The American Red Cross seemed in its true element following September 11, 2001. It was flooded with donations to do its highly needed and regarded work. Most of those donations went to its Liberty Fund. But shortly after it started to disperse the funds, the media began asking questions. And the American Red Cross soon wore a patina of tarnish. Learn about the research that evaluated Americans’ perception of the Red Cross and how research by Wirthlin Worldwide helped craft a new and highly effective donation solicitation process. www.wirthlin.com; www.redcross.org >Abstract

>The Scenario

Whether it’s a landslide in California, a flood in Puerto Rico, fires in Colorado, hurricanes in Florida, or tornadoes in Texas, the Red Cross can be depended on to help not only the victims but also those involved in rescue and relief services. But each local independent chapter of the American Red Cross also responds to thousands of smaller events that disrupt peoples lives yet aren’t as likely to be splashed across headlines or lead the evening news, such as a fire in a single-family house fire or a family that loses its breadwinner when the father’s military reserve unit is activated to serve in the war in Iraq. While the magnitude of the disaster affects the visibility of the Red Cross’s relief efforts, the skilled professionals and volunteers who constitute the American Red Cross pride themselves on being where they are needed as quickly as possible, providing the services that are needed by those both directly and indirectly affected. In a single year the American Red Cross affiliated chapters respond to approximately 70,000 such disasters, both small and catastrophic, by providing disaster relief services, family emergency services, domestic preparedness for bioterrorism, critical lifesaving services, and 24-hour military assistance. The American Red Cross provides these services 24 hours per day, every day. And it provides them for free. A totally independent philanthropy, one receiving no government financial support, the American Red Cross relies on the generosity of U.S. citizens for the operating capital to fund its services. For decades it has followed a policy of raising funds by soliciting donations via advertising during the high-visibility period surrounding a disaster that has captured media attention. As its Web site details, “One of the best ways to help disaster victims, people in need where you live, and people around the world right now is through a financial donation.” Donors primarily are encouraged to give to (1) the Disaster Relief Fund, which “enables the Red Cross to provide shelter, food, counseling and other assistance to those in need across the country,” (2) their local Red Cross chapter, which “assists people in need” within a donor’s community, or (3) the International Response Fund, which “allows the American Red Cross to respond to people’s needs around the globe.” Its stellar reputation for speedy, quality assistance generates millions of dollars in donations each year. September 11, 2001, changed many people’s lives and it also dramatically changed the way the American Red Cross solicits donations. The sheer number of people affected was beyond the scope of any other domestic disaster addressed, including Oklahoma City, the San Francisco earthquake, and hurricanes Camilla or Hugo. Typically, the Red Cross develops a disaster plan by determining what will be needed in terms of resources—financial, services, and manpower—to respond to those in need. It is able to use its extensive disaster experience to estimate the amount of money necessary to address the needs, and it does this quickly, often within three to seven days. But it would take three Can Research Rescue the Red Cross? 2 weeks to estimate the dollars required to address the needs created by the acts of September 11. And services couldn’t and didn’t wait. Contrary to the perceptions of many U.S. citizens at that time, the Red Cross doesn’t maintain a huge pool of dollars, just waiting for the next disaster to happen. When a need occurs, the local chapter draws on its own local disaster fund, generated by its own fundraising efforts. Depending on the size and resources of the chapter, it might not have sufficient reserves to address a major disaster and so turns to the national organization. The chapter can gain assistance with advertising to solicit additional donations, as well as dip into the national Disaster Relief Fund, which contains dollars that poured in from donors after previous disasters but were not needed to provide services to those disasters’ victims or relief workers. The local chapter must replace funds taken from the national Disaster Relief Fund. Following September 11, advertising soliciting for donations began immediately, right along with disaster relief services. Using its prior experience, the Red Cross typically plans the advertising flight and stops advertising when it reaches a certain percentage of its monetary those funds needed by the families for disaster services and hold in reserve for “future disasters” those dollars it deemed unnecessary to expend. Then the media criticized the Red Cross for not distributing donations as fast as they were coming in. The Red Cross was caught between an angry tirade of accusations by the media demanding change and total involvement in providing disaster services, both to the victims and to the disaster relief workers who were operating under increasing stress and strain. On November 8, 2001, Daniel Borochoff, president of the American Institute of Philanthropy, testified to a congressional subcommittee of the Committee on Ways and Means investigating charity response to the September 11 terrorist attacks. “The Red Cross could have avoided a lot of donor confusion had it used the Liberty Fund exclusively to raise money for immediate disaster relief and direct victim aid and then cut off fundraising after that need had been met at about $250 million.” Explaining that the Red Cross’s Liberty Fund and the United Way’s September 11 Fund accounted for about 75 percent of all funds raised related to September 11, Borochoff claimed that rather than earning the organization the Nobel Prize, the Red Cross’s actions “have tarnished its high public standing and brought distrust and skepticism to the entire nonprofit field.” During this period of continuing attack, on the pages of newspapers and magazines and on newscasts, not a single donor requested his or her money back. But neither did a single supporter come forward to defend the long-standing Red Cross fund-raising policy of using the sympathy generated by a current disaster to raise money for “this and other disasters.” In this instance, the donations following September 11 were separated and deposited in the Liberty Fund. Borochoff testified that he believed the “Red Cross in its zeal to fundraise while the iron was hot raised more money than it needed for what it would ordinarily do in a disaster and behaved opportunistically by using this crisis to raise money for programs that were not a major part of its advertising—such as upgrading its phones…building a strategic blood reserve…[and providing funds for] physiological trauma counseling nationwide.” Behind the scenes, some officials within the Red Cross were second-guessing whether the Liberty Fund should have been established. Others were asking an even more important question: “If something ever happens like this again, what should we do differently.” Officers of the Red Cross began to suspect from the anecdotal evidence reported in the news that donors responding to the ads either didn’t read or hear the ads fully or didn’t perceive that donations not needed to address issues related to a specific disaster, one then in the media spotlight, would be used to respond to future disasters. The same officials questioned whether the problem went beyond donors responding to the September 11 ad campaign. Did donors simply not understand how the Red Cross raised money? Did it not understand how the Red Cross spent donor contributions? By November 14, the media dialogue became so intense that Red Cross CEO Harold Decker, appointed following Healy’s resignation, stated, “We deeply regret that our activities over the past eight weeks have not been as sharply focused as America wants, nor as focused as the victims of this tragedy deserve. The people affected by this terrible tragedy have been our first priority, and beginning today, they will be the only priority of the Liberty Fund.” More than 25,000 families were then in the database of those receiving direct payouts from the Liberty Fund. In that same press release, David McLaughlin, chairman of the American Red Cross Board of Governors, stated, “The people of this country have given the Red Cross their hard-earned dollars, their trust, and very clear direction for our September 11 relief efforts. Regrettably, it took too long to hear their message. Now we must change course to restore the faith of our donors and the trust of Americans, and, most importantly, to devote 100 percent of our energy and resources to helping the victims of the terrorist attacks.”

1. If you had been McLaughlin or Decker, what research would you want done?

2. Create the management-research question hierarchy for the research you think might help the Red Cross make decisions related to public relations efforts and future advertising soliciting donations.

3. What considerations should influence sampling decisions in any research the Red Cross would do on this issue?

PROGRAM INSTRUCTIONS:

1. Code an application that asks the customer for a log-in and password. 2. The real log-in is "Buffet2011" and the real password is "Rank1Bill2008". 3. Allow the customer two (2) attempts to type either.

a. Each time the customer enters an invalid log-in or password issue an error message.

b. If the customer fails all two (2) log-in attempts, issue another error message and exit the program.

c. If the log-in is successful, the customer can calculate the cost of multiple trades, so there can be a combination of online and broker assisted trades.

4. Ask the customer if it's an online trade, if so charge $5.95 for the trade; otherwise, ask if it's a broker assisted trade, if so then charge a 2% brokerage fee. If not then print an error message, and let the customer try again. Keep track of the number of stocks for which trades are being made.

5. Logical Control Structures from PA1:

a. Use a while loop to process for multiple stock trades in a given transaction. Use a sentinel controlled loop variable.

b. Use if-else, nested if-else and if structures to figure out

i. whether it is an online trade or broker assisted trade;

ii. when to print the error message "INVALID TRADE TYPE!"

iii. when to print the final output with the total calculations for stock cost, online fees, commissions, and overall cost.

c. The customer can calculate for multiple stock purchases as long as the customer has more purchases to calculate. The calculated stock cost is added to a total for stock cost and the overall total (total cost); the online fee is added to a total for online fees and the overall total; and, the commission is added to a total for commissions and the overall total. Use printf() with format specifiers where needed.

d. Don’t forget to insert the exit statement at the end of main().

e. The prompts, the final output specs, and the sample output show you in what order to place your code. To return from these links press Alt then left arrow.

6. Logical Control Structures for PA2: This program is the same as PA1 EXCEPT:

a. There are additional prompts for the login and password.

b. Both the login and password must be correct to proceed.

c. You’ll use a do-while loop to control the number of attempts.

d. Use an if-else to test the attempts left, so the proper message is displayed for more than 2 attempts left, 1 attempt left and no more attempts left. Embed a switch to test for attempts less than or equal to 1.

e. There are 3 new variables.

7. Program Logic: NO plan for this PA.

a. The prompts tell you what input variables you will need.

b. The output will tell you the type of calculations you will need (if any) and whether you will need to declare additional variables.

c. The output will tell you the order of logic for your code.

8. Work and submit this program on your own (no partner). Name your program as YourLastNameFirstInitialYourSectionNoPA2.

9. Commenting Your Program:

a. In your program, YOU MUST insert a program purpose in the first comment box. The content of that first comment box was shown to you in the Anatomy of a Java Program lecture for chapter 1.

b. Use Javadoc comment boxes beginning with /** and ending with */ for your comment boxes.

c. Insert a Javadoc comment box above your methods explaining what is going on in the method that goes for the main() which is a method.

d. Line comment the import statements and the variables declared at the class level and/or in any method [including main()].

10. Formatting Rules: Refer to the Java Style Guide posted on Blackboard in IS 2033. Always test your output to validate that your program is functioning properly with the correct output and spacing (line advances and spacing after punctuation). The %n can function differently when using separate printf statements versus one printf.

PROMPTS: Code the bold from the prompts below in the printf statements that capture data into your program. Once again, the prompts tell you your input variables.

Welcome Message: Prints before prompt for customer name.

YEE-TRADE, INC. - The Wild West of Electronic Trading

Welcome to Yee-Trade's stock purchase calculator.  

1st Prompt:  

What is your name?  

2nd Prompt: Beginning with this prompt, the majority of the code will be nested in the do-while mentioned in 2c above.  

Enter your log-in:  

3rd Prompt: If the entries from the 2nd and 3rd prompts match the real log-in and password proceed to the 4th prompt else print the error message(s).  

Enter your password:  

Error Message When Log-In & Password Incorrect: One of these error messages will be displayed every time the log-in or password is incorrect. The 9 represents the number of attempts left out of two (2). You’ll accommodate in the code for the possibility of more than 2 attempts.

Invalid log-in or password! 9 attempts left. ? Use when >= 2 attempts left Invalid log-in or password! 9 attempt left. ? Use when 1 attempt left

Error Message When No More Attempts Left: This error message will be displayed when there are no more attempts left, and the program will terminate. This is NOT a forced exit. The code should automatically sequence to the exit statement at the end of main().  

No more attempts left! Contact tech nical support at 1-800-111-2222.  

4th Prompt: This prompt will display after the customer enters the correct log-in and password within the allotted 2 attempts. The value captured from this prompt is the loop-control variable for the sentinel-while loop mentioned in 1a of the Program Instructions section above.  

Do you want to calculate your stock purchases? Enter 'Y' or 'N' to exit: If the answer is anything other than ‘Y’, the while loop is by-passed and this message is displayed: Thank you for using Yee-Trade's stock purchase calculator!

5th Prompt: Prompts 5 through 9 will be in a sentinel-controlled while loop.  

How many shares did you purchase?  

6th Prompt:  

What is the price per share?  

7th Prompt: If the answer to this prompt is 'Y' add a 5.95 online trading fee to the stock cost then go to the 9th prompt, else go to the 8th prompt. Also, refer to 1c for additional calculation instructions.

Is this an online trade? Enter 'Y' or 'N':  

8th Prompt: This prompt will display only when the answer to the 7th prompt is 'N'. If the answer to this prompt is 'Y', calculate the commission by assessing a 2% brokerage fee on the stock cost then go to the 9th prompt, else proceed to the error message.  

Is this a broker assisted trade? Enter 'Y' or 'N':

Error Message When Trade is Neither Online or Broker Assisted: If the answer is 'N', print this error message then proceed to the 9th prompt.

"INVALID TRADE TYPE!"  

9th Prompt: If the answer is 'Y' then you'll go back to the 5th prompt. This is the same loop-control variable in prompt 4.

Enter 'Y' to calculate the cost of another stock purchase or ‘N’ to exit:  

If the answer is anything other than ‘Y’, the while loop is exited, the final output is displayed along with this message:

Thank you for using Yee-Trade's stock purchase calculator!

Original Code:

/**
* @(#)004PA1.java
* @author
* version 1.00 2020/09/23
*
* PROGRAM PURPOSE: This program controls whether
* a customer can calculate the cost of
* their stock purchase
*/
import java.util.Scanner;
import java.util.Calendar;

public class 004PA1
{
public static void main(String[] args)
{
Scanner input = new Scanner(System.in);
Calendar dateTime = Calendar.getInstance();
String date = String.format("%1$TB %1$TD, %1$TY", dateTime);
  
String customerName = null;
int shares = 0, noOfStocks = 0;
double sharePrice = 0.0,
stockCost = 0.0,
commission = 0.0,
totalCost = 0.0,
onlineFee = 0.0,
totalStockCost = 0.0,
totalCommissions = 0.0,
totalOnlineFees = 0.0;
char onlineTrade = ' ',
brokerAssisted = ' ',
another = 'N';
  
System.out.printf("%nYEE-TRADE, INC. - The Wild West of Electronic Trading%n"
+ "%nWelcome to Yee-Trade\'s stock purchase calculator. %n");
System.out.printf("%nWhat is your name? ");
customerName = input.nextLine();
System.out.printf("%nDo you want to calculate your stock purchases? "
+ "Enter\'Y\' or \'N\' to exit: ");
another = input.nextLine().charAt(0);
  
while(Character.toUpperCase(another) == 'Y')
{
noOfStocks = noOfStocks + 1;
  
System.out.printf("%nHow many shares did you purchase? ");
shares = input.nextInt();
  
System.out.printf("%nWhat is the price per share? ");
sharePrice = input.nextDouble();
stockCost = shares * sharePrice;
totalStockCost += stockCost;
totalCost += stockCost;
  
input.nextLine();
  
System.out.printf("%nIs this an online trade? "
+ "Enter \'Y\' or \'N\': ");
onlineTrade = input.nextLine().charAt(0);
  
if(Character.toUpperCase(onlineTrade) == 'Y')
{
onlineFee = 5.95;
totalOnlineFees += onlineFee;
totalCost += onlineFee;
}
else
{
System.out.printf("%nIs this a broker assisted trade? "
+ "Enter \'Y\' or \'N\': ");
brokerAssisted = input.nextLine().charAt(0);
  
if(Character.toUpperCase(brokerAssisted) == 'Y')
{
commission = stockCost * .02;
totalCommissions = totalCommissions + commission;
totalCost = totalCost + commission;
}
else
{
System.out.printf("%nINVALID TRADE TYPE!");

noOfStocks = noOfStocks - 1;
totalStockCost = totalStockCost - stockCost;
totalCost = totalCost - stockCost;   
}   
}
System.out.printf("%nEnter 'Y' to calculate the cost of another stock purchase "
+ "or 'N' to exit: ");
another = input.nextLine().charAt(0);
}
if (noOfStocks > 0)
{
System.out.printf("%nYEE-TRADE,INC."
+ "%nTOTAL COST OF STOCK PURCHASES "
+ "%nFOR " + customerName
+ "%nAS OF " + date
+ "%nTotal Stock Cost: $" + totalStockCost
+ "%nTotal Online Fees: $" + totalOnlineFees
+ "%nTotal Commissions: $" +totalCommissions
+ "%nTOTAL COST: $" + totalCost);
}
System.out.printf("%nThank you for using Yee-Trade's stock purchase calculator!");
noOfStocks = 0;
  
System.exit(0);

}
}

Using stakeholder analysis, analyse the power and level of interest of the relevant stakeholders involved in running and regulating the London taxi business.

Uber are often accused of ignoring employee rights and employee welfare. How might Uber management address their employees’ concerns?

Guidance notes:

In Sessions 2 of Block 3 you encountered the concept of stakeholder analysis, as a key part of analysing the political context. In particular, Activity 2.1 and Reading 4 discussed some of the theory supporting stakeholder analysis and gave you the opportunity to undertake a practice exercise. The stakeholder analysis framework shown in Reading 4 Figure 1 may help with your answer.

The second part of Question 1 requires you to look at some of the employee relations issues that are taking place at Uber. Block 3, Session 4, introduced you to the idea of inclusive and participatory employment relations. In particular, Reading 6 discussed the importance of employee ‘voice’ and why voice matters in modern organisations. Block 3, Session 5, discusses the issues of flexible working and employee empowerment. Activity 5.1 looks at the importance of involving employees and suggests ways this might be achieved. Your answer should draw on appropriate concepts and theories from Block 3 together with suitable evidence from the case study to support your arguments.

Case study:

Technological challenges in the taxi industry

Uber is a technology company that offers a free programme, or app, available on a mobile device for those wishing to request a ride. At its core, Uber seeks to match passengers to drivers. The platform is able to track a user’s GPS coordinates, even if the user does not know where they are, and within minutes an Uber driver will arrive. The user is able to track how long until the ride will pick them up and receives a text message confirming when the Uber driver is arriving. The driver is able to hit a button on their own app that says ‘Arriving now’ which sends the text message. No cash is exchanged when using Uber since signing up for an account requires providing credit card information. After the ride, Uber charges the user electronically and immediately emails them a receipt. There is a rating system so that passengers can rate their driver and vice versa (Dong et al, 2014).

According to Uber, the company ‘pushes the limits of the transportation industry to create a simple, more efficient, and more enjoyable car service experience. For drivers, Uber is a revenue stream, allowing professional drivers to make more money by turning downtime into profits.’ (Uber, 2016). Unlike the taxi industry, Uber does not employ or license its drivers, but rather views them as independent contractors. The unique experience provided by Uber has enabled rapid growth and international expansion centred on three main focal points: a commitment to on-demand service, an efficient supply of luxurious rides, and the easy accessibility of its smartphone application.

Uber’s growth over the past five years is an example of a major success in what is known as the ‘sharing economy’. The sharing economy is an economic system where assets or services are shared between private individuals either free or for a fee, typically by means of the internet. However, the success of this new business model is attracting criticism from government and civic leaders concerned that this new ‘collaborative economy’ is simply a means of sidestepping regulations, taxes and other legal obligations. These ‘gig economy’ apps have been criticised for failing to provide traditional employee rights such as paid holidays and in-work insurance.

The size of the UK taxi and private hire market is estimated at £9.4 billion. The industry is mature, with high levels of revenue volatility, technological changes, and high competition with low barriers to entry (Skok & Baker, 2019). In London, Uber’s growing popularity meant that their drivers completed some £115m of business within London (Quinn, 2016). However, Uber London (the taxi app’s UK holding company) recorded only a sales take of £23m and a profit before tax of £1.83m. The sales figure reflects only Uber’s share of fares for trips booked on its app. In addition, Uber London retain 20% of any fare to the driver. Despite this Uber London paid just the small sum of £411,000 in UK tax last year.

Concerns have also been raised over driver working conditions, particularly regarding claims that some drivers are doing excessive and unsafe hours.

Some Uber drivers are working up to 21 hours a day to make ends meet as the company increases its cut of fares and fights a ruling giving them employment rights. Drivers in London interviewed by The Sunday Times told of regularly working hours that Uber itself describes as ‘unsafe’. The newspaper has seen official Uber documentation proving one of the men worked a 91-hour week. The disclosures come as new figures show a dramatic rise in casualties involving taxis and private hire vehicles in London.

In interviews with 12 Uber drivers waiting at Heathrow, three admitted working 16 hours or more a day. Tom, from High Wycombe, said: ‘On average every day [I work] 14 hours, and 16 is top whack. I had a colleague last week who said he had worked 19 hours. I know people who even sleep in the car, and they go crazy … I can start at six o’clock in the morning and finish the following day at maybe two o’clock, three o’clock,’ – a 20 or 21-hour day.

A second driver, Peter, said: ‘Recently, Uber cut rates per mile by 25%. Now I’m having to work longer and longer hours in order to pay my rent. I want people to know how powerless you feel when your income comes from a faceless app and when you open it up one morning, things are just different and you’re earning less money and there’s no boss you can talk to, you weren’t told about it, you just see your income is lower today and you just have to deal with it’. A third Uber driver, Khaled, said ‘We need to speak the truth. I work 70-80 hours a week and weekends it’s 14-16 hours a day. There are plenty of days where, minus petrol, I make less than minimum wage. It’s very, very stressful but I don’t have a choice. I feel like I’m a slave; we work like slaves for this company. I wish I knew what I know now earlier,’ he said. ‘I was blindsided. If I knew about the expenses, just how expensive it is to do this gig, then I wouldn’t have gone into it in the first place’. The legal limit for a bus or lorry driver is 56 hours a week.

Another Uber driver, Razak, said: ‘Once Uber got control of the market, they changed in the worst ways. When I started I made 80% of the fees from my fares with 20% going to Uber. Now they are charging anything they want, sometimes taking as much as 60%. All drivers are asking for is fair pay, and that’s what Uber won’t give to us. They are not willing to be transparent. They are willing to change the logo, they are willing to advertise, to spend millions on lobbying, but they are not willing to pay the drivers fairly. Uber treats drivers as just something they have to deal with until technology for autonomous cars gets to the point where they can eliminate drivers all together. They don’t listen to us’. Three other drivers could not be interviewed because they were asleep in their cars. One had installed curtains in the vehicle.

Figures published in 2016 by the London transport regulator, Transport for London (TfL), show there has been a 26% rise in casualties among taxi and minicab passengers during the previous year. The number of passengers killed or seriously injured rose from 13 to 20, a 54% rise.

However, Uber UK said it had no plans to limit driver hours. In London, for new drivers, it has increased the cut it takes on fares from 20% to 25%, forcing them to drive for longer to earn the same money.

The company suffered a blow in 2017 when an employment tribunal ruled that Uber drivers were not self-employed, and were entitled to holiday pay, pensions and other workers’ rights. In 2018 it appealed against this ruling but lost. The Appeal Court judges found there was a “high degree of fiction” in the wording of the standard agreement between Uber and its drivers. The judgement went on to state that “For Uber to be stating to its statutory regulator that it is operating a private hire vehicle service in London and is a fit and proper person to do so, while at the same time arguing in this litigation that it is merely an affiliate of a Dutch-registered company which licenses tens of thousands of proprietors of small businesses to use its software, contributes to the air of contrivance and artificiality which pervade’s Uber’s case.” (Butler, 2018). Uber is appealing this latest judgement.

Steve Garelick, of the professional drivers’ branch of the GMB union, said: ‘Through the app, Uber knows precisely how long everyone has been available. It and other operators could stop this overnight if they wanted to. They’ve made the effort to limit hours in New York, so what’s wrong with London?’ Tom Elvidge, general manager of Uber London, said that three-quarters of Uber drivers in the capital were logged in to the app for less than 40 hours a week. ‘We regularly advise drivers to take rest breaks’ he said. ‘We take this issue very seriously and are always looking into ways to improve the overall safety of the app.’

Uber London actively resists attempts by TfL or other government agencies to bring in any regulation of its services, or to bring its service into line with the historic business practices of London’s historic black cabs. The European Parliament has approved new minimum rights for workers in ‘gig economy’ jobs, including Uber drivers. Under the European Union (EU) regulations, casualised employees across Europe will have a right to compensation from their bosses for last-minute cancellation of work, mandatory training will have to be provided free of charge, and ‘exclusivity clauses’ that ban workers from taking other jobs will also be banned. The UK could end up following EU rules at this point if the Brexit transition period is extended, meaning the rights could apply to workers in the UK. However, if the UK leaves the EU earlier, employees will not benefit from the rules and will probably be exposed to harsher employment conditions (Stone, 2019).

In 2017, Uber was rocked by a former employee’s devastating assessment of her time working at the company. She detailed several instances of sexual harassment and a culture that did not welcome women. In response, Uber launched an investigation involving more than 100 ‘listening sessions’ across the company. The report concluded that ‘The focus of the company had been on the business and not the employees’ and that the atmosphere at the company had created a ‘cult of the individual’ (Lee, 2017).

London’s taxis are responding to the technological challenges presented by Uber, and TfL announced last year that all black cabs in London would be required to take credit cards and contactless payments from October 2016.

Groups representing taxi drivers said the decision by TfL would benefit both drivers and customers. The move by TfL’s board followed a consultation in which it received support from 86% of respondents.

‘Every black cab taking cards is fantastic news for London. In future, when you hail a cab you can be sure that you can pay the way you like – card, contactless or cash. That is without doubt better for our customers and for drivers who will benefit from extra work,’ said Steve McNamara, general secretary of the Licensed Taxi Drivers Association.

The move towards mandatory card payments in black cabs is part of wider changes by London’s 22,500 cabbies in rising to the challenge from Uber. For example, some black-cab operators are fighting back with smartphone apps of their own, such as Hailo and Gett. Gett offers discounts on metered fares for journeys of six miles or more and those made in off-peak hours. Hailo allows Londoners to get a taxi through their smartphone.

Remo Gerber, chief executive of Gett UK, said: ‘This is another strong sign of how the London black cab trade is embracing the future; not only have cabbies embraced apps, but everyone is behind making card payments universally accepted and by that making all journeys easier for Londoners.’

The firm’s application for a new licence in London was rejected in September 2017 on the basis that the company is not a ‘fit and proper’ private car hire operator. At an appeal, a court decided Uber should be awarded a 15-month probationary licence to operate in London after the ride-hailing service promised improvements. In May 2019, Uber completed the significant landmark of floating on the New York stock exchange at a staggering valuation of $91 billion.

Read the "Establishing Proof" Article below and respond to the following questions: ARTICLE IS IN BOTTOM

1. Why were newborn babies being given supplemental oxygen? What would have happened if they did not get supplemental oxygen?

2. Describe the clinical trial Drs. Hoeck and Patz designed. Was it an example of an experiment or an observational study? How was consent given? How were infants assigned to treatments?

3. Describe the clinical trial conducted by the NIH. Was it an example of an experiment or an observational study? How was consent given? How were infants assigned to treatments?

4. What were the results of the clinical trials? Did lowering supplemental oxygen appear to prevent RLF?

5. What unintended consequence of reducing supplemental oxygen did the two doctors from Johns Hopkins discover?

6. Describe how blindness has impacted the lives of the individuals and families of people with RLF.

7. When (if ever) is it okay for one person to give consent for another to be part of a medical trial?

8. How should doctors and researchers weigh risk and benefit when they are designing a clinical trial?

9. How would you feel if if you lost your sight due to a decision a doctor made when you were an infant? Would it make any difference if you knew the doctor was acting to the best of his or her knowledge? What if it was your child who lost his or her sight? Would you have given consent for your child to participate in the clinical trials described in the article?

10. What part of this story made the greatest impression on you? Is there a lesson from the experiences of the doctors and patients described in the story that you can put into practice in your life? Has your viewpoint about medical research been broadened or changed in some way?

Establishing Proof

Some Fifty Years Ago a Baby-Blinding Epidemic Confounded Experts -- Until a Pioneering Study

Conclusively Tied Cause and Effect, and Enshrined Clinical Trials in Medical Practice

By David Brown

Washington Post Staff Writer

Tuesday, April 19, 2005; Page HE01

Marc Maurer was born on June 3, 1951, in Des Moines, the second child of a traveling salesman

and a housewife. He was two months premature. As is often the case with babies born very

early, his lungs were underdeveloped. He spent two months in the hospital. During the first,

supplemental oxygen was pumped into his incubator continuously.

In the same city three months earlier, Patricia Schaaf was born. Her father was a plumber, her

mother was a school cook. Their first child, Patricia was 3 pounds, 10 ounces at birth and two

months premature. She, too, got oxygen for at least a month.

Today, both Maurer and Schaaf are blind.

Maurer is president of the National Federation of the Blind, and his wife -- the former Patricia

Schaaf -- is its director of community relations. They work in South Baltimore in a refurbished

factory that is the headquarters of the 50,000-member advocacy organization. Marc Maurer, a

lawyer by training, has a spacious corner office overlooking the Patapsco River, which he cannot

see.

The Maurers were part of an epidemic that began in the early 1940s and peaked in 1951, the

year of their birth. They were blinded by high concentrations of oxygen, which was routinely

given to premature infants in the United States during and after World War II. It took 15 years

to discover the link between oxygen and blindness -- 15 years in which a mysterious disease

haunted America's best hospitals.

This tragic outbreak was not the first time a medical treatment thought to be beneficial was

shown to cause harm. Nor would it be the last.

In recent years, hormone replacement therapy taken by millions of women turned out to cause

heart attacks, not prevent them. Vitamin A supplements don't lower the risk of lung cancer, as

many smokers once thought; it may increase it. Antidepressants relieve depression in some

teenagers but appear to drive a small number toward suicide, depression's tragic endpoint.

Three years ago the pain reliever Vioxx was the 15th most commonly prescribed drug in the

United States, with $1.8 billion in annual sales. Today, some experts believe it may have

contributed to as many as 160,000 heart attacks and strokes since its arrival in 1999.

The story of oxygen and blindness is a distant mirror of these therapeutic surprises. But it is

much more as well.

Of all the elements on the periodic table, oxygen is the one that seems most to symbolize life

and health itself. Could extra oxygen be dangerous to tiny babies struggling to survive? It

seemed inconceivable!

But it was true. Two doctors proved it more than a half-century ago in a clinical experiment run

in the wards of a hospital in Washington. The medical world didn't believe them, at least not

enough to change routine practice. So a second, bigger experiment was conducted at more

than a dozen American hospitals.

Fifty years ago this summer, the preliminary results of that trial were published. They changed

medical history. Almost overnight, physicians stopped automatically giving supplemental

oxygen to preemies, ending the epidemic of retrolental fibroplasia (RLF), as the disease was

called then. (It is now known as retinopathy of prematurity.)

But the study's results did something else equally important and historic. They convinced many

American physicians of the usefulness of randomized controlled trials, which had been

"invented" less than 10 years earlier in Britain. Not least, the study taught doctors they couldn't

assume that what seemed like a good idea -- extra oxygen -- would necessarily lead to a good

outcome.

"Doctors have to approach their patients, and what they think they know, with a certain

amount of humility," said Steven Goodman, a physician at Johns Hopkins University's

Bloomberg School of Public Health and editor of the journal Clinical Trials. "This is one of the

trials that taught us humility."

The events that culminated 50 years ago is also a story of self-reliance, doggedness and even

heroism on the part of the blind survivors of RLF and the two doctors who first proved the

disease's cause. Those doctors, as it happens, are still alive.

Arnall Patz went on to become the chairman of ophthalmology at Johns Hopkins University

School of Medicine

.

Now 84 and officially retired, he lives in Baltimore and still works part of

nearly every day on some medical project. Last spring, President Bush awarded him the

Presidential Medal of Freedom for a lifetime of scientific discovery that began with the oxygen

experiment at Gallinger Municipal Hospital, the predecessor of D.C. General. His long-ago

collaborator in that work is Leroy E. Hoeck, a 93-year-old retired pediatrician living in Fort

Washington.

The discovery they made in 1951 and 1952 didn't come in time for Marc or Patricia Maurer. Nor

did it come in time for RLF's most famous victim, Stevie Wonder, born prematurely in Michigan

in 1950 as Steveland Judkins. Nor for 10,000 other babies born here and around the world who

became blind from oxygen. But it did come in time for numberless preemies born in the last 50

years who can still see.

Survivors and Pioneers

Nobody knows the first infant to become blind from retrolental fibroplasia. But the first

recorded in the annals of medicine is James Edgar Pew II.

Pew and his twin sister, Margaretta, were born on July 13, 1940, at the Boston Lying-In

Hospital. They were seven weeks premature. Margaretta died in six hours. Her brother held on,

thanks to oxygen.

"The child was examined at the age of ten minutes, at which time the respirations were gasping

and irregular . . . the baby was immediately given oxygen. After about ten hours, his condition

improved," the pediatrician in charge of the premature nursery, Stewart H. Clifford, wrote in

the hospital chart, according to an account published in the Saturday Evening Post magazine in

1955.

The boy's father, George L. Pew, was extremely wealthy, a direct descendant of Joseph N. Pew,

the founder of Sun Oil Company. (Today, the family name is best known for the foundation four

of Joseph Pew's children endowed, the $4.1 billion Pew Charitable Trusts). Jimmy Pew received

the best medical care money could buy. He spent two months in the hospital and got

supplemental oxygen almost continuously.

When the boy was 7 months old, his parents and some visiting relatives became alarmed when

he failed to track the movement of a cigarette lighter his father held in front of his face. (This

anecdote, and many details of the following narrative, come from the magazine account by

Steven M. Spencer and from a 1980 book, "Retrolental Fibroplasia: A Modern Parable," written

by a pediatrician and historian named William A. Silverman.)

Even though it was a Sunday, the Pews summoned Clifford to their Beacon Hill house. He

examined the child and told the parents he suspected the boy was blind. Curiously, Clifford had

just seen a similar case, the infant daughter of a rabbi. "I was shocked to find my second case

within a week of my first," he later said.

The Pews insisted an eye doctor be called. With some effort, Clifford reached Theodore L.

Terry, a Harvard professor of ophthalmology. He came and thought the problem might be

congenital cataracts. Within a few days, however, that diagnosis was abandoned. The cause of

the Pew baby's blindness was something else -- and it also appeared to be something new.

Terry wrote the case up for a medical journal, making reference to the rabbi's daughter and

three other blind infants he saw soon afterward at the Massachusetts Eye and Ear Infirmary. All

five babies had been born prematurely. In the American Journal of Ophthalmology in February

1942, he made a prophetic observation: "[S]ome new factor has arisen in extreme prematurity

to produce such a condition."

He also personally notified about 50 specialists of his findings and asked them to look for cases.

Soon, he had more, and with them a fuller picture of what was happening.

By the time blindness could be diagnosed for certain in the babies, their eyes contained a

distinctly abnormal membrane in front of the retina, the eye's back wall, where the visual

receptors lie. Terry believed the condition developed after birth, but somehow involved

embryonic tissue. He tried to reproduce it in laboratory animals, but was unable to. He died in

1948 with 117 cases, and no answer.

Proof that retrolental fibroplasia

was

new, and that babies weren't born with it, came from a

look-back at records at Johns Hopkins Hospital. A husband-and-wife research team, Ella and

William Owens, found no cases from 1935 and 1944, but five in premature infants born after

1945. All had normal eyes at birth.

But what was causing it?

There were dozens of theories. They included high-protein diets, large doses of vitamins, blood

transfusions, hormone therapy and antibiotics -- all treatments given with varying frequency to

premature infants. Too much light was the other main candidate. Some of the theories were

put to the test in small experiments. None panned out.

There seemed to be nothing in common with all the cases except prematurity and, ironically,

good medical care. RLF wasn't a disease of incompetence, poverty or inadequate technology.

Quite the opposite. Throughout the 1940s, reports of the disease trickled, and then began to

flow, from Canada, Western Europe and Australia -- all places with advanced medical care and

high standards of living.

Eventually oxygen made it onto the list of possible causes.

The person who put it there appears to have been an English doctor named Mary Crosse. She

noticed that RLF didn't occur in Birmingham until 1948, when the National Health Service was

created. Then, for the first time, many hospitals could buy American incubators and bottles of

oxygen.

The use of oxygen to treat asphyxiation in a newborn was first tried in 1780. It was studied and

recommended again in 1900. By the early 1940s, supplemental oxygen was standard treatment

for premature infants in the best-equipped hospitals. What seems to have initiated the

epidemic of RLF, however, was the development of incubators that could keep pumped-in

oxygen from leaking out. Molded plastics developed during the war made postwar incubators

increasingly airtight.

Crosse's observation came to the attention of an Australian pediatrician named Kate Campbell,

who worked in three hospitals in Melbourne. One had incubators that could give premature

babies air with two or three times the amount of oxygen in atmospheric air. The second used a

less efficient way of delivering the gas. The third required patients to pay for supplementary

oxygen, so it was "used with more economy," she wrote.

She looked at the records of her patients for the years 1948 through 1950 and saw a

remarkable effect. At the hospital where oxygen was given most intensively, 19 percent of

premature babies developed RLF. At the other two where it was used sparingly, the rate was

only 7 percent. She speculated that the adjustment to the "oxygen-rich" world outside the

womb was a stress that premature infants somehow couldn't adjust to.

It was a hunch that in broadest interpretation would turn out to be correct.

Side Effects

When Marc Maurer was 6 months old, his parents took him to Minneapolis for an eye

operation. He had a second when he was 3. He had a third when he was 6. That's the one he

remembers.

People with RLF often develop glaucoma, a condition in which the internal pressure in the

eyeball rises because of problems in the circulation of fluid. Maurer had glaucoma and the

surgery was intended to relieve it. It did that -- and more.

Until then, Maurer had a small bit of residual vision in his left eye. He could see large objects at

a distance of 20 feet. After the surgery, that was gone. "I lost what I thought of as vision," he

recalled recently, speaking in a flat, nearly emotionless voice. "It was very depressing for a kid

like me."

When he returned home from the hospital, he refused to do anything but sit inside on a couch

for a week. His mother eventually took him outside and forced him to go down a slide in the

yard. With great protest, he did. Then she made him do it again. He got mad and decided to run

away. He refused to go back inside.

It was a crucial lesson, he believes. "It got me out of the theory that blindness would stop me

from doing stuff." Still, he adds, his voice heavy with memory, "I know the discouragement of

becoming blind. I remember it still."

Maurer attended a school for the blind in Iowa for the first five grades. He learned Braille (as

did his mother), and became an avid reader. In the fifth grade, he returned home to the town

of Boone (pop. 12,000) and attended parochial school. He says now that he found no

insuperable obstacles to learning what he wanted to.

In high school, he took extra courses at a junior college. After graduating, he spent a year in a

program for blind students in Iowa. There, he expressed interest in auto mechanics; the state

Commission for the Blind provided the tools for him to overhaul a car engine. Ultimately he

graduated from Notre Dame and got a law degree from the University of Indiana.

Patricia Maurer's parents suspected she couldn't see when at 6 months she failed to start

reaching for things. They took her to the Mayo Clinic in Rochester, Minn. and a doctor there

diagnosed RLF. She also had a small amount of light perception in one eye.

She spent her entire career in public school. She didn't even learn Braille until she was 15, when

she mastered it over the course of a summer with the help of a teacher. She took part in school

activities in what seemed a normal way.

"As a child you really don't understand why things happen the way they do," she recalled. Of

her blindness, she says: "I got to the place where I thought it was the way it was supposed to be

for me. I knew I didn't want to just sit around. I knew I wasn't going to give up."

She met her future husband in the same training program where he rebuilt the car engine. She

graduated from Drake University in Des Moines, where she studied special and elementary

education. The couple married in 1973. They have two children, both sighted.

Jimmy Pew remembers Theodore Terry, the doctor who made him the first recorded case of

RLF, "as a very kind, gentle man." Terry operated on him twice for glaucoma. Pew can see

shadows in both eyes, but has no useful vision.

When Pew was about 7, his family moved to Maine. He lived in a large house outside Portland

with his parents and an older brother, and eventually also with four cousins taken in after their

parents were lost at sea. He learned Braille and as a child was a ham radio operator. He

attended Brooks School, a boarding school north of Boston, where he was the only blind

student. In his senior year, he got a guide dog, the first of six. He, too, is glad he was

mainstreamed.

"My parents wanted me to go to regular schools. I think it was a good decision."

Pew also went to college, majoring in psychology at the University of Maine. He earned a

doctorate from the University of Detroit and is now a clinical psychologist in San Francisco,

where he moved in 1972.

First Suspicions

Arnall Patz grew up in Elberton, Ga., the grandson of Lithuanian Jews who immigrated to

Baltimore. His father was a peddler who eventually put down roots in a town on his southern

route.

One of seven children, Patz attended college and medical school at Emory University, both

under accelerated, wartime schedules. He graduated from medical school in 1945, and after an

internship at a hospital in Baltimore entered the Army. During a posting at Walter Reed Army

Hospital, he decided he wanted to be an ophthalmologist. This was also the time he first heard

about retrolental fibroplasias, a growing epidemic of unknown cause. When he was discharged

in July 1948, he took an ophthalmology residency at Gallinger, the District's public hospital.

It was an unlikely choice for an ambitious young doctor who'd already published a paper (on

several cases of a rare allergic reaction he'd seen as an intern) in the New England Journal of

Medicine. But Gallinger beckoned for one reason. In the unvarnished parlance of medical

training, it had "good pathology" -- an abundant and varied harvest of disease.

Working at the hospital when Patz arrived was a pediatrician, Leroy E. Hoeck. He was seven

years older and in charge of the newborn nursery.

Hoeck grew up in Iowa, graduated from medical school there and practicing briefly before being

called into military service. After discharge in 1946, he took a short post-graduate course in

pediatrics at George Washington University's medical school. He then entered a three-year

training program at Gallinger.

From a distance of more than 50 years, both men remember a signal moment that drew them

irretrievably into the search for an answer to what caused RLF.

Patz's came in the summer of 1948, right after his residency began, when he visited the

newborn nursery to look for babies with RLF. "I noticed in the nursing notes for the first time a

single entry about oxygen. The nurse had recorded that the baby [was] 'receiving oxygen at six

liters flow' [per minute]. My interest in oxygen stemmed, really, from that one nursing note."

Hoeck's also involved a single infant -- the first baby born under 1,000 grams (2.2 pounds) in

Gallinger's history to survive. He was a boy, 997 grams, and Hoeck was his doctor. The baby was

"a save" in medical lingo, and Hoeck was proud of his work.

"The problem was that when I happened to see him in the outpatient clinic four months later,

that particular baby -- " Hoeck stops, unable to go further. He is choked with emotion. After 10

seconds of silence, he resumes. " -- he was completely blind." He takes a breath. "And that was

devastating. I just felt we had to find the cause."

Hoeck began to research the possibilities, which in early 1949 still comprised a long list. He

spent days in the library of the Army Medical Museum, on the mall where the Hirshhorn

Museum now stands, reading articles. Eventually, he found an article from the "Staff Meetings

of the Mayo Clinic" of 1940 by three doctors, one an Army captain. They had examined the

effects of varying concentrations of oxygen (as might be encountered by bomber pilots) on

blood vessels in the eye. They reported that after 30 minutes of breathing pure oxygen, a

person's retinal arteries narrowed markedly -- an observation not previously made "to our

knowledge," they wrote.

With the nudge from that article, Hoeck realized that in addition to prematurity, the one thing

all the babies with RLF had in common was exposure to supplemental oxygen. Of course, they

shared that with lots of babies whose sight was unimpaired, too.

Hoeck shared his suspicions with Patz, who was coming to have his own. Patz noticed that the

retinal blood vessels in a premature baby on oxygen were narrowed and constricted, like the

adults in the Mayo Clinic study. If the exposure to the high concentrations of oxygen was brief,

the vessels returned to normal in 30 minutes or so. But in the babies who'd been in oxygen for

days, the constriction seemed to persist indefinitely.

Patz also looked back into Gallinger's nursery records. Even though they usually didn't record

the exact oxygen flow rate, it was pretty clear that nearly all the babies who went on to develop

RLF had had prolonged exposure to high concentrations of the gas. In fact, over three years it

was 18 out of 21.

"I said, 'Roy, the only thing we can do is a carefully controlled prospective study to test the

oxygen,' " Patz recalled.

(The fact that Patz understood the concept of a controlled trial -- and Hoeck apparently did, too

-- is amazing in itself. The first such study, an English trial that proved the antibiotic

streptomycin could cure tuberculosis, had only been published in October 1948.)

Patz got a $4,000 grant from the newly created National Institutes of Health (NIH) after his

initial application was rejected as unscientific and unethical. He reassured the reviewers that

every premature baby who needed extra oxygen to stay pink and healthy would get it. But all

the premature babies wouldn't get it automatically.

The Trial

On Jan. 1, 1951, they started their experiment. Babies weighing under 3.5 pounds were

alternately assigned, based on time of birth, to get either 80 percent oxygen for at least 28 days

or 40 percent oxygen "only for specific clinical indications." Parents were told about the study

after their child was assigned. But they weren't asked whether they wanted their child included,

and they signed nothing. This lack of "informed consent" in the modern sense was standard for

the time.

"We weren't doing those babies any harm," Hoeck recalled thinking. "In fact, we were doing

what we thought was beneficial in every way."

There

was

a group worried about harm, though. It was the nurses.

Part of the mythology of this trial is that nurses would go around at night turning up the oxygen

taps to the low-oxygen babies in a guerrilla operation to save the infants' lives. That story

heightens the drama, but Patz today says it's mostly wrong.

One or two night nurses did crank up the oxygen to all the incubators when they came on shift,

but that occurred during a dry run for the experiment. Patz says he explained the protocol and

asked them to stop, which they did.

In May 1953, he and Hoeck stopped enrolling babies. This was what they found: 12 out of 60

premature babies assigned to standard care were blind from RLF. In the curtailed-oxygen

group, one out of 60 was. There were also a lot of near-misses. In the high-oxygen group, 21

babies developed early RLF, which eventually regressed to normal. In the low-oxygen group,

nine babies showed those changes.

The young doctors published their first-year results in September 1952 (a year after Kate

Campbell's report from Australia), and the final results two years later. By that time, Patz had

successfully reproduced the disease in newborn mice, rats, kittens and puppies. However, even

before the study was finished, the American Academy of Ophthalmology and Otolaryngology

(AAOO) -- the professional organization of eye, ear, nose and throat doctors -- was making

plans to do its own trial of oxygen use.

As is usually the case in medicine, a single well-conducted trial wasn't enough to convince

doctors to change their practice. The Gallinger study had the additional drawback of being

relatively small (and therefore of greater uncertainty) and the product of two unknown

researchers.

The AAOO proposed a trial in 18 hospitals east of the Mississippi River. It would enroll enough

babies to answer the question beyond any doubt -- provided people could agree how to run it.

Some doctors felt that because the chief problem of premature babies was respiratory distress,

limiting oxygen to them was likely to cause brain damage or death. Others felt that giving

supplemental oxygen indiscriminately would cause avoidable cases of blindness. Few people

were in the middle -- and certainly not Arnall Patz and Leroy Hoeck. Neither Johns Hopkins

Hospital, where by then Patz had an affiliation, nor Gallinger participated in the study.

"I couldn't take part in it," Hoeck said. "I didn't have to be convinced any more."

At a meeting in the mansion house of NIH's new campus in Bethesda, about 45 scientists met to

draw up plans. They wrangled through an entire night, at one point placing a transatlantic

telephone call to Austin Bradford Hill, the British biostatistician who had designed the

streptomycin-for-TB study. He suggested a Solomonic compromise.

The trial would basically be two studies run sequentially. For three months, premature infants

would be randomly assigned to routine high oxygen, or oxygen only if they needed it, in a 1:2

ratio. That would answer the question whether oxygen caused RLF. Then -- assuming the study

wasn't stopped because of higher mortality in the curtailed-oxygen group -- all babies born in

the following nine months would get oxygen only for clinical need. That would provide an

estimate of the incidence of RLF under oxygen-sparing conditions -- a statistic nobody actually

knew.

Cobbled together with a speed inconceivable today, the 18-hospital study commenced on July

1, 1953. It was run out of a central office at the Kresge Eye Institute in Detroit by a biochemist

named V. Everett Kinsey, who'd been interested in RLF since working with Theodore Terry in

Boston a decade earlier. The study used random numbers, not every-other-baby assignment as

in Washington, to determine which infants would get what treatments. Western Union

provided a teletype machine for free, and seven days a week telegrams came and went from

the 18 hospitals.

"This was at the height of the McCarthy era," recalled William A. Silverman, who was in charge

of enrolling preemies into the trial at Columbia's Babies Hospital in New York. "Some people

from the FBI came up to see me to find out what kind of subversive activity was going on with

all these suspicious telegrams." (Silverman died last December.)

The trial closed on June 30, 1954. Before the summer was over, Kinsey and his collaborators

had answers, which they presented to a meeting of eye doctors in New York that fall.

RLF severe enough to cause blindness occurred in 17 percent of the babies getting routine high

oxygen, but in only 5 percent of the curtailed-oxygen group. The death rate in the two groups

was similar -- 22 versus 25 percent. Oxygen -- and nothing else -- was responsible for the

epidemic of blindness in premature infants. Doctors could safely turn it down.

In fact, not to do so would soon be unforgivable.

The preliminary trial results, published in August 1955, and the final 62-page report of "The

Cooperative Study of Retrolental Fibroplasia and the Use of Oxygen," which appeared in

October 1956, might have been the end of the story. But it wasn't quite.

The rate of RLF started dropping in 1952. By 1956 it was roughly at the level of 1946, the early

period of the epidemic. In 1960, however, two physicians at Johns Hopkins Hospital wondered

if this remarkable decline might have come at an unnoticed price.

They reviewed autopsies of babies who had died in the premature nursery, looking especially

for deaths from respiratory complications. They discovered that the percentage of babies dying

in the first six days of life rose from 8 to 13 between 1948 and 1958. The fraction of autopsies

that found lung immaturity as the cause increased by the same proportion during that time. In

1962, an English physician reported a related and similarly unsettling trend. The longer a

premature infant with breathing problems got oxygen, the higher its risk of blindness -- but the

lower its risk of brain damage and paralysis.

Again, the culprit appeared to be oxygen. Only this time it was too little, not too much. Limiting

supplementary oxygen to premature babies had a cost: death or brain damage, at least in some

of them.

Why hadn't this been recognized in either the Washington study or the 18-hospital study?

Patz and Hoeck, surprisingly, didn't record the number of deaths in their study, although they

wrote that there wasn't a significant difference between the high- and low-oxygen groups. In

the 18-hospital study, however, the reason there appeared to be no mortality cost is now clear

-- it's because the babies weren't enrolled in the trial until they were 48 hours old. Before then,

they could get supplemental oxygen.

Those first two days of life were when the tiny infants, clinging to life, were most likely to die.

Oxygen kept some of them alive. When the oxygen was then turned down, they not only lived,

they escaped blindness. If the study had denied them oxygen in those first two days, a

significant number would never have made it to the point where blindness was the worst

outcome. They would have already died -- which was the fate of some of the preemies cared

for in the post-study years.

Recognition of this led to a half-swing back of the pendulum by the early 1960s. Oxygen use

was liberalized, especially in the first days of life.

Fifty years after the dangers of oxygen were discovered, the safe maximum -- if there is one --

still isn't known. As increasingly premature babies can be saved, the prevalence of oxygen-

induced blindness and damaged vision has ceased falling. The condition is not nearly as

common as it was in the 1950s. But it's still here.

Results

Over the years, a lot was learned about the mechanism of RLF.

It's now clear that with prolonged exposure to supplemental oxygen, the arteries in the eye not

only constrict, they become completely obliterated. That leads to a second growth of vessels,

possibly because of a sensation of oxygen deficiency in the eye. This new crop of vessels grows

wildly. It can destabilize the whole retina, which in severe cases peels back and rolls up into a

useless mass behind the lens -- "retrolentally." Much of this knowledge came from the

laboratories of Arnall Patz, his collaborators and students over the last half-century.

Patz became chairman of the Wilmer Eye Institute, Johns Hopkins's renowned department of

ophthalmology. Long before then, though, his RLF work was recognized with the Lasker Award,

which are sometimes called "America's Nobels." He shared his in 1956 with Everett Kinsey, who

ran the big RLF trial, and Jonas Salk, whose successful testing of a polio vaccine was the other

big medical news of 1955. Helen Keller, the most famous blind person in the world, presented

the award.

Leroy Hoeck stayed at the renamed D.C. General Hospital until 1957. He then entered private

practice in the Maryland suburbs of Washington until retiring in 1987. He was asked recently if

he remembered the name of the 997-gram baby whose blindness still makes him choke back

tears.

"Do I know his name?" he answers with incredulity in his voice. "I know it like my own." But he

won't say what it is. Perhaps the man is still alive. Perhaps he is still in Washington.

Jimmy Pew, the index case of the RLF epidemic, has spent much of his career in clinical

psychology treating the victims of another epidemic -- AIDS. As a man living in San Francisco

since 1972, he witnessed that disease come out of nowhere. He blames no one for his

blindness

,

nor does he find it ironic that the best medical care in America took away his vision.

"It was just something that happened," he says.

This, too, is the view of Marc and Patricia Maurer.

"I'm one of the luckiest people I know," asserts Marc Maurer. Lucky because he's been able to

help a large number of blind people like himself find independence and happiness.

"Now, certain things have changed because of blindness," he says. "There are some things that

are different for us than they are for others. Have I ever seen the face of my own children? No.

But it hasn't prevented me from working with them and loving them."

He continues, in a heavy cadence.

"Some people say to me, 'Aren't you

sorry

?' No, I'm not sorry. What the doctors did was give

me what they knew to keep my alive. And I am grateful to them for that."

Earlier in the conversation, the couple had been told of Hoeck's memory of the baby

unwittingly blinded by his treatment. It was emotional even in the retelling.

Patricia Maurer follows up what her husband has just said with this: "Maybe you can give that

message to the good doctor who was so upset”.

Using the CNA Insurance company Knowledge Management scenario (below), carry out the following knowledge management assignment Questions after reading the scenario/essay:

===============================================================================================================

For Gordon Larson, telling stories is all in a day's work at his job as chief knowledge officer at CNA, and that's just fine with executives at the Chicago-based insurance giant. Larson owes his job to a shift in corporate direction. Three years ago, under the direction of a new chairman, CNA set off on a new mission. The ultimate goal, says Karen Foley, CNA's executive vice president of corporate development, was "to get out of the distribution business and become a great underwriting company." And in order to do that, the company had to become more informed about the industries and customers it served. But CNA's traditional structure of 35 separate strategic business units made sharing internal information among employees nearly impossible. A single customer seeking answers to different insurance needs might be passed along to a variety of departments.

CNA knew it had to create one uniform face to customers, and that meant it had to reeducate its employees. Branch offices would have to be consolidated to facilitate closer working relationships among staff teams. Most important of all, CNA had to equip its employees—many of whom had focused solely on niche markets—with the much broader knowledge of all the company's products. To do that, CNA set about building a Web-based knowledge network that captures the expertise of its employees. And it's that expertise that Larson uses as the fodder for his "knowledge" stories. In 1999, a team of CNA executives evaluated the feasibility of becoming a "great underwriting company," and what they found wasn't pretty. In North America, 175 branch offices supported CNA's 35 business units. In order to create a single face for customers, the executives decided to reorganize the company's business into three major areas: property casualty, life and group benefits, and reinsurance. By December 2001, the trio of new business units was established. CNA is still consolidating its field operations into 75 offices organized around five geographic regions, and that process is expected to be complete by early next year.

Along with the physical reorganization, the very nature of what employees did had to change as well. "Just by reorganizing, we wouldn't get people to change how they think and work with other people," Larson says. "Moving from a decentralized culture to a collaborative one is a major change-management challenge." As the new "single face" of the company, each employee had to cede narrow product and market expertise to gain general knowledge of the company's entire product portfolio. In the past, a CNA small business customer that wanted additional coverage in the international arena would have to contact another underwriter and complete separate applications. With the new CNA, such customers would get all their needs met through one representative. "We needed to give the frontline underwriter the ability to appear like an expert for a variety of products," Larson says.

But how to make instant experts out of the staff? CNA's offerings include hundreds of products in more than 900 industry segments for both businesses and individuals, and in-depth knowledge was dispersed among 15,000 employees. The company had to figure out how to make the collective expertise of so many employees readily available to anyone, when and where it was needed. And it would have to do so in a way that didn't crimp individual work styles or create undue burdens on employees looking for information. Larson knew the company would have to "make it easy for any individual to have access to people within CNA who had answers and information." Even if that staff was geographically dispersed. Then Larson hit upon the idea of an expert locator system, software that allows employees to post questions and give answers via the Internet or an intranet.

Working with consultants from Cap Gemini Ernst & Young, a team of CNA managers spent the end of 2000 evaluating numerous expert location software products. In late 2000, the team chose AskMe Enterprise software from AskMe Corp. of Seattle. Factors in AskMe's favor included software that was scalable and capable of being integrated with Microsoft Outlook (already used by the company's employees), which meant a quick implementation. In February 2001, Bob James, CNA executive vice president of the technology and operations group, spearheaded a team of consultants from AskMe's professional services group to customize the software and create a small pilot project of 500 employees. The system, which CNA calls the knowledge network, has since been rolled out companywide and is being actively used by 4,000 employees.
Now if a CNA employee needs someone with underwriting experience in the inland marine industry, for example, he can type in a query and other employees are notified via e-mail that a question in their area of expertise has been posted. When employees answer questions, the software automatically adds to the archive, which eliminates the headache of answering the same question over and over again. Employees who have identified themselves as subject experts are known as knowledge sources. "Our knowledge network is a high-tech, geographically neutral watercooler that enables access to thousands of people," says James.

Larson, a 20-year veteran of the insurance industry and CNA employee since 1995, didn't officially join CNA's knowledge management effort until four months after the pilot launch of the expert locator system. Back then, Larson was working with Foley in the corporate development department on efforts to bring together CNA's various products and expertise in professional liability and standard property casualty. "It was hard to bring our internal expertise to our customers because each business unit had separate channels and distribution," Larson says. Given his prior experience in cross-marketing and in getting employees in different units to collaborate, he was very interested in taking a key role in CNA's new strategic direction. In June 2001, Foley formalized a leadership role around knowledge management, and Larson assumed the helm of a four-person team dedicated to promoting KM.

As Larson sees it, implementing KM represented a significant cultural change at CNA, where employees traditionally didn't collaborate with one another. For Foley, creating a KM department under the corporate development umbrella was a nod from management to the importance of knowledge sharing. "Our KM sits in corporate development for a specific reason," she says. "We chose not to put KM under technology because we don't want it viewed as a piece of technology. We chose not to put it in HR because it's not a training program. For us, KM involves brand development, research and employee communication."

Daniel Wright, AskMe's vice president of professional services, who consulted with James on implementing the knowledge network, says that CNA's establishment of a high-profile chief knowledge officer (CKO) role in conjunction with rolling out a KM system is part of an increasing trend. "Having a CKO not only shows commitment from the executive team, but it helps create accountability," he says. "Leaders within an organization have to drive adoption of knowledge-based networks in order for them to be effective."

That's not to say that Larson has had it easy simply because he now wears an official CKO mantle. He is quick to admit that creating an environment receptive to knowledge sharing came at a particularly problematic time. When CNA announced its reorganization plans, the inevitable rumors of layoffs and restructuring that resulted sent nervous vibes throughout the company. "Getting traction for the knowledge network in the second half of last year was difficult," Larson concedes. "We were reorganizing the company into three major business units, there was a great amount of organizational turmoil, and employees were not sure of their roles or where they would fit in the new structure." However, now that the reorganization is complete, organizational roles have been clarified. "There's now a clear understanding of the importance of collaboration and knowledge sharing because the knowledge network is aligned with our corporate strategy," Larson says. For their part, employees are now clearer about their roles, responsibilities and accountabilities, and Larson has seen a groundswell of interest in the knowledge network as a result.

Much of that interest in the knowledge network is attributable to Larson's message and the way he has chosen to deliver it. He has hammered home to employees and CNA's leadership alike the connection between presenting one face to the customer and shared knowledge. Larson has done that by telling stories about how sharing knowledge has helped employees on the job. He highlights individual success stories and publicizes them on CNA's intranet via a newsletter called Inside Scoop that's pushed to employees' desktops. As of April, Larson was in the process of recruiting so-called knowledge champions in about 20 functional areas throughout the company who will be responsible for collecting stories and passing them his way. "Storytelling is a helpful way for people to understand the role of the network," he says. "I highlight some of the ways using the network has helped us land new business or avoid unnecessary costs."

The case of Donald Schwanke is a perfect example. A claims consultant in commercial insurance from Syracuse, N.Y., Schwanke received a claim from Canada in February 2001 that involved a lawsuit relating to alleged abuses that took place between 1953 and 1962. Included with the claim was a policy written through Continental Insurance, which had merged with CNA. Canada would not allow any statute of limitation defense—making this, potentially, CNA's responsibility. However, some of Schwanke's colleagues, former employees of Continental, recalled that all the Canadian policies had been sold following the merger. Schwanke needed to find out if the policy in question was among those sold and if so, which company had purchased it. Schwanke turned to the CNA knowledge network, where he posted his question. His answer came the next day from an executive in a different business line who pointed Schwanke to a Canadian insurance company that had indeed purchased the policy. Schwanke was then able to notify the party who'd sent the claim of the correct insurer. According to Larson, the end result was Schwanke saving hours researching the issue—and CNA was spared settling a potentially very expensive claim.

Larson spent last winter and early spring reorganizing the categories on the knowledge network to better reflect CNA's new strategy and the roles of employees. For example, within the underwriting group, Larson is organizing content into casualty, property and specialty categories to capitalize on internal expertise. In the process, Larson is also recruiting new knowledge sources to populate the categories with information. To get out the word about the new knowledge network, Larson and his KM team took their message on the road this summer by visiting CNA's field offices and offering a hands-on introduction. In addition to gathering feedback from employees about the knowledge network and its relevancy to their job, Larson gathered more stories to share. To demonstrate the value of the knowledge network in the future, Larson wants to incorporate a more formal metrics process through regular employee surveys.

Despite high-level executive support for the knowledge network in particular and knowledge management in general, Foley remains circumspect about KM's ability to completely transform CNA. "We're excited about the [KM] initiative, but we've come to understand that people and paper are still important," she says. James is a bit more enthusiastic. "The idea of using technology to connect people in a knowledge network is a very interesting one for corporations with a lot of intellectual talent geographically dispersed," he says. "Where it's difficult to get to know your colleagues, these networks can really help collaboration efforts." For Larson, the end result is the power of collective knowledge. "With the network," he says, "we have the tremendous capability to deliver the expertise of thousands of people to our customers."

=============================================================================

Using the Essay above to help answer with the Questions:

Conclusions – summarize your findings in the form of an overall description of the current KM situation. (Answer must be at least 2 paragraphs)

Evaluation of this answer will be based on completeness in addressing all key KM dimensions (e.g. BTOPP Framework or KM Maturity Model), ability to analyze and to justify discussion and recommendations made (e.g. level of persuasiveness of your arguments, justifications, and prioritization).

“How I Reengineered a Small Business” by Richard H. Snyder, Strategic Finance (May 1999)

Case Study

REENGINEERING IS NOT JUST FOR LARGE BUSINESSES. IT'S TRUE THAT ONLY
GIANT CORPORATIONS CAN AFFORD TO PAY THE FEES FOR HIGH­POWERED
CONSULTANTS TO COME IN AND TURN THE ORGANIZATION UPSIDE DOWN. BUT
FOR THOSE BRAVE SOULS IN SMALL BUSINESSES WILLING TO THINK THE
UNTHINKABLE, REENGINEERING CAN BE MANAGED WITHOUT HUGE MONEY
OUTLAYS.
The major stumbling block in reengineering a small business is the staff who has worked
at the business for years and tends to develop an ownership in the current process and,
as a result, may be unable or unwilling to consider a revolutionary change in the
process. What is required is knowledge of the system that exists and a willingness to
consider radical new processes that would dramatically improve the system. In such
circumstances an outsider may be necessary in order to produce dramatic change.
Take as an example the case of James Street Fashions dba Latt­Greene, a knitting and
converting operation in Vernon, Calif. I became controller of the company on January 2,
1990, at the request of the owner in order to introduce control into the activities of the
company. I had a prior knowledge of the textile industry, having been in public

accounting for many years and having had some textile companies as clients (not Latt-
Greene). I also had controllership, internal auditing, and cost accounting experience and

had guided businesses though bankruptcy.
Latt­Greene knits textiles for the women's and children's apparel market, dyes and prints
designs on the textiles according to customer instructions, and delivers the product to
the customer ready for cutting and sewing into clothing. The customers of the company
consist of clothing manufacturers who sell to clothing retailers.
In the initial interviews at this family­owned and operated company, I discovered some of
the concerns: severe negative cash flow, a belief that not all sales to customers were
being billed or collected, a paper­heavy system that was being crushed by its own
weight. In my initial walk­through, I was astonished to see that the accountant was still
keeping records on a "one­write" system. There wasn't a single computer to be found on

the premises. I told the owners that if I were hired I would be making some dramatic
changes including introducing data processing.
UNRAVELING THE OLD
The first thing I did upon being hired was to purchase a personal computer. I purchased
one without any networking software because at that moment I had no one to network
with. But I did look forward to that day in the future and purchased a computer with the
capability of being turned into a central server at a future date. The only software that I
installed at that time was a powerful spreadsheet, Quattro Pro. In order to gain insight
and perspective into the problems of the system, I loaded into a spreadsheet all the
invoices billed to customers during the month of November 1989, the most current
period available at that time. I then began filling in columns with dyeing and printing
costs from the subcontracting companies who did this work for Latt­Greene. I also
calculated and added yarn costs and added a knitting cost, a tricky and inaccurate
process because such costs had never been accumulated or calculated. The only
financial records being prepared at this time were the general ledger, cash receipts
journal and customer ledgers, and a cash disbursement journal. As yarn was knitted into
unfinished textiles (called greige goods), sheets were manually prepared showing what
pieces were assigned to what lot and what the lot weighed. But no attempt was made to
cost the greige goods. When the finished goods were delivered to customers, they were
billed as per the purchase order, but again no attempt was made to cost the product. The
owners believed they knew what their knitting costs should be, and so I used that
number as a starting point.
Table 1
YEAR ENDED NET
05/31 SALES ROI
1985 16.5 113%
1986 19.8 (46%)
1987 24.8 (18%)
1988 33.6 33%
1989 39.2 11%
1990 54.8 (6%)
SEVEN MONTHS
ENDED 12/31
1990 31.3 63%
YEAR ENDED
12/31
1991 54 61%
1992 30 7%
1993 32 41%

1994 38 53%
1995 31 28%
1996 30 30%
1997 36 43%
1998 30 24%

As I developed the cost sheet, several problems began to surface. One, I couldn't locate
dyeing and printing invoices that could be matched up against the sales invoices. There
was no controlling order number that followed the job through all its steps before the
finished product was delivered to the customer. The dye house assigned its own number
to the orders, and the print plant did the same. In some cases it was virtually impossible
to determine to which order the costs applied. Two, I found purchase orders for which no
shipment to the customer could be located. Three, I found many orders being delivered
late. The person who placed orders into work kept the orders in an alphabetical file on
her desk and each day rummaged through the file, pulled some orders from it, and told
her assistant to put them into work. Many orders were delivered very late simply
because they didn't get pulled from the file, and there was no control over the orders that
were in process.
As I completed input for the month of November, I began seeing that a large number of
the orders either had a too low gross margin to generate a profit on the sale, or even
incurred a gross loss. I began analyzing these orders, and several problems came to the
surface. First, like a conscientious baker who regularly gives his customers a "baker's
dozen," Latt­Greene was producing textiles that were heavier than required. If an order
called for goods that weighed eight ounces to the running yard, we were filling it with
goods that weighed nine ounces. This extra weight made for a nice finished product, but
it also often meant the difference between a profit and a loss. Second, in many cases,
while the weight was okay, and all other factors in the production were correct, the order
didn't produce a profit. We came to the conclusion that in many cases the product was
simply being sold for too low a price. No wonder the company's sales increased from
$16 million to over $54 million in five short years.
During the time that I was developing this spreadsheet, the solutions to the problems
being uncovered were becoming clearer. I developed a manual costing system whereby
every new order coming in was costed as it progressed through the stages of production.
When it was delivered to the customer we knew immediately whether we made or lost
money and the reasons for an unsatisfactory result. But this manual costing system
required a tremendous amount of time to maintain and keep current.
KNITTING TIlE NEW TOGETHER
While searching for computer software that would take the place of the manual system, I
looked at several programs, but each had some faults or shortcomings that disqualified

them. Finally, I was introduced to a company that had produced a textile conversion
system for a business which was smaller than Latt­Greene, and which did no knitting.
But I liked what I saw because it had many fine features and controls. Talking with the
developer convinced me that the knitting operation could be added to produce a system
that met our needs.
In October 1990, we installed a computer system using my old personal computer as the
central server and added 10 stations using the Novell system. After installation, I had to
train the employees to use the new system. For some who resisted abandoning "the way
we had always done it," I had to warn them to either do it my way or I would get
someone who would. Over several months they learned to become computer operators,
and the old system was forgotten.
As better and better cost data was developed using the new system, we refined our
sales prices. In some cases major customers were lost because we raised our prices.
But most customers were retained because we improved our service to them in several
ways. Delivery schedules were met on a more consistent basis, and product consistency
and quality improved as the employees were able to spend more time on those aspects
of the product and less time on paperwork and trying to track down product location.
The system developer and I were able to develop a system that works very well for us
because we took the time to thoroughly understand the business of Latt­Greene and the
problems that occur in the textile industry. I took the time to talk to everyone involved in
the process of converting yarn into a dyed and printed textile. I looked at every piece of
paper being produced and traced an entire month's orders through to the final invoicing
of the finished product. This thorough analysis uncovered the problems. All that was left
was the development of the systems necessary to fix the problems. I involved as many
of the employees of Latt­Greene as possible in identifying the problems and in
suggesting solutions. Then, when the final system was installed, many of the people who
would be working with it already felt ownership of the system. The few who felt
threatened by it and resisted it subsequently left the company.
How successful were we in turning the company around? The table on page 28 displays
sales and return on owners' investment (ROI) for the years 1985 to 1998.
The big ROI fluctuations up to the year ended May 31, 1990, represent the agonies the
company was experiencing because of its rapid growth without corresponding
improvements in the systems. The marked decline in ROI in 1992 was due to the
upheavals introduced when the recession hit the clothing industry with a vengeance that
year. But the important thing here is that even in the deep recession into which the
clothing industry sank that year, Latt­Greene continued to be profitable. The 1998
numbers reflect the fact that tremendous quantities of Asian textiles were "dumped" in
the United States at prices that we cannot compete against. Several of our clothing
customers closed up because of this situation. Even during this "textile depression,"

however, Latt­Greene continued to be profitable.
The lesson here is that reengineering can have a dramatic impact upon a business.
Huge costs to implement change aren't necessary. The entire cost of our new system
was approximately $150,000. Turnaround was swift and dramatic. Downsizing did not
take place. We have about the same size office staff as we did in 1990 (eight people).
The difference is that now we know what our costs are, we bill all our sales, and collect
all our receivables. We are able to plan and to develop strategy. While marketing
mistakes still occur (for example, when we miss a season because of incorrect designs),
the cost of these mistakes is minimized because we can measure them and identify
exactly what the nature of the mistake was and make corrections before the mistake
becomes a catastrophe.
AN UPDATE
Nine years after inception, the system has changed considerably from the initial setup,
but we have never had to do another reengineering. The staff today is still about the
same size as it was in 1990. All the personnel that I hired in 1990 to assist in
administering the system are still with us. The only office staff to leave were those who
refused to work with the new system and had left by the end of 1990.
Some general principles that I learned from this reengineering and which may be helpful
to others who would like to upgrade their operation:
* Be open with all employees regarding the process.
* Solicit input from all employees.
* Involve everyone in the implementation of the new system.
* Understand the system yourself because this understanding is more important than
bringing in consultants and helps to ensure that costs are kept under control.

Discussion Questions:

Briefly describe the company, its products and customers.

What problems did the author discover when he conducted his initial interviews?

Describe the company’s old financial costing system, and identify its weaknesses as well as business operating and profit consequences cause by its poor costing system.

What are major impacts of the company’s new computerized costing system on its business operations, product prices and quality, and company’s profit?

What are general principles learned by the author for changing or reengineering a company’s costing system?

The number of goods sold by “The Local” is in excess of one million per year with deliveries being about 40% of that figure. The amount of goods sold has decreased marginally in recent years. “The Local” is wholly owned but Bianca and her staff have a standard of living to maintain so there is some pressure to raise overall sales whilst keeping costs, particularly delivery costs, in check.     Bianca continues: It is your job to use the sample data from last year’s overall sales to do some statistical analyses and interpretations, investigating what the current overall sales of the business are and providing insights that will guide future business decisions.

Below is last years overall sales vs deliveries data.

1. Please identify the qualitative and quantitative discrete, continuous varibles?

2. Is it cross sectional or time series data?

3. How do you calculate z scores and which are outliers?

4. How do you calculate the covariance and correlation and what does it mean?

Product ID	Fat/Sugar Content	Item Type	Overall Sales	Deliveries
FDV28	Regular	Frozen Foods	272	122
FDF34	Regular	Snack Foods	397	151
FDN49	Regular	Breakfast	399	192
FDP38	Low Fat/Sugar	Canned	405	174
FDT36	Low Fat/Sugar	Baking Goods	459	184
FDX38	Regular	Dairy	575	213
DRJ59	Low Fat/Sugar	Diet Drinks	579	266
FDE35	Regular	Potato Crisps	586	170
FDZ02	Regular	Dairy	587	317
NCK06	Regular	Household	606	321
FDX48	Regular	Baking Goods	618	235
FDG40	Low Fat/Sugar	Frozen Foods	645	213
FDA49	Low Fat/Sugar	Canned	698	181
FDV11	Regular	Breads	700	224
NCI29	Regular	Health and Hygiene	709	284
FDE59	Regular	Potato Crisps	719	223
NCK05	Regular	Health and Hygiene	735	323
DRN35	Low Fat/Sugar	Diet Drinks	755	219
FDE17	Regular	Frozen Foods	756	212
NCI31	Regular	Others	769	400
DRI25	Regular	Soft Drinks	774	333
FDU33	Regular	Snack Foods	781	211
FDY40	Regular	Frozen Foods	788	292
DRK35	Low Fat/Sugar	Diet Drinks	797	215
FDK04	Low Fat/Sugar	Frozen Foods	802	401
FDR43	Regular	Fruits and Vegetables	806	258
FDY12	Regular	Baking Goods	810	227
NCG43	Regular	Household	833	425
FDA44	Regular	Fruits and Vegetables	849	297
DRB25	Regular	Soft Drinks	858	360
FDW38	Regular	Dairy	863	345
FDV48	Regular	Baking Goods	864	415
FDW12	Regular	Baking Goods	871	226
FDW13	Low Fat/Sugar	Canned	883	459
FDO60	Low Fat/Sugar	Baking Goods	892	464
FDT43	Regular	Fruits and Vegetables	935	234
DRL35	Low Fat/Sugar	Diet Drinks	952	400
FDE22	Low Fat/Sugar	Snack Foods	959	422
FDW24	Low Fat/Sugar	Baking Goods	972	311
DRD25	Low Fat/Sugar	Soft Drinks	1019	255
NCJ19	Regular	Others	1031	454
FDX23	Low Fat/Sugar	Baking Goods	1040	541
FDD10	Regular	Snack Foods	1071	364
FDU26	Regular	Dairy	1073	354
FDP39	Low Fat/Sugar	Meat	1091	513
DRH25	Low Fat/Sugar	Soft Drinks	1091	578
DRC25	Regular	Soft Drinks	1117	559
FDY03	Regular	Meat	1125	563
FDU46	Regular	Snack Foods	1125	349
FDH27	Low Fat/Sugar	Dairy	1151	633
FDB27	Low Fat/Sugar	Dairy	1182	355
FDZ33	Low Fat/Sugar	Snack Foods	1182	579
FDR49	Low Fat/Sugar	Canned	1198	503
FDX27	Regular	Dairy	1229	430
FDV04	Regular	Frozen Foods	1257	679
FDH21	Regular	Seafood	1268	418
FDY35	Regular	Breads	1286	514
FDP24	Low Fat/Sugar	Baking Goods	1333	720
FDR02	Low Fat/Sugar	Dairy	1334	374
FDL38	Regular	Canned	1338	455
FDC59	Regular	Potato Crisps	1342	523
NCK53	Regular	Health and Hygiene	1389	542
DRD37	Low Fat/Sugar	Soft Drinks	1398	489
FDY60	Regular	Baking Goods	1438	733
NCH54	Regular	Household	1438	374
FDU32	Regular	Fruits and Vegetables	1462	731
FDK15	Low Fat/Sugar	Meat	1488	491
FDE53	Low Fat/Sugar	Frozen Foods	1491	581
FDS48	Low Fat/Sugar	Baking Goods	1505	497
FDY07	Regular	Fruits and Vegetables	1516	379
FDR48	Low Fat/Sugar	Baking Goods	1518	516
FDA50	Low Fat/Sugar	Dairy	1545	773
FDE10	Regular	Snack Foods	1574	787
FDR26	Low Fat/Sugar	Dairy	1594	558
NCB06	Regular	Health and Hygiene	1598	575
NCJ17	Regular	Health and Hygiene	1619	550
FDJ07	Low Fat/Sugar	Meat	1631	881
FDH35	Low Fat/Sugar	Potato Crisps	1645	543
FDQ14	Low Fat/Sugar	Dairy	1648	593
FDB34	Low Fat/Sugar	Snack Foods	1657	746
FDQ56	Regular	Fruits and Vegetables	1678	839
FDH14	Regular	Canned	1686	506
NCJ43	Regular	Household	1744	942
FDR07	Regular	Fruits and Vegetables	1809	923
FDP01	Regular	Breakfast	1830	769
FDH47	Low Fat/Sugar	Potato Crisps	1847	720
FDS37	Low Fat/Sugar	Canned	1854	686
FDD36	Low Fat/Sugar	Baking Goods	1896	720
FDF16	Low Fat/Sugar	Frozen Foods	1921	730
FDG53	Low Fat/Sugar	Frozen Foods	1957	1037
FDM44	Regular	Fruits and Vegetables	1961	1039
NCI54	Regular	Household	1965	550
FDY24	Regular	Baking Goods	1995	1057
NCJ30	Regular	Household	2037	774
FDF33	Regular	Seafood	2049	1086
FDW20	Regular	Fruits and Vegetables	2094	1047
FDN15	Low Fat/Sugar	Meat	2097	860
NCJ18	Regular	Household	2133	619
FDB49	Regular	Baking Goods	2168	542
FDE11	Regular	Potato Crisps	2221	1088
DRO47	Low Fat/Sugar	Diet Drinks	2264	1155
FDP59	Regular	Breads	2285	686
FDX43	Regular	Fruits and Vegetables	2330	1235
FDX51	Regular	Meat	2349	1292
FDO24	Low Fat/Sugar	Baking Goods	2377	689
FDU47	Regular	Breads	2388	812
FDS12	Low Fat/Sugar	Baking Goods	2391	1076
FDU35	Low Fat/Sugar	Breads	2397	719
FDU57	Regular	Snack Foods	2408	819
DRE49	Regular	Soft Drinks	2429	1312
FDW47	Low Fat/Sugar	Breads	2437	1170
DRI47	Low Fat/Sugar	Diet Drinks	2445	1051
NCM43	Regular	Others	2447	856
NCH18	Regular	Household	2457	1302
NCH30	Regular	Household	2490	921
FDB17	Low Fat/Sugar	Frozen Foods	2535	1039
DRD24	Low Fat/Sugar	Soft Drinks	2553	1098
DRM23	Low Fat/Sugar	Diet Drinks	2587	1138
DRI01	Regular	Soft Drinks	2587	802
FDZ10	Low Fat/Sugar	Snack Foods	2657	1116
FDW26	Regular	Dairy	2669	774
FDE04	Regular	Frozen Foods	2696	755
FDX01	Low Fat/Sugar	Canned	2796	1314
FDZ21	Regular	Snack Foods	2800	868
DRK59	Low Fat/Sugar	Diet Drinks	2812	844
FDB32	Regular	Fruits and Vegetables	2816	732
FDC60	Regular	Baking Goods	2834	1247
DRJ23	Low Fat/Sugar	Diet Drinks	2836	936
FDP19	Regular	Fruits and Vegetables	2842	1222
DRN47	Low Fat/Sugar	Diet Drinks	2876	1582
FDJ41	Low Fat/Sugar	Frozen Foods	2878	1266
NCF54	Regular	Household	2932	1583
NCK29	Regular	Health and Hygiene	2956	946
FDU58	Regular	Snack Foods	2993	1377
FDZ12	Low Fat/Sugar	Baking Goods	3006	1293
NCH55	Regular	Household	3036	759
FDZ51	Regular	Meat	3047	975
DRM47	Low Fat/Sugar	Diet Drinks	3057	856
FDE05	Regular	Frozen Foods	3062	1439
FDJ28	Low Fat/Sugar	Frozen Foods	3079	1447
NCK19	Regular	Others	3100	837
FDC35	Regular	Potato Crisps	3106	1677
FDZ09	Low Fat/Sugar	Snack Foods	3112	934
FDB58	Regular	Snack Foods	3120	1654
NCM55	Regular	Others	3147	1699
FDZ45	Low Fat/Sugar	Snack Foods	3175	1111
FDK51	Low Fat/Sugar	Dairy	3180	827
FDG33	Regular	Seafood	3264	1697
FDF52	Low Fat/Sugar	Frozen Foods	3284	1182
FDV36	Low Fat/Sugar	Baking Goods	3289	1612
FDC15	Low Fat/Sugar	Dairy	3300	1749
FDU23	Low Fat/Sugar	Breads	3302	826
FDV60	Regular	Baking Goods	3339	1469
FDM25	Regular	Breakfast	3340	1102
FDZ26	Regular	Dairy	3346	870
FDB28	Low Fat/Sugar	Dairy	3362	1849
NCG18	Regular	Household	3384	1861
FDB22	Low Fat/Sugar	Snack Foods	3384	1117
FDY02	Regular	Dairy	3419	1436
NCH06	Regular	Household	3449	1897
FDM39	Low Fat/Sugar	Dairy	3582	896
NCC54	Regular	Health and Hygiene	3615	1844
FDQ39	Low Fat/Sugar	Meat	3631	1852
FDS13	Low Fat/Sugar	Canned	3710	1187
FDL14	Regular	Canned	3739	1159
DRA12	Regular	Soft Drinks	3829	1723
FDV31	Regular	Fruits and Vegetables	3882	1359
NCH42	Regular	Household	3905	1445
FDE28	Regular	Frozen Foods	3916	1958
FDT11	Regular	Breads	3943	1498
FDX12	Regular	Baking Goods	4097	1967
NCH07	Regular	Household	4120	1318
FDR37	Regular	Breakfast	4196	1175
FDT13	Low Fat/Sugar	Canned	4334	1777
FDP27	Low Fat/Sugar	Meat	4364	1658
FDD47	Regular	Potato Crisps	4432	1330
NCL29	Regular	Health and Hygiene	4437	2041
FDZ03	Regular	Dairy	4474	1253
FDY39	Regular	Meat	4594	2251
FDW40	Regular	Frozen Foods	4844	2277
FDB60	Low Fat/Sugar	Baking Goods	4860	1215
FDA43	Regular	Fruits and Vegetables	4877	1561
FDJ57	Regular	Seafood	5015	2207
FDC46	Low Fat/Sugar	Snack Foods	5164	2014
FDW56	Regular	Fruits and Vegetables	5195	1455
DRE01	Regular	Soft Drinks	5332	2506
DRF36	Low Fat/Sugar	Soft Drinks	5350	2408
FDK28	Low Fat/Sugar	Frozen Foods	5411	2868
FDV59	Low Fat/Sugar	Breads	5661	1585
FDI38	Regular	Canned	5798	2087
DRJ11	Low Fat/Sugar	Diet Drinks	6051	1513
DRL01	Regular	Soft Drinks	6310	2209
FDX39	Regular	Meat	6332	1710
FDO11	Regular	Breads	6972	2719
FDC02	Low Fat/Sugar	Canned	7029	1898
DRG49	Regular	Soft Drinks	7086	2551
FDB15	Low Fat/Sugar	Dairy	7646	4205
FDY26	Regular	Dairy	7834	3682
FDG47	Regular	Potato Crisps	8132	4147
FDP15	Low Fat/Sugar	Meat	9228	3599

Owen Mills Limited began its operations on Trumpet Land, a beautiful island in the Caribbean with a very diverse population in terms of age, gender, ethnicity, religion, disability, sexual orientation, education, and origin. In 1970, at the age of twenty-eight (28), Owen Mills a progressive thinking young man decided to start his own business. His father had worked as a Manager at a large department store in the city of Trumpet Land for as long as Owen can remember, and his father would share his daily experiences. The idea of operating his own business was always at the forefront of Owen’s mind. After gaining four (4) Advanced Level subjects (Mathematics, Geography, English Literature and Spanish), Owen got a job at a large Credit Union where he moved up the ranks from a Customer Service Clerk to Supervisory level within four (4) years and then onto being a Credit Officer.

During his time at the Credit Union, Owen attended a number of short management courses. This built his confidence that someday soon he will achieve his dream of being a big business man. At age twenty-eight (28) Owen thought that he had saved sufficient money along with his wife who worked at another Credit Union, so that they could purchase a small one-story building in the heart of the city. The building was at the corner of French Street and John Street, the main street in the city. The building was refurbished and painted in bright red, and blue to suit the liking of Mr. Mills. He thought to himself “No one could miss this building” and he also thought of a tag line. Business started in February 1970. From the inception of the business to date, the tagline emblazoned at the front of the store “We have all that you want!’ has remained.

The Early Years Owen Mills Limited operated as a sole proprietorship for many years selling almost every item that a household could want, staying true to his tagline. The business began with five (5) employees: his wife serving as the cashier, two store clerks, one driver and a cleaner. The store was well sectioned with a variety of items as shown in Table #1 below. Table #1 – Variety of Items sold by Owen Mills Limited Cosmetics and related products for men and women. School items – copy books, pencils, pens rulers, etc. Basic food/grocery items – rice, flour, sugar, peas, salt, seasonings and other condiments Personal hygiene products Plumbing and electrical material A variety of snacks and soft drinks Perfumes/fragrances Small appliances Kitchen ware and Glassware Clothing and footwear for babies, and boys and girls Household items – batteries, glue, tacks, etc. A variety of gift items Ladies and gents’ underwear and other everyday garments Household cleaning products Gardening tools/implements and hardware items Gym shoes and slippers for ladies and gents Sewing items A variety of handy man tools

Orders would be placed with wholesalers who would deliver the products on scheduled days. Mr. Mills was very organized. During the first two (2) years of operating in the city of Trumpet Land, Mr. Mills observed that his customers comprised of citizens from all over the island. He got an idea, “I could go to the outer area of the city with my products.” He started in October 1971 to pack his Toyota panel van and leave with his driver on Saturdays and Sundays to the areas bordering the city. Mr. Mills was successful with this venture and discovered that there were retirees and housewives who were at home during the week, and he began to go into those area at least two (2) days per week in addition to Saturdays and Sundays.

Clearly, Mr. Mills was an astute businessman who was always thinking of the next move to grow the business. He and his wife joined the Chamber of Commerce, read widely about what was happening locally, regionally and internationally, and made every effort to attend conferences and seminars which they thought would be beneficial. He was always thinking about growth and expansion. Owen Mills Limited became a known business even to those persons who had never patronized the store. In the midst of it all, Mr. Mills understood his corporate social responsibility and as such was respected highly by other businessmen and members of the community and country. A proud moment for Mr. Mills, his family and employees occurred when he was awarded Business Man of the Year Award in 1999.

On a Growth Path The years flew by very quickly and by 1995, Mr. Mills had added two (2) more floors to the original building that he bought. He now had four (4) grown children 4 (two (2) boys and two (2) girls) all in their twenties and who all showed an interest in the business. Similar to their father, they had done very well at the secondary school level and had aspirations of gaining a tertiary level education as well as being a part of the business. They pondered their options of going to school fulltime or enrolling in an online programme, so that they could better manage their time and fulfill their career objectives. The oldest son began to pursue the Association of Chartered Certified Accountants (ACCA) Programme. He thought that he can become the Accountant for Owen Mills Limited or open an accounting firm in the next few years.

By the year 2000, Mr. Owen Mills had spread his wings to the eastern, southern and western part of Trumpet Land. He was able to purchase within a five-year period, three (3) large two-story buildings in each of the areas. The buildings were painted in the same colors as the first one in the city in the north and carried the well-known tagline - We have all that you want! The business incurred a manageable mortgage loan, but that will be repaid in less than ten (10) years. Mr. Mills began to think about succession for his business and the future of his children who had been supporting him throughout the years. He held a family meeting and it was decided that with the imminent opening of three (3) other Branches, that each child would manage a branch and he will now be considered as the Chairman.

In the midst of the initiatives being undertaken, Mr. Mills was very cognizant that the world of business was wrought with dynamism and uncertainty and he and his family needed to understand about strategic moves that could be undertaken. He had been reading and trying to keep up to date with what was happening in the world of business. He and his family did not have a full grasp of the theoretical 5 underpinnings to maneuver quickly out of any new challenges, and he understood very well that challenges can surface with expansion. By 2018, the total staff had grown to eighty (80) persons which included cashiers, information technology personnel, supervisors, customer service staff, cleaners, drivers and his four (4) children as managers,

Looking to the Future Undoubtedly, Owen Mills Limited has been a successful enterprise. However, Mr. Mills and his eldest son, who had gained his ACCA qualification began to look at the financials very closely. They recognized that while the company had repaid the mortgage loans, and there was still an influx of customers at all branches, the profits had been reducing in the three (3) years prior to 2020, though minimally. Mr. Mills and his family had their usual monthly meeting in December 2019. One of the daughters took some points in relation to the present status of the Company. It related to a SWOT Analysis. Whist the SWOT Analysis was not fully articulated in terms of what the strengths can and have brought to the Company; how the weaknesses are impacting the Company; the possible outcomes from taking advantage of available opportunities; and the possible impact of threats, her brief notes are highlighted below:

Strengths:  Committed employees and management  Appropriate management style  Adequate financial and human resources  Wide variety of products 6  Broad market coverage  Good financial management  Brand name reputation  Excellent customer service skills  Some expertise in new venture management

Weaknesses  Lack of research and development skills  Lack of understanding of strategic management and planning

Opportunities  Exploit new market segments  Move into new businesses, but how and what type  Expand into foreign markets  Acquire a profitable acquisition

Threats  Increase in competition, but where do we look  New forms of competition  Changes in customer preferences  Rising costs of products and labour

At the start of 2020, Mr. Mills and his family began to follow the news with respect to the deadly COVID-19 virus. “This is a time for quick action” pondered Mr. Mills. The business has been successful, but Mr. Mills and family has recognized that things are changing in the environment and could have negatives on the business. At the January 2020 monthly meeting, it was decided that the company should seek the services of a reputable consultant who can advise and assist the company with getting a clear understanding of what strategic management and planning entails. Other matters discussed which the family agreed to pursue, include embarking on a training initiative which would include staff at all levels as well as to create an awareness of the environmental factors that can affect the company. One member in the meeting raised the issue of how they can determine with accuracy the financial situation at the company. She is aware that ratios could be used, but that’s as much as she knows. Changes in demographic factors  Changes in economic factors and down turn in the economy  Slow growth in the market

Mr. Mills stretched his imagination, “We had better start thinking about starting a branch in some foreign country, or start to manufacture something that people will need.” Then he pondered to himself, “I do not have all the knowledge about the intricacies of manufacturing and so-called strategies to continue to be a winner” The meeting ended with Mr. Mills thinking aloud that they should all read up about what it means to be innovative. He indicated that at the next meeting, they will all come with their ideas of a plan that is different to what they are doing now and which can contribute to continued success. He was not sure what type of plan that would be. He has been following keenly the possible impact and negative fallout that the company could experience because of the COVID-19 virus. However, the astute businessman that Mr. Mills is, he purchased some cotton material, took some elastic and thread from the store, and hired two (2) seamstresses to make 8 protective masks. The masks have been a fast seller and is bringing a profit to the store. Once more, Owen Mills Limited is living up to its tagline - We have all that you want!

Question:

Q1 a). In the early years, Mr. Mills along with his driver went into the areas bordering the city where his store was located. Identify the type of strategy by name that was used by Mr. Mills in his effort to capture additional sales. Also, provide a brief explanation for the strategy identified as well as provide three (3) reasons why Mr. Mills was successful with that initiative.

Q1(b). With the emergence of COVID-19, Mr. Mills saw an opportunity to help with protective gear, namely masks, as well as to make some money. Identify the type of strategy by name that was used by Mr. Mills through the initiative to make and sell masks. Also, provide a brief explanation for the strategy identified as well as provide three (2) reasons why Mr. Mills was successful with that initiative.

Q1(c). Mr. Owen Mills is thinking about starting a branch in some foreign country, but will need advice on the types of strategies that could be adopted. As the hired Consultant, how would you advise Mr. Mills and family about the best approaches to entering a foreign market. Provide justification for your advice.

In addition, could you provide Mr. Mills and family about the types of experiences that they may encounter, and which may not be always positive. Based on your response, would you advise Mr. Mills to enter a foreign market? Provide justification for your advice.

Case Study

Owen Mills Limited

We have all that you want!

Owen Mills Limited began its operations on Trumpet Land, a beautiful island in the Caribbean with a very diverse population in terms of age, gender, ethnicity, religion, disability, sexual orientation, education, and origin. In 1970, at the age of twenty-eight (28), Owen Mills a progressive thinking young man decided to start his own business.   His father had worked as a Manager at a large department store in the city of Trumpet Land for as long as Owen can remember, and his father would share his daily experiences. The idea of operating his own business was always at the forefront of Owen’s mind. After gaining four (4) Advanced Level subjects (Mathematics, Geography, English Literature and Spanish), Owen got a job at a large Credit Union where he moved up the ranks from a Customer Service Clerk to Supervisory level within four (4) years and then onto being a Credit Officer.

During his time at the Credit Union, Owen attended a number of short management courses. This built his confidence that someday soon he will achieve his dream of being a big business man. At age twenty-eight (28) Owen thought that he had saved sufficient money along with his wife who worked at another Credit Union, so that they could purchase a small one-story building in the heart of the city. The building was at the corner of French Street and John Street, the main street in the city. The building was refurbished and painted in bright red, and blue to suit the liking of Mr. Mills.   He thought to himself “No one could miss this building” and he also thought of a tag line. Business started in February 1970. From the inception of the business to date, the tagline emblazoned at the front of the store “We have all that you want!’ has remained.

The Early Years

Owen Mills Limited operated as a sole proprietorship for many years selling almost every item that a household could want, staying true to his tagline. The business began with five (5) employees: his wife serving as the cashier, two store clerks, one driver and a cleaner. The store was well sectioned with a variety of items as shown in Table #1 below.

Table #1 – Variety of Items sold by Owen Mills Limited

Cosmetics and related products for men and women.	School items – copy books, pencils, pens rulers, etc.	Basic food/grocery items – rice, flour, sugar, peas, salt, seasonings and other condiments
Personal hygiene products	Plumbing and electrical material	A variety of snacks and soft drinks
Perfumes/fragrances	Small appliances	Kitchen ware and Glassware
Clothing and footwear for babies, and boys and girls	Household items – batteries, glue, tacks, etc.	A variety of gift items
Ladies and gents’ underwear and other everyday garments	Household cleaning products	Gardening tools/implements and hardware items
Gym shoes and slippers for ladies and gents	Sewing items	A variety of handy man tools

Orders would be placed with wholesalers who would deliver the products on scheduled days. Mr. Mills was very organized. During the first two (2) years of operating in the city of Trumpet Land, Mr. Mills observed that his customers comprised of citizens from all over the island. He got an idea, “I could go to the outer area of the city with my products.” He started in October 1971 to pack his Toyota panel van and leave with his driver on Saturdays and Sundays to the areas bordering the city.   Mr. Mills was successful with this venture and discovered that there were retirees and housewives who were at home during the week, and he began to go into those area at least two (2) days per week in addition to Saturdays and Sundays.

Clearly, Mr. Mills was an astute businessman who was always thinking of the next move to grow the business. He and his wife joined the Chamber of Commerce, read widely about what was happening locally, regionally and internationally, and made every effort to attend conferences and seminars which they thought would be beneficial. He was always thinking about growth and expansion. Owen Mills Limited became a known business even to those persons who had never patronized the store. In the midst of it all, Mr. Mills understood his corporate social responsibility and as such was respected highly by other businessmen and members of the community and country. A proud moment for Mr. Mills, his family and employees occurred when he was awarded Business Man of the Year Award in 1999.

On a Growth Path

The years flew by very quickly and by 1995, Mr. Mills had added two (2) more floors to the original building that he bought.   He now had four (4) grown children (two (2) boys and two (2) girls) all in their twenties and who all showed an interest in the business. Similar to their father, they had done very well at the secondary school level and had aspirations of gaining a tertiary level education as well as being a part of the business. They pondered their options of going to school full-time or enrolling in an online programme, so that they could better manage their time and fulfill their career objectives. The oldest son began to pursue the Association of Chartered Certified Accountants (ACCA) Programme.   He thought that he can become the Accountant for Owen Mills Limited or open an accounting firm in the next few years.  

By the year 2000, Mr. Owen Mills had spread his wings to the eastern, southern and western part of Trumpet Land.   He was able to purchase within a five-year period, three (3) large two-story buildings in each of the areas. The buildings were painted in the same colors as the first one in the city in the north and carried the well-known tagline - We have all that you want!  The business incurred a manageable mortgage loan, but that will be repaid in less than ten (10) years.

Mr. Mills began to think about succession for his business and the future of his children who had been supporting him throughout the years. He held a family meeting and it was decided that with the imminent opening of three (3) other Branches, that each child would manage a branch and he will now be considered as the Chairman.

In the midst of the initiatives being undertaken, Mr. Mills was very cognizant that the world of business was wrought with dynamism and uncertainty and he and his family needed to understand about strategic moves that could be undertaken. He had been reading and trying to keep up to date with what was happening in the world of business.   He and his family did not have a full grasp of the theoretical underpinnings to maneuver quickly out of any new challenges, and he understood very well that challenges can surface with expansion. By 2018, the total staff had grown to eighty (80) persons which included cashiers, information technology personnel, supervisors, customer service staff, cleaners, drivers and his four (4) children as managers,

Looking to the Future

Undoubtedly, Owen Mills Limited has been a successful enterprise. However, Mr. Mills and his eldest son, who had gained his ACCA qualification began to look at the financials very closely. They recognized that while the company had repaid the mortgage loans, and there was still an influx of customers at all branches, the profits had been reducing in the three (3) years prior to 2020, though minimally.

Mr. Mills and his family had their usual monthly meeting in December 2019. One of the daughters took some points in relation to the present status of the Company. It related to a SWOT Analysis. Whist the SWOT Analysis was not fully articulated in terms of what the strengths can and have brought to the Company; how the weaknesses are impacting the Company; the possible outcomes from taking advantage of available opportunities; and the possible impact of threats, her brief notes are highlighted below:

Strengths:

• Committed employees and management
• Appropriate management style
• Adequate financial and human resources
• Wide variety of products
• Broad market coverage
• Good financial management
• Brand name reputation
• Excellent customer service skills
• Some expertise in new venture management

Weaknesses

• Lack of research and development skills
• Lack of understanding of strategic management and planning

Opportunities

• Exploit new market segments
• Move into new businesses, but how and what type
• Expand into foreign markets
• Acquire a profitable acquisition

Threats

• Increase in competition, but where do we look
• New forms of competition
• Changes in customer preferences
• Rising costs of products and labour
• Changes in demographic factors
• Changes in economic factors and down turn in the economy
• Slow growth in the market

At the start of 2020, Mr. Mills and his family began to follow the news with respect to the deadly COVID-19 virus.  “This is a time for quick action” pondered Mr. Mills. The business has been successful, but Mr. Mills and family has recognized that things are changing in the environment and could have negatives on the business. At the January 2020 monthly meeting, it was decided that the company should seek the services of a reputable consultant who can advise and assist the company with getting a clear understanding of what strategic management and planning entails. Other matters discussed which the family agreed to pursue, include embarking on a training initiative which would include staff at all levels as well as to create an awareness of the environmental factors that can affect the company. One member in the meeting raised the issue of how they can determine with accuracy the financial situation at the company. She is aware that ratios could be used, but that’s as much as she knows.

Mr. Mills stretched his imagination, “We had better start thinking about starting a branch in some foreign country, or start to manufacture something that people will need.”   Then he pondered to himself, “I do not have all the knowledge about the intricacies of manufacturing and so-called strategies to continue to be a winner”  

The meeting ended with Mr. Mills thinking aloud that they should all read up about what it means to be innovative.   He indicated that at the next meeting, they will all come with their ideas of a plan that is different to what they are doing now and which can contribute to continued success. He was not sure what type of plan that would be.   He has been following keenly the possible impact and negative fallout that the company could experience because of the COVID-19 virus.   However, the astute businessman that Mr. Mills is, he purchased some cotton material, took some elastic and thread from the store, and hired two (2) seamstresses to make protective masks. The masks have been a fast seller and is bringing a profit to the store.   Once more, Owen Mills Limited is living up to its tagline - We have all that you want!

Q1.      Mr. Owen Mills, the owner of Owen Mills Limited has been operating a successful business since 1970. However, he is not fully aware of what strategic management and planning entails. You are hired as a consultant to advise Mr. Mills, his family and selected members of the Company about what strategic management and planning entails as well as how important it is for the organization to engage in strategic management and planning.   

What would you say to the members present at the meeting so that they can have a very good understanding of what strategic management and planning entails, and why they should engage in the process so as to maintain the competitive advantage of Owen Mills Limited? (Total - 25 marks)

Case Study

Owen Mills Limited

We have all that you want!

Owen Mills Limited began its operations on Trumpet Land, a beautiful island in the Caribbean with a very diverse population in terms of age, gender, ethnicity, religion, disability, sexual orientation, education, and origin. In 1970, at the age of twenty-eight (28), Owen Mills a progressive thinking young man decided to start his own business.   His father had worked as a Manager at a large department store in the city of Trumpet Land for as long as Owen can remember, and his father would share his daily experiences. The idea of operating his own business was always at the forefront of Owen’s mind. After gaining four (4) Advanced Level subjects (Mathematics, Geography, English Literature and Spanish), Owen got a job at a large Credit Union where he moved up the ranks from a Customer Service Clerk to Supervisory level within four (4) years and then onto being a Credit Officer.

During his time at the Credit Union, Owen attended a number of short management courses. This built his confidence that someday soon he will achieve his dream of being a big business man. At age twenty-eight (28) Owen thought that he had saved sufficient money along with his wife who worked at another Credit Union, so that they could purchase a small one-story building in the heart of the city. The building was at the corner of French Street and John Street, the main street in the city. The building was refurbished and painted in bright red, and blue to suit the liking of Mr. Mills.   He thought to himself “No one could miss this building” and he also thought of a tag line. Business started in February 1970. From the inception of the business to date, the tagline emblazoned at the front of the store “We have all that you want!’ has remained.

The Early Years

Owen Mills Limited operated as a sole proprietorship for many years selling almost every item that a household could want, staying true to his tagline. The business began with five (5) employees: his wife serving as the cashier, two store clerks, one driver and a cleaner. The store was well sectioned with a variety of items as shown in Table #1 below.

Table #1 – Variety of Items sold by Owen Mills Limited

Cosmetics and related products for men and women.	School items – copy books, pencils, pens rulers, etc.	Basic food/grocery items – rice, flour, sugar, peas, salt, seasonings and other condiments
Personal hygiene products	Plumbing and electrical material	A variety of snacks and soft drinks
Perfumes/fragrances	Small appliances	Kitchen ware and Glassware
Clothing and footwear for babies, and boys and girls	Household items – batteries, glue, tacks, etc.	A variety of gift items
Ladies and gents’ underwear and other everyday garments	Household cleaning products	Gardening tools/implements and hardware items
Gym shoes and slippers for ladies and gents	Sewing items	A variety of handy man tools

Orders would be placed with wholesalers who would deliver the products on scheduled days. Mr. Mills was very organized. During the first two (2) years of operating in the city of Trumpet Land, Mr. Mills observed that his customers comprised of citizens from all over the island. He got an idea, “I could go to the outer area of the city with my products.” He started in October 1971 to pack his Toyota panel van and leave with his driver on Saturdays and Sundays to the areas bordering the city.   Mr. Mills was successful with this venture and discovered that there were retirees and housewives who were at home during the week, and he began to go into those area at least two (2) days per week in addition to Saturdays and Sundays.

Clearly, Mr. Mills was an astute businessman who was always thinking of the next move to grow the business. He and his wife joined the Chamber of Commerce, read widely about what was happening locally, regionally and internationally, and made every effort to attend conferences and seminars which they thought would be beneficial. He was always thinking about growth and expansion. Owen Mills Limited became a known business even to those persons who had never patronized the store. In the midst of it all, Mr. Mills understood his corporate social responsibility and as such was respected highly by other businessmen and members of the community and country. A proud moment for Mr. Mills, his family and employees occurred when he was awarded Business Man of the Year Award in 1999.

On a Growth Path

The years flew by very quickly and by 1995, Mr. Mills had added two (2) more floors to the original building that he bought.   He now had four (4) grown children (two (2) boys and two (2) girls) all in their twenties and who all showed an interest in the business. Similar to their father, they had done very well at the secondary school level and had aspirations of gaining a tertiary level education as well as being a part of the business. They pondered their options of going to school full-time or enrolling in an online programme, so that they could better manage their time and fulfill their career objectives. The oldest son began to pursue the Association of Chartered Certified Accountants (ACCA) Programme.   He thought that he can become the Accountant for Owen Mills Limited or open an accounting firm in the next few years.  

By the year 2000, Mr. Owen Mills had spread his wings to the eastern, southern and western part of Trumpet Land.   He was able to purchase within a five-year period, three (3) large two-story buildings in each of the areas. The buildings were painted in the same colors as the first one in the city in the north and carried the well-known tagline - We have all that you want!  The business incurred a manageable mortgage loan, but that will be repaid in less than ten (10) years.

Mr. Mills began to think about succession for his business and the future of his children who had been supporting him throughout the years. He held a family meeting and it was decided that with the imminent opening of three (3) other Branches, that each child would manage a branch and he will now be considered as the Chairman.

In the midst of the initiatives being undertaken, Mr. Mills was very cognizant that the world of business was wrought with dynamism and uncertainty and he and his family needed to understand about strategic moves that could be undertaken. He had been reading and trying to keep up to date with what was happening in the world of business.   He and his family did not have a full grasp of the theoretical underpinnings to maneuver quickly out of any new challenges, and he understood very well that challenges can surface with expansion. By 2018, the total staff had grown to eighty (80) persons which included cashiers, information technology personnel, supervisors, customer service staff, cleaners, drivers and his four (4) children as managers,

Looking to the Future

Undoubtedly, Owen Mills Limited has been a successful enterprise. However, Mr. Mills and his eldest son, who had gained his ACCA qualification began to look at the financials very closely. They recognized that while the company had repaid the mortgage loans, and there was still an influx of customers at all branches, the profits had been reducing in the three (3) years prior to 2020, though minimally.

Mr. Mills and his family had their usual monthly meeting in December 2019. One of the daughters took some points in relation to the present status of the Company. It related to a SWOT Analysis. Whist the SWOT Analysis was not fully articulated in terms of what the strengths can and have brought to the Company; how the weaknesses are impacting the Company; the possible outcomes from taking advantage of available opportunities; and the possible impact of threats, her brief notes are highlighted below:

Strengths:

• Committed employees and management
• Appropriate management style
• Adequate financial and human resources
• Wide variety of products
• Broad market coverage
• Good financial management
• Brand name reputation
• Excellent customer service skills
• Some expertise in new venture management

Weaknesses

• Lack of research and development skills
• Lack of understanding of strategic management and planning

Opportunities

• Exploit new market segments
• Move into new businesses, but how and what type
• Expand into foreign markets
• Acquire a profitable acquisition

Threats

• Increase in competition, but where do we look
• New forms of competition
• Changes in customer preferences
• Rising costs of products and labour
• Changes in demographic factors
• Changes in economic factors and down turn in the economy
• Slow growth in the market

At the start of 2020, Mr. Mills and his family began to follow the news with respect to the deadly COVID-19 virus.  “This is a time for quick action” pondered Mr. Mills. The business has been successful, but Mr. Mills and family has recognized that things are changing in the environment and could have negatives on the business. At the January 2020 monthly meeting, it was decided that the company should seek the services of a reputable consultant who can advise and assist the company with getting a clear understanding of what strategic management and planning entails. Other matters discussed which the family agreed to pursue, include embarking on a training initiative which would include staff at all levels as well as to create an awareness of the environmental factors that can affect the company. One member in the meeting raised the issue of how they can determine with accuracy the financial situation at the company. She is aware that ratios could be used, but that’s as much as she knows.

Mr. Mills stretched his imagination, “We had better start thinking about starting a branch in some foreign country, or start to manufacture something that people will need.”   Then he pondered to himself, “I do not have all the knowledge about the intricacies of manufacturing and so-called strategies to continue to be a winner”  

The meeting ended with Mr. Mills thinking aloud that they should all read up about what it means to be innovative.   He indicated that at the next meeting, they will all come with their ideas of a plan that is different to what they are doing now and which can contribute to continued success. He was not sure what type of plan that would be.   He has been following keenly the possible impact and negative fallout that the company could experience because of the COVID-19 virus.   However, the astute businessman that Mr. Mills is, he purchased some cotton material, took some elastic and thread from the store, and hired two (2) seamstresses to make protective masks. The masks have been a fast seller and is bringing a profit to the store.   Once more, Owen Mills Limited is living up to its tagline - We have all that you want!

Question 3(b):

As a forward-thinking entrepreneur, Mr. Owen Mills is pondering going into manufacturing something, but he has to think carefully about the product to be manufactured. Therefore, he needs to understand what the Value Chain is about as well as the types of strategies that he could utilize to gain a competitive advantage.

What information would you provide to Mr. Mills and his family regarding the Value Chain as they think seriously about going into the manufacturing sector?

Also, what are the possible strategies that could be utilized once the Manufacturing company becomes established?   Provide justification for your advice.

Discuss the strategic role of employee training from the perspective of the organization and the employee.