Economics: Communication Age

This is our wiki committed to communication technologies in terms of how they are shaping the way we do business and how that consequently affects the economics of our world. Our mission with this wiki is to allow readers to get a glimpse of what we've learned in researching these subjects and how they pertain to our everyday lives.

"Wal-Marting Across America"
By Caleb Pardick

This incident relates to the worlds of communication and economics because the problems that arose came about because of the use of an on-the-rise communication technology, the weblog, or more commonly, the blog. If the blog wasn’t available as a means of message delivery, the entire ordeal probably never would have happened.

The anonymity of blogs and the way they enable users to be able to post messages without providing any real background information was what specifically enabled this to happen. It couldn’t have happened in a newspaper; it’s too cheery. It couldn’t have happened in a magazine; with fact-checking measures used, it would have been discovered much earlier that the two bloggers weren’t just average people. It could, however, have happened in a newsletter or public relations publication, but, as mentioned before, these wouldn’t have been able to provide the sort of audience penetration that the blog could—and did.

What happened

In fall 2006, retail giant Wal-Mart came under fire for its use of one form of communication technology, the blog, to fraudlently promote its own name. The corporation hired a pair of “regular folks” in an effort to restore its image as a company that cares about the everyman and looks to give back to Americans.

These two people, known simply as “Jim” and “Laura,” traveled around the country in fall 2006, visiting Wal-Mart customers and employees and blogging about the way everyone at every store seemed so happy to be there—a far cry from the unhappy employees, rushing customers and long lines that most people have come to associate with Wal-Mart.

It was later found out that Jim, a photographer for the Washington Post, and Laura, a freelance writer, had been paid to write the blog entries and even for their gas and rental fees for the RV they used to travel, by a group called Working Families for Wal-Mart. The blog, titled "Wal-Marting Across America," ended up being more of a public relations mess  than a rejuvenation of the corporation's unfavorable image, as was intended.

Public response

Once it was discovered that Jim and Laura weren’t everyday folks, the press seemed to collectively indict Wal-Mart yet again, but this time for being dishonest with its customers. The company is already in the news on a weekly basis for offering poor wages and/or no benefits to its employees, two things that the press has in the past called the company out on.

The blame is not placed on the blog itself in any way, but most articles do indicate that Wal-Mart was essentially hiding behind the Internet as a way to try to promote itself surreptitiously.

Businessweek.com followed up on the discovery of the blog as a fake—a “flog,” as it’s now being called—and called it “relentlessly upbeat” in an Oct. 8, 2006 article titled “Wal-Mart’s Jim and Laura: The Real Story.” Similar articles were published and posted online regarding Wal-Mart’s already checkered past and its latest effort to repair its tarnished image.

Wal-Mart's defense

Wal-Mart spokesman David Tovar declined comment on the situation: “We won’t comment on the RV tour, since it was a Working Families for Wal-Mart initiative and we didn’t have anything to do with it.”

Richard Edelman, CEO of the Edelman public relations firm that set up the blog, initially declined comment, but later admitted to hosting two other fake blogs, or "flogs," on behalf of Wal-Mart This sort of after-the-fact, hands-off approach indicates that even though Tovar and Edelman feel a sense of responsibility (and guilt), because of the disinhibitive effects of the Internet, they don’t feel as responsible as they would have if the incident had occurred in another medium.

Ethical considerations

This incident raises a few ethical questions that were either completely ignored or not thought of in any manner before it was decided to go through with this. First and foremost, Wal-Mart clearly had no hang-ups about indirectly hiring a pair of “everyday people” to champion their cause. Secondly, the questions of whether Jim and Laura should have considered their own personal careers couldn’t have been posed, either.

The competing interests involved with the posting of this blog are those concerning Wal-Mart’s image and the ethicality of producing something that they knew to be illegitimate. While the line may be grayish in hue, Wal-Mart clearly overstepped its bounds by shadily hiring a third party to do marketing work for it. Jim and Laura also compromised their own interests by knowingly producing something that was not on the level.

Again, the technology itself (the blog) contributes to the ethical dilemmas at hand because it more than likely made it seem to the public relations firm, Jim and Laura, and Wal-Mart, that their collective actions were somehow less real because they were happening only in cyberspace. While this fact doesn’t excuse what was done, it may help to explain it.

HDTV: A shift in entertainment
By: Kathryn Kuczka

What Is It?

HDTV stands for high-definition television. It is television that results in Dolby Digital surround sound and high-quality pictures.

Where Did It Begin?

It was introduced to in the 1980's by Japan to the United States' National Association of Broadcasters. There was two groups that opposed HDTV the United States Congress and television broadcasters.

The United Congress was concerned because HDTV was a Japanese product that Americans would purchase. HDTV would make millions for Japan and absolutely nothing for the United States. They feared this because it happened once before with another product, the VCR.

Television broadcasters were concerned that their television programs would not be able to handle the bandwidth of HDTV because it required more than normal television. New television channels were being created for HDTV, leaving old channels to worry that they may be in jeopardy of losing their viewers and their jobs.

eCommerce risks: the TJ Maxx incident
On January 18, 2007, several media outlets reported that the TJX Corporation's computer systems were hacked. Customer information and transaction data was accessed from 2003 and the period from mid-May through December 2006. Personal information, including credit card numbers, expiration dates, card verification values and four-digit codes to verify authenticity were recorded, which is enough for thieves to make fake cards. Identity theft can occur on a large scale when personal information is stored on computers.

If the information was not stored on computers, it would have to be stored on paper and that would make it much more difficult to steal. Computer hackers can obtain the information without physically taking anything and do it at a much greater volume since computers are able to hold so much information. Merchants are supposed to limit the amount of data that is stored on their computers according to the Payment Card Industry Data Security Standard.

When TJX discovered what had happened in December, they reported it to authorities and major credit card companies. They hired General Dynamics and IBM to investigate and secure their systems. Credit Card companies have notified banks that information may have been stolen and are reissuing credit cards to customers. In December Visa said it would offer $20 million for businesses to comply with the credit card security rules. TJX customers have filed a class action lawsuit against TJX. Personal lawsuits are also being filed.

Outdated systems are being blamed and it is likely that some data was not stored intentionally by TJX. The technology was put into use before there was thought about cyber attacks. Analysts believe the attack was very well orchestrated and may have been carried out by people who previously hacked other computer systems. 

Ethical Issues

Identity theft is an ongoing problem in today’s technological environment because so much of peoples’ personal information is stored on computers. The ethical questions raised have to do with responsibilities for peoples’ personal information that is stored in business computers. Will businesses be held responsible to the consumers that may have their identity stolen? Will the business be responsible to the credit card companies that have the expense of reissuing credit cards to all their customers? If businesses are not held responsible then people will have no way to be sure that their identities are not stolen. Businesses need to keep up with security measures to prevent identity theft. Because technology changes at such a rapid rate, it is very expensive to continually keep up with the latest changes. Businesses are going to have to weigh the their profit margins with the price of security. Identity theft is not going to end as long as personal information is stored on computers.

Satellite Radio
What it is

A satellite radio is a special digital radio that receives signals broadcast by communications satellite. This allows the listener to follow a single channel no matter where he or she is because the signal's reach is not limited by station power (as long as there are no major obstructions, such as buildings, in the line of sight between the antenna and the satellite). en.wikipedia.org/wiki/Satellite_radio

Who it is For

Music lovers with a wide-ranging taste of music, a diver who spends a lot of time on the road, or a resident of a rural area with no satisfactory radio options.

Cell Phone Banking
By Stephanie Sherer

In South Africa, the cell phone is used as a means of banking. There are a large number of people who can not access banking services. So, the cell phone networks teamed up with one of South Africa’s largest banks, and now poor people who never could access banks, ATM machines or credit cards have a way to be a part of the official economy. Before this new banking system, these individuals were underserved and ignored by the traditional banks and were stuck in the cash economy.

How it works

This form of banking allows consumers to maintain their bank accounts via cell phone. Deposits can be made at any bank or post office by scanning a debit card, taking the person’s cash and then immediately credit the account. Then, the user enters commands on his/her cell phone to check balances or transfer money, by using a PIN number for verification. After every transaction, a text message is sent to the user's cell phone, notifying them of the money being transferred.

Will it work?

Cell phone banking is already popular in Vietnam, the Philippines, and China. In 2007, cell phone banking is suppose to be used in the United States. A cell phone repairer from South Africa reported that he felt that many people would use the new advancement if the fees were low enough because many people there have cell phones and can not easily access banks. The article says that many people will welcome the new form of banking in South Africa. [] Ethical Considerations

There are several ethical considerations with cell phone banking. These considerations include rates of service, accessiblity and security. This service can be expensive to the poverty-stricken people of South Asia. Not everyone can afford the cost of banking via cell phones. There are fees that they are forced to pay to use the service. "There are a large number of individuals who are unable to access banking services because conventional banking is expensive, relative to their income. And physically we don't have banking facilities in remote areas," said Herman Singh, director of technology engineering at Standard Bank []. Also, if a person does not have a cell phone he/she can not participate in banking by phone. Security issues with cellphone banking can include incidents of hacking into other users accounts. E-crime is a potential problem with cell phone banking. Viruses are now targeting cell phones. This technology is so up-and-comming that new users may not be able to understand to the fullest how to operate this system to its fullest. Cell phone banking uses the same 128-bit encryption as Internet banking. The users personal pin is created by the user which establishes security. There is the same amount of security that regular banking has.

Rules and Regulations

Providers

The cell phone companies that are currently providing users with the banking by phone method include:

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