Just as businesses are adapting to the shock of Brexit, the global pandemic presents another disruption to businesses. These two events have created huge uncertainty for most small businesses while some have benefited . The striving small businesses are revaluating their strengths with financial metrics to enhance their sustainability as the new markets are emerging. Financial metrics present small businesses with the opportunities to increase efficiency in their operations, liquidity, profitability and stability during uncertainty period. Some commentators argue that inadequate liquidity is the major reason small businesses collapse during the uncertainty period.
The quick ratio helps the business managers to evaluate their businesses financial liquidity. This informs the business managers of how current assets excluding inventories can be quickly converted to cash to meet their current liabilities. This ignores inventory because it is not easily converted to cash. Unlike the current ratio which considers inventory value, the quick ratio is generally viewed as the conservative evaluation of business liquidity as it’s based on the business most liquid assets. For instance, a business has current assets worth £40,000 of which inventory is £10,000, and £15,000 worth of current liabilities thus the business has a 2:1 quick ratio. This indicates that the business can afford to meet the short-term liabilities twice with the short-term assets.
Businesses with a 1:1 or lower quick ratio could be at risk of becoming a going concern. Thus, small businesses with limited access to funds might fire sale their non-current assets to meet the current liabilities.
Many businesses have already closed due to Brexit and the global pandemic and it has been estimated that a further approximately, 98,000 small businesses might not survive the current pandemic. Thus, small business managers that are currently struggling to survive should pay attention to their financial metrics especially the quick ratio.
Unlike the quick ratio, many commentators argue that the current ratio cannot accurately evaluate some businesses short-term liquidity power. For instance, a retail business that targets seasonal customers will stock up inventory for the season. Thus, toward this period the current ratio rises and fall after the seasonal sales. Hence, the quick ratio would be best to evaluation the liquidity ability of such businesses as it ignores the inventory value.
However, other commentators argue that excluding the inventory value from the current assets could be an inefficient way of evaluating liquidity ability for some businesses. For instance, small business such as corner shops that a large percentage of their current assets are fast-moving inventory. Thus, excluding the inventory from the current asset would relatively inflate the current liability. Hence, the quick ratio will present an inaccurate picture of the business to cover their current liability with their most liquid assets.
In conclusion, business managers need to consider both the quick ratio and current ratio, especially during the uncertainty period. This would provide a more accurate measurement of their business ability to pay their short-term liabilities without being forced to fire sale their non-current asset.
Business managers need to ensure that the quick ratio and current ratio is not too excessive compared to other competitors in their sector as this could indicate poor control of working capital. This might suggest that the business is not turning over its inventory quickly enough or is carrying slow-moving or obsolete inventory and has poor credit control practices resulting in their customers delaying payments beyond the agreed terms.
Storm Barratt, Course Director, Staffordshire Business School
Almost
never a day goes by, when we aren’t reminded that “today” is National,
International or even Global “something” awareness day or week or month. From
the ever-popular Christmas Jumper day to my own particular favourite – National
Squirrel Appreciation Day (!), from National Allotment week to Fairtrade
fortnight to National Bed month.
All of
these campaigns are designed to raise awareness and/or funds for some serious
and not so serious issues. So, why as a business, would you want to know this?
Firstly, all businesses
have basic ethical and legal responsibilities; however, the most successful
businesses establish a strong foundation of corporate citizenship, showing
a commitment to ethical behaviour by creating a balance between the needs of
shareholders and the needs of the community and environment in the surrounding
area. These practices help bring in consumers and establish brand and company
loyalty.
It is
considered normal for businesses to balance the other stakeholders’ needs with
those of the shareholders during the decision-making process. Corporate Social
Responsibility (CSR) goes even further, making the general public a stakeholder
and shows that the business wishes to actively improve things for everyone.
For any
business making a profit is still key and, of course, the needs of employees,
customers and suppliers must be satisfied if the business is to survive.
However, Corporate Social Responsibility has become far more important over the
last few decades with consumers worrying about how the products they buy were
made and how companies that they buy from are run. On many company websites
there will be narratives of how they look after the environment and all the CSR
initiatives of which they are a part.
Corporate social responsibility comes in many
forms. Even the smallest company impacts social change by making a simple
donation to a local food bank. Some of the most common examples of CSR include:
Reducing carbon footprints
Improving labour policies
Participating in Fairtrade
Charitable giving
Volunteering in the community
Corporate policies that benefit the environment
Socially and environmentally conscious investments
The
growing popularity of National Awareness Days can tap into these initiatives helping
a company both internally and externally.
One internal perspective is if your employees can see that the business is taking a caring approach, by raising funds for charity for instance, involving the staff may mean that they become more motivated to engage with each other working towards a common goal. In fact, whilst “Wear a Christmas Jumper to Work” day seems an opportunity to raise a smile amongst colleagues as we approach the long dark winter months, the serious aspect is that the jumper wearers are raising money for a great cause.
Another
perspective is using “Awareness
Days” to help a business promote their product or service (all the better if
this can also highlight the CSR approach taken by the company). The issues can make an ideal
marketing tool for a business, providing inspiration for marketing content.
By adding
context to an awareness day, a business can plan their content by linking a day
to their product or service, so for example an artisan baker could showcase
their expertise and knowledge during Real Bread Week, or a nutritionist could
use National Allotment Week to encourage healthy and organic eating whilst
promoting their own healthy eating programme.
It’s not just
about direct promotion though. Awareness days can provide a great opportunity
for a business to engage in conversation with future consumers via social media
using hashtags associated with the cause, on Facebook, Instagram and Twitter. This
will allow people to find and contact you, consequently building your audience.
From engaging with employees to good PR to corporate social responsibility, supporting a national awareness day is a great way to show which values are important to you and your business. It can differentiate you from your competitors and allow you to build partnerships with charities and organisations that share your beliefs. With the potential to build trust as well as give a little back, it’s a win-win situation for all.
Become a responsible leader of global business.
Do you want to be at the forefront of modern enterprise? Our BA (Hons) Business Management and Sustainability course challenges the traditional interpretations of enterprise and will open your mind to a broad range of contemporary themes in business.
Our emphasis on ethical business and sustainability will position you to create long-lasting value for your organisation and you will learn the practical skills needed to become a responsible business leader.
It’s really great to see a developer with a good reputation working for the first time in the city. Let’s hope this also encourages more developers to look at other sites in the city.
The plans will see the redevelopment of the Swift House site, which is owned by the council, transformed into The Goods Yard, with
180 new homes,
a 150 bed hotel,
25,000 sq ft of workspaces
10,000 sq ft of retail and leisure space
Personally, I’m very happy that we will have have quality accommodation right next to the University for all the visitors, students and guests that work with us. People will be able to walk straight out of the train station drop their bags at the hotel and then join us on campus. This ties in well with a new project by Paul Barratt and Prof Ruth Swetnam on the 15 minute campus to encourage less carbon intensive travel.
The addition of new workspaces hopefully targeting start-ups, creatives and digital businesses may also be one way to help keep graduates in the area and ties in well with the development of the Enterprise Zone on College Road.
Capital & Centric, who featured heavily in the BBC Two series Manctopia, are one of the UK’s most creative and active developers. They have worked on several award-winning projects in the North West, particularly Manchester and Liverpool, but this is the first time they have come down as far ‘south’ as Stoke-on-Trent, so it’s a real coup for the city.
The plan will see the present building demolished but its secret vaulted basement, which historically served as a goods yard and interchange between the railway and the canal, will be reimagined and opened up to the public as a workspace and leisure venue – possibly a waterside restaurant/bar.
I remember visiting this a few years ago when the GIS team used to work in the building. Good example of a hidden gem of Stoke on Trent.
There will be a new outdoor public space that links The Goods Yard to the train station, canal and wider area, and there’s even an ambition to create a water-taxi to Stoke City’s bet365 Stadium just one mile away. Located next to Stoke-on-Trent train station, and on the doorstep of Staffordshire University, the Trent and Mersey Canal and the A500, the site is in an ideal location for commuters, students, visitors and businesses.
Waiting to be transformed
The current ugly exterior will not be missed
Digital impression of what the site could look like when finished
So a promising start to 2021 and I can’t wait to see the project develop.
Once you have used these initial basic filters to find the
strongest ideas, the next stage is to use a more in-depth filter to make
decisions on the remaining ideas. Day (2007) recommends using a risk matrix. The R-W-W matrix is based to three key questions:
Is it Real?
Can we Win?
Is it Worth doing?
This is expanded into the following set of questions:
Is it real?
Is the market real?
Is there a need or desire for the product? Can the customer buy it? Is the size of the potential market adequate? Will the customer buy the product?
Is the product real?
Is there a clear concept? Can the product be made? Will the final product satisfy the market?
Can we win?
Can the product be competitive?
Does it have a competitive advantage? Can the advantage be sustainable? How will competitors respond?
Can our company be competitive?
Do we have superior resources? Do we have appropriate management? Can we understand and respond to the market?
Is it worth doing?
Will the product be profitable at an acceptable risk?
Are forecasted returns greater than costs? Are the risks acceptable?
Does launching the product make strategic sense?
Does the product fit our overall growth strategy? Will top management support it?
STAGE THREE
Once a few viable marketing innovation ideas remain, the
next stage is to consider the risks even further. This is where conducting a pre-mortem is a useful tool. This helps
organisations identify the possible failures of a project before they happen
and mitigate risk by pre-planning so that those failures don’t occur.
The following pre-mortem exercise has been adapted from Gray
et al. (2010).
Activity
Step 1
Imagine we are two years in the future. Things have gone completely wrong. What could have caused this? Generate a list of all the reassons failure occurred.
Step 2
List all concerns and rank them to deterimine priority
Step 3
Address the 2 or 3 items of greatest concern and list what actions you would need to take to stop the issues happening.
The list of risks and actions that
need to be taken to mitigate the risk can be used as Critical Success Factors (CSFs) for an innovation or project
launch.
Hopefully, this article has helped you think about the different types of innovation you can potentially pursue and how to evaluate the best route forward, using a systematic filtering process.
Fisk, P. (2017). Gamechangers:
Are you ready to change the World? Creating Innovative Strategies for Business
and Brands. West Sussex: John Wiley and Sons Ltd.
Gower, L. (2015) The
Innovation Workout. Harlow: Pearson Education Limited.
Gray, D., Brown, S. & Macanufo, J. (2010) Game Storming: A Playbook for Inovators,
Rulebreakers, an Changemakers. Sebastopol: O’Reilly Media, Inc.
Keeley, L., Pikkel, R., Quinn, B. and Walters, H. (2013). Ten Types of Innovation: The Discipline of
Building Breakthroughs. New Jersey: John Wiley & Sons, Inc.
Osterwalder, A. and Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers
and Challengers. New Jersey: John Wiley & Sons, Inc.
Supporting SME leaders to create resilience and manage uncertainty in 2021 and beyond
Access free ideas, guidance, peer & 121 support to help your business to manage the uncertainty of steering through the pandemic and impacts of Brexit for up to TWO leaders in your business.
Staffordshire Business School is supporting regional business by delivering free training in leadership and management to provide exactly what business needs most to build a resilient future.
This is cohort 5 of the SBLP and the positive impacts of previous cohorts are being felt across the region. Here is what Rhys from XP VR thought of the course
Why choose to be part of the Small Business Leadership Programme? ▪ Make your business more resilient ▪ Boost business performance and growth ▪ Create an innovative and agile organisation ▪ Recover from the impact of COVID-19 ▪ Find solutions to the impact of Brexit ▪ Build leadership skills, confidence and effectiveness ▪ Plan for a solid future for your business ▪ Build lasting relationships with small business leaders ▪ Improve risk management and efficiency
When does the course start? Tuesday the 30th March 2021 (1st webinar at 3pm)
If you would like to have a chat about the course then please email one of our experienced Entrepreneurs in Residence with your phone number and they will call you back,
Here’s what another business thought of the course: Geoff Barton, General Manager of Canalside Farm in Great Haywood near Stafford said: “It’s allowed me to connect with other businesses, and I’ve learned much and managed to strengthen a few knowledge gaps and boost my handling of the business during these unique times.”
What’s involved? Eligibility requirements ▪ Your business must be a Small or Medium-sized Enterprise (SME) based in England. ▪ Your business needs to employ between 5 and 249 people and have been operational for at least one year ▪ The participant should be a decision maker or member of the senior management team within the business with at least one person reporting directly to them. ▪ The participant must be able to commit to attending the full programme
Time commitment The programme is designed to be manageable alongside full-time work and furloughed staff can join the programme.
Participants will attend 8×90- minute webinars across ten weeks, and complete up to 2 hours of independent development and peer-supported engagement per week.
Places are fully funded by the Government to support the resilience, recovery and growth of SMEs during and after COVID-19. The programme is completely free to attend but places are strictly limited.
Register Now There are two ways to register.
Email one of the Entrepreneurs in Residence as listed above and they will talk you through the process.
Follow the simple instructions below (this takes 3 minutes) and we will be in touch: • Go to https://smallbusinesscharter.org/sblp-registration/ • Choose ‘West Midlands’ from the pink vertical menu on the left • Scroll through the list of centres until you find Staffordshire University (start date 30th march) & click register
PLEASE NOTE: Your business can send up to two eligible delegates to this programme and delegates can be furloughed. Please do one registration for each person.
On 28th January, myself (Ben Cooke), Lia Bover
Armstrong and Cerys Chilton hosted the Celebrating Student Success awards for
the Staffordshire University Business School. The event was a fun-packed,
exciting evening which praised students for their outstanding efforts over the
last year. The three of us thoroughly enjoyed the opportunity to host the event
and have decided to compile a short Q&A in order to offer “a glimpse behind
the curtain”.
How did you work together as a team?
CC: This was our first time working together as a
team and I felt we worked well. It was an amazing opportunity to develop skills
and knowledge, by working with people I don’t normally work with. It also
benefitted me learning where I fit in with different types of people’s work
styles. In the beginning we managed to delegate roles amongst ourselves to help
plan the event. Considering the short period of time to conduct the event, we successfully
used each other’s previous experiences in the event industry to decide roles in
planning the event. Working with people you don’t necessarily know is going to
be a part of any industry, in particular events, being thrown into a
challenging task has built my confidence in communication. Throughout the
planning of the event, the role of Team Leader transferred to different
individuals throughout the stages of the event, depending on factors that we
had to consider and manage. For example, Ben managed a lot of the technological
side of the event and Lia managed the communications via email. This
opportunity gave us a real-life experience of the industry we all hope to go
into, and I feel our joint appreciation for this motivated us all to succeed in
the project.
What challenges did you face during the planning process?
LBA: Thankfully, there weren’t many challenges we had
to face, but I think Ben and Cerys can agree with me that having to meet
virtually and having a short amount of time to plan everything was a bit
stressful, as getting information across is slower that if you were meeting
face to face. However, it was a good way to learn how to work in a team with
people you don’t usually work with; to see what it would be like to work in the
events industry during these current times where you must work from home even
if you are part of a team; and that there is always a solution for everything,
even if that means getting out of your comfort zone.
What challenges did you face throughout the event and how
did you deal with them?
BC: Being on the technical role, using a new software
was challenging. It took a bit of playing around to get used to it, but with a
bit of practice it became easy. I would say the challenge using StreamYard
throughout the event would be changing from screen to screen to share content
for the viewers. This task takes a lot of patience as the software might play
up at certain times due to the pace you are trying to change the visuals at. In
order for the viewer not to realise the delay, we used the private chat not
visible to the attendees in order to inform Lia and Cerys that there was a
technical issue and to keep the content rolling in order to fill any gaps. This
was a useful tool as it appeared to the viewer as a seamless transition.
What went well?
CC: As previously mentioned, we worked well as team
and we delegated roles efficiently according to our skills. On the night we
worked well as a team, as well through the private chat box to ensure that
everyone was okay. Where needed gaps were filled and any crisis were quickly
solved, for example if there was a delay, me and Lia as hosts would continue to
chat and talk to prevent awkward silences. The creative ideas we came up with
for the awards ceremony such as the use of Mentimeter and a short acoustic
performance from Mick Williams were a success, engaging with the audience. The
use of StreamYard was also successful as we could see the engagement of the stream
as we were hosting and could refer to the comments throughout the live stream.
How would you improve and what have you learnt from this?
BC: If we were to host a similar event again, I would
use a computer with two screens to change visuals over at a quicker pace. Due
to being under lockdown restrictions, I only had the one screen available which
caused a slight delay in proceedings to get the content on the stream. Despite
this point I would possibly look down other routes of streaming software.
StreamYard can be slightly limited in the content you can share on the screen,
so further research into similar software would be a great idea.
What advice would you give to people hosting an online
event?
LBA: Make the most of it and make sure you give yourselves enough time to plan it all. Enjoy every second of the whole process and just be positive and optimistic about it all. Get yourself out of your comfort zone, even if it feels scary at first, and don’t let it get to you if something doesn’t work straight away because it’s normal and even the biggest events out there have technical issues and learn from those experiences.
The British Academy (the United Kingdom’s national academy for the humanities and the social sciences) has tasked us with investigating the specific challenges that UK business owners faced during the COVID-19 pandemic and lockdown, the strategies that they used to keep their businesses afloat, and how they engaged with financial and regional support.
We are also interested in how best to support members of the Black Asian and Minority Ethnic (BAME) business community.
To participate in our study, kindly fill the survey below and/or please share the URL with your networks if you know any other business owners:
Ethnic minorities were particularly affected by the COVID-19 pandemic in the UK and US, as in some other countries. In particular, the risk of death for some ethnic minority individuals who contracted COVID-19 in these countries was two to three times more compared to white individuals.
This disparity was a result of the underlying social and economic risk factors that ethnic minorities face, such as living in overcrowded and urban accommodation, being employed in riskier lower-skilled jobs, reduced access to healthcare, and structural racism. In other words, ethnic poverty in developed countries is driving higher infection and consequently death rates for ethnic minorities.
Drivers of Ethnic Poverty
Underlying the drivers of poverty for ethnic minorities in many developed countries are several socio-economic factors which include historical factors, discrimination, educational and entrepreneurial variations, and employment and pay disparities between ethnic groups.
Despite facsimile policies that emphasize equal access to education and employment in many developed countries, discrimination remains a critical barrier to equal employment. Several studies have found that both ethnic minorities are called back for interviews 50% less frequently than comparable whites, hired less often for high-skill jobs, and once hired are paid less. Thus, despite the increasing educational gains made by ethnic minority individuals, many are overqualified for the jobs that they do. Ethnic minority workers also often report not being given pay rises and being passed over for promotion.
Another very important driver for the disproportionately high poverty rates among ethnic minority groups is the concentration of such workers in low-paid work. Ethnic minority workers are more likely to work in low-paid sectors with limited progression opportunities and lower wages. Lack of movement out of low-paid work increases the risk of poverty among ethnic groups. In addition, there is generally a lower percentage of ethnic minority workers who are managers, directors, and senior officials.
Before the pandemic, BAME business owners were less likely than non-BAME business owners to obtain mainstream business support and in the early days of coronavirus, nearly two-thirds of BAME business owners felt unable to access state-backed loans and grants, leaving many on the brink of financial ruin.
BAME-owned businesses are traditionally concentrated in the sectors worst hit by lockdown such as retail, health and social care, education, restaurants and accommodation.
The economic crisis facing these businesses is aggravated by the fact that they are more likely to hire a considerable number of BAME employees and attract more BAME customers. The significantly higher risk among such groups from COVID-19 implies that these businesses would have had to incur considerable costs to protect their staff and customers.
Solutions
Ethnic minorities consistently report reduced access to education, lack of social and financial capital, unemployment, low-pay, and poor progression from low-paid sector work. This suggests similar solutions for all groups, which would lead to better-quality jobs and higher pay. However, given that some of the drivers of poverty, such as higher unemployment and inactivity rates disproportionately affect ethnic groups, specific forms of outreach activity and drawing on local knowledge may be needed in these contexts.
Similarly, government solutions to reduce ethnic poverty in developed country contexts include interventions that ensure that education, training and apprenticeships are provided for ethnic minorities as well as schemes that help tackle low pay among ethnic minority workers. There is a need for policies that focus the on education, skills and training for ethnic groups particularly digital, literacy, and numeracy skills. Moreover, policies should also be encouraged that monitor the workforce in relation to ethnicity, which should include the recruitment, retention and progression phases of jobs.
Authorities need to work with employers to provide better-paid jobs and they should do more to listen to and encourage employers to hire a diverse range of skills and experiences. It is advisable to consider putting targets for ethnic minority representation on boards, something that has proven successful in the case of gender. It is also important to recognise the benefits of positive discrimination in the labour market, rather than view legislation to combat ethnic inequality as red tape or political correctness. Mortgage market discrimination needs to be eliminated as this would allow ethnic minorities to take advantage of the benefits that come with owning a home.
State-backed grants and loans should be made more accessible as an incentive to business owners who have incurred additional costs to protect customers and staff. Crucially, the process to obtain them should not be too onerous and the criteria should be fair. Regional governments should also take care to plug BAME businesses into the supply chains of local projects in response to the pandemic.
Source: Author
All these should reduce ethnic poverty and the economic and health inequalities that the COVID-19 pandemic has highlighted.
Over the last few months we have been running a module on
‘Innovation, Value and Markets’ to over 70 Staffordshire business people, as
part of our Small
Business Leadership Programme.
During the workshops it was very clear that most small businesses have had to rethink their business model to adapt to massive shifts in consumer behaviour (and supply chains) because of Covid. The UK Government defines innovation as: The successful exploitation of new ideas. Innovation may involve an organisation’s:
Products and services
Processes (e.g. exploiting new technologies)
Business model (e.g. new income sources/
improved supply chain)
Business Model Innovation
According to Fisk (2021) although there are an infinite
number of potential business models some of the most common formats (applicable
to nearly every type of business) are:
Advertising-based
models. Services are free to users, whilst advertisers pay to engage with
the audience attracted, e.g. Google, Facebook.
Razor-and-blades
models. The facilitating item, like a razor, is sold cheaply, then
accessories, like blades, at a premium, e.g. HP, Nespresso.
Added-value
models. The facilitating item, like an iPad, is sold at a premium, then
accessories, like apps, sold cheaply, e.g. Apple.
One-of-one models. The company donates a
product to a charity, or person in need, for every product sold, e.g. Toms,
Warby Parker.
Cashflow
models. High volumes are generated at low margins, payments received
quickly from customers, paid slowly to suppliers, e.g. Amazon, Dell.
Platform-based
models. These bring buyers and suppliers together, typically charging both
of them to connect and transact, e.g. Airbnb, Uber.
Subscription-based
models. These charge a regular, e.g. monthly, fee for unlimited use of a
product or service, e.g. Netflix, Zipcar.
Freemium
models. These encourage trial or a basic level of usage for free, but
charge for additional or premium options, e.g. Spotify, Fornite.
Direct to
consumer models. Products which in the past would have been sold through
intermediaries are sold direct, e.g. Allbirds, Casper.
10 Types of Innovation
If we want to expand the UK Government’s three categories of
innovation, recent research has identified ten main types of innovation (Keeley et al., 2013):
Profit Model: The way you make money (e.g. Netflix changed the video rental industry by implementing a subscription model)
Network: Connections with others to create value (e.g. Target works with renowned designers to differentiate itself)
Structure: Alignment of your talent assets (e.g. Whole Foods has built a robust feedback system for internal teams)
Process: Signature of superior methods for doing your work (e.g. Zara’s ‘fast fashion’ strategy moves its clothing from sketch to shelf in record time)
Product Performance: Distinguishing features and functionality (e.g. OXO Good Grips costs a premium but its ‘universal design’ has a loyal following)
Product System: Complementary products and services (e.g. Nike+ partnered shoes, sensors, apps and devices into a sport lifestyle suite)
Service: Support and enhancements that surround your offerings (e.g. Zappos “deliver WOW through service” is their #1 internal core value)
Channel: How your offerings are delivered to customers and users (e.g. Nespresso locks in customers with its useful members only club)
Brand: Representation of your offerings and business (e.g. Virgin extends its brand into sectors ranging from soft drinks to space travel)
Customer Engagement: Distinctive interactions you foster (e.g. Wii’s experience draws more from the interactions in the room than from on-screen)
The ‘Business Model Canvas’ is one of the most used
templates in business to map a business model (Osterwalder and Pigneur, 2010).
This is a useful tool for rethinking the whole business, seeing connections and
then innovating the business.
Fisk, P. (2017). Gamechangers: Are you ready to change the World? Creating Innovative Strategies for Business and Brands. West Sussex: John Wiley and Sons Ltd.
Keeley, L., Pikkel, R., Quinn, B. and Walters, H. (2013). Ten Types of Innovation: The Discipline of Building Breakthroughs. New Jersey: John Wiley & Sons, Inc.
Osterwalder, A. and Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers. New Jersey: John Wiley & Sons, Inc.
Author
Tanya Hemphill can be found on twitter @DigitalTanya she has recently joined Staffordshire Business School. She teaches on the MSc in Digital Marketing Management which includes a credited workplacement.
Papi
Paul (Paul Dobson) has had extensive experience in supporting the hospitality
trade, including the successful start-up and running of pizza restaurant and
takeaways, both here in the UK and France.
On Friday 5th February, 1pm-2pm, Paul will be delivering a pizza making demo and chat which will cover a quick and easy way to make Nutella® pizzas and discuss the start-up and running of a pizzeria.
Share your passion for Nutella ® with a tweet by adding the tag @nutelladay and the hashtag #worldnutelladay. Become a follower of @nutelladay on Twitter, connect at nutelladay.com and share your World Nutella ® Day images on Instagram and Pinterest and tag your photos or stories using the hashtag #WorldNutellaDay.
Paul’s session will be delivered on Microsoft Teams. To join the session, click the following link at 1pm on Friday 5th February:
To take part in making your very own Nutella Pizza, you will need the following:
Ingredients :- 500g OO flour, plus extra to dust 1 x 7g sachet fast action dried yeast 1 tsp fine sea salt 1 tsp caster sugar 2 tbsp olive oil, plus extra to drizzle 1 tbsp semolina, to press out
Equipment: mixing bowl wooden spoon baking tray/pizza stone Oven at 220 degrees.
Olushola Fashola, Lecturer, Staffordshire Business SChool
Nuthall
(2019) asserted that the United Nations estimates that between 2% and 5%
(US$800bn–US$2trillion) of global GDP is laundered. The year 2019 saw global
anti-money laundering (AML) penalties going beyond £6billion (actual value was
£6.2billion which is equivalent to around $8billion), with the US imposing
double the quantum of fines imposed by UK authorities (Sweet, 2020). These facts
suggests financial crimes is on the rise, which is a worrying development for
societies, governments, organisations, and individuals. It is therefore
important that some sort of reflection (collectively or individually) be
undertaken by all concerned regarding how things have deteriorated to current
level in terms of emerging global narrative on financial crime. Consequently,
my own lived experience within a socio-economic and institutional context
offers a basis for looking at financial crime through the multiple lens of
three actors – “the vulnerable”, “the gullible” and “the
culpable”.
THE
VULNERABLE
Some
years back I was looking through job advertisements on various websites, hoping
to find a flexible job that will permit me to spend more time with my young
children. I did not search too long before I came across one placed by a
supposedly US based company. Though, the role was described as Administrative
Assistant, the job description was more of a home-based funds transfer officer.
Considering that I have practice experience in banking and finance, I quickly
applied and was very optimistic as to my chances of eventually getting the job.
Just as I had anticipated, I was offered the job. However, mode of operation
triggered some curiosity – the company will pay money into my account which I
shall subsequently transfer to various recipients!
THE
GULLIBLE
The
unusual nature of the responsibilities attached to this job role sent alarm
bells ringing. I contacted the website where I found the job to let them know
of my suspicion that something was not quite right about this company and the
job. The website’s initial response was to dismiss my suspicion, suggesting
there was nothing unusual about either the company or the job. Whilst pondering
as to the genuineness or otherwise of this job offer, I listened to the BBC
money box programme focused on money mules. This made the connection between this
job offer and money mule operations vividly clear. I contacted the website
again, now aware of the prospect of being used as a money mule based on what I
have learnt from the BBC programme. This time, the response was an apology and
commitment to bar the company from using the website. Prioritisation of
corporate social responsibility can help reduce the chances of financial fraud
occurring (Liao et al., 2019).
THE
CULPABLE
Whilst
I did not allow this company the opportunity to pay any money into my bank
account, I wonder how many people they had successfully persuaded into
accepting such payments through their banks. The banking industry is central to
economic growth and development, but also remains a vital part of the carefully
orchestrated dastardly design of financial crimes’ architecture. The growing
evidence against banks with respect to recurring culpability in facilitating
financial crimes is a worrying trend that compounds erosion of public trust in
them since the financial crisis of 2008/2009. Sanctions imposed on banks (see
below) for offences with a bearing on financial crimes bears testimony to
banking industry’s culpability.
Feb
2014: Standard Bank PLC fined £7.6m for failures in its anti-money laundering
controls (BBC, 2014)
May
2015: Barclays fined $2.4bn for forex rigging (Financial Times, 2015)
June
2015: HSBC pays out £28m “compensation” to Swiss authorities over
money-laundering claims (The Guardian, 2015)
November
2015: Barclays Bank (Barclays) was fined £72,069,400 for failing to minimise
the risk that it may be used to facilitate financial crime by the Financial
Conduct Authority (FCA) (FCA, 2015)
December
2019: HSBC to pay $192m penalty in US for helping clients hide $1billion dollar
worth of assets for tax evasion purpose (Financial Times, 2019).
Financial
service regulators may have demonstrated a commitment to ensuring banks do not
act as facilitators of financial crimes through these sanctions, but the
inherent culpability of the financial regulatory system in certain
jurisdictions means that these fines do not address why they have become a
magnet for financial crime. The public prosecutor in the HSBC/Swiss regulator
case as cited in The Guardian (2015) sums up the real source of financial
service industry culpability in financial crime thus:
“When
we have a law that doesn’t punish financial intermediaries accepting doubtful
funds then we have a problem. This problem dates from long before the HSBC affair.”
REFLECTION
ON EVIDENCE
Criminals
adept at committing financial crimes often targets the vulnerable. They are
also very clever at deciphering individual vulnerabilities. Unemployment was a
vulnerability ready to be exploited in this case. However, various other
vulnerabilities can be the focus of the ploy of these criminals. For instance,
search for acceptance and love (BBC 2020), desire to help others and outright
greed, are a mix of vulnerabilities often exploited by advance fee (otherwise
called “419”) fraudsters.
Individuals
or organisations should not think they are above gullibility when it comes to
financial crimes. The website involved in this case is a subsidiary to one of
the major global online platforms. Yet their vetting process allowed this job
advertisement to be placed; and initial response to contacting them laid bare
their gullibility – a failure in their social responsibility obligation to
society!
Banking
industry and its regulatory framework remains an important defence line in
society’s response to combating financial crime (Ryder, 2017). A basic line of
defence where banks had in the past dropped their guards is with respect to
“Know Your Customer” (KYC). This important anti-money laundering requirement
needs full compliance for the global fight against financial crime to be
successful. Specifically, a risk-based approach to KYC practice can help
operators in the financial services industry balance regulatory compliance with
business exigencies. Such an approach can help focus attention on potentially
risky clients such as the politically exposed person (popularly referred to as
PEP). The need for some sort of global regulatory alignment to ensure that
there are no safe havens for illicit wealth (Nance, 2018) will require every
nation to review its laws and ensure that loopholes exploited by financial
criminals and their intermediaries are plugged.
CONCLUDING
REMARKS
Fraud
triangle comprising of opportunity, incentive/pressure, and rationalization
(Cressey, 1953) had received wide scholarly attention, it is perhaps time we
switched attention to actors whose moral gap facilitates financial crime.
Vulnerability, gullibility, and culpability represents a collection of
attributes that helps financial crime to spread like wildfire and the criminals
that benefit from them to take the rest of society for granted. Hence, the need
for every individual and organization to undertake a self-assessment as to
whether they may be tacitly facilitating financial crime as a vulnerable,
gullible, or culpable actor in a dark web that leaves society morally and
economically bankrupt.
Liao,
L., Chen, G. and Zheng, D. (2019) Corporate social responsibility and financial
fraud: evidence from China. Accounting & Finance, 59(5),
pp.3133-3169.
Nance,
M.T. (2018) The regime that FATF built: an introduction to the Financial Action
Task Force. Crime, Law and Social Change, 69(2), pp.109-129.
Ryder,
N. (2017) The financial crisis and financial crime in the United Kingdom: A
critical analysis of the response by Financial Regulatory Agencies. The
Company Lawyer, 38(1), pp.4-14.
