Author Archives: Adam Clare

High CEO Pay Reduces Customer Satisfaction

The more a CEO is paid the worst customers are treated. Everyone knows inequality is bad for our society, but now shareholders might start caring because inequality within companies produces negative results. Customers are less satisfied with companies with high CEO compensations, and internally the companies suffer from inefficiency and lower morale.

This article adopts a marketing perspective to examine how wage inequality between top managers and their employees may have customer-related consequences (i.e., customer-directed effort, customer-directed opportunism, and customer-oriented culture) that affect customer satisfaction and firm performance. Surprisingly, marketing scholars and practitioners have largely neglected this pressing societal issue. The authors collect a cross-industry, multisource data set, including responses by top-level managers and objective data on wage inequality and firm performance from 106 business-to-business-focused firms (Study 1). In addition, they analyze multisource longitudinal panel data covering 521 firm-year observations for business-to-consumer-focused firms (Study 2). The results consistently reveal that wage inequality harms customer satisfaction. This relationship is mediated by customer-directed opportunism and customer-oriented culture but not customer-directed effort. Moreover, while wage inequality has a positive direct effect on short-term firm profitability, this effect is dampened by the negative indirect effect through customer-related consequences and customer satisfaction. Importantly, the positive direct effect of wage inequality on short-term profitability vanishes in the long run, whereas the adverse effect through customer satisfaction persists, leading to a nonsignificant total effect on long-term profitability. These findings may guide researchers, managers, shareholders, and policy makers in addressing the challenge of rising wage inequality.

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Roasting Coffee by the Rays of the Sun

coffee

In Italy your next cup of coffee may come from a solar roaster instead of an unsustainable source. Climate change is threatening the ability of coffee plants to survive, as a result the entire industry may not exist by the end of the century. This has got smaller players in the industry (not the mega corporations) to explore new ways to process coffee from plant to cup.

A roasters the size of a tennis court can roast coffee using only the rays of the sun, making it incredibly efficient. The only high tech aspect of the whole operation are a few microchips and servos to move the mirrors

The process isn’t only environmentally friendly and economically convenient. According to Durbe and Tummei, it also better preserves the coffee’s aroma, giving it a richer flavor. Unlike conventional hot air ovens, which are typically gas-powered, the concentrated sunlight roasts the coffee without heating the air around it — by penetrating the grains in a more uniform way and without burning the exterior.

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Taxing Sugar Drinks Works if the Tax is Known

beer

Soda taxes get proposed often, and they have varying levels of success depending on how they are implemented. A new study reveals that when people are made aware that the sugar tax impacts the price of products they stop buying the unhealthy product. If you educate people then they act on that knowledge. One way to remind people about the health impact of consumer food products is on their bill.

But the share of sugary drinks purchased did decline slightly (45%) when the tags mentioned the price included the added tax.

Results showed that most consumers who chose to avoid sugary drinks with the added tax chose a drink that was not subject to the tax.

“Consumers are averse to taxes, so when they learn that their favorite drink has this sugary beverage tax, some are less interested in buying it,” Donnelly said.

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Even Bees Practice Social Distancing

Pandemics happen often in the animal world, and not even little insects can avoid them. Researchers have discovered that one of the greatest creatures on the Earth, the humble bumble bee, practices social distancing during a pandemic. By keeping far apart it reduces the likelihood of other members of the group getting infected and prolonging the suffering of the whole. Bees figured this out thousands of years ago. That’s right even beings as small as the bee are smarter than anti-maskers.

Social insects are particularly vulnerable to pathogens and parasites owing to the dense network of contacts among highly related nestmates and the large amounts of food stored in a nest under relatively stable environmental conditions (1). To counteract disease pressure, social insects have evolved, in addition to individual immune responses, many forms of social immunity, i.e., strategies based on the cooperation of the individual group members (2). The latter occur at the behavioral, physiological, and organizational level and can act synergistically to avoid invasion, establishment, and replication of pathogens or parasites inside the colony (2, 3).

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Here’s why social distancing is important for humans too:
Covid-19 Transmission graphic

COP26 Starts Soon, We Need to Capture Carbon Now

A company in Iceland captures carbon right out of the air and injects into the earth, the operation is a working proof that we can take carbon out of thin air. The carbon capture and storage (ccs) process is one of many options we have as a species to advert our own demise. With COP26 starting next week we not only need to get politicians to enforce policies to help the environment (like cutting market manipulating polices like oil subsidies) but to invest in building ccs solutions.

The Economist magazine (which is incredibly slow in acknowledging the world changes) has a good article exploring the state of ccs and what options we have. There are multiple solutions and we should explore them all.

Without a doubt our focus should be on reducing carbon emissions, but there’s no reason we can’t reduce our carbon output while also looking into capturing it.

The negative emissions is held to offer play two roles in climate stabilisation. One might be seen as balancing the current carbon account. Although most emissions can theoretically be eliminated using technologies that exist now, aviation, shipping and some industrial processes remain hard to decarbonise.Some agricultural greenhouse-gas emissions look as if they will prove recalcitrant. As long as emissions of long-lived greenhouse gases persist, stabilisation will require negative emissions.

The other role for is getting rid of historical excess. As we have seen, the cumulative CO2-emissions budget consistent with a 50-50 chance of meeting the 2°C goal is 3.7trn tonnes. The budget for 1.5°C is just 2.9trn tonnes. With 2.4trn tonnes already emitted, that leaves a decade of emissions at today’s rates for 1.5°C, maybe 25 years for 2°C.

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