Friday, May 22, 2009

Response to, "economy, market and competitors are the major influence to business opportunities and threats. But how can we assess that?"

Response to, "economy, market and competitors are the major influence to business opportunities and threats. But how can we assess that?"

I like this question ( hope it wasn't rhetorical) as it is highly relevant to our plan results and my response may assist you in the interests of our own group self-interest! We can't take risk out of the mix completely. I think success is also a portion of "happy chance." However here are a few recommended steps. We work from the outside in to build our "roux" :

A. 1. Focus on key uncertainties of the industry or market itself: These are generally known, high level scans.

i. political: key factors implicating future stability or autonomy and investor confidence?

ii. economic: employment and growth, projected postiive or negative?

iii. cultural: relationship to market or product, importance of cultural integration of product or service?

iv. demographic: consumer profiling of product or service, growth or decline?

v. technological: ubiquitous rates of growth or cyclical trends?

Analysis is through review of any government, business , academic, periodical or news resource with integrative "bits and bytes" of information which begin to assist in the painting of a "background or context" to frame the product or service proposal. When I use the internet to do this it is like collecting lint out of the dryer after several cycles and trying to weave a thimble out of it.

A. 2. Return to the material in #1 and focus on at least two "spikes of data" which reveal certain elements of greater depth worth researching which provide more detailed weaving of the relevant data into a "snapshot" or product "sample" in trends for each set of variables for evaluation. The degree of depth provides irrefutable evidence of good research. I agree with what others have said. We need to examine the negative aspects of all of these factors to well plot worst case scenarios first. But it is similar to a circling of the wagons or setting up of the wigwams. These are mobile and changeable and need consistent updating.

B. Another useful analysis is Porter's Five Forces.

In this format one may examine worst case scenarios and problems as almost a secondary lower level scan with greater clarity of details as it is more familiar (especially if one has worked through the previous trends analysis). These factors include:

a. Identification of industry.

b. Threats of new entrants into industry sector, relevant barriers or regulatory environments which may encourage or prevent it. Local versus global hiring policies for example have not accompanied most FTAs other than in the EU.

c. Threats of substitutes: Other product or even industry placements or developments which may subvert or erode market share. As Emma mentioned difficult to pin-point but different markets rarely introduce or diffuse new products simultaneously everywhere.

d. Pressures from suppliers: Push versus pull environmental factors which will effect sources of materials and or pricing in future. Walmart versus industrial age of manfacturer determined products and inventories.

e. Pressures from customers: Effects on pricing, product or producer preferences, resource usage. Current global trends for lowest cost factor at times being seen opposed by certain fair trade or localization interests reminsicent of vertical integration practices of the 1970s.

f. Possible rivals: Current or future market participants. These may change as some nations introduce or adopt new technologies at different rates than others but may currently be in development in one while unavailable in another.

g. Focal Challenges and Opportunities: This a return to the "two spikes" description and an attempt to give a "heart beat" or pulse to data which unless well considered could appear overly baked or under examined or raw.

C. (Almost there!): Engage competitive analysis of actual product and business itself.

These KSFs or "key success factors" should reveal both value drivers and core competencies of the business itself arrived at through working over the previous two steps. It is a third closer to the product level analysis which relies on progressive working through of the previous steps.

D. Scenarios Planning

We may then develop scenarios and results effecting the business on a X/Y axis which reveal key trends in positive and negative possible futures in comparison to increase or decline over key uncertainties. These provide possible reference at the present time for future events and provide decision-makers with a blueprint or "fire alarm" response to actual problems which may occur while implementing the plan.

This is a pragmatic attempt and the best precis of it tailored to a lite model road map I could rustle up. Hope its useful?

Good memories of Wawa...

Wednesday, May 20, 2009

Sailing in the Fog in a Blob...

If the plan is carved in stone it will fail...

Response to, "Business Plans can allow for the emergence of unexpected opportunities and threats..."

The purpose of planning particulary contingencies and scenarios is to try to anticipate opportunities and pitfalls prior to being "too far gone" to find a remedy and get the plan rolling again. Enter the Ssangyong Rodius, a "blobject" (?) of questionable design planning from a deflating company in serious trouble with sales falling 66% under bankruptcy protection over the last year. Were they sailing a blob into a blip market? Does bad design indicate bad planning?

In terms of desk-bound market research the funnel concept of evaluating ideas will help explore new opportunities and threats to the overall viability of the business plan. The plan is only as good as the planners and their ability to absorb and adapt to changing information and circumstances be they among market, competitors, present/future trends and uncertainties or even orientation to time?

The problem is humans sometimes resist information which does not confirm currently held views which might implicate specialists? This coupled to in-group/out-group biases helps reinforce outdated or outmoded views which could sink any plan and turn a good one into a bad one?

There are several research examples which provide that culturally based models of differentiation exist in national culture approaches to future uncertainties such as Geert Hofstede's Cultural Dimensions. In the case of in-group bias which appears to frequently blind businesses (even Intel or Microsoft for example) to their own blunders a classic book on the topic might be: Life and Death in the Fastlane: Irrational Organisations and Their Leaders by Manfred Kets DeVries.

You can read my own response to the difficulty in sourcing unbiased data here. I agree no one can plan for everything. But apparently the benefits of building a team with singularly different strengths and skillsets assists in approaching a plan, problem or solution as in the Delphi Method.

Sailing in a fog in a blob. Mix in a bit of luck and major road-blocks may at least be prepared for? I have yet to see a business planning concept which requests planners to first focus on their skill-set weaknesses to help stretch those capabilities and allow peer correction/discussion to take place followed by regular focus areas? If we are not planning to adapt to new threats and opportunities at all times then what are we doing? Playing IBM/GM/FIAT?

Tuesday, May 19, 2009

The action plan the Australians panned...



1. Sole Trader: Least feasible due to size of group. Perhaps following agreed 3-5 year limited partnership period (revert to sole trader if partners seek exit).

2. Limited Partnership: Appears most feasible. However depends on business strategy. For example, capital outlays may be minimal in first three to five years under this plan. However engineers may prefer associates or SME (subject matter expert) positions with contingency based or commissions based or profit sharing dependent upon performance (or combination). Do engineers have profit sharing requirements with their current employers?

3. Company:Most logically next step for partnership based on three to five year success rate. For example, have we sustained target growth?
Would we start a company without having first tested the waters with more of a part-time venture which partnership offers? Also might engineers have employment restrictions as terms of their current contracts?


1. Management: In partnership we would represent primary management. In limited partnership two main operating managers with engineers as associate consultants. Would need to agree details of association, contract and renewal terms.

2. Investors: Australian small business start-up funds, Singapore seed-incubator programs, and perhaps a third(China/Hong Kong or Korea?)

3. Potential Employees: At present limit employees/consultants/associates positions to our group of five. With company start-up (following preliminary 3-5 years of boot-strapping we would need a head office staff)

4. Customers: I propose three potential clients:

a. Government/business/university research agencies seeking to assemble international research project teams or study project feasability
b. Research qualified candidates sourced from Australia, (PRC) China, Singapore and/or North East Asia
c. Research agencies seeking to link research programs, assign copatent and "Pasteur-type" collaborations (match-making)


1. Executive Summary:
I suggest we frame our business as a "boutique" consulting agency
which implies a) small size b) core competencies c) intimacy and flexible customer orientation

2. Background:
For example, how could we assist Chinese nationals access and enter research projects in Australia/Singapore or other parts of Asia? How can we assist local research agencies in any of those three locales find their candidates quickly? How can we connect researchers in similar but complimentary disciplines? How can we
assess and review future technology developments to meet possible government/university/business sponsored sector development projects?

3. Business team: In this section we need to summarize the skills and abilities of our group members with perhaps a paragraph on each emphasizing these are the five content and subject expertise we offer our customers. For example, engineers can you provide your own predictions on possible growth trends in product development in each of your industries in Australia, Singapore and perhaps a third Asian market?

4. Product/services and customers: We need to quickly identify proejct management opportunities and proposals for policy research development faster and more cheaply than larger consulting agencies. The reason I suggest a three customers or three markets approach is that we may need to adjust our model over time and plan for the future as well. For example we might seek to focus on Australia singularly however with three Chinese members of our team it would make sense to concurrently develop our network in Asia.

Stage One Australia: Obviously for practical purposes a logical starting point.

Stage Two: Singapore/Hong Kong (?): These are incubator supported and government driven sectoral incentives markets. We need to identify opportunities here too I think.

Stage Three: As a means to meaningfully link growth in the previous two stages to other similar or soon to develop sector incentives campaigns.

5. Analysis of marketplace and competitors: Following "fall in love with three of everything law" so that we do not over-rely on one source of income.
We would otherwise miss opportunities. We also have three engineering sector areas of concern.

AUSTRALIA: We could look at three levels for benchmarking a) current start-ups b)medium sized national c) large sized multinational
SINGAPORE: Each level would need to represent best in class.
Third (agreed market): This would represent a wild card where perhaps best-practices are not the actual drivers.

6. Business marketing objectives and strategies:

As each of us represents a different core competency diversity of network opportunities form core of strategy. Diffusive model. We need to use our network of associations and familiarity with government/business/university agencies (in Australia, Singapore, and a third market) to seek/find/create business knowledge transfer proposals and project management tenders which are a) better than competitors b) faster than competitors c) cheaper than competitors.

7. Operational Strategies:

We would need to contribute most of our free time to these endeavours (for those of us in full-time positions that would be at least a couple of hours a day and most weekends). In partnership mode we would need to develop perhaps a website for "office in a briefcase" business and use current technology to maintain operational connectivity. Site management visits would be necessary, assessing and recruiting competent management and/or research associates (referal and team management held by us) with site management/research teams assembled by us.

8. Business structure:

The core of our business could be managerial as in collecting/gathering/assembling material and personnel for project development proposals limiting our input to managerial and overall team assembly, desk and interview based research project and policy proposal research. However we would need to access engineers considerable network of under-employed and/or associations-based network of reputable/recommended project participants either from Australian or Chinese/international based pool of canidates. So part of our business is HR sourcing but on a full project management basis. We could consider three options of service: a) project/policy research perhaps leading to b) Project/team design including needs assessments and full project plan perhaps leading to c) full project managment and implementation program with recruiting/hiring and subcontracting of further management/research associates. It would be easy to envision steps a-c would be a building on strengths scenario where our first year of operations would assist in identifying sector developments, second year would be assembling teams plans and third year begin taking on larger assignments as our business generates more income and we become familiar with our customers.

9. Financial model and projections:

In general businesses do not go global without projected minimum growth rates of about 15% annually. We could then expect to double our earnings from year zero in four years if we consider the standard calculation of 60/divided by any percentage rate of growth to find its doubling time. We could expect fast growth in the beginning however as we get larger we get slower and our earnings may not maintain a 15% rate of growth. What projection is acceptable? Three years or five?

Sample Balance Sheet (Simple)
Assets Liabilities and Owners' Equity
Cash $ [cost of partnership registration (state or federal + Liabilities
possible registration costs in Singapore and third market]
Accounts Receivable $[payments for policy research]
Notes Payable $[Proposals accepted paid in installments]
Accounts Payable [fees and income distributed to associates]
Total liabilities $[Including legal fees for contracts and terms]
Tools and equipment $[In partnership mode limited] Owners' equity
[Need to agree to percentage of reinvestment Capital Stock $[may need to agree to reinvest earned profits to build to move on to business/company mode]
Retained Earnings $[Depending upon agreement % of profits to reinvest]
Total owners' equity $[Equitable distribution of holdings]
Total $[Small outlay in partnership mode leading to larger in company
Total $[Need to agree on percentages of reinvestment]


For the year ended DECEMBER 31 2009
$ $
GROSS PROFIT (Total profit)
RENT (1)
TAXES --------

Earnings After Taxes (EAT) --------

(1) These are more likely expenses in business company mode rather than partnership mode.


Growth rate needs to be estimated (possibly require at least 15%)
Cost of sales(2)
Need to determine percent of revenues
Research and development(2)
Percent of revenues
Selling, general and administrative (2)
Previous year SGA times (1 + (75 percent of the revenue growth rate)

(2) The more we as a group agree to reinvest the lower these percentages will be in partnership mode.

Ozzian Tech Funds that I like: Where is Canada's Innovations Funds Listing?

Ozzian Tech Funds that I like

1. GBS Ventures Preseed Program: Provision for independent IP holders?
2. Cleantech Australia Fund: LP Provisions.
3. Innovation Capital Fund II: Ditto.
4. Redfire Investment Capital Fund: Ditto.
Master List: Does Canada have a list like this, eh?

Ozzian Solar Subsidies (Where's Canada, eh?)

Ozzian Solar Subsidies (Where's Canada, eh?)

Solar Water Heater Subsidy (Western Australia)

10% Subsidy for Urban Water Desalination Plans (piddling?)

Rebates for households to install rainwater tanks or greywater systems

Solar Power: Government Incentives Looking Good in Australia

Ozian Gov. Solar Incentives

“The A$150 million Solar Homes and Communities Plan, which provides up to 50 per cent rebates on capital costs for 6,000 homes and 400 community buildings annually when installing solar energy systems (limit $8,000).” “The A$75 million Solar Cities Program, including funding for photovoltaic panels on housing, commercial and iconic buildings in six major towns and cities.”

Canada: Shouldn't you beat or match this?

Read the full text here. Clean Energy: Solar (Austrade 2009)

Solar Cube works well...but the price is ouch?

“Solar Cube is powered by sunlight and wind, and can provide up to 3,500 gallons of clean drinking water per day from polluted water or salt water…” “The Solar Cube ranges in price from $38,000 to $80,000 USD. Training and operational instruction is included in the purchase price.”

Read the full article here. "Solar powered water desalination device for emergency relief" Cleantech Group (March, 2007)

Interesting claims of efficiency in membrane desalination...

This sounds familiar...

"His prototype is able to run on solar panels and produce 50 kilograms of water per metre square of the membrane per hour [...] current technology would produce about seven to eight kilograms per metre per hour."

Read the full article here. "Ottawa Student Could Make Water Desalination 600-700% More Efficient" by Michael Graham Richard, Gatineau, Canada (Treehugger Science & Technology, 2008)

Have you heard of halophytes?

Interesting article about salt water plants which produce more oil than sunflowers.

"After taking into account environmental protections and other factors, Glenn’s report estimates that 480,000 square miles of unused land around the world could be used to grow a special set of salt-tolerant plants — halophytes. Glenn’s team calculated that this could produce 1.5 billion barrels of oil equivalent per year. That’s 35 percent of the United States’ liquid fuel needs.

Halophytes thrive in saltwater. While salt damages most plants, these salt-loving plants actually use the saltwater to draw in fresh water. In essence, they make themselves saltier than the surrounding water, which, through osmosis, drives fresh water into the plant."

Read the full article here. “Food vs. Fuel: Saltwater Crops May Be Key to Solving Earth’s Land Crunch” (Wired 2008)

Tuesday, May 12, 2009

Canadian Dream Jobs: List # 1 (Santa Are You Reading?)

Dalla serie "Domestic Tourism": Feluca © Maha Maamoun

A List of Canadian Dream Jobs: Santa Are You Reading?

I love my job. But sometimes I wonder where I would go at a moment's notice? If no then when my contract is finished. Somewhere I read Korea is sometimes described as, "a velvet ditch." I think it's better than that. I feel more priviledged than that. So I am making my Christmas Canadian Dream Job Wish List #1 somewhat early and something like this (again and again - Homage to Manuel Lopez.)

So I am willing to share this list just in case someone may be reading and wondering if I were anywhere but here, working, what would I choose to be doing? Perhaps you are in Canada contemplating any full time job rather than making your lists, continuously searching, or sending applications and waiting patiently. Some employers might tell you to line up when they start advertising like a good little leprechaun. Most people appear to do that anyway. This list is for you or the conventional.

Dan's Christmas Canadian Dream Job Wish List #1

1. Hong Kong. Interesting call for lecturers at HK Space in Suchow.
College Lecturers in China Mainland [RF: 2008/09-FT-307-CTOL]

2. Vietnam. Described as internal on the University of Queensland website but also actively posted on (minus the internal designation an infernal homage to keeping it all in the family?) Director of Studies - Based in Vietnam INSTITUTE OF CONTINUING & TESOL EDUCATION (ICTE)at The University of Danang.

3. Dubai. Murdoch University International Study Centre seeks lecturers for the Masters of Business Administration program. Lecturer – Master of Business Administration (Scroll down to #8).

4. Saskatoon. Operations Co-ordinator, International Transports at TAM International. "Candidates with limited experience but strong educational backgrounds in international business will also be considered." Their specialized commodities are nuclear fuels and wastes.

5. Lloydminster. Lakeland College, Alberta. They are looking for a term Instructor, Business Administration, Competition # 09-2301-003.

6. Qatar (Pronounced "Gutter.") College of the North Atlantic in Doha
has a position for Instructor, Business Studies (Marketing and Entrepreneurship)Competition Number: CNA-Q.PPD.BSME.09.59-CB

7. Fredricton. UNB has a position for a PROJECT MANAGER at The PLANETARY AND SPACE SCIENCE CENTRE, UNB FREDERICTON. Competition #003-08.09

8. Toronto. C.D. Howe Institute Seeks a Policy Analyst

Fill’er Up or Fries?

Fill’er Up or Fries?

Competitors are sometimes difficult to penetrate. Whether a company seeks to innovate and monopolize (firm specific advantages FSAs) or quickly diffuse its technology throughout a market place depends upon the product’s ability to deliver profitability, growth and sustained survival of the business according to Kolk and Pinkse (2008) who describe the possibility that fast-food outlets might soon provide the first adopter mass market positioning for alternative auto fuels.

Similarly, an e-learning blog that highlights new gadgets from time to time -things that early adopters crave catches the eye. How soon before all of us are nodding in agreement while wearing goggles like EduPOV instead of staring at screens as pragmatic users of this new product (early adopters will have already moved on to something else)?

How many monitor designers would willingly sell or develop EduPOV with potential leveragability undercutting their market share? Maybe Raybans could run with it instead?

Some of the issues relating to a chasm of early foresight in terms of graduate sustainability are described briefly here. Has anyone read Blessed Unrest: How the Largest Movement in the World Came Into Being and Why No One Saw It Coming? (2007)

Egmonda, Jonkersb and Kok (2006) describe this sustainability chasm in bridging early adoption and pragmatic use consumers and a strategy to address it in respect to developing energy related innovations among householder associations:

1. Identify policy-desirable innovative products.
2. Identify a mainstream niche in the target consumer group.
3. Produce an innovation to satisfy the niche.
4. Commence advertising and marketing.

The question returns,"who designates policies, businesses or democratically elected governments?" Without the fashion of sustainability what innovative progresses really benefit?

Market Creation Logistics Case Study

The last few years my students have been making presentations on "The Blue Ocean Strategy" by W. Chan Kim and Rene Mauborgne which describes the creation of a market share or space where there previously was none. The concept popped up again while researching recommendations for improvements in logistics and food supply chain here in Korea. CJ -Global Logisitics Services (CJ-GLS) has developed a remote EDI/bar code recognition system similar to GPS which innovates through eliminating hand scanning time on individual break bulk freight loads in shipping and receiving through envisioning a method to reduce labour costs and handling time in the overall supply chain. Out of the seven major logistics companies in Korea, it came sixth in market share in 2004 so while it was and is not a market leader it was the first to reduce receiving inspection time from 10 to 3 seconds and shipping inspection time from 600 to 3 seconds on single units of product. This saves energy.

Risky Technologies Often Overinvested

DeMarzoa, Kaniel, & Kremera (2007) “Technological innovation and real investment booms and busts” describe cases of irrational exuberance in terms of new technologies investment in the US giving the example of over development of optical fibre networks with 2-3% utilization rates as of 2003. They consider excessive investment in risky technology is the norm rather than the exception especially in cases of future growth and adoption predictions which provide positive outcomes. Conversely competitors and variables such as jealousy and “keeping up with the Joneses” provokes further investment in risky technologies with lowered returns according to their over investment calculations and formulas.

DeMarzo, P., et al.(2007) “Technological innovation and real investment booms and busts,” Journal of Financial Economics, [Accessed: May 12, 2009]

Egmonda C., Jonkersb, R. and Kok, G. (2006)“A strategy and protocol to increase diffusion of energy related innovations into the mainstream of housing associations,” Energy Policy, Volume 34, Issue 18, December 2006, Pages 4042-4049.[Accessed: May 12, 2009]

Kim, C, Yang, K & Kim, J. (2006) "A strategy for third-party logistics systems: A case analysis using the blue ocean strategy," Special Issue on Logistics: New Perspectives and Challenges, Omega, Volume 36, Issue 4, August 2008, Pages 522-534.

Kolk, A. and Pinkse, J. (2008) “A perspective on multinational enterprises and climate change: Learning from “an inconvenient truth,” Journal of International Business Studies (2008) 39, 1359–1378, Academy of International Business.[Accessed: May 12, 2009]

"Strategic Advertsing Management" by Larry Percy, John R. Rossiter, and Richard Elliot (numerous useful weblinks relating to the importance of developing successful advertising and marketing) [Accessed: May 12, 2009]

Friday, May 08, 2009

More American Workers Outsourcing Own Jobs Overseas

Funny! The "lower level workers" lying around on the job like nocturnal animals. "Achmed" the poorest man on earth will be doing 83% of the world's work..."lay in one place and not do any work...!"

Thursday, May 07, 2009

Wednesday, May 06, 2009

Response to, "Some fields of research seem more ‘fashionable’ to government and the universities than others"

(From Funny Potato)

Response to, "Some fields of research seem more ‘fashionable’ to government and the universities than others"

I have given up looking for my saved but unsubmitted thread on this topic. I like these questions and will attempt to answer two of them first and the last cheekily before asking a few of my own. There is a dry, old and illuminating book "Globalization and Fragmentation: International Relations in the Twentieth Century" written by Ian Clark which could be applied to the national micro-cosmic innovation drivers at work in Australia's universities, research and business environments which mirrors his description of parallel but competitive forces described as internationalisation and globalisation.

"What drives and motivates certain fields of research to be more popular than others?"

On the international level self-interest or suspicious special interests determined Cold War "Iron Curtain" type philosophies of knowledge transfer and sharing between client or allied nations versus rogue or enemy states which Clark says is mostly maintained at a public policy level in national governments up to the present. Why would such perspectives not be engrained in political, societal and academic policies as well?

At the same time globalisation has also taken place first in the form of developmental international assistance programs and information or knowledge sharing to the benefit of trading partners followed by increased foreign direct investment reducing policy influences related especially to environmental and social justice. While national benefit is always an aspect of self-interest it is also an IP protection related topic as dissemination of pirated or stolen materials has never been higher (partially as a result of increased globalisation).

One aspect of these competing fashions "open source versus IP protection" mimics the original internationalisation versus globalisation described by Clark. Industries or innovations originators, designers and developers might lose more control over their IP the more popular it becomes thus heavily regulating IP rather than actually developing more of it. Similarly the US lost world economic dominance by offshoring its investments and industries no longer perhaps formulating its own policies but becoming an economic net debtor/sultanate-like vassal falling back on traditional international measures of political and military influences to make up the differences and divergences in policy. This would explain new quantitative or qualitative measures of fashionable research which no longer may be measured on strictly local terms. I often think the often individual business-oriented search for competitive advantage has so diffused and permeated our western cultural mindset to blind us to opportunities for collective benefits in conflict management and mediated dispute resolutions.

"Would it be in the long-term or short-term interests of society?"

In East Asia much evidence for increased IT and business management development may be directly traced to exponential increases in offshored western and/or Australian educational programs delivered for (short term ?) export profit gains. These new economic players have created developmental competition in areas of national competitiveness and research commercialisation which did not exist prior to relevant business and IT training and research based upon perhaps more highly successful rates of patent registrations locally (if these are to be considered relevant measures in innovation growth) and/or government directed innovation programs which appear soon outstripping those found in Australia or other western nations where the original learning and education were first developed. Even as early as the 1980s Mitsubishi Corporation was described as conducting more research and development than Canada as an entire nation. How soon before all of Asia (minus Australia once described by Lee Kwan Yew as "The Trailer Trash of Asia") outstrips the rest of the world's IP development?

This is another example of global versus international ends and means where one aspect of globalizing education has both long-term benefits and long term negative consequences for competitive research in countries such as Australia.

"Where and how is data collated to determine a particular research fields ‘popularity’?"

Thank Michael for exposing me to the Aalborg Project written about by Bent Flyberg in his book "Rationality and Power" which makes unbiased data appear impossible to collect and thus subjective. Here is a possible answer:

"Statistics are like a bikini. What they reveal is suggestive, but what they conceal is vital." (Aaron Levenstein)

Good business often squandered/squashed regardless of structure.

Good business often squandered/squashed regardless of structure.

In response to the statement, "The choice of business structure depends on the nature of the product or service, and the nature of the industry sector in which commercialisation is taking place."

There is a great little book worth reading called, "The Company: A Short History of a Revolutionary Idea" (2003) by John Micklethwait and Adrian Woolridge which, while perhaps overly simplistic/sympathetic to the modern world's laissez-faire liberal economic policies, provides evidence that regulatory business oversight has had significant impact in terms of pendulum swings of public demand for reform and/or oversight of business structures through their officially short, brief and often not fully accounted for story.

Middle-class and middle-income nations rely heavily on sole proprietorships, family ownership and limited liability partnerships in the midst of a dwindling regional industrial tax base gutted as surely as derivatives and free currency exchanges have conversely swelled (which hasn’t mattered much in terms of governmental tax collection effectiveness during “laissez faire” derivatives binges) the scale of multinational corporate enterprise. Small businesses make up the backbone of difficult to relocate or offshore structures. These are often described as “Mom and Pop” operations and are often credited for keeping a large proportion of US businesses actually US owned and/or operated as opposed to relocated to free trade zones in Mexico south of the border. Corporate structures as we know them today and limited liability partnerships did not exist even in theory more than about a century ago. At that time service industries were not represented as the ideal economic drivers of entire national economies as they are today.

Similar constraints existed in terms of research funding, development and its relationship (or even relevance) to the public versus corporate or academic fishbowls of the past as in contrast to such a seemingly small business start-up friendly (cozily government-structured political/economic environment) as which supports IP development and patent protection in Australia as described in Howard’s “Domains of Knowledge Transfer” at present. These fish boned diagrammatic representations of knowledge transfer were very fuzzy and up for high debate as little as three to four decades ago (especially sticking in the craws of consulting versus internally employed French engineers of the inter-war period) (Henry in Kipping and Engwall) where the combination of consulting and academic work were little applied or even considered relevant or mutually inclusive with the first case being found in frigid Sweden in the area of auditing just prior to World War Two. (Engwall, Furusten & Wallerstedt in Kipping and Engwall) Even Australia's historical approach to knowledge transfer could be considered infantile and grossly under-endowed when compared to East Asian innovation rate of increase of patent registration since the mid-nineties.

Clearly corporations seek to exist as legal entities to support product development and service delivery but still rely on the due diligence and moral authority of their managing board of directors even if they are dabbling in profit-earning research. There are no liability limitations for failures of managerial due diligence, especially in the phrasing of the question, “What constitutes due diligence?” No global standard is yet applied in such accountancy in a global economy. However I would say (even with reasonable recommendations) regardless of business structure if auditing firms are found to actively engage in moral hazard then the political and power based dynamics influencing business structure as described in Bent Flyberg’s work, “Rationality and Power” may have more impact than the nature or structure of the business itself. Good research and good business are often squandered or squashed by special interests regardless of structure.

Cunningham, L.A. (2006) “Too Big to Fail: Moral Hazard in Auditing and the Need to Restructure the Industry Before it Unravels,” Columbia Law Review, Vol. 106, 2006/Boston College Law School Research Paper No. 108.

Kipping, M. and Engwall, L. (Editors) (2003) Management Consulting: Emergence and Dynamics of a Knowledge Industry, Oxford University Press, Oxford.

Micklethwait, J. and Woolridge, A. (2003) The Company: A Short History of a Revolutionary Idea, Modern Library/Random House, New York.

Flyvbjerg, B. (1998) Rationality and Power, The University of Chicago Press, Chicago.