Entrepreneurship

1. Discuss what steps Craig took to develop and grow his business. (7 marks)

2. Illustrate the role Craig played in contributing towards the economy (8 marks)

clearrisk | craig rowe

Business is risky, but that is Craig Roweâs business - risk management to be precise. Craig,

the President of ClearRisk Inc., becomes animated and energized as he explains his line of

work. âRisk,â he says, âis not negative. It is when there is opportunity for a downside or an

upside.â Risk management is about formalizing the decision making process. People are

constantly assessing risks, whether it is instinctively in crossing the street or deliberately in

weighing the pros and cons of buying a car. âBusiness people,â he says, âengage in the same

process whether in deciding where to build a head office or whether to buy another company.â

the entrepreneur

Craig spent almost 20 years in the insurance industry, where he started right out of high

school. Over the years, he attained various insurance designations and completed many

business courses and ample on-the-job training. Craig is naturally entrepreneurial and also

operated his own consulting company and became involved in several insurance industry

associations. This allowed him to develop a large network of connections.

Craig found himself thinking and talking more and more about risk management. He realized

that if businesses did some basic things to manage risk they would save money. In 2001 he

wrote a book on the topic and later adapted the ideas in to a workshop which he presented

throughout Canada and the United States. Insurance industry professionals and other business

people noticed Craig and saw the logic in his message. Soon he was being invited to speak to

various associations and was asked to assist in writing material on risk management. When

dealing with clients of his consulting business, he noticed the same set of steps and questions

could be applied to different realities in different types of companies. He was sure that there

was something that could be packaged and sold to assist these companies.

He went in search of risk management software. He found some, but none applicable to small

and mid-sized companies and organizations. So he decided to build it. He teamed with David

dâEntremont who had the background provide technical expertise. Together they founded

ClearRisk. They developed a business plan which became their roadmap, even though it was

constantly being adapted to take into account new realities, circumstances and goals. Craig estimates they are on version 30 by now!

Craig decided to leave his job and pursue ClearRisk full-time. It was not an easy decision to

make as Craig had a young family at the time. He had to engage in his own risk management

process and weigh his options. He had almost 20 years of solid insurance industry experience.

He had an extensive network of contacts. He had entrepreneurial experience through his

consulting business. He knew the market. He knew what his customers needed and he knew

that he could develop a product to meet that need. He found a solid business partner to

complement his skills. So the timing was right and after 10 years of thinking, dreaming and

percolating ideas, Craig made the leap in 2006.

Craig says that the biggest challenge facing ClearRisk and any business, whether it is in

starting, sustaining or growing the business, is cash. ClearRisk needed capital to develop its

product. For any business to have credibility with lenders and investors, that initial money has

to come from the business owner. Craig and David secured an operating line of credit from the

bank based on personal guarantees.

Step 2 was to seek more financing to start implementing the business. Craig says that it is

important to look for money before you need it because you are building relationships and

confidence and convincing people that you are creditworthy. A business plan is a necessity but

âeveryone invests in people.â This applies to accessing financing from Business Development

Bank of Canada (BDC), Atlantic Canada Opportunities Agency (ACOA), or any government

organization, as well as private lenders and investors. It is necessary to raise private money to

leverage government money.

Another important factor in developing ClearRisk was being accepted by Memorial Universityâs

Genesis Centre, a facility which provides business and technical support to new and emerging

technology businesses. This added to their credibility and attracted the attention of angel

investors. Angel investors are business people with financial resources available to invest in

new promising businesses.

Technological businesses are expensive to grow and ClearRiskâs growth has been made

possible by private investors and organizations such as Growth Works (a venture capital

company). Ownership of the company is now shared with these investors and ClearRisk is a

corporation with multiple shareholders. One of the tradeoffs in taking money from investors is

that ownership becomes shared. Craig says, âYou can have a big piece of something small or

a small piece of something big.â He chose the latter.

Craigâs idea has grown immensely. He keeps the numbers to himself, but says sales have

grown exponentially. His primary market is North America and the ClearRisk software has been

launched in French and Spanish. Customers do not pay an upfront fee; instead, they pay an

annual fee for the software and support. ClearRisk is constantly improving its products. The

team is always enhancing features and improving functionality. Currently, they offer three

programs to consumers: ClearRiskâ¢ Manager, which enables an organization to build and

implement a risk management plan; ClearRiskâ¢ Tracker, which facilitates tracking insurance

claims; and ClearRiskâ¢ Trainer, an online instructional program which increases awareness of

risk and its management. The latter two products are offered in partnership with other

organizations.

ClearRiskâs web-based business is global; however, Craig is cautious about expanding beyond

North America. The insurance industries in the USA and Canada are relatively interconnected

and homogeneous. It would be very difficult to provide support to countries with different

regulations and different languages. ClearRisk offers a web-based software service so they

use web-based marketing, rarely using traditional media. They access all forms of social media

such as Facebook, Twitter, MySpace, and blogs and find the approach cost effective and high

impact. Social media facilitates the use of in-bound marketing.

In addition to web-based marketing, ClearRisk is now getting calls from referrals. Clients are

spreading the word to other businesses seeking a similar product. The demand for ClearRiskâs

product is expanding but Craig resists growing the team too quickly. Craig prefers a small team

and likes the dynamics of small groups. However, more sales people are needed and they will co-op

and computer science students to his company. He likes to hire young people. It is

rewarding to see them take shape and become leaders.

Craig speaks favorably about starting a new business in Newfoundland and Labrador. He

says that the provincial climate is positive. In addition to the practical and financial support

available, the provincial government has done a lot to assist business in recent years, including

reducing taxes and red tape and increasing funding.

When Craig reflects on the path his career has taken, he gives special acknowledgement to

Paul Johnson of Johnson Insurance as a business icon and an inspiration. Mr. Johnson

inherited his fatherâs small insurance office and built it into an innovative, billion-dollar

Company. Not only was Mr. Johnson a great businessman, he was a community-minded

Philanthropist. This is evident today throughout the capital city in the parks, trail ways, and the

Johnson Geo on Signal Hill. Mr. Johnson has influenced Craigâs professional and

Community life. In addition to Craigâs entrepreneurial success he is firmly rooted in his

Community; he currently serves as Chair of the YM/YWCA.

Craig has advice for young people who dream of starting their own businesses. He says to be

Informed, to go in with open eyes and to seek honest opinions from knowledgeable people. He

advises that an entrepreneur should realize that âthe odds are against you, but you need the

tenacity and perseverance to stick with it. It is important to understand your industry, to

understand the need for your product or service and ultimately to understand the risks before

you make the leap.â In business, managing risk is everyoneâs business!

1. Discuss what steps Craig took to develop and grow his business.

2. Illustrate the role Craig played in contributing towards the economy

browntoad1

in this module (in my commentary) we read about the kwakiutl indians of the pacific northwest, and the custom in which a person who suffers serious loss may "lash back" at the hardship by inflicting pain on another party. in particular we looked at the case of a chief of a tribe who lost his sister and his niece in an accident. what do you think the right thing to do is in this case? stepin and police it?, or live and let live, as they say? defend your view. how does this pertain to the central topic of this module, ethics in international business? can you draw on case studies in our text that pertain to this subject? (remember, your essay you should have at least 600 words)

module 1:This module reading opens with a bizarre anecdote regarding Paul Ceglia, the guy who sued Mark Zuckerberg, founder of Facebook, for squeezing him out of the operation. Cegliaproduced a two-page contract as part of his owndefense but careful scrutiny revealed that he had added "page one" on his own, and then doctored it to make it look real by baking it in the sun (the clothes pins which he used to hang it left marks). This is a rather blunt instance of contract fraud, and not your everyday type of story, but it does set the tone for the subject of this module--the ethical requirements of contracts and the laws which advance and support those requirements.

To start, we might note that reading and understanding contracts, even relatively minor purchase contracts, can be an arduous process. Consider the catalog for NCA&T, or consider the standard college syllabus. These documents seem to grow more comprehensive and complicated every semester. On this head, the text quotes a summary remark from a 2009 contract dispute: "An insured should not have to consult a long line of case law or law review articles and treatises to determine the coverage he or she is purchasing under an insurance policy." And yet, this is often what happens with contracts, even for relatively basic purchases, like Dish on Demand package or an Internet service.

There are a range of interesting cases in this reading but I thought we could focus on two in this commentary which touch on everyday experiences. The first is car repair. Sears auto shops generate of a lot of income for the company, almost 10% of the 19 billion that it makes overall per year. In the 1990s a series of undercover operations revealed that Sears mechanics were overcharging in 90% of brake-repair cases by an average of $223 per customer. Closer inquiry revealed that Sears had a repair incentive program in place in which mechanics were offered promotions and pay raises if they generated sufficient repair revenue. Indeed in many instances, a mechanic's baseline salary was based on fulfilling such incentives. And if mechanics failed to keep their revenue up, according to the investigation, then they were often demoted or let go. Critics have argued that this policy almost forces employees to overcharge their customers. Even worse, said one critic, is that Sears was using its 100-year-old name (which supposedly is a name that inspires consumer trust) as a marketing tool. In response to the investigationsSears retracted its mechanic incentive program, fired a few top management people, and made a public apology, mixed with some remarks of innocence, of course. Profits for the company quickly dropped however, so much so, that there was pressure to reinstate the mechanic incentive program, which the company in fact did (partially) in 1994. I think to most of us it seems like a very basic and egregious conflict of interest to instate a program such as this, where workers at a company get rewarded for shafting customers in effect, and yet many businesses flirt with this sort of thing when they pay employees on commission. There are alternative models. If you have ever bought a car at Car Max then you know that there is no percentage-based commission. Sales people get a flat fee for every car they sell, whether it costs $10,000 or $50,000. (Incidentally, the flat commission is something like $150, which any car salesperson will tell you is not very much.) The company argues that this policy discourages the kind of scams and price-manipulation that so-often happens with car sales. Should this model be enforced as a matter of public policy? What about the old injunction, "buyer beware." Should the government be allowed to step in and police the payment structure for mechanics at Sears?

On a lighter note (I guess) is the account presented on page 362 which cites a New York Postinvestigation into the length of Subway's "foot-long" sandwich. Reporters for the paper discovered that some four out of seven sub sandwiches measure only eleven inches, or slightly less. Subway's response in its defense was that the "Footlong" is just a casual name for the item and not a testament to its exact length. Now, a bunch of disgruntled long-time Subway customers and a team of lawyers have filed a class-action lawsuit on grounds of "decepetive advertising." This may sound funny but it raises interesting questions about all kinds of claims made in advertising, which amount to a form of contract. I work in Rockingham County and every day I drive past a housing development called Oak Hills Estates. I look out my car window....no oaks, no hills, and no estates, at least not by any reasonable definition of that term. Or, another case, I also drive past a coffee shop which says it offers the "best coffee in the world." Now, I don't think anyone would have a problem with the coffee shop, right?, because the claim is obvious hyperbole. But what about the housing development and what about subway? Next time you see or hear an advertisement pay attention to this sort of thing. You will find that such claims are everywhere, and if so, does that lawsuit against Subway stand a chance? I mean that It seems that if we go after Subway and hold it to a certain exact standard then a lot of other advertisements would come under fire too, if we are going to be consistent. Hard to draw a line here, no?

module 2:We live in a global society, it is often said, and certainly the world of commerce has no borders, or fewer and fewer all the time. But when dealing in trade across various cultures, it seems we need a shared set of values or standards that apply to all actors. The text operates with the presumption that we can in fact forge such standards, and perhaps you do too. But there is a school of ethical theory which believes that no such standards exist, and this school, called moral relativism, may present a serious challenge to many of the points in our Module 6 reading, so I though it would be a good idea to revisit moral relativism in a little more detail here, at the very least to see what an international code of business practices would be up against, theoretically speaking.

When we briefly studied moral relativism in Module 1 (page 15) we looked at the premise that there is no one code of values that applies to all people in all places at all times. Relativism states that there are no moral codes that apply to all people, or that morality varies from culture to culture. The basic point is this: Morally speaking I come into the world a blank slate, and I receive concepts of virtue and vice based on what my particular culture believes. My attitudes on issues like marriage, showing respect, raising children, sexuality, etc. are shaped and defined by the fact that I live in 21st century America. If had I lived some place else, like India, or at some other time, like in ancient Greece, I might have very different views of right and wrong. Morality is relative to my cultural background; hence the name relativism. Moral relativism may be contrasted with Moral Objectivism, the view that there are some codes that apply to all people, no matter when or where they happen to live. Such codes are called absolute, or objective or universal.

So, moral relativism is the view that moral or ethical statements vary from culture to culture, and are thus all equally valid, so society's opinion of âright and wrongâ is really better than any other. The basic idea is that there is no ultimate standard of good or evil, so every judgment about right and wrong is purely a product of a culture's preferences. There is no ultimate standard of morality, according to moral relativism, and no statement or position can be considered absolutely âright or wrong,â âbest or worst.â Many arguments for relativism rest on the idea that different practices equal different morals. Consider this example, devised originally by the ancient Greek historian Herodotus: Culture A burns the dead. Culture B eats the dead. Therefore right/wrong in regard to dealing with the dead is relative to what your culture says. Or, you might come from culture C, which says that the dead ought to be buried. The point is that the relativist looks at these varying practices and concludes that there must be no objective universal standard that applies to all people. And of course we can compare cultures on other issues too, like drinking or abortion or marriage, etc. The world exhibits wide diversity when it comes to all of these customs. And the relativist concludes from such diversity that there are no codes that apply to all people (no objective codes).

In response to this, the moral objectivist might ask the following question: Does diverse behavior (on the surface) really entail diverse ethical codes? Perhaps these radically different practices are just various ways of expressing the same core moral value. Culture A burns the dead. Culture B eats the dead. But even though they express themselves differently, they share the same core moral value: Show respect for the dead. As you read, keep this argument in mind. Rachels discusses this point in section 2.5 of the chapter, entitled, Why There is Less Disagreement Than It Seems.

Moral objectivists have a number of reasons for claiming that relativism is weak and even incoherent: They say for one thing that it restricts us from judging the customs of other societies. Letâs look at a concrete illustration from a book called Patterns of Culture written in the 1930s by an Anthropologist named Ruth Benedict. Benedict describes a group of native Americans from the Pacific Northwest known as the Kwakiutl. They have a custom in which hardship or grief may be dealt with by lashing out at anyone, even if that person had nothing to do with the hardship. Benedict writes,

Among the Kwakiutl it did not matter whether a relative had died in bed of disease, or by the hand of an enemy, in either case death was an affront to be wiped out by the death of another person. The fact that one had been caused to mourn was proof that one had been put upon. A chiefâs sister and her daughter had gone up to Victoria, and either because they drank bad whiskey or because their boat capsized they never came back. The chief called together his warriors, âNow I ask you, tribes, who shall wail? Shall I do it or shall another?â The spokesman answered, of course, âNot you, Chief. Let some other of the tribes.â Immediately they set up the war pole to announce their intention of wiping out the injury, and gathered a war party. They set out, and found seven men and two children asleep and killed them. âThen they felt good when they arrived at Sebaa in the evening.â

What is going on here? A man loses his sister and his niece so he randomly kills nine people who had nothing to do with it to make himself feel better. Now, if you did something nasty to me I might seek some sort of punishment for you in order to make myself feel better. That is called retributive justice, we see it in many places, most notably perhaps in the Bible (an eye for an eye), and it makes sense to a lot of people. But the Kwakiutl have something completely different going on. Itâs not like you do something nasty to me and I seek justice against you. Itâs like, you do something nasty to me and I punch the person sitting next to you. Should the Kwakiutl be allowed to practice this custom? Should someone step in and police their behavior? If you are an ethical relativist, your answer to that last question would certainly be no, for all the reasons described above.

Maybe some of you would call yourselves relativists in this particular case. Hey, itâs their culture and who am I to step in and police them, you might say. I wouldnât want them coming to Greensboro, NC and telling me what I can or cannot do, so why do I have any right to do that to them. Live and let live. But if we take this principle and apply it consistently, we may run into some very disagreeable conclusions. Forget the Kwakiutl for a moment and replace the nine innocent deaths with six million Jews. Strictly speaking, the relativist would have no grounds for saying âstopâ to Hitler than she would for saying stop to the Kwakiutl. And that position, to many, including Rachels, is deeply problematic.

Along with this critique of relativism I want to presents an argument in support of moral objectivism, the view that there are some codes that apply to all people, and the view which seems to be the basic operating position in our text. Imagine a culture in which there is no value placed on telling the truth. Letâs think that through. Imagine that this commentary that Iâve written is a complete crock, and you are going to get an F on the exam because I have been lying to you about relativism. You canât complain to my supervisors because our culture places no value on truth telling and that means I am allowed to lie to you. So, you take your F and leave campus and stop for lunch at a restaurant. You ask your server if the pasta has gluten in it because you canât eat gluten. He says it doesnât even though heâs not sure because heâs too lazy to check and he knows he wonât get in trouble because lying is permissible. So now youâve got and F and youâre in the hospital with a severe allergic reaction to your lunch. The person standing over your bed likes the idea of being a doctor even though she never went to medical school. She has lied her way into the position, with no retribution of course, and now you are being treated by someone with no credentials and you wind up dead. The end. You can see how quickly something like a disregard for truth-telling could ruin your day. the moral objectivist's point is that it is impossible to imagine such a culture. Having some regard for honesty is an objective code, he says; it is universal.

Despite this sort of defect it is important to present some positive aspects of the relativistâs outlook. Defenders say that relativism guards against the danger of assuming that our preferences are based on some absolute standard, and that is what helps us check that disdain or repugnance we might feel for those whose practices differ from our own, so we donât just assume the Callatians, or the Ancient Greeks, or the people down the street, are morally repulsive. Thus, though the theory seems to have many faults, it does offer some genuine insightâ¦it encourages tolerance and discourages arbitrary prejudice.

This commentary has strayed a bit from the immediate reading in the text, but I thought (given the very brief attention we paid to relativism in Module 1) that it would be a good idea to give more careful consideration to what the international business community is up against when it attempts to forge standards that would apply to all participants worldwide. Global trade is not going away. Isolation is bad economic policy (look at North Korea). Thus it seems the only way forward is to devise some standards of trade that apply to all of us. In conclusion, I'd like to draw attention to various cross-cultural iterations of the golden rule, listed on page 389. When we look at something like this, it seems that a unified point of view may not be so far-fetched. The question is whether the sort of consensus presented on page 389 can translate into commerce. Is that plausible?

maroonhorse371