Many websites received Jill’s bicycle data. Jill’s bicycle racing club and fitness center tracked her health and training progress. The retailer where she got the bike tracks her activity to give her new apps and races that would be interesting, alerts her to needed repairs on her bike and to learn how this valued customer is using the product. Jill’s health insurance company tracks her activity and health in order to increase the chance that her rates will go down. Jill’s boss finds out that she is biking when she really should be at the meeting at 3 p.m.

Has “bicycle networking” gone too far? Privacy is greatly reduced when even your employer can find out how much you ride your bike and where you are.

Bicycle networking is part of the new wave of computer innovation involving “social machines.” They are objects in your house that you use every day that can share data about your behavior on the Internet.

Your refrigerator can tell your doctor, employer, friends, local store and yourself what food you have inside, how many calories have been removed two days ago and what needs to be purchased at the store tomorrow. Your blender can inform your social network that you have included yogurt, strawberries and that secret ingredient for only 100 calories per serving. Your toothbrush can alert your dentist that you brushed for two minutes this morning but forgot to brush your tongue. Your chair or couch can tell you and your doctor that you have been sitting on it for too long. It will sound an alarm after 45 minutes to make sure you are off of it for at least five minutes.

The computers of the future will not only take on more shapes but will be a part of more everyday objects. They will provide enormous business opportunities for innovative computer companies. They will provide a vast amount of new data about ourselves that can be used to our advantage, shared with others to enhance friendships or business, or exploited by others.

The exploitation can happen because our privacy laws are not quite ready to handle the new technology. Remember Jill’s bike? Her boss finds out that her bike is going up Castle Rock at 3 p.m. when she should be at a meeting. Jill is not on her bike. Her friend Jack really took the bike while Jill left an email to her boss stating that she will be late to the 3 p.m. meeting because an earlier meeting was running late. The boss makes a false assumption that Jill is not at work.

Jill was going to get the promotion but did not because somehow her boss got information about Jill’s terrible heart rate, blood pressure, calories she gets from the fridge, the secret ingredient she adds in her blender, her bad brushing habits and the enormous time she sits on the couch from the Internet.

gkaupins@boisestate.edu

In his recently published book, “Doing More With Less: The New Way to Wealth,” Bruce Piasecki suggests that frugality and industriousness are the ways to wealth. Frugality is certainly with us, and companies are starting to reap the benefits of this mindset through earnings growth. But more is needed. Industriousness is really about taking what we have and exploiting it. Take the humble profit and loss statement as a case in point.

Companies invest heavily in creating the traditional profit and loss statement because it is a periodic requirement that measures business performance. The problem is that management is framed into thinking about summarized information, routine reporting and often irrelevant historical performance. Rather than treat it like a mandatory reporting necessity, a periodic photograph of the past that reminds them of what once was, we suggest that companies exploit this versatile tool by adding our three applications that will provide insights into what can be.

We engaged in a “learning in action” accounting project to help a company extract the most out of its profit and loss statement. We were industrious and introduced the company to three modern uses for the statement: profit planning, profit analysis and market analysis.

Profit planning involves taking the existing profit and loss statement and using its contents to forecast future performance by line items. Sales, for example, can be forecast using last year’s sales, adjusting for inflation, product mix, market share, market size and other economic factors. The profit plan forces a company to think about its future targets and how its performance can be achieved. It is an application of goal setting, and goals help motivate, and control and focus management and staff through a feedback process that uses targets or standards for the line items in the profit and loss. Specifically, targets are developed for quantities, prices and costs for each line item. Profit planning helps sustain margins by highlighting variances in revenue and cost to management and staff. So, how do you know what to do with the variances in revenue and cost?

Profit analysis is used to explain revenue and cost variances by breaking them up into pricing effects, cost effects, quantity effects, efficiency effect and product mix. With both actual and planned data on the price and quantity of sales, cost and quantity of cost of goods sold and, in the case of a manufacturer, cost and quantity of materials and labor used, companies can analyze the differences between actual and planned data to pinpoint the causes for a variance. Management would normally apply their limited time to an item they know to be a large variance (for example, a cost variance), delve into the cause of the variance (cost effect? quantity effect?) and make improvements (for example, reduce materials or labor costs).

Companies can include market analysis into their profit plan and profit analysis. Essentially, companies record the market size and calculate their market share for their products and services. This enables them to explain their sales volumes in relation to the size of the market and their share of the market. While an increase in sales volume indicates increased sales performance, it is only a good performance if it exceeds the growth in the size of the market.

michaellee2@boisestate.edu  and michaelwright@boisestate.edu

Jim had quite a first day of work. He parked his car in the paved parking lot by the building, and a grumpy employee yelled at him to move his car to the dirt lot two blocks away. Only managers park on the paved lot.

Jim’s boss, Karen, greeted him and sent him to his office. The big account needed to be completed that week. Karen gave Jim the appropriate passwords and sent him off to work on the account.

Later that morning, Jim asked Karen where the nearest restroom was. She said, “Turn left, go three doors down, turn right, then left.”

Well, he sort of did that and accidentally opened the paint room door as alarms went off. A startled paint room employee showed Jim the correct route.

In spite of the big account deadline, Karen introduced Jim to eight members of the department and 30 folks from the division that afternoon.

The 50-page employee handbook also was provided. It was to be read and signed by the next day.

Two days later, Melissa stopped by Jim’s office. Jim said hello, smiled, and had a blank look. Melissa said, “Don’t you remember me?” I’m from accounting, and we talked two days ago.”

Jim’s orientation, if you can call it that, was about the opposite of what was needed.

Orientation programs should focus on the basics first. Where can I park? Where is my office? Where are the restrooms? Where can I eat lunch? How can I make copies? What are the passwords? Jim had to suffer through parking and restroom embarrassments. After a week, he could not figure out why nobody ate at the company cafeteria. The diner nearby was cheaper.

If possible, a new employees should be given an easy assignment at the start rather than tackling the big account. Sometimes new computer programmers are asked to answer the following question on their computers: “What is three plus five?” To answer this “simple” question, programmers must know the passwords, computing protocols, and relationships with other programmers. It is a more complicated question than it appears on the surface.

Jim also needs to be gradually introduced to people in the company. Meeting 38 people on the first day makes it hard to memorize. Melissa was like a dust grain in an hourglass. Start introducing newcomers to others in their department and then graduate to other parts of the company.

Jim needs a mentor who can help on many inside issues. What is the best way to get a travel authorization? What is the secret to being promoted quickly? What’s up with the battle between accounting and payroll? Who pulls the strings on budget requests for software? Why do some employees drink at the diner when there is a policy against it?

Speaking of policies, 50 pages of unreadable jargon may be a bit much. A meeting highlighting the most important aspects of the employee handbook along with a short written summary would help. The encyclopedic handbook may still need to be signed in a reasonable time, but it is important to get to the point on key issues.

In summary, orientation programs should allow new employees to satisfy basic needs fast, receive advice from a mentor, work on doable problems, be gradually introduced to fellow employees, and understand employee handbook issues at a reasonable pace.

gkaupins@boisestate.edu

Sam loved the new 3-D printing machine. His new faucet design can be created in the lab and quickly copied to other collaborators in the country. The speed of physical communication greatly reduces his development costs.

But Sam was concerned one day when Bill copied a new design of a wrench he also had been tinkering with and sent it to a product developer. That developer made an unauthorized use of that design and put a “wrench” on Sam’s plans to market a new set of tools.

As with any invention or new design, Sam needed to set up protections for whatever was created. 3-D printing provides extra challenges. Existing court rulings have not distinguished how 3-D printing relates to copyright and patent law.

In any case, Sam, in his employment handbook and contracts, needs to make statements that any new intellectual property (inventions, designs, prototypes) should not be shared with others unless there is specific authorization from Sam. Major security-related assets such as keys and locks should be copied only with permission. Clear penalties for unauthorized use, such as discharge, should be defined.

3-D printing should increase business possibilities. Body part replacement can be made easier with custom-fitted materials. Tools can be quickly and inexpensively transported, and 500 new physical designs of a crankshaft can be compared much faster.

The law and attached court cases will need to catch up. Expensive jewelry designs, machine parts, keys and guns can be copied that can violate copyright, patent, and criminal laws. Guns are a particular issue because it is possible for a felon to copy a gun for his or her own use. The technology might not be adequate now to replicate guns down to the exact materials used, but future gun replication may come very close.

With unauthorized copying of gun parts and keys, various criminal laws associated with theft and burglaries could be violated. The possibility for chicanery will increase with the capability of creating a 3-D object from a 2-D photograph. A key left for a few seconds on a table could be photographed, copied, and used to break into a building.

How would you like to have your face copied and literally “plastered” everywhere in inappropriate places as if you were part of a wax museum? One potential law violated would be the Civil Rights Act of 1964. Sexual harassment can occur if your face, and the rest of your body, would be used inappropriately. Body part copying also could be a problem for privacy laws, the Health Insurance Portability and Accountability Act, the National Labor Relations Act, Pregnancy Discrimination Act, Age Discrimination in Employment Act, and the Americans With Disabilities Act.

3-D copying could cause problems with safety laws such as the Occupational Safety and Health Act. An example would be if a copy of a machine part is made for a plant a thousand miles away. The copy is not an exact duplicate because it is made of a different material from the original part. The copy causes the machine to malfunction, and that in turn causes an accident.

In summary, 3-D printing has great potential to enhance the speed of parts and equipment delivery. Company policies restricting its use can help. Unfortunately, laws and their related court cases are evolving with the new technology.

gkaupins@boisestate.edu

As seen in the Idaho Statesman Business Insider on April 16, 2013

In the business law courses I teach at Boise State, I often ask students if they work for an employer who enforces a secrecy policy that prohibits them from discussing their wages with each other. Almost always, at least a few students raise their hands.

Perhaps one of these students works for your business.

After the show of hands, I ask students whether such a policy might violate the National Labor Relations Act, which governs labor relations in most private industries. The usual answer is “No, because I’m not in a union.”

Perhaps you, as a business owner, just had the same thought.

So you think the NLRA does not apply to your business because your workforce is not unionized? Think again. The act grants rights to many employees, not just those who belong to a labor union.

Yes, the NLRA applies specifically to union activity. Section 7 grants employees the right to self-organize, to form or join labor organizations, and to bargain collectively with their employer. This is the essence of protected union activity. Employers who interfere with employees’ exercise of these rights have committed an illegal unfair labor practice.

However, Section 7 also gives employees the right to engage in concerted activities for “other mutual aid or protection,” not just union activity.

Let’s look at the term “concerted activity.” Generally, it means two or more employees acting together. One employee, acting alone and on her own behalf, is not covered by the act. One employee acting for herself and others, or two or more employees acting together, are.

Next, consider the term “other mutual aid or protection.” The National Labor Relations Board, the federal agency charged with administering and enforcing the NLRA, has held recently that various employment practices unrelated to union activity have violated the act.

In one recent case, the employer, Quicken Loans Inc., included a clause in its employment contract that prohibited employees from disclosing confidential information, including personal information such as phone numbers and addresses, to any person.

A nondisparagement clause prohibited employees from publicly criticizing, ridiculing or disparaging the company through any written or oral statement.

When Quicken tried to enforce this contract against a terminated employee, she challenged the provisions before the board.

The administrative law judge hearing the case found that both provisions violated the NLRA.

The broad nondisclosure policy violated the law because it created a chilling effect on employees’ right to discuss working conditions with each other.

The nondisparagement clause violated employees’ right to criticize their employers (in some circumstances) and to appeal to the public for support.

Other recent NLRB cases involve rulings against employers who tried to limit what employees could post on their Facebook pages, who employees could speak to about the company, and what types of communication employees could engage in with government agencies.

How does this apply to your business? How might you draft an employment policy that both protects your business and honors your employees’ right to engage in protected concerted activity?

The policy language should be carefully and concisely written. Unless you have a clear business justification for doing so, it may be wise to avoid limiting employees’ ability to discuss wages, benefits or other working conditions.

Your policy also should include a disclaimer stating that the policy is not intended to discourage or prohibit protected Section 7 activity.

As always, you should consult a good employment law attorney or HR specialist for guidance in drafting your policy before communicating it to employees.

spark@boisestate.edu

What do Japan, Greece, Iceland, Italy, Portugal, Ireland and Belgium have in common? They all have national debt to gross domestic production ratios worse than the United States. According to the Organization for Economic Cooperation and Development, the U.S. government debt to GDP percentage in 2011 (the most recent year for actual numbers) was actually below average for the 35 OECD member countries (102.2 percent vs 102.9 percent).

Japan tops the list at a whopping 205 percent. At the other end of the spectrum are countries such as Australia, Norway and South Korea (27-37 percent of GDP). Yes, we have a lot of debt, but it is not abnormal among developed countries.

With sequestration on the minds of most Americans, it is time to talk factually about deficit spending and the U.S. debt situation.

I have been an economist who for decades has said deficit spending and government debt are overstated issues.

In business, year-to-year growth in debt is not necessarily bad. Businesses use debt to fuel growth. As long as year-to-year net income growth exceeds interest obligations, it is called leverage.

Government debt has often been a red herring for people arguing other philosophical viewpoints on tax policies or social policies. Truthfully, you can sustain some level of deficit spending. Philosophically it may not be what you desire, but financially and economically you can sustain it.

Recent deficit spending does raise my concerns regarding the rate of deficit spending. According to White House statistics, in 1951-1989, the U.S. debt to GDP ratio averaged 48 percent. In 1990-2008 it stepped up to 63 percent, and it ended 2011 at 98.7 percent.

In the earlier time period, our deficit spending ran about 1.9 percent of GDP each year, while real GDP growth was outstripping it at 3.5 percent. In the 1990-2008 period, deficit spending stood at 2.9 percent of GDP, while GDP growth nearly matched it at 2.75 percent per year. In 2009-11, deficit spending reached 9.3 percent of GDP while GDP growth slowed to 0.4 percent.

We deficit-spent merrily from 1951 through 1990 and still drew our government debt down from 80 percent of GDP in 1951 to 56 percent in 1990, because our economic growth allowed us to incur the spending. Some may argue the spending actually enhanced the growth through infrastructure and elevating the quality of human capital. From 1990 to 2008 we clearly pushed the limits by matching deficit rate to GDP growth rates, and debt as a percent of GDP crept up to 70 percent by 2008.

The worm turned in 2009-11. Clearly the level of deficit spending and the level of economic slowdown were not compatible, and we expanded our debt obligation to relatively high levels (but not out of the norm). Preliminary numbers show 2012 to be a repeat of the 2008-11 experience.

We have reason to be worried about our current rate of deficit spending. We need to respond by managing our financial house (income as well as expenditures, i.e., taxes as well as spending). We should, however, resist the urge to summarily say deficit spending in and of itself is the culprit. One could argue that we never would have seen the growth of 1951-89 without the public investment made.

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briangreber@boisestate.edu