Questions
Case2: Disneyland in Europe Between 1988 and 1990 three $150 million amusement parks opened in France....

Case2: Disneyland in Europe

Between 1988 and 1990 three $150 million amusement parks opened in France. By 1991 two of them were bankrupt and the third was doing poorly. Despite this, the Walt Disney Company went ahead with a plan to open Europe’s first Disneyland in 1992. Far from being concerned about the theme park doing well, Disney executives were worried that Euro Disneyland would be too small to handle the giant crowds. The $4.4 billion project was to be located on 5,000 acres in Seine-et-Marne 20 miles east of Paris. And the city seemed to be an excellent location; there were 17 million people within a two-hour drive of Euro Disneyland, 41 million within a four-hour drive, and 109 million within six hours of the park. This included people from seven countries: France, Switzerland, Germany, Luxembourg, the Netherlands, Belgium, and Britain. Disney officials were optimistic about the project. Their US parks, Disneyland and Disneyworld, were extremely successful, and Tokyo Disneyland was so popular that on some days it could not accommodate the large number of visitors. Simply put, the company was making a great deal of money from its parks. However, the Tokyo park was franchised to others—and Disney management felt that it had given up too much profit with this arrangement. This would not be the case at Euro Disneyland. The company’s share of the venture was to be 49 per cent for which it would put up $160 million. Other investors put in $1.2 billion, the French government provided a low-interest $900 million loan, banks loaned the business $1.6 billion, and the remaining $400 million was to come from special partnerships formed to buy properties and to lease them back. For its investment and management of the operation, the Walt Disney Company was to receive 10 per cent of Euro Disney’s admission fees, 5 per cent of food and merchandise revenues, and 49 per cent of all profits. The location of the amusement park was thoroughly researched. The number of people who could be attracted to various locations throughout Europe and the amount of money they were likely to spend during a visit to the park were carefully calculated. In the end, France and Spain had proved to offer the best locations. Both countries were well aware of the park’s capability for creating jobs and stimulating their economy. As a result, each actively wooed the company. In addition to offering a central location in the heart of Europe, France was prepared to provide considerable financial incentives. Among other things, the French government promised to build a train line to connect the amusement park to the European train system. Thus, after carefully comparing the advantages offered by both countries, France was chosen as the site for the park. At first things appeared to be off to a roaring start. Unfortunately, by the time the park was ready to open, a number of problems had developed, and some of these had a very dampening effect on early operations. One was the concern of some French people that Euro Disney was nothing more than a transplanting of Disneyland into Europe. In their view the park did not fit into the local culture, and some of the French press accused Disney of “cultural imperialism.” Others objected to the fact that the French government, as promised in the contract, had expropriated the necessary land and sold it without profit to the Euro Disneyland development people. Signs reading “Don’t gnaw away our national wealth” and “Disney go home” began appearing along roadways. These negative feelings may well have accounted for the fact that on opening day only 50,000 visitors showed up, in contrast to the 500,000 that were expected. Soon thereafter, operations at the park came under criticism from both visitors and employees. Many visitors were upset about the high prices. In the case of British tourists, for example, because of the Franc exchange rate, it was cheaper for them to go to Florida than to Euro Disney. In the case of employees, many of them objected to the pay rates and the working conditions. They also raised concerns about a variety of company policies ranging from personal grooming to having to speak English in meetings, even if most people in attendance spoke French. Within the first month 3,000 employees quit. Some of the other operating problems were a result of Disney’s previous experiences. In the United States, for example, liquor was not sold outside of the hotels or specific areas. The general park was kept alcohol free, including the restaurants, in order to maintain a family atmosphere. In Japan, this policy was accepted and worked very well. However, Europeans were used to having outings with alcoholic beverages. As a result of these types of problems, Euro Disney soon ran into financial problems. In 1994, after three years of heavy losses, the operation was in such bad shape that some people were predicting that the park would close. However, a variety of developments saved the operation. For one thing, a major investor purchased 24.6 per cent (reducing Disney’s share to 39 per cent) of the company, injecting $500 million of much needed cash. Additionally, Disney waived its royalty fees and worked out a new loan repayment plan with the banks, and new shares were issued. These measures allowed Euro Disney to buy time while it restructured its marketing and general policies to fit the European market. In October 1994, Euro Disney officially changed its name to “Disneyland Paris.” This made the park more French and permitted it to capitalize on the romanticism that the word “Paris” conveys. Most importantly, the new name allowed for a new beginning, disassociating the park from the failure of Euro Disney. This was accompanied with measures designed to remedy past failures. The park changed its most offensive labor rules, reduced prices, and began being more culturally conscious. Among other things, alcohol beverages were now allowed to be served just about anywhere. The company also began making the park more appealing to local visitors by giving it a “European” focus. Ninety-two per cent of the park’s visitors are from eight nearby European countries. Disney Tomorrowland, with its dated images of the space age, was jettisoned entirely and replaced by a gleaming brass and wood complex called Discovery land, which was based on themes of Jules Verne and Leonardo da Vinci. In Disneyland food services were designed to reflect the fable’s country of origin: Pinocchio’s facility served German food, Cinderella’s had French offerings, and at Bella Notte’s the cuisine was Italian. The company also shot a 360-degree movie about French culture and showed it in the “Visionarium” exhibit. These changes were designed to draw more visitors, and they seemed to have worked. Disneyland Paris reported a slight profit in 1996, and the park continued to make a modest profit through to the early 2000s. In 2002 and 2003, the company was once again making losses, and new deals had to be worked out with creditors. This time, however, it wasn’t insensitivity to local customs but a slump in the travel and tourism industry, strikes and stoppages in France, and an economic downturn in many of the surrounding markets.

Questions

What is Walt Disney Company shown as multinational enterprises (MNE) characteristics?
Disney instead of licensing some other firm to build and operate the park and settling for a royalty, it takes wholly ownership strategy in the firm, why?
Are Walt Disney and Euro Disney indicate the same strategy of MNE?
Before going ahead with Euro Disney, was there an external environmental analysis from Disney? Clarify.

answer about 800 words.

In: Operations Management

Case: Disneyland in Europe Between 1988 and 1990 three $150 million amusement parks opened in France....

Case: Disneyland in Europe

Between 1988 and 1990 three $150 million amusement parks opened in France. By 1991 two of them were bankrupt and the third was doing poorly. Despite this, the Walt Disney Company went ahead with a plan to open Europe’s first Disneyland in 1992. Far from being concerned about the theme park doing well, Disney executives were worried that Euro Disneyland would be too small to handle the giant crowds. The $4.4 billion project was to be located on 5,000 acres in Seine-et-Marne 20 miles east of Paris. And the city seemed to be an excellent location; there were 17 million people within a two-hour drive of Euro Disneyland, 41 million within a four-hour drive, and 109 million within six hours of the park. This included people from seven countries: France, Switzerland, Germany, Luxembourg, the Netherlands, Belgium, and Britain. Disney officials were optimistic about the project. Their US parks, Disneyland and Disneyworld, were extremely successful, and Tokyo Disneyland was so popular that on some days it could not accommodate the large number of visitors. Simply put, the company was making a great deal of money from its parks. However, the Tokyo park was franchised to others—and Disney management felt that it had given up too much profit with this arrangement. This would not be the case at Euro Disneyland. The company’s share of the venture was to be 49 per cent for which it would put up $160 million. Other investors put in $1.2 billion, the French government provided a low-interest $900 million loan, banks loaned the business $1.6 billion, and the remaining $400 million was to come from special partnerships formed to buy properties and to lease them back. For its investment and management of the operation, the Walt Disney Company was to receive 10 per cent of Euro Disney’s admission fees, 5 per cent of food and merchandise revenues, and 49 per cent of all profits. The location of the amusement park was thoroughly researched. The number of people who could be attracted to various locations throughout Europe and the amount of money they were likely to spend during a visit to the park were carefully calculated. In the end, France and Spain had proved to offer the best locations. Both countries were well aware of the park’s capability for creating jobs and stimulating their economy. As a result, each actively wooed the company. In addition to offering a central location in the heart of Europe, France was prepared to provide considerable financial incentives. Among other things, the French government promised to build a train line to connect the amusement park to the European train system. Thus, after carefully comparing the advantages offered by both countries, France was chosen as the site for the park. At first things appeared to be off to a roaring start. Unfortunately, by the time the park was ready to open, a number of problems had developed, and some of these had a very dampening effect on early operations. One was the concern of some French people that Euro Disney was nothing more than a transplanting of Disneyland into Europe. In their view the park did not fit into the local culture, and some of the French press accused Disney of “cultural imperialism.” Others objected to the fact that the French government, as promised in the contract, had expropriated the necessary land and sold it without profit to the Euro Disneyland development people. Signs reading “Don’t gnaw away our national wealth” and “Disney go home” began appearing along roadways. These negative feelings may well have accounted for the fact that on opening day only 50,000 visitors showed up, in contrast to the 500,000 that were expected. Soon thereafter, operations at the park came under criticism from both visitors and employees. Many visitors were upset about the high prices. In the case of British tourists, for example, because of the Franc exchange rate, it was cheaper for them to go to Florida than to Euro Disney. In the case of employees, many of them objected to the pay rates and the working conditions. They also raised concerns about a variety of company policies ranging from personal grooming to having to speak English in meetings, even if most people in attendance spoke French. Within the first month 3,000 employees quit. Some of the other operating problems were a result of Disney’s previous experiences. In the United States, for example, liquor was not sold outside of the hotels or specific areas. The general park was kept alcohol free, including the restaurants, in order to maintain a family atmosphere. In Japan, this policy was accepted and worked very well. However, Europeans were used to having outings with alcoholic beverages. As a result of these types of problems, Euro Disney soon ran into financial problems. In 1994, after three years of heavy losses, the operation was in such bad shape that some people were predicting that the park would close. However, a variety of developments saved the operation. For one thing, a major investor purchased 24.6 per cent (reducing Disney’s share to 39 per cent) of the company, injecting $500 million of much needed cash. Additionally, Disney waived its royalty fees and worked out a new loan repayment plan with the banks, and new shares were issued. These measures allowed Euro Disney to buy time while it restructured its marketing and general policies to fit the European market. In October 1994, Euro Disney officially changed its name to “Disneyland Paris.” This made the park more French and permitted it to capitalize on the romanticism that the word “Paris” conveys. Most importantly, the new name allowed for a new beginning, disassociating the park from the failure of Euro Disney. This was accompanied with measures designed to remedy past failures. The park changed its most offensive labor rules, reduced prices, and began being more culturally conscious. Among other things, alcohol beverages were now allowed to be served just about anywhere. The company also began making the park more appealing to local visitors by giving it a “European” focus. Ninety-two per cent of the park’s visitors are from eight nearby European countries. Disney Tomorrowland, with its dated images of the space age, was jettisoned entirely and replaced by a gleaming brass and wood complex called Discovery land, which was based on themes of Jules Verne and Leonardo da Vinci. In Disneyland food services were designed to reflect the fable’s country of origin: Pinocchio’s facility served German food, Cinderella’s had French offerings, and at Bella Notte’s the cuisine was Italian. The company also shot a 360-degree movie about French culture and showed it in the “Visionarium” exhibit. These changes were designed to draw more visitors, and they seemed to have worked. Disneyland Paris reported a slight profit in 1996, and the park continued to make a modest profit through to the early 2000s. In 2002 and 2003, the company was once again making losses, and new deals had to be worked out with creditors. This time, however, it wasn’t insensitivity to local customs but a slump in the travel and tourism industry, strikes and stoppages in France, and an economic downturn in many of the surrounding markets.

Questions :

What is Walt Disney Company shown as multinational enterprises (MNE) characteristics?
Disney instead of licensing some other firm to build and operate the park and settling for a royalty, it takes wholly ownership strategy in the firm, why?
Are Walt Disney and Euro Disney indicate the same strategy of MNE?
Before going ahead with Euro Disney, was there an external environmental analysis from Disney? Clarify.
Total: 800 words.

In: Operations Management

On the Job: Zappos' Retail Experiment Selfies as a Sales Tool  >> Will, you're based...

On the Job: Zappos' Retail Experiment Selfies as a Sales Tool



>> Will, you're based out in San Francisco.

>> Yep.

>> You've got a dozen people working in this Zappos Skunkworks. What are you doing out there?

>> Yeah, I think we created this labs office because we've seen just retail and ecommerce change so quickly. You know--

>> But surely Zappos is already at the forefront of ecommerce.

>> Yeah. And I think what we do exceptionally well is if you want those black beautiful dress shoes and you have them in mind, you come to Zappos and you type black dress shoes. We find them for you, we ship them to you next day, we're amazing, great customer service. I think as we're trying to evolve our brand is we look at like people are spending so much time on Pinterest and Instagram. What does that mean to Zappos as a brand. And so that's one of the things we really think about as a retailer.

>> Yeah, as you think about people like us who use it, as you say, to deliver a product, now you're trying to transition us to make it part of our lifestyle. Is that?

>> I wouldn't say transition because it doesn't have to be either or, right? We're never going to stop being that amazing experience when you want to find great black dress shoes, a nice suit. Some people are surprised we sell suits and wedding dresses on Zappos. So, the works. I think as we're seeing just consumer behavior change and people obviously move to their phones, what does that mean to that shopping experience?

>> Will, you make an important point. Mark and I might shop with our phones but we're not likely to do that much shopping with our phone. My kids, on the other hand--

>> Absolutely.

>> And Mark's do a lot of shopping on their phones. You're trying to reach the millennials and even the next generation. How do you do that?

>> I think it's, to kind of, I think in the early days when everyone saw Facebook being big and Pinterest blowing up, every big retailer's like let's build our own social network. And I think everyone failed at that, including us. So, it really was, like, how do we be a natural part of that conversation. So we've, people are doing stuff naturally on Instagram, for example.

>> Like what? Posting selfies.

>> Selfies. And it's, I think to us older folks, like, we kind of joke about it but there's this hashtag on Instagram called OOTD. You know, they do the hashtag OOTD. It stands for outfit of the day.

>> And you do this every day, right?

>> Every day. And I get an opinion. Pink tie, purple tie. But there's 30 million pictures on Instagram with that hashtag.

>> Seriously?

>> 30 million.

>> 30 million.

>> So, it's 30 million, or 30 million pictures that've said this is my style, this is what I care about, and I want the world to know. As a retailer, how do we not be a part of that conversation, right?

>> Embrace the narcissism.

>> And actually, I would call it self-expression. I call it self-expression.

>> But how do you become a part of that? As a retailer, how do you get your brand to be tied to those things?

>> Absolutely. So one of the, we did a small pilot a couple months ago and we saw some really interesting engagement. We asked actually people, you're already going an outfit picture. We don't want you to do anything else. Just add the hashtag, Next OOTD. And that was a signal to Zappos, Zappos, look in my Instagram account and make a personalized recommendation for me. So, that's what we did. So we actually, and you know, Zappos is very good at doing things manual. We're famous for 10 and a half hour phone calls in our call center. So, when we see someone do that hashtag, we actually look in their Instagram account, look at what they wear, look at their friends' style, look at the places they go and make some recommendations. And we have a huge catalog, 180,000 items.

>> Okay.

>> And we just take, like, we think you'll like--

>> What's the follow through like, though? When you make, when those recommendations are made to these people who put hashtag NOOTD--

>> Yeah, and--

>> What do they do? Do they shop?

>> So we've seen them, they all go to the recommendations. And it's interesting, I think, that a thing we're seeing is if you're on Instagram, you might check out one of our recommendations. And you don't necessarily feel like buying right away. Because, you know, you're on Instagram. I think a lot of, we've heard a lot of feedback, like Zappos sells clothing? Like, that's a big surprise to a lot of people. You know, because we're known for shoes, and--

>> But, Will, is it a bot that's creating that?

>> No.

>> Or is it a human?

>> It's a stylist on our end.

>> Yeah, see that's cool, because now we're going to create jobs. So it's not that technology is going to take the jobs away. This actually is going to create jobs.

>> Absolutely.

>> And cool jobs. Stylist jobs.

>> And a big reason we moved our headquarters to Las Vegas. Our lab team is in San Francisco. A big reason we moved the headquarters to Las Vegas is to grow our call center locally and not outsource it. And so we actually have stylists that are kind of on our team that do some of these stylist recommendations as well.

>> What interests me about this, though, is it is very commercially focused. There are a lot of companies that spend time on social media trying to build brand awareness, loyalty, affinity, without any real sense as to whether there's a clickthrough or a follow through. That seems to be different at Zappos.

>> Well, I think we do both. I think building brand affinity's extremely important. I think if you look at our huge investment in our call center, it's hard to measure the ROI. Like, when we do a 10-hour phone call with a customer who just wants to talk for 10 hours, like, you can't measure that. There's no immediate short-term ROI.

>> It's, I would venture to say it might be negative.

>> Exactly, right?

>> That's a lot of sales.

>> But it becomes, like, the story of legend. It becomes, like, the old-fashioned way of brand building, word of mouth and all that stuff. So, people tell their friends and--

>> Well, it's Nordstrom-esque.

>> Yeah, I would absolutely say--

>> It's Nordstrom-esque and if you can achieve that level of branding and be the go-to store--

>> Absolutely.

>> Or you're not a store. A go-to experience?

>> Yeah, I would say we're a whole experience. A shopping experience online for people. And I think it's, yeah. So, Zappos, I think we started with shoes but developed a lot--

Discussion Questions:

  1. When customers use the hash tag #nextOOTD, who is initiating the communication? Describe how the communication process works in this instance, including times when noise may occur and the likely nature of the noise. Is this one-way or two-way communication?
  2. When customers use the hash tag #nextOOTD, is this an information pull or an information push? How would this Zappos product be different if it was the opposite kind?
  3. When Zappos uses Instagram to send customers outfit recommendations, how rich is this medium of communication?

In: Operations Management

Between 1988 and 1990 three $150 million amusement parks opened in France. By 1991 two of...

Between 1988 and 1990 three $150 million amusement parks opened in France. By 1991 two of them were bankrupt and the third was doing poorly. Despite this, the Walt Disney Company went ahead with a plan to open Europe’s first Disneyland in 1992. Far from being concerned about the theme park doing well, Disney executives were worried that Euro Disneyland would be too small to handle the giant crowds. The $4.4 billion project was to be located on 5,000 acres in Seine-et-Marne 20 miles east of Paris. And the city seemed to be an excellent location; there were 17 million people within a two-hour drive of Euro Disneyland, 41 million within a four-hour drive, and 109 million within six hours of the park. This included people from seven countries: France, Switzerland, Germany, Luxembourg, the Netherlands, Belgium, and Britain. Disney officials were optimistic about the project. Their US parks, Disneyland and Disneyworld, were extremely successful, and Tokyo Disneyland was so popular that on some days it could not accommodate the large number of visitors. Simply put, the company was making a great deal of money from its parks. However, the Tokyo park was franchised to others—and Disney management felt that it had given up too much profit with this arrangement. This would not be the case at Euro Disneyland. The company’s share of the venture was to be 49 per cent for which it would put up $160 million. Other investors put in $1.2 billion, the French government provided a low-interest $900 million loan, banks loaned the business $1.6 billion, and the remaining $400 million was to come from special partnerships formed to buy properties and to lease them back. For its investment and management of the operation, the Walt Disney Company was to receive 10 per cent of Euro Disney’s admission fees, 5 per cent of food and merchandise revenues, and 49 per cent of all profits. The location of the amusement park was thoroughly researched. The number of people who could be attracted to various locations throughout Europe and the amount of money they were likely to spend during a visit to the park were carefully calculated. In the end, France and Spain had proved to offer the best locations. Both countries were well aware of the park’s capability for creating jobs and stimulating their economy. As a result, each actively wooed the company. In addition to offering a central location in the heart of Europe, France was prepared to provide considerable financial incentives. Among other things, the French government promised to build a train line to connect the amusement park to the European train system. Thus, after carefully comparing the advantages offered by both countries, France was chosen as the site for the park. At first things appeared to be off to a roaring start. Unfortunately, by the time the park was ready to open, a number of problems had developed, and some of these had a very dampening effect on early operations. One was the concern of some French people that Euro Disney was nothing more than a transplanting of Disneyland into Europe. In their view the park did not fit into the local culture, and some of the French press accused Disney of “cultural imperialism.” Others objected to the fact that the French government, as promised in the contract, had expropriated the necessary land and sold it without profit to the Euro Disneyland development people. Signs reading “Don’t gnaw away our national wealth” and “Disney go home” began appearing along roadways. These negative feelings may well have accounted for the fact that on opening day only 50,000 visitors showed up, in contrast to the 500,000 that were expected. Soon thereafter, operations at the park came under criticism from both visitors and employees. Many visitors were upset about the high prices. In the case of British tourists, for example, because of the Franc exchange rate, it was cheaper for them to go to Florida than to Euro Disney. In the case of employees, many of them objected to the pay rates and the working conditions. They also raised concerns about a variety of company policies ranging from personal grooming to having to speak English in meetings, even if most people in attendance spoke French. Within the first month 3,000 employees quit. Some of the other operating problems were a result of Disney’s previous experiences. In the United States, for example, liquor was not sold outside of the hotels or specific areas. The general park was kept alcohol free, including the restaurants, in order to maintain a family atmosphere. In Japan, this policy was accepted and worked very well. However, Europeans were used to having outings with alcoholic beverages. As a result of these types of problems, Euro Disney soon ran into financial problems. In 1994, after three years of heavy losses, the operation was in such bad shape that some people were predicting that the park would close. However, a variety of developments saved the operation. For one thing, a major investor purchased 24.6 per cent (reducing Disney’s share to 39 per cent) of the company, injecting $500 million of much needed cash. Additionally, Disney waived its royalty fees and worked out a new loan repayment plan with the banks, and new shares were issued. These measures allowed Euro Disney to buy time while it restructured its marketing and general policies to fit the European market. In October 1994, Euro Disney officially changed its name to “Disneyland Paris.” This made the park more French and permitted it to capitalize on the romanticism that the word “Paris” conveys. Most importantly, the new name allowed for a new beginning, disassociating the park from the failure of Euro Disney. This was accompanied with measures designed to remedy past failures. The park changed its most offensive labor rules, reduced prices, and began being more culturally conscious. Among other things, alcohol beverages were now allowed to be served just about anywhere. The company also began making the park more appealing to local visitors by giving it a “European” focus. Ninety-two per cent of the park’s visitors are from eight nearby European countries. Disney Tomorrowland, with its dated images of the space age, was jettisoned entirely and replaced by a gleaming brass and wood complex called Discovery land, which was based on themes of Jules Verne and Leonardo da Vinci. In Disneyland food services were designed to reflect the fable’s country of origin: Pinocchio’s facility served German food, Cinderella’s had French offerings, and at Bella Notte’s the cuisine was Italian. The company also shot a 360-degree movie about French culture and showed it in the “Visionarium” exhibit. These changes were designed to draw more visitors, and they seemed to have worked. Disneyland Paris reported a slight profit in 1996, and the park continued to make a modest profit through to the early 2000s. In 2002 and 2003, the company was once again making losses, and new deals had to be worked out with creditors. This time, however, it wasn’t insensitivity to local customs but a slump in the travel and tourism industry, strikes and stoppages in France, and an economic downturn in many of the surrounding markets.

  1. What is Walt Disney Company shown as multinational enterprises (MNE) characteristics?
  2. Disney instead of licensing some other firm to build and operate the park and settling for a royalty, it takes wholly ownership strategy in the firm, why?
  3. Are Walt Disney and Euro Disney indicate the same strategy of MNE?
  4. Before going ahead with Euro Disney, was there an external environmental analysis from Disney? Clarify.
  5. total answer must be 800 words

In: Operations Management

// TASK #2 Add an import statement for the Scanner class // TASK #2(Alternate) // Add...

// TASK #2 Add an import statement for the Scanner class
// TASK #2(Alternate)
// Add an import statement for the JOptionPane class

/**
This program demonstrates how numeric types and
operators behave in Java.
*/

public class NumericTypes
{
public static void main (String [] args)
{
// TASK #2 Create a Scanner object here
// (not used for alternate)

// Identifier declarations
final int NUMBER = 2 ; // Number of scores
final int SCORE1 = 100; // First test score
final int SCORE2 = 95; // Second test score
final int BOILING_IN_F = 212; // Boiling temperature
int fToC; // Temperature Celsius
double average; // Arithmetic average
String output; // Line of output

// TASK #2 declare variables used here
// TASK #3 declare variables used here
// TASK #4 declare variables used here

// Find an arithmetic average.
average = (SCORE1 + SCORE2) / NUMBER;
output = SCORE1 + " and " + SCORE2 +
" have an average of " + average;
System.out.println(output);

// Convert Fahrenheit temperature to Celsius.
fToC = 5/9 * (BOILING_IN_F - 32);
output = BOILING_IN_F + " in Fahrenheit is " +
fToC + " in Celsius.";
System.out.println(output);
System.out.println(); // To leave a blank line

// ADD LINES FOR TASK #2 HERE
// Prompt the user for first name
// Read the user's first name
// Prompt the user for last name
// Read the user's last name
// Concatenate the user's first and last names
// Print out the user's full name

System.out.println(); // To leave a blank line

// ADD LINES FOR TASK #3 HERE
// Get the first character from the user's first name
// Print out the user's first initial
// Convert the user's full name to uppercase
// Print out the user's full name in uppercase

System.out.println(); // To leave a blank line

// ADD LINES FOR TASK #4 HERE
// Prompt the user for a diameter of a sphere
// Read the diameter
// Calculate the radius
// Calculate the volume
// Print out the volume
}
}

Task #2a Using the Scanner Class for User Input (4 pts)
⦁   Add an import statement above the class declaration to make the Scanner class available to your program.
⦁   In the main method, create a Scanner object and connect it to the System.in object.
⦁   Prompt the user to enter his or her first name.
⦁   Read the name from the keyboard using the nextLine method and store it into a variable called firstName (you will need to declare any variables you use).
⦁   Prompt the user to enter his or her last name.
⦁   Read the name from the keyboard and store it in a variable called lastName.
⦁   Concatenate the firstName and lastName with a space between them and store the result in a variable called fullName.
⦁   Print out the fullName.
⦁   Compile, debug, and run, using your name as test data.
⦁   Since we are adding on to the same program, each time we run the program we will get the output from the previous tasks before the output of the current task.
Task #2b (alternate) Using Dialog Boxes for User Input (4 pts)
⦁   Add an import statement above the class declaration to make the JOptionPane class available to your program.
⦁   In the main method, prompt the user to enter his or her first name by displaying an input dialog box and storing the user input in a variable called firstName (you will need to declare any variables you use).
⦁   Prompt the user to enter his or her last name by displaying an input dialog box and storing the user input in a variable called lastName.
⦁   Concatenate the firstName and lastName with a space between them and store the result in a variable called fullName.
⦁   Display the fullName using a message dialog box.
⦁   Compile, debug, and run, using your name as test data.
⦁   Since we are adding on to the same program, each time we run the program we will get the output from the previous tasks before the output of the current task.

Task #3 Working with Strings (4 pts)
⦁   Use the charAt method to get the first character in firstName and store it in a variable called firstInitial (you will need to declare any variables that you use).
⦁   Print out the user’s first initial.
⦁   Use the toUpperCase method to change the fullName to uppercase and store it back into the fullName variable.
⦁   Add a line that prints out the value of fullName and how many characters (including the space) are in the string stored in fullName (use the length method to obtain that information).
⦁   Compile, debug, and run. The new output added on after the output from the previous tasks should have your initials and your full name in uppercase.
Task #4 Using Predefined Math Functions (4 pts)
⦁   Add a line that prompts the user to enter the diameter of a sphere.
⦁   Read in and store the number into a variable called diameter (you will need to declare any variables that you use).
⦁   The diameter is twice as long as the radius, so calculate and store the radius in an appropriately named variable.
⦁   The formula for the volume of a sphere is:
r3
Convert the formula to Java code and add a line which calculates and stores the value of volume in an appropriately named variable. Use Math.PI for and Math.pow to cube the radius.
⦁   Print your results to the screen with an appropriate message.
⦁   Compile, debug, and run using the following test data and record the results.

Diameter   Volume (hand calculated)   Volume (resulting output)
2      
25.4      
875,000      
Task #5 Create a program from scratch (4 pts)
In this task you will create a new program that calculates gas mileage in miles per gallon. You will use string expressions, assignment statements, input and output statements to communicate with the user.

⦁   Create a new file in your IDE or text editor.
⦁   Create the shell for your first program by entering:
public class Mileage
{
   public static void main(String[] args)
   {
       // Add your declaration and code here.
   }
}
⦁   Save the file as Mileage.java.
⦁   Translate the algorithm below into Java code. Don’t forget to declare variables before they are used. Each variable must be one word only (no spaces).
Print a line indicating this program will calculate mileage
Print prompt to user asking for miles driven
Read in miles driven
Print prompt to user asking for gallons used
Read in gallons used
Calculate miles per gallon by dividing miles driven by gallons used
Print miles per gallon along with appropriate labels
⦁   Compile the program and debug, repeating until it compiles successfully.
⦁   Run the program and test it using the following sets of data and record the results:

Miles driven   Gallons used   Miles per gallon (hand calculated)   Miles per gallon
(resulting output)
2000   100      
500   25.5      
241.5   10      
100   0      

⦁   The last set of data caused the computer to divide 100 by 0, which resulted in what is called a runtime error. Notice that runtime can occur on programs which compile and run on many other sets of data. This emphasizes the need to thoroughly test you program with all possible kinds of data.
Task #6 Documenting a Java Program (2 pts)
⦁   Compare the code listings of NumericTypes.java with Mileage.java. You will see that NumericTypes.java has lines which have information about what the program is doing. These lines are called comments and are designated by the // at the beginning of the line. Any comment that starts with /** and ends with */ is considered a documentation comment. These are typically written just before a class header, giving a brief description of the class. They are also used for documenting methods in the same way.
⦁   Write a documentation comment at the top of the program which indicates the purpose of the program, your name, and today’s date.
⦁   Add comment lines after each variable declaration, indicating what each variable represents.
⦁   Add comment lines for each section of the program, indicating what is done in that section.
⦁   Finally add a comment line indicating the purpose of the calculation.

In: Computer Science

Susan G. Komen for the Cure: Can This Relationship Be Saved? Written by Mary Anne Doty,...

Susan G. Komen for the Cure: Can This Relationship Be Saved?

Written by Mary Anne Doty, Texas A&M University– Commerce

On January 31, 2012, news reports circulated that Susan G. Komen for the Cure had decided to stop funding clinical breast exams through a grant to Planned Parenthood. Initially, Komen cited the congressional investigation of Rep. Cliff Stearns, a conservative legislator who has pushed for abortion restrictions, as the reason for the change in policy barring grants to groups under government investigation. This decision had been made quietly in late November, 2011, with notification to Planned Parenthood in mid- December. As the story broke, Komen found itself in the middle of a controversy. Overnight the organization faced severe criticism (and some praise) as the story mushroomed through television and newspapers, as well as Facebook, Twitter, and other social media.1

Susan G. Komen for the Cure has become the largest source of nonprofit funds dedicated to the fight against breast cancer in the world, investing more than $1.9 billion since 1982. In April 2012 their website listed 124 corporate sponsors from varying organizations, including product brands (American Airlines, Ford Motor Company, Mohawk Flooring, and Yoplait Yogurt), retailers (Belk, Lowe’s, Old Navy, Walgreens), and sports organizations (Dallas Cowboys, Major League Baseball, Ladies PGA).2 In thirty years the brand had reached iconic proportions, beloved by people on all parts of the political spectrum. Charity Navigator, a website that rates nonprofit organizations on the percentage of funds used for the organization’s mission and on transparency, gave Komen a rating of 4/4 stars, with a score of 62/70.3 Supporters have a very personal link with the organization because volunteers have given (or walked) in honor of loved ones affected by breast cancer.

As word trickled out about the Komen decision, supporters and critics began sharing opinions through social networking sites. Former Komen supporters responded with anger and disappointment, many expressing feelings of betrayal. While the Komen grants totaled only $680,000 in 2011, an outpouring of donations to Planned Parenthood raised $3 million in three days, including over 10,000 new donors. As the lines were drawn for supporters of both organizations, most chose Planned Parenthood.4

The negative publicity also drew attention to many of Komen’s practices that had not faced public scrutiny.5 Among the complaints were: (1) the relatively small percentage of Komen funds that go to medical research for a cure (less than 19%); (2) high salaries of the founder and board members (founder Nancy Brinker is reportedly paid over $400,000 annually); (3) large legal expenses incurred from suing other charities defending the words “for the Cure” in their trademark; and (4) making women’s health a political issue.

Susan G. Komen for the Cure did not respond to the social media uproar initially, which angered many of their former supporters.6 Komen received a strong defense from people who disapproved of Planned Parenthood. Many of these were people who previously did not support Komen’s activities because of their grants to Planned Parenthood. In spite of the approval, it was not clear that this segment would replace the funding and other support at risk by the decision.

Corporate sponsors, who generally fear controversial issues, complained that Komen had not informed them of the policy change in advance.7 While none of the sponsors publicly abandoned Susan G. Komen for the Cure in the short term, they made it clear that better communication was expected if the relationship was to thrive.

After four days of intense negative publicity, Komen announced they were reversing their decision and would consider reinstating the Planned Parenthood grants.8 Komen founder Nancy Brinker apologized and announced that in the future groups will only be disqualified from receiving grants when they are under investigations that are “criminal and conclusive in nature and not political.”

This response was probably a case of “too little, too late” that angered those on both sides of the debate. Planned Parenthood supporters claimed the wording was full of loopholes and not a strong repudiation of the initial decision. Planned Parenthood opponents were angry that the decision was reversed and vowed not to support Komen in the future. The slow response managed to alienate a majority of the public.9

When the decision to defund Planned Parenthood’s grant became public on February 1, 2012, a number of Komen executives and employees resigned in protest, including a medical advisory board member, a health official, and the directors of several large Komen chapters. After the reversal on February 3, public outcry did not fade away. Karen Handel, Senior Vice President for Public Affairs, received most of the blame for the initial decision and for politicizing Komen policies by focusing on abortion politics rather than detecting and treating breast cancer. Handel, a former political candidate who had campaigned on an anti–Planned Parenthood platform, resigned on February 7.10

By February 23, news stories reported Komen hired a consulting firm to assess damage to their brand among supporters.11 The 20-minute survey tested the wording of various apologies and then measured the credibility of the Komen foundation and its leaders, along with the credibility of other public figures. Komen’s problems continued into March when two top executives resigned, the Executive VP and Chief Marketing Officer, as well as the CEO of Komen’s New York City affiliate. As the organization struggled to repair its relationship with supporters, some Komen affiliates reported revenues were substantially lower than in previous campaigns, and participation in the Race for the Cure was also down.

It may take years to determine if Komen can repair its relationships and be restored as a premiere charity brand. The damage of these events affects employees in the form of poor morale, former supporters who are angered by Komen’s initial decision and are not mollified by the reversal of that decision, corporate sponsors who are leery of future controversy, a public that views Susan G. Komen for the Cure as a tarnished organization, and disappointed anti-abortion groups who remain opposed to Komen. Moving forward, it may be time to reexamine their mission. When the organization was founded in 1982, breast cancer was often a death sentence for women (and a few men) because the prognosis was poor when cancer was detected in later stages. Komen raised awareness of breast cancer and spent millions of dollars on public education and breast cancer screening. By any measure, those efforts were a resounding success. It may be time for Komen to focus their strategy on research and treatment (as implied by the trademark name, “…for the Cure”) and save their education campaigns for less informed segments.

Question 1: How did social media impact the complaining behaviors of donors and participants for Susan G. Komen for the Cure activities?

Question 2: What types of complaining behaviors were most apparent? What was the response by Susan G. Komen for the Cure to negative public publicity after their decision to stop funding mammograms in partnership with Planned Parenthood? Would you have responded differently had you been in charge?

Question 3: Officials at Susan G. Komen for the Cure seemed unprepared for the intensity of response that they encountered. How would an understanding of the difference between customer loyalty and customer inertia have prepared the Komen officials for the reactions they experienced?

Question 4: Does the Komen organization demonstrate I characteristics of relationship loyalty with their donors? Why or why not?

Question 5: Many Komen supporters switched their donations to Planned Parenthood after the negative public publicity. Use the concept of share of wallet to explain why this might have happened.

In: Operations Management

Please study the article below and choose one specific corporation & business at your choice from...

Please study the article below and choose one specific corporation & business at your choice from the most unstable industries in the U.S. right now, in April 2020 due to corona virus impact and discuss in a word document the following topics (please do a brief research using external internet resources, website of the corporation, annual or quarterly company reports or your required book and OSM 311 power points):

-Company products & services

-The impact on sales or revenue or profit for this corporation of the corona virus effect on customers, supply chain, operation & employees, distribution, shelter in place government & state decision.

-What should you decide on inventory management (Anticipation inventory or Seasonal Inventory and safety inventory) as an operation manager for this company

-How can you reduce the inventory cost (slide 14) and Total cost minimization (slide 22-25).

-Losses & how to maximize the gross profit (review the break-even point)?

-Operations Strategies that your recommend for this business & corporation in this difficult situation of the economy (required book, page 581).

Airlines

With people around the world being asked to stay home and travel bans preventing people from entering and leaving certain countries becoming more common, the airline industry has been suffering major losses. Vertical Research Partners said that passenger revenues could decline to zero by the end of the first quarter and stay there for the whole year, Reuters reported.

Many major airlines have taken a hit. For example, Lufthansa has idled 700 of its 763 aircraft, and Qantas made plans to cut all international flights, which means 30,000 of its workers would need to take paid or unpaid leave.

The airline industry has been asking for government aid to get through the crisis, and on March 27, the U.S.’s coronavirus aid package passed, which would provide $58 billion to the American airline industry, Business Insider reported. The bill protects airline employee jobs through Sept. 30.

Many stakeholders see this as a win, including Delta Airlines and the Association of Flight Attendants.

“This is an unprecedented win for frontline aviation workers and a template all workers can build from,” Association of Flight Attendants president Sara Nelson said in a statement obtained by Business Insider. “The payroll grants we won in this bill will save hundreds of thousands of jobs and will keep working people connected to healthcare many will need during this pandemic.”

However, other experts think the bailout won’t be enough to save the industry, which relies on passengers to make revenue.

“We have an airline industry right now that is flying empty planes,” airline consultant Mike Boyd told CNN. “This isn’t going to save the industry unless we get back in [the] business of flying people.” And it’s unknown when that time might come.

“We’re talking about at least six to eight months down the road before flying starts to resume at anything approaching normal,” Boyd said. “And even then, we’re likely to see a significant reduction. One way or another, we’re going to have a smaller airline industry.”

Auto Manufacturing

Ford, General Motors, Fiat Chrysler, Honda, Toyota, Nissan and Hyundai have all shut down manufacturing plants amid concerns about the spread of the coronavirus, ABC News reported. The closing of  Ford, General Motors and Fiat Chrysler’s Detroit facilities will leave 150,000 workers without jobs, though they are likely to receive supplemental pay in addition to unemployment benefits.

However, the slowdown in demand for cars as a result of the coronavirus could have major ripple effects. According to one projection, for every seven-day period that consumers stop buying new vehicles, the U.S. economy would lose roughly 94,400 jobs and $7.3 billion in overall earnings, NBC News reported.

Construction

Although the construction industry is pushing to be seen as “essential” to keep their projects running, there could still be some major impacts to the industry. The shutdown of the production of construction materials in China could lead to material delays and more expensive materials stateside, Construction Dive reported. It could also lead to fewer projects, especially in the realm of hospitality, as clients and lenders pull back on funding and expansion in these times of uncertainty.

“My gut tells me we’re going to see higher prices and projects canceled, although I can’t point to the extent of it,” Joe Natarelli, national construction industry leader at accounting services firm Marcum, told Construction Dive.

Cruises

All the major cruise lines have ceased operations as countries continue to close their ports. Thousands of workers have lost their jobs — both those who work on the cruise ships and those who work at the ports — and the values of the three biggest U.S. cruise lines — Carnival, Royal Caribbean and Norwegian — have all plummeted, The Guardian reported.

“This will be a disastrous time for the industry,” Dr. Christopher Muller, a senior professor at Boston University’s School of Hospitality Administration, told The Guardian. “When you have 3,500 people booked on one of these mega cruises and the boat doesn’t go, it’s an enormous expense. Someone’s paying for that boat that’s sitting idle in the harbor and it’s very hard to recapture those ongoing fixed-cost losses.”

However, he believes the industry will be able to bounce back eventually.

“The logical thing is they will have to have very deep discounts, and those deep discounts will be especially present in the next cycle of cruise seasonality in September,” Muller said. “By August and September, the consuming public will be enticed to go back on cruises because the pricing is going to be outrageously good with enormous discounts.”

Film and TV Production

Major networks and film studios have put a halt on production as a result of the coronavirus outbreak. Netflix has stopped production on all shows in the U.S. and Canada, including “Stranger Things” season four; NBC Universal has suspended production on 35 or more shows; and Warner Bros., Disney +, Apple TV +, CBS, AMC and Viacom have all also paused production on their shows, Forbes reported.

The release dates of several major films have also been pushed, including “Wonder Woman 1984,” “In the Heights,” “Black Widow” and “A Quiet Place Part II,” while others have been released straight to streaming.

Over 100,000 entertainment industry workers have lost their jobs, while studios, networks and producers face major losses, the Los Angeles Times reported.

“There may be irrecoverable losses to the movie and entertainment industry,” Brian Kingman, who helps film and television companies find insurance policies, told the Los Angeles Times. “It’s going to take a long time to sort out.”

Gambling

As a result of the coronavirus, 92% of all of the casinos in America are now closed, including those in Las Vegas, the Las Vegas Review-Journal reported. In addition, the legal sports betting industry is also suffering as live sporting events have been canceled or postponed, Business Insider reported.

These closures not only affect the hospitality and gaming employees who are now out of work, but also the U.S. economy as a whole. If casinos remain closed for two months, it would rob the U.S. economy of $43.5 billion in economic activity, the Las Vegas Review-Journal reported.

Gyms

Many gyms and fitness studios have temporarily closed as a result of the coronavirus. But the pandemic hasn’t been bad for all sectors of the fitness industry — it’s actually been good news for Peloton, which has seen an increase in share prices, CNBC reported. But as people invest more in their at-home gyms while traditional gyms and fitness studios are closed, they might be reluctant to go back once they are open, feeling that they need to justify the thousands they just spent on new equipment.

In: Operations Management

(i) Develop your written part by answering the six questions given in the case. Each question...

(i) Develop your written part by answering the six questions given in the case. Each question may be answered in about 150 to 200 words. (50% to the marks)

(ii) Develop a PowerPoint presentation. You have to take one side, either the company ThyssenKrupp or the fired employee. If you decide to represent ThyssenKrupp, then you are the defense lawyer. If you decide to represent the fired mechanic, you are the Plaintiff’s Lawyer. Present your arguments with evidence and supporting matter to the Judge (Raj Mohanty) via a PowerPoint presentation. In a courtroom, the Judge is always addressed as “Me Lord” or “Your Honor”. (50% to the marks) No presentation in the classroom or on Adobe Connect will be needed. Your only chance to convince the judge is through your PowerPoint

. ThyssenKrupp Elevator Canada INTRODUCTION During a lunchroom break, a male employee at ThyssenKrupp decided to take up a dare from a fellow colleague for $100 and the Jackass-like prank was videotaped then posted to YouTube. When it came to the attention of the HR manager and other senior management, the employee was fired for violating company policy. The employee argued in court that the organizational culture allowed such behavior. But would the Ontario Labour Relations Board (OLRB) agree?

BACKGROUND ThyssenKrupp Elevator Canada was subcontracting elevator installation at a construction site in downtown Toronto where a large office building was being built. All the workers on the site, including those from ThyssenKrupp, and the main contractor of the site, PCL Construction, were male and the culture of the workplace was described as a “macho” environment where pranks were played. There were reportedly pictures of women and provocative calendars hanging on walls, as well as signs displaying vulgar humor. There was little concern about these as access to the building was restricted to people involved in the construction project. One of ThyssenKrupp's employees at the site was an elevator mechanic. He and several other employees engaged in what he called “picking” on each other and playing pranks to keep things light at work. They also watched pornographic scenes on a worker's iPod and episodes of the television show Jackass, which features individuals doing stupid activities on dares.

ESCALATION OF PRANK BEHAVIOUR Over a period of a few weeks, the mechanic and other employees performed more and more pranks that copied some of the ones they saw on the Jackass show. Typically these events took place in the basement lunchroom where employees gathered for breaks and meals, to change clothes, and to socialize. Soon, money was being offered on dares to do certain actions. For example, one ThyssenKrupp employee accepted a dare that involved a $60 payment—money collected from fellow employees, including three foremen. The dare involved the employee eating spoiled food found in the common refrigerator of the lunchroom. A couple of weeks after the first dare, the mechanic was observed playing with a stapler in the lunchroom on a break. One of the foremen walked in and jokingly said, “What are you going to do with that? Why don't you staple your nuts to something?” The mechanic jokingly replied that he'd do it “if you get enough money.” Though he claimed it was intended as a joke, word spread within a few hours, and soon $100 was raised among seven other ThyssenKrupp and three PCL employees. Another four people were in the lunchroom later that afternoon watching when the mechanic decided to go ahead with the staple dare. He proceeded to drop his work uniform trousers and staple his scrotum to a wooden plank, which was met by “cheering and high fives,” according to the mechanic. With the mechanic's knowledge, the prank was filmed on video. Included on-camera were all those employees present, wearing full worksite uniforms, PCL logos on hats, and TK shirt patches—all easily identifiable and recorded by a worker who was present that day. The mechanic was advised at a later date that the event was posted on YouTube. Initially, the mechanic did nothing about the YouTube posting but eventually asked for it to be taken off the site. To ensure this was done, the mechanic went back to YouTube searching for the video clip, but couldn't find it. He assumed it had been removed, however, it was not—he just didn't search correctly. In total, the video clip was assessable on YouTube for two weeks, during which time many employees in the construction industry watched it. It was during these two weeks that ThyssenKrupp became aware of the video after the HR department received an email with a link to the video, and several people discussed it with a ThyssenKrupp executive at a construction labor relations conference. Conference participants insisted the employee was from ThyssenKrupp, and they questioned how the company could allow something like that to happen during work hours. At this point, ThyssenKrupp management reviewed the video one more time and decided that the mechanic had violated its workplace harassment policy, which prohibited “practical jokes of a sexual nature which cause awkwardness or embarrassment.” The mechanic was fired for “a flagrant violation” of ThyssenKrupp's harassment policy and risking the company's reputation.

CULTURE AT FAULT Upon being fired from his job, the mechanic filed a grievance with the OLRB. He argued that dismissal was too harsh given the culture of the workplace which was accepting of that type of behavior. He also said no one told him not to do it, no one expressed displeasure, and no one mentioned they were offended. He argued that other employees had done stunts but questioned why he was the only one disciplined for his actions. He also claimed to have never seen the workplace harassment policy, even though it was part of the orientation package. THE DECISION In July 2011, the OLRB found the mechanic's misconduct on the employer's premises, plus his permission to record it, “patently unacceptable in almost any workplace.” The fact that his employer was easily identified in the video clip contributed to the decision. The fact that the mechanic claimed not to have known about the corporate harassment policy was irrelevant—he should have known better. The OLRB also dismissed as irrelevant that no one protested or objected to the prank during the lunch break, which the mechanic argued was “not during work hours.” The court stated that ThyssenKrupp has an interest in preventing such horseplay and stunts in the workplace. They are in a safety-sensitive industry and such employee misconduct places the firm's reputation in jeopardy. The seriousness of the mechanic's misconduct also superseded any other factors, such as his claim of being a good employee with a clean record and the argument around the culture. There was no evidence that the company was aware of other pranks, and his role as the principal offender wasn't diminished by the culture, said the board. In dismissing the mechanic's grievance, the board stated, “If (ThyssenKrupp) employees want to emulate the principles of Jackass by self-abuse, they may be free to do so when they are not on the (employer's) premises and cannot be identified as being associated with (ThyssenKrupp).”

Questions

(1) What corporate values did ThyssenKrupp refer to when deciding to terminate the mechanic? What are the health and safety issues involved here? Do you think an informal work environment is leading towards a lack of strict health & safety policy at the workplace?

(2) Considering that the mechanic claimed that the ThyssenKrupp culture contributed to such behavior, in your opinion, does ThyssenKrupp need to change its corporate culture? If not, why not?

(3) Are there any Tort issues involved here? What other legal issues are involved here? Explain.

(4) Did the Ontario Labour Relation Board (OLRB) accept the defense that organizational culture contributed to the employee behavior? Explain their reasoning. Considering the company’s work environment, what factors need to be considered while updating the company’s health & safety policy?

(5) If this case goes to court, what arguments the Plaintiff’s Lawyer, representing the fired worker, would present before the court?

(6) What would be the line of Defense for the Lawyer of Thyssen Krupp Elevator?

In: Operations Management

1. In theory, what conditions must exist for a company to build a new factory? That...

1. In theory, what conditions must exist for a company to build a new factory? That is, what hurdles must a firm overcome in order to build a factory?  

2. What are the five areas, or categories, of Total Spending? How large is each area, in terms of total dollars spent, and in percentage terms--- as a percent of Total Spending?  

3. What are the four events that may cause a recession, in theory? What IS a recession, exactly? Are we in one right now? What has happened to Total Spending in 2020, as compared to 2019? Why?

4. Please list and discuss three features of business spending that make it unique--that set it apart form the other areas of total spending. Why is business spending so important to our economy?

here is the lecture:


THE TOTAL SPENDING EQUATION AND THE IMPORTANCE OF “I”--- INVESTMENT --- BUSINESS SPENDING: An introduction into the entire field of Macroeconomics, in theory, may be expressed by the following equation: Total Spending (as measured by the GDP) = C + I + G + (X -M), that is, the concept of the total amount of money spent on U.S. goods and services in any given year may be measured by examining various areas of our economy: C, consumption, also known as household spending, I, Investment, which is more accurately described as business spending, G, government spending, X, exports, and M, imports. We have examined C, consumption, in earlier modules. We will now examine the concept of I, Investment, business spending. Later in the course we will examine G, government spending, along with tax collection, and the deficit and the debt, along with X and M. Before March 2020, total spending was cruising along at a level of about $21.5 trillion for the year---on an annual basis. Owing to the recession of 2020, total spending will probably drop to somewhere in the area of $20 trillion for the year---or lower. In terms of a percentage breakdown, C, total household spending, makes up about 68% of total spending, I, Business Spending, comes in at a historical average of about 17%, though it had been dropping for several months prior to March 2020, G comes in at about 22% of the total--- much higher than just a few years ago, while (exports minus imports) may vary between minus 3% and minus 5% of total spending. We track exports and imports in relationship to one another, which we call the ‘trade deficit”. Prior to March 2020, exports tended to represent about 12% of the U.S. economy, in terms of total spending, and imports represented about 15% of total spending. Here, a little humility is in order: WE DO NOT KNOW with any degree of precision what will happen to these numbers--- exports and imports--- in the next year or two. We have a global recession on our hands, and estimates are changing week to week. It is a very daunting time to come up with the next edition of an Econ text! Obviously, it is my job to present you with the latest numbers and the latest news in all matters involving the study of macroeconomics. As you may imagine, I am very busy these days! The category of total spending known as “I”, which stands for Investment, also known as Business Spending (sorry about all the terms!) is particularly compelling. I believe it is safe to say that the area of the economy known as “I” is MUCH MORE IMPORTANT THAN JUST 17% OF OUR ECONOMY. This sounds a little odd, since an area representing 17% of our economy should be worth 17% of our time---right? Well… it is ‘worth more than that’, one may argue. WHY? WHAT IS SO DARN SPECIAL ABOUT BUSINESS SPENDING??? Well, it is the only category of the ‘big three’--- C, I, and G --- that can rise or fall by 20% in one year. In fact, it would not surprise me if business spending DID IN FACT DROP BY 20%----OR MORE --- IN THE YEAR 2020. C will not drop 20% (THANK GOODNESS), and G SURELY WILL NOT DROP THIS YEAR---IN FACT, IT IS RISING AT A RATE NOT SEEN SINCE WORLD WAR TWO--- this rise in G will be studied for decades, if not centuries. The EXTRA $2.2 trillion in stimulus spending so far in 2020 is just the start. MUCH MORE ON THIS LATER! We may describe the area of business spending as follows: “businesses… spending money… hiring workers… to BUILD”---what we are really talking about here is CONSTRUCTION VOLUME, or CONSTRUCTION ACTIVITY! So… why not just call it CONSTRUCTION spending?? I do not know. That is what I would call it. It is more descriptive. A warning: the word “Investment” means something distinct and different inside this course: it is used to represent this area of the economy. Outside this course, this very slippery, malleable word means something else. The phrase: “we ‘invested’ $10,000 by buying Apple stock today” has a different meaning--- related to our definition, but not the same. Let me explain: “investment” in this course stands for the construction of new factories, (new plant and equipment and office buildings), the construction of new housing units (homes, condos, apartment units, ADUs, mobile homes) and the addition of new inventories—more on this later. What is so special and unique about Investment, also known as business spending? It involves BUILDING SOMETHING NEW: in 1932, it was zero for the year. C and G would NEVER be zero for the year. In 1932, we were three years in to the Great Depression. Unemployment (U) reached 25% AND STAYED THERE. U may hit 20 or 25% later in 2020, but IT WILL NOT STAY THERE. In 1932, there was no demand for new factories, or new homes, and businesses were busy drawing down inventories—not adding to them. Let’s look at one selfish firm deciding whether or not to build a new factory on U.S. soil in the next 12 months . This is the essence of business spending. It must proceed through four steps, or see four “green lights’, before it will start down this path. STEP #1: GREAT EXPECTATIONS! The decision to build this new factory is an ALL OR NOTHING decision. Let’s say it is April, 2019, and we are deciding whether or not to build the new factory. If we build the factory, we will start construction in Jan, 2020 and finish in Dec, 2020. The factory will cost $100 million to build in calendar year 2020 if we build it, and $0 if we do not build it. All or nothing. This is a small factory! The Tesla – Panasonic battery plant outside Sparks, Nevada may end up with a cost of about $5 billion when it is finally completed. Regardless of the size of the factory, a firm must have ‘the green light’ in order to build a new factory---an “all or nothing” decision. IT MUST GET EXCITED ABOUT THIS PROJECT! THIS IS THE MOST IMPORTANT DECISION THIS FIRM WILL MAKE IN THE NEXT THREE YEARS! This project will most likely have to ‘beat out’ other projects inside the firm competing for scarce resources. I want you to visualize a healthy firm that is doing so well THAT IT WANTS TO EXPAND. It has MORE IDEAS THAN MONEY. Thus, there is a ‘competition’ inside the firm for which project to pursue and which factory to build. Jobs and careers are at stake. ONCE WE HAVE THE GREEN LIGHT, then we have to line up FINANCING—whether it is generated in equity markers or in debt markets. More on this later, but let me introduce you to the idea that THERE IS A FINITE AMOUNT OF MONEY available for projects such as this one. We will have to ‘beat out’ other firms who are competing for the same pot of money. Our government does not help all of this by BORROWING A TREMENDOUS AMOUNT OF MONEY EACH YEAR. This is known as the deficit. Obviously, the deficit is skyrocketing this year as our government is borrowing over $2.2 trillion MORE THAN BEFORE in its efforts to save our economy and reduce the scale of human misery that comes with tens of millions of workers losing their jobs. Every major economist I have seen and heard this year has said “let’s not worry about the debt and the deficit right now”---and that is fine. We MUST worry about it LATER! MUCH more on this later! If the firm can secure financing, it must also clear regulatory hurdles: it must apply for, and be granted BUILDING PERMITS --- from local, state and federal government agencies. Thus, this area of spending in our economy is no “slam dunk”--- many pieces must fall into place in order for a construction project to move forward. Looking at the equation Total Spending = C + I + G + (X – M) we may ask this question: what possible events may occur that would start a recession? Now, there is a very precise definition of a recession, but an introductory look at this suggests that a recession occurs when total spending drops for two business quarters in a row—six months. In fact, there is a commission that “calls” recessions. There is NO doubt that we are in one right now. Recessions have occurred in: 1981-2, 1990-1, 2001, 2008-9, and, of course, 2020. WHAT FOUR EVENTS MAY CAUSE A RECESSION? In theory, we may see: 1. A drop in G 2. A drop in X 3. A drop in C 4. A drop in I. Let’s look at each possible event: in terms of the historical norm, a drop in G does not happen from year to year. I suppose that G, government spending, may well drop from its INCREDIBLY HIGH levels in 2020, back down to its ‘normal’ level in 2021---we certainly hope so. We hope and pray that the current recession is short. Normally, G rises by about 4% per year, for various reasons—much more on this later. If G must rise by 4% per year, or at least $160 billion per year, then SOME OTHER AREA of total spending must REALLY DROP in order to cause a recession. G does not drop from year to year in normal times. A drop in X may occur this year, but a once-in-a-century pandemic is not normal. In a normal year, export sales will rise as the global economy grows. Obama came in to the presidency in early 2009 promising to preside over a doubling of export sales--- and he just about got us there. The global economy tends to rise about 2 to 3% per year. Not so this year, obviously. We have a great record of producing products and services that are sold to households, businesses and governments in other countries: planes with weapons on them, planes without weapons on them, food, entertainment products and services, financial services, and MANY other products and services. Prior to March 2020, export sales accounted for over ten percent of our economy, and our jobs. In theory, let’s say that one of our trading partners is suffering a drop in total spending, and thus will be cutting back on the volume of products and services that they may buy from U.S. businesses. We have some of our best and brightest people in positions of power to try to make sure this does not happen: our trade representatives, the IMF, the World Bank, and many other institutions may act so to help that country’s economy. We also have “foreign aid”. While foreign aid represents a TINY portion of overall government spending, there is a false impression of it among many Americans. Many people believe that we just ‘hand out’ money to other countries. Let’s take Egypt as an example. As the most populous Arab nation, Egypt is just INCREDIBLY important in terms of U.S. interests. Ever since they signed a peace agreement with Israel--- President Carter’s greatest foreign policy achievement---our government has been ‘giving’ them a lot of money each year--- but it is NOT a ‘handout”. We tell Egypt, for example: “here is $3 billion—now, WHAT U.S. PRODUCTS AND SERVICES ARE YOU BUYING WITH THIS MONEY? Food? Weapons?” If we drill down more deeply, we see that this is a U.S. JOBS PROGRAM. Why does Turkey receive so much aid from the U.S.? Could it be that we have a military base on their soil? That they are a member of NATO? Our nation has a very good record of preventing event #2 from occurring. A once-in-a-century pandemic does not change this fact. EVENT #3: a drop in C. Now, obviously, it was a drop in C that caused this recession. Well, that is a bit simplistic… when many of our 30.2 million small business CLOSED SHOP, NEVER TO REOPEN, and over 20 million workers LOST THEIR JOBS OVERNIGHT… we will see a drop In C. Let’s say this is unusual. The events of 2020 will be studied 100 years from now. In normal times, obviously, a drop in C may cause a recession--- but that is not normally how it works, in terms of the ‘timing’---the initial cause of a recession. C, household spending, drops DURING a recession (usually) as a ‘fifth-in-time’ event. We may recall the story of Tom Green: he lost his job, and yes, as a direct result, his family will cut back on household spending. Here is how the sequence may transpire: 1. FOR SOME REASON, total spending drops. 2. Businesses see a drop in sales volume. 3. Businesses react by cutting back on production volume. 3. In doing so, they cut the hours of some workers and terminate the employment of others (when I get fired, my hours get cut, obviously, to zero) 4. Workers see a drop in wage income. 5. In response to the drop in income, most workers will cut back on household spending levels --- as income drops, household spending drops, albeit not dollar-for-dollar. YET… WHAT WAS THE INITIAL CAUSE OF THE DROP IN TOTAL SPENDING! What event “started’ the recession? In most cases, it is a drop in I, business spending. Not all cases, but most. Leading up to March 2020, economists were getting more and more concerned that this area of the economy was ALREADY DROPPING, partly in part to Trump’s erratic trade policies. Businesses need ‘GREAT EXPECTATIONS’ to build that new factory on U.S. soil ---(at least in theory)--- and Trump is not good at creating and maintaining great expectations. Then, the pandemic invaded our country, and both C and I dropped in a dramatic fashion. In the months leading up to the recession of 1981-1982, the volume of business spending dropped… and dropped… and dropped more… and more…. And, finally, the drop in business spending “dragged down” total spending. The drop I--- business spending---- OVERWHELMED the rise in government spending, and, as a result, the recession was inevitable. The recession started in Jan. 1981 – just as Reagan came in to office. By the time he was running for reelection in November, 1984, the economy had completely rebounded. Nice timing! The Fed had pursued ‘contractionary monetary policy’ from March 1979 to March 1980, in order to battle high rates of inflation, raising interest rates to a modern-day high. A home loan cost about 18% interest. VERY few homes were purchased, or sold, or BUILT during this time. Sellers of homes often had to PERSONALLY LEND buyers some of the money! If the new home buyers could not pay the monthly mortgage, the home seller, in theory, would have to hire an attorney and foreclose on the house. Thus, even though C and G are LARGER AREAS of total spending, I, that is, business spending, is by far THE MOST VOLATILE --- THE QUICKEST TO CHANGE, and BY A GREAT MAGNITUDE. Home construction and sales volume DROPPED BY HALF during the Great Recession which ran from Dec. 2007 to June 2009. The entire category of business spending can drop by 20% in one year. It may be doing just that right now in 2020. Our government is AGGRESSIVELY trying to minimize the drop in C, household spending, during this turbulent time. We will study some of the programs involved later in the course. Yet, business spending continues to drop this year as MANY firms delay planned construction projects. Thus, it is clear to see that business spending is quite unique and special, and deserves ‘more than 17%’ of our time. Later in the course, we will examine the role of our government in attempting to cause a rise in business spending—not just for one year, but for the next 20 years.


In: Economics

The Sorry Side Of Sears BY JOHN MCCORMICK ON 2/21/99 AT 7:00 PM EST IT'S NOT...

The Sorry Side Of Sears

BY JOHN MCCORMICK ON 2/21/99 AT 7:00 PM EST

IT'S NOT EASY TO DIGEST A DISASTER at 8:30 a.m. on a Sunday. Sitting with his top executives at a conference table in Chicago on a spring morning in 1997, Arthur C. Martinez was in shock. His lawyers used overhead slides to explain how employees at Sears, Roebuck and Co.--the once moribund company he'd worked so hard to revive--had secretly violated federal law for a decade. Their actions, which had been exposed by a bankruptcy judge in Boston, were about to erupt in a nationwide scandal. Already the U.S. Justice Department was weighing not just civil penalties, but criminal prosecution. Worse, this wasn't a rogue operation, or an honest misinterpretation of the law: Sears appeared to have been violating the rights of some credit-card holders systematically and intentionally. The company, the lawyers were suggesting, may even have put the illegal practice in its procedures manual. How could such wrongdoing have gotten started, and how could it have gone unchecked for years? Martinez wanted to know. ""Not one phone call about this? Ever?'' he demanded. It was, says one participant in the meeting, ""a sickening moment.''

There would be many more sickening moments as Sears scrambled to contain the legal, financial and public-relations fallout from its lapse. Last week, after a 22-month FBI investigation, a Sears subsidiary agreed to plead guilty to a criminal charge of bankruptcy fraud--and to pay the government a stunning $60 million, the largest such fine in U.S. history. A federal judge still must approve the plea bargain. NEWSWEEK'S lengthy investigation of the scandal reveals the inside story of the turmoil at Sears during those intervening months. It shows how Sears struggled, first to assess the scope of its problem, and ultimately to understand what in its management structure, executive style or corporate culture had led it to commit the most serious ethical breach in its history.

It all began with what's known around federal bankruptcy court in Boston as the letter that cost Sears a half-billion dollars. Scrawling on a yellow legal pad in November 1996, a disabled security guard named Francis Latanowich begged to reopen his bankruptcy case. Although Judge Carol Kenner had wiped out his debts, Latanowich had agreed to repay Sears the $1,161 he owed for a TV, a car battery and other goods. But the monthly payment, he wrote, ""is keeping food off the table for my kids.''

Sears, it turned out, had mailed Latanowich an offer. In return for $28 a month on his account, it wouldn't repossess the goods he'd bought with a Sears charge card before he went bankrupt. Urging debtors to sign such deals, called reaffirmations, is legal, and roughly a third of bankrupts do so. But many judges view them as sucker deals that keep people from getting a fresh start. And every signed reaffirmation must be filed with the court so a judge can review whether the debtor can handle the new payment. Sears hadn't filed this one. Kenner wanted to know why.

At a Jan. 29, 1997, hearing, a Boston attorney working for Sears served up a convoluted technical excuse for not filing. Kenner's response: ""Baloney.'' There were hints from prior cases that Sears, both praised and feared nationwide as the most aggressive pursuer of reaffirmations, wasn't filing many of them with the court. If true, the company was using unenforceable agreements to collect debts that legally no longer existed. Kenner pushed for a list of such cases. Sears's response, delivered reluctantly in mid-March by a credit manager, was a shocker: since 1995 Sears apparently had ignored the law 2,733 times in Massachusetts alone.

It wasn't hard to conjure up a likely motive. With bankruptcies nationwide skyrocketing from 780,000 in 1994 to 1.3 million last year, many companies are awash in bad debts. Getting debtors to sign reaffs is a way to reclaim some of the losses. And not filing them keeps nosy judges from nixing many of those side deals. ""The worst thing about what Sears has done is that they're kicking the little guy when he's down--2,733 times,'' Kenner steamed. ""Frankly, I think their actions have been predatory. They've shown a wholesale disregard for the Bankruptcy Code, and sanctions will be stiff.''

The scandal couldn't have hit Sears at a more inopportune time. Martinez, an outgoing Brooklyn native who'd come to Sears from Saks Fifth Avenue in 1992, had rescued the huge retailer from years of drift. He'd killed off the old Sears catalog, cut 50,000 employees and promoted ""the softer side of Sears'' with a push into high-profit apparel lines. The ink was barely dry on a Barron's profile that approvingly discussed how Sears also cut losses by pursuing bad debts. Fortune was headed to press with a similar piece about the resurgence at Sears, where profits were rising 20 percent a year.

Word of a livid judge in Boston reached Michael Levin, then head of Sears's law department, on March 27. Like Martinez and other top execs at Prairie Stone, the company's glassy headquarters outside Chicago, Levin says he'd known nothing about Sears's misconduct; he had joined just 15 months earlier. But he quickly discovered that the company had been breaking the law in federal bankruptcy courts across the United States. Eventually Sears would determine it had improperly collected $110 million from 187,000 consumers. Early on Martinez asked Levin if Sears had ever pleaded guilty to a crime. The answer was no. ""I said to myself, "The company's 111 years old, and I'm the guy in the chair when we plead guilty to a criminal offense','' Martinez says. ""Wonderful.''

At 4:15 p.m. on April 9, a cryptic e-mail message flashed onto screens at Prairie Stone. It summoned Sears's top 200 executives--the so-called Phoenix Team--to an urgent meeting at 8 the next morning. As Martinez explained Sears's serious breach of law, says one attendee, ""Arthur was not angry, but very sad.'' The costs, he said, were incalculable. ""We've rebuilt our customers' trust and confidence in this company brick by brick,'' he said, ""and now all of that has been bulldozed.''

It was a devastating moment for the Phoenix Team. ""I was watching the veterans, the people who've been through so much,'' says one executive. ""There was no movement, no expression, no shuffling of feet. They were heartbroken.'' As the meeting ended, Martinez told every executive to spend the next half hour at his or her desk. Do nothing, he said, but think about your own operation. ""Not just to identify additional exposure,'' he says, ""but to fundamentally rethink--Is what I do, the direction I give, the body language I use, creating an environment where something like this could happen? Is my message, "Make the numbers at any cost'?''

Martinez has asked himself the same question. Sears had suffered a black eye before he arrived, when auto-repair employees in California were caught hiking their own commissions by selling customers products they didn't need. Martinez is proud of the ethics office and other integrity initiatives he launched after he joined Sears. ""We tried to set a tone at the top,'' he says. But in the early 1990s Martinez also oversaw the extension of credit cards to 17 million new customers. That's about 5 million more than Sears might routinely have added. Credit by itself is big business: last year the company earned 50 percent of its operating income from credit, including charge cards held by more than half of all U.S. households. The problem, Martinez admits, is that too many of those new cardholders barely qualified. So, in its zeal to attract new business, Sears became a lender to its riskiest customers. As the number of bankruptcies nationwide mushroomed, so did the number of unpaid accounts at Sears: by 1997 more than one third of all personal bankruptcies in the United States included Sears as a creditor.

Any company that dependent on income from its credit cards must aggressively pursue bad debts, and Sears isn't the only retailer to have crossed the line. Bankruptcy experts estimate that creditors historically haven't filed perhaps one third of all reaffirmations that bankrupt Americans sign. Since the Sears case broke, Federated Department Stores (which owns Macy's and Bloomingdale's), May (Filene's), G.E. Capital (Montgomery Ward) and Discover card have settled with debtors. But Martinez saw the scandal as more disturbing than a credit tactic run amok. Several weeks after the crisis erupted he probed for deeper cultural flaws during a Saturday retreat with his Phoenix Team. ""Maybe all the bullshit that's being written about how we've changed values and culture is just that,'' he told his executives. ""What allowed this thing to go unnoticed, untouched and unreported for so long?'' Talking in small groups, the managers agreed that Sears's transformation from an exhausted, defeatist bureaucracy into an aggressive, can-do company had an unanticipated consequence: they hated to send bad news back up to the top. That's a common pathology. Managers aren't trained to expose problems, says James Schrager, a business ethicist at the University of Chicago. ""They're trained to make their goals or heads will roll.'' CEOs can't control every employee's actions, Schrager says. They can, however, emphasize that workers may lose their jobs for failing to report violations--but never for telling management the truth.

Still, Sears's problem wasn't just culture. It was policy. To investigate the roots of its misconduct, Sears hired law firms in Chicago, New York, Detroit and Boston to interview 400 people inside and outside the company. Based on that probe, Martinez and Levin have given NEWSWEEK an explanation never aired in public or in court. They say the problem traces to a Sears lawyer working in a field office in 1985. Sears will not identify the lawyer. ""This fellow had gone to a seminar on bankruptcy,'' Levin says. ""Out of that, this idea was triggered. I don't believe the lawyer thought there was a criminal act involved.'' The practice of not filing all reaffs was later rolled out nationwide.

The next obvious question is why nobody at Sears ever stopped such a serious breach of law. Levin has told NEWSWEEK there were clues: at least one outside law firm had told someone at Sears that the company's policy was questionable. But word of that alert--which might have triggered a broader inquiry at Sears--never worked its way up through the company. ""There should have been a review,'' Levin says. ""Somebody in the law department should have stood up and said, "This is the wrong thing to do'.'' Martinez thinks he knows why nobody blew the whistle. ""I'm sure our people would say, "These goddamn deadbeats; they took the merchandise and they didn't pay for it, and they filed for bankruptcy. I'm going to find a way to protect my company.' That's wrongheaded, but it's an accurate reflection of the culture.'' Another discovery was even more disturbing: Sears's own procedures manual--actually, a database available to every computer user--was part of the problem. ""As a reader, you'd conclude that there are some circumstances--which you can't define with precision--when [reaffirmations] wouldn't be filed,'' Levin says.

The damaging discovery inside its own procedures manual helped cement Sears's resolve: get this over quickly, pay restitution in full, avoid years of litigation and bad press. Those who attended the first crisis meetings say Martinez insisted from the very beginning that Sears come clean. ""We had to admit to failure here and commit to repaying people the money we'd inappropriately collected,'' he says. ""We said to ourselves, "We can't go into court and defend any of our practices'.'' At Levin's suggestion, Sears made a startling admission: that its own ""flawed legal judgment'' was to blame for the misconduct.

With Kenner watching closely, Sears began a hunt for every case of wrongdoing back through 1992. (Before that records were fuzzy.) The raw numbers were daunting. In the prior five years 510,000 Americans had signed reaffirmations pledging to pay Sears debts that totaled $412 million. But figuring out which agreements hadn't been submitted to judges was a massive project. Reaff data retrievable by computer went back only eight months. Digging for clues, 60 computer and audit specialists searched records of 110 million Sears credit accounts. More workers scoured files in federal courts and Sears credit offices nationwide. So many documents flowed into a windowless workroom at Prairie Stone that one worried auditor performed weight calculations to see if the floor would collapse.

The search cost $14 million, but Sears's eagerness to find and repay the people it had wronged won high marks from Justice and other combatants in the case. ""Usually we have two years of knock-down, drag-out before we get down to business,'' says John Roddy, a Boston attorney for the debtors. ""This is the only case I've ever filed where I didn't get a pure stonewall response.'' A few of those affected stepped forward to identify themselves. Several dozen people wrote the company to say they didn't deserve refunds, and planned to keep paying off their debts. One man called to say that he'd declared bankruptcy twice, under the names Jeff and Geoff; he wanted to make sure he got both refunds. Another man called on his mobile phone while cruising past Prairie Stone on Interstate 90. Would it be possible, he asked, to drop by and pick up a refund?

When the last lawyer's bill arrives, the scandal will have cost Sears close to $475 million. Almost $300 million has gone to the wronged debtors, both as refunds (plus interest) of about $1.40 for every $1 Sears improperly collected, and as forgiveness of remaining debt for whatever items they'd purchased. The balance: the pending federal fine, a separate penalty paid to the 50 states and the cost of settling a lawsuit brought by a group of shareholders who claimed that the scandal had hurt the price of their stock. Sources outside Sears say six managers have been forced out of their jobs. (Levin also has departed for unrelated reasons.)

Last week's plea bargain--which Sears swallowed in order to avoid a criminal trial--should let the company dispose of the scandal for good. Martinez says he's pleased that ""the end is clearly in sight.'' He's got other things to worry about. His turnaround has lost some momentum, and Sears stock is languishing near its 52-week low. Martinez is now launching his ""Second Revolution,'' a plan to re-energize the company with, among other things, new merchandise and more store remodelings. Pressing as those challenges are, it's a relief for Martinez--and everyone else at Prairie Stone--to get back to business.

PROFIT--AND LOSS Sears makes much of its profits from credit cards. It pushed hard to expand that business, and ended up with less credit-worthy customers.

63 million households have Sears credit cards. In the last 12 months, 32 million of those accounts were active.

More than one third of all personal bankruptcies in 1997 included Sears as a creditor who hadn't been paid.




QUESTION:

1. Give a synopsis of this case and describe/explain why this is an ethical issue

2. What are some of the legal and ethical issues involved? Explain why the conduct in the case could be right or wrong

3. What are the implications for Managers and the Businesses?


In: Economics