aquaculture products that turned to be one of top three favorable dishes in restaurant, and it could reach to 4 billion dollar for sale in 2000. As Wild Cat fish is popular in U.S., other countries such as Vietnam and Australia interested to export their product to sell in U.S. market. Especially, Vietnam’s cat fishes that for some reasons, it turned out to be a problem for U.S. cat fish market.

Problem:

                       The main problem is the prices of U.S. catfish had dropped to 50 cents, and it was continuing to drop since 2001. U.S cat fish producers said it was because of Vietnamese Cat fish. For Vietnam side, they said it was because of U.S. fault that they sold only some states.

             The dispute as follow caused American Cat fish farmer to FDA (The Food and Drug Administration) and Congress to help them with labeling, and it made catfish to sell if they are from Ictularidae family. As a result, Vietnam changed their catfish to be called “basa” or “tra”, and it turned out to increase sell in Vietnam fish.

                     To protect themselves, the catfish farmers of American requested for import tariffs, which it made American consumer preferred fish less from Vietnam, since it was too high to pay for payment.

Theories:

                     According to Walton (2004), “Since the end of the Vietnam War, relations between the United States and Vietnam have been largely based on trade, causing both cooperation and conflict”. The relationship through trade made international business between USA and Vietnam both import and export products. Since, some products may similar to each other, and it caused a problem between them.

                   According to Drahos (2005), “The rule orientation of bilateral dispute resolution is more likely to prove to be a weapon of the powerful than it is a protector of the trade interests of weaker actors.” From the U.S. Vietnam Bilateral Trade Agreement, it made U.S. used the advantage to argument about the type of fish and the tariff from import fish from Vietnam. 

Conclusion:

                    Doing business or trade with other countries, you need to sign the agreement with that country even two or more countries. The conflict and argument can be happen through the benefit of each country, you who prefer to do international business or international trade must be prepare for that situation, and use the benefit of agreement to fight or protect your trade. Therefore, you who prefer to do international business or international business should be considerate with your agreement and use it wisely.

           

References:

Walton, Amalia R. CATFISH WARS: VIETNAM'S FIGHT FOR FREE TRADE IN THE U.S. COURT OF INTERNATIONAL TRADE: Pacific Rim Law & Policy Journal Association. 2004. Print.

Drahos, Peter. The Bilateral Web of Trade Dispute Settlement.: Australian National University. 2005. Print.

Czinkota, Michael R. International Business Eight Edition: John Wiley & Sones, Inc. 2011. Print.

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Blog 1: The truth behind a cup :: Black Gold

The Truth Behind a Cup :: BLACK GOLD

Background:               

                 Coffee is a drink that has been our daily life drink, especially in business world. You could see coffee in the office or people hold it for their quick breakfast in a hurry morning. Ethiopia is a birthplace of coffee. Tadesse Meskela is a representative of Ethiopia Coffee or The Oroma Coffee Farmers Co-operative Union, who sees the problems of Ethiopia Coffee business, and he tried to help coffee farmers from their problems.

Problem:

                 Ethiopian coffee got low price for selling, and it made farmers got low profit also. Low price, low profit equal less money. They did not have money to gain more workers or buy equipments to improve their production. In 1989, International Coffee Agreement collapsed, it made farmers got low price from sell coffee beans. Farmers did not have enough money to spend for their life and their family. Since, Ethiopia is what they called “3^rd World”, they cannot survive or give a good education for their people. That is why most of Ethiopian farmers changed their product from coffee to “Chat”, which is one of the addicted plant consider as drug, because it make more money than coffee. Normally, the price of product that sells around the world judged by WTO (World Trade Organization), which somehow unfair for other countries that it is not US or Europe. When coffee sent to retail store or coffee shop with brand attached it, the price of coffee is getting high more than farmers got paid, what a sad story.

Theories:

                There are two interesting theories which I would like to compare them with story of “Black Gold”. 

        First, “Pax Romana”, Pax Romana was a period of Raman Empire that had been a wonderful business history. On that time, good business started from good law and good transportation for seller which was transport by ship. International business also started from here, it made people had a good life, since the price may low due to pirate problem, but products could be known wider through the sea. Ethiopian coffee failed in business by the collapsed of International Coffee Agreement, and it got unfair price in WTO too, these showed an uncertain business, and failure of somewhere in laws cause. It was also show that other countries involved in each other business since ancient times as Roman and Chinese, and today are Ethiopia and other countries, because of the word “International Business”

        Second, “Pax Americana”, Pax Americana was the increasing period of business in America. The United State of America developed to be one of the business leaders of the world. International business took an important role in America during Civil War; it turned to be a tool for fighting against each other.

Conclusion

        All in all, International business brought impacts to countries; it could be a judgment of economic country. For consumer, it made choices for people, and you can choose which brand from which countries you would like to try. What you do not know is the truth behind “Black gold” as a high price coffee. Black Gold is one of the truths hidden behind a cup of coffee that you drink every day. Somewhere or somehow, before you decide to buy coffee from retail stores or coffee shops, why do not you try to think more deeply about highly price coffee as “Black Gold”.