Pain “Pain,” an excerpt from the book Reaching Up for Manhood, draws on the writer’s training and experience as a psychologist. He uses the narrative to explain the power of memory in our lives, especially memory of painful experiences. His particular focus is on boys and on the ways, they are taught to repress the wounds caused by painful experiences. Nonetheless, it should be easy for readers to apply his insights to the experiences of girls.
1. Boys are taught to suffer their wounds in silence. To pretend that it doesn’t hurt, outside or inside. So many of them carry the scars of childhood into adulthood, never having come to grips with the pain, the anger, the fear. And that pain can change boys and bring doubts into their lives, though more often than not they have no idea where those doubts come from. Pain can make you afraid to love or cause you to doubt the safety of the ground you walk on. I know from my own experience that some pain changes us forever.
2. It all started because there was no grass. Actually, there was grass, you just couldn’t walk on it.
3. In the late fifties and early sixties, the projects were places people moved to get away from tenement buildings like mine. We couldn’t move into the projects because my mother was a single parent. Today most projects are crammed full of single parents, but when I was a child your application for the projects was automatically rejected if that was your situation. The projects were places for people on the way up. They had elevators, they were well maintained, and they had grass surrounding them. Grass like we had never seen before. The kind of grass that was like walking on carpet. Grass that yelled out to little girls and boys to run and tumble and do cartwheels and roll around on it. There was just one problem, it was off limits to people. All the projects had signs that said “Keep Off the Grass.” And there were men keeping their eyes open for children who dared even think of crossing the single-link chain that enclosed it. The projects didn’t literally have the only grass we could find in the Bronx. Crotona Park, Pelham Bay Park, and Van Cortland Park were available to us. But the grass in those parks was a sparse covering for dirt, rocks, and twigs. You would never think about rolling around in that grass, because if you did you’d likely be rolling in dog excrement or over a hard rock.
4. There was one other place where we found grass in our neighborhood. Real grass. Lawn-like grass. It was in the side yard of a small church that was on the corner of Union Avenue and Home Street. The church was small and only open on Sundays. The yard and its precious grass were enclosed by a four-foot-high fence. We were not allowed in the yard by the pastor of the church.
5. Occasionally we would sneak in to retrieve a small pink Spaulding ball that had gone off course during a game of stickball or punch ball, but if we were seen climbing the fence there would be a scene, with screams, yells, and threats to tell our parents. So although we often looked at that soft grass with longing, the churchyard was off limits.
6. It would have stayed off limits if it had not been for football. Football came into my life one fall when I was nine years old, and I played it every fall for the rest of my childhood and adolescence. But football in the inner city looked very different than football played other places. The sewer manhole covers were the end zones. Anywhere in the street was legal playing territory, but not the sidewalk. There could be no tackling on pavement, so the game was called two-hand touch. If you touched an opponent with both hands, play had to stop. The quarterback called colorful plays: “Okay now. David, you go right in front of the blue Chevy. I’m gonna fake it to you. Geoff, see the black Ford on the right? No, don’t look, stupid—they’re gonna know our play. You go there, stop, then cross over toward William’s stoop. I’ll look for you short. Richard, go to the first sewer and turn around and stop. I’ll pump it to you, go long, Geoff, you hike on three. Ready! Break!”
7. All we needed was grass. All our eyes were drawn to the churchyard. A decision had to be made. Rory was the first to bring it up. “We should sneak into the churchyard and play tackle.”
8. We all walked over to Home Street and, out of sight of front windows, climbed over the fence and walked onto the grass. A thick carpet of grass that felt like falling on a mattress. We were in heaven.
9. Football in the churchyard was everything we had imagined. We could finally block and tackle and not worry about falling on the hard concrete or asphalt streets. We didn’t have to worry about cars coming down the block the way we did when we played two-hand touch. And because we were able to tackle, we could have running plays. We loved it. We played for hours on end.
10. There was one problem with our football field, which was about thirty yards long and fifteen yards wide: at the far end there was a built-in barbecue pit, right in the middle of the end zone. If we were running with the football, or going out for a pass, we had to avoid the barbecue pit with its metal rods along the top, set into its concrete sides. We knew that no matter what you were doing when in that area of the yard, you had to keep one eye on the barbecue pit. To run into its concrete sides—or, even worse, the metal bars—would be very painful and dangerous.
11. I was fast and crafty. I loved to play split end on the offense. I could fake out the other kids and get free to catch the ball. I had one problem, though—I hadn’t mastered catching a football thrown over my head. To do this you have to lean your head back and watch as the football descends into your hands. Keep your eye on the ball, that’s the trick to catching one over the shoulder. We all wanted to go deep for “the bomb”—a ball thrown as far as possible, where a receiver’s job is to run full speed and catch it without-stretched hands. It took me forever to learn to concentrate on the football, with my head back as far as it would go, while running full speed. But finally, I mastered it. I was now a truly dangerous receiver. If you played too far away from me I could catch the ball short, and if you came too close I could run right by the slower boys and catch the bomb.
12. The move I did on Ned was picture perfect. I ran ten yards, turned around, and faced Walter. He pumped the ball to me. I felt Ned take a step forward, going for the fake as I turned and ran right by him. Walter launched the bomb. As the football left his hand I stopped looking over my shoulder at him and started my sprint to the end zone. After running ten yards I tilted my head back and looked up at the bright blue fall sky. Nothing. I looked forward again and ran harder, then looked up again. There it was, the brown leather football falling in a perfect arc toward the earth, toward where I would be in three seconds, toward the winning touchdown.
13. And then pain. The bar of the barbecue pit caught me in midstride in the middle of my shin. I went down in a flurry of ashes, legs and arms flying every which way. The pain was all-enveloping. I grabbed my leg above and below where it had hit; I couldn’t bear to touch the place where it had slammed into the bar. The pain was too much. I lay flat on the ground, trying to cry out. I could only make a humming sound deep in the back of my throat. My friends gathered around and I tried to act like a big boy, the way I had been taught. I tried not to cry. Then the pain consumed me and I couldn’t see any of my friends anymore. I howled and then cried and then howled some more. The boys saw the blood seeping through my dungarees and my brother John said, “Let me see. Be still. Let me see.” He rolled my pants leg up to my knee to look at the damage. All the other boys who had been playing or watching were in a circle around me. They all grimaced and turned away. I knew it was bad then, and I howled louder.
14. Catching the metal bar in full stride with my shin had crushed a quarter-sized hole in my leg. The skin was missing and even to this day I can feel the indentation in my shinbone where the bar gouged out a small piece of bone. I was off my feet for a few days and it took about two weeks for my shin to heal completely. Still, I was at the age where sports and friends meant everything to me. I couldn’t wait to play football in the churchyard again, but I was a much more cautious receiver than before.
15. Several years later, when I finished the ninth grade at a junior high school in the South Bronx and was preparing to go to high school, I knew that my life had reached a critical juncture. My high school prospects were grim. I didn’t pass the test to get into the Bronx High School of Science (I was more interested in girls than prep work), so my choices were either Morris High School or Clinton High School. Both of these were poor academically and suffered from a high incidence of violence. I asked my mother if I could stay with my grandparents in the house they had just built in Wyandanch, a quiet, mostly African-American town on Long Island. She agreed, and they agreed, so I went there for my three years of high school.
16. That first year I went out for the junior varsity football team at Wyandanch High and played football as a receiver. I was a good receiver. The years of faking out kids on the narrow streets of the Bronx made me so deceptive that I couldn’t be covered in the wide-open area of a real football field. But I had one problem—I couldn’t catch the bomb. My coach would scream at me after the ball had slipped through my fingers or bounced off my hands. “Geoff! What’s the matter with you? Concentrate, dang it! Concentrate!” I couldn’t. No matter how I tried to focus on the ball coming down out of the sky, at the last minute I would have to look down. To make sure the ground wasn’t playing tricks on me. No hidden booby traps. What happened in the churchyard would flash into my mind and even though I knew I was in a wide-open field, I’d have to glance down at the ground. I never made it as a receiver in high school. I finished my career as quarterback. Better to be looking at your opponent, knowing he wanted to tackle you, sometimes even getting hit without seeing it coming, but at least being aware of that possibility. Never again falling into the trap of thinking you were safe, running free, only you and the sky and a brown leather ball dropping from it.
17. Boys are conditioned not to let on that it hurts, never to say, “I’m still scared.” I’ve written here only about physical trauma, but every day in my work I deal with boys undergoing almost unthinkable mental trauma from violence or drug abuse in the home or carrying emotional scars from physical abuse or unloving parents. I have come to see that in teaching boys to deny their own pain we inadvertently teach them to deny the pain of others. I believe this is one of the reasons so many men become physically abusive to those they supposedly love. Pain suffered early in life often becomes the wellspring from which rage and anger flow, emotions that can come flooding over the banks of restraint and reason, often drowning those unlucky enough to get caught in their way. We have done our boys an injustice by not helping them to acknowledge their pain. We must remember to tell them “I know it hurts. Come let me hold you. I’ll hold you until it stops. And if you find out that the hurt comes back, I’ll hold you again. I’ll hold you until you’re healed.”
18. Boys are taught by coaches to play with pain. They are told by parents that they shouldn’t cry. They watch their heroes on the big screen getting punched and kicked and shot, and while these heroes might groan and yell, they never cry. And even some of us who should know better don’t go out of our way to make sure our boys know about our pain and tears, and how we have healed ourselves. By sharing this we can give boys models for their own healing and recovery.
19. Even after I was grown I believed that ignoring pain was part of learning to be a man, that I could get over hurt by simply willing it away. I had forgotten that when I was young I couldn’t run in an open field without looking down, that with no one to talk to me about healing, I spent too many years unable to trust the ground beneath my feet.
MEANINGS AND VALUES
1. What is the main expository point (thesis) of the essay, and where does the writer state it? (See “Guide to Terms”: Unity.)
2. What desires or aspirations did grass represent for the writer as a young man?
3. a. What, according to the writer, are the consequences of painful experiences (physical or emotional) suffered in youth?
b. Why might the writer have chosen to focus on the consequences of pain for boys? How might the essay’s conclusions be applied to or adapted for understanding the experiences of girls?
In: Psychology
The cases involving the explosion of Ford Pinto's due to a defective fuel system design led to the debate of many issues, most centering around the use by Ford of a cost-benefit analysis and the ethics surrounding its decision not to upgrade the fuel system based on this analysis.Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding, the company chose not to implement the design, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk/benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change. This risk/benefit analysis was created out of the development of product liability, culminating at Judge Learned Hand's BPL formula, where if the expected harm exceeded the cost to take the precaution, then the company must take the precaution, whereas if the cost was liable, then it did not have to. However, the BPL formula focuses on a specific accident, while the risk/benefit analysis requires an examination of the costs, risks, and benefits through use of the product as a whole. Based on this analysis, Ford legally chose not to make the design changes which would have made the Pinto safer. However, just because it was legal doesn't necessarily mean that it was ethical. It is difficult to understand how a price can be put on saving a human life.
There are several reasons why such a strictly economic theory should not be used. First, it seems unethical to determine that people should be allowed to die or be seriously injured because it would cost too much to prevent it. Second, the analysis does not take into all the consequences, such as the negative publicity that Ford received and the judgments and settlements resulting from the lawsuits. Also, some things just can't be measured in terms of dollars, and that includes human life. However, there are arguments in favor of the risk/benefit analysis. First, it is well developed through existing case law. Second, it encourages companies to take precautions against creating risks that result in large accident costs. Next, it can be argued that all things must have some common measure. Finally, it provides a bright line which companies can follow.
I. IntroductioIn May of 1968, the Ford Motor Company, based upon a recommendation by then vice-president Lee Iacocca, decided to introduce a subcompact car and produce it domestically. In an effort to gain a large market share, the automobile was designed and developed on an accelerated schedule. During the first few years sales of the Pinto were excellent, but there was trouble on the horizon.
A. Grimshaw v. Ford Motor Company1In May 1972, Lily Gray was traveling with thirteen year old Richard Grimshaw in a 1972 Pinto when their car was struck by another car traveling approximately thirty miles per hour. The impact ignited a fire in the Pinto which killed Lily Gray and left Richard Grimshaw with devastating injuries. A judgment was rendered against Ford and the jury awarded the Gray family $560,000 and Matthew Grimshaw $2.5 million in compensatory damages. The surprise came when the jury awarded $125 million in punitive damages as well. This was subsequently reduced to $3.5 million.2
B. The Criminal Case3Six month following the controversial Grirnshaw verdict, Ford was involved in yet another controversial case involving the Pinto. The automobile's fuel system design contributed (whether or not it was the sole cause is arguable) to the death of three women on August 10, 1918 when their car was hit by another vehicle traveling at a relatively low speed by a man driving with open beer bottles, marijuana, caffeine pills and capsules of "speed."4 The fact that Ford had chosen earlier not to upgrade the fuel system design became an issue of public debate as a result of this case. The debate was heightened because the prosecutor of Elkart County, Indiana chose to prosecute Ford for reckless homicide and criminal recklessness.Some felt the issues raised in the Ford Pinto cases were an example of the "deep pocket" company disregarding consumer safety in pursuit of the almighty dollar. Others feel they are an example of runaway media coverage blowing a story out of proportion.5 Regardless of opinion, the Ford Pinto case is a tangled web of many complex legal and ethical issues.
To determine if the proper result was achieved in this case, one has to evaluate and weigh these many issues. The central issue in deciding whether Ford should be liable for electing not to redesign a defective product in order to maximize its bottom line, one must analyze the so-called "cost/benefit" analysis Ford used to defend this decision. Within the scope of this paper, this cost/benefit issue (and associated sub-issues) will be the focus of discussion. Other issues, such as the ethics involved in Ford's decision, the choice of prosecuting Ford criminally, whistle-blowing, the assignment of punitive damages and the Court of Appeals decision reducing the damages are all important issues of this case that will not be the focus herein.
II. Facts
A. Incident FactsOn August 10, 1978, three teenage girls stopped to refuel the 1973 Ford Pinto sedan they were driving. After filling up, the driver loosely reapplied the gas cap which subsequently fell off as they headed down U. S. Highway 33. Trying to retrieve the cap, the girls stopped in the right lane of the highway shoulder since there was no space on the highway for cars to safely pull off the roadway. Shortly thereafter, a van weighing over 400 pounds and modified with a rigid plank for a front bumper was traveling at fifty five miles an hour and stuck the stopped Pinto. The two passengers died at the scene when the car burst into flames. The driver was ejected and died shortly thereafter in the hospital. Inspecting the van shortly after the accident, the police found open beer bottles, marijuana and caffeine pills inside.6The subsequent proceedings were rather surprising. Based on the facts of the case, it seemed that any one of a number of parties could be liable in a civil action or prosecuted criminally. The obvious target seemed to be the driver of the van. It seems he could have been prosecuted for criminal homicide or the families of the victims could have pursued a civil action, in light of the fact the driver possessed several controlled substances at the time of the accident.A second potential party open to a civil suit was the Indiana Highway department. It was their design which left no safe stopping place along Highway 33 where cars could pull over for emergencies. In fact, the road was so dangerous that the Elkart County Citizens' Safety Committee had previously written a letter to the department asking that the road design be modified to provide safe stopping place for emergencies.7 It is also conceivable, the driver of the Pinto could have been found negligent for stopping a car in the middle of the highway.
The first surprise of the resulting litigation carne when Indiana state prosecutor filed suit against Ford Motor Company for criminal recklessness and reckless homicide.8 The famous and highly publicized legal battle was underway. Some have argued the prosecution acted unethically from day one, gathering and hiding evidence from the defendant and concealing information about the condition of the van driver.9 Whether true or not, the following litigation caused damage that would take Ford years to recover from.
B. Questionable DesignThe controversy surrounding the Ford Pinto concerned the placement of the automobile's fuel tank. It was located behind the rear axle, instead of above it. This was initially done in an effort to create more trunk space. The problem with this design, which later became evident, was that it made the Pinto more vulnerable to a rear-end collision. This vulnerability was enhanced by other features of the car. The gas tank and the rear axle were separated by only nine inches. There were also bolts that were positioned in a manner that threatened the gas tank. Finally, the fuel filler pipe design resulted in a higher probability that it would to disconnect from the tank in the event of an accident than usual, causing gas spillage that could lead to dangerous fires. Because of these numerous design flaws, the Pinto became the center of public debate.
These design problems were first brought to the public's attention in an August 1977 article in Mother Jones magazine. This article condemned the Ford Motor Company and the author was later given a Pulitzer Prize.10 This article originated the public debate over the risk/benefit analysis used by the Ford Motor Company in their determination as to whether or, not the design of the Pinto fuel tank be altered to reduce the risk of fire as the result of a collision.The crux of the public debate about The Ford Motor Company was the decision not to make improvements to the gas tank of the Pinto after completion of the risk/benefit analysis. Internal Ford documents revealed Ford had developed the technology to make improvements to the design of the Pinto that would dramatically decrease the chance of a Pinto "igniting" after a rear-end collision.11This technology would have greatly reduced the chances of burn injuries and deaths after a collision. Ford estimated the cost to make this production adjustment to the Pinto would have been $11 per vehicle.12 Most people found it reprehensible that Ford determined that the $11 cost per automobile was too high and opted not to make the production change to the Pinto model.
C. Risk/Benefit AnalysisIn determining whether or not to make the production change, the Ford Motor Company defended itself by contending that it used a risk/benefit analysis. Ford stated that its reason for using a risk/benefit analysis was that the National Highway Traffic Safety Administration (NHTSA) required them to do so.13 The risk/benefit approach excuses a defendant if the monetary costs of making a production change are greater than the "societal benefit" of that change. This analysis follows the same line of reasoning as the negligence standard developed by Judge Learned Hand in United States vs. Carroll Towing in 1947 (to be discussed later). The philosophy behind risk/benefit analysis promotes the goal of allocative efficiency. The problem that arose in the Ford Pinto and many other similar cases highlights the human and emotional circumstances behind the numbers which are not factored in the risk/benefit analysis.The Ford Motor Company contended that by strictly following the typical approach to risk,/benefit analysis, they were justified in not making the production change to the Pinto model. Assuming the numbers employed in their analysis were correct, Ford seemed to be justified. The estimated cost for the production change was $11 per vehicle. This $11 per unit cost applied to 11 million cars and 1.5 million trucks results in an overall cost of $137 million.
The controversial numbers were those Ford used for the "benefit" half of the equation. It was estimated that making the change would result in a total of 180 less burn deaths, 180 less serious burn injuries, and 2,100 less burned vehicles. These estimates were multiplied by the unit cost figured by the National Highway Traffic Safety Administration. These figures were $200,000 per death, $67,000 per injury, and $700 per vehicle equating to the total "societal benefit" is $49.5 million. Since the benefit of $49.5 million was much less than the cost of $137 million, Ford felt justified in its decision not to alter the product design. The risk,/benefit results indicate that it is acceptable for 180 people to die and 180 people to burn if it costs $11 per vehicle to prevent such casualty rates. On a case by case basis, the argument seems unjustifiable, but looking at the bigger picture complicates the issue and strengthens the risk/benefit analysis logic.
III. History and Development of Product Liability
A. IntroductionWhen defendants were found liable for only intentional harms, these harms fell under the category of absolute liability. Over time, courts added liability to some accidental harms. In order for a court to determine there was no liability in a conflict, it had to be ascertained whether or not the accident was "truly unavoidable."14 Technological advances created societal harms that were never before contemplated by courts. The truly unavoidable standard became a grayer area that was undefined and unreliable. Eventually, as industry rapidly advanced further, it became impossible and unreasonable to describe any accident as unavoidable.15 Still, courts seemed unwilling to shift to the theory of absolute liability, as it seemed to strict. However, with the courts finding fewer and fewer harms "unavoidable", another level had to be found between unavoidable accidents and strict liability.16
B. The Ordinary Care StandardIn the mid 1800s, courts began the evolution of moving away from what they once considered an important decision--whether a harm was a result of an action "on trespass" or a harm as a result of an action "on the case."17 The first landmark decision moving away from this distinction and thinking was Brown v. Kendall18 in 1850. In the decision, Chief Justice Shaw acknowledged moving away from this traditional distinction and to consideration of whether a harm was "willful, intentional, or careless."19 Not only did this decision move away from the strict "all or nothing" standard, it established the fluctuating standard of "ordinary care." Judge Shaw explained the use of this new standard:
"In using this term, ordinary care, it may be proper to state that what constitutes ordinary care will vary with the circumstances of cases. In general, it means that kind and degree of care, which prudent and cautious men would use, such as required by the exigency of the case, and such as is necessary to guard against probable danger."20
In essence Judge Shaw had created a "moving" standard of negligence that varied from situation to situation depending on the extent of care used, rather than the inflexible extremes discussed above. This new standard was not just a flat decision of whether an actor used due care in a situation, but whether the actor should have recognized the danger before taking the risk. Courts also required a defendant's actions be related to the harm incurred. In Crain v. Petrie,21 the court stated that "damages must appear to be the legal and natural consequences arising from the tort.22 Courts also considered whether the defendant should have taken some kind of preventive measure in advance that could have foreseeable prevented the harm.23
These many factors the court considered boiled down into one main question: Was the accident truly avoidable or the fault of the defendant?24 The Brown court stated,
"If, then, in doing this act, using due care and all proper precautions necessary to the exigency of the case, to avoid the hurt to others, in raising his stick..., he accidentally hit the plaintiff in his eye and wounded him, this was the result of the pure accident, or was involuntary, and unavoidable, and therefore the action would not lie.25
This thinking was followed in similar cases and decisions of the time.26 As stated above, this thinking moved the court from cut-and-dried ideas of negligence to ones that fluctuated and had to be examined on a case by case basis. If an accident seemed to be unavoidable and part of every day life there would be no action for recovery.
As technology progressed, courts began to find less and less accidents "unavoidable." In Huntress v. Boston & Main R.R.,27 the court found the defendant negligent even though it took all necessary precautions. When a pedestrian was killed walking across the railroad tracks and the locomotive engineer had used all possible precautions in conducting the train, the defendant was still found to be negligent. The court stated that the railroad company should have foreseen the plaintiff's poor appreciation of the risk and that whether more precautions were necessary was a question for the jury.28 As the power of design and invention advanced, so did the courts' perception of the power to prevent accidents.29 It seemed the courts had almost moved to the extreme of absolute liability.
With this evolution, the courts were faced with a new problem. Should defendants be found liable in almost every situation because of new technological 'advancements? This created a new theory of negligence, one of balancing risks and benefits. In the early 1900s the courts evolved from just determining if an accident were unavoidable (as most at this point were considered to be) to what the costs were to avoid this accident in some fashion. The first attempt to consider this question and create a new standard was in a 1919 case, Adams v. Bullock.30
In Adams, a young boy was playing with a rod when it struck the defendant's trolley wires that had been strung under a railroad bridge where the boy was walking. The court reversed a judgment for the plaintiff, claiming that the company had taken all reasonable precautions to avoid the accident. Judge Cardozo's opinion made use of the traditional analysis and verbiage of the avoidable/unavoidable analysis. However, he discussed the "duty to adopt all reasonable precautions.31Furthermore, Judge Cardozo stated that the defendant had acted with the area of normal provision.32
C. The Introduction of the Balancing ApproachAlthough Judge Cardozo concluded that the accident was not foreseeable and therefore unavoidable, the Adams case laid the groundwork for a "balancing" approach to negligence. The balancing approach assumes that if an accident has a very low probability, and there is a cost associated with preventing it, a defendant is not liable if he does not take precautionary measures. By stating that absent a "gift of prophecy the defendant could not have predicted the point upon the route where such an accident would occur," Judge Cardozo indicated that giving every possibility the ultimate amount of protection would be too costly compared to the risk of injury.33 He further stated that guards everywhere would have prevented the injury but this would prove to be much too costly, and "guards here and there are of little value.34 This decision was the harbinger of the balancing standard and cost/benefit analysis; a weighing of the risk of harm and the overall costs of avoiding it.
At the turn of the century, courts began focusing on this "balancing" method to determine liability. Costs, risks, and probability began to make their way into decisions. Courts began to compare degrees of risks and costs of harms with the benefits of activities on society. The trend moved toward placing the burden on society in instances where the benefit outweighed the risk or the risk was less than the cost to avoid it.35 In cases such as this, the ``risk initiator" was assigned no liability. This balancing act seemed to be a tolerable middle ground between the old negligence liability standard and the extreme standard of absolute liability.
With courts struggling to define the middle ground during this time of technological advancement, they faced the same questions legal systems faced in similar times such as the industrial revolution and the growth of railroads. As the advancements created new products and the profits that went with them, courts had to decide what levels of risk society could tolerate and who should bear the costs when harms actually occurred.36
F. Ford's Risk/Benefit AnalysisThe main controversy surrounding the Ford Pinto case was The Ford Motor Company's choices made during development to compromise safety for efficiency and profit maximization. More specifically, it was Ford's decision to use the cost/benefit analysis detailed in section 11 to make production decisions that translated into lost lives. During the initial production and testing phase, Ford set "limits for 2000" for the Pinto. That meant the car was not to exceed $2000 in cost or 2000 pounds in weight. This set tough limitations on the production team. After the basic design was complete, crash testing was begun. The results of crash testing revealed that when struck from the rear at speeds of 31 miles per hour or above, the Pinto's gas tank ruptured. The tank was positioned according to the industry standard at the time (between the rear bumper and the rear axle), but studs protruding from the rear axle would puncture the gas tank. Upon impact, the fuel filler neck would break, resulting in spilled gasoline. The Pinto basically turned into a death trap. Ford crash tested a total of eleven automobiles and eight resulted in potentially catastrophic situations. The only three that survived had their gas tanks modified prior to testing.55
Ford was not in violation of the law in any way and had to make the decision whether to incur a cost to fix the obvious problem internally. There were several options for fuel system redesign. The option most seriously considered would have cost the Ford Motor Company and additional $11 per vehicle.56 Under the strict $2000 budget restriction, even this nominal cost seemed large. In addition, Ford had earlier based an advertising campaign on safety which failed miserably. Therefore, there was a corporate belief, attributed to Lee Iacocca himself, of "safety doesn't sell."57
Ultimately, the Ford Motor Company rejected the product design change. This was based on the cost-benefit analysis performed by Ford (see Exhibit One). Using the NHTSA provided figure of $200,000 for the "cost to society" for each estimated fatality, and $11 for the production cost per vehicle, the analysis seemed straightforward. The projected costs to the company for design production change were $137 million compared to the project benefits of making the design change which were approximately $49.5 million. Using the standard cost/benefit analysis, the answer was obvious--no production changes were to be made.
IV. The Negligence Efficiency Argument
A. Ford's DecisionThe Ford Motor Company's use of the risk/benefit analysis was the central issue of the suits filed against the company. Many pieces of evidence, including a number of internal Ford documents indicate the risk/benefit analysis was the main reason for Ford's decision not to make design changes to increase vehicle safety. However, before discussion of the risk/benefit analysis it should be noted there were secondary concerns which supported Ford's decision not to upgrade the fuel system design: (1) As stated above, Ford had based an earlier advertising campaign around safety, which failed. The company realized this was not a primary factor in car sales; (2) the bad publicity involved with a recall would be too much negative publicity to overcome. If this unquantifiable factor were included in the cost/benefit analysis the difference may have been overwhelming. Even though it was not a factor included in the analysis, Ford wanted to avoid it at any cost; (3) At the time of the product design and crash tests, the law did not require them to redesign the fuel system; and, (4) It was customary in the automotive industry to place the gas tank and between the rear axle and bumper.
Although case law has shown that business custom is not an excuse to escape liability, custom combined with the risk/benefit analysis would lead to the same result.58 With these factors influencing the decision in the background, the primary factor was Ford's risk/benefit analysis of making the changes. The question is: Should a risk/benefit analysis be used in all circumstances, and was it the proper framework to use in this situation? If so, it seems that the correct decision was made. Examining this question after-the-fact, it certainly seems like a poor decision.
B. The NumbersThe Ford Motor Company's risk/benefit analysis indicated costs would be 2.5 times larger than the resulting benefits. It is apparent why Ford chose no to go ahead with the fuel tank adjustment. However, basing this decision on just the numbers with no consideration of any other factors falls short of a comprehensive analysis of the action. chose not to go ahead with the fuel tank adjustment. To do a complete job of analyzing Ford's decision, the variables inside the equation must be examined. On the cost side of the equation, the most questioned variable during the case was the cost per vehicle used by Ford. The manufacturer claimed making adequate changes to the fuel system would have cost $11 per vehicle. Some evidence indicated that these potential costs may have been much lower, maybe as low as $5 per vehicle.59 Even with this lower cost and all other factors remaining the same, the costs still would have exceeded the benefits, although the difference would have been much less substantial (see Exhibit 2). In fact, will all other variables remaining the same, the cost per vehicle would have had to be as low as $3.96 to make the benefits "break even" with the costs (see Exhibit 3). However, if the costs were around $5 per vehicle, the Ford Motor Company would not have had as strong a risk/benefit argument as with the $11 figure provided.
The "benefit side" of the equation contains the most controversial number of the analysis--the value of a human life. Ford estimated no alterations to the gas tank design would result in 180 deaths, 180 burn victims and 2100 burned vehicles. In retrospect, these estimates are slightly low. It is hard to determine the exact number of victims because every victim did not file a claim, but these numbers were reasonable estimations at the time. Ford used $200,000 as the "cost" or "lost benefit" for each fatal burn injury, 567,000 for each burn injury and $700 for each burned vehicle. The number quantifying the price of a value life ($200,000) is what makes this problem so difficult. It is hard to decide what a life is worth, but most people feel the value of theirs is greater than $200,000. While this $200,000 figure was the most controversial of the equation, it was not determined by Ford. In 1972, the National Highway Traffic Safety Administration (NHTSA) provided the auto industry with the number $200,725 as the value to be utilized in risk/ benefit analysis such as was done by Ford (see Exhibit 4).60Following the standard for negligence established by Judge Learned Hand in Carroll Towing, or the risk/utility standard established for manufacturer's liability, the decision was well founded. The costs to Ford to make this change, which would have been borne by the consumer, was 2.5 times higher (using the original numbers) than the benefit to society. Some negative publicity may have been expected, but certainly Ford did not anticipate being found criminally negligent. In fact, it would seem Ford had a strong argument against any liability whatsoever. The decision in the liability suit with the award of punitive damages was a surprise to the Ford Motor Company, much less the criminal prosecution. How could such a decision be rendered after Ford Motor Company had followed the standard set by the courts themselves? The answer lies in the fact that the "benefit" side of the equation included the benefit of saving lives, and putting a value on this variable is not as defensible as putting a value on the benefit of saving an inanimate object, such as a vehicle.
V. The Negligence-Efficiency Debate
A. IntroductionThe Ford Motor case has spurned the arguments for and against the use of risk/benefit analysis because of its foundation of economic efficiency. The Ford Motor Company case has spurred this argument. In 1972, Judge Richard Posner's article on the negligence-efficiency theory seemed to be the "starting point" for this argument and was both highly praised and highly criticized. The essence of this article is summarized in the following excerpt: "We lack a theory to explain the social function of the negligence concept ... This article attempts to formulate and test such a theory.... The essential clue, I believe, is provided by Judge Learned Hand's famous formulation of the negligence standard.... In a negligence case, Hand said, the judge (or jury) should attempt to measure three things: the magnitude of the loss if an accident occurs; the probability of the accident's occurring; and the burden of taking precautions that would avert it. If the product of the first two terms exceeds the burden of precautions, the failure to take those precautions is negligence. Hand was adumbrating, perhaps unwittingly, an economic meaning of negligence.... If the cost of safety measures.... exceeds the benefit in accident avoidance to be gained by incurring that cost, society would be better off, in economic terms, to forego accident prevention.... Furthermore, overall economic value or welfare would be diminished ... by incurring a higher accident-prevention cost to avoid a lower accident cost.''61
Thus, the economic efficiency of negligence argument was born. While many economists have agreed and praised this article, it has been equally criticized by those not taking the "economic point of view." I will first discuss some of the many arguments against this economic efficiency point of view in light of the Ford Pinto case. Following is a further elaboration of Posner's view and defense of his position.
B. Arguments Against Negligence-Efficiency
1. EthicsTaking an ethical approach to the Ford Pinto case makes accepting the risk/benefit analysis performed by the Ford Motor Company difficult. In making what seems to be the correct decision based on numbers, Ford is essence adopted a policy of allowing a certain number of people to die or be injured even though they could have prevented it. When taken on a case-by-case basis the decision seems to be a blatant disregard for human life. From a human rights perspective, Ford disregarded the injured individual's rights and therefore, in making the decision not to make adjustments to the fuel system, acted unethicallv.62
2. Act UtilitarianismA second problem with strictly applying the risk/benefit framework is that it does not seem to take into account all of the consequences of Ford's decision. This position is considered the "act utilitarian' point of view. The act utilitarian approach evaluates each action separately and the consequences that arise from it.63 This analysis would include any "harms" or "benefits" incurred by any people involved in the case. In utilizing this approach, it seems there are many factors that the Ford Motor Company did not account for in its risk/benefit analysis. When taking the situation from this perspective, it seems like the harms of not changing the fuel system outweighed the benefits. Not included in the previous risk/benefit analysis was the millions of dollars in settlements in unreported cases that never saw the courtroom. It is almost a sure bet that the settlement numbers were more on a per-case basis than the average numbers used for lost life per accident. Also, the bad publicity and reputational damage suffered by Ford over the next few years for being the cause of these lawsuits is hard to quantify, but the harm was considerable.64 >From the utilitarian point of view, the harms and the benefits are far closer together than Ford determined in its analysis. In addition, if this was figured after-the-fact the harms far outweighed the benefits. This would be due to the cost of having to recall the 19711976 Pintos after the fact and the extreme bad publicity (much worse than could have been expected) that the Ford Motor Company suffered through for years after all litigation was settled.
3. Health and Safety Regulation ExceptionCritics argue there are several other related, yet distinct reasons why the Ford Motor company, as well other companies finding themselves in similar positions, should be condemned for relying on a risk/benefit analysis to make decisions based on consumer safety. In the areas of safety and health regulation, there are instances where it may not be wise to undertake a certain decision even though the benefits do not outweigh the costs.65 This idea is imbedded somewhere between the utilitarian point of view and ethical point of view, discussed above. That is, the issue of whether the benefits outweigh the costs should not govern our moral judgment. There are some cases where a company must "do the right thing." While this may seem an argument based on emotion, there seem to be certain instances where these kind of considerations must be made. For instance, when governmental officials decide what level of pollution is allowable they take into effect certain vulnerable people--such as asthmatics or the elderly--and set the standard higher although the average citizen would not be affected by a lower one. This decision escapes the risk/benefit analysis. The higher standard is set so that the rights of the minority are not sacrificed for the needs of the majority. This kind of decision, much like automobile safety, are in the realm of specially valued things. For these, many will argue, risk/benefit analysis should not apply.66
4. Expressing Terms in Dollar ValuesIn order to perform a risk/benefit analysis, all costs and benefits must be expressed in some common measure. This measure is typically in dollars, as the Ford Motor Company used in its analysis. This can prove difficult for things that are not commonly bought and sold on the open market. This is mainly the case for environmental policy, such as permissible levels of air pollutants, as in the example above.67 The Ford Pinto case provides an extreme example. It questions how to value human life.
Economists have attempted to quantify, non-quantifiable items
using varying methods with varying
success.68 Since individuals have unique
tastes and values they are willing to pay different amounts for
products and resources. This valuation system often receives high
criticism. People's willingness to pay for something can also vary
widely depending upon other circumstances. Based on these reasons,
attempts to quantify something such as a human life can be very
difficult and is the most debated aspect of the Ford Pinto
case.
There are numerous things which individuals consider "priceless."
For instance, most people would claim that they would not sell
their right to vote or their freedom of speech for any amount of
money.69 Therefore, to tell someone that there is a
certain price for their life is a preposterous notion. Therefore
when taken on a case-by-case basis it is impossible for an
individual to grasp the concept. There are numerous things which
individuals consider "priceless." For instance, most people would
claim that they would not sell their right to vote or their freedom
of speech for any amount of money. Moreover, would a parent be able
to put a value on the life of a child? Obviously, the notion that,
on an individual basis, a person would take a certain amount of
money for their life is ludicrous. To tell someone that $200,725 is
a sufficient trade-off for their life, as argued in the Ford Pinto
case, illustrates this point.
Economists, however, do not agree with the "priceless" concept. To
them, to trade one unit of anything, even a life, for an infinite
quantity of all other goods is an equally preposterous notion. It
can be argued that everything can be priced or have a value laid
upon it. To take this theory down to an individual level reduces
the strength of this notion.
In Ford's case, the $200,725 value of a human life was provided to
the company by the National Highway Traffic Safety Administration.
The criticism for the value can not be laid upon Ford. The
criticism is in using a number, or in other words using the
risk/benefit analysis, in this situation at all. To compound the
problem, Ford seemed to blindly follow the dictated numbers without
giving any extra consideration to the fact that it in fact was a
human life they were quantifying.
5. No Wealth MaximizationRelated to the lack of
"markets" or "prices" for a life is the idea of wealth
maximization. The foundation of the risk/benefit analysis is the
theory of economic efficiency and an underlying principle for
efficiency is wealth maximization. If legal decisions are based on
efficiency, then nothing will be wasted and the wealth of the
country will be at its maximum.70 However,
in order to conduct an efficiency analysis, everything must have a
price--returning to the reoccurring problem. Since the reliance on
prices is necessary and not merely contingent, the system of wealth
maximization cannot tell us anything about right conduct where no
prices exist. Prices are, in part, the result of demand and demand
is the result of prior entitlements. Consequently, wealth
maximization cannot generate an initial set of entitlements."
71
Along the same lines, efficiency theory assumes that wealth
maximization is the goal of law, which is not the case. The goal of
law is the indefinable term. "justice."72
Judges and juries do not attempt to make decisions based on wealth
maximization, they base their decisions on justice. This difference
can be seen in the special rules for rescue, handicapped citizens,
and whether the insane are found liable for their
torts.73
6. ExternalitiesAnother potential problem with the
risk,/benefit approach is the fact that it does not take
externalities into effect. This is a topic with which the law of
torts often has trouble. However, it cannot be ignored just because
it is hard to compute.74 Victims are permitted to
recover for pain and suffering and the cost/benefit analysis seems
to ignore this point. It is yet another one of the variables that
is almost impossible to estimate, much less pinpoint. In addition,
this is another area where the lack of a market is influential.
Minimization of social costs differs from the minimization of
private costs precisely because there is an absence of complete
markets, and this absence is exactly what makes measurements so
difficult.75
7. Activity FrequencyIf a company or a court were
to accurately analyze the costs and benefits of an activity, it
must calculate the number of times the potential victim engages in
the activity.76 Taking out the number of
times the activity is engaged in reduces the damages. This
calculation is often unobtainable, especially in Ford's case in
terms of automobile use. Professor Polinsky, in his book, An
Introduction to Law and Economics explains, "In practice it is
usually not feasible to include the level of participation in the
activity has an aspect of the standard of care. For example, it
would be virtually impossible for a court to determine bow many
miles a particular person drives each. year since that person might
drive a different car that is shared with other family members or
he might drive different cars owned by the household. If the
injurer's level of participation in the activity is omitted from
the standard of care, than a negligence rule generally will lead
him to participate in the activity to an excess degree. The reason
for this is straightforward, if the care he exercises meets the
standard of care, be will not be liable for any damages. In
practice, the negligence rule is likely to be inefficient for this
reason.77
8. Negligence is Predictable: Victims Often LoseFinally, the cost/benefit analysis and economic efficiency reasoning is argued to be a skewed framework because it does not take into account the fact that injured parties are at a disadvantage. While the law attempts to place the plaintiff and defendant on equal ground, it is impossible to accomplish. The plaintiff must prove the negligence, a difficult task. The negligence-efficiency theory does not account for plaintiffs who cannot afford to bring a lawsuit to trial or those who cannot establish negligence although it exists. With the adoption of the negligence-efficiency theory, it is predictable that victims are going to lose more than. They are going to win.78
9.
ConclusionObviously there are a number of arguments
against the use of cost/benefit analysis and the
negligence-efficiency theory. Most of these arguments are separate
but related and .revolve around the fact that there are no markets
or prices for human life. It will be forever debated whether it is
possible to set a price or value on a life to use in these
calculations and whether this leads to an economically efficient
outcome In the case of Grimshaw, the jury was obviously appalled
with Ford's attempt to apply the NHTSA's calculation to
risk/benefit standard. Was this a sign of this standard's
inefficiency or was it just a sign of an ineffective jury?
C. For Negligence-EfficiencyFor as many arguments
as there are against risk/benefit analysis, there are as many
claiming it is economically efficient and therefore the correct
standard. In defense of the Ford Motor Company, this standard
developed over many years of caselaw, as detailed earlier in this
paper. This negligence standard and the use of risk/benefit
analysis for product liability had been accepted by courts for
years before the Pinto controversy. There was no reason for Ford to
believe that this was not the standard that should be used in
making its decision. Ford's automatic decision once it "ran the
numbers" confirms the fact that they did not question the idea of
using this analysis. In addition, there are many arguments in
support of this sort of analysis other than just the fact that this
was the standard at the time.
1. Risk/benefit
Analysis is "Instinctively Done"In 1972, Judge Richard
Posner wrote an article entitled, "A Theory of Negligence,"
claiming all tort law furthers economic efficiency. He claims that
while judges do not write opinions in terms of welfare economics,
there has always been an effort to decide cases on this basis.
"People can apply the principles of economics intuitively--and thus
`do' economics without knowing they are doing it.''79
Therefore, Posner claims that the Carroll Towing decision was not a
novel concept, it just expressed in algebraic terms what court had
long been applying.80
2. Maximization
of Social ResourcesFor defendants, such as the Ford Motor
Company, who create risks of harm that may be suffered by others,
the risk-benefit standard for negligence provides incentives to
take precautions to avoid or minimize risks that can be avoided
more cheaply than the cost of the precautions. By holding a
defendant liable for injuries that could have been avoided at less
cost than the accident, a risk-benefit test acts as a deterrent to
curb risks that are worth avoiding, while allowing a defendant to
take actions or avoid precautions that are not worth deterring.
Deterring conduct that results in greater accident costs than the
benefits of the conduct minimizes the total costs of accidents and
accident precaution. Therefore, it seems this tort "policy" serves
the goal of maximizing societal resources.81
To understand the efficiency theory of the risk-benefits analysis,
one other point must be explained. In a products liability design
defects case, use of the discussed liability standard requires
identification of an alternative design that would have prevented
the accident. One must be able to compare the additional costs
created by the alternative design, in relation to the existing
design, with the costs of the injuries that the alternative design
could prevent.82 In the Pinto case, Ford
obviously undertook this analysis, examining the additional $11
cost per unit of changing the fuel system design.
3. Economic
Feasibility of Valuing Non-Economic ItemsThe decision to
use a risk/benefit analysis does not necessarily result in the
strict utilitarianism as suggested by some
critics.83 Most all detractors of
cost/benefit analysis center their argument around the idea that
placing a value on "non-economic" items, such as a human life, does
not lead to economic efficiency. Proponents of the system claim
their risk/benefit analysis is nothing more than what it claims to
be--an effort to find some common measure for things that are not
easily comparable, yet must be compared. While this may seem
crass--comparing lives to dollars--some comparison must be made and
all the factors in the equation must be brought down to a common
denominator for the comparison to take place. Other instances arise
where lives are traded against lives, just not brought down to the
dollar amount that took place in the Ford Pinto case. In the choice
between hospital beds and preventive treatment, lives are traded
against lives.84 It is when the analysis is
taken down to an individual level that it becomes
problematic.Economists dispel the related argument just as easily.
The idea that if one can quantify "non-economic" items, there are
certain "specially valued" things that cannot be priced. It is true
that different individuals value certain things differently, but
simply because an individual deems something has "special value"
does not mean that they are unaffected by economic factors. One may
specially value a personal relationship, but how often he calls
this person is influenced by long-distance rates. One may specially
value music or watching sporting events, but still can be affected
by the price of records and tickets to the Kennedy Center or the
price for watching events on cable or a ticket to the ball game.
85
4. Efficiency
Does Not Equal ImmoralCritics look at risk/benefit
analysis in cases such as the Ford Pinto case as a depravity of
morality. The idea is that everyone has the "right" to a safe and
healthy workplace, or the "right" to expect product they purchase
to be safe.86 Those who subscribe to this
philosophy feel there are some "moral" decisions that must be made
no matter what the fiscal impacts may be or what the risk,/benefit
relationship dictates. Proponents of the risk/benefit analysis
counter this "ethical" argument with the idea that these are not
either/or decisions being made, but rather gradations of
risk.87 That is, Ford is not sacrificing all
safety features of the Pinto, it is a question of to what degree
Ford feels safety features are necessary. It could be argued that
the safety question was answered for them prior to the risk/benefit
analysis when Ford's earlier advertising campaign based on safety
failed. Decisions involving gradation of risks are made every day,
just not under such strict scrutiny. Obviously, highways would be
safer if the speed were restricted to 25 miles per hour on all
roads. However, this must be balanced with the "price" of slower
traffic. in choosing 55 or 65 as the speed limit, we are
sacrificing lives to make travel quicker and less costly.
Therefore, the Ford Motor Company is not morally void for choosing
between levels of safety. Auto manufacturers do this every
dav.
5. No Standard
for Using an "Ethical Balancing"All of the arguments
against the use of risk/benefit analysis seem to center around the
"ethical argument." Instead of a monetary system, sire should adopt
an ethical system that balances conflicts between certain
unspecified duties and rights according to "deliberate
reflection.88 While placing dollar amounts
on these items is admittedly arbitrary, the "ethical" method would
open a much larger debate. Who would be in charge of this ethical
reflecting and on whose behalf would these decisions be made? There
would be no clear limits for the actions of regulatory agencies.
What public values would rise above these vague guidelines? Finding
or arriving at a consensus for this ethical standard is virtually
impossible.
USING ABOVE CASE PLEASE
Please use this strategy when you analyze a case:
Identify and write the main issues found discussed in the case (who, what, how, where and when (the critical facts in a case).
List all indicators (including stated "problems") that something is not as expected or as desired.
Briefly analyze the issue with theories found in your textbook or other academic materials. Decide which ideas, models, and theories seem useful. Apply these conceptual tools to the situation. As new information is revealed, cycle back to sub steps a and b.
Identify the areas that need improvement (use theories from your textbook)
Specify and prioritize the criteria used to choose action alternatives.
Discover or invent feasible action alternatives.
Examine the probable consequences of action alternatives.
Select a course of action.
Design and implementation plan/schedule.
Create a plan for assessing the action to be implemented.
Conclusion ( should end with a strong conclusion or summary)
Writing Requirements
3–5 pages in length (excluding cover page, abstract, and reference list)
APA format,
In: Operations Management
1. Using any data sets, run two multiple regression equations. state the dependent and independent variable ( you need to start with at least three and end with at least two) and how you believe they will be related. Run the regression equation until you get to the final model. Then test for the assumptions and interpret the necessary statistics. (use excel Megastat).
Please select from any of the data sets.
Real Estate Data
| Price | Bedrooms | Size | Pool | Distance | Twnship | Garage | Baths |
| 263.1 | 4 | 2300 | 0 | 17 | 5 | 1 | 2 |
| 182.4 | 4 | 2100 | 1 | 19 | 4 | 0 | 2 |
| 242.1 | 3 | 2300 | 1 | 12 | 3 | 0 | 2 |
| 213.6 | 2 | 2200 | 1 | 16 | 2 | 0 | 2.5 |
| 139.9 | 2 | 2100 | 1 | 28 | 1 | 0 | 1.5 |
| 245.4 | 2 | 2100 | 0 | 12 | 1 | 1 | 2 |
| 327.2 | 6 | 2500 | 1 | 15 | 3 | 1 | 2 |
| 271.8 | 2 | 2100 | 1 | 9 | 2 | 1 | 2.5 |
| 221.1 | 3 | 2300 | 0 | 18 | 1 | 0 | 1.5 |
| 266.6 | 4 | 2400 | 1 | 13 | 4 | 1 | 2 |
| 292.4 | 4 | 2100 | 1 | 14 | 3 | 1 | 2 |
| 209 | 2 | 1700 | 1 | 8 | 4 | 1 | 1.5 |
| 270.8 | 6 | 2500 | 1 | 7 | 4 | 1 | 2 |
| 246.1 | 4 | 2100 | 1 | 18 | 3 | 1 | 2 |
| 194.4 | 2 | 2300 | 1 | 11 | 3 | 0 | 2 |
| 281.3 | 3 | 2100 | 1 | 16 | 2 | 1 | 2 |
| 172.7 | 4 | 2200 | 0 | 16 | 3 | 0 | 2 |
| 207.5 | 5 | 2300 | 0 | 21 | 4 | 0 | 2.5 |
| 198.9 | 3 | 2200 | 0 | 10 | 4 | 1 | 2 |
| 209.3 | 6 | 1900 | 0 | 15 | 4 | 1 | 2 |
| 252.3 | 4 | 2600 | 1 | 8 | 4 | 1 | 2 |
| 192.9 | 4 | 1900 | 0 | 14 | 2 | 1 | 2.5 |
| 209.3 | 5 | 2100 | 1 | 20 | 5 | 0 | 1.5 |
| 345.3 | 8 | 2600 | 1 | 9 | 4 | 1 | 2 |
| 326.3 | 6 | 2100 | 1 | 11 | 5 | 1 | 3 |
| 173.1 | 2 | 2200 | 0 | 21 | 5 | 1 | 1.5 |
| 187 | 2 | 1900 | 1 | 26 | 4 | 0 | 2 |
| 257.2 | 2 | 2100 | 1 | 9 | 4 | 1 | 2 |
| 233 | 3 | 2200 | 1 | 14 | 3 | 1 | 1.5 |
| 180.4 | 2 | 2000 | 1 | 11 | 5 | 0 | 2 |
| 234 | 2 | 1700 | 1 | 19 | 3 | 1 | 2 |
| 207.1 | 2 | 2000 | 1 | 11 | 5 | 1 | 2 |
| 247.7 | 5 | 2400 | 1 | 16 | 2 | 1 | 2 |
| 166.2 | 3 | 2000 | 0 | 16 | 2 | 1 | 2 |
| 177.1 | 2 | 1900 | 1 | 10 | 5 | 1 | 2 |
| 182.7 | 4 | 2000 | 0 | 14 | 4 | 0 | 2.5 |
| 216 | 4 | 2300 | 1 | 19 | 2 | 0 | 2 |
| 312.1 | 6 | 2600 | 1 | 7 | 5 | 1 | 2.5 |
| 199.8 | 3 | 2100 | 1 | 19 | 3 | 1 | 2 |
| 273.2 | 5 | 2200 | 1 | 16 | 2 | 1 | 3 |
| 206 | 3 | 2100 | 0 | 9 | 3 | 0 | 1.5 |
| 232.2 | 3 | 1900 | 0 | 16 | 1 | 1 | 1.5 |
| 198.3 | 4 | 2100 | 0 | 19 | 1 | 1 | 1.5 |
| 205.1 | 3 | 2000 | 0 | 20 | 4 | 0 | 2 |
| 175.6 | 4 | 2300 | 0 | 24 | 4 | 1 | 2 |
| 307.8 | 3 | 2400 | 0 | 21 | 2 | 1 | 3 |
| 269.2 | 5 | 2200 | 1 | 8 | 5 | 1 | 3 |
| 224.8 | 3 | 2200 | 1 | 17 | 1 | 1 | 2.5 |
| 171.6 | 3 | 2000 | 0 | 16 | 4 | 0 | 2 |
| 216.8 | 3 | 2200 | 1 | 15 | 1 | 1 | 2 |
| 192.6 | 6 | 2200 | 0 | 14 | 1 | 0 | 2 |
| 236.4 | 5 | 2200 | 1 | 20 | 3 | 1 | 2 |
| 172.4 | 3 | 2200 | 1 | 23 | 3 | 0 | 2 |
| 251.4 | 3 | 1900 | 1 | 12 | 2 | 1 | 2 |
| 246 | 6 | 2300 | 1 | 7 | 3 | 1 | 3 |
| 147.4 | 6 | 1700 | 0 | 12 | 1 | 0 | 2 |
| 176 | 4 | 2200 | 1 | 15 | 1 | 1 | 2 |
| 228.4 | 3 | 2300 | 1 | 17 | 5 | 1 | 1.5 |
| 166.5 | 3 | 1600 | 0 | 19 | 3 | 0 | 2.5 |
| 189.4 | 4 | 2200 | 1 | 24 | 1 | 1 | 2 |
| 312.1 | 7 | 2400 | 1 | 13 | 3 | 1 | 3 |
| 289.8 | 6 | 2000 | 1 | 21 | 3 | 1 | 3 |
| 269.9 | 5 | 2200 | 0 | 11 | 4 | 1 | 2.5 |
| 154.3 | 2 | 2000 | 1 | 13 | 2 | 0 | 2 |
| 222.1 | 2 | 2100 | 1 | 9 | 5 | 1 | 2 |
| 209.7 | 5 | 2200 | 0 | 13 | 2 | 1 | 2 |
| 190.9 | 3 | 2200 | 0 | 18 | 3 | 1 | 2 |
| 254.3 | 4 | 2500 | 0 | 15 | 3 | 1 | 2 |
| 207.5 | 3 | 2100 | 0 | 10 | 2 | 0 | 2 |
| 209.7 | 4 | 2200 | 0 | 19 | 2 | 1 | 2 |
| 294 | 2 | 2100 | 1 | 13 | 2 | 1 | 2.5 |
| 176.3 | 2 | 2000 | 0 | 17 | 3 | 0 | 2 |
| 294.3 | 7 | 2400 | 1 | 8 | 4 | 1 | 2 |
| 224 | 3 | 1900 | 0 | 6 | 1 | 1 | 2 |
| 125 | 2 | 1900 | 1 | 18 | 4 | 0 | 1.5 |
| 236.8 | 4 | 2600 | 0 | 17 | 5 | 1 | 2 |
| 164.1 | 4 | 2300 | 1 | 19 | 4 | 0 | 2 |
| 217.8 | 3 | 2500 | 1 | 12 | 3 | 0 | 2 |
| 192.2 | 2 | 2400 | 1 | 16 | 2 | 0 | 2.5 |
| 125.9 | 2 | 2400 | 1 | 28 | 1 | 0 | 1.5 |
| 220.9 | 2 | 2300 | 0 | 12 | 1 | 1 | 2 |
| 294.5 | 6 | 2700 | 1 | 15 | 3 | 1 | 2 |
| 244.6 | 2 | 2300 | 1 | 9 | 2 | 1 | 2.5 |
| 199 | 3 | 2500 | 0 | 18 | 1 | 0 | 1.5 |
| 240 | 4 | 2600 | 1 | 13 | 4 | 1 | 2 |
| 263.2 | 4 | 2300 | 1 | 14 | 3 | 1 | 2 |
| 188.1 | 2 | 1900 | 1 | 8 | 4 | 1 | 1.5 |
| 243.7 | 6 | 2700 | 1 | 7 | 4 | 1 | 2 |
| 221.5 | 4 | 2300 | 1 | 18 | 3 | 1 | 2 |
| 175 | 2 | 2500 | 1 | 11 | 3 | 0 | 2 |
| 253.2 | 3 | 2300 | 1 | 16 | 2 | 1 | 2 |
| 155.4 | 4 | 2400 | 0 | 16 | 3 | 0 | 2 |
| 186.7 | 5 | 2500 | 0 | 21 | 4 | 0 | 2.5 |
| 179 | 3 | 2400 | 0 | 10 | 4 | 1 | 2 |
| 188.3 | 6 | 2100 | 0 | 15 | 4 | 1 | 2 |
| 227.1 | 4 | 2900 | 1 | 8 | 4 | 1 | 2 |
| 173.6 | 4 | 2100 | 0 | 14 | 2 | 1 | 2.5 |
| 188.3 | 5 | 2300 | 1 | 20 | 5 | 0 | 1.5 |
| 310.8 | 8 | 2900 | 1 | 9 | 4 | 1 | 2 |
| 293.7 | 6 | 2400 | 1 | 11 | 5 | 1 | 3 |
| 179 | 3 | 2400 | 1 | 8 | 4 | 1 | 2 |
| 188.3 | 6 | 2100 | 0 | 14 | 2 | 1 | 2.5 |
| 227.1 | 4 | 2900 | 1 | 20 | 5 | 0 | 1.5 |
| 173.6 | 4 | 2100 | 1 | 9 | 4 | 1 | 2 |
| 188.3 | 5 | 2300 | 1 | 11 | 5 | 1 | 3 |
Baseball2012 Data
| Team | League | Opened | Age | Seating Capacity | Salary 2012 | Wins | Attendance | BA | ERA | HR | Errors | SB |
| San Diego Padres | 0 | 2004 | 10 | 42691 | 55.2 | 76 | 2.12 | 0.247 | 4.01 | 121 | 121 | 155 |
| Houston Astros | 0 | 2000 | 14 | 40981 | 60.7 | 55 | 1.61 | 0.236 | 4.56 | 146 | 118 | 105 |
| Pittsburgh Pirates | 0 | 2001 | 13 | 38362 | 63.4 | 79 | 2.09 | 0.243 | 3.86 | 170 | 112 | 73 |
| Arizona Diamondbacks | 0 | 1998 | 16 | 48633 | 74.3 | 81 | 2.18 | 0.259 | 3.93 | 165 | 90 | 93 |
| Colorado Rockies | 0 | 1995 | 19 | 50398 | 78.1 | 64 | 2.63 | 0.274 | 5.22 | 166 | 122 | 100 |
| Washington Nationals | 0 | 2008 | 6 | 41487 | 81.3 | 98 | 2.37 | 0.261 | 3.33 | 194 | 94 | 105 |
| Cincinnati Reds | 0 | 2003 | 11 | 42319 | 82.2 | 97 | 2.35 | 0.251 | 3.34 | 172 | 89 | 87 |
| Atlanta Braves | 0 | 1996 | 18 | 49586 | 83.3 | 94 | 2.42 | 0.247 | 3.42 | 149 | 86 | 101 |
| Chicago Cubs | 0 | 1914 | 100 | 41009 | 88.2 | 61 | 2.88 | 0.24 | 4.51 | 137 | 105 | 94 |
| New York Mets | 0 | 2009 | 5 | 41922 | 93.4 | 95 | 2.24 | 0.249 | 4.09 | 139 | 101 | 79 |
| Los Angeles Dodgers | 0 | 1962 | 52 | 56000 | 95.1 | 86 | 3.32 | 0.252 | 3.34 | 116 | 98 | 104 |
| Milwaukee Brewers | 0 | 2001 | 13 | 41900 | 97.7 | 83 | 2.83 | 0.259 | 4.22 | 202 | 99 | 158 |
| St. Louis Cardinals | 0 | 2006 | 8 | 43975 | 110.3 | 88 | 3.26 | 0.271 | 3.71 | 159 | 107 | 91 |
| San Francisco Giants | 0 | 2000 | 14 | 41915 | 117.6 | 94 | 3.38 | 0.269 | 3.68 | 103 | 115 | 118 |
| Miami Marlins | 0 | 2012 | 2 | 36742 | 118.1 | 69 | 2.22 | 0.244 | 4.09 | 137 | 103 | 149 |
| Philadelphia Phillies | 0 | 2004 | 10 | 43651 | 174.5 | 81 | 3.57 | 0.255 | 3.83 | 158 | 101 | 116 |
| Oakland Athletics | 1 | 1966 | 48 | 35067 | 55.4 | 94 | 1.68 | 0.238 | 3.48 | 195 | 111 | 122 |
| Kansas City Royals | 1 | 1973 | 41 | 37903 | 60.9 | 72 | 1.74 | 0.265 | 4.3 | 131 | 113 | 132 |
| Tampa Bay Rays | 1 | 1990 | 24 | 34078 | 64.2 | 90 | 1.56 | 0.24 | 3.19 | 175 | 114 | 134 |
| Toronto Blue Jays | 1 | 1989 | 25 | 49260 | 75.5 | 73 | 2.1 | 0.245 | 4.64 | 198 | 101 | 123 |
| Cleveland Indians | 1 | 1994 | 20 | 43429 | 78.4 | 68 | 1.6 | 0.251 | 4.78 | 136 | 96 | 110 |
| Baltimore Orioles | 1 | 1992 | 22 | 45971 | 81.4 | 93 | 2.1 | 0.247 | 3.9 | 214 | 106 | 58 |
| Seattle Mariners | 1 | 1999 | 15 | 47860 | 82 | 75 | 1.72 | 0.234 | 3.76 | 149 | 72 | 104 |
| Minnesota Twins | 1 | 2010 | 4 | 39504 | 94.1 | 66 | 2.78 | 0.26 | 4.77 | 131 | 107 | 135 |
| Chicago White Sox | 1 | 1991 | 23 | 40615 | 96.9 | 85 | 1.97 | 0.255 | 4.02 | 211 | 70 | 109 |
| Texas Rangers | 1 | 1994 | 20 | 48194 | 120.5 | 93 | 3.46 | 0.273 | 3.99 | 200 | 85 | 91 |
| Detroit Tigers | 1 | 2000 | 14 | 41255 | 132.3 | 88 | 3.03 | 0.268 | 3.75 | 163 | 99 | 59 |
| Los Angeles Angels | 1 | 1966 | 48 | 45957 | 154.5 | 89 | 3.06 | 0.274 | 4.02 | 187 | 98 | 134 |
| Boston Red Sox | 1 | 1912 | 102 | 37495 | 173.2 | 69 | 3.04 | 0.26 | 4.7 | 165 | 101 | 97 |
| New York Yankees | 1 | 2009 | 5 | 50287 | 198 | 74 | 3.54 | 0.265 | 3.85 | 245 | 74 | 93 |
| Data Set 3 --Buena School District Bus Data | |||||||||
| Bus Number | Maintenance | Maint | Age | Age med | Miles | Type | Type-Dum | Bus-Mfg | Passenger |
| 982 | 441 | 0 | 1 | 0 | 823 | Diesel | 0 | Bluebird | 55 Passenger |
| 279 | 390 | 0 | 2 | 0 | 792 | Diesel | 0 | Bluebird | 55 Passenger |
| 695 | 477 | 1 | 2 | 0 | 802 | Diesel | 0 | Bluebird | 55 Passenger |
| 686 | 329 | 0 | 3 | 0 | 741 | Diesel | 0 | Bluebird | 55 Passenger |
| 101 | 424 | 0 | 4 | 0 | 827 | Diesel | 0 | Bluebird | 55 Passenger |
| 814 | 426 | 0 | 4 | 0 | 757 | Diesel | 0 | Bluebird | 55 Passenger |
| 554 | 458 | 1 | 4 | 0 | 817 | Diesel | 0 | Bluebird | 14 Passenger |
| 918 | 390 | 0 | 5 | 0 | 799 | Diesel | 0 | Bluebird | 55 Passenger |
| 725 | 392 | 0 | 5 | 0 | 774 | Diesel | 0 | Bluebird | 55 Passenger |
| 731 | 432 | 0 | 6 | 0 | 819 | Diesel | 0 | Bluebird | 42 Passenger |
| 321 | 450 | 0 | 6 | 0 | 856 | Diesel | 0 | Bluebird | 6 Passenger |
| 358 | 461 | 1 | 6 | 0 | 849 | Diesel | 0 | Bluebird | 55 Passenger |
| 75 | 478 | 1 | 6 | 0 | 821 | Diesel | 0 | Bluebird | 55 Passenger |
| 135 | 329 | 0 | 7 | 0 | 853 | Diesel | 0 | Bluebird | 55 Passenger |
| 507 | 410 | 0 | 7 | 0 | 866 | Diesel | 0 | Bluebird | 55 Passenger |
| 714 | 433 | 0 | 7 | 0 | 817 | Diesel | 0 | Bluebird | 42 Passenger |
| 57 | 455 | 0 | 7 | 0 | 828 | Diesel | 0 | Bluebird | 55 Passenger |
| 768 | 494 | 1 | 7 | 1 | 815 | Diesel | 0 | Bluebird | 42 Passenger |
| 977 | 501 | 1 | 7 | 1 | 874 | Diesel | 0 | Bluebird | 55 Passenger |
| 887 | 357 | 0 | 8 | 1 | 760 | Diesel | 0 | Bluebird | 6 Passenger |
| 984 | 392 | 0 | 8 | 1 | 851 | Diesel | 0 | Bluebird | 55 Passenger |
| 692 | 469 | 1 | 8 | 1 | 812 | Diesel | 0 | Bluebird | 55 Passenger |
| 704 | 503 | 1 | 8 | 1 | 857 | Diesel | 0 | Bluebird | 55 Passenger |
| 884 | 381 | 0 | 9 | 1 | 882 | Diesel | 0 | Bluebird | 55 Passenger |
| 326 | 433 | 0 | 9 | 1 | 848 | Diesel | 0 | Bluebird | 55 Passenger |
| 875 | 489 | 1 | 9 | 1 | 858 | Diesel | 0 | Bluebird | 55 Passenger |
| 418 | 504 | 1 | 9 | 1 | 842 | Diesel | 0 | Bluebird | 55 Passenger |
| 953 | 423 | 0 | 10 | 1 | 835 | Diesel | 0 | Bluebird | 55 Passenger |
| 954 | 476 | 1 | 10 | 1 | 827 | Diesel | 0 | Bluebird | 42 Passenger |
| 520 | 492 | 1 | 10 | 1 | 836 | Diesel | 0 | Bluebird | 55 Passenger |
| 600 | 493 | 1 | 10 | 1 | 1008 | Diesel | 0 | Bluebird | 55 Passenger |
| 200 | 505 | 1 | 10 | 1 | 822 | Diesel | 0 | Bluebird | 55 Passenger |
| 883 | 436 | 0 | 2 | 0 | 785 | Gasoline | 1 | Bluebird | 55 Passenger |
| 464 | 355 | 0 | 3 | 0 | 806 | Gasoline | 1 | Bluebird | 55 Passenger |
| 540 | 529 | 1 | 4 | 0 | 846 | Gasoline | 1 | Bluebird | 55 Passenger |
| 500 | 369 | 0 | 5 | 0 | 842 | Gasoline | 1 | Bluebird | 55 Passenger |
| 660 | 337 | 0 | 6 | 0 | 819 | Gasoline | 1 | Bluebird | 55 Passenger |
| 29 | 396 | 0 | 6 | 0 | 784 | Gasoline | 1 | Bluebird | 55 Passenger |
| 39 | 411 | 0 | 6 | 0 | 804 | Gasoline | 1 | Bluebird | 55 Passenger |
| 387 | 422 | 0 | 8 | 1 | 869 | Gasoline | 1 | Bluebird | 55 Passenger |
| 43 | 439 | 0 | 9 | 1 | 832 | Gasoline | 1 | Bluebird | 55 Passenger |
| 699 | 475 | 1 | 9 | 1 | 816 | Gasoline | 1 | Bluebird | 55 Passenger |
| 40 | 466 | 1 | 10 | 1 | 865 | Gasoline | 1 | Bluebird | 55 Passenger |
| 861 | 474 | 1 | 10 | 1 | 845 | Gasoline | 1 | Bluebird | 55 Passenger |
| 490 | 497 | 1 | 10 | 1 | 859 | Gasoline | 1 | Bluebird | 55 Passenger |
| 122 | 558 | 1 | 10 | 1 | 885 | Gasoline | 1 | Bluebird | 55 Passenger |
| 482 | 514 | 1 | 11 | 1 | 980 | Gasoline | 1 | Bluebird | 55 Passenger |
| 751 | 444 | 0 | 2 | 0 | 757 | Diesel | 0 | Keiser | 14 Passenger |
| 705 | 403 | 0 | 4 | 0 | 806 | Diesel | 0 | Keiser | 42 Passenger |
| 603 | 468 | 1 | 4 | 0 | 800 | Diesel | 0 | Keiser | 14 Passenger |
| 365 | 462 | 1 | 6 | 0 | 799 | Diesel | 0 | Keiser | 55 Passenger |
| 45 | 478 | 1 | 6 | 0 | 830 | Diesel | 0 | Keiser | 55 Passenger |
| 767 | 493 | 1 | 6 | 0 | 816 | Diesel | 0 | Keiser | 55 Passenger |
| 678 | 428 | 0 | 7 | 0 | 842 | Diesel | 0 | Keiser | 55 Passenger |
| 724 | 448 | 0 | 8 | 1 | 790 | Diesel | 0 | Keiser | 42 Passenger |
| 759 | 546 | 1 | 8 | 1 | 870 | Diesel | 0 | Keiser | 55 Passenger |
| 989 | 380 | 0 | 9 | 1 | 803 | Diesel | 0 | Keiser | 55 Passenger |
| 61 | 442 | 0 | 9 | 1 | 809 | Diesel | 0 | Keiser | 55 Passenger |
| 948 | 452 | 0 | 9 | 1 | 831 | Diesel | 0 | Keiser | 42 Passenger |
| 732 | 471 | 1 | 9 | 1 | 815 | Diesel | 0 | Keiser | 42 Passenger |
| 120 | 503 | 1 | 10 | 1 | 883 | Diesel | 0 | Keiser | 42 Passenger |
| 754 | 515 | 1 | 14 | 1 | 895 | Diesel | 0 | Keiser | 14 Passenger |
| 481 | 382 | 0 | 3 | 0 | 818 | Gasoline | 1 | Keiser | 6 Passenger |
| 162 | 406 | 0 | 3 | 0 | 798 | Gasoline | 1 | Keiser | 55 Passenger |
| 9 | 414 | 0 | 4 | 0 | 864 | Gasoline | 1 | Keiser | 55 Passenger |
| 353 | 449 | 0 | 4 | 0 | 817 | Gasoline | 1 | Keiser | 55 Passenger |
| 10 | 427 | 0 | 5 | 0 | 780 | Gasoline | 1 | Keiser | 14 Passenger |
| 38 | 432 | 0 | 6 | 0 | 837 | Gasoline | 1 | Keiser | 14 Passenger |
| 427 | 359 | 0 | 7 | 0 | 751 | Gasoline | 1 | Keiser | 55 Passenger |
| 370 | 459 | 1 | 8 | 1 | 826 | Gasoline | 1 | Keiser | 55 Passenger |
| 693 | 469 | 1 | 9 | 1 | 775 | Gasoline | 1 | Keiser | 55 Passenger |
| 880 | 474 | 1 | 9 | 1 | 857 | Gasoline | 1 | Keiser | 55 Passenger |
| 396 | 457 | 1 | 2 | 0 | 815 | Diesel | 0 | Thompson | 55 Passenger |
| 833 | 496 | 1 | 8 | 1 | 839 | Diesel | 0 | Thompson | 55 Passenger |
| 398 | 570 | 1 | 9 | 1 | 844 | Diesel | 0 | Thompson | 14 Passenger |
| 314 | 459 | 1 | 11 | 1 | 859 | Diesel | 0 | Thompson | 6 Passenger |
| 193 | 540 | 1 | 11 | 1 | 847 | Diesel | 0 | Thompson | 55 Passenger |
| 156 | 561 | 1 | 12 | 1 | 838 | Diesel | 0 | Thompson | 55 Passenger |
| 168 | 467 | 1 | 7 | 0 | 827 | Gasoline | 1 | Thompson | 55 Passenger |
| 671 | 504 | 1 | 8 | 1 | 866 | Gasoline | 1 | Thompson | 55 Passenger |
Banking Chicago Data
| Balance | ATM | Services | Debit | Interest | City |
| 748 | 9 | 2 | 1 | 0 | 1 |
| 1501 | 10 | 1 | 0 | 0 | 1 |
| 740 | 6 | 3 | 0 | 0 | 3 |
| 1593 | 10 | 8 | 1 | 0 | 1 |
| 1169 | 6 | 4 | 0 | 0 | 4 |
| 2125 | 18 | 6 | 0 | 0 | 2 |
| 1554 | 12 | 6 | 1 | 0 | 3 |
| 1474 | 12 | 7 | 1 | 0 | 1 |
| 1913 | 6 | 5 | 0 | 0 | 1 |
| 1218 | 10 | 3 | 1 | 0 | 1 |
| 1006 | 12 | 4 | 0 | 0 | 1 |
| 2215 | 20 | 3 | 1 | 0 | 4 |
| 137 | 7 | 2 | 0 | 0 | 3 |
| 167 | 5 | 4 | 0 | 0 | 4 |
| 343 | 7 | 2 | 0 | 0 | 1 |
| 2557 | 20 | 7 | 1 | 0 | 4 |
| 2276 | 15 | 4 | 1 | 0 | 3 |
| 2144 | 17 | 3 | 0 | 0 | 3 |
| 1995 | 10 | 7 | 0 | 0 | 2 |
| 1053 | 8 | 4 | 1 | 0 | 3 |
| 1120 | 8 | 6 | 1 | 0 | 3 |
| 1746 | 11 | 2 | 0 | 0 | 2 |
| 1958 | 6 | 2 | 1 | 0 | 2 |
| 634 | 2 | 7 | 1 | 0 | 4 |
| 580 | 4 | 1 | 0 | 0 | 1 |
| 1320 | 4 | 5 | 1 | 0 | 1 |
| 1675 | 6 | 7 | 1 | 0 | 2 |
| 789 | 8 | 4 | 0 | 0 | 4 |
| 1784 | 11 | 5 | 0 | 0 | 1 |
| 1326 | 16 | 8 | 0 | 0 | 3 |
| 2051 | 14 | 4 | 1 | 0 | 4 |
| 1044 | 7 | 5 | 1 | 0 | 1 |
| 765 | 4 | 3 | 0 | 0 | 4 |
| 32 | 2 | 0 | 0 | 0 | 3 |
| 1266 | 11 | 7 | 0 | 0 | 4 |
| 2204 | 14 | 5 | 0 | 0 | 2 |
| 2409 | 16 | 8 | 0 | 0 | 2 |
| 1338 | 14 | 4 | 1 | 0 | 2 |
| 2076 | 12 | 5 | 1 | 0 | 2 |
| 1708 | 13 | 3 | 1 | 0 | 1 |
| 2375 | 12 | 4 | 0 | 0 | 2 |
| 1487 | 8 | 4 | 1 | 0 | 4 |
| 1125 | 6 | 4 | 1 | 0 | 2 |
| 2156 | 14 | 5 | 1 | 0 | 2 |
| 1756 | 13 | 4 | 0 | 1 | 2 |
| 1831 | 10 | 4 | 0 | 1 | 3 |
| 1622 | 14 | 6 | 0 | 1 | 4 |
| 1886 | 17 | 3 | 0 | 1 | 1 |
| 1494 | 11 | 2 | 0 | 1 | 1 |
| 1526 | 8 | 4 | 0 | 1 | 2 |
| 1838 | 7 | 5 | 1 | 1 | 3 |
| 1616 | 10 | 4 | 1 | 1 | 2 |
| 1735 | 12 | 7 | 0 | 1 | 3 |
| 1885 | 10 | 6 | 1 | 1 | 2 |
| 1790 | 11 | 4 | 0 | 1 | 3 |
| 1645 | 6 | 9 | 0 | 1 | 4 |
| 890 | 7 | 1 | 0 | 1 | 1 |
| 2138 | 18 | 5 | 0 | 1 | 4 |
| 1455 | 9 | 5 | 1 | 1 | 3 |
| 1989 | 12 | 3 | 0 | 1 | 2 |
International Data
| x1 | x2 | x3 | x4 | x5 | x6 | x7 | X8 | X9 | X10 | X11 | X12 | X13 | X14 |
| Country | Area (KM) | G-20 | Petroleum | Pop (1000's) | 65 & over | Life Expectancy | Literacy % | GDP/cap | Labor force | Unemployment | Exports | Imports | Cell phones |
| Algeria | 2,381,740 | 0 | 2 | 31,736 | 4.07 | 69.95 | 61.6 | 5.5 | 9.1 | 30 | 19.6 | 9.2 | 0.034 |
| Argentina | 2,766,890 | 1 | 1 | 37,385 | 10.42 | 75.26 | 96.2 | 12.9 | 15 | 15 | 26.5 | 25.2 | 3 |
| Australia | 7,686,850 | 1 | 1 | 19,357 | 12.5 | 79.87 | 100 | 23.2 | 9.5 | 6.4 | 69 | 77 | 6.4 |
| Austria | 83,858 | 0 | 0 | 8,150 | 15.38 | 77.84 | 98 | 25 | 3.7 | 5.4 | 63.2 | 65.6 | 4.5 |
| Belgium | 30,510 | 0 | 0 | 10,259 | 16.95 | 77.96 | 98 | 25.3 | 4.34 | 8.4 | 181.4 | 166 | 1 |
| Brazil | 8,511,965 | 1 | 1 | 174,469 | 5.45 | 63.24 | 83.3 | 6.5 | 79 | 7.1 | 55.1 | 55.8 | 4.4 |
| Canada | 9,976,140 | 1 | 1 | 31,592 | 12.77 | 79.56 | 97 | 24.8 | 16.1 | 6.8 | 272.3 | 238.2 | 4.2 |
| China | 9,596,960 | 1 | 1 | 1,273,111 | 7.11 | 71.62 | 81.5 | 3.6 | 700 | 10 | 232 | 197 | 65 |
| Czech Republic | 79 | 0 | 0 | 10,264 | 13.92 | 74.73 | 99.9 | 12.9 | 5.2 | 8.7 | 28.3 | 31.4 | 4.3 |
| Denmark | 43,094 | 0 | 1 | 5,352 | 14.85 | 76.72 | 100 | 25.5 | 2.9 | 5.3 | 50.8 | 43.6 | 1.4 |
| Finland | 337,030 | 0 | 0 | 5,175 | 15.03 | 77.58 | 100 | 22.9 | 2.6 | 9.8 | 44.4 | 32.7 | 2.2 |
| France | 547,030 | 1 | 0 | 59,551 | 16.13 | 78.9 | 99 | 24.4 | 25 | 9.7 | 325 | 320 | 11.1 |
| Germany | 357,021 | 1 | 0 | 83,029 | 16.61 | 77.61 | 99 | 23.4 | 40.5 | 9.9 | 578 | 505 | 15.3 |
| Greece | 131,940 | 0 | 1 | 10,623 | 17.72 | 78.59 | 95 | 17.2 | 4.32 | 11.3 | 15.8 | 33.9 | 0.937 |
| Hungary | 93,030 | 0 | 0 | 10,106 | 14.71 | 71.63 | 99 | 11.2 | 4.2 | 9.4 | 25.2 | 27.6 | 1.3 |
| Iceland | 103,000 | 0 | 0 | 278 | 11.81 | 79.52 | 100 | 24.8 | 0.16 | 2.7 | 2 | 2.2 | 0.066 |
| India | 3,287,590 | 1 | 1 | 1,029,991 | 4.68 | 62.68 | 52 | 2.2 | * | * | 43.1 | 60.8 | 2.93 |
| Indonesia | 1,919,440 | 1 | 2 | 228,437 | 4.63 | 68.27 | 83.8 | 2.9 | 99 | 17.5 | 64.7 | 40.4 | 1 |
| Iran | 1,648,000 | 0 | 2 | 66,129 | 4.65 | 69.95 | 72.1 | 6.3 | 17.3 | 14 | 25 | 15 | 0.265 |
| Iraq | 437,072 | 0 | 2 | 23,332 | 3.08 | 66.95 | 58 | 2.5 | 4.4 | * | 21.8 | 13.8 | 0 |
| Ireland | 70,280 | 0 | 0 | 3,840 | 11.35 | 76.99 | 98 | 21.6 | 1.82 | 4.1 | 73.5 | 45.7 | 2 |
| Italy | 301,230 | 1 | 0 | 57,680 | 18.35 | 79.14 | 98 | 22.1 | 23.4 | 10.4 | 241.1 | 231.4 | 20.5 |
| Japan | 377,835 | 1 | 0 | 126,771 | 17.35 | 80.8 | 99 | 24.9 | 67.7 | 4.7 | 450 | 355 | 63.9 |
| Kuwait | 17,820 | 0 | 2 | 2,041 | 2.42 | 76.27 | 78.6 | 15 | 1.3 | 1.8 | 23.2 | 7.6 | 0.21 |
| Libya | 1,759,540 | 0 | 2 | 5,240 | 3.95 | 75.65 | 76.2 | 8.9 | 1.5 | 30 | 13.9 | 7.6 | 0 |
| Luxembourg | 2,586 | 0 | 0 | 443 | 14.06 | 77.3 | 100 | 36.4 | 0.248 | 2.7 | 7.6 | 10 | 0.215 |
| Mexico | 1,972,550 | 1 | 1 | 101,879 | 4.4 | 71.76 | 89.6 | 9.1 | 39.8 | 2.2 | 168 | 176 | 2 |
| Netherlands | 41,526 | 0 | 1 | 15,981 | 13.72 | 78.43 | 99 | 24.4 | 7.2 | 2.6 | 210.3 | 201.2 | 4.1 |
| New Zealand | 286,680 | 0 | 0 | 3,864 | 11.53 | 77.99 | 99 | 17.7 | 1.88 | 6.3 | 14.6 | 14.3 | 0.6 |
| Nigeria | 923,768 | 0 | 2 | 126,635 | 2.82 | 51.07 | 57.1 | 0.95 | 66 | 28 | 22.2 | 10.7 | 0.027 |
| Norway | 324,220 | 0 | 1 | 4,503 | 15.1 | 78.79 | 100 | 27.7 | 2.4 | 3 | 59.2 | 35.2 | 2 |
| Poland | 312,685 | 0 | 0 | 38,634 | 12.44 | 73.42 | 99 | 8.5 | 17.2 | 12 | 28.4 | 42.7 | 1.8 |
| Portugal | 92,391 | 0 | 0 | 10,066 | 15.62 | 75.94 | 87.4 | 15.8 | 5 | 4.3 | 26.1 | 41 | 3 |
| Qatar | 11,437 | 0 | 2 | 769 | 2.48 | 72.62 | 79 | 20.3 | 0.233 | * | 9.8 | 3.8 | 0.043 |
| Russia | 17,075,200 | 1 | 1 | 145,470 | 12.81 | 67.34 | 98 | 7.7 | 66 | 10.5 | 105.1 | 44.2 | 2.5 |
| Saudi Arabia | 1,960,582 | 1 | 2 | 22,757 | 2.68 | 68.09 | 62.8 | 10.5 | 7 | * | 81.2 | 30.1 | 1 |
| South Africa | 1,219,912 | 1 | 0 | 43,586 | 4.88 | 48.09 | 81.1 | 8.5 | 17 | 30 | 30.8 | 27.6 | 2 |
| South Korea | 98,480 | 1 | 0 | 47,904 | 7.27 | 74.65 | 98 | 16.1 | 22 | 4.1 | 172.6 | 160.5 | 27 |
| Spain | 504,782 | 0 | 0 | 40,038 | 17.18 | 78.93 | 97 | 18 | 17 | 14 | 120.5 | 153.9 | 8.4 |
| Sweden | 449,964 | 0 | 0 | 8,875 | 17.28 | 79.71 | 99 | 22.2 | 4.4 | 6 | 95.5 | 80 | 3.8 |
| Switzerland | 41,290 | 0 | 0 | 7,283 | 15.3 | 79.73 | 99 | 28.6 | 3.9 | 1.9 | 91.3 | 91.6 | 2 |
| Turkey | 780,580 | 1 | 0 | 66,494 | 6.13 | 71.24 | 85 | 6.8 | 23 | 5.6 | 26.9 | 55.7 | 12.1 |
| United Arab Emirates | 82,880 | 0 | 2 | 2,407 | 2.4 | 74.29 | 79.2 | 22.8 | 1.4 | * | 46 | 34 | 1 |
| United Kingdom | 244,820 | 1 | 1 | 59,648 | 15.7 | 77.82 | 99 | 22.8 | 29.2 | 5.5 | 282 | 324 | 13 |
| United States | 9,629,091 | 1 | 1 | 278,059 | 12.61 | 77.26 | 97 | 36.2 | 140.9 | 4 | 776 | 1223 | 69 |
| Venezuela | 912,050 | 0 | 2 | 23,917 | 4.72 | 73.31 | 91.1 | 6.2 | 9.9 | 14 | 32.8 | 14.7 | 2 |
Variable descriptions
Real Estate Sales data
Variables
X1 = selling price in $000
X2= Number of bedrooms
X3= Size of the home in square feet
X4= Pool (1=yes, 0= no)
X5= Distance from the center of the city in miles
X6= Township
X7= Garage attached (1=yes, 0= no)
X8= Number of bathrooms
105 homes sold
Baseball Data
Variables
X1 = Team
X2= Language (American =1, National =0)
X3= Built (year stadium was built)
X4= Size (stadium capacity)
X5= Salary (total 2012 team salary, $ million)
X6= Wins
X7= Attendance (total for team in millions)
X8= BA (team batting average)
X9= ERA (Team earned run average)
X10= HR (Team home runs)
X11 = Errors (team errors)
X12= SB (team stolen bases)
X13= year
X14= Average player salary ($)
Buena School District Bus Data
Variables
X1 = Bus number
X2= Maintenance cost ($)
X3= (Age)
X4= Miles
X5= Bus type (diesel or gasoline)
X6= Bus Manufacturer (Bluebird, Keiser, Thompson)
X7= Passengers
2. Using any dataset, run an ANOVA test, and interpret the statistically significant Tukey output.
I will be glad if this two questions are answered. My previous question was not answered. Please remember to use MegastatThank you.
In: Statistics and Probability
Between 2000 and 2012, Gap, Inc. (Gap) ceded its world leadership position in specialty fashion retailing to Inditex of Spain and H&M of Sweden. These two companies, each less than a quarter of Gap’s size in 2000, were now setting the pace in the global mass fashion market, and Gap appeared to be falling ever further behind. In the intervening twelve years, three CEOs had struggled to turn around the fading brand. While several temporary profit boosts appeared to herald a recovery, a sustained rally remained elusive. Mickey Drexler, Gap’s CEO since 1983, who had been responsible for Gap’s rise to global prominence, was fired in 2002 after two years of double digit, same-store sales declines and a 75% drop in the stock price. 1 His successor, Paul Pressler, appeared to have engineered a remarkable recovery, but was fired in 2007 after disappointing sales and another slump in profits. His replacement, Glenn Murphy, fresh from a successful turnaround at a Canadian drug-store chain, promised tighter price controls, lower administrative costs, and a leaner, more aggressive Gap. He cut costs and drove up earnings per share, but sales continued to decline. After four years of troubles, Murphy brought in former J. Crew President, Tracy Gardner, to consult with the Gap brand and he began a bold program to close one fifth of Gap’s North American store base. In 2012, sales had lifted 8%, same-store sales were strongly positive for all of Gap’s domestic sub-brands, and the company’s share price had lifted nearly 50% from the prior year. After 12 years of poor performance, had Glenn Murphy finally discovered the answers to Gap’s problems? Mickey Drexler: 2000-2002 After Gap, Inc. “misjudged fashion trends in 2000,” its sales growth rate slowed to 18%, below the historical average, and operating profits fell 20% to $1.4 billion.3 CEO Mickey Drexler, was confident that this stumble was a short term problem, but 2001 results suggested otherwise. Sales lifted only 1%, operating profits plunged anther 70% to $426 million and the company made a net loss. 2002 saw sales rise 4% and operating profits recover to $1.0 billion, but comparable stores sales continued to fall. Gap’s stock price decreased from a high of $53.75 in February 2000 to $14 in May 2002.4 Several top designers and senior executives left the company “disillusioned with how bureaucratic the organization had become.” Analysts noted that, while Gap had made “button-down shirts, chinos and basic cotton T-shirts the boomer uniform,” it was struggling to resonate as well with some members of Generation Y (those born in the late 1970s to early 1990s) who were “looking for individuality, not conformity.”6Chairman Don Fisher had had enough. The night before the Gap board meeting on May 22, 2002, Steve Jobs, a board member, called Mickey Drexler to warn him that the board was planning to fire him the next morning. Drexler entered the board meeting aggressively and a board member later described it as “a very emotional scene.”Despite his shock and disappointment, Drexler quickly recovered. In 2003, he became the CEO of J. Crew, a quality basic clothing chain which was incurring heavy losses. Within two years, he had returned it to profitability and, within five, he had more than doubled sales. Paul Pressler: 2002-2007 Paul S. Pressler replaced Drexler as the CEO of Gap, Inc. Pressler had spent 15 years with The Walt Disney Company and ended his tenure there as the chairman of Walt Disney Parks and Resorts. The press noted the difference in the two men’s leadership styles: whereas Drexler “flew by the seat of his khakis,” relying on his honed intuition to direct apparel development, Pressler was researchoriented and left decisions about apparel to Gap, Inc.’s designers. 8 Pressler stated, “I had to demonstrate to everyone that the general manager is here to lead the people—not pick the buttons.”9 Pressler moved quickly to close 200 underperforming stores, slow the rate of new openings, and reduce excess inventory, 10 resulting in a “spectacular turnaround” in 2003. 11 Between 2002 and 2003, operating profits rose 87% to $1.8 billion, marginally beating the all-time record set in 1999. Gap Brand Pressler hired Canadian Pina Ferlisi as executive vice president of product design in March 2003 to define the division’s style aesthetic. Before joining Gap, Inc., Ferlisi worked at Perry Ellis, Tommy Hilfiger, and Theory; she also helped launch the successful Marc by Marc Jacobs line. Her Gap design team was located in New York City and included Vice President of Women’s Design Louise Trotter, who formerly worked at Calvin Klein, and Vice President of Accessories Design Emma Hill, who previously held a similar post at Marc Jacobs. Both Trotter and Hill hailed from the U.K. Scores of consumer and employee insights indicated that female Gap customers felt that the brand’s offerings were too androgynous and boxy. Hence, Ferlisi made the women’s lines more feminine and focused on fabric and fit. Banana Republic For years, Banana Republic had a reputation of being “a purveyor of chic basics—casual office wear in black or beige”27—i.e., an upscale Gap. However, under the direction of President Marka Hansen, the division focused on making its product assortment more fashionable and trendy, minimizing the overlap between Gap and Banana, and catering to 25- to 30-year-old professionals . Hansen explained, “What’s the hook or differentiation? . . . It’s an affordable, covetable luxury . . . . We’re bringing fashion to a wider audience. Old Navy Under President Jenny Ming, Old Navy continued its focus on families, rolling out underwear, maternity, and infant lines to raise margins.32 The division expanded to Canada in Pressler’s first year as CEO and it targeted Hispanics with its first Spanish television spot at the end of 2003. The company’s localization strategy was tested in select Old Navy stores in 2004, and the company planned to extend the program to all Old Navy outlets in 2005. Forth & Towne Gap, Inc. established five test stores for Forth & Towne in Chicago and New York by fall 2005. Under Gary Muto’s leadership, the firm positioned Forth & Towne to appeal to women aged 35– 50. Gap Online Toby Lenk, a 1987 Harvard MBA, headed the company’s online division, Gap, Inc. Direct. In 2004, Gap, Inc. was the largest U.S. online apparel retailer with sales of over $500 million. It was “redesign[ing] and rebuild[ing] all of [its] websites from the ground up” to enhance visitors’ online shopping and to improve online and in-store integration.47 Lenk noted that 35% of the company’s Web site visitors were pre-shoppers preparing for store visits, and 13% of those who entered a Gap, Inc. store had visited the store’s online site beforehand. The firm’s new e-commerce platform would allow the sites to take back orders and preorders. Lenk explained, “This means we will never have to walk a sale on a basic item, and at the same time it will allow us to run our basic inventory much tighter.”48 The company planned to have most of the Web site enhancements completed by the 2005 holiday season. Marketing Along with reworking Gap’s main brands, Pressler also overhauled Gap’s public image and publically positioned its divisions as lifestyle brands. The CEO remarked, “We need to bring more theatrics, storytelling and consistency [to retail]. If you can’t tell me what a Gap dinner party, Banana Republic car or Old Navy vacation looks like, then we haven’t built our stories.”49 Pressler had also been focused on differentiating the brands and “upgrading the marketing functions at all of Gap’s brands, including the hires of new head marketers at all three units.”50 Recent Gap-brand TV advertising featured actors and singers. The company paid 40-year-old actress Sarah Jessica Parker, former Sex and the City star, $38 million to appear in television and print ads for three seasons during 2004–2005. It replaced Parker with 17-year-old British soul singer Joss Stone as its Gap spokes-model in the summer of 2005.51 In an effort to tout its “vastly expanded variety of fits” in jeans, the company planned to use more nontraditional types of advertising—i.e., “guerrilla marketing and grassroots tactics,” according to Jeff Jones, executive vice president of marketing at Gap. After lackluster results in 2005 and six consecutive quarters of declining same-store sales, Pressler pointed to 2006 as a key year to prove Gap’s recovery and justify his rebranding efforts.60 Pressler noted, “We are acting with a tremendous sense of urgency to win back customers.”61 Pressler also increased the annual cash dividend 78% for 2006 and the board authorized a further $500 million for a share repurchase program, $250 of which would be repurchased in Q1 and Q2 of 2006. Fisher: Interim CEO, 2007 Although Fisher was interim CEO for less than a year, he made a number of moves that undid much of Pressler’s previous work. Less than a week after firing Pressler, he cut many of Pressler’s hires from Disney. Cynthia Harriss, the president of Gap U.S., was replaced by Marka Hansen, the previous president of Banana Republic and an employee since 1987. Fisher also closed all Forth & Towne stores by the end of June, taking a pretax charge of $40 million.67 Although Forth & Towne has been open since 2005, financials were never disclosed for the brand. Fisher also began to reduce Gap’s workforce to bring down expenses, cutting a “relatively small percentage” of the 150,000 workers. Glenn Murphy: 2007-2012 On July 26, 2007, Gap appointed Glen Murphy, as the new CEO. Since 2001, he had been the CEO of Shoppers Drug Mart, a Canadian drugstore chain. Murphy’s first major move as CEO was to cut expenses and control inventory discounting. Quarter three profit for 2007 lifted 26% due to lower marketing spending and better product margins. In 2008, Spain’s Inditex overtook Gap, Inc. as the world’s largest specialty apparel retailer, reaching $3.3 billion in sales for the first quarter of 2008 compared to Gap’s $3.25 billion.86 With over 200 designers and rapid supply chains that could produce and stock hot items within weeks. Problems returned in 2011. Sales remained steady at $14.5 billion, but operating profits fell 27% to $1.4 billion. Murphy hired former J. Crew President, Tracy Gardner, to consult with the Gap brand. Gap announced plans to shut more than one fifth of its North American stores over the next two years and aimed to shrink the U.S. store base to 700 by the end of 2013.91 Murphy noted that China was Gap’s biggest market for further growth. However, by the end of 2012, Murphy’s strategy appeared to be working. Sales lifted 8% to $15.6 billion, a six-year high, and operating profit recovered to $1.9 billion. Store closings lifted sales per store in the North American Gap to $3.7 million (from a low of $3.3 million in 2009) and comparable store sales were strongly positive for all of Gap’s North American divisions. Gap had also made significant steps toward streamlining its production and engaging more closely with trending fashions. By 2012, Gap had cut its lead time from more than nine months in the early 2000s to less than four months for key items.96 Across all lines, production time had been cut by nearly one third. 97 In January Gap acquired Intermix Inc. for $130 million, which promised expansion into the luxury market as well as greater access to of-the-moment fashion pieces. Although Intermix didn’t manufacture its own clothing, it has established relationships with a variety of high street designers. What else could Murphy do to restore Gap’s leading position in fashion retailing? Would Murphy’s international and online focus be enough to sustain this turnaround?
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What is the case about?
What are the important events that occurred in the case?
What can we learn from reading the case?
What advice do you have for the leaders in the case and/or company in the case?
In: Finance
Item 1
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Many students graduate from college not knowing what they want to do with their lives. We propose that students should be encouraged to think about life goals (not just career goals) from an early age and be encouraged to be constantly on the lookout for better goals. References: |
Unfortunately, I was not encouraged to think about life goals (not just career goals) from an early age or encouraged to be on the lookout for better goals (Reigeluth et al., 2008, p.34). Instead, my parents and teachers seemed to care more about trivial details like showing up to class on time. References: |
Which of the following is true for the Student Version above?
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Obviously, it is vitally important in the war of attrition that individuals should give no inkling of when they are going to give up. Anybody who betrayed, by the merest flicker of a whisker, that he was beginning to think of throwing in the sponge, would be at an instant disadvantage. References: |
In the game of survival between individuals in nature, indicating in any way that tossing in the towel is being seriously considered can be exploited by an adversary (Dawkins, 1989). |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 3
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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We shall take the simpleminded view that a theory is just a model of the universe, or a restricted part of it, and a set of rules that relate quantities in the model to observations that we make. It exists only in our minds and does not have any other reality (whatever that might mean). A theory is a good theory if it satisfies two requirements. It must accurately describe a large class of observations on the basis of a model that contains only a few arbitrary elements, and it must make definite predictions about the results of future observations. References: |
A theory can be thought to exist only in our brains and lack any other form of tangible reality. This does not mean that theories are just fleeting thoughts, since they are comprised of a specific model of how things work and rules that associate model attributes to what we observe in the universe. |
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In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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There is a desperate need for theorists and researchers to generate and refine a new breed of learning-focused instructional design theories that help educators and trainers to meet those needs, (i.e., that focus on learning and that foster development of initiative, teamwork, thinking skills, and diversity). The health of instructional-design theory also depends on its ability to involve stakeholders in the design process. Reference 1: Original Source Material 2
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Driscoll (2000) defines instruction broadly as "any deliberate arrangement of events to facilitate a learner's acquisition of some goal" (p. 25). In order to increase the effectiveness of instruction, there is a critical need for the creation and refinement of instructional design theories to aid those who seek to promote learning. According to Reigeluth (1999), "The health of instructional-design theory also depends on its ability to involve stakeholders in the design process" (p. 27). References: Reigeluth, C. M. (1999). What is instructional-design theory and how is it changing? In C. M. Reigeluth (Ed.), Instructional-design theories and models: A new paradigm of instructional theory(Vol. II, pp. 5-29). Mahwah, NJ: Lawrence Erlbaum Associates. |
Which of the following is true for the Student Version above?
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Paraphrasing plagiarism
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In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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The philosophical position known as constructivism views knowledge as a human construction. The various perspectives within constructivism are based on the premise that knowledge is not part of an objective, external reality that is separate from the individual. Instead, human knowledge, whether the bodies of content in public disciplines (such as mathematics or sociology) or knowledge of the individual learner, is a human construction. References: |
Does knowledge exist outside of, or separate from, the individual who knows? Constructivists hold that human knowledge, whether the bodies of content in public disciplines (such as mathematics or sociology) or knowledge of the individual learner, is a human construction (Gredler, 2001).
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Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
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Item 6
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Pei is popularly known for the controversy surrounding his Grand Louvre Pyramid (1988), constructed in the courtyard of the Louvre (fig. 25.21). The Pyramid deliberately turns the tradition and concept of pyramid inside out. A pyramid is supposed to be solid, dark, and solitary--a mesmerizing symbol of the exotic world beyond the streets and cultures of Europe. References: |
We saw one of the highlights of the architectural tour of Paris as we approached the Louvre. The guide told us that Pei's Grand Louvre Pyramid deliberately turns the tradition and concept of pyramid inside out. When we got off the bus we were able to get a closer look at the glass pyramid and what was below it. |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 7
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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As a further example, APT queries and their results may be used to form rules for expert systems that become part of an intelligent computer-based instructional system. Such a system theoretically can optimize student learning by recommending instructional sequences (i.e., temporal patterns) that have high probabilities of resulting in student mastery. In other words, APT-based decision making by a computer program can provide an empirical foundation for artificial intelligence. References: |
One way that learning can be personalized is through the use of computers to aid in "recommending instructional sequences (i.e., temporal patterns) that have high probabilities of resulting in student mastery" (Frick, 1990, p. 202). However, the ability for computers to make appropriate decisions about instructional strategies is limited, in part, by the quality of information they have access to. References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
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But what are reasonable outcomes of the influence of global processes on education? While the question of how global processes influence all aspects of education (and who controls these forces) is multidimensional and not completely testable, there appear to be some theories of globalization as it relates to education that can be empirically examined. References: |
The authors are not alone in asking “what are reasonable outcomes of the influence of global processes on education” (p.138). In fact, this same question provides the basis for the discussion that follows. |
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Suppose you study a group of successful companies and you find that they emphasize customer focus, or quality improvement, or empowerment; how do you know that you haven't merely discovered the management practice equivalent of having buildings? How do you know that you've discovered something that distinguishes the successful companies from other companies? You don't know. You can't know--not unless you have a control set, a comparison group. References: |
Attributes of rigorous research can be shared across subjects of study. For example, Collins and Porras (2002) highlight the importance of having a control group when comparing companies in any effort to identify what specific company characteristics are able to distinguish the successful from the ordinary. References: |
Which of the following is true for the Student Version above?
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Merck, in fact, epitomizes the ideological nature--the pragmatic idealism--of highly visionary companies. Our research showed that a fundamental element in the "ticking clock" of a visionary company is a core ideology--core values and a sense of purpose beyond just making money--that guides and inspires people throughout the organization and remains relatively fixed for long periods of time. References: |
Several factors can contribute to long-term organizational success. One is the establishment of a core ideology that Collins and Porras (2002) describe as "core values and sense of purpose beyond just making money" (p. 48). Also, the importance of a visionary leader that guides and inspires people throughout the organization and remains relatively fixed for long periods of time is hard to over emphasize. References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
In: Psychology
Case Study: Your Star Salesperson Lied. Should He Get a Second Chance?
KANA’S HOME, THURSDAY NIGHT
Kana Kapoor rarely checked Facebook. As CEO of one of the largest pharmaceutical-marketing firms in Western India, he didn’t have time for social media. But right now, he needed to log on. He searched for the doctor’s name—Parasaran Srinivasan—and recognized the first picture that popped up. Just as he’d thought, they’d gone to university together in Mumbai. Looking at his old classmate’s page, he groaned. The pictures of Parasaran at a recent World Cup party confirmed that one of Novacib Labs’ top salespeople had falsified his sales report. Now he had to decide what to do about it.
NOVACIB HQ, THAT MORNING Surprising News
Everyone at Novacib knew Kana hated getting emails with that little red exclamation mark. So when he saw both the red mark and the word “URGENT” in his in-box, his stomach dropped. The email was from Armina Pillai, Novacib’s regional sales manager in the Mumbai office. She’d kept her message short: “Need your advice on a potential ethical breach.” Kana canceled his next meeting and called her mobile. “Tell me what’s going on,” he said when she picked up. “I’m afraid we have an issue with one of our sales reports,” Armina said carefully. “What kind of issue?” “It seems that Dave may have intentionally falsified some information about his customer calls.” “Dave?” Kana made no attempt to hide his surprise. Dave Madhav was one of Novacib’s best salespeople. He routinely exceeded his targets by 10% to 20% and had earned the company’s top commission prize three times in the past five years. And he was a generous colleague. He often took new salespeople under his wing, sharing sales tactics and handing off easy customers. There was no doubt that the company’s targets were ambitious. Sales reps were required to meet with a minimum of 10 physicians and four retail pharmacies a day, allocating that time according to the potential of the target: 50% to platinum-class customers, 30% to gold, and 20% to silver. The regional sales managers worked closely with the reps to coach and support them— 2 but Dave rarely needed Armina’s help. In fact, he often served as a mentor to his more junior colleagues. “Could there be some mistake?” Kana asked. “It’s possible. But I know how seriously you take ethical issues. I wanted to bring this to your attention right away.” Five years earlier, when Kana had taken the helm at Novacib Labs, its founder and outgoing CEO had given him a mandate: grow the company by 40% and ensure that it remains the market leader. New competitors were popping up every day, vying to capitalize on the explosive growth in the Indian pharma industry. Kana knew that to accomplish his goals, he needed to be laserfocused on strategy. And by all accounts, he’d been successful. During his tenure, the company’s portfolio had grown from 22 brands to 46, and from 10 sales territories to most of Western India. That success, he believed, rested on Novacib’s new positioning—to customers and employees— as “the ethical pharmaceutical-marketing company.” Amid growing concerns that similar firms were bribing customers or overstating products’ benefits, this stance distinguished Novacib. Kana and his leadership team had even changed the firm’s tagline from “Health for everyone” to “Health with integrity.” Behaving ethically became part of Novacib’s story, and all employees were encouraged to share it, especially during sales calls. And the tagline was more than a marketing slogan to Kana. He’d always prided himself on leading a principled life. Armina was absolutely right that he would be concerned about false reports. To protect its reputation, Novacib had a zero-tolerance policy for ethics violations. But would sacking Dave really be in the best interest of the firm, Kana couldn’t help but wonder? He had always made or exceeded his numbers—and boosted the performance of his colleagues as well. “Kana?” Armina asked. “I’m still here,” he said. “Tell me exactly what happened.” “Something Doesn’t Feel Right” Armina recounted what she’d discovered the evening before. “I was leaving the office last night,” she began, “when I got a text from Dave that said, Baby still sick. Need to give wife a reprieve. I’ll make up the visits next week. Of course, I felt for him. I’d been in his shoes. The baby is just a few weeks old, and neither he nor his wife have slept much. He’s still been hitting his quotas, but he looks exhausted. “I decided to stay at the office to finish up my reports in case I had to cover his sales calls. And as I was looking over his activity, one date stood out: June 21. That was the day Argentina lost to Croatia in the World Cup. 3 “I remember it well, because I had followed the match online. Dates don’t typically stick in my mind, but that day was depressingly memorable, not just because my team lost but also because I watched the game by myself. My family—like most of Mumbai—had skipped work to watch together. I hadn’t wanted to get behind, so I spent the day alone in the office. “I had spoken with Dave the morning of the game, and he mentioned that he was going to watch it. And yet his daily report listed the names of three doctors that he supposedly saw that afternoon. I texted him about the discrepancy—something like Sorry to bother you with baby sick. Can you resend your activity report for the week of June 18? Ten minutes later he emailed me the same information, so I texted again: Are you sure that’s accurate? He sent back a thumbs-up emoji.” She paused. “Go on,” Kana said grimly. “I’m not in the habit of tracking our salespeople’s whereabouts, especially in the case of Dave, who has always been a star performer.Normally, I’d give him the benefit of the doubt, but something didn’t feel right. I looked him up on Twitter and scrolled back to his tweets from June 21. He’d clearly been watching the game—at home. Then I tried one of the doctors on Dave’s report. Same thing: He’d been watching the game, too, not meeting with Dave. That’s when I started to panic.” Kana was starting to panic as well. Trust was essential to the company’s mission, and Dave’s actions were exactly the kind of thing that could undercut Novacib’s culture and reputation and breed resentment among employees. Kana recognized that Novacib was bound to encounter less-than-honest salespeople, but he was still having trouble believing that Dave would be the one to get into trouble first. At the same time, there was no denying his outsize contribution to the success of the firm—and how hard it would be to replace him. Shocked and angry, Kana wondered to himself, How could Dave have done this? NOVACIB HQ, FRIDAY MORNING Now What? The next day, Kana met with Bob Batra, Novacib’s HR director, in his office. They dialed in Armina on speakerphone. “This is bad,” Kana began. “Last night, I confirmed another doctor listed on the report whom Dave couldn’t have met with that afternoon.” “Armina and I had a conference call with him after she spoke with you,” Bob said. “We asked him about the report, and he said he had met with the doctors he listed—but not on June 21. He all but admitted that he lied. I’m not seeing any option other than letting him go.” “I don’t understand why he didn’t tell anyone he was struggling,” said Kana. “He’s the first one to help his colleagues out; people would have jumped at the chance to return the favor.” 4 “It’s definitely out of character for him,” Armina. “That’s why I feel strongly that we should issue a warning—especially with his being a new father. After all, he did meet with everyone he said he had. He wasn’t fabricating that.” “But he was altering the dates to meet his daily targets,” Bob countered, leaning toward the speakerphone. “That’s a serious breach, and we have to consider the broader impact of merely giving him a slap on the wrist.” She looked up at Kana. “When you brought me in after the rebranding, you asked me to help you build a culture of ethics and honesty. I’d be failing at my job if I advised you to let a transgression like this go. I recognize the value of Dave to our team, but our motto isn’t ‘Health with occasional integrity.’ We have to always do the right thing.”7 “I agree,” Kana said. “Integrity is our promise to every employee and every customer we interact with. If our people knew we tolerated this behavior after all the ethics training we’ve put them through, we’d look like hypocrites. We’d be hypocrites. And if this ever got out to our customers or the press, it could destroy our reputation.” “But how are we going to look to the rest of the team when we sack their beloved colleague with a newborn at home?” Armina asked. “And he’s such a strong performer! Think of the revenue hit we’d take. Are people actually going to care about three names listed for the wrong day on one weekly report?8 It’s not as if those call targets are tied to his compensation.” Small offenses may seem harmless, but research shows that they can breed problems by desensitizing our brains to the negative emotions related to unethical behavior. “It’s the principle of the thing,” Bob retorted. “And how do we know if this is the first time he’s fudged his reports? How can we trust him going forward? Are you going to check with his customers every week to confirm his reports?” Armina was silent on the line. Kana closed his eyes briefly. He knew she was right that the company would suffer if they fired Dave. He brought in over $250,000 a year, and he had built strong customer relationships that Novacib stood to lose if they sacked him. But Kana couldn’t shake his disappointment in Dave. Bob broke the silence. “You’ve addressed this issue repeatedly in our sales offsites,” she said. “You’ve stated in no uncertain terms that you’d rather salespeople not meet their targets than fake their numbers. If you don’t take action, you’ll damage your credibility. I know it’s painful, but I think it’s time to put your money where your mouth is.” NOVACIB HQ, FRIDAY AFTERNOON A Second Chance? “Thank you so much for the baby gift. Did you get the thank-you note my wife sent?” Dave’s voice sounded tentative on the phone, the small talk forced. 5 Kana had dreaded making the call, but before he reached a decision, he wanted to talk with Dave himself. “I did. Listen, Dave, I don’t want to make this anymore awkward than it needs to be. I just want to hear your side of the story.” Dave repeated what he’d told Armina: that he had met with those doctors, just on different dates. That he shouldn’t have submitted the false report. “I made a big mistake, and I’m sorry. I was feeling the pressure with the new baby. I knew I wasn’t going to hit my targets, and I didn’t want to disappoint anyone.” Kana hated to hear Dave sound so dejected. But part of him still felt betrayed. He reminded himself that Dave could easily find another job, especially since Novacib had no intention of going public with the circumstances if they let him go. But Dave would be devastated nonetheless. “We need accurate data to grow this business, and we’ve been very clear about our ethics policy,” Kana said. “I wish you’d talked to Armina about the pressure.” “I know, and I’d understand if you have to make an example of me. But please believe me that it has never happened before and won’t happen again. Don’t people deserve a second chance?”
Questions:
1. Should Kana fire Dave? Why? Why not? Explain in detail.
2. What options should Kana consider before firing Dave or overlooking the infraction?
3. Should Armina have kept a closer eye on her top performer?
4. What are the ethical implications of checking up on employees by tracking their activity on social media?
5. Do you think zero-tolerance policies result in bad outcomes? Do they force leaders to take action when a better solution could be found? Explain.
In: Operations Management
Keshk, Walied; Lu, Hung‐Yuan Richard; Mande, Vivek (2020). How have US banks adopted the Financial Accounting Standards Board's Level 3 fair value disclosure rules? Accounting & Finance 60, April Supplement S1, 693-727.
1. Read from the beginning until page 701 (hypothesis 3), and the conclusion on page 720. Summarize in your own words (about 100 words).
2. Explain the difference between Levels 1, 2, and 3. Keshk et al (2020) categorize levels 1,2 together, so you are free to do so but are not required. You may cite and reference other sources to answer this question.
3. If you were an auditor, which type of estimate requires more work to audit Levels 1,2 or Level 3? Explain.
Introduction:
This study examines how US banks have complied with the Financial Accounting Standards Board’s (FASB’s) requirements on Level 3 fair value disclosures. There has been a rise in the use of fair values in financial reporting during the past decade. The FASB’s Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, however, provides only principle-based guidance on how fair values should be measured using internal and external information. Under ASC 820, fair values of assets/liabilities are classified into Levels 1, 2 and 3 of the fair value hierarchy.
While Levels 1 and 2 fair values rely on market-based inputs, Level 3 measurements require model-based inputs. As such, Level 3 valuations are regarded as highly subjective and less reliable than other fair values. Firms are, therefore, required to provide more detailed information about the inputs used to calculate Level 3 fair values (ASC 820-10-50-8) and describe the processes in place for obtaining and validating these measurements (ASC 820-10-55-105). To increase their usefulness to investors, quantitative information about the valuation inputs must be presented in a tabular format (ASC 820-10-50-2bbb). In response to users’ concerns that the variability arising from these measurements can have a big impact on financial statements, firms must also disclose qualitatively the sensitivities of fair value measurements to changes in inputs (ASC 820-10-50-2 g). Additionally, to assist users, firms must prepare a table that reconciles the beginning balance of fair values to their ending balances by each level in the hierarchy (ASC 820-10-50-2c). When firms use third-party specialists for developing estimates of fair values, ASC 820 requires a description of the processes in place for evaluating and validating the valuation methodologies and the inputs provided by outside specialists (ASC 820-10-55-105). Compliance with the above rules, however, has proved to be a challenge for many firms (e.g. Ernst & Young 2012). The Securities and Exchange Commission (SEC) routinely issues comment letters pointing out instances of noncompliance and deficiencies in both fair value measurements and related disclosures.1 Significant deficiencies have also been found by the PCAOB in the audits of fair value measurements and disclosures (e.g. Acuitas, Inc., 2016). In many instances, these deficiencies occurred because effective internal controls were not in place in these firms (Ettredge et al., 2011; Acuitas, Inc., 2016). This study examines two research questions.2 First, we investigate the extent of noncompliance with Level 3 fair value disclosures provided by banks about their recurring fair value measurements. We focus on the banking industry because banks hold more financial instruments measured at fair values than do firms in most other industries (Lu and Mande, 2014a). Second, we test whether there are systematic differences between compliant and noncompliant banks. Because fair value measurements and disclosures are complex, we expect that compliance will be a challenge for smaller banks. The work of auditors is also paramount in ensuring that client firms are compliant with fair value disclosure rules. Therefore, we expect compliance in banks to increase as audit quality increases. As audit committees are responsible for the oversight of financial statements, we hypothesise that banks having effective audit committees will be more compliant with financial reporting rules. Finally, we predict that institutional investors, who often are the primary users of fair value information, will be more likely to monitor banks’ disclosure behaviour. Our results show that there is widespread noncompliance with the basic disclosure requirements of ASC 820. Over 40 percent of banks do not disclose the valuation inputs table. Additionally, a majority of banks do not fully discuss the processes used for validating fair value estimates, whether developed internally or obtained from third-party specialists. A majority of banks also do not provide disclosures related to the sensitivities of fair values to changes in valuation inputs. Our results also show that, in support of our hypotheses, noncompliant banks are smaller, have less effective audit committees and internal controls, are associated with lower audit quality and have lower levels of institutional monitoring. By documenting the extent of noncompliance, this study sheds light on the complexity and cost burden associated with fair value reporting mandates. Our results should help audit committees, auditors, regulators and other capital market participants identify more easily banks that are likely to be in violation of fair value reporting rules. We believe that our findings will also be useful to the FASB which is currently engaged in an ‘improvements project’ for simplifying fair value disclosure rules.3 Finally, our theory and findings should be relevant to regulators in the United States, Australia and other countries that have fair value disclosure requirements.4 The rest of this study is organised as follows. Section 2 reviews the literature on disclosure quality and develops our hypotheses. Section 3 presents our sample and empirical model, followed by a discussion of the results in Section 4. Section 5 then concludes the study. 2. Literature review and hypotheses development 2.1. Factors influencing disclosure quality Prior work has extensively examined factors influencing the quantity and type of voluntary disclosures provided by firms to investors. Studies show that firms voluntarily provide additional information when they desire access to capital markets. Firms providing superior disclosures reap benefits in the form of higher share prices, lower bid-ask spreads and lower costs of equity and debt capital (Welker, 1995; Botosan, 1997; Sengupta, 1998). Related literature finds that managers voluntarily disclose good or bad news in a strategic fashion. For example, Einhorn (2007) argues that managers strategically hide good news from their investors in order to lower stock prices prior to option grants. There have been, however, fewer studies examining factors affecting disclosures that are mandatory. Schwartz and Soo (1996) document widespread noncompliance with disclosures about auditor changes in Forms 8-K, especially when the departing auditor is a Non-Big N firm. Ettredge et al. (2011) find that noncompliance in disclosures about auditor changes is positively related to low quality corporate governance. Chen et al. (2015) document noncompliance with disclosure requirements relating to litigation losses mandated under ASC Topic 450, but when the firms are audited by an industry specialist, the authors find that compliance with GAAP rules increases. Research using Australian firms shows similar evidence of noncompliance with mandatory reporting requirements. Mayorga and Sidhu (2012) examine how the largest 20 Australian listed firms comply with disclosure requirements relating to major assumptions and estimation uncertainties associated with the valuation of a firm’s assets and liabilities. Their results show that firms do not fully comply with these requirements, thereby limiting the informativeness of the disclosures. Using a sample of large Australian firms, Gallery et al. (2008) document sizable variation in the quality of mandatory predisclosures about the effects of adopting International Financial Reporting Standards (AIFRS). Among 50 large Australian firms with goodwill on their books, Carlin and Finch (2010) find that more than 10 percent of them failed to provide the discount rate used for estimating the fair value of goodwill. Failure to provide mandatory disclosures can have significant negative consequences for firms in the form of penalties, lawsuits and stock price declines (Ettredge et al., 2011). Although we should not expect that firms will behave strategically in their noncompliance, there is some evidence that they do. Alexander et al. (2011), for example, find that firms do not disclose the effects of a new accounting standard under Staff Accounting Bulletin (SAB) 74 if the disclosures reveal bad news. Along the same lines, Ettredge et al. (2011) find that firms behave opportunistically with regard to disclosing bad news about auditor changes noting that it is ‘surprising that managers are willing to risk the disapproval of the SEC by partial compliance with 8-K regulation’. 2.2. Noncompliance with fair value disclosure requirements There is ample anecdotal evidence that firms face challenges in implementing fair value reporting requirements. Ernst & Young (EY) (2012), for example, document pervasive noncompliance with fair value disclosures concerning: presentation of quantitative Level 3 inputs, disclosures of those inputs and valuation techniques, levels of disaggregation at which fair value information is presented and inputs developed by third parties. In its study, EY surveys Level 3 fair value disclosures of 60 companies in 2012. However, the small size of the sample (only 14 banks are included) limits their study’s usefulness. EY also does not examine what firm characteristics are associated with fair value noncompliance. SEC comment letters also provide evidence of noncompliance with fair value disclosure rules. The SEC’s focus has mainly been on disclosures about Level 3 inputs mandated by ASU 2011-04 because of the high degree of judgment required from management in developing these inputs. The recent comment letters have requested that companies increase ‘granularity and transparency’ of disclosures about Level 3 inputs and provide additional information where the disclosures are incomplete or omitted.5 Additionally, the role of auditors in clients’ noncompliance with fair value rules has come under PCAOB scrutiny. In its inspections, the PCAOB has found that auditors routinely fail to adequately test clients’ controls around fair value disclosures and measurements, fail to identify weaknesses when qualified personnel are not used in the valuations, place too much reliance on third-party work and fail to adequately test the classification in the fair value hierarchy.6 There have only been a few academic studies examining noncompliance with fair value rules. Lu and Mande (2014a) examine banks’ compliance with one requirement of the FASB’s ASU 2010-06–Improving Disclosures about Fair Value Measurements. Prior to ASU 2010-06, firms were allowed to present fair value information in the notes by category of investments. ASU 2010-06, however, requires presentation by class of investments which involves a finer partitioning of fair value information.7 Using data from the first quarter of 2010, Lu and Mande report that 23 percent of the banks in their sample failed to provide fair value information disaggregated by class of investment. In a related study, Lu and Mande (2014b) find that fair value information is more value relevant when it is disaggregated by class of investment. In contrast to Lu and Mande, we mainly examine banks’ compliance with Level 3 fair value disclosure requirements included in the FASB’s ASU 2011- 04–Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. Disclosures mandated by ASU 2011- 04 are significantly more complex than those mandated by ASU 2010-06 (see Appendix I for a comparison). Compliance with ASU 2010-06 in Lu and Mande’s study, only required firms to present information that was readily available to them, albeit in a ‘finer’ fashion. Not surprisingly, within a year of ASU 2010-06 going into effect, virtually all banks were fully compliant with the requirement to disaggregate fair values.8 Therefore, Lu and Mande (2014a) document that there was only initial noncompliance with one of the requirements of ASU 2010-06. The reporting requirements of ASU 2011-04, however, are significantly more onerous for firms. Not only does it require significant changes in how data are organised (e.g. presentation in tables), but firms are tasked with the collection of new data (e.g. information about valuation inputs from third parties) and are required to perform new analyses (e.g. sensitivity of changes in fair values to changes in inputs).
Conclusion:
Our study examines compliance with Level 3 fair value disclosures provided by banks about their recurring measurements of financial instruments. Level 3 valuations are considered to be the most subjective and complex fair value measurements provided by firms on their financial statements. To assist users, the FASB, therefore, requires firms to provide detailed information about inputs and the validation of the fair value measurements. Furthermore, all quantitative information about Level 3 fair value measurements must be presented in a tabular format. The contribution of our study is twofold. First, we document the extent of noncompliance with fair value disclosure rules. Second, we study whether noncompliant banks are smaller and associated with lower levels of monitoring. Our results show that banks are compliant in providing fair values by classes of investments. However, there is widespread noncompliance with other basic fair value disclosure rules. Over 40 percent of banks do not provide an ‘inputs’ table while a majority of banks do not fully discuss the sensitivity of fair value estimates or how these estimates, whether developed internally or through third party specialists, are validated. These findings should concern the FASB because they show the presence of noncompliance with ‘first order’ requirements of ASC 820. We also noticed anecdotally other forms of noncompliance with regard to the information presented in the tables. The rates of noncompliance, therefore, are higher than those documented in this study. We also find that smaller banks face greater challenges in complying with fair value disclosure rules. Firms that have ineffective internal controls and lower levels of institutional monitoring are also less compliant. Finally, this study shows, albeit weakly, that effective audit committees and higher audit quality are associated with greater compliance. Our results should be of use to the SEC and PCAOB who have a great interest in ensuring compliance with the requirements of ASC 820. Our study should also benefit the FASB and other standard setters as they continue their work on improving the quality of fair value disclosures provided to investors.
In: Accounting
Pain “Pain,” an excerpt from the book Reaching Up for Manhood, draws on the writer’s training and experience as a psychologist. He uses the narrative to explain the power of memory in our lives, especially memory of painful experiences. His particular focus is on boys and on the ways, they are taught to repress the wounds caused by painful experiences. Nonetheless, it should be easy for readers to apply his insights to the experiences of girls.
1. Boys are taught to suffer their wounds in silence. To pretend that it doesn’t hurt, outside or inside. So many of them carry the scars of childhood into adulthood, never having come to grips with the pain, the anger, the fear. And that pain can change boys and bring doubts into their lives, though more often than not they have no idea where those doubts come from. Pain can make you afraid to love or cause you to doubt the safety of the ground you walk on. I know from my own experience that some pain changes us forever.
2. It all started because there was no grass. Actually, there was grass, you just couldn’t walk on it.
3. In the late fifties and early sixties, the projects were places people moved to get away from tenement buildings like mine. We couldn’t move into the projects because my mother was a single parent. Today most projects are crammed full of single parents, but when I was a child your application for the projects was automatically rejected if that was your situation. The projects were places for people on the way up. They had elevators, they were well maintained, and they had grass surrounding them. Grass like we had never seen before. The kind of grass that was like walking on carpet. Grass that yelled out to little girls and boys to run and tumble and do cartwheels and roll around on it. There was just one problem, it was off limits to people. All the projects had signs that said “Keep Off the Grass.” And there were men keeping their eyes open for children who dared even think of crossing the single-link chain that enclosed it. The projects didn’t literally have the only grass we could find in the Bronx. Crotona Park, Pelham Bay Park, and Van Cortland Park were available to us. But the grass in those parks was a sparse covering for dirt, rocks, and twigs. You would never think about rolling around in that grass, because if you did you’d likely be rolling in dog excrement or over a hard rock.
4. There was one other place where we found grass in our neighborhood. Real grass. Lawn-like grass. It was in the side yard of a small church that was on the corner of Union Avenue and Home Street. The church was small and only open on Sundays. The yard and its precious grass were enclosed by a four-foot-high fence. We were not allowed in the yard by the pastor of the church.
5. Occasionally we would sneak in to retrieve a small pink Spaulding ball that had gone off course during a game of stickball or punch ball, but if we were seen climbing the fence there would be a scene, with screams, yells, and threats to tell our parents. So although we often looked at that soft grass with longing, the churchyard was off limits.
6. It would have stayed off limits if it had not been for football. Football came into my life one fall when I was nine years old, and I played it every fall for the rest of my childhood and adolescence. But football in the inner city looked very different than football played other places. The sewer manhole covers were the end zones. Anywhere in the street was legal playing territory, but not the sidewalk. There could be no tackling on pavement, so the game was called two-hand touch. If you touched an opponent with both hands, play had to stop. The quarterback called colorful plays: “Okay now. David, you go right in front of the blue Chevy. I’m gonna fake it to you. Geoff, see the black Ford on the right? No, don’t look, stupid—they’re gonna know our play. You go there, stop, then cross over toward William’s stoop. I’ll look for you short. Richard, go to the first sewer and turn around and stop. I’ll pump it to you, go long, Geoff, you hike on three. Ready! Break!”
7. All we needed was grass. All our eyes were drawn to the churchyard. A decision had to be made. Rory was the first to bring it up. “We should sneak into the churchyard and play tackle.”
8. We all walked over to Home Street and, out of sight of front windows, climbed over the fence and walked onto the grass. A thick carpet of grass that felt like falling on a mattress. We were in heaven.
9. Football in the churchyard was everything we had imagined. We could finally block and tackle and not worry about falling on the hard concrete or asphalt streets. We didn’t have to worry about cars coming down the block the way we did when we played two-hand touch. And because we were able to tackle, we could have running plays. We loved it. We played for hours on end.
10. There was one problem with our football field, which was about thirty yards long and fifteen yards wide: at the far end there was a built-in barbecue pit, right in the middle of the end zone. If we were running with the football, or going out for a pass, we had to avoid the barbecue pit with its metal rods along the top, set into its concrete sides. We knew that no matter what you were doing when in that area of the yard, you had to keep one eye on the barbecue pit. To run into its concrete sides—or, even worse, the metal bars—would be very painful and dangerous.
11. I was fast and crafty. I loved to play split end on the offense. I could fake out the other kids and get free to catch the ball. I had one problem, though—I hadn’t mastered catching a football thrown over my head. To do this you have to lean your head back and watch as the football descends into your hands. Keep your eye on the ball, that’s the trick to catching one over the shoulder. We all wanted to go deep for “the bomb”—a ball thrown as far as possible, where a receiver’s job is to run full speed and catch it without-stretched hands. It took me forever to learn to concentrate on the football, with my head back as far as it would go, while running full speed. But finally, I mastered it. I was now a truly dangerous receiver. If you played too far away from me I could catch the ball short, and if you came too close I could run right by the slower boys and catch the bomb.
12. The move I did on Ned was picture perfect. I ran ten yards, turned around, and faced Walter. He pumped the ball to me. I felt Ned take a step forward, going for the fake as I turned and ran right by him. Walter launched the bomb. As the football left his hand I stopped looking over my shoulder at him and started my sprint to the end zone. After running ten yards I tilted my head back and looked up at the bright blue fall sky. Nothing. I looked forward again and ran harder, then looked up again. There it was, the brown leather football falling in a perfect arc toward the earth, toward where I would be in three seconds, toward the winning touchdown.
13. And then pain. The bar of the barbecue pit caught me in midstride in the middle of my shin. I went down in a flurry of ashes, legs and arms flying every which way. The pain was all-enveloping. I grabbed my leg above and below where it had hit; I couldn’t bear to touch the place where it had slammed into the bar. The pain was too much. I lay flat on the ground, trying to cry out. I could only make a humming sound deep in the back of my throat. My friends gathered around and I tried to act like a big boy, the way I had been taught. I tried not to cry. Then the pain consumed me and I couldn’t see any of my friends anymore. I howled and then cried and then howled some more. The boys saw the blood seeping through my dungarees and my brother John said, “Let me see. Be still. Let me see.” He rolled my pants leg up to my knee to look at the damage. All the other boys who had been playing or watching were in a circle around me. They all grimaced and turned away. I knew it was bad then, and I howled louder.
14. Catching the metal bar in full stride with my shin had crushed a quarter-sized hole in my leg. The skin was missing and even to this day I can feel the indentation in my shinbone where the bar gouged out a small piece of bone. I was off my feet for a few days and it took about two weeks for my shin to heal completely. Still, I was at the age where sports and friends meant everything to me. I couldn’t wait to play football in the churchyard again, but I was a much more cautious receiver than before.
15. Several years later, when I finished the ninth grade at a junior high school in the South Bronx and was preparing to go to high school, I knew that my life had reached a critical juncture. My high school prospects were grim. I didn’t pass the test to get into the Bronx High School of Science (I was more interested in girls than prep work), so my choices were either Morris High School or Clinton High School. Both of these were poor academically and suffered from a high incidence of violence. I asked my mother if I could stay with my grandparents in the house they had just built in Wyandanch, a quiet, mostly African-American town on Long Island. She agreed, and they agreed, so I went there for my three years of high school.
16. That first year I went out for the junior varsity football team at Wyandanch High and played football as a receiver. I was a good receiver. The years of faking out kids on the narrow streets of the Bronx made me so deceptive that I couldn’t be covered in the wide-open area of a real football field. But I had one problem—I couldn’t catch the bomb. My coach would scream at me after the ball had slipped through my fingers or bounced off my hands. “Geoff! What’s the matter with you? Concentrate, dang it! Concentrate!” I couldn’t. No matter how I tried to focus on the ball coming down out of the sky, at the last minute I would have to look down. To make sure the ground wasn’t playing tricks on me. No hidden booby traps. What happened in the churchyard would flash into my mind and even though I knew I was in a wide-open field, I’d have to glance down at the ground. I never made it as a receiver in high school. I finished my career as quarterback. Better to be looking at your opponent, knowing he wanted to tackle you, sometimes even getting hit without seeing it coming, but at least being aware of that possibility. Never again falling into the trap of thinking you were safe, running free, only you and the sky and a brown leather ball dropping from it.
17. Boys are conditioned not to let on that it hurts, never to say, “I’m still scared.” I’ve written here only about physical trauma, but every day in my work I deal with boys undergoing almost unthinkable mental trauma from violence or drug abuse in the home or carrying emotional scars from physical abuse or unloving parents. I have come to see that in teaching boys to deny their own pain we inadvertently teach them to deny the pain of others. I believe this is one of the reasons so many men become physically abusive to those they supposedly love. Pain suffered early in life often becomes the wellspring from which rage and anger flow, emotions that can come flooding over the banks of restraint and reason, often drowning those unlucky enough to get caught in their way. We have done our boys an injustice by not helping them to acknowledge their pain. We must remember to tell them “I know it hurts. Come let me hold you. I’ll hold you until it stops. And if you find out that the hurt comes back, I’ll hold you again. I’ll hold you until you’re healed.”
18. Boys are taught by coaches to play with pain. They are told by parents that they shouldn’t cry. They watch their heroes on the big screen getting punched and kicked and shot, and while these heroes might groan and yell, they never cry. And even some of us who should know better don’t go out of our way to make sure our boys know about our pain and tears, and how we have healed ourselves. By sharing this we can give boys models for their own healing and recovery.
19. Even after I was grown I believed that ignoring pain was part of learning to be a man, that I could get over hurt by simply willing it away. I had forgotten that when I was young I couldn’t run in an open field without looking down, that with no one to talk to me about healing, I spent too many years unable to trust the ground beneath my feet.
EXPOSITORY TECHNIQUES
1. Which paragraphs in the essay are devoted primarily to retelling events? Which focus on analyzing the events and generalizing about behavior?
2. Why do you think the writer waited until the end of the essay to offer an extended discussion of the psychological consequences of painful events? Where else in the essay might he have undertaken such an explanation?
3. Discuss the strategies the writer employs to create transitions between the paragraphs in the following pairs: 1 and 2, 5 and 6, 6 and 7, 12 and 13, and 17 and 18.
In: Psychology
1.What is qualitative abnormality?
a. abnormal symptoms for which statistical norms are established b. a major deviation from key social norms
c. a consistent state of frustration and helplessness d. symptoms diagnosed in women e. symptoms of high quality
2. In the abbreviation, DSM, what does the “SM”stand for?
a. scientific method b. solo-micro c. statistical manual d. serious manic e. statistical manic-depressive
3. Your 22-year-old female patient displays symptoms of persistent anxiety for two weeks. As a clinical psychologist, how would you diagnose these symptoms?
a. Generalized Anxiety Disorder b. no diagnosis: these symptoms must be present for a longer period
c. phobia of the Othertype d. hypomanic episode with panic e. Phobia with anxiety symptoms
4. How many editions of the Diagnostic Statistical Manual of Mental Disorders have been released?
a. 3 b. 4 c. 5 d. 6 e. 7
5. A newly arrived male patient is extremely reluctant to undergo a simple procedure that requires a small incision (cut) on his neck; he fainted when the nurse showed him a digital picture of the proposed operation. If you know that this patient has a long history of phobic reactions, what type of phobia are you dealing with right now?
a. neck-and-face phobia b. nurse/doctor phobia c. irresponsible pain fear
d. situational/medical/operational phobia e. blood/injection/injury phobia
6. Why have there been several editions of DSM?
a. because the law requires the change every 3 years b. because of new research and new evidence about disorders c. because the law requires the change every 5 years d. because different sates use different editions
e. because some editions are designed for psychiatrists and others are for psychologists
7.Which three diagnostic categories are no longer in use in the United States?
a. phobia, mania, and panic disorder b. hysteria, mania, and panic disorder c. hysteria, madness, and neurosis
d. obsessive-compulsive disorder, phobia, and madness e. neurosis, phobia, and panic disorder
8. What is the difference between obsession and compulsions?
a. there is no difference according to DSM
b. obsessions are actions, compulsions are thoughts
c. obsessions are hallucinations, compulsions are delusions
d. compulsions are hallucinations, obsessions are delusions
e. obsessions are ideas, compulsions are behaviors
9. Which of these categories does not belong to the known types of OCD?
a. Cheaters b. Checkers c. Doubters d. Hoarders e. Counters
10. People with this type of OCD accumulate enormous amount of things of relatively low value they do not need to have and will likely never use.
a. storage people b. accumulators c. hoarders d. value jets e. keepers
11. One hundred years ago, the symptom “neurasthenia” meant that:
a. a patient had madness b. a patient developed alcohol addiction c. a patient was healthy
d. a patient had a brain injury e. a patient had a weak nervous system
12. Generalized Anxiety Disorder typically occurs as a response to a:
a. pregnancy b. manic episode c. major depressive episode d. weather change e. life stressor
13. Three major criteria to diagnose mental illness: abnormality, dysfunction and……
a. depression b. illness c. severe dysfunction d. emotional problem e. distress
14. There is a category of phobias called “Other”. What does this category represent?
a. phobias hat are associated with fear of heights b. phobias that are mild and do not require medical attention
c. phobias that do not fit in the basic four categories d. Phobias causing depression
e. phobias in other members of your family
15. Phobias of the animal type are most common in this group:
a. children b. adolescents (16-18) c. young adults (20-25) d. adults (40-55) e. mature adults (60-)
16. What is the clinical-psychological difference between anxiety and fear?
a. fear is common in women, anxiety is common in men
b. fear is common in men, anxiety is common in women
c. fear is specific, anxiety is free-floating
d. fear refers to the future, anxiety refers to the past
e. fear is an emotion, anxiety is a form of depression
17. What is quantitative abnormality?
a. symptoms diagnosed mostly in women
b. a state of unreasonable joy
c. a major deviation from cultural norms
d. symptoms diagnosed mostly in men e. abnormal symptoms for which statistical norms are established
18. Certain symptoms of schizophrenia are called “negative” Why?
a. because these symptoms stand for slowing down and withdrawing b. because these symptoms were described negatively in the media c. because if you call them “positive,” some patients could feel bad d. because these symptoms are associated with violence e. because they are viewed as not good for patients’ future
19.Delusion of grandeurwas discussed in class. What is this delusion about?
a. it is another name for hallucinations b. beliefs about own superpowers and high social status c. beliefs about being an unimportant person d. beliefs in being strong and healthy e. beliefs in being connected with the dead
20. The most common type of hallucinations in patients with symptoms of schizophrenia is:
a. seeing monsters and demons b. hearing voices c. feeling cold d. hearing music e. abdominal pain
21. Why do many people suffering from PTSD start using substances such as alcohol or cocaine?
a. because some doctors prescribe them b. because people who suffer from PTSD are primarily drug users
c. because people believe they do not have other means to reduce their painful symptoms d. because they can be used to treat sleep problems e. because they have hallucinations and delusions
22. Consider a case: an elderly female patient for many years claims she has multiple physical symptoms; in reality, however, she cannot be diagnosed with any specific illness. What will be the name for her condition?
a. pain disorder b. dissociative future c. Attention deficit disorder d. somatization disorder e. dissociative fugue
23. What do most medical professionals think of Multiple Personality Disorder?
a. most consider it valid and serious disorder b. most of them deny its existence c. most specialists say they have never heard of this disorder d. most consider this disorder a form of depressive disorder e. some agree, some disagree that this is a valid disorder
24.Ralf is a 9 year-old boy; he was scared by sound of a thunderstorm in 2015. Nobody was injured and no destruction took place. How likely it is that Ralf, because of this incident, would develop PTSD later in life?
a. very likely b. somewhat likely c. very unlikely
d. almost certainly, he has already developed a stress-related disorder
25.Delusion of communicationwas discussed in class. What is it?
a. it is another name for hallucinations b. beliefs that all journalists are demons c. beliefs in being a communication major d. beliefs in being connected to other people, God, or the Devil e. beliefs about knowing many languages
26. Echolalia or echopraxia are symptoms that are common features of:
a. PTSD b. Autism c. Bipolar Disorder d. delusion of reference e. catatonia
27. Why don’tmost professionals such as firefighters, police officers, and doctors working in emergency rooms develop symptoms of PTSD? a. because they take medication in the morning b. because they take special medication once a week c. because they are on therapy d. because they typically don’t experience intense fear when witnessing traumas e. because they have a genetic resistance to stress and fear
28. Symptoms such as failure to make eye contact, social withdrawal, lack of spoken language, and repetitive behaviors are among major symptoms of which disorder?
a. PTSD b. ADD c. ADHD d. Tourette’s Disorder e. Autistic Disorder
29.What is the third group of symptoms typically identified in Attention Deficit/Hyperactivity Disorder? (The first one is Inattention, the second is Hyperactivity)
a. excessive anxiety b. hallucinations c. motor tics d. obsessions and compulsions e. impulsivity
30. A person witnesses a traumatic event but does notdevelop symptoms of PTSD. How common is this?
a. this is very unusual: the person must develop a stress disorder
b. this is unusual: most people develop a stress disorder under these circumstances
c. this is common: most people in such circumstances don’t develop a stress disorder
d. this is common but only in men e. women almost always develop a stress disorder in such circumstances
31. People who develop schizophrenia fall under the rule of “three thirds”. What is this rule?
a. the rule explains that why women are not diagnosed with this illness b. the rule explains the negative symptoms of this illness c. the rule explains the positive symptoms of this illness d. the rule predicts how many people would likely to recover from illness e. the rule explains that why children are not diagnosed with this illness
32.On this stage of the addiction process, without the substance, the person suffers from pains, anxiety, depression, agitation, sleepiness, anger, or nausea. What is the name of this stage?
a. withdrawal b. panic attack c. tolerance d. degradation e. shame
33. Which is the most common, typical cause of stress?
a. personal health problems b. lack of money c. devotion to a cause d. cultural adjustment e. daily hassles
34.Delusion of reference was discussed in class. What is it?
a. beliefs that a person carries a special and very important knowledge of global significance
b. beliefs that the government wants to kill this person
c. beliefs about the earth being melted from within as a result of global warming
d. beliefs about the ability to predict scores in football and other sports
e. beliefs about knowing many languages
35. Attention Deficit Disorder is different from ADHD. What is the difference?
a. no inattention symptoms in ADHD b. no positive symptoms in ADD c. no negative symptoms in ADD
d. no delusions in ADD e. no hyperactivity symptoms in ADD
36.Conduct disorder is typically diagnosed in:
a. women only b. men only c. criminals d. 60-70 year olds e. children and adolescents
37. What is the probability that a 44-year old woman develops schizophrenia if she has not have symptoms before?
a. about 30% b. about 10% c. about 5% d. about 2% e. about zero
38. A 14-year-old girl has the following symptoms present for more than 3 years: physically cruel to people, deliberately destroyed others' property, often lies to obtain goods or favors, and has run away from home overnight 5 times. What would be your likely diagnosis?
a. manic episode b. conduct disorder c. fighting complex d. gender violent syndrome e. power disorder
39. Is it accurate to say that every person with a serious mental illness is insane? Find the best answer.
a. yes, accurate: any serious mental illness is insanity
b. yes, accurate but only for schizophrenia, which is the other word for insanity
c. accurate only for personality disorders, which cause insanity
d. not accurate because insanity stands for a person’s violent behavior
e. not accurate: insanity only means that a person is not legally responsible for his or her action
40. Your patient complains about persistent preoccupation with fears of having a serious disease; you learn, however, that this patient’s belief is based on the person’s misinterpretation of her physical symptoms. What would be your diagnosis?
a. hypocrisy b. hypochondriasis c. conversion disorder d. dissociative fugue e. pain disorder
41. A few decades ago many doctors combined cold baths, laxatives, and bloodletting to treat their mental patients. What was the perceived goal of such treatments?
a. to demoralize the patient b. to clean the body of harmful elements c. to research the placebo effect
d. to help patient lose weight e. to punish patients for their misbehavior
42. According to lectures, treating and preventing of suicidal behaviors should be based on at least three general strategies: reducing the intense psychological pain and suffering; expanding the constricted view by helping the individual to see options. What is the third strategy?
a. giving a person money to pay the bills b. invite a relative from another town or city to come and live with this person
c. encouraging a person to pull back from a new self-destructive act d. to suggest a person to change eating habits
e. encouraging a person to get a job
43. As a therapist, you explain to your client that her worries are irrational and she must adopt a more realistic view of her life. What kind of a therapy are you using in this case?
a. behavioral b. systematic relaxation c. electro-convulsive d. biomedical e. cognitive
44.Dr. Drew Pinsky developed a multi-step program to fight addictive behavior? His therapy is:
a. a combination of cognitive and behavior therapy
b. a kind of psychoanalytic therapy
c. a type of electroconvulsive treatment
d. a combination of psychoanalysis and electroconvulsive treatment
e. a combination of psychoanalysis and spiritual healing
45. What is the stigma of mental illness?
a. a type of behavioral therapy b. a negative view of psychological disorders
c. a gender bias in diagnosing mental illness d. a type of cognitive therapy
e. any reserac0based knowledge of mental illness
46.The famous “drug revolution” in treatment of mental illness took place in the:
a. 2001-2003 b. 1990s c. 1980s d. 1970s e. 1960s
47. “The use of spiritual healingcould help your patients in their better understanding of their lives, the importance of positive thinking, hope, compassion, and good will.Which therapeutic approach does this statement reflect?” a. behavior b. cognitive c. psychoanalytic d. biomedical e. none of the above
48. What psychotherapy?
a. any form of medical treatment b. a type of verbal interaction between a clinician and his or her client
c. a form of medical care to treat most violent patients d. a form of medical care to treat emotional problems
e. a type of treatment involving prescribed drugs
49. The Phineas Cage case linked psychological dysfunction with:
a. poverty b. brain injury c. abuse d. immigration e. genetic factors
50. According to psychoanalysis, what triggers initial anxiety in people with serious emotional problems?
a. pregnancy in women and maturity in boys
b. losing money or a job
c. a traumatic event during childhood
d. traumatic event during adulthood
e. inability to find a good, reliable friend
In: Psychology
For the following case study address the questions in details (no bullets)
1- What is the nature of the product quality problem faced by Mattel?
2- What organizational practices of Mattel contributed to the problem?
3 What can Mattel do to enhance product quality?
4- Which toys should be recalled? What should the recall strategy be?
MATTEL AND THE TOY RECALLS (A)1
Jay Leno aptly reflected the mood of U.S. consumers during the summer of 2007. Many Chinese-made goods, such as pet food, toothpaste, seafood, and tires, had been recalled in recent weeks. These recalls began lo severely erode the confidence of U.S. consumers in Chinese-made goods. On July 30, 2007, the senior executive team of Mattel, under the leadership of Bob Eckert, CEO, received reports that the surface paint on the Sarge Cars made in China contained lead in excess of U.S. federal regulations .2 It was certainly not good news for Mattel, which was about to recall 967,000 Chinese-made children's character toys, such as Dora, Elmo, and Big Bird, because of excess lead in the paint. Not surprisingly, the decision ahead was not only about whether to recall the Sarge Cars and other toys that might be unsafe, but also how to deal with the recall situation .
TOY INDUSTRY - OVERVIEW
The global toy market was estimated to be a $71 billion business in 2007 -an increase of about six per cent over the previous year .3 About 36 per cent of the global market was concentrated in North America (about $24 billion), but annual sales in this region were growing at a slower pace -about one per cent. European markets accounted for about 30 per cent of the global toy sales and were growing at about five per cent each year. ln contrast, the markets in Asia grew at 12 per cent in 2006, and were expected to grow by 25 per cent in 2007.4 A large part of this growth was expected to occur in China and India, whose burgeoning middle-classes were thriving on the double-digit economic growth in their countries.
The toy industry in the United States had a large nu mber of players . About 880 companies operated in the dolls, toys, and games manufacturing industry in 2002. This figure was about 10 per cent less than the 1 ,019 companies that operated in 1997. Approximately 70 per cent of the toy companies employed less than 20 persons.5 The industry was dominated by a few key players such as Mattel, Hasbro, RC2, JAAKS Pacific, Marvel, and Lego. The industry leaders were Mattel and Hasbro, whose combined sales in 2006 were about US$8 .7 billion . The sales of many other major players were under a billion dollars. Exhibit 1 contains key financial data of some major U.S. toy makers.
Big retailers like Wal -Mart and Target had become major players in the U.S. toy market. They not only sold the products of other toy companies such as Mallet, Hasbro, and Lego, but also sourced toys directly from China. These toys were often sold u nder their own brand names . For example, Wal -Mart sold toys under its Kid-Connection brand while Target sold toys under its PlayWonder brand.6 It was estimated that Wal -Mart accounted for about 25 per cent of the toy sales in the United States.7 As a result of the entry of big-box retailers in the toy industry, specialty toy retailers such as Toys'R'Us had steadily lost market share.8 The top five retailers sold about 60 per cent of all the toys sold in the United States.9
Toy markets i n the United States were categorized into multiple segments, such as Action Figures & Accessories, Arts & Crafts, Building Sets, Dolls, Games/Puzzles, f nfant/Preschool Toys, Youth Electronics, Outdoor & Sports Toys, and Plush Vehicles. Of these, the infant/preschool toy segment was the largest, followed by outdoor and sport toys, and dolls. These segments had largely remained stagnant over the years. As a result of kids getting old younger (KOOY), the only segment with noticeable growth was youth electronics. By contrast, video games tha.t were outside the traditional toy industry ha.d been experiencing remarkable growth. For segment-wise sales of toys in the United States, see Exhibit 2.
While the major markets for toys existed in the United States and Europe, production was concentrated in Asia, primarily China.. About 60 per cent of the toys sold in the world were made in China.. More than I 0,500 toy makers operated in China. 10 These companies typically had contacts with large Western toy companies. The toy companies in China formed a complex web of supply chains, with contractors themselves sub-contracting production of components.,and often, entire products to various companies .
TOY PRODUCTION IN CHINA
Over the years, U.S. toy companies shifted their production overseas and focused their domestic operations on product design, marketi ng, research and development, and other high-value activities . As a result, employment i.n the domestic toy industry declined from 42,300 workers in 1993 to 17,400 workers in 2005, while toy imports increa.sed.11 Approximately l 0 per cent of the demand for toys in the U .S. market was met by domestic production , while the rest was met through imports, primarily from China (see Exhibit 3).12
Chinese toy imports accounted for a full 86 per cent of toy imports to the United States in 2006, up dramatically from 41 per cent in 1992. The rise of China came at the expense of other toy exporting countries, whose combined share of toy imports to the United States plummeted from 59 per cent to 14 per cent during the same period. For instance, Japan remained a strong exporter of toys to the United States until a substantial drop around 2001. Despite its prox·imity to the United States, Mexico had not been able to sustain the up-tick it experienced in 2002. Further, Taiwan and Hong Kong toy exports had both been in decline for over a decade.
China's rising share of U.S. toy imports, and more generally, China 's position in the global toy industry, can be attributed to the lower cost business environment in China. China had attracted tremendous foreign direct investment and outsourcing of manufacturing operations . While analysts have often pointed to the phenomenal economic growth in China, they have also noted the resultant pressure on the physical, technical, and human resource infrastructures .13 These pressures. some analysts argue, have resulted in the Chi.nese manufacturers compromising on the product safety.
According to American regulators, tainted pet food imported from China was responsible for deaths of, or injuries to, about 4,000 cats and dogs. As a result, regulators initiated the biggest pet food recall in U.S. history. This was followed by worldwide recalls of Chinese toothpaste laced with anti-freeze called diethylene glycol, which was found to be responsible for nearly 200 deaths in Haiti and Panama. Shortly thereafter, Chinese-made tires were linked to two deaths in an accident in the United States and were recalled. The tires lacked a safety feature that prevented tire treads from splitting and falling apart.14 The spate of recalls of Chinese-made goods began to erode consumer confidence in products made in China .
TOY SAFETY
The safety of consumer goods in the United States is managed by four federal agencies: (i) the Food and Drug Administration (FDA) has jurisdiction over foods, drugs and cosmetics, (ii) the Department of Transportation oversees the safety of cars, trucks, motorcycles, and their accessories, such as tires and car seats, (iii) the Department of Treasury has jurisdiction over alcohol, tobacco and firearms, and (iv) the U.S. Consumer Product Safety Commission (CPSC) has jurisdiction over about 15,000 types of consumer products, from microwave ovens to cribs to lawn mowers .15
The safety of toys and other children's products falls within the jurisdiction of CPSC, which was created in 1972 by Congress in the Consumer Product Safety Act to "protect the public against unreasonable risks of injuries and deaths associated with consumer products ."In 2007, the CPSC had an operating budget of $66 million and a staff of 393 full-time equivalent employees . Its strategic goals for the year were to reduce deaths and injuries by fire hazards , carbon monoxide poisoning hazard, and hazards from children 's products .16 According to CPSC, 22 toy-related deaths and an estimated 220,500 toy-related injuries occurred in 2006.17 Based on its analysis, CPSC identified the Top Five Hidden Home Hazards. These hazards were listed 011 the CPSC website to make consumers aware of the hazards and avoid injuries due to them . In 2007, CPSC listed the following as the top hazards: magnets, recalled products , tip-overs, windows and covering, pool and spa drains.
The CPSC collects information about product safety issues from sources such as hospitals. doctors, newspaper reports, industry reports, consumer complaints, investigations conducted by its staff, and reports from companies. When a company becomes aware of hazards associated with the products it sold, it is required by law to immediately inform the CPSC. Based on the infomiation it received , CPSC worked in coordination with the companies involved to recall the hazardous products from the market. Exhibit 4 presents the number of toy recalls made by CPSC since 1988. Not surprisingly, the majority of recalls in recent years involved toys made in China. See Exhibit S for a list of the toys recalled in the United States since the beginning of 2007 . All the toys recalled, with one exception, were made in China. Seven of the recalls were a result of excess lead in the surface paint of the toys.
Lead in children's products poses a serious hazard because exposure to lead can affect almost every organ and system in the human body. Children exposed to h igh levels of lead can suffer from damage such as IQ deficits, attention deficit hyperactivity disorder, motor skills, and reaction time. Considering the damages that lead can cause to humans, particularly child ren, the U.S. government Limited the permissible amount of lead in products. Under the Consumer Safety Product Act 1972, lead in products accessible to children should not be greater than 600 parts per million (ppm).The standards for permissible lead in other products va1y depending on the usage and amount of lead in the product that is accessible.
Although lead use is banned or restricted in many developed countries, the same is not true for developing countries. In developed countries, the only source of lead exposure to children is from paint. In contrast, lead exposure in developing countries occurs due to lead gasoline, ceramics, mining, batteries, and even medication and cosmetics. Manufacturers use paint with a high percentage of lead because it is highly resistant to corrosion, extremely malleable, and has poor electrical conductivity. In addition, paint with higher lead is heavy and bright, making products such asjewelry more appealing to consumers.
While excess lead in toys and other children's products is an issue of concern, CPSC has identified another major hazard associated with small magnets in toys. Due to the availability of powerful rare-earth magnets at cheap prices. the manufacturers began to use them in many toys, such as building blocks and jewelry. On some of these products, the magnets came loose. If a child swallowed more than one magnet, they could attach to each other and cause intestinal perforations and blockage, which can be fatal. In April 2006, CPSC and Rose Art Industries recalled 3.8 million Magnetix magnetic building sets following the death of a 20-month-old boy after he swallowed magnets that twisted his small intestine and created a blockage. In addition, several other children required surgery and intensive care to remove the magnets they swallowed .18
Following the recall of Magnetix building sets, Rose Art Industries redesigned its building sets to cover the magnets and reinforced these with resins so that the magnets could not be detached from the building set. Further, they changed the age suita bility of their product to six years or older and provided new warnings about the dangers associated with ingesting magnets .19 The recall of Magnetix was followed by another five recalls of toys that contained small magnets that detached . One of those recalls involved 2.4 million Polly Pocket play sets (an additional 2 million sets were sold worldwide), which was prompted by 170 reports of magnets coming loose and three children who swallowed the magnets requiring surgical care.20 The Polly Pocket play sets, recalled on November 21, 2006, were made by Mattel and sold between May 2003 and September 2006.
MATTEL - THE N0.1 TOY MAKER IN THE WORLD
With a vision to provide "the world 's premier toy brands -today and tomorrow," Mattel "designs, manufactures, and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers."2 1 Mattel's position as a leader in the global toy industry was so formidable that Mattel 's international business division, with gross sales of $ 2.7 billion in 2006, would be the industry 's third largest company, if it was a separate company, and Mattel 's U.S. business with $3.4 billion would still be No.1.22
Mattel was an industry leader not only by its sales, but also through its pioneering efforts to be a good corporate citizen . In 1996, Mattel initiated its Global Manufacturi ng Principles, which aimed to ensure responsible management practices used in Mattel's fuctories as well as by its vendors. Mattel's factories were audited by the lntemational Center for Corporate Accountability , an independent body, and its results made publicly available by Mattel. Mattel engaged in philanthropic activities through Mattel Children's Foundation in 37 countries. It was named one of the top J OO Best Corporate Citizens by CRO Magazine i n 2006. More saliently, Mattel's corporate governance received the highest global rating of I 0 by Governance Metrics International (GMJ), which placed the company among the top one per cent of more than 3,400 global companies.
The journey of Mattel, however, began modestly in 1944, when Harold Matson and Elliot Handler began to make toys out of a converted garage in California. They named the company Mattel, using letters from their last and first names. Matson sold his share to Elliot Handler and his wife, Ruth Handler, who incorporated the company in 1948. Mattel's first products were picture frames and doll house fumiture.23 Jts first big product was a mass-produced, and thus, inexpensive music box, which established Mattel firmly in the toy business . The introduction of Barbie in 1959,and Ken two years later, propelled company growth . The products introduced later, such as Hot Wheels, went further to establish Mattel's position as an industry leader. Mattel went pu blic in 1960.
Mattel 's products were organized in three different business groups:(i) Mattel Girls & Boys Brands, which includes brands like Barnie dolls and ac.cessories, Polly Pocket, Hot Wheels, Matchbox, Batman, CARS, and Superman. (ii) Fisher-Price Brands, consisting of brands such as Fisher-Price, Little People, Sesame Street, Dora the Explorer, Go-Diego-Go!, Winnie the Pooh, and Power Wheels. (iii) American Girl Brands , with brands such as Just Like You and Bitty Baby. In the United States alone, the sales of these three groups in 2006 were: Mattel Girls & Boys Brands -$1.57 billion, Fisher-Price Brands -$1.47 billion, and American Girl Brands -$0.44 billion. About 45 per cent of Mattel 's sales were accounted for by three major buyers: Wal-Mart, Toys'R'Us, and Target. In addition to its principal competitors, such as Hasbro and RC2, Mattel also competed with a large num ber of smaller companies that made toys, v ideo games, and consumer electronics, and pu blished children's books.
Jn the 1990s, Mattel made a num ber of significant acquisitions, including Fisher -Price (1993, leader in pre school segment), Kransco (1994, made battery-powered ride-on vehicles), Tyco (1997, made Tickle Me Elmo and Matchbox cars), Pleasant Company (1998, mail-order firm that made American Girl-brand books, dolls,and clothing), and Bluebird Toys (1998, made toys such as Polly Pocket and The Tiny Disney Collection). Mattel 's acquisition of The Learning Company, a leading educational software maker, in 1999 at a cost of $3.6 billion proved to be troublesome. The company lost money and was later sold. Mattel also made a hostile bid to acquire Hasbro, the second-largest toy company. This bid, made in 1996, failed to materialize .
The toy industry is different from other industries on two major counts. First, toy sales are seasonal. Most sales occurred during the third and last qua11er of the year, which coincide with the traditional holiday period. Second, there is a lot of uncertainty around new product success. It was difficult, almost impossible, to predict whether a particular toy would be liked by children . Not surprisingly, many companies in the toy industry made millions with one succ.essful toy and also went bankrupt with one big failure.
Over a long period, Mattel had managed the pecul iarities of the toy industries well with a num ber of innovative and often revolutionary ideas. Traditionally, the retailers promoted toys during the holiday season and toy manufacturers had little, if any, role to play. In 1955, Mattel tied up with ABC Television and sponsored a 15-minute segment of Walt Disney 's Mickey Mouse Club for one full year. At that time, Mattel 's revenues were only $5 million, but it paid $500,000 for the sponsorship. The sponsorship quickly established a continuous connection for Mattel with the kids and gave it an opportunity to influence the buying habits of its consumers. Not surprisingly, this move changed the nature of marketing in the toy industry. Also, for Mattel, it paved the way for further partnerships with entertainment companies to produce character toys.
Mattel entered into licensing agreements to make toys based on the characters owned by companies such as Disney, Warner Brothers, Viacom (Nickelodeon), Origin Products, and Sesame Workshop. These agreements gave the company access to characters such as Winnie the Pooh, Disney Princesses, CARS, Dora the Explorer, Go-Diego-Go!, Sponge Bob SquarePants, Polly Pocket, Batman, Superman, and Elmo. Jn 2005, Mattel partnered with Scholastic Entenainment to produce educational learning systems. Not only did l\llattel license characters, but also Iicensed some of its core brands to other non-toy companies to design and develop an array of products sporting the core brand names . These deals included Barbie eyewear for little girls (with REM Eyewear), Hot Wheels apparel and accessories (with lnnovo Group), Barbie video games (with Activision), and CD Players, teaming laptops, and MP3 players .
Recently , Mattel was trying to reduce its reliance o.n its big customers, such as Wal-Mart, Target, and Toys'R'Us, through internet and catalogue sales.24 Traditionally, toy companies relied on point-of-sale (POS) data to forecast demand for toys. With its Hot Wheels brand, Mattel realized that variety was the key driver of the sales and introduced a rolli ng mix strategy. This strategy involved changing the physical 72-car assortment mix by seven to eight per cent every two weeks. This changed the nature of its practices and instead of relying on POS data, Mattel only needed to design the varieties and supply an assortment pack to the retailer .25
Mattel designed and developed toys in its corporate headquarters . ln 2006, Mattel spent US$174 million on in-house product design and development. 111 contrast, the company spent US$261 million on royalties and US$65 J million on advertising. Mattel manufactured products in its own factories as well as through third party manufacturers. Also, it marketed the products purchased from unrelated companies that designed, developed, and manufactured those products .
Offshoring the Toy Production
Mattel 's principal manufacturing facitities were located in China, Indonesia, Thailand, Malaysia , and Mexico. It closed its last toy factory in the U.S., originally part of its fisher-Price divisions, in 2002 .26 Mattel produced its core brands, such as Barbie and Hot Wheels, in company-owned facilities , but used third-party manufacturers to produce its non-core brands. It used third-party manufacturers in a number of countries, including the United States, Mexico, Brazil, India, New Zealand, and Australia. This manufacturing mix minimized Mattel's risk and gave it focus and flexibility. The core brands were a staple business, while the non-core brands tended to be those products that were expected to have a short market life. The non-core brands were typically associated with popular movie characters and had a life of one year.21 The development of new toys was done at Mattel 's corporate headquarters. Outsourcing for the manufacturing of non-core brand toys followed a strict multi-step process . The design teams created a bid package containing the new product's blueprint and engineering specifications. It often contained a physical model. After the selection of a vendor, the company established the vendor's production infrastructure. At this point, Mattel assumed responsibility for the cost of tooling. The vendor then produced 50 units as "First Shots"to verify if any tool modifications were required.This was followed by one or more "Engineering Pilot," depending on the toy's complexity, and the "Final Engineering Pilot." After this, a "Production Pilot'' of 1,000 units was run using the entire assembly line to run the product. Finally, the"Production Start''phase began only when the new toy met design compliance .28
Mattel and its vendors manufactured about 800 million products each year. Approximately half of the toys Mattel sold were made in its own plants, a higher proportion than other large toy makers . Also, Mattel made a larger percentage of its toys outside China than other large toy companies. Mattel 's manufacturing and offshoring strategy was developed over a period of five decades. The company made its first Barbie doll in Asia in 1959. Since then , Mattel managed the risks of offshored operations by employing a mix of company-owned and vendor-owned manufacturing facilities all over Asia .
In China alone, Mattel had contracts with approximately 37 principal vendors who made toys for the company.29 The principal vendors further used smaller companies for the full or pa11ial production of toys. As a result, the supply chains in China were long and complex. According to some estimates , about 3,000 Chinese companies made Mattel products .30 However, Mattel had direct contact only with the principal vendors.
A RECALL UNDERWAY
In June 2007, a French direct importer of Mattel 's products , Auchan, performed pre-shipment tests with the help of Intertek, an independent laboratory. These tests revealed that Mattel's toys, made by vendor Lee Der Industrial Company, contained lead above permissible limits. lntertek sent the test results, on June 8, 2007, to Mattel employees in China. Consequently, Mattel employees contacted Lee Der instructing it to correct the problem and provide another sample for testing. Another test by Intertek on June 29, for Auchan, on the same toy produced by Lee Der had passed the test.
On June 27, 2007, Mattel 's call center in the United States received a report from a consumer, who informed them that a home test kit found excessive lead in Mattel 's toys. These were also manufactured by Lee Der. Following this, Mattel tested five samples of Lee Der toys and found on July 6 that three of them contained excess lead. As the testing was underway, Auchan informed Mattel on July 3 about lead violations in another toy made by Lee Der. As soon as the test results were out, Mattel employees in China notified Lee Der and stopped accepting products made by Lee Der. Further tests on the toy samples collected from Lee Der were conducted on July 9 in Mattel's own laboratories, which revealed that nine of the 23 samples of Lee Der toys contained excess lead :in surface paint.
Mattel 's employees in China notified the senior management team at corporate headquarters on July 12 about the issues with Lee Der products . Following this, Mattel management ordered an immediate suspension of all shipments of products made by Lee Der. Further investigatio11s by Mattel revealed that the nonconformi ng lead levels were because of a yellow pigment in paint used on portions of toys manufactured by Lee Der.31
Lee Der Industrial Company was located in Foshan City of Guangdong Province, where thousands of small toy factories existed. The company was founded by two Chinese entrepreneurs, Cheng Shu-hung and Xie Yuguang. Mattel first used Lee Der for making a small batch of educational toys in 1993. By July 2007, Lee Der employed approximately 2,500 people and made toys almost exclusively for Mattel. With annual sales of about $25 million, Lee Der was about to open a new $5 million plant.32
Lee Der had purchased its paint from Dongxing New Energy Co.since 2003. The owner of Dongxing was a good friend of Cheng Shu-bung. In April 2007, D011gxing ran out of yellow pigment and sourced about 330 pounds of it for $1,250 from Dongguan Zhongxin Toner Powder Factory . Then, Dongxing supplied the paint to Lee Der, which used it in Mattel 's toys. Initial reports suggested that Dongguan Zhongxin Toner Powder Factory was fake and that its owners were not traceable.33
An essential component of Mattel 's contracts with its vendors is that the products made by vendors comply with applicable safety standards . Mattel had systems that required the vendors to either purchase paint from a list of eight certified vendors in China or test for compliance each batch of the pai nt purchased from a non-certified vendor . Mattel also conducted audits of certified paint suppliers and vendors to ensure that Mattel 's requirements were being followed.The frequency of audits depended on Mattel 's prior experience with the suppliers and vendors.
Following its investigations, Mattel filed an initial report with the CPSC on July 20 and followed it up with another on July 26, indicating that it would like to is·sue a recall of all the products manufacnired by Lee Der between April 19, 2007 (the date when Lee Der took delivery of the lead-tainted paint from its supplier), and July 6, 2007, the date when Mattel stopped accepting products from Lee Der.34 Work on this recall was underway and Mattel and the CPSC were scheduled to announce the recall on August 2, 2007. See Exhibit 6 for the press release announcing the recall expected to be issued by the CPSC. Mattel had already informed big retailers such as Wal-Mart and Toys 'R'Us of the impending recall. The retailers pulled the toys off their shelves and flagged the cash registers so that customers could not buy the toys from the stores.35
ANOTHER INSTANCE OF LEAD AND FURTHER REPORTS OF LOOSE MAGNETS
While Mattel was prepari ng to announce its recall, on July 30, 2007, it found that paint on Sarge cars contained excess lead. The Sarge cars were made for Mattel by Early Light Industrial Company, Ltd. of Hong Kong, which made them in its manufacturing facility located in Pinghu, China.36 Early Light had supplied toys to Mattel for 20 years.37 Only further investigation would be able to clarify where exactly in the supply chain the problem originated, and why . Initial reports indicated that approximately 250,000 Sarge cars made between May 2007 and August 2007 may have been affected with lead paint.
After the November 2006 recall of eight different Polly Pocket play sets made in China for the problem of magnets coming loose, Mattel reinforced the magnets. by locking them in the toys rather than gluing them. Nonetheless, in recent months, Mattel had received a few hundred reports of magnets coming loose from a number of play sets sold before Novem ber 2006. The play sets affected with magnet problems were: (i) fifty additional models of Polly Pocket play sets (about five million of these play sets were sold between March 2003 and November 2006), (ii) Batman and One Piece action figures (about 350,000 toys sold between June 2006 and June 2007), (iii) Barbie and Tamier play sets (about 683,000 toys sold between May 2006 - July, 2007), and (iv) Doggie Day Care play sets (about one million sold between July 2004 and July 2007).
Recalls are a nightmare to companies for several reasons. First, the recalls pose major logistics challenges as the company needs to establish a set-up to handle the recalls . Second, the company has to deal with regulators who tend to push the company to ensure that not only a recall is issued, but the products in consumers' hands are actually returned to the company. Third, recalls are often viewed as an admission of guilt and open the company to consumer litigations. Finally, recalls damage the reputation of the company and result in increased costs, lost sales, and stock price erosion.
Mattel and Fisher Price were not new to recalls. In their long history, they had recalled products in the past (see Exhibit 7). Nevertheless, the current situation seemed entirely new, complex, and challenging. It was not clear if and which products needed to be recalled . As importantly, how could the company minimize the negative consequences that were germane to any product recall? Finally, how could the company ensure such recalls did not recur?
In: Operations Management