In the mid-1990s a study was conducted in which 10 men with arthritic knees were schedule for surgery. They were all treated exactly the same except for one key difference: only some of them actually had the surgery. Once each patient was in the operating room and anesthetized, the surgeon looked at a randomly generated code indicating whether to do the full surgery or just make three small incisions in the knee and stitch them up to leave a scar. All patients received the same post-operative care, rehabilitation, and were later evaluated by staff who didn't know which treatment they had. The result: The men getting the sham knee surgery had improvement that was not distinguishable from the men getting the real surgery.

Identify the treatments and the subjects

By the mid-1990s South Korea was considered one of the Asian Tigers (along with Taiwan, Hong Kong and Singapore). However, the second half of the 90s proved to be disastrous for many of the Asian economies – Asian Financial Crisis (1997-99).   Choose two issues that led to Briefly discuss two issues and how they negatively impacted the South Korean economy. Additionally, briefly discuss the role the IMF had to assist the country during the Asian Financial Crisis.    

By the mid-1990s South Korea was considered one of the Asian Tigers (along with Taiwan, Hong Kong and Singapore). However, the second half of the 90s proved to be disastrous for many of the Asian economies – Asian Financial Crisis (1997-99).   Choose two issues that led to Briefly discuss two issues and how they negatively impacted the South Korean economy. Additionally, briefly discuss the role the IMF had to assist the country during the Asian Financial Crisis.

During the 1990s, the management "craze" was TQM (Total Quality Management) in which workers used the term "customer" to describe anyone who was receiving their services, not just real customers that were purchasing goods and services from the firm. Government agencies also joined in. For example, IRS workers were told to call taxpayers with whom they dealt "customers," and when I was doing some work at the Tennessee Valley Authority, we were to call people in other departments that ordered a computer from my department "customers."

Using your reading from Peter Klein and F.A. Hayek, explain why the TQM initiatives tended to work better at regular business firms than they did with government agencies.

Cranston Dispensers, Inc.

In the early 1990s, Cranston Dispensers, Inc. was quick to realize that concern for the environment would cause many consumer product manufacturers to move away from aerosol dispensers to mechanical alternatives that pose no threat to the ozone layer. In the following decades, most countries banned the most popular aerosol propellants, first chlorofluorocarbons and then hydrocholrofluorocarbons. As the leading manufacturer of specialized pump and spray containers for a variety of products in cosmetics, household cleaning supplies, and pharmaceutical industries, Cranston experienced a rapid increase in sales and profitability after it made this strategic move. At that time, the firm focused much of its attention on capturing market share and keeping up with demand.

For most of 20x4 and 20x5, however, Cranston’s share price was falling while shares of other companies in the industry were rising. At the end of fiscal 20x5, the company hired Susan McNulty as the new treasurer, with the expectation that she would diagnose Cranston’s problems and improve the company’s financial performance relative to that of its competitors. She decided to begin the task with a thorough review of the company’s working capital management practices.

While examining the company’s financial statements, she noted that Cranston had a higher percentage of current assets on its balance sheet than other companies in the packaging industry. The high level of current assets caused the company to carry more short-term debt and to have higher interest expense than its competitors. It was also causing the company to lag behind its competitors on some key financial measures, such as return on assets and return on equity.

In an effort to improve Cranston’s overall performance, Susan has decided to conduct a comprehensive review of working capital management policies, including those related to the cash conversion cycle, credit policy, and inventory management. Cranston’s financial statements for the three most recent years follow.    

($ in thousands)

Cranston Dispensers

Balance Sheet

($ in thousands)

5.   Cranston now bills its customers with terms of net 45. Although most customers pay on time, some routinely stretch the payment period to sixty or even ninety days. What steps can Cranston take to encourage clients to pay on time? What is the potential risk of implementing penalties for late payment?

6.   Suppose Cranston institutes a policy of granting a 1% discount for payment within fifteen days with the full amount due in 45 days. Half the customers take the discount, the other half take an average of sixty days to pay.

a.   What is the length of Cranston’s collection cycle under this new policy?

b.   In dollars, how much would the policy have cost Cranston in 20x5?

c.    If this policy had been in effect during 20x5, by how many days would Cranston have shortened the cash conversion cycle?

7.   An image-based lockbox system could accelerate Cranston’s cash collections by three days. Cranston can earn an annual rate of 6% on the cash freed by accelerated collections. Using sales for 20x5, determine the most that Cranston should pay per year for the lockbox system.

Scenario: In the early 1990s, Stella Liebeck, 79 ordered a cup of coffee at McDonald's. She accidentally spilled the coffee on her lap and suffered serious burns. She sued McDonald's for negligence, among other things.
Liebeck v. McDonald's Restaurants, P.T.S., Inc., No. D-202 CV 93 02419, 1995 WL 360309 (Bernalillo County, N.M. Dist. Cut. August 18, 1994).
Support the plaintiff, Liebeck and highlight the strengths and weaknesses of the plaintiff to a basic negligence action only.

Activity based costing "blasted" on the cost accounting scene in the late 1980s and early 1990s. It's authors, Dr. Robert Kaplan and Dr. Robin Cooper, from Harvard University, presented it as a more accurate costing method which would improve the accuracy of accounting information, and therefore lead to much improved decisions, leading to more profitable and successful companies. Has ABC lived up to its hype? Has it been a success? A dud? or somewhere in between? Is the novelty wearing off? Find evidence in the literature to support your opinion.

The 1990s were characterized as the “lost decade” for Japan. Growth in per-capita GDP was very low as the economy stagnated. The IS-LM model played a key role in the economist’s debates. This question is about trying to understand which policy the government should use to try to pull Japan out of a recession.

1. Interest rates were extremely low in Japan at this time. When interest rates get close to zero, the demand for money is extremely high (say close to infinity). In this case, what does the LM curve look like? Draw a picture of what the LM curve may look like for Japan.

2. Now, let’s think about the IS-LM equilibrium in Japan. Which part of this LM curve do you think the Japanese economy is in equilibrium at? Indicate this on your graph and draw in the IS curve now to give you an equilibrium at that point.

3. How effective a tool is a monetary policy for pulling the economy out of the recession in Japan?

GOOGLE Started in the late 1990s, Google grew rapidly to become one of the leading companies in the world. Google’s mission is “to organize the world’s information and make it universally accessible and useful.” It is operating on a simple but innovative business model of attracting Internet users to its free search services and earning revenue from targeted advertising. In the winner-takes-all business of Internet search, Google has captured considerably more market share than its next highest rival, Yahoo!. This has turned Google’s Web pages into the Web’s most valuable real (virtual) estate. Through its two flagship programs, AdWords and AdSense, Google has capitalized on this leadership position to capture the lion’s share in advertisement spending. AdWords enables businesses to place ads on Google and its network of publishing partners for as low as 25 cents per thousand impressions. On the other hand, it uses AdSense to push advertisements on publishing partners’ Web sites targeting specific audience and share ad revenue with the publishing partner. This creates a win–win situation for both advertisers and publishers and developed Google into one giant sucking machine for ad revenue. However the European Union recently fined Google $2.7 billion for using its dominant position to favor its own price comparison service, Google shopping. This is illegal under EU law as it is unfair to rivals and denied consumers a real choice among competitor services in thirteen European countries. Even as a large company, Google continues to take risks and expand into new markets. It currently offers over 120 products or services, including google translate, google maps, google+ social network and Android, the worlds most used operating system. Sergey Brin and Larry Page, the founders, declared in Google’s IPO prospectus, “We would fund projects that have a 10% chance of earning a billion dollars over the long term. . . We place smaller bets in areas that seem very speculative or even strange. As the ratio of reward to risk increases, we will accept projects further outside our normal areas.” They further add that they are especially likely to fund new types of projects when the initial investment is small. Google promotes a culture of creativity and innovation in a number of ways. IT encourages innovation in all employees by allowing them to spend 20% of their time on a project of their own choosing, and to switch between project teams. In addition, it offers benefits such as free meals, on-site gym, on-site dentist, and even washing machines at the company for busy employees. Managers have both a portfolio of projects and a portfolio of people to manage: Google has a cross-functional (matrix) organizational structure but with as few middle managers as possible.. Despite open and free work culture, a rigid and procedure-filled structure is imposed for making timely decisions and executing plans. For example, when designing new features, the team and senior managers meet in a large conference room. They use the right side of the conference room walls to digitally project new features and the left side to project any transcribed critique with a timer clock giving everyone 10 minutes to lay out ideas and finalize features. Thus, Google utilizes rigorous, data-driven procedures for evaluating new ideas in the midst of a chaotic innovation process. Google’s vice president for search products and user experience, Marissa Mayer, outlines nine notions of innovations embedded in the organizational culture, processes, and structure of Google. 1. Ideas come from everywhere: Google expects everyone to innovate, even the finance team. 2. “Innovation; not instant perfection”: Google employees can take a good idea and experiment to improve upon it. 
 Google launches early and often in small beta tests, before releasing new features widely. 3. “A license to pursue dreams”: To help promote innovation, Google employees get one “free” 
day each week to work on their pet ideas. Half of new launches come from this ‘‘20% time.’ 4. “Morph projects, don’t kill them”: Google employees should always to find something
salvageable in projects that aren’t pursued 
 5. “Share everything you can”: Google employees have a lot of collective knowledge. To encourage sharing, each employee writes an e-mail on Monday with five to seven bullet points of what they learned earlier and Google then consolidates this information and makes it available to the employees. 
 Every idea, every project, every deadline—it’s all accessible to everyone on the intranet. 6. “Worry about usage and users, not money: Google will be successful if we can please the users; advertisers (and their money) will follow. 
 7. Don’t politic, use data “Data is apolitical”: Mayer discourages the use of ‘‘I like’’ in meetings, pushing staffers to use metrics”: Design is a science at Google. Good ideas must be supported with evidence. 
 8. “Creativity loves constraints”: Google employees work best when they are challenged and have to think outside the box. Give people a vision, rules about how to get there, and deadlines. 
 9. “You’re brilliant? We’re hiring”: Google likes to hire really smart people—even if they may not have a lot of experience.
 Founders Larry Page and Sergey Brin approve hires. They favor intelligence over experience. Keeping up with the organizational strategy of Google, its IT department provides free and open access to IT for all employees. Rather than keeping tight control, Google allows employees to choose from several options for computer and operating systems, download software themselves, and maintain official and unofficial blog sites. Google’s intranet provides employees information about every piece of work at any part of Google. In this way employees can find and join hands with others working on similar technologies or features. In building the necessary IT infrastructure, Google’s IT department balances buying and making its own software depending on its needs and off-the-shelf availability. For example, it uses Oracle’s accounting software, whereas it built its own customer relationship management (CRM) software, which it then integrated with its ad systems. It also supports open source projects both by extensively using open source software within the organization and by paying college students to contribute to them through programs like Summer of Code. Google’s Ads Data Infrastructure systems run the multibillion dollar ads business at Google. High availability and strong consistency are critical for these systems. Google builds systems that run in multiple datacenters all the time, and adaptively move load between datacenters, with the ability to handle outages of any scale completely transparently, causing minimal disruption to the operational system. Their F1 system is a distributed relational database system that combines high availability and the scalability of NoSQL systems, and the consistency and usability of traditional SQL databases. Mesa is a petabyte-scale data warehousing system with high availability, reliability, fault tolerance, and scalability for large data and query volumes. In addition, Google also develops generic applications such as GoogleApps for both internal and external use. Given the nature of business, security of information resources is critical for Google. For instance, its master search algorithm is considered a more valuable secret formula than Coca- Cola’s. However, rather than improving IT security by stifling freedom through preventive policy controls, Google puts security in the infrastructure and focuses more on detective and corrective controls. Its network management software tools combined with 150 security engineers constantly look for viruses and spyware, as well as strange network traffic patterns associated with intrusion.

1. Which underlying principles and factors affect Google’s organizational functions and systems in a global environment? 
2

6. What does Google use as information sourcing options, explain your answers

The number of commercial airline boardings on domestic flights increased steadily during the 1990s as shown in the table below. Let​ f(t) be the number of commercial airline boardings on domestic flights​ (in millions) for the year that is t years since 1990.

Numbers of Commercial Airline Boardings on Domestic Flights

f f(x)

Year Number of Boardings​ (millions)

1991 452

1995 547

1997 599

1999 635

2000 666

Find an equation of f.