COMPANY Case: Porsche: Guarding the Old While Bringing in the New

Porsche (pronounced Porsh-uh) is a unique company. It has always been a niche brand that makes cars for a small and distinctive segment of automobile buyers. In 2009, Porsche sold only 27,717 cars in the five models it sells in the United States. Honda sold about 10 times that many Accords alone. But Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a great deal of time thinking about customers. They want to know who their customers are, what they think, and how they feel. They want to know why they buy a Porsche rather then a Jaguar, a Ferrari, or a big Mercedes coupe. These are challenging questions to answer; even Porsche owners themselves don’t know exactly what motivates their buying. But given Porsche’s low volume and the increasingly fragmented auto market, it is imperative that management understands its customers and what gets their motors running.

Since its early days, Porsche has appealed to a very narrow segment of financially successful people. These are achievers who see themselves as entrepreneurial, even if they work for a corporation. They set very high goals for themselves and then work doggedly to meet them. And they expect no less from the clothes they wear, the restaurants they go to, or the cars they drive. These individuals see themselves not as a part of the regular world but as exceptions to it. They buy Porsches because the car mirrors their self-image; it stands for the things owners like to see in themselves and their lives.

Most of us buy what Porsche executives call utility vehicles. That is, we buy cars primarily to go to work, transport children, and run errands. Because we use our cars to accomplish these daily tasks, we base buying decisions on features such as price, size, fuel economy, and other practical considerations. But Porsche is more than a utility car. Its owners see it as a car to be enjoyed, not just used. Most Porsche buyers are not moved by information but by feelings. A Porsche is like a piece of clothing—something the owner “wears” and is seen in. They develop a personal relationship with their cars, one that has more to do with the way the car sounds, vibrates, and feels, rather than the how many cup holders it has or how much cargo it can hold in the trunk. They admire their Porsche because it is a competent performance machine without being flashy or phony.

People buy Porsches because they enjoy driving. If all they needed was something to get them from point A to point B, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not. One successful businesswoman and owner of a high-end Porsche said, “When I drive this car to the high school to pick up my daughter, I end up with five youngsters in the car. If I drive any other car, I can’t even find her; she doesn’t want to come home.”

For its first few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand’s son. Ferry created the Porsche 356 because no one else made a car like he wanted. But as the years rolled on, Porsche management became concerned with a significant issue: Were there enough Porsche buyers to keep the company afloat? Granted, the company never had illusions of churning out the numbers of a Chevrolet or a Toyota. But to fund innovation, even a niche manufacturer has to grow a little. And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them.

This led Porsche to extend its brand outside the box. In the early 1970s, Porsche introduced the 914, a square-ish, mid-engine, two-seater that was much cheaper than the 911. This meant that a different class of people could afford a Porsche. It was no surprise that the 914 became Porsche’s top selling model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had: an engine in the front. At less than $20,000, more than $10,000 less than the 911, the 924 and later 944 models were once again Porsche’s pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60,000 cars a year.

Although these cars were in many respects sales successes, the Porsche faithful cried foul. They considered these entry-level models to be cheap and underperforming. Most loyalists never really accepted these models as “real” Porsches. In fact, they were not at all happy that they had to share their brand with a customer who didn’t fit the Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on mass over class marketing. This tarnished image was compounded by the fact that Nissan, Toyota, BMW, and other car manufacturers had ramped up high-end sports car offerings, creating some fierce competition. In fact, both the Datsun 280-ZX and the Toyota Supra were not only cheaper than Porsche’s 944 but also faster. A struggling economy threw more sand in Porsche’s tank. By 1990, Porsche sales had plummeted, and the company flirted with bankruptcy.

But Porsche wasn’t going down without a fight. It quickly recognized the error of its ways and halted production of the entry-level models. It rebuilt its damaged image by revamping its higher-end model lines with more race-bred technology. In an effort to regain rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales goals and decided that moderate growth with higher margins would be more profitable in the long term. Thus, the company set out to make one less Porsche than the public demanded. According to one executive, “We’re not looking for volume; we’re searching for exclusivity.”

Porsche’s efforts had the desired effect. By the late 1990s, the brand was once again favored by the same type of achiever who had so deeply loved the car for decades. The cars were once again exclusive. And the company was once again profitable. But by the early 2000s, Porsche management was again asking itself a familiar question: To have a sustainable future, could Porsche rely on only the Porsche faithful? According to then CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market. We don’t want to become just a marketing department of some giant. We have to make sure we’re profitable enough to pay for future development ourselves.”

So in 2002, Porsche did the unthinkable. It became one of the last car companies to jump into the insatiable sport utility vehicle (SUV) market. At roughly 5,000 pounds, the new Porsche Cayenne was heavier than anything that Porsche had ever made, with the exception of some prototype tanks it made during WWII. Once again, the new model featured an engine up front. And it was the first Porsche to ever be equipped with seatbelts for five. As news spread about the car’s development, howls could be heard from Porsche’s customer base.

But this time, Porsche did not seem too concerned that the loyalists would be put off. Could it be that the company had already forgotten what happened the last time it deviated from the mold? After driving one of the first Cayenne’s off the assembly line, one journalist stated, “A day at the wheel of the 444 horsepower Cayenne Turbo leaves two overwhelming impressions. First, the Cayenne doesn’t behave or feel like an SUV, and second, it drives like a Porsche.” This was no entry-level car. Porsche had created a two-and-a-half ton beast that could accelerate to 60 miles per hour in just over five seconds, corner like it was on rails, and hit 165 miles per hour, all while coddling five adults in sumptuous leather seats with almost no wind noise from the outside world. On top of that, it could keep up with a Land Rover when the pavement ended. Indeed, Porsche had created the Porsche of SUVs.

Last year, Porsche upped the ante one more time. It unveiled another large vehicle. But this time, it was a low-slung, five-door luxury sedan. The Porsche faithful and the automotive press again gasped in disbelief. But by the time the Panamera hit the pavement, Porsche had proven once again that Porsche customers could have their cake and eat it to. The Panamera is almost as big as the Cayenne but can move four adults down the road at speeds of up to 188 miles per hour and accelerate from a standstill to 60 miles per hour in four seconds flat.

Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doors, Porsche insists that two trends will sustain these new models. First, a category of Porsche buyers has moved into life stages that have them facing inescapable needs; they need to haul more people and stuff. This not only applies to certain regular Porsche buyers, but Porsche is again seeing buyers enter its dealerships that otherwise wouldn’t have. Only this time, the price points of the new vehicles are drawing only the well heeled, allowing Porsche to maintain its exclusivity. These buyers also seem to fit the achiever profile of regular Porsche buyers.

The second trend is the growth of emerging economies. Whereas the United States has long been the world’s biggest consumer of Porsches, the company expects China to become its biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche’s worldwide sales. Now, it accounts for only about 26 percent. In China, many people who can afford to buy a car as expensive as a Porsche also hire a chauffeur. The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary.

The most recent economic downturn has brought down the sales of just about every maker of premium automobiles. When times are tough, buying a car like a Porsche is the ultimate deferrable purchase. But as this downturn turns back up, Porsche is better poised than it has ever been to meet the needs of its customer base. It is also in better shape than ever to maintain its brand image with the Porsche faithful and with others as well. Sure, understanding Porsche buyers is still a difficult task. But a former CEO of Porsche summed it up this way: “If you really want to understand our customers, you have to understand the phrase, ‘If I were going to be a car, I’d be a Porsche.’

.

Required Questions

Question 01: You are asked to develop a Mission statement and four Marketing objectives for Porsche for the next ten years (2021- 2025) . Draft an ideal mission statement and outline your four marketing objectives (5 marks

.

Question 02: Identify , explain and justify the main consumer behaviour characteristics that influences the Porche buyers.

COMPANY Case: Porsche: Guarding the Old While Bringing in the New

Porsche (pronounced Porsh-uh) is a unique company. It has always been a niche brand that makes cars for a small and distinctive segment of automobile buyers. In 2009, Porsche sold only 27,717 cars in the five models it sells in the United States. Honda sold about 10 times that many Accords alone. But Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a great deal of time thinking about customers. They want to know who their customers are, what they think, and how they feel. They want to know why they buy a Porsche rather then a Jaguar, a Ferrari, or a big Mercedes coupe. These are challenging questions to answer; even Porsche owners themselves don’t know exactly what motivates their buying. But given Porsche’s low volume and the increasingly fragmented auto market, it is imperative that management understands its customers and what gets their motors running.

Since its early days, Porsche has appealed to a very narrow segment of financially successful people. These are achievers who see themselves as entrepreneurial, even if they work for a corporation. They set very high goals for themselves and then work doggedly to meet them. And they expect no less from the clothes they wear, the restaurants they go to, or the cars they drive. These individuals see themselves not as a part of the regular world but as exceptions to it. They buy Porsches because the car mirrors their self-image; it stands for the things owners like to see in themselves and their lives.

Most of us buy what Porsche executives call utility vehicles. That is, we buy cars primarily to go to work, transport children, and run errands. Because we use our cars to accomplish these daily tasks, we base buying decisions on features such as price, size, fuel economy, and other practical considerations. But Porsche is more than a utility car. Its owners see it as a car to be enjoyed, not just used. Most Porsche buyers are not moved by information but by feelings. A Porsche is like a piece of clothing—something the owner “wears” and is seen in. They develop a personal relationship with their cars, one that has more to do with the way the car sounds, vibrates, and feels, rather than the how many cup holders it has or how much cargo it can hold in the trunk. They admire their Porsche because it is a competent performance machine without being flashy or phony.

People buy Porsches because they enjoy driving. If all they needed was something to get them from point A to point B, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not. One successful businesswoman and owner of a high-end Porsche said, “When I drive this car to the high school to pick up my daughter, I end up with five youngsters in the car. If I drive any other car, I can’t even find her; she doesn’t want to come home.”

For its first few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand’s son. Ferry created the Porsche 356 because no one else made a car like he wanted. But as the years rolled on, Porsche management became concerned with a significant issue: Were there enough Porsche buyers to keep the company afloat? Granted, the company never had illusions of churning out the numbers of a Chevrolet or a Toyota. But to fund innovation, even a niche manufacturer has to grow a little. And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them.

This led Porsche to extend its brand outside the box. In the early 1970s, Porsche introduced the 914, a square-ish, mid-engine, two-seater that was much cheaper than the 911. This meant that a different class of people could afford a Porsche. It was no surprise that the 914 became Porsche’s top selling model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had: an engine in the front. At less than $20,000, more than $10,000 less than the 911, the 924 and later 944 models were once again Porsche’s pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60,000 cars a year.

Although these cars were in many respects sales successes, the Porsche faithful cried foul. They considered these entry-level models to be cheap and underperforming. Most loyalists never really accepted these models as “real” Porsches. In fact, they were not at all happy that they had to share their brand with a customer who didn’t fit the Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on mass over class marketing. This tarnished image was compounded by the fact that Nissan, Toyota, BMW, and other car manufacturers had ramped up high-end sports car offerings, creating some fierce competition. In fact, both the Datsun 280-ZX and the Toyota Supra were not only cheaper than Porsche’s 944 but also faster. A struggling economy threw more sand in Porsche’s tank. By 1990, Porsche sales had plummeted, and the company flirted with bankruptcy.

But Porsche wasn’t going down without a fight. It quickly recognized the error of its ways and halted production of the entry-level models. It rebuilt its damaged image by revamping its higher-end model lines with more race-bred technology. In an effort to regain rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales goals and decided that moderate growth with higher margins would be more profitable in the long term. Thus, the company set out to make one less Porsche than the public demanded. According to one executive, “We’re not looking for volume; we’re searching for exclusivity.”

Porsche’s efforts had the desired effect. By the late 1990s, the brand was once again favored by the same type of achiever who had so deeply loved the car for decades. The cars were once again exclusive. And the company was once again profitable. But by the early 2000s, Porsche management was again asking itself a familiar question: To have a sustainable future, could Porsche rely on only the Porsche faithful? According to then CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market. We don’t want to become just a marketing department of some giant. We have to make sure we’re profitable enough to pay for future development ourselves.”

So in 2002, Porsche did the unthinkable. It became one of the last car companies to jump into the insatiable sport utility vehicle (SUV) market. At roughly 5,000 pounds, the new Porsche Cayenne was heavier than anything that Porsche had ever made, with the exception of some prototype tanks it made during WWII. Once again, the new model featured an engine up front. And it was the first Porsche to ever be equipped with seatbelts for five. As news spread about the car’s development, howls could be heard from Porsche’s customer base.

But this time, Porsche did not seem too concerned that the loyalists would be put off. Could it be that the company had already forgotten what happened the last time it deviated from the mold? After driving one of the first Cayenne’s off the assembly line, one journalist stated, “A day at the wheel of the 444 horsepower Cayenne Turbo leaves two overwhelming impressions. First, the Cayenne doesn’t behave or feel like an SUV, and second, it drives like a Porsche.” This was no entry-level car. Porsche had created a two-and-a-half ton beast that could accelerate to 60 miles per hour in just over five seconds, corner like it was on rails, and hit 165 miles per hour, all while coddling five adults in sumptuous leather seats with almost no wind noise from the outside world. On top of that, it could keep up with a Land Rover when the pavement ended. Indeed, Porsche had created the Porsche of SUVs.

Last year, Porsche upped the ante one more time. It unveiled another large vehicle. But this time, it was a low-slung, five-door luxury sedan. The Porsche faithful and the automotive press again gasped in disbelief. But by the time the Panamera hit the pavement, Porsche had proven once again that Porsche customers could have their cake and eat it to. The Panamera is almost as big as the Cayenne but can move four adults down the road at speeds of up to 188 miles per hour and accelerate from a standstill to 60 miles per hour in four seconds flat.

Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doors, Porsche insists that two trends will sustain these new models. First, a category of Porsche buyers has moved into life stages that have them facing inescapable needs; they need to haul more people and stuff. This not only applies to certain regular Porsche buyers, but Porsche is again seeing buyers enter its dealerships that otherwise wouldn’t have. Only this time, the price points of the new vehicles are drawing only the well heeled, allowing Porsche to maintain its exclusivity. These buyers also seem to fit the achiever profile of regular Porsche buyers.

The second trend is the growth of emerging economies. Whereas the United States has long been the world’s biggest consumer of Porsches, the company expects China to become its biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche’s worldwide sales. Now, it accounts for only about 26 percent. In China, many people who can afford to buy a car as expensive as a Porsche also hire a chauffeur. The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary.

The most recent economic downturn has brought down the sales of just about every maker of premium automobiles. When times are tough, buying a car like a Porsche is the ultimate deferrable purchase. But as this downturn turns back up, Porsche is better poised than it has ever been to meet the needs of its customer base. It is also in better shape than ever to maintain its brand image with the Porsche faithful and with others as well. Sure, understanding Porsche buyers is still a difficult task. But a former CEO of Porsche summed it up this way: “If you really want to understand our customers, you have to understand the phrase, ‘If I were going to be a car, I’d be a Porsche.’

Required Questions –

Question 01: Critically analyze the relevant Porters generic strategies and the growth strategies Porsche is pursuing , justify your answer by referring to the case study (5 marks)

Question 02: Marketing had evolved through five stages, out of this five which concept or concepts is Porsche following , justify your answer. Do you agree with this why or why not (5 marks)

COMPANY Case: Porsche: Guarding the Old While Bringing in the New

Porsche (pronounced Porsh-uh) is a unique company. It has always been a niche brand that makes cars for a small and distinctive segment of automobile buyers. In 2009, Porsche sold only 27,717 cars in the five models it sells in the United States. Honda sold about 10 times that many Accords alone. But Porsche owners are as rare as their vehicles. For that reason, top managers at Porsche spend a great deal of time thinking about customers. They want to know who their customers are, what they think, and how they feel. They want to know why they buy a Porsche rather then a Jaguar, a Ferrari, or a big Mercedes coupe. These are challenging questions to answer; even Porsche owners themselves don’t know exactly what motivates their buying. But given Porsche’s low volume and the increasingly fragmented auto market, it is imperative that management understands its customers and what gets their motors running.

Since its early days, Porsche has appealed to a very narrow segment of financially successful people. These are achievers who see themselves as entrepreneurial, even if they work for a corporation. They set very high goals for themselves and then work doggedly to meet them. And they expect no less from the clothes they wear, the restaurants they go to, or the cars they drive. These individuals see themselves not as a part of the regular world but as exceptions to it. They buy Porsches because the car mirrors their self-image; it stands for the things owners like to see in themselves and their lives.

Most of us buy what Porsche executives call utility vehicles. That is, we buy cars primarily to go to work, transport children, and run errands. Because we use our cars to accomplish these daily tasks, we base buying decisions on features such as price, size, fuel economy, and other practical considerations. But Porsche is more than a utility car. Its owners see it as a car to be enjoyed, not just used. Most Porsche buyers are not moved by information but by feelings. A Porsche is like a piece of clothing—something the owner “wears” and is seen in. They develop a personal relationship with their cars, one that has more to do with the way the car sounds, vibrates, and feels, rather than the how many cup holders it has or how much cargo it can hold in the trunk. They admire their Porsche because it is a competent performance machine without being flashy or phony.

People buy Porsches because they enjoy driving. If all they needed was something to get them from point A to point B, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not. One successful businesswoman and owner of a high-end Porsche said, “When I drive this car to the high school to pick up my daughter, I end up with five youngsters in the car. If I drive any other car, I can’t even find her; she doesn’t want to come home.”

For its first few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand’s son. Ferry created the Porsche 356 because no one else made a car like he wanted. But as the years rolled on, Porsche management became concerned with a significant issue: Were there enough Porsche buyers to keep the company afloat? Granted, the company never had illusions of churning out the numbers of a Chevrolet or a Toyota. But to fund innovation, even a niche manufacturer has to grow a little. And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them.

This led Porsche to extend its brand outside the box. In the early 1970s, Porsche introduced the 914, a square-ish, mid-engine, two-seater that was much cheaper than the 911. This meant that a different class of people could afford a Porsche. It was no surprise that the 914 became Porsche’s top selling model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had: an engine in the front. At less than $20,000, more than $10,000 less than the 911, the 924 and later 944 models were once again Porsche’s pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60,000 cars a year.

Although these cars were in many respects sales successes, the Porsche faithful cried foul. They considered these entry-level models to be cheap and underperforming. Most loyalists never really accepted these models as “real” Porsches. In fact, they were not at all happy that they had to share their brand with a customer who didn’t fit the Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on mass over class marketing. This tarnished image was compounded by the fact that Nissan, Toyota, BMW, and other car manufacturers had ramped up high-end sports car offerings, creating some fierce competition. In fact, both the Datsun 280-ZX and the Toyota Supra were not only cheaper than Porsche’s 944 but also faster. A struggling economy threw more sand in Porsche’s tank. By 1990, Porsche sales had plummeted, and the company flirted with bankruptcy.

But Porsche wasn’t going down without a fight. It quickly recognized the error of its ways and halted production of the entry-level models. It rebuilt its damaged image by revamping its higher-end model lines with more race-bred technology. In an effort to regain rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales goals and decided that moderate growth with higher margins would be more profitable in the long term. Thus, the company set out to make one less Porsche than the public demanded. According to one executive, “We’re not looking for volume; we’re searching for exclusivity.”

Porsche’s efforts had the desired effect. By the late 1990s, the brand was once again favored by the same type of achiever who had so deeply loved the car for decades. The cars were once again exclusive. And the company was once again profitable. But by the early 2000s, Porsche management was again asking itself a familiar question: To have a sustainable future, could Porsche rely on only the Porsche faithful? According to then CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be dependent on the most fickle segment in the market. We don’t want to become just a marketing department of some giant. We have to make sure we’re profitable enough to pay for future development ourselves.”

So in 2002, Porsche did the unthinkable. It became one of the last car companies to jump into the insatiable sport utility vehicle (SUV) market. At roughly 5,000 pounds, the new Porsche Cayenne was heavier than anything that Porsche had ever made, with the exception of some prototype tanks it made during WWII. Once again, the new model featured an engine up front. And it was the first Porsche to ever be equipped with seatbelts for five. As news spread about the car’s development, howls could be heard from Porsche’s customer base.

But this time, Porsche did not seem too concerned that the loyalists would be put off. Could it be that the company had already forgotten what happened the last time it deviated from the mold? After driving one of the first Cayenne’s off the assembly line, one journalist stated, “A day at the wheel of the 444 horsepower Cayenne Turbo leaves two overwhelming impressions. First, the Cayenne doesn’t behave or feel like an SUV, and second, it drives like a Porsche.” This was no entry-level car. Porsche had created a two-and-a-half ton beast that could accelerate to 60 miles per hour in just over five seconds, corner like it was on rails, and hit 165 miles per hour, all while coddling five adults in sumptuous leather seats with almost no wind noise from the outside world. On top of that, it could keep up with a Land Rover when the pavement ended. Indeed, Porsche had created the Porsche of SUVs.

Last year, Porsche upped the ante one more time. It unveiled another large vehicle. But this time, it was a low-slung, five-door luxury sedan. The Porsche faithful and the automotive press again gasped in disbelief. But by the time the Panamera hit the pavement, Porsche had proven once again that Porsche customers could have their cake and eat it to. The Panamera is almost as big as the Cayenne but can move four adults down the road at speeds of up to 188 miles per hour and accelerate from a standstill to 60 miles per hour in four seconds flat.

Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doors, Porsche insists that two trends will sustain these new models. First, a category of Porsche buyers has moved into life stages that have them facing inescapable needs; they need to haul more people and stuff. This not only applies to certain regular Porsche buyers, but Porsche is again seeing buyers enter its dealerships that otherwise wouldn’t have. Only this time, the price points of the new vehicles are drawing only the well heeled, allowing Porsche to maintain its exclusivity. These buyers also seem to fit the achiever profile of regular Porsche buyers.

The second trend is the growth of emerging economies. Whereas the United States has long been the world’s biggest consumer of Porsches, the company expects China to become its biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche’s worldwide sales. Now, it accounts for only about 26 percent. In China, many people who can afford to buy a car as expensive as a Porsche also hire a chauffeur. The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary.

The most recent economic downturn has brought down the sales of just about every maker of premium automobiles. When times are tough, buying a car like a Porsche is the ultimate deferrable purchase. But as this downturn turns back up, Porsche is better poised than it has ever been to meet the needs of its customer base. It is also in better shape than ever to maintain its brand image with the Porsche faithful and with others as well. Sure, understanding Porsche buyers is still a difficult task. But a former CEO of Porsche summed it up this way: “If you really want to understand our customers, you have to understand the phrase, ‘If I were going to be a car, I’d be a Porsche.’

Required Questions –

Question 01: Critically analyze the relevant Porters generic strategies and the growth strategies Porsche is pursuing , justify your answer by referring to the case study

Please study the article below and answer to the following questions: 1. As an operation manager for a service company (Amazon, FedEx, UPS, pizza shop, pharmaceutical services, resident manager, coffee shops and bank tellers) what safety plan do you need to implement to minimize the risk for the delivery workers during the pandemic corona virus and also for “Safety stock versus MRP” 2. Do you think the employees in these businesses should continue to work during the “shelter in place” and restrictions now in March-April 2020 due to corona virus impact?

Workers push for more safety measures

Grocery delivery startup Instacart's delivery workers were set to begin a work stoppage Monday to press safety demands, as a walkout was planned by employees at an Amazon warehouse said to be the site of coronavirus infections. - Agence France-Presse

Under normal circumstances, delivering pizza, filling prescriptions or making bubble tea might not seem heroic. But when workers across the country are being told to stay at home, service workers and pharmacists are putting themselves at risk just by doing their jobs. - The New York Times

"This sounds dramatic, but I think people are really scared for their lives," said Sarah Clarke, an organizer with the group behind the Instacart strike.

They Are Still Working During the Coronavirus Outbreak

On March 20, in an effort to control the growing number of coronavirus cases in New York — New York City in particular — Gov. Andrew M. Cuomo issued an executive order requiring all nonessential businesses to keep their workers at home. Restaurants, grocery stores, pharmacies, convenience stores and hardware stores are all deemed essential, and all are allowed to remain open.

Damon Winter walked one block in Manhattan — on 72nd Street between Broadway and Columbus Avenue — to conduct an informal photographic census of the businesses still open and the people who were working in the hours before Governor Cuomo’s order went into effect.

Under normal circumstances, delivering pizza, filling prescriptions or making bubble tea might not seem heroic. But when workers across the country are being told to stay at home, service workers and pharmacists are putting themselves at risk just by doing their jobs. Simple actions like commuting to work or opening a door could expose them to the coronavirus.

In the past few weeks, New York City, a massive city by any measure, has shrunk. The block is one’s village. These are the people who make it tick.

Emdadul Chowdhury has worked at Gray’s Papaya, a city institution selling hot dogs and tropical drinks, since 2008, preparing food or tending the register. Only four people are working there now (compared with seven before the executive order), and it has gone from being a 24-hour operation to being open just six hours a day.

“Compared to last week, less and less people are coming into the store,” Mr. Chowdhury said. His main fear is of contracting the coronavirus on his commute from the Bronx, on a mostly empty D train. He wears gloves and a mask and washes his hands.

Chow Mok owns Zen Medica, a nutritional supplement store. “Every time people come in, we’re trying to tell them to stay calm, to relax. Stress is going to compromise the immune system,” she said.

“Protecting ourselves is helping to manage and support our own body’s defense, which is the immune system,” Ms. Mok added. “I get nervous too but having more freak-out attacks is not going to help anybody.”

She has a shipment of organic hand sanitizers, medicinal mushrooms and immune-support nutrients coming in. With fewer people walking through the door, most of her business has transitioned to shipments.

Donna Schofield owns Stationery and Toy, which sells office and school supplies, party supplies, board games and, lately, a lot of toilet paper, hand sanitizer and Clorox wipes.

“It’s kind of hard to stay afloat,” Ms. Schofield said. “I might be able to manage it. I’m just going day by day right now.”

“We leave the front door open so that nobody has to touch the handle,” she added. “We’re just going with the flow. I survived Sandy. I can probably survive this, too.”

Andrew Greaves has delivered packages for FedEx for five years. His route extends on 72nd Street from Riverside Drive to Central Park West. “It’s like Christmas all over again,” he said. “The more people are staying home, the more they order.”

Although the volume of packages has gone up during the pandemic, some aspects of his job are easier. “The more deserted the streets are, the easier it is to deliver a package in Manhattan,” Mr. Greaves said. Another good thing is that almost everyone is at home to accept a package.

“The only thing that is weird and different is the part where someone would have to sign for a package,” he said. People are hesitant to touch the scanner. Instead, FedEx is allowing him to write “C-19” in place of a customer’s signature.

“I’m thankful to still be working, that’s for sure,” Mr. Greaves said.

Sherif Eltahawy is a pharmacist and the owner of two pharmacies on 72nd Street: Joseph Pharmacy and Wellness Pharmacy. In addition to shortening his stores’ hours, he has asked all his workers to use masks and gloves and allows no more than five customers into each store at once.

“A lot of people are more panicked than is necessary,” he said. “It is understandable, but a lot of people are afraid that there’s going to be a shortage of their medications.”

Acetaminophen, hand sanitizer and cough medications are in short supply. “We’re trying to order from different vendors, different suppliers, to do the best we can to stock,” he said, “but it’s very limited.”

Althea Gordon has worked for nine years as a teller at Citibank. “I’m holding on to what’s going on,” she said. “It’s hard. It’s stressful. I’m taking precautions.” At work, she says, she is using a lot of hand sanitizer. “We wash our hands often and we use Lysol inside and outside.”

Citibank has shortened her branch’s hours, but it is still open six days a week. “People are nice when they come in,” Ms. Gordon said. “They tell us that they appreciate us.”

“I love to help people and I love to work with people,” she added. “That’s why I get up every day.”

Not surprisingly, Babacar Fall, the manager of Gartner’s Hardware, has seen an uptick in sales of face masks, gloves, cleaning supplies, hand sanitizers and thermometer batteries.

“The business never goes down, honestly. I have very good customers,” he said. “We’re doing better, compared to neighbors and everybody.” He came to New York from Senegal in 1984.

As the resident manager of an apartment building on the block, Blerim Havolli maintains and cleans the building. He has been doing this job for eight years. With the coronavirus, “I have to clean more than any other time,” he said.

He worries about people who enter the building to deliver food or packages. “You don’t know if one of them is infected or not,” he said.

“I’m trying to be very careful because I’m the guy who has responsibility of the building at this time,” Mr. Havolli said. “If I get sick, the building isn’t going to fall down, but nobody can clean up.”

Mr. Havolli has lived in New York City since 1999. Now a U.S. citizen, he immigrated from Kosovo as a refugee.

Juan Gutierrez has worked for three years as a chef at Friedmans. Normally he works 40 hours a week, but that has been reduced to 15 or 20.

“The business has gone down, I imagine, by 85 percent,” he said. “It’s difficult because the store used to have a lot of employees, and many of them are without work and they have families and kids.”

Before the executive order, there would be four or five others with him in the kitchen, but for now, he cooks alone, mostly for delivery. One of his colleagues started a GoFundMe page for his co-workers who are without work.

Rachel Pellerin moved from Florida a month and a half ago to start a church for deaf people with her husband. She works at Coco Fresh Tea & Juice to help finance that dream.

“We stayed open and so far we have been getting a lot of delivery orders,” she said. “I’m grateful to still be able to get paid, but at the same time it can be a little nerve-racking because I know the danger of being outside.”

She and her co-workers disinfect the shop at least once an hour.

Tahmid Khan worked at Dunkin’ Donuts for two years before quitting on Monday. He is a student in computer science at City College.

“I think that it’s irresponsible to keep the store open given the circumstance right now,” he said. “It’s not safe for me or for the customers. It was a $15-an-hour job. I don’t care if I lose it.” He moved to New York three years ago from Bangladesh.

“I think the Dunkin’ Donuts franchise should be more responsible about their operations,” he said. “I just don’t think that they don’t care about the workers or the customers at all. They just care about the money.”

Jayang Tenzin works at Pho Shop, a Vietnamese restaurant. “I’m just a server doing my work from my heart,” he said. “Times like this you have to be there for each other.” Mr. Tenzin moved to New York from Tibet eight years ago. “Got to chase the American dream,” he said.

He commutes an hour on the No. 2 train from Brooklyn. “It’s very quiet. It’s like a ghost town,” he said. “I come out of work, I don’t see anybody.”

Issouf Mande has delivered for Domino’s on an e-bike for two years. “I am scared of the virus because I’m going everywhere, opening every kind of door, going to any kind of house, meeting any kind of people,” he said.

“Most deliveries I deal with the doorman or just call the person and leave it in front of the door.”

Mr. Mande moved to New Jersey three years ago from Burkina Faso. He doesn’t understand why Domino’s is still open. “I think it’s not safe,” he said. “We meet so many people in deliveries. I don’t see enough protection.”

Benjamin Loucks has been homeless for two years. “There is no money to be made,” he said. “No traffic.”

Summary and Thoughts about this article (please, without copying it from another article, resource or whatever, your own words). (It doesn't have to be long, at least 4 paragraphs).

People in Economics

Man with a Mission

Hyun-Sung Khang profiles Princeton’s Atif Mian, who sees the fight against inequality as a moral imperative

Everyone knows someone who buys more than he or she can afford. This has been characterized mockingly as millennials spending beyond their means on avocado toast and expensive lattes, often borrowing to fund those wants. But in the modern era, dependence on credit isn’t a sign of profligacy, according to Atif Mian, a Princeton professor of economics, public policy, and finance. Rather, he argues, excessive borrowing is evidence of an economic system that has become distorted by widening income inequality.

“It’s almost as though the modern economy has become addicted to credit,” Mian says. “We need to understand how, and why, that happened.”

The 44-year-old Pakistani-American has done much to shed fresh light on our modern-day addiction to debt, and in the process, to proffer a new thesis for the greatest economic downturn in more than half a century. He and coauthor Amir Sufi, a University of Chicago finance professor, offer a novel take on the Great Recession in their 2014 book, House of Debt. The book helped land Mian on that year’s list of the world’s 25 most influential young economists, compiled by the IMF.

The authors parse vast amounts of data to show that a dramatic rise in household debt among borrowers least able to repay helped precipitate the greatest global financial crisis since the Great Depression. In their book, they argue that policymakers erred by focusing excessively on the banking system and in bailing out banks, not borrowers.

Sufi says their research has helped put household debt much more prominently on the radar of the IMF, the Federal Reserve, the Bank of England, and central banks of Australia, China, and Israel.

In the five years since the book’s publication, Mian and Sufi have broadened the scope of their research, focusing on household debt and economic inequality. Their more recent work links the worsening of household debt since 1980 to the rise of the
superrich. They connect increased income inequality to the concentration of vast amounts of wealth, which has flooded the economic system with easy credit that fuels consumption, rather than contributing to economic growth through real investment.

Passion for efficiency

In broadcast interviews and in the presence of his coauthor, Mian’s quieter, more reserved style is overshadowed by his fluent, fast-talking writing partner. But in person, and away from the camera, Mian’s mildness comes across as kind, thoughtful, and charming. He brings an easily overlooked passion to the dismal science and is attracted by the allure of the greater efficiencies it promises.

“The reason I get so excited about economics is—and this is my definition of economics: how can we better organize ourselves to do something where the sum is bigger than the parts?” says Mian. “I think economics is the unique field that exactly focuses on those kinds of questions.”

Mian’s wife of almost 20 years, Ayesha, jokes that the pursuit of efficiency prevails even in his personal life, manifesting itself in an obsession with “space utilization around the house,” during frequent evenings hosting guests.

“If there’s a three-seater [sofa], he wants three people to sit on it,” she says with a laugh. “But if there are two people sitting comfortably on it, he sees it as inefficient. Small things like that, he cannot get out of his head.”

And if a third person fails to fill the allotted slot? “You can see the pain on his face.”

Mian came to economics by accident. Born into a solidly upper-middle-class family in Pakistan as the only son of government physicians, Mian typically would have been expected to become either a doctor or an engineer, he says. As he had no interest in medicine, he chose engineering. Such was the value the family attached to education that Mian’s mother moved to Lahore, Pakistan’s second largest city, for the children’s education while his father remained posted a couple of hundred miles away.

At the age of 17, encouraged by his father, the young Mian applied to a handful of US schools and won a full scholarship to study electrical engineering at the Massachusetts Institute of Technology. He describes receiving MIT’s letter of acceptance as “one of the happiest (and luckiest) moments of my life.”

MIT was Mian’s first real exposure to life outside Pakistan and his first experience of independent living. Although he was a diligent student, engineering didn’t inspire him. Mian switched to mathematics and computer science and stumbled across economics while fulfilling his humanities requirement.

He saw in economics a field of study where he could address the big sociopolitical questions growing out of his childhood in 1980s Pakistan, a nation emerging from dictatorship, riven by violence, extremism, and internal sectarian tensions.

“You’re sort of wondering, like, is this really how the world is supposed to work in terms of the violence, in terms of the way the society seems to be splitting apart, and can one do better?” Mian says. “That was something that always resonated with me, that I wanted to do something about.”

After completing his undergraduate degree in mathematics and computer science with a perfect grade-point average and following a short sojourn at Princeton, Mian opted to return to MIT for his PhD. He earned his degree in 2001 with a dissertation on banking and governance. He then served as an assistant and associate finance professor at the University of Chicago business school until 2009 and as a professor of economics, finance, and international business at the University of California, Berkeley, until 2012, before coming to Princeton.

Research partnership

The partnership with Sufi, a Pakistani-American born in Detroit and reared in Topeka, Kansas, emerged from an introduction by a mutual friend, who suggested they had similar interests. According to Sufi, that interest was in “using applied microeconomic techniques to answer important questions at the intersection of finance and macroeconomics.”

It is this use of micro, or granular, data to answer macroeconomic questions that the authors view as their special contribution to economics. “This empirical approach has really taken off since our early work on the 2008 recession,” says Mian.

From that shared interest grew their book, which was short-listed for the Financial Times 2014 Business Book of the Year, although Thomas Piketty’s Capital in the Twenty-First Century ultimately won.

Former US Treasury Secretary Larry Summers suggested that the work “could be the most important book to come out of the 2008 Financial Crisis and subsequent Great Recession.” In a review, Summers expresses some sympathy for the authors’ assertion that there should have been greater consideration given to households during the Great Recession.

In discussions with Mian, there is almost a sense of a philosophical underpinning to his work, a belief that the well-being of a community or society depends on all individuals thriving. “When we talk about stuff like the Great Recession, you know, it really matters that we are able to absorb each other’s shocks, that we realize how we’re all ultimately connected to each other,” he says.

Summers agrees that all future work on financial crises will have to consider household balance sheets. At the same time, he defends the policymakers of the day.

“Mian and Sufi’s error is a common one among academic economists, many of whom are unwilling to try to understand policy choices that arise from considerations outside simple models,” Summers writes.

“This is exactly the kind of political timidity and failure to understand the gravity of the situation that has led to these kinds of problems,” retorts Mian.

Mian and Sufi write that policymakers could have done a better job of managing the financial crisis if they had facilitated bailouts for indebted households. The authors are sharply critical of the determination to rescue banks at the expense of households that were underwater.

“You could have said to the banks: ‘We, the central bank and the Treasury, we are giving you free money. You must pass that on to the borrower,’” Mian says. In addition, the government could have ordered a moratorium on house foreclosures. “There was no one to absorb the 4 million homes that were actually put on the market by banks.” Mian knows that because the data tell him so.

Data is always king, wife Ayesha says, but Mian is open to reasoned argument. When their two young daughters resisted attending a private school on the grounds that it was elitist, they spoke to their father and explained their views.

His response, according to Ayesha, was “There’s no way we are sending the girls there. As long as they give me a good reason, I’m OK with any decision they make.”

The two have known each other from a young age. They married in Lahore after Mian visited Pakistan to propose. Ayesha describes her husband as very serious and straightforward. Even as a student in his early 20s, “it was like talking to a 40–45-year-old.” She describes their early relationship as “practical” and “pragmatic.” “The romance came later,” she says.

Late last year, their 14- and 12-year-old daughters were joined by a brother. According to Ayesha, with the security of tenure and a major publication under his belt, Mian is relishing this third experience of fatherhood.

“He’s always been a phenomenal father, but now he’s lightened up more and is much more accessible,” she says.

Inequality and household debt

Mian’s and Sufi’s work on debt focuses on the reasons for and consequences of the steady and continued rise in debt relative to GDP. At the beginning of the 1980s, debt to GDP in the United States was about 30 percent. Since then, the figure has ballooned to more than 100 percent, a pattern duplicated in countries around the world.

The metanarrative the researchers are now exploring is the notion that the wealthiest in societies around the world make more money than they can possibly spend consuming. Rather than funding investment, the surplus is channeled through financial markets for lending to fuel consumption, Mian says.

“We’ve become a global economy dependent on credit creation to generate sufficient demand for growth,” he says.

With ever-increasing credit flowing through the system, to encourage more borrowing, interest rates are driven lower and lower, Mian suggests. But with interest rates at record low levels, there is a limit to how much further they can fall, creating the current liquidity trap, with low growth bedeviling countries around the globe. Mian suggests ominously that this credit “supercycle” is nearing an end.

From this thesis flow dismaying sociopolitical repercussions, including growing inequality, widespread discontent, and angry populism around the world, Mian says.

“You now have a relatively struggling global economy, against the background of more inequalities and inequities,” he says. “And so that raises political tensions. There’s something wrong. People sense that, and they want answers.”

Mian identifies unequal growth as the “fundamental disease” behind this credit supercycle, leading to a sense of disenfranchisement from society. The social costs are high and far-reaching. He cites examples ranging from child hunger in the United States, to high incarceration rates among black men, to low public investment in infrastructure.

“If you were to come from Mars and look at this situation, you would say, ‘What? Are these people crazy?’” Mian says.“‘They are forgetting millions of their population who have huge potential to make a difference; they are literally throwing them off the curbside.’ To the extent people like me matter, I see our role as trying to convey what is happening and why it’s happening.”

Inclusive prosperity

While pondering these questions, Mian became embroiled in a bitter, personal controversy in his native country. Last September, Pakistan’s newly elected Prime Minister Imran Khan named Mian to the Economic Advisory Council. Though widely praised internationally, Mian’s nomination was vehemently attacked by the religious right in Pakistan because of his membership in the minority Ahmadi religious community. After three days of street protests, the government reversed its decision. It was a bitter disappointment to Mian, who was looking forward to being of service to a country he loves.

Mian’s research, fueled by moral conviction, has led him to passionate advocacy for the fruits of growth to be shared more widely because, he says, economics shows us that our fortunes are linked.

Earlier this year, he added his name as one of 11 founding members of “Economics for Inclusive Prosperity,” a network of economists pledged to come up with policy solutions that will generate prosperity for all.

“While prosperity is the traditional concern of economists, the ‘inclusive’ modifier demands both that we consider the interest of all people, not simply the average person, and that we consider prosperity broadly, including nonpecuniary sources of well-being, from health to climate change to political rights,” the group’s website declares.

The reason for his support of the group? “Because we are all in it together,” Mian says. “Whatever ‘it’ is, we are all in it together.”

The world’s 3 billion-plus smartphones emit the kind of data that health authorities covet during outbreaks. They show where individuals are, where they’ve been and who they might have talked to or even touched — potentially offering maps to find infected people and clues to stopping new ones.
But gaining access to this data, even amid a global pandemic, is made complex by the legal and ethical issues surrounding government access to information that can reveal intimate details about citizens’ lives. That includes clues to their social networks, their sexual relationships, their political activity, their religious convictions and their physical movements over previous months and even years.
This is a central dilemma as officials in the United States and other nations seek troves of data that might help fight the devastating coronavirus outbreak but also could raise fears that their government is spying on them or gaining access to information that could be used against them later, after the health emergency has waned.
Public-health experts argue that the location-tracking capabilities as practiced in such countries as Taiwan, South Korea and Singapore proved remarkably effective at helping officials control the spread of coronavirus — and that the U.S. needs all the help it can get amid projections that millions of Americans may get infected and hundreds of thousands may die.
“We are at war and we are fighting for our survival, for our lives, our health, our economy,” said Chunhuei Chi, director of the Center for Global Health at Oregon State University. “We are stretched very thin in most states, so this kind of technology can help every state to prioritize, given their limited resources, which communities, which areas, need more aggressive tracking and testing.”
Many privacy advocates see value in potentially giving public health authorities access to information created by smartphone use. That’s especially true if the data is voluntarily shared, as is already happening in several nations, where apps give users the option of uploading their location histories to health authorities.
“There’s no reason to have to throw out our principles like privacy and consent to do this,” said Peter Eckersley, an artificial intelligence researcher who organized an open letter on ways the tech industry could help combat the outbreak.
There is far more concern, however, about the program underway in Israel, which is using location data the government collected for fighting terrorism, to identify people potentially exposed to the novel coronavirus and ordering them to immediately isolate themselves “to protect your relatives and the public.” Hundreds of such texts started being sent by health authorities there on Wednesday. Late Thursday, the Israeli supreme court issued a temporary injunction, allowing only those who test positive to be tracked, and ruled that a parliamentary committee would have to endorse the initiative by Tuesday or it must be shut down.
In the United States, the White House has been in negotiations with major technology companies, including Google and Facebook, about potentially using aggregated and anonymized location data created by smartphone use, The Washington Post reported on Tuesday, but those efforts have been kept largely from the public Based on The Post’s reporting, Sen. Edward J. Markey (D-Mass.) sent a letter Thursday seeking answers about potential partnerships between the federal government and private companies.
“Although I agree that we must use technological innovations and collaboration with the private sector to combat the coronavirus, we cannot embrace action that represents a wholesale privacy invasion, particularly when it involves highly sensitive and personal location information,” Markey wrote to Michael Kratsios, the government’s chief technology officer. “I urge you to balance privacy with any data-driven solutions to the current public health crisis.”
Telecommunications giants in Austria, Germany and Italy also said this week that they would provide anonymized data on customers’ locations to government agencies hoping to analyze people’s movements.
O2, a telecom giant in the U.K., said Thursday that it was one of a group of mobile operators in the country asked by government officials to share aggregate location data on mass movements. The discussions are in an early stage, said a spokesman, who added that the company has “the potential to build models that help to predict broadly how the virus might move.”
Privacy experts repeatedly have shown that supposedly anonymous data can still be used to identify individual people, based on their known movements and other markers. Data that’s both anonymous and aggregated is far more private but also less useful in identifying people at particular risk for contracting coronavirus and spreading it to others.
The U.S. government has broad authority to request personal data in the case of a national emergency but does not have the legal authority, except in criminal investigations, to insist that companies turn it over, said Al Gidari, director of privacy at Stanford Law School’s Center for Internet and Society.
With appropriate safeguards, Gidari said the potential use of location data to combat coronavirus is “a real opportunity to do something positive with the technology and still protect people’s privacy.”
But currently there are no legal controls on how the federal government might use data once it has been collected, so location information collected for a health emergency could later be acquired by the FBI or the IRS.
Such complexities put companies in the uncomfortable position of balancing public safety and their customers’ privacy in deciding what data to share.
Many public-health experts say however that there are examples overseas of how such technology blunted the fast-spreading outbreak. In South Korea, the government directed tens of thousands of quarantined people to install a “Self-Quarantine Safety Protection” app that would monitor their phone’s location and alert health authorities if they left home. People also could use the app to report daily symptom check-ins and speak with the local government official overseeing their case.
On the app's website, the country's Ministry of the Interior and Safety said users would be protecting the “health and safety of your neighbors through strict self-isolation and observing the rules of life.” But because the app is voluntary, some critics have suggested its value is limited; people who wanted to skip quarantine could simply not turn it on.
Korean officials also routinely send text messages to people’s phones with public-health tips and alerts on newly confirmed infections in their neighborhood — in some cases, alongside details of where the unnamed person had traveled before entering quarantine.
But more so than the technology, the country’s vigorous health-screening infrastructure — more than 300‚000 people have been tested there in the last two months, compared to roughly 80,000 in the U.S. — has been credited by researchers with helping the country slow the virus’ spread.
Singapore, too, has asked people to use a voluntary location-tracking system based around QR codes — the square bar codes with information readable by smartphones — installed in cabs, offices and public spaces, which people have been instructed to scan upon passing. Health officials there have said the digital breadcrumb trail can help with infection “contact tracing,” but the data is far from complete, likely limiting its widespread use.
For an even more aggressive and seemingly effective example, some public-health experts have pointed to Taiwan, an island nation of 24 million people that has recorded only 100 infections, though it sits just 80 miles off the Chinese coast.
The country uses mandatory phone-location tracking to enforce quarantines, sending texts to people who stray beyond their lockdown range, directing them to call the police immediately or face a $33,000 fine. People who don’t have a GPS-enabled phone are issued a governmentprovided phone for the full length of the quarantine.
Devastated by a SARS outbreak in 2003, the country has spent years investing and preparing for viral outbreaks and, in some cases, disinformation campaigns from neighboring China. It also has established a government agency, the Central Epidemic Command Center, with special crisis-era powers to gather data and track people's movements.
When the outbreak spread, the government combined citizens’ health records — from its universal heath-care system — with customs and immigration records, helping piece together the travel histories of people suspected of infection. Those histories were made instantly available to medical providers, who tested for covid-19 and ordered quarantines for both confirmed cases and those who had traveled recently from widely infected countries.
For everyone else, the government offers an app that provides daily updates on reported cases, travel restrictions and details on community spread. Officials also make reams of real-time data publicly available, including online maps of where people can buy surgical masks.
The level of data gathering and surveillance is deeply intimate. But Chi, the Center for Global Health director, said it has also given Taiwanese people peace of mind about the unprecedented spread of a virus they can’t see.
“When the public doesn’t get adequate information, you give room for fake information to spread, and also panic,” Chi said. “When you do something like Taiwan did, you feel safe: You don’t have to worry about who’s infected. That’s not the case in the U.S.”
In the United States, wireless carriers such as AT&T and Verizon have extensive records on their customer’s movements based on what cellular towers their smartphones use to connect to broader networks. AT&T said it has not had talks with any government agencies about sharing this data for purposes of combating coronavirus. Verizon did not respond to requests for comment.
The information collected by some technology companies is significantly more precise, by tracking locations through GPS and the proximity of individual users to wireless data sources. Google, which operates navigation apps Google Maps and Waze and also produces the Android mobile operating system, the world’s most popular, has a particularly extensive trove of data.
Google said on Tuesday that it had not yet shared any data with the U.S. government to help combat the outbreak but it was considering doing so.
“We’re exploring ways that aggregated anonymized location information could help in the fight against covid-19. One example could be helping health authorities determine the impact of social distancing, similar to the way we show popular restaurant times and traffic patterns in Google Maps,” spokesman Johnny Luu said in a statement, stressing any such partnership “would not involve sharing data about any individual’s location, movement, or contacts.”
Government officials also could simply buy location data from companies that already collect and market such information, typically from apps that gather the locations of their users. Such data is readily accessible but regarded by technology experts as less comprehensive and reliable than data from other sources.
There are technical limits as well. Even the most granular cellphone data can be imprecise, potentially complicating its use as a logbook for establishing close interpersonal contact. Most GPS-enabled smartphones are accurate only within a roughly 15-foot radius and can be obstructed by trees and roofs.
Many privacy advocates recall a previous national tragedy, the Sept. 11, 2001 terrorist attacks, not only for the human toll in deaths and dislocation but the U.S. government’s subsequent moves to aggressively gain access to sensitive data through technical means and expanded legal authorities.
The full sweep of that data grab only became clear years later, perhaps most powerfully when former National Security Agency contractor Edward Snowden shared a huge trove of classified information with The Washington Post and other news organizations in 2013.
That history looms over the current debate.
“It would be very unfortunate if the government’s failure to conduct testing when it had the opportunity now became the reason for expanded surveillance authority,” said Marc Rotenberg, president of the Electronic Privacy Information Center, a research and advocacy group based in Washington.
The source of location data and how it was acquired could affect how useful it is to government health experts. Ryan Calo, an associate law professor at the University of Washington, said location-sharing partnerships between government and industry, like phone location data or GPS-sharing apps, could serve as critical tools for officials wanting to know, for instance, where crowds are violating social-distance rules or which hospitals are dangerously strained.
But other ideas now being pursued in the U.S., including consumer apps where people are mapped based on their self-submitted health status, threaten to promote a false sense of security that could leave more people at risk.
“The immediate and obvious trouble is where you purport to convert that information that’s crowdsourced, that’s imperfect, that can be gamed, into some kind of broader knowledge that people can deploy to avoid getting infected,” Calo said

Answer the following questions from the article above.

Question 1- South Korea implemented a “Self-Quarantine Safety Protection” app. Suggest five potential requirements the app could have been designed to meet.

Question 2-  Assume you’ve been asked to build a COVID-19 location tracking system. What are the limitations of the waterfall approach to software development in this scenario?

Question 3- Identify the pros and cons of using crowdsourced data in a COVID-19 response app or website.

Course- Management information system

The world’s 3 billion-plus smartphones emit the kind of data that health authorities covet during outbreaks. They show where individuals are, where they’ve been and who they might have talked to or even touched — potentially offering maps to find infected people and clues to stopping new ones.
But gaining access to this data, even amid a global pandemic, is made complex by the legal and ethical issues surrounding government access to information that can reveal intimate details about citizens’ lives. That includes clues to their social networks, their sexual relationships, their political activity, their religious convictions and their physical movements over previous months and even years.
This is a central dilemma as officials in the United States and other nations seek troves of data that might help fight the devastating coronavirus outbreak but also could raise fears that their government is spying on them or gaining access to information that could be used against them later, after the health emergency has waned.
Public-health experts argue that the location-tracking capabilities as practiced in such countries as Taiwan, South Korea and Singapore proved remarkably effective at helping officials control the spread of coronavirus — and that the U.S. needs all the help it can get amid projections that millions of Americans may get infected and hundreds of thousands may die.
“We are at war and we are fighting for our survival, for our lives, our health, our economy,” said Chunhuei Chi, director of the Center for Global Health at Oregon State University. “We are stretched very thin in most states, so this kind of technology can help every state to prioritize, given their limited resources, which communities, which areas, need more aggressive tracking and testing.”
Many privacy advocates see value in potentially giving public health authorities access to information created by smartphone use. That’s especially true if the data is voluntarily shared, as is already happening in several nations, where apps give users the option of uploading their location histories to health authorities.
“There’s no reason to have to throw out our principles like privacy and consent to do this,” said Peter Eckersley, an artificial intelligence researcher who organized an open letter on ways the tech industry could help combat the outbreak.
There is far more concern, however, about the program underway in Israel, which is using location data the government collected for fighting terrorism, to identify people potentially exposed to the novel coronavirus and ordering them to immediately isolate themselves “to protect your relatives and the public.” Hundreds of such texts started being sent by health authorities there on Wednesday. Late Thursday, the Israeli supreme court issued a temporary injunction, allowing only those who test positive to be tracked, and ruled that a parliamentary committee would have to endorse the initiative by Tuesday or it must be shut down.
In the United States, the White House has been in negotiations with major technology companies, including Google and Facebook, about potentially using aggregated and anonymized location data created by smartphone use, The Washington Post reported on Tuesday, but those efforts have been kept largely from the public Based on The Post’s reporting, Sen. Edward J. Markey (D-Mass.) sent a letter Thursday seeking answers about potential partnerships between the federal government and private companies.
“Although I agree that we must use technological innovations and collaboration with the private sector to combat the coronavirus, we cannot embrace action that represents a wholesale privacy invasion, particularly when it involves highly sensitive and personal location information,” Markey wrote to Michael Kratsios, the government’s chief technology officer. “I urge you to balance privacy with any data-driven solutions to the current public health crisis.”
Telecommunications giants in Austria, Germany and Italy also said this week that they would provide anonymized data on customers’ locations to government agencies hoping to analyze people’s movements.
O2, a telecom giant in the U.K., said Thursday that it was one of a group of mobile operators in the country asked by government officials to share aggregate location data on mass movements. The discussions are in an early stage, said a spokesman, who added that the company has “the potential to build models that help to predict broadly how the virus might move.”
Privacy experts repeatedly have shown that supposedly anonymous data can still be used to identify individual people, based on their known movements and other markers. Data that’s both anonymous and aggregated is far more private but also less useful in identifying people at particular risk for contracting coronavirus and spreading it to others.
The U.S. government has broad authority to request personal data in the case of a national emergency but does not have the legal authority, except in criminal investigations, to insist that companies turn it over, said Al Gidari, director of privacy at Stanford Law School’s Center for Internet and Society.
With appropriate safeguards, Gidari said the potential use of location data to combat coronavirus is “a real opportunity to do something positive with the technology and still protect people’s privacy.”
But currently there are no legal controls on how the federal government might use data once it has been collected, so location information collected for a health emergency could later be acquired by the FBI or the IRS.
Such complexities put companies in the uncomfortable position of balancing public safety and their customers’ privacy in deciding what data to share.
Many public-health experts say however that there are examples overseas of how such technology blunted the fast-spreading outbreak. In South Korea, the government directed tens of thousands of quarantined people to install a “Self-Quarantine Safety Protection” app that would monitor their phone’s location and alert health authorities if they left home. People also could use the app to report daily symptom check-ins and speak with the local government official overseeing their case.
On the app's website, the country's Ministry of the Interior and Safety said users would be protecting the “health and safety of your neighbors through strict self-isolation and observing the rules of life.” But because the app is voluntary, some critics have suggested its value is limited; people who wanted to skip quarantine could simply not turn it on.
Korean officials also routinely send text messages to people’s phones with public-health tips and alerts on newly confirmed infections in their neighborhood — in some cases, alongside details of where the unnamed person had traveled before entering quarantine.
But more so than the technology, the country’s vigorous health-screening infrastructure — more than 300‚000 people have been tested there in the last two months, compared to roughly 80,000 in the U.S. — has been credited by researchers with helping the country slow the virus’ spread.
Singapore, too, has asked people to use a voluntary location-tracking system based around QR codes — the square bar codes with information readable by smartphones — installed in cabs, offices and public spaces, which people have been instructed to scan upon passing. Health officials there have said the digital breadcrumb trail can help with infection “contact tracing,” but the data is far from complete, likely limiting its widespread use.
For an even more aggressive and seemingly effective example, some public-health experts have pointed to Taiwan, an island nation of 24 million people that has recorded only 100 infections, though it sits just 80 miles off the Chinese coast.
The country uses mandatory phone-location tracking to enforce quarantines, sending texts to people who stray beyond their lockdown range, directing them to call the police immediately or face a $33,000 fine. People who don’t have a GPS-enabled phone are issued a governmentprovided phone for the full length of the quarantine.
Devastated by a SARS outbreak in 2003, the country has spent years investing and preparing for viral outbreaks and, in some cases, disinformation campaigns from neighboring China. It also has established a government agency, the Central Epidemic Command Center, with special crisis-era powers to gather data and track people's movements.
When the outbreak spread, the government combined citizens’ health records — from its universal heath-care system — with customs and immigration records, helping piece together the travel histories of people suspected of infection. Those histories were made instantly available to medical providers, who tested for covid-19 and ordered quarantines for both confirmed cases and those who had traveled recently from widely infected countries.
For everyone else, the government offers an app that provides daily updates on reported cases, travel restrictions and details on community spread. Officials also make reams of real-time data publicly available, including online maps of where people can buy surgical masks.
The level of data gathering and surveillance is deeply intimate. But Chi, the Center for Global Health director, said it has also given Taiwanese people peace of mind about the unprecedented spread of a virus they can’t see.
“When the public doesn’t get adequate information, you give room for fake information to spread, and also panic,” Chi said. “When you do something like Taiwan did, you feel safe: You don’t have to worry about who’s infected. That’s not the case in the U.S.”
In the United States, wireless carriers such as AT&T and Verizon have extensive records on their customer’s movements based on what cellular towers their smartphones use to connect to broader networks. AT&T said it has not had talks with any government agencies about sharing this data for purposes of combating coronavirus. Verizon did not respond to requests for comment.
The information collected by some technology companies is significantly more precise, by tracking locations through GPS and the proximity of individual users to wireless data sources. Google, which operates navigation apps Google Maps and Waze and also produces the Android mobile operating system, the world’s most popular, has a particularly extensive trove of data.
Google said on Tuesday that it had not yet shared any data with the U.S. government to help combat the outbreak but it was considering doing so.
“We’re exploring ways that aggregated anonymized location information could help in the fight against covid-19. One example could be helping health authorities determine the impact of social distancing, similar to the way we show popular restaurant times and traffic patterns in Google Maps,” spokesman Johnny Luu said in a statement, stressing any such partnership “would not involve sharing data about any individual’s location, movement, or contacts.”
Government officials also could simply buy location data from companies that already collect and market such information, typically from apps that gather the locations of their users. Such data is readily accessible but regarded by technology experts as less comprehensive and reliable than data from other sources.
There are technical limits as well. Even the most granular cellphone data can be imprecise, potentially complicating its use as a logbook for establishing close interpersonal contact. Most GPS-enabled smartphones are accurate only within a roughly 15-foot radius and can be obstructed by trees and roofs.
Many privacy advocates recall a previous national tragedy, the Sept. 11, 2001 terrorist attacks, not only for the human toll in deaths and dislocation but the U.S. government’s subsequent moves to aggressively gain access to sensitive data through technical means and expanded legal authorities.
The full sweep of that data grab only became clear years later, perhaps most powerfully when former National Security Agency contractor Edward Snowden shared a huge trove of classified information with The Washington Post and other news organizations in 2013.
That history looms over the current debate.
“It would be very unfortunate if the government’s failure to conduct testing when it had the opportunity now became the reason for expanded surveillance authority,” said Marc Rotenberg, president of the Electronic Privacy Information Center, a research and advocacy group based in Washington.
The source of location data and how it was acquired could affect how useful it is to government health experts. Ryan Calo, an associate law professor at the University of Washington, said location-sharing partnerships between government and industry, like phone location data or GPS-sharing apps, could serve as critical tools for officials wanting to know, for instance, where crowds are violating social-distance rules or which hospitals are dangerously strained.
But other ideas now being pursued in the U.S., including consumer apps where people are mapped based on their self-submitted health status, threaten to promote a false sense of security that could leave more people at risk.
“The immediate and obvious trouble is where you purport to convert that information that’s crowdsourced, that’s imperfect, that can be gamed, into some kind of broader knowledge that people can deploy to avoid getting infected,” Calo said

Answer the following questions from the article above.

Question 1- QR codes are proposed as a potential location-tracking solution in the article. Identify three other emerging technologies that could be relevant and describe how they might be useful.

Question 2- . Identify three potential applications of intelligent information systems suggested by the article.

Question 3-  Identify three potential applications of management support systems suggested by the article.

Course- Management information system

case study:

Spanx Inc.: Growth Dilemma for a Shapewear Leader

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Arpita Agnihotn and Saurabh Bhattacharya wrote this case solely to provide material for class discussion. The authors do nat intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder Reproduction of this matenal is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, lvey Business School, Westem University, London, Ontario, Canada, N6G ON1, (ty 519.661.3208, (e) cases@ivey ca; wwww.iveycases.com?

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Founded in 2000 in Atlanta, Georgia, United States, by Sara Blakely, Spanx Inc. (Spanx) had been, since its inception, a pioneer and market leader in the body-shaping hosiery and intimate apparel segment known as shapewear. Spanx shapewear was lightweight and comfortable, unlike traditional girdles and pantyhose. From Blakely's initial investment of only USS5.000, sales of Spanx quickly accelerated, reaching $250 million by 2012 and $400 million by the end of 2016. In March 2012. Forbes magazine named Blakely the world's youngest, self-made female billionaire. In the same year, Time magazine listed her among the world's 100 most influential people.

Spanx, apart from being the market leader, also became synonymous with shapewear. However, in 2012. doctors revealed several health problems associated with shapewear. Changes in cultural currents also meant that women were less interested in using shapewear to create an ideal body shape, New product categories, such as athleisure wear and activewear, were also launched by companies such as lululemon athletica Inc. and Nike Inc. These clothes were more comfortable to wear, and unlike Spanx, they could be worn on a daily basis.

Despite Spanx's market leadership position in shapewear, by 2015. the company's shapew was being ear perceived as a "tummy-tucking" commodity rather than a fashion statement. To combat these challenges. from 2015 onward, Spanx initiated a rebranding drive for shapewear and diversified into other fast-growing product categories such as athletic wear. Blakely's entrepreneurial spirit led to her being invited to appear as a motivational speaker on television shows such as Shark Tank. In May 2017. Forbes estimated that Blakely was worth S billion." However, would Spanx be able to manage sustainable growth in the product category it had created? Did Spanx need to be rebranded? Would its product diversification strategy pay off? What should Spanx have done to keep its momentum of growth moving against competitors?

BACKGROUND

The idea for Spanx struck Blakely in 1998, when she was getting ready for a party and realized she lacked the right underwear to provide a smooth look under her white pants. She cut the feet out of her panty hose, and hence the idea of footless pantyhose was born.10 Blakely also observed that other womenoften complained about the discomfort of pantyhose, which covered them from foot to waist." As a result, Blakely knew that demand for her product existed and she was ready to take the opportunity.

The core mission of Spanx was "To help women feel great about themselves and their poential,"" Before akely had sold fax machines, and she was sure that she would be able to sell her starting Spanx pantyhose as well." She started her business in one of her spare bedrooms, without any ernal financial help. Blakely explained, "Nobody gave me any money and I also really didn't understand that Iventure capitall world," further adding, "I did not understand how people raise money. know anything about the undergarment industry.

She worked during the day a a salesperson and spent her evenings at the Georgia Tech Library in Atlanta, Georgia, researching pantyhose patents after lawyers refused to file patents for her, having found her idea unusual. Finally. Blakely wrote the patents herself. She had also worked as a stand-up comedian, and that skill taught her that the letter "k" makes people laugh. Also. wellknown brand names at that time, such as the Eastman Kodak Company and Coca-Cola. contained the sound k. Thus, she decided that the company's brand name should include a prominent "k" sound. Furthermore, Blakely's research showed that constructed words were more attention-catching. and she therefore replaced the "ks" in the word "spanks" with an "x maintaining the same pronunciation but with an invented spelling.

her next challenge was to find a manufacturer of hosiery products; she had developed excellent sales. which helped her as she began contacting several hosiery manufacturers. Blakely mentioned, "I couldn't help but think of the days when my job was to cold call people in Clearwater to try and sell them fax machines and how many of them said "No, no, no.

However, just as lawyers had been skeptical about her patent, manufacturers were skeptical about making her product. However, Blakely did not shy away from asking for help:

“ I used a lot of very confident, very powerful language, but l also asked for help. If you covered up your weaknesses, I thought you missed opportunities for human nature to want to kick in. At the end of the day, the guy [manufacturerl ended up just wanting to help me. He didn't even believe in the idea.”

Finally, Blakely found a manufacturer and after a year's effort to find appropriate knitting technology, she developed a prototype. Blakely's panty hose differed from traditional pantyhose in several ways. First with her pantyhose, cellulite was not visible. Second, it did not have rubber cords in the waistbands, but waistbands that were comfortably sized. Similarly. even leg bands were absent, eliminating thigh bulge. The Spanx prototype had a cotton gusset, which provided cool wearability. instead of the typical polyester gusset. Lastly, unlike traditional pantyhose, these pantyhose did not crease the skin at the ankle. Blakely decided to call this product Footless Bodyshaping Pantyhose, which later became synonymous with the product category shapewear.

SHAPEWEAR MARKET POTENTIAL

Shape wear had been in demand as women experienced conflicts between their actual body shape a current cultural ideals Early forms of shapewear included girdles (woven garments similar to wide belts) and corsets. Between the 1920s and 1960s. many women considered wearing these garments to be essential. Corsets were used to shape the body. through a squeezing effect. sometimes reducing the waist to as little as 20 inches (50 centimetres). Consequently. corsets at times resulted in broken ribs or a reduced ability to breathe fully Gradually. corsets were replaced with control garments or control pantyhose, which adapted the concept of the corset. smoothing bulges and bumps in the abdominal area. Because of advancements in fabric technology. demand for shapewear remained h when Spanx launched its pantyhose featuring advanced fabric. which provided more comfort, hid undergarment linings, and offered the benefits of a shapewear product.

PACKAGING

To differentiate from its competitors, Spanx packaging was brightly coloured (such as cherry red): in contrast, competitors' packaging tended to be neutrally coloured and featured images of women extending their legs. A graphic designer was employed to create images unlike those on traditional hosiery packages, such as illustrations of three women. who were fully clothed and showed the various advantages of wearing pantyhose under skirts or pants. Again, Blakely used her sales skills and comedic wit to make packaging more interesting. adorning packages with cartoons and funny captions such as "When you think everyone's looking at your train but they're really looking at your caboose," or "Don't worry, we have got your butt covered. Even the branding of Spanx products was unique and humorous: products were given such names as Bra elujah and Tight-End Tights. PROMOTING SPANX Advertisement through any channel-print, television, or radio was not an option for Blakely due to budget constraints. During Sp start-up days, word of mouth, not an advertising strategy, was a necessity. At first, Blakely stimulated artificial demand by asking her friends to purchase Spanx. later sending them reimbursement cheques She even stood in stores for hours to sell each pair herself because Spanx products were placed in obscure corners of retailers' shelves. She specifically stated. "I learned very quickly that my biggest challenge was location of the store ISpanx werel put in the sleepiest corner. Irealized. "This is going to come here and leave ifI don't personally intervene, even if i have to sell every pair myself." And that's basically what I did.

Next, to further stimulate sales. Blakely decided to target celebrities in the hopes of receiving their free endorsements. She sent a basket of Spanx products to Oprah Winfrey's television program and explained her products. The products aught Oprah's attention, and she named Span her product of the ear. In fact, Hollywood celebrity Gwyneth Paltrow publicly thanked Blakely for Spanx, claiming that Spanx made her post-baby body look better. This free publicity spurred Blakely's career. By 2003. she had become well-known among Hollywood celebrities, who started using Spanx under their Oscar gowns. By 2012. she became an international figure when Time magazine identified her as one of the world's most influential people.

Even as of 2017. Spanx did not employ any type of advertisement. As the former chief executive officer (CEO) Laurie Ann Goldman mentioned in 2012, despite the company's ability to afford any billboard in Times Square, it never publicized Spanx products. Instead, Spanx promoted a philosophy of woman to woman" advice, especially relevant in the era of social media. As Goldman affirmed:

“ The power of women discovering the brand from other women was actually a better strategy. The aunt telling her niece: one woman to a college friend. There's something about saying. "Look, feel my back, no lines" that's powerful. Look at how big social media has become now. People trust advice.

Spanx thus relied on word-of-mouth marketing by it believed that woman-to-woman communication over social media would be much more powerful than paid advertising.

Similarly, Blakely decided to engage in public relations on her own; she was confident about the product and did not feel any need to hire an external agency. She stated. "I believed so much in my dream that the idea of someone pitching it who maybe hadn't even worn Spanx just completely freaked me out. So, I decided to try the public relations myself for a while But as her business grew, a public relations manager was appointed to oversee not only press coverage and media relations but also celebrity relationship management. Further, Spanx began offering several sales promotions for consumers. especially for online shopping, such as discounts with coupons or promotion codes or free shipping when buying through selected retailers. At times, the discounts offered by the company were as high as 70 per cent of the product price.

SPANX'S GROWTH STRATEGY

The cornerstone of Spanx's strategy was innovation. By 2010. Spanx started manufacturing undergarments r men under the label Manx.. Spanx continued adding product lines and variants, and by 2014. the company was selling more than 200 products. fuelling its growth (see Exhibit I) The innovations in the shapewear market had resulted, in part, from abrupt changes in fabric technology and garment design.

Spanx products were sold under different brand names, including Bod a Bing and Hide and Sleek. The company's four most well-known brands were ASSETS, Spanx, Starpower, and the Red Hot label. Spanx offered a range of compression options in a variety of products, such as tights, full slips, half slips, and camisoles, in addition to other hosiery-based products, such as knee-highs. stockings, and socks.

Industry experts noted that as a part of the company's strategic rollout, it was vital for Spanx to have its own independent stores for two reasons: to eliminate the need to fight for space in department stores and to be able to test new product launches easily and effectively, Thus, by 2012, Blakely started launching stand-alone Spanx stores in shopping malls. The first stand-alone outlet was launched in Washington, D.C., with the intent of later extending stores into Pennsylvania and New Jersey. The objective for these stores was to better connect with customers. Blakely trained the sales staff on all the product lines so that they could provide in-person guidance to help customers select the right garments to match their clothing.

Spanx valued innovation, risk-taking, and optimism across all departments, the inculcating leadership values and accountability among a employees. Furthermore, Spanx hired most of its employees through referrals from fashion, health, and beauty companies, which ensured a high level ofexpertise. By 2013. Spanx had 112 employees across all its locations, eight times more than in 2010.

SPANX'S COMPETITORS

In the shapewear product category. Spanx's several competitors had distinctive competitive advantages. Leonisa. for instance, provided flexibility to women by adjusting the level of control required. A Chery was yet another competitor in the shapewear category, which was voted most preferred shapewear in 2015 Your Contour specialized in arm-shaping shapewear. Apart from these specialty competitors, players from other apparel product categories had ventured into the ear category. including shapew Wacoal, Hanes, and Under Armour. Overall, in the hosiery sector globally (see Exhibit 2). Spanx had a market share of 2.06 per cent as of2016.

CHANGES IN THE SOCIOLOGICAL ENVIRONMENT

Both shapewear and compression wear belonged to the intimate apparel segment. According t a 2013. female body weight across the globe was increasing including in countries Euromonitor report in in Eastern Europe, Western Europe, and North America. However, fashion and beauty magazines continued to promote and idolize celebrities. focusing especially o their appearance and weight loss. Partly due to the influence of such magazines. women bought hosiery products such as shapewear. and consequently, the U.S. shapewear market reached its peak in 2010, with record sales of S850 million.

But women gradually started developing concerns about the health effects of tight clothing products such Spanx. According to doctors, products such as Spanx could lead to meralgia paresthetica (a burning sensation as a result of excessive pressure on nerves) or disease due to excessive pressure on the abdomen." The fashion world also shifted its beauty ideals. In France, excessively thin models were banned, while in the United States, Victoria's Secret launched more lingerie in plus sizes. In response to such concems, companies emerged with new clothing that addressed different concerns for example, promising reductions in cellulite or anti-aging properties, releasing sunscreen, or masking odour with fragrance. These concems negatively affected the North American shapewear market. which declined to $678 million by 2015.

Spanx was challenged not only by the intimate apparel or hosiery sector but also by other apparel sectors. While the overall apparel market in North America grew by 2 per cent in 2015. activewear (i.e.. casual clothing meant for exercise and general wear, such as yoga pants or leggings) grew by 16 per cent in 2015 Growth was mainly derived from millennials in the United States, which represented 28 per cent of the U.S population. Their increased health consciousness and informal workplace culture increased the popularity o functional but less fashionable clothing such as activewear." Moreover, activewear products also provided the benefit of a slim fit, which further enticed consumers to shift from uncomfortable, tight shapewear products to stretchable, yet slim-fitting activewear products." As customers switched to new activewear products, fewer new customers tried shapewear due to the discomfort associated with it. The attractiveness f the activewear market could be gauged from entries into this market by large sportswear companies such as Under Armour and retailers such as Walmart (see Exhibit 3)

Critics had labelled shapewear an obsolete product. For the period 2014-2022, the shapewear category was projected to grow in international markets to a value reaching S5.58 billion; however, this estimate was much lower than estimates for new product categories such as activewear. The global activewear mark was growing, on average, 5.52 per cent year-on-year and was expected to reach a value of S365 billion by 2020 (see Exhibit 4)

Nevertheless, the shapewear category found a place among a new segment of consumers. young teenagers instead of adult women. Shapewear became more popular among teenaged girls between the ages o 5 years. Wearing Spanx became so popular among teens that they wore the product for every occasion. ranging from the classroom to the sports field. Thus, wearing Spanx became a trend among teenagers to such an extent that they wore these products irrespective of their weight. Everyone, ranging from thin athletes to healthy teenage girls. began wearing Spanx and other shapewear

SPANX S RESPONSE TO CHALLENGES

Repositioning Spanx

Spanx was originally worn by women for special occasions, such as wedding or parties. When Jan Singer was the CEO of Spanx, she realized that consumer preference had been changing since 2015. and she decided to reposition Spanx from occasional wear" to "everyday wear To achieve this repositioning. Spanx launched a new Power Series line, consisting of high waisted panties and shorts. which slightly smoothed body shape while retaining the wearer's true form. These products were lightweight and more comfortable. The entire product range was repackaged and reformulated to indicate higher performance. comfort, and aesthetics. Packaging was printed with the slogan, "Reshape the way you get dressed, so you can shape the world to reflect feminist inspiration. Furthermore, to establish a stronger connection with the founder of Spanx, the Power Series packaging featured Blakely's signature. Critics, however, believed that the Spanx's repositioning efforts were incomplete because its website still promoted the theme of "the thinner, the better," even selling products such as Power Mama hosiery to accommodate pregnant women. and Spanx's traditional products, such as high-waisted shorts and body suits, remained prominent.

The repositioning efforts were company-wide: senior management restructuring also took place under Singer's regime, with the objective of increasing customer focus. To explain her restructuring effort. Singer stated, "The eye on the consumer was really missing and Spanx needed to get back into deeply understanding the consumer. Furthermore, the market research agency Kramer Group was hired as part of a rebranding effort, which helped in restructuring the Spanx store format, packaging. and even communication. The Kramer Group suggested that Spanx needed to enhance its fashion appeal, while retaining the authenticity of the brand, the new repositioning theme and of everyday wear needed to be consistent across social media, retail and digital media.

Entering the Apparel Segment

Given the potential of the activewear market. Spanx extended its product line to incorporate activewear eggings in 2014: however, online reviews indicated that Spanx was not on par with competitors in terms of sales. For instance, until September 2017. its competitor Zella had received a total of 3,905 online reviews on Nordstrom.com variants of leggings, while Spanx received a total of 617 reviews. Furthermore. none of Spanx's legging varieties received five-star ratings from consumers. in contrast to Zella, which received five-star ratings for several of its products. A whereas competitors such as Zella provided 89 legging variants. Spanx provided only 14.

In the apparel segment, Spanx also entered the denim jeans market. However, in contrast to the activewear segment, the denim industry was struggling, due to poor fit, performance, and price problems. It was market share in its core markets, Europe and North America, although the burgeoning middle-class consumers from other countries, such as India and China, supported its growth to some extent.

Seeing potential in the denim jean market, Spanx diversified into this sector in 2014. Spanx pioneered the launch of the first denim shapewear to compete an existing denim jeans. Spanx denim was different from that of its competitors: it triple-thread technology, used which involved extra stretchable yarn, hereby rendering a body-contouring fit. nvolved other patent-pending shaping features and also offered shaping waistbands for additional slimming. However, fashion critics did not seem to find Spanx s revolutionary, but viewed them as just another option in a sea of denim.

PHILANTHROPY

In 2013. Blakely joined the Giving Pledge campaign, which committed her to donating half o philanthropic endeavours." She was in fact, the first women billionaire to join the foundation led by Warren Buffet and Melinda and Bill Gates She also founded the Sara Blakely Foundation in 2006. which supported organizations such as Grameen America. Malala Fund, the Empowerment Plan, and more. Her objective was to contribute toward women's empowerment and welfare through philanthropy. and she contributed approximately S24 million to these foundations. Despite the potential competitive threat from new start-ups, she also created a platform known as the Leg Up initiative to provide telephone consultation and funding to future women entrepreneurs. Similarly, she started the Belly Art Project to make pregnancy and childbirth safe for women in need.

CHALLENGES AND THE ROAD AHEAD

Whereas 50 per cent of start-ups in the United States fail in the first five years, Blakely's Spanx was not only successful in its home country but also created an international market for her products. With 12.000 distribution outlets across 50 countries, Spanx was a brand synonymous with the shapewear product category. Spanx had a high profile and dedicated customer base, the only undergarment that received joyful shout-outs from the red carpet at award shows, Public acclamations by celebrities such as "I am triple Spanx-ed tonight!" were common.

A market leader in the shapewear category by 2016, Spanx became a S400 million private company with 00 per cent ownership by Blakely. Furthermore, although she did not intend to take the company public, she did plan to launch many new product lines, stating, "Before I retire. I want to make a comfortable high heel. I don't subscribe to the beauty is pain philosophy. She also commented. "I was inspired to move into all categories of fashion eventually because there was so much opportunity to make things more comfortable, fit better, [and] feel better. n March 2017. Spanx launched a bridal lingerie range. Although Spanx continued to innovate, several challenges did remain.

Spanx also experienced its own set of problems in-company. Former S CEO Singer, within two years of her tenure, joined the company's rival Victoria's Secret in 2017. Similar challenges arose when current employees posted negative reviews on job websites such as glassdoor.com about working with Spanx. Due to dissatisfaction, employee tumover also increased throughout 2017.

Furthermore, the glamour of shapewear was declining. As one critic commented, "The game was changed, the rules were changed, and the playing field was changed, and Spanx j didn't have the marquee brand power they had before. Although the product category was expected to grow in international markets with a value reaching S5.58 billion, it was nevertheless much lower than projected growth for new product categories such as activewear.

In the midst of these challenges, would Spanx be able to maintain its position in the market? Since 2015 Spanx had been trying to respond to challenges through rebranding or entering different core product segments, but was this strategy sustainable in the long run? As big players entered the shapewear and other apparel markets, how would Spanx withstand competition and sustain future growth?

Questions: (the answer must be simple and much easier)

1)    Was it strategically appropriate for Spanx to diversify from its core product (i.e., shapewear) to unrelated products (i.e., jeans and activewear)? Is this diversification strategy likely to pay off in the long run?

2)    What is the optimal growth strategy should Spanx follow to sustain its market position in the future?

Keywords: Covid-19 Globalization International Business Risk Trade Uncertainty

2. Theoretical background and conceptual framework 2.1. Uncertainty – Definition and dimensions Past research identifies different types of uncertainty based on its source (environmental, industry or firm characteristics) or its nature (exogenous vs. endogenous) in the international business context (Certo, Connelly, & Tihanyi, 2008). However, there is still no consensus on the distinction among different dimensions of uncertainty and as a result, these are often used inconsistently or interchangeably, which in turn may hamper the decision-making by international business managers facing uncertainty, by providing an incomplete picture of the role played by uncertainty in international business context (Sniazhko, 2019). A lack of clear distinction among different dimensions of uncertainty may also lead to risky decisions due to misplaced perceptions about the prevailing environment (Brouthers, 1995). A consensus on the exact definition of uncertainty remains elusive, with arguments revolving around whether it is an objective description of an firm’s environment (Milliken, 1987) or the subjective perception of an individual manager or decision-maker about the uncertainty in the environment (Michel, 2007; Milliken, 1987). While the former suggests a universal view of uncertainty, the latter implies uncertainty lies “in the eye of the beholder” (Milliken, 1987; p. 134). To add to the confusion, researchers describe uncertainty in terms of ambiguity, complexity, conflict, entropy, equivocality, risk, and turbulence (Alpers, 2019). Milliken (1987; p. 136) defines uncertainty as a “perceived inability to predict something accurately” resulting from a lack of confidence in one’s knowledge in a situation. From that perspective, uncertainty can be considered to be an overarching environmental variable that influences a business or the economy as a whole, rather than a level of ambiguity, complexity or risk involved in a single problem or decision-making context (Alpers, 2019). This depiction of uncertainty as an overarching environmental variable is particularly relevant to the current crisis as uncertainty due to its widespread and almost instantaneous impact across different countries and markets has made it difficult to predict and control by any single business as it has affected entire international business ecosystems within and across nations. Past research also identifies several dimensions of uncertainty, namely environmental uncertainty that includes political, economic, government, cultural and discontinuous uncertainty, and represents both formal and informal parts of a country’s environment (Sniazhko, 2019). As is evident by the rapid global spread of Covid-19, the nature and level of uncertainty is potentially amplified due to the potential disconnect that each of these elements may have across different national boundaries. Similarly, industry uncertainty includes input, demand, competition and technological uncertainty, whereas firm uncertainty relates to behavioral, R&D, operating and previous experience uncertainty. The cross-national differences in these two types of uncertainties, coupled with the inconsistencies in the way uncertainty is conceptualized and operationalized (Sniazhko, 2019), fail to provide a complete picture of the impact of uncertainty on international business performance. At first glance, discontinuous uncertainty may seem to best describe the uncertainty associated with the Covid-19 pandemic, because its impact is quite similar to that of a natural disaster that result in widespread human and economic casualties (Oetzel & Oh, 2014). However, P. Sharma, et al. Journal of Business Research 116 (2020) 188–192 189 viewing it through this single lens may be problematic because of its cascading effect on other types of uncertainty, such as environmental, political, industry, and firm uncertainties, as highlighted by the way most countries across the world did not consider Covid-19 to be a serious threat when it was mainly concentrated in China and neighboring countries. In fact, they seemed to be only concerned about the continuity of supply chains to ensure the availability of manufactured goods from China, while they waited for further instructions from WHO about the impending disaster, which may have resulted in a great deal of political uncertainty (Gray, 2020). However, as the virus spread across the globe, its impact on the governments, public institutions, industries and individual firms became more apparent, with most nations coming to a stand-still due to the lock-downs and closing of borders, which led to industry and firm level uncertainty. Hence, one major learnings from this experience for international business managers and policy-makers is to consider all the dimensions of uncertainty simultaneously or in sequence, to ensure a more unified approach to dealing with such global disasters in future. 2.2. Uncertainty assessment Previous studies also examine how contextual (e.g. firm, industry, and national) factors influence managerial perceptions of uncertainty (Bouquet, Morrison, & Birkinshaw, 2009; Santos-Álvarez & GarcíaMerino, 2010). For example, larger and older firms tend to have more resources that may help reduce the perceived risk due to an uncertain environment (Acedo & Jones, 2007; Liesch, Welch, & Buckley, 2011), while family firms perceive greater risk than non-family firms (Claver, Rienda, & Quer, 2008). Others show systematic variation in risk perceptions across nations due to differences in their formal and informal institutional structures (Makhija & Stewart, 2002), which affect the nature and availability of information for decision-makers and the consequences of their decisions (Delerue & Simon, 2009). The Covid-19 crisis provides mixed evidence to these ideas as we can see even larger and older businesses like airlines and retailers coming under tremendous pressure and being forced to furlough or layoff a large number of employees, just as smaller businesses like cafes and restaurants. Similarly, developed nations in Europe and North America lead the number of diagnosed cases and deaths due to Covid19, which suggests either a complete failure of their public health systems (e.g., in Italy and Spain) or a lack of political leadership (e.g., in UK and USA). By contrast, countries like South Korea, Australia, and New Zealand have managed to flatten the infection curve with minimal disruption, due to a combination of excellent public health systems and responsible political leadership, while Singapore has seen a second wave of cases despite its early success (Ang, 2020). Interestingly, China seems to have almost controlled further spread of Covid-19, while India has so far managed to keep the number of cases and death quite low relative to its huge population (Srivastav, 2020). However, it is still early to see how countries in the rest of Asia, Africa and Latin America handle this ongoing crisis. 2.3. Uncertainty – Antecedents and outcomes Current literature focuses on the factors that influence the choice of a particular approach to manage uncertainty (e.g., the role of decisionmakers) but pays less attention to the antecedents and outcomes of the different types of uncertainty and/or the outcomes of international business firms strategies used to manage uncertainty. As a result, there is a limited understanding of the impact of uncertainty in the international business environment, and in particular, how it may influence the performance of different businesses based on their unique conditions. For example, one of the main challenges in international business is the assessment of the impact of uncertainty when the risks are interconnected and asymmetric (Bekaert, Harvey, Lundblad, and Siegel, 2014; Buckley, Chen, Clegg, & Voss, 2016), including macro risks that affect most firms and micro risks that only impact a few firms – contingent upon their origin (Eduardsen & Marinova, 2020). Most small firms do not even attempt to assess some types of uncertainty (e.g., political and economic) as these may not affect them directly and/or due to the unstructured and subjective nature of their assessment methods (Oetzel, 2005). Moreover, they may rely on the managers’ own judgment and expert opinion that could be biased and subjective (Eduardsen & Marinova, 2020), as exhibited by the inability of the governments in many countries to anticipate and control the spread of Covid-19 despite having proper pandemic plans in place for many years. For example, public health managers and political leaders have launched programs and initiatives after every major health crisis in the US in the last two decades but most of these “programs were defunded, staff was allowed to depart and Washington forgot the stark lessons it had just learned” (Diamond, 2020). The Covid-19 crisis further demonstrates these issues in quite a dramatic manner, wherein many small businesses around the world have simply collapsed due to the lack of demand from their regular customers and an inability to pivot to alternate ways of doing business. Of course, there are exceptions, such as restaurants switching over to a take-away model instead of dine-in option, fast food franchisees selling bread and milk through their drive-thru counters, and rideshare operators such as Ola and Uber taking up mail and package delivery as their traditional passenger business has almost dried up (cites). Of course, there are implications in such actions that may further increase uncertainty. For example, UberEats has been in battle with food retailers in Australia over delivery fee structures but the company is reportedly not only digging its heels in but is seemingly reluctant to be more flexible in adjusting their fee structures in the current Covid-19 environment (Durkin, 2020). The core uncertainty here is whether this action is signaling power play for channel control or simply a business taking advantage of the uncertain environment by acting opportunistically. Going forward, we would need to look at how these businesses can better prepare themselves so that they can become not only more resilient to overcome the uncertainty imposed by unexpected events but also be more agile to cope with these challenges by being flexible and innovative. 2.4. Uncertainty management Managing uncertainty involves strategies that help firms either reduce (risk management) or cope with (strategic management) uncertainty; reducing uncertainty is a natural motivator that guides firms’ behavior, whereas coping with it allows firms to adapt their strategy to deal with the type of uncertainty faced by them (Sniazhko, 2019). Uncertainty reduction involves information gathering, proactive collaboration or cooperation, and networking; whereas, uncertainty coping consists of flexibility (diversification and operational adaptation), imitation (copy competitors and early movers), reactive collaboration and/ or cooperation, control and avoidance (Simangunsong, Hendry, & Stevenson, 2012). For instance, many food retailers in the United Kingdom (Co-op, Waitrose, etc.) have been forced to reduce their offers on shelves and to focus on delivering the most essential products, to reduce the operational pressure and give more time to retailers’ employees to prepare shelves, clean stores and respond to abnormal customer demand during the lockdown due to Covid-19. More employees were also deployed to increase cleaning across all operations. To reassure customers safety concerns, retailers have offered free hand washing to customers, implemented social distancing with limiting number of customers in outlets, and limiting contact at pay points with installing the protective screens across stores and increasing the card contactless limit to £45. During times like these, reactive collaboration and/or cooperation (e.g., shifting the risk and uncertainty to the firms’ partners) is the most common strategy used by firms to handle environmental or industry uncertainty. Firms may also try to avoid uncertainty when the level of P. Sharma, et al. Journal of Business Research 116 (2020) 188–192 190 environmental and industry uncertainties is much greater than their worst expectations. Overall, managing uncertainty involves reducing the probability of undesirable outcomes and their impact on the businesses at various stages of the value chain (Figueira-de-Lemos & Hadjikhani, 2014). For instance, Aldens is family owned butcher SME, based in Oxford and established in 1783, supplies universities, restaurants, pubs, etc., and they faced an 85% reduction in orders overnight (Midcounties, 2020). Aldens partnered with regional Midcounties Coop retailer to supply fresh meet and substitute those product lines that were in jeopardy because of increased consumer demand and disrupted supply chains. Similarly, many SMEs in fashion industry have started making face masks and lab coats, to meet the insatiable demand for these personal protective equipment (PPE). Similarly, many alcohol factories are now producing hand sanitisers, while a small firm (Isinnova) was able create a system to use the Decathlon diving Mask as a pulmonary ventilator (Murdock, 2020). In this context, it may also be useful to see the experience of Samsung, a South Korean giant in consumer electronics and home appliances, during the ongoing Covid-19 crisis. Being fully aware of the risks of single sourcing, Samsung has established a vast manufacturing network over the years with factories in Brazil, India, Indonesia, South Korea, and Vietnam, to fulfill its huge production demand and to reduce its dependence on China. Unsurprisingly, this has helped Samsung shift its production from one location to another during the ongoing Covid19 crisis, thereby facing just a slow-down, and not a complete shutdown in production. Similarly, to compensate for the closure of retail stores, Samsung has leveraged its contracts with mobile phone retailers and Benow (a payment and EMI technology firm) to create an e-commerce platform so that its retail business can continue to sell and deliver the products to its customers (Mukherjee, 2020). Samsung has also launched additional services to maintain its customer relationships, such as “Free Repairs for the Frontline” program to offer free smartphone repair services to healthcare workers and special discounts for first responders and healthcare professionals (Mihai, 2020).

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CASE STUDY ON LEADERSHIP/

Aidensfield hospital currently faces major problems with staff, management, general performance and service quality. It is conceivable that these problems are related to the ‘leadership’ styles adapted by those in charge. The senior management have proposed some changes within the organisation to hopefully make improvements but making such decisions requires an in-depth understanding of what is going wrong and why.

Leadership as a concept is often considered in isolation when in reality, it is coherent with management. Their amalgamation gives rise to the term ‘managerial leadership’ – a combination of Mullins’(2007) task and maintenance functions. In simpler terms, good managers do not view workers as machines artlessly pumped with fuel (or money) to produce output (the job) like Henry Ford. More appropriately, they are considered, for lack of a simpler expression, like horses that besides given food must also be pampered and directed to maximise productivity. Therefore, managerial leadership is characterised, along with task-oriented behaviour, by motivation, attention, communication and interest in the worker as these are the principles that agglutinate leader and subordinate (Buchanan & Huczynski 2010). Several leadership style classifications parade in general knowledge but the problem is they are usually considered  in vacuo. It is impossible to simply adapt one classified style because, like Castell (2010) argued, it will be unreasonable not to scrutinise the epistemology behind this rigid taxonomy. He stated that;

“Managers cannot adopt neutral stances with an air of scientific detachment because such detachment cannot exist ... the knowledge that managers bring to management is constructed situationally ... in the present and in relation to the context” (2010, pg. 234);

The key word here is ‘constructed’. Delving into real life applications of managerial leadership, contingency theorists argued that selective combination of relevant elements within styles to fit whatever circumstance that presents itself is ideal (Mckenna, 2012). Hence, this essay aims to critically cull ideas from the distinct styles and theories, explaining how they may coalesce into academically supported explanations of issues in Aidensfield’s unique context. Firstly considering motivation, which is apparently the most pressing issue, relevant traditional theory will be discussed extensively. The discussion will then move on to how motivation can be determined by perception and the psychological contract. Prompted by perception, communication concepts will follow before finishing with leader-member relationships, trust and group dynamics. Throughout, these determinant factors will be linked to various leadership styles and supported with examples from the Aidensfield case.

Although the theory that performance is directly affected by leadership is supported by some empirical evidence, critics like Porter and McLaughlin (2006) argue that majority of research has been anecdotal. Therefore, concluding that there is a direct relationship between performance and leadership is probably an “act of faith” (Currie & Lockett, 2011, pg. 292). Nevertheless, one certainty is leadership style determines motivational levels which predetermine morale levels which in turn regulates performance. Therefore, motivation is the key link between leadership and performance.

McGregor (1987) conceived two approaches to motivation; Theory X, which only occurs at the physiological and security levels in Maslow’s (1943) needs hierarchy, and Theory Y, which focuses on higher level needs (Buchanan & Huczynski 2010). Noticeably, the lower levels have been satisfied in workers at Aidensfield based on the fact that sixty per cent of employees have been on the same job for a decade.. This statistic indicates that the leaders adopt the Theory X approach – a common behaviour within autocratic practices. As a result, staff are not discontent with their work. Unfortunately, Maslow (1943) warned that once a need has been satisfied, it might no longer serve as a motivator. So, even though low turnover may be interpreted as a positive, it is actually linked to the reason workers lack motivation. Herzberg’s (1987) theories explain that having only lower needs (hygiene factors) satisfied will result in no dissatisfaction (Latham & Ernest, 2006) but create a lack of motivation because higher level needs (growth factors) have been ignored (Shuck & Herd, 2012). This lack of motivation is demonstrated by the falling quality of service reported e.g. Drivers making patients wait. From De Cremer’s (2006) point of view, quality of service can only be improved using intrinsic motivation i.e. the Theory Y approach – common in democratic leadership.

This direct relationship between motivation and performance is elucidated in Mullins’(2010) formula; Performance = function (ability X motivation). Considering that function and ability are relatively constant, and motivation is the only variable, then low motivation equates low performance. One must note that this formula, although still viable, fails to consider emotional factors like trust (Kreitner and Kinicki, 2009), happiness and well-being – which will be discussed later – as factors that also determine motivational levels. At Aidensfield, the attempt to extrinsically motivate through bonus rewards systems seem to be failing as it has only short term effects. On the other hand, intrinsic motivation, even though more desired, might be equally ineffective because the jobs have little variety or challenge. According to Porter and Lawler’s (1968) expectancy model, employee performance in jobs like this will hardly be improved by intrinsic rewards. Further proving this, the jobs have a low Motivating Potential Score (MPS). According to Hackman and Oldman’s (1980) formula MPS can be calculated thus

MPS = (skill variety + task variety + task significance)/3  X autonomy  X feedback

Since autonomy and feedback stand alone as non-averaged variables, they have a more significant effect on the MPS Score (Buchanan & Huczynski, 2007). It was reported that employee empowerment is a problematic issue at Aidensfield (lack of autonomy) and that it suffers from a slack reporting structure which may result in a lack of clear channels for information on performance effectiveness (feedback), therefore there is minimal opportunity within the job design for motivation. Brytting & Trollestad (2000) and Van Vugt et al (2004) support this with their arguments that employees starved of responsibility tend to react with passivity rather than interest, and is apparent when the Aidensfield security staff display nonchalant attitudes to customers – Another negative aspect of autocratic leadership. With the absence of an effective feedback system mentioned earlier, expectancy theorists may argue that it signifies there is no clarified procedure for performance evaluation. Hence the staff may not ‘perceive’ any equitable rewards for their effort.

This leads on to the idea of perception as a factor that affects motivation and behaviour. An employee’s level of engagement is built around their perception of the work environment and unique encounters with leadership (Shuck, Rocco & Albornoz, 2011). It determines their expectations of the employer and what they think their obligations are – like an invisible contract drawn-up mentally – the ‘psychological contract’ (Conway & Coyle Sharpio, 2011). Guest et al (2003) advised that breaches can be avoided if employees adopt effective people management practices but as highlighted in the report, the supervisory grades at Aidensfield abdicate said people management responsibilities. Conway, Guest and Trenberth’s (2011) research on psychological contract breach suggests that this begotted the reported lack of commitment, poor employee engagement and the perceived job insecurity.

There seems to be a psychological contract breach between the line managers and senior management as well. The delegation of HR practices to them may have been perceived as excess work outside their obligations. It is evident that this delegation has been done without their proper consultation – an autocratic method of decision-making. The senior management may have done this in an attempt to empower them because according to Rich, LePine & Crawford (2010), more intellectual work creates a higher level of engagement and may in turn, result in increased performance. Apart from the possible breach, this empowerment may not have been successful because the reported slack reporting structures and weak lines of communication. This suggests that the line managers did not have the required support to take on such work in the first place. If the job descriptions had been properly ‘communicated’, possibly through a more democratic method of constant dyadic exchange (Felfe & Schyns, 2010; Conway & Coyle Sharpio, 2011), this problem may not have occurred.

This brings us to communication, as a leadership tool. Adensfield’s organisational structure diagram suggests a chain communication network amongst the senior management. This centralised system is common within authoritative leadership where all information is routed through a predetermined channel (Mullins, 2007). It is questionable because even though it may be appropriate for simple tasks, the accumulated complexity of the entire ancillary operations may need to be handles within a decentralised network – a more participative approach to communication (Restubog et al, 2010). On the other hand, the simplicity of the tasks at lower levels where the charge hands’ teams operate may require a more centralised network to be optimally efficient. Even though it may be more effective, pressure might built up on the charge hands who do not feel qualified to do the job and is possibly the reason they abdicate responsibility as reported.

Having a centralised communication network amongst charge hands’ groups does not necessarily mean their adapted leadership style must be authoritative in nature. Decisions can be made centrally to maintain speed and effectiveness but according Restubog et al (2010) it is still possible maintain high quality Leader-Member Exchange (LMX) along the same centralised communication lines. High LMX is more common within democratic or transformational leadership settings. It is evident that there is low level LMX amongst senior management, charge hands and group members at Aidensfield because when the breaches in psychological contract mentioned earlier occurred, it had significant detrimental effect on the in-role performances of staff. Zhao et al (2007), speaking from a ‘social support’ perspective, argue that if high quality LMX is present in an organization, the leaders will easily help their subordinates manage and recover from the breach. On the contrary, the ‘betrayal’ perspective argues that the effect on staff may be too much to handle (Restubog et al, 2010). They argued that high LMX begets greater expectations and trust in leaders and therefore when the inevitable breach occurs, the staff will feel highly betrayed or for lack of a better word, ripped- off (2010). Besides this highlighted disadvantage, many social identity theorists, including Felfe, Schyns (2010) and Turner (2005) still encourage high LMX because, even though breach is inevitable, it will be less likely. This is supported by the fact that similar people, reason similarly and are less likely to have conflicting perceptions.

To facilitate LMX it is necessary for leaders to share common values or represent the collective identities of their subordinate groups (Rizzo, House & Lirtzman, 1970; Tajfel & Turner, 1986). This is referred to as ‘leader-group prototypicality’ and is part of Social Identity theory commonly practiced amongst transformational leaders. Considering that there have been close knit informal groups developed within the charge hands’ formal groups, the presence of high leader-group prototypicality can be deduced, despite the low LMX environment. Hogg et al (2004) explained that the collective values of group members determine the group norms and behaviour. Therefore, a group-prototypical leader will behave in a similar way as group members. This explains why charge hands and operational staff at the hospital share common characteristics of lack of motivation and passivity towards work. Though transformational in nature, these values are not aligned with those of the organisation at all.

This commonality in personal characteristics invokes mutual trust within team members (Tanghe, Wisse and Flier, 2010). This in turn makes a strong cohesive group but does not necessarily mean improved productivity. Kelly and Barsade (2001) and Smith et al (1995) argue that members of a group may work well together but performance is only improved when their group values are in line with that of the organization .The small groups of five appear to share high levels of intra-group trust that have propagated an equally high level of inter-group distrust which explains why they are reported to have highly demarcated traditions and work very independently. Mullins (2007) states that these strongly cohesive Informal groups may experience low staff turnover but are notorious for low productivity, inter-group conflict and neglect of organizational functions for more social activities – all of which are reportedly present within staff at Aidensfield. The aforementioned role ambiguity is another reason for informal group formations. Cicero, Pierro and van Knippenberg (2010) support this possibility by suggesting that role uncertainty in a job tends to make workers rely more on group social memberships for identity than on organisational descriptions. Understanding this complex ‘trust – uncertainty – behaviour’ relationship explains why staff are doing the things they are.

Not just group dynamics, but all the factors discussed, from motivation down to trust, are clearly very important in understanding staff behaviour and deciding a leaders approach to his subordinates. As mentioned in the introduction, it is impossible to classify Aidensfield’s leaders with one style. For example, there were so many autocratic characteristics identified earlier but yet, the reported lack of managerial control suggests a laissez-faire approach. Therefore, instead of rigid classification, the consideration of these little details are what shape managers’ or leaders’ responses – like the numerous tiny screws, nuts and bolts that enable a complex machine to work. They are necessary to create a competitive workforce in Aidensfield’s sector of service and to prevent being left behind by competitors who strive to attain higher levels of service.

Q1. Explain the relationship between motivation and performance as explained in the case.

Q2.Discuss how employee empowerment can be used as a development tool with reference to the case.