Questions
WRITTEN CASE ANALYSIS SECTIONS At a minimum, the following sections are to be included in each...

WRITTEN CASE ANALYSIS SECTIONS At a minimum, the following sections are to be included in each written case analysis. Full discussions, explanations, reasoning, and support are to be included as to demonstrate to the reader the student’s complete understanding, knowledge, and competencies of all areas of business.

Complete SWOT Analysis

Competitors –direct and indirect

CHRISTOPOHER A. BARTLETT

Microsoft: Competing on Talent (A)

In the summer of 1999, a front-page Wall Street Journal article was attracting attention on the

Redmond campus. Under the headline “As Microsoft Matures, Some Top Talent Chooses to Go Off

Line,” the article reported: “Tired of grueling deadlines, frustrated by the bureaucracy that has

accompanied Microsoft’s explosive growth, or lured away by the boom in high-tech start-ups, dozens

of the company’s most capable leaders, all around 40, have opted out—at least temporarily . . .”i (See

Exhibit 1 for the article’s list of senior level departures.)

Steve Ballmer, the company’s recently appointed president and COO, was quoted as saying that

some of the departures were voluntary and some were not, opening opportunities for fresher,

smarter replacements. “We have a bench that is very deep,” he said. “We have people who are fired

up—driven—to lead the next generation.”ii Yet despite the positive outlook, Ballmer clearly

recognized that Microsoft had to change or adapt some of the human resource practices that had

allowed it to assemble and retain what CEO Bill Gates proudly called “the best team of software

professionals the world has ever seen.” Just six weeks before the WSJ article was published, Ballmer

had announced a package of changes that sweetened salaries, allowed more frequent promotions,

and softened some of the pressures that had long been part of the” hard-core” Microsoft culture.

Still, there were some who wondered if the rumblings in the senior management ranks reported

by the WSJ were not the signs of larger looming problems for Microsoft. It was a question taken very

seriously by Gates and Ballmer who understood very well that the company’s enormous success was

largely due to its ability to recruit, motivate, and retain extraordinary talent.

the company’s growth led to changes in the way such policies were managed in the 1990s—and

sometimes to changes in the policies themselves. (See Exhibit 2 for Microsoft’s growth profile.)

Recruiting: Attracting the Best and Brightest

Gates had long recognized that it took exceptional people to write outstanding software. His

preference for hiring extremely intelligent, not necessarily experienced, new college graduates dated

from Microsoft’s start-up days, when he and co-founder Paul Allen recruited the brightest people

they knew from school—their “smart friends.” In subsequent years, the importance of recruiting well was constantly reinforced by Gates, who considered helping his managers hire the best of all possible

candidates as his greatest accomplishment. “We’re in the intellectual property business,” he told

them. “It’s the effectiveness of our developers that determines our success.” Underlining the

importance of hiring and retaining superior talent, in 1992 Gates acknowledged: “Take our 20 best

people away, and I will tell you that Microsoft will become an unimportant company.”iii

For Gates, acquired knowledge was less important than “smarts”—the ability to think creatively;

and experience was less important than ambition—the drive to get things done. Above all, however,

he wanted to use recruiting to continually raise the bar. “I’d have to say my best business decisions

have had to do with picking people,” he said. “Deciding to go into business with Paul Allen is

probably at the top of the list, and subsequently, hiring a friend—Steve Ballmer—who has been my

primary business partner ever since.” As Fortune magazine once observed, “Microsoft has been led

by a man widely recognized as a genius in his own right, who has had the foresight to recognize the

genius in others.”iv Almost from the day he was hired as assistant to the president in 1980, one of Steve Ballmer’s

primary responsibilities was to act as recruiting coordinator. It was an assignment he particularly

relished. According to one senior manager, “Steve’s mantra was, ‘We want people who are smart,

who work hard, and who get things done.’ That simple mantra is something that people still talk

about today.” And once the smartest, most driven were identified, Ballmer and his team were

relentless in getting them on board. “There’s a standing policy here,” said Ballmer, “whenever you

meet a kick-ass guy, get him. . . . There are some people you meet only once in a lifetime. So why

screw around?” In Fortune’s assessment, “The deliberate way in which [Gates] has fashioned an

organization that prizes smart people is the single most important, and the most consistently

overlooked aspect of Microsoft’s success.”v

Although the need for experienced managers led the company to recruit some key people from

other companies, in the early days Microsoft’s favorite recruiting grounds were elite educational

institutions, particularly Harvard, Yale, MIT, Carnegie-Melon, Stanford, and a few highly targeted

others. As growth increased recruiting needs, the net spread wider, eventually targeting 15

universities in the United States, four in Canada, and six in Japan. Microsoft recruiters made visits to

each of these schools in search of the most brilliant, driven students—“once-in-a-lifetime” people—

paying little attention to prior experience. Indeed the company preferred people who didn’t have to

unlearn different company values, work habits, or technological approaches.

Before being hired, however, every candidate had to survive an intense interview process that

many found quite harrowing. Each candidate was interviewed by at least 3, and sometimes up to 10,

Microsoft employees. During the interview, the candidates were tested more on their thought

processes, problem-solving abilities, and work habits than on specific knowledge or experience. And

because developers played such an important role in Microsoft—writing the lines of code that were

Microsoft products—their recruiting process was particularly rigorous.

Technical interviews typically focused on programming problems that candidates were expected

to answer by writing code. Some managers posed scenarios with key information missing to see if

the candidate would ask for data or just move straight to a solution. Then they might throw in an

oddball question like, “How many times does the average person use the word ‘the’ in a day?” meant

to test the candidate’s deductive reasoning, creative problem solving, and composure. If a candidate

gave such questions 30 seconds of thought and said they didn’t know, the interview was effectively

over. If they were incapable of creative problem solving, they were not an appropriate candidate.

Next, an unfamiliar but practical problem—for example, describe the perfect TV remote control—

might be thrown in to see how the candidates broke down the problem, how simple or complex they

made the solution, and if that solution solved customer needs.

As soon as the interview was over, each interviewer would send e-mail to all other interviewers,

starting with the words “Hire” or “No Hire,” followed by specific feedback and suggestions for

follow-up. There was no “gray area”—a good candidate who just cleared the bar was a “No Hire.”

Based on earlier e-mails, people interviewing later in the afternoon would refine their questions to

drill down in areas where the earlier interviewers thought the candidate was weak. The purpose of

the interviews was to push the candidates until they failed, to get a full understanding of both their

strengths and their limitations. (See Exhibit 3 for an interview feedback email.)

After all the input was in, the hiring decision had to pass two screens. If the reviews were

favorable overall, a final, end-of-the-day interview with the candidate’s prospective manager was

scheduled. Based on his or her own impressions and the comments from other people in the group,

the prospective manager then made the hire/no hire recommendation. But to assure that only top

candidates were hired, a so-called “as appropriate” interviewer was also involved in the interviewing

process. A senior manager explained:

Very often, the “as appropriate” interviewer is a person who is outside the hiring group, a

person really solidly grounded in Microsoft culture and committed to making sure that we hire

only those who are going to be good Microsoft people, not just good people for specific jobs.

That person has veto power, which puts a system of checks and balances in, because the hiring

manager may feel a lot of pressure to fill a job, while the “as appropriate” interviewer doesn’t.

Microsoft’s tight control on headcount further reinforced the pressure to resist settling for the

merely satisfactory candidate. Even in the early days, when the company was growing extremely

rapidly, Gates and Ballmer insisted on hiring fewer employees than were actually required to carry

out the work. The internal code for this philosophy was “n minus 1,” where n was the number of

people really needed. Said one senior HR manager:

[Beyond hiring smart, driven people] the second principle Steve Ballmer was preaching was

that the default decision on a candidate is “no-hire.” In other words, unless you can identify a

clear reason why we should hire this person, we should not hire him or her. . . . That principle

has been really important in keeping the bar high and our selection ratio very low.

The company’s credo was that an adequate but not outstanding new employee was worse than a

disastrous appointment. “If you have somebody who’s mediocre, who just sort of gets by on the

job,” Gates explained to Microsoft managers, “then we’re in big trouble.” The “big trouble” Gates

saw was that, while poor performers were quickly weeded out, a mediocre employee might continue

to occupy a place that could be filled by someone brilliant.

In: Operations Management

Gravity Payments In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of...

Gravity Payments

In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of Gravity Payments, announced an increase in every employee’s wage to US$70,000. Every employee, including the lowest-paid clerk and newly hired staff, would receive a minimum annual salary of $70,000 over the next three years. The announcement stunned the employees and triggered a wave of high-fiving and clapping. With this decision, one young entrepreneur in Seattle, Washington, became an instant hero when he issued a direct and adventurous challenge to the long-standing problem of U.S. income inequality. However, at the same time, he was experiencing unexpected challenges from different people only a few months after his bold move.

Income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.

  • Dan Price, CEO

COMPANY OVERVIEW

Gravity Payments was a private credit card processing and financial services company. It was founded in February 2004 by brothers, Dan and Lucas Price.

Gravity Payments provided a variety of processing and financial services, including credit card processing, POS (point of Sales) systems, mobile payments, working capital financing, and gift and loyalty cards. The company’s customers were mostly small and medium-sized businesses. By 2009, the company became the largest credit card processor in the state of Washington, serving more than 15 percent of small businesses in the Seattle area. The company’s success was mainly due to its low-cost strategy and word of mouth publicity. The company charged less than half of the industry-average processing rate.

Gravity Payments had had a philanthropic mandate since its beginning, and launched the “Gravity Gives” program in March, 2008. Through this program, 2 percent of the company’s revenue had been donated to charities, including World Vision, the Fred Hutchinson Cancer Research Center and Northwest Harvest. Price believed strongly in fighting poverty on both a global and locale scale.

THE DECISION

It was the right thing to do. I want everybody that I’m partnered with at Gravity to really live the fullest, best life they can
 I think that’s the [income level] where you can start to check off those life’s goal boxes – saving for college, buying a home, some of the basics, starting a family. I want everyone to have those basic opportunities.

  • Dan Price, CEO

Announcement of the $70,000 Minimum Salary

In April 2015, Price set a new minimum salary of $70,000 for all of his 120 employees at Gravity Payments. The idea struck him when one of his friends shared her worries about trying to pay her bills and student loans on an annual income of $40,000. Some of Price’s own employees earned that amount or less.

Price decided upon the amount of $70,000 based upon a 2010 study conducted at Princeton University by economist, Angus Deaton and psychologist, Daniel Kahneman, a Nobel Laureate. According to the study, those who made less that $75,000 were likely to experience emotional pain and job dissatisfaction. However, even if people made more than $75,000, they did not feel any greater level of happiness. Simply put, the study suggested that emotional well-being increased with economic compensation, but only up to the amount of about $75,000. The study concluded that “low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated with both with low life evaluation and low emotional well-being.”

Before Price initiated the salary increase, the average salary at Gravity Payments was about $48,000, with the lowest salary at around $34,000. Due to Price’s decision, about 30 employees had their paycheques nearly double overnight, and others also received raises to reach the $70,000 level. Ryan Pirkle, the spokesman for Gravity Payments, mentioned that this new minimum wage policy would increase the salary of about 70 employees. The ground-breaking move was met with applause and shouts of joy by many employees. Kevin, a customer operations associate, said in an interview with the media, “I was there at the meeting
 honestly, I could not believe what I heard, and I think that’s what a lot of people felt. I kind of felt that we needed to get that repeated.” Phillip Akhavan, a staff member in the merchant relations team, who earned an annual salary of $43,000, also said, “My jaw just dropped
 This is going to make a difference to everyone around me.” Jaime June, in the marking department, said, “Dan is just an incredible man in general. He has a really amazing moral compass.”

The new salary would change employees’ lives. Maria Harley, vice-president of operations said, “I’ve heard things from, ‘I can finally afford to move out of my parent’s home,’ [to] ‘I can finally afford to have a baby,’ we have some people that are parents and really want a good education for their children and feel like they can finally afford that.”

Huge publicity from all major national media had generated clear public-relations benefits for the company. After Gravity Payments became a front-page media story, it received more than 5,000 resumes in just one day. Before the announcement, Gravity Payments added 200 clients per month on average. In June 2015, the number grew to 350.

The Downside of the $70,000 Minimum Salary Plan

There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs. I came up with the best solution I could
 I know the decision to pay everyone a living wage is controversial.

  • Dan Price, CEO

The implementation of this wage increase was not easy. In order to pay for the increases in employees’ salaries, Price cut his own remuneration from $1 million to $70,000. Also, about 75 to 80 percent of the company’s $2.2 million profits had to be uses.

Many questions were raised. Was this a social experiment? Was it a public relations stunt? Or was Price just a nice guy? In addition, not everyone was pleased with his move. Other local business owners and some entrepreneurial CEOs in the same, close-knit, entrepreneurial network complained that his decision made them look stingy. Steve Duffield, CEO of DACO Corp., who had met Price through the Entrepreneurs’ Organization in the Seattle area, said, “I worry how that’s going to impact other businesses. We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”

Some customers were against the “socialist” gesture and stopped their business with Gravity Payments. Others customers withdrew their business due to an anticipation of a fee increase, in spite of the repeated assurances from the company that this would not happen.

Complaints even came from Price’s own employees. While 30 or so employees would see their pay nearly double overnight, and about 70 employees also go raises, the remaining 50 were already paid more than $70,000. In fact, according to the New York Times, the company’s two best employees left the company because of Price’s decision. For example, Maisey McMaster, who joined Gravity Payments five years earlier and had worked long hours that left little time for her family, was one of them. She said, “He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.” McMaster talked to Price after contemplating a fairer proposal. From her view, a fairer proposal was offering small raises with the opportunity to gain a future increase with more experience. “He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

Grant Moral, a web developer whose salary increased from $41,000 to $50,000 (due to the first stage of pay increase), also expressed concerns, even though he would receive a substantial pay increase from this plan. He opted to leave the company. “I had a lot of mixed emotions. Now the people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members.” He added, “I was kind of uncomfortable and didn’t like having my wage advertised so publicly and so blatantly. It changed perspectives and expectations of you, whether it’s the amount you tip on a cup of coffee that day or family and friends now calling you for a loan.” From McMaster and Moran’s points of view, it was not fair to double the paycheque of someone with the lowest skills, while the longest-serving and highest-skilled employees received a small or no salary increase.

Furthermore, even employees who were exhilarated by the raises had new concerns and indicated they were facing a lot of pressure. “Am I doing my job well enough to deserve this? I didn’t earn it,” said Stephanie Brooks, 23, who joined the company as an administrative assistant two months before the decision.

Question:

  1. What are the potential problems of a minimum salary as a compensation plan for the organization? How can you minimize these problems and motivate employees?

In: Operations Management

Since the beginning of European settlement, Australian culture has been shaped by the successive waves of...

Since the beginning of European settlement, Australian culture has been shaped by the successive waves of immigration, and our culinary culture is much the richer for it. From the stodgy and predictable Anglo cuisine that dominated our eating habits well into the 1960s, Australians now enjoy some of the most diverse, exotic and interesting food and beverage choices available anywhere in the world — and the options are continually expanding. One of the interesting beverage options available are Asian ‘bubble’ teas (so-called because the fruit- and milk-based drinks are recognisable by the chewy tapioca ‘pearls’ or ‘bubbles’). Originating in Taiwan, the bubble tea craze spread throughout Asia before arriving in Australia. Among the fastest growing of the competing franchises is Chatime. Founded in Taiwan in 2003, Chatime is an international franchise with over 800 stores worldwide. From its launch in Australia in 2009, the chain has grown to over 45 stores across Australia, with further ambitious growth planned. Chatime is not alone in this regard — the market leader in the Asian tea market is EasyWay, but other brands such as GongCha have recently opened stores. Chatime’s local master franchisor Charlley Zhao would be happy for the company to emulate the Australian success of Boost Juice and the international success of Starbucks. Chatime’s business model and its success have much in common with the Starbucks and Boost approaches: Chatime tea is brewed fresh in store using the highest quality natural ingredients with no added preservatives. It is against the company’s policy to use pre-made tea or tea powders and we are proud to support Australian farmers, with fresh milk delivered to Chatime stores daily by Dairy Farmers and Pura. Freshly brewed tea has more flavour and fragrance. Chatime draws from Page 5 of 6 traditional Taiwanese tea concepts to create their delicious fusion of flavours and continuously develop many new and innovative drinks, while keeping true to the delicious Taiwanese tea flavour.13 To date, Chatime has concentrated its marketing on Asian–Australians and focused in geographic locations with high concentrations of Asian residents. The first store opened in the Sydney suburb of Hurstville, which has a population of 47.5 per cent Chinese according to the 2011 Census. Chatime’s marketing has focused on Mandarin-language media and sponsoring concerts by Chinese pop stars. Zhao has also targeted Asian franchisees. ‘Obviously if we were targeting mainstream in the beginning, it would be a lot harder than targeting Asians. We used the strategy to go that way,’ he says.14 For Chatime, however, there are currently limitations and challenges typical of any business that has expanded to the practical limits of its ‘natural’ market niche. Now Zhao wants to open more outlets — but he needs to expand beyond the traditionally Asian suburbs populated by first- and second-generation immigrant families together with international (mostly Chinese) students. He is confident that a mainstream audience will embrace the tea brand, but the franchisees are not easily convinced. Many of the 29 franchisees are keen to open additional outlets but are not convinced that Anglo–European suburbs and towns are ready for the product. Zhao says: We do all the research to tell them that the other areas may be good but . . . they’re maybe not confident in thinking that local mainstream markets will love this drink.15 For Chatime, the current limits to growth are the size and geographic concentration of the Chinese–Australian population and the issue is whether this niche will provide sufficient revenue and growth to satisfy the aspirations of the parent company, Zhao and franchisees. To expand beyond the current customer base will inevitably require Chatime to capture a viable share of the mainstream (predominantly Anglo–European) Australian market. The challenge is not insurmountable, however. After all, no Australian suburb or town would be complete without its local Chinese restaurant, although this assimilation occurred over decades, which wouldn’t suit Zhao’s ambitious plans. Australian appetites for introduced and exotic cuisines and beverages give encouragement that ‘pearl teas’ will eventually become as much a part of the vernacular as ‘skim caramel mochaccino latté’ (if such a drink exists!). Zhao is confronting three common, and related, problems: First, he needs to ensure Chatime’s product fits the local, mainstream market. Then he needs to focus on an educative marketing campaign that changes consumers’ perceptions about the brand. Finally, he needs to persuade franchisees to open outlets outside the Asian-heavy suburbs.16 In relation to the first issue, the challenge is in recognising the distinctive characteristics of the local market and in deciding how far the local product should be adapted to local tastes. Zhao says: Just as McDonald’s introduced the Aloo Tikki burger when it expanded to India, catering to locals’ taste for the spiced potato patty snack of the same name, franchises need to be prepared to adjust their products to fit new markets. Chatime has introduced skim and soy milk and also allows consumers to customise their sugar levels.17 Although premium pearl milk tea is Chatime’s bestseller globally, fruit-based teas and smoothies perform more strongly in Australia than they do in Taiwan. This is because the Australian marketplace likes ‘more fresh and more healthy’ products, Zhao says. Of course, modifying mass-market fast foods and beverages to suit the tastes of local markets is both sensible and widely practiced. McDonald’s, Hungry Jack’s (Burger King), KFC Page 6 of 6 and Pizza Hut have all specially developed and marketed ‘Aussie’ versions of their staples, although typically only for brief promotional periods (such as leading up to Australia Day). In a move that is similar to Australian fresh juice providers and taps into a broad-based perception of ‘freshness’, Zhao has overhauled the look of Chatime. A bright, cartoonish purple was the launch colour, but now the store interiors are a pale green with bamboo details. ‘Purple doesn’t give people any feeling of fresh’, he says. Tea leaves are on display to show the ‘natural’ side of the brand. Zhao wants to court a mature customer and leave the teenagers to his competitors, so he avoids the moniker of ‘bubble tea’. He also wants Chatime to be known as the ‘tea experts’. ‘We really want to focus on people who are well educated, who know the benefits of drinking tea,’ he says. ‘That’s why our branding and wording is quite mature and serious. We’re trying to tell people, “Yes, we are the experts, trust us, drink our tea, you’ll get healthy”.’ This repositioning should see Chatime better attuned to both its original Chinese and local non-Chinese customers. At the same time, Chatime must be careful not to radically adapt its core ‘bubble tea’ product offering and service experience so that it alienates its core customer groups. After all, these customers have several alternative providers such as EasyWay and GongCha, who can still provide the ‘authentic’ product. It’s a juggling act that often challenges companies seeking to capture more of the mainstream market. Expert marketing opinion, however, is not universally in favour of the logic of broadening and adapting niche products to meet the needs of ever-wider markets. Rod Young, franchise guru and managing director of DC Strategy, has sober advice for such plans. ‘I think that these niche markets are creating terrific opportunities and I would encourage any organisations to not be all things to all people,’ he says. ‘There’s nothing invalid about focusing on a particular ethnic market and maximising the market penetration in those markets.’18 Having resolved the issues of product adaptation, there is clearly also a need to create product awareness, particularly among the new mainstream Australian target customers who may have noticed the new stores at their local shopping malls but are unaware of the pleasures and health benefits of ‘pearl teas’. This suggests the need for a product and brand awareness campaign, which may demand an increased marketing communications budget to capture the attention of the targeted new users. Of course, word-of-mouth, enhanced by social media, can also play a central role in this campaign. Expanding beyond major Australian cities and suburbs with large Chinese populations will be central to the aspirations of Chatime, who wants to become the ‘Starbucks of tea’. However, the Starbucks experience in Australia, and elsewhere, also demonstrates that such aspirations are not always enough, and that competition and the diverse tastes of the local market can frustrate ambitious and optimistic plans. The challenge for Chatime and its competitors is to move the product from being a fad and a craze — albeit an exotic and pleasurable one — to being a product of universal appeal and a permanent fixture in the Australian beverage landscape. The keys to success will be the attractive idea, a sufficient budget, excellent execution and patience.

1.What are the key elements that have contributed to Chatime’s success in Australia to date?

2.What product attributes should Chatime emphasise in its promotion to maximise its appeal?

3.Describe the Chatime brand and outline what Chatime can do to encourage brand loyalty.

4.Do you believe Chatime should target ‘non-Chinese’ locations at this stage of its development, or should it stick to its existing location strategy? Why/why not?

In: Economics

Gravity Payments In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of...

Gravity Payments

In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of Gravity Payments, announced an increase in every employee’s wage to US$70,000. Every employee, including the lowest-paid clerk and newly hired staff, would receive a minimum annual salary of $70,000 over the next three years. The announcement stunned the employees and triggered a wave of high-fiving and clapping. With this decision, one young entrepreneur in Seattle, Washington, became an instant hero when he issued a direct and adventurous challenge to the long-standing problem of U.S. income inequality. However, at the same time, he was experiencing unexpected challenges from different people only a few months after his bold move.

Income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.

  • Dan Price, CEO

COMPANY OVERVIEW

Gravity Payments was a private credit card processing and financial services company. It was founded in February 2004 by brothers, Dan and Lucas Price.

Gravity Payments provided a variety of processing and financial services, including credit card processing, POS (point of Sales) systems, mobile payments, working capital financing, and gift and loyalty cards. The company’s customers were mostly small and medium-sized businesses. By 2009, the company became the largest credit card processor in the state of Washington, serving more than 15 percent of small businesses in the Seattle area. The company’s success was mainly due to its low-cost strategy and word of mouth publicity. The company charged less than half of the industry-average processing rate.

Gravity Payments had had a philanthropic mandate since its beginning, and launched the “Gravity Gives” program in March, 2008. Through this program, 2 percent of the company’s revenue had been donated to charities, including World Vision, the Fred Hutchinson Cancer Research Center and Northwest Harvest. Price believed strongly in fighting poverty on both a global and locale scale.

THE DECISION

It was the right thing to do. I want everybody that I’m partnered with at Gravity to really live the fullest, best life they can
 I think that’s the [income level] where you can start to check off those life’s goal boxes – saving for college, buying a home, some of the basics, starting a family. I want everyone to have those basic opportunities.

  • Dan Price, CEO

Announcement of the $70,000 Minimum Salary

In April 2015, Price set a new minimum salary of $70,000 for all of his 120 employees at Gravity Payments. The idea struck him when one of his friends shared her worries about trying to pay her bills and student loans on an annual income of $40,000. Some of Price’s own employees earned that amount or less.

Price decided upon the amount of $70,000 based upon a 2010 study conducted at Princeton University by economist, Angus Deaton and psychologist, Daniel Kahneman, a Nobel Laureate. According to the study, those who made less that $75,000 were likely to experience emotional pain and job dissatisfaction. However, even if people made more than $75,000, they did not feel any greater level of happiness. Simply put, the study suggested that emotional well-being increased with economic compensation, but only up to the amount of about $75,000. The study concluded that “low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated with both with low life evaluation and low emotional well-being.”

Before Price initiated the salary increase, the average salary at Gravity Payments was about $48,000, with the lowest salary at around $34,000. Due to Price’s decision, about 30 employees had their paycheques nearly double overnight, and others also received raises to reach the $70,000 level. Ryan Pirkle, the spokesman for Gravity Payments, mentioned that this new minimum wage policy would increase the salary of about 70 employees. The ground-breaking move was met with applause and shouts of joy by many employees. Kevin, a customer operations associate, said in an interview with the media, “I was there at the meeting
 honestly, I could not believe what I heard, and I think that’s what a lot of people felt. I kind of felt that we needed to get that repeated.” Phillip Akhavan, a staff member in the merchant relations team, who earned an annual salary of $43,000, also said, “My jaw just dropped
 This is going to make a difference to everyone around me.” Jaime June, in the marking department, said, “Dan is just an incredible man in general. He has a really amazing moral compass.”

The new salary would change employees’ lives. Maria Harley, vice-president of operations said, “I’ve heard things from, ‘I can finally afford to move out of my parent’s home,’ [to] ‘I can finally afford to have a baby,’ we have some people that are parents and really want a good education for their children and feel like they can finally afford that.”

Huge publicity from all major national media had generated clear public-relations benefits for the company. After Gravity Payments became a front-page media story, it received more than 5,000 resumes in just one day. Before the announcement, Gravity Payments added 200 clients per month on average. In June 2015, the number grew to 350.

The Downside of the $70,000 Minimum Salary Plan

There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs. I came up with the best solution I could
 I know the decision to pay everyone a living wage is controversial.

  • Dan Price, CEO

The implementation of this wage increase was not easy. In order to pay for the increases in employees’ salaries, Price cut his own remuneration from $1 million to $70,000. Also, about 75 to 80 percent of the company’s $2.2 million profits had to be uses.

Many questions were raised. Was this a social experiment? Was it a public relations stunt? Or was Price just a nice guy? In addition, not everyone was pleased with his move. Other local business owners and some entrepreneurial CEOs in the same, close-knit, entrepreneurial network complained that his decision made them look stingy. Steve Duffield, CEO of DACO Corp., who had met Price through the Entrepreneurs’ Organization in the Seattle area, said, “I worry how that’s going to impact other businesses. We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”

Some customers were against the “socialist” gesture and stopped their business with Gravity Payments. Others customers withdrew their business due to an anticipation of a fee increase, in spite of the repeated assurances from the company that this would not happen.

Complaints even came from Price’s own employees. While 30 or so employees would see their pay nearly double overnight, and about 70 employees also go raises, the remaining 50 were already paid more than $70,000. In fact, according to the New York Times, the company’s two best employees left the company because of Price’s decision. For example, Maisey McMaster, who joined Gravity Payments five years earlier and had worked long hours that left little time for her family, was one of them. She said, “He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.” McMaster talked to Price after contemplating a fairer proposal. From her view, a fairer proposal was offering small raises with the opportunity to gain a future increase with more experience. “He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

Grant Moral, a web developer whose salary increased from $41,000 to $50,000 (due to the first stage of pay increase), also expressed concerns, even though he would receive a substantial pay increase from this plan. He opted to leave the company. “I had a lot of mixed emotions. Now the people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members.” He added, “I was kind of uncomfortable and didn’t like having my wage advertised so publicly and so blatantly. It changed perspectives and expectations of you, whether it’s the amount you tip on a cup of coffee that day or family and friends now calling you for a loan.” From McMaster and Moran’s points of view, it was not fair to double the paycheque of someone with the lowest skills, while the longest-serving and highest-skilled employees received a small or no salary increase.

Furthermore, even employees who were exhilarated by the raises had new concerns and indicated they were facing a lot of pressure. “Am I doing my job well enough to deserve this? I didn’t earn it,” said Stephanie Brooks, 23, who joined the company as an administrative assistant two months before the decision.

Questions

  1. Use equity theory to explain the reactions of Gravity employees. What steps are these employees taking, or might they take, to rectify any inequities?

In: Operations Management

What “cost of quality” criteria (i.e., prevention, appraisal, internal failure, and external failure costs) might be...

  1. What “cost of quality” criteria (i.e., prevention, appraisal, internal failure, and external failure costs) might be included in an analysis at the following stages of a global diamond supply chain---mining, cutting and polishing centers, and retail jewelry store? Explain. Provide examples.

    The Global Value Chain for Diamonds

    A simple way to view the major stages of the diamond value chain is exploration, mining, rough diamonds, polished diamonds, and customer jewelry. It is normally 18 to 36 months from the time a diamond is mined until it reaches a retail store. Rare or large stones often reduce this processing time by one-half. The supply chain is global since no one country or company performs all the work required to bring a diamond to its final resting place – customer jewelry. About one-half of rough diamonds are used in industrial applications such as oil and gas drilling equipment and metal cutting tools. The major stages of the global value chain for diamonds can be defined in numerous ways but usually consists of the following stages.

    Exploration

    A diamond is a unique pyramidal structure of carbon atoms. Billions of years ago heat and pressure deep inside the earth created natural diamonds. The ancient Greek word for diamond means “unbreakable.” Historically, much of the diamond industry involves African countries and sometimes the exploitation of native people. Russia and Africa account for 70 percent of the world’s diamond reserves.

    Major corporations that focus on diamond mining, production, and sales include DeBeers, with about 37% market share. DeBeers is a Kimberley, South Africa based corporation with mines and facilities in South Africa, Tanzania, Botswana, and Namibia.   ALROSA is a Russian state-owned corporation with about 30% market share, and with mines and facilities in Russia and Angola. Rio Tinto is an Australian corporation that mines diamonds, iron, copper, uranium, aluminum, gold, and coal, with about a 5% global market share in diamonds. Its mines and facilities are in Australia, Zimbabwe, Africa, and Canada. Other firms such as Aber, BHP Billiton, and Leviev compete in the diamond industry.

    Mining

    The two major ways to mine rough diamonds are an open-pit method, where rock and soil at the surface are excavated; and underground mining. First-level sorting is done at this stage, to separate gem-quality stones from obvious industrial grade stones.

    The controversies begin at this stage of the diamond value chain. The 2006 movie Blood Diamond, for example, starring Leonardo DiCaprio, Jennifer Connelly, and Djimon Hounsou, highlighted militant groups and corrupt governments trying to get their share of “blood diamond” revenues to fund revolutions and wars. Conflict-free diamonds are supposed to be free of other injustices such as child labor, smuggling, worker exploitation, and sexual violence. And, of course, ethical supply chains try to prevent all of the previous cited issues, plus worker accidents, environmental pollution, deceitful grading of diamonds, deforestation, poverty, low wages, and so on.

    Sorting and Grading

    The basic criteria for grading diamonds include size (carats), color, shape, and quality. At this stage second-level sorting and grading begins at separate locations from the mines. About 20-25 percent of rough diamonds are used in the retail value chain while the rest are used for industrial proposes. Human eyes, hands, and expertise assess the quality and value of most diamonds. Advanced machines do some of the sorting and grading process for smaller stones. But sorting and grading diamonds is not an exact science even with current industry regulations and quality standards.

    Cutting and Polishing Centers

    The Four C’s – Cut, Color, Clarity, and Carat weight – are used to further classify diamonds at a production facility, located in cities like Dubai, New York, Johannesburg, Hong Kong, London, Tel Aviv, Antwerp, and Mumbai.

    Normally, by the end of this stage one-half to two-thirds of the rough diamond is waste. For example, a ten-carat rough diamond might result in a three- to five-carat diamond that can be set in customer jewelry. Much of the waste is used in industrial diamond applications or by the cutters themselves for cutting and polishing.

    During the Great Recession smaller diamond cutters and polishers went out of business while larger firms gained market share. Cutting and polishing costs-per-carat range from about $100 in Antwerp, New York, and Tel Aviv; to $10 to $50 in India, China, and Thailand. Diamond defects and errors can take many forms in this industry: impurities, optical flaws, mixed colors, crystal flaws, cutting mistakes, and non-ethical diamonds. The cutter must decide how best to cut the rough diamond to remove defects, keep the most carat weight possible, and make the diamond as perfect as possible.

    The quality of a rough diamond can be enhanced or hindered by the way the rough diamond is cut and polished. High-quality rough diamonds of over 20 carats almost always go to the world’s best cutters and polishers.

    Trading Centers

    A current industry trend is the consolidation of cutting and polishing with trading centers into a “diamond hub” in cities like New York, Tel Aviv, Antwerp, Dubai, and Mumbai. Major producers like DeBeers sell most of their diamonds based on long-term contracts to a select group of buyers and sellers. Long-term contracts provide price and demand stability, predictable buyers and sellers, and large sales volumes. Trading centers and producers are sometimes accused of forming price-controlled cartels by holding back diamond stocks (reserves) to maintain retail prices. Another way to limit supply in the global diamond market is for major producers to sell diamonds only to their “site holders.” A site holder can be a company or individual who can only buy direct from major producers. If all reserves of diamonds were released, supply would greatly exceed demand, and diamond prices would plummet.

    However, new sales channels are emerging that take advantage of Internet capabilities such as on line auctions and virtual sales platforms. Sales take many forms such as face-to-face negotiations, take-it-or-leave it on line offers at fixed prices, live on line auctions with multiple bidding rounds, and time limited on line auctions. In addition, physical diamond auctions take place at Sotheby’s and Christie’s.

    Jewelry Manufacturing

    Manufacturing transforms cut, polished, and graded diamonds into customer jewelry. Often a custom setting for the stones includes pouring hot metal into a ring or jewelry mold; and/or metal machine fabrication, milling, and polishing. Standard diamond ring production exhibits both job and flow shop characteristics while custom jewelry is a job shop. Diamond defects can be hidden by the clever design of customer jewelry. Here the jewelry artist or customer designs how the finished diamond will be displayed

    . Over $50 billion in value is added at the jewelry manufacturing and retail store stages.

    Retailing

    In the diamond value chain, Tiffany & Company and Cartier are two examples of luxury goods retailers that enjoy high margins. The price per carat (value) of a typical diamond usually increases eight to ten times from mining to retail store as each stage of the value chain adds its profit margin. After the original sale, most diamonds don’t wear out so they are resold (recycled) many times within the value chain. The “diamond is forever” slogan also applies to generating repeat sale profits.  

    To further complicate customer- and trading-center buying decisions, diamond buyers must cope with whether the diamond is synthetic. In one audit by the International Gemological Institute with a sample of 1,000 stones over one-half were found to be synthetic diamonds. Moreover, the synthetic diamonds had human-engineered flaws to make them appear as natural stones. Only expert gemologists with special equipment can tell the difference between a natural and synthetic stone.

    From the viewpoint of natural diamond producers, synthetic diamond pollution is an ever-increasing industry problem. A four-carat synthetic diamond might sell for a few hundred dollars. In addition, synthetic diamond producers argue their diamonds are brighter and clearer than natural stones, and the only true ethical diamonds.

    The Kimberley Process Certification Scheme (KPCS)

    A multitude of industry-related associations, governments, and corporations have adopted quality and sustainability standards, trade regulations and laws, and certification programs to ensure no conflict or blood diamonds enter their value chain. But diamond traceability along the value chain is very poor. Few diamond producers or retailers actually investigate the route their diamonds take along the supply chain. Diamond smugglers and corrupt governments often certify diamonds without complete investigations while worker exploitation and environmental pollution continues.

    In 2003 in Kimberly, South Africa the KPCS was designed to certify rough diamond shipments as “conflict-free” and prevent conflict diamonds from entering the value chain. This initiative has been somewhat successful but fake KPCS certification documents have been found throughout the value chain. A recent initiative is to etch a serial number on each non-conflict diamond with a laser that is not visible to the human eye. The KPCS process is criticized for focusing on front-room customer perceptions, not back-room supply chain practices.

In: Operations Management

**Only need the bold answered In Java, implement the Athlete, Swimmer, Runner, and AthleteRoster classes below....

**Only need the bold answered

In Java, implement the Athlete, Swimmer, Runner, and AthleteRoster classes below. Each class must be in separate file. Draw an UML diagram with the inheritance relationship of the classes.

1. The Athlete class
a. All class variables of the Athlete class must be private.

b.is a class with a single constructor: Athlete(String lName, String fName, int birthYear, int birthMonth, int birthDay, char gender). All arguments of the constructor should be stored as class variables. There should only be getter methods for first and last name variables. There should be no getters or setters for birthYear, birthMonth, birthDay.

c. Getter and setter methods for the gender of the athlete. The method setGender accepts a character and store it as a class variable. Characters 'm', 'M' denotes male, 'f' or 'F' denotes male or female. Any other char will be treated as undeclared. The method getGender return either the word "male" or "female" or “undeclared”.

  1. The method computeAge() takes no arguments and returns the athletes computed age (as of today's date) as a string of the form "X years, Y months and Z days". Hint: Use the LocalDate and Period classes.

    i. e.g. "21 years, 2 months and 3 days". ii. e.g. "21 years and 3 days".

    iii. e.g. "21 years and 2 months". iv. e.g. "21 years".

    v. e.g. "2 months and 3 days".

  2. The method public long daysSinceBirth() takes no arguments and returns a long which is the number of days since the athlete’s date of birth to the current day. Hint: Use the LocalDate and ChronoUnit classes.

  3. The toString method returns a string comprised of the results ofgetFname, getLName and computeAge. E.g.

    i. “Bunny Bugs is 19 years and 1 day old”

  4. The equals method returns true if the name and date of birth of this athlete and the compared other athlete are the same, otherwise return false.

2. The Swimmer class
a. All class variables of the Swimmer class must be private.

  1. inherits from the Athlete class and has a single constructor,

    Swimmer(String lName, String fName, int birthYear, int birthMonth, int birthDay, char gender, String team). There should be a class variable for team. There should be a getter method for team.

  2. The Swimmer class stores swim events for the swimmer. There should be a class variable for events. A swimmer participates in one or more of these events. The addEvent method is oveloadedand either adds a single event for the swimmer public boolean addEvent(String singleEvent) or adds a group of events for the swimmer public boolean addEvent(ArrayList multiEvents). Each event is of type String. Duplicate events are not stored and return false if duplicate found.

  3. There should be a getter method that returns the class variable events.

  4. The overridden toString method returns a string comprised of the concatenation of the parent’s toString return plus " and is a swimmer for team: XXXXX in the following events: YYYYY; ZZZZZZ." E.g.

    i. “Missy Franklin is 24 years and 4 months old and is a swimmer for team: Colorado Stars. She participates in the following events: [100m freestyle, 100m backstroke, 50m backstroke]”

3. The Runner class
a. All class variables of the Runner class must be private.

  1. inherits from the Athlete class and has a single constructor,

    Runner(String lName, String fName, int birthYear, int birthMonth, int birthDay, char gender, String country). There should be a class variable for country. There should be a getter method for country.

  2. The Runner class stores race events for the runner. There should be a class variable for events. Each event is a Distance. The list of valid events is given below:
    M100, M200, M400, M3000, M5000, M10000. A runner participates inone or more of these events. The addEvent method is oveloadedand either adds a single event for the runner public boolean addEvent(String singleEvent) or adds a group of events for the runner public boolean addEvent(ArrayList multiEvents). Each event is of type String. Duplicate events are not stored and return false if duplicate found.

  1. There should be a getter method that returns the class variable events.

  2. The toString method returns a String in the form: " AAA BBBB is XX years, YY months and ZZ days. He is a citizen of CCCCCCC and is a DDDDDDDD who participates in these events: [MJ00, MK00, ML00]”. If she does not participate in M3000 or M5000 or M10000 then she is a sprinter. If she does not participate in M100 or M200 or M400 then she is a long-distance runner. Otherwise she is a super athlete. E.g.

    i. “Bunny Bugs is 19 years and 1 day old. His is a citizen of USA and is a long-distance runner who participates in these events: [M10000]”

4. The AthleteRoster class
a. All class variables of the AthleteRoster class must be private.

  1. Does not inherits from the Athlete class. The AthleteRoster class has a single constructor, AthleteRoster(String semster, int year). There should be class variables for semester and year. There should be getter methods for semester and year.

  2. The AthleteRoster class has only one method for adding Athlete to the roster, by using the boolean addAthlete(Athlete a)method. The method returns true if the athlete was added successfully, it returns false if the athlete object already exists in the roster and therefore was not added.

  3. Your AthleteRoster class will have only one class level data structure, an ArrayList, for storing athlete objects.

  4. The String allAthletesOrderedByLastName() method returns a string object with of all the names of the athletes (Swimmers, Runners, etc.) in ascending order of last names(a-z).

  5. The String allAthletesOrderedByAge() method returns a string object with of all the names of the athletes (Swimmers, Runners, etc.) in descending order of age(100-0).

  6. The String allRunnersOrderedByNumberOfEvents() method returns a string object with of all the names of the Runners only in ascending order of number of events they participate in (0-100).

Here is the driver:

import java.util.ArrayList;
import java.util.Arrays;

public class AthleteDriver {
   public static void main(String args[]) {

       //Check Athlete Class
       Athlete a1 = new Athlete("Daffy","Duck", 2000, 9, 7,'j'); System.out.println("Gender is "+a1.getGender());//undeclared
       a1.setGender('F');
       System.out.println("Gender is "+a1.getGender());//female
       a1.setGender('m');
       System.out.println("Gender is "+a1.getGender());//male
       System.out.println("ComputeAge method says "+a1.computeAge());
       System.out.println("First name is : "+a1.getFname()); //Daffy
       System.out.println("DaysSinceBirth method says "+a1.daysSinceBirth()+" days"); System.out.println("Last name is : "+a1.getLname()); //Duck
       System.out.println("Output of our toString correct?: \n"+a1);
       System.out.println("=======================================\n");

       //Check Runner Class
       Runner r5 = new Runner("Bugs","Bunny", 2000, 9, 8, 'm',"USA");
       System.out.println("Did we add M10000 successfully?: "+r5.addEvent("M10000")); //true
       System.out.println("Did we unsucessfully try to add M10000 again?: "+r5.addEvent("m10000")); //false
       ArrayList<String> temp = new ArrayList<String>(Arrays.asList("M100", "M3000"));
   System.out.println("Did we successfully add mutiple events?: "+r5.addEvent(temp));//true
       System.out.println("Did we unsucessfully try to add mutiple events?: "+r5.addEvent(temp));//false
       System.out.println("How many events does Bugs participate in?: "+r5.getEvents().size());//3
       System.out.println("Gender is "+r5.getGender());//male
       System.out.println("Output of our toString correct?: \n"+r5);
       System.out.println("=======================================\n");

       //Check Swimmer Class
       Swimmer s1 = new Swimmer("Franklin", "Missy", 1995, 5, 10, 'F', "Colorado Stars");
       System.out.println("Did we add 100m backstoke successfully?: "+s1.addEvent("100m backstoke")); //true
       System.out.println("Did we unsucessfully try to add 100m backstoke again?: " +s1.addEvent("100M Backstoke")); //false
       temp = new ArrayList<String>(Arrays.asList( "200m backstoke","200m freestyle"));
       System.out.println("Did we successfully add mutiple events?: "+s1.addEvent(temp));//true
       System.out.println("Did we unsucessfully try to add mutiple events?: "+s1.addEvent(temp));//false
       System.out.println("How many events does s1 participate in?: "+s1.getEvents().size());//4 System.out.println("Gender is "+s1.getGender());//female
       System.out.println("Output of our toString correct?: \n"+s1);
       System.out.println("=======================================\n");

       //Check AthleteRoster
       Swimmer s2 = new Swimmer("Ruele", "Naomi", 1997, 1, 13, 'F',"Florida International University");
   //   s2.addEvent(newArrayList<String>(Arrays.asList("100m backstoke","50m backstoke","100m freestyle")));

   //   Runner r1 = new Runner("Bolt", "Usain", 1986, 8, 21, 'M',"Jamaica");
//       r1.addEvent("M100"); r1.addEvent("M200");

   //   Runner r2 = new Runner("Griffith", "Florence", 1959, 12, 21, 'F',"United States of America"); r2.addEvent("M100"); r2.addEvent("M200");
   //   r2.addEvent("M400"); r2.addEvent("M10000"); r2.addEvent("M3000");
   //   r2.addEvent("M5000");

   //   AthleteRoster ar = new AthleteRoster("Fall",2019);
   //   ar.addAthlete(a1);
   //   ar.addAthlete(s1);
   //   ar.addAthlete(r1);
   //   ar.addAthlete(r2);
   //   ar.addAthlete(s2);
   //   ar.addAthlete(r5);
   //   System.out.println(ar.allRunnersOrderedByNumberOfEvents());
       System.out.println("=======================================\n");

   //   System.out.println(ar.allAthletesOrderedByAge());
       System.out.println("=======================================\n");

   //   System.out.println(ar.allAthletesOrderedByLastName());
       System.out.println("=======================================\n");


   }

}

Complete the code before the due date. Submission of the completed eclipse project is via github link posted on the class page. Add your UML drawing to the github repo. ________________________________________________________________________ Example output:

__________Example from AthleteDriver shown below

Gender is undeclared
Gender is female
Gender is male
ComputeAge method says 19 years and 4 days
First name is : Duck

DaysSinceBirth method says 6943 days Last name is : Daffy
Output of our toString correct?:
Duck Daffy is 19 years and 4 days old =======================================

Did we add M10000 successfully?: true
Did we unsuccessfully try to add M10000 again?: false
Did we successfully add multiple events?: true
Did we unsuccessfully try to add multiple events?: false
How many events does Bugs participate in?: 3
Gender is male
Output of our toString correct?:
Bunny Bugs is 19 years and 3 days old. His is a citizen of USA and is a super athlete who participates in these events: [M10000, M100, M3000] =======================================

In: Computer Science

MGMT 440-03: INTERNATIONAL MANAGEMENT [Assignment to Replace the Group Project] Case: Subway’s Franchising Challenges in China...

MGMT 440-03: INTERNATIONAL MANAGEMENT

[Assignment to Replace the Group Project]

Case: Subway’s Franchising Challenges in China

Subway, the sandwich and salad fast-food chain, operates the largest number of restaurants worldwide—more than 44,000 stores in 110 countries. Subway generates more than $19 billion in annual revenues and has more than 25 million Facebook fans.

The franchising chain opened its first international restaurant in Bahrain in 1984. Since then, Subway (www.subway.com) has expanded worldwide and generates about one-fifth of its annual revenues internationally. The firm expects foreign markets to contribute much of its future growth.

Subway is one of the most successful fast-food chains in China. Fish and tuna salad sandwiches are the top sellers. By 2006, Subway had opened about 40 stores in China. The franchise had its share of initial setbacks. Subway’s master franchisee in Beijing, Jim Bryant, lost money to a scheming partner and had to teach the franchising concept to a country that had never heard of it. Until recently, there was no word in Chinese for franchise.

Cultural problems are still an ongoing challenge. After Bryant opened his first Subway shop, customers stood outside and watched for a few days. When they finally tried to buy a sandwich, many were confused so Bryant printed signs explaining how to order. Some didn’t believe the tuna salad was made from fish because they could not see the head or tail. Others didn’t like the idea of touching their food, so they would gradually peel off the paper wrapping and eat the sandwich like a banana. To make matters worse, few customers liked sandwiches. Subway has had to create menu items that suit local tastes, such as Roasted Duck Sub.

Subway—or Sai Bei Wei (Mandarin for “tastes better than ­others”)—has forged ahead. Bryant has recruited numerous committed franchisees that he monitors closely to maintain quality. He recruited local entrepreneurs, trained them to become franchisees, and served as liaison between them and Subway headquarters. For this work, he received half of their $10,000 initial fee and one-third of their 8 percent royalty fees. Today, there are about 500 Subway stores in China.

Other multinational franchisors still face significant challenges in China, particularly in dealing with the ambiguous legal environment, finding appropriate partners, and identifying the most suitable marketing, financing, and logistics strategies. Famous brands such as A&W, Dunkin’ Donuts, and Rainforest Cafe have all experienced these issues.

Why China for Franchising?

Franchising is an advanced form of licensing. On the surface, franchising in China is attractive because of its huge market, long-term growth potential, and dramatic rise in disposable income among its rapidly expanding urban population. Fast-food sales in China are around $150 billion per year. China’s urban population, the target market for casual dining has expanded rapidly, a trend expected to continue. Increasingly hectic lifestyles have led to an increase in meals the Chinese eat outside the home. Surveys reveal that Chinese consumers are interested in sampling non-Chinese foods.

Market researchers have identified several major benefits to franchising in China.

  • A win–win proposition. Franchising in China combines the Western expertise of franchisors with the local market knowledge of franchisees. Many Chinese have strong entrepreneurial instincts and are eager to launch their own businesses.
  • Minimal entry costs. Because much of the cost of launching a restaurant is borne by local entrepreneurs, franchising minimizes the costs to franchisors of entering the market.
  • Rapid expansion. By leveraging the resources of numerous local entrepreneurs, the franchisor can get set up quickly. Franchising is superior to other entry strategies for rapidly establishing many outlets throughout any new market.
  • Brand consistency. Because franchisors are required to adhere strictly to company operating procedures and policies, brand consistency is easier to maintain.
  • Circumvention of legal constraints. Franchising allows the focal firm to avoid trade barriers associated with exporting and FDI, common in China.

Challenges of Franchising in China

China’s market also poses many challenges for franchisors.

  • Knowledge gap Despite the likely pool of potential franchisees, Chinese entrepreneurs may have limited knowledge about how to start and operate a franchise business. There is still much confusion about franchising among lawmakers, entrepreneurs, and consumers. Focal firms must educate government officials, potential franchisees, and creditors on the basics of franchising, a process that consumes energy, time, and money.
  • Ambiguous legal environment Franchisors need to examine China’s legal system closely regarding contracts and intellectual property rights. China’s legal system on franchising is evolving and has loopholes and ambiguities. Some critical elements are not covered. The situation has led to diverse interpretations of the legality of franchising in China. Franchisors must be vigilant about protecting trademarks. A local imitator can quickly dilute or damage a trademark a focal firm has built up through much expense and effort. Branding is important to franchising success, but consumers become confused if several similar brands are present. Chinese imitators have launched restaurants that use similar logos and menus and even accept coupons from Subway when consumers mix up the two stores.
  • Escalating start-up costs Ordinarily, entry through franchising is cost effective. However, various challenges, combined with linguistic and cultural barriers, can increase the up-front investment and resource demands of new entrants in China and delay profitability. The franchisor may have to invest in store equipment and lease it to the franchisee, at least until the franchisee can afford to buy it. Franchisors must be patient. McDonald’s has been in China since the early 1990s and has devoted substantial resources to building its brand, but few firms have its resources.

Perhaps the biggest challenge of launching franchises in China is finding the right partners. It is paradoxical that entrepreneurs with the capital to start a restaurant often lack the franchising business experience or entrepreneurial drive, whereas entrepreneurs with sufficient drive and expertise often lack the start-up capital. Subway’s franchise fee of $10,000 is equivalent to two years’ salary for the average Chinese. The banking system in China is still developing. Capital sources for small businesses are limited. Entrepreneurs often borrow funds from family members and friends to launch business ventures. Fortunately, Chinese banks are increasingly open to franchising. The Bank of China established a comprehensive credit line of $12 million for Kodak franchisees.

Availability and financing of suitable real estate are major considerations as well, particularly for initial showcase stores where location is critical. According to established Chinese law, local and foreign investors are allowed to develop, use, and administer real estate. But in many cases, the Chinese government owns real estate that is not available for individuals to purchase. Private property laws are underdeveloped, and franchisees occasionally risk eviction. Fortunately, a growing number of malls and shopping centers are good locations for franchised restaurants.

The Chinese authorities maintain restrictions on the repatriation of profits to the home country. Strict rules discourage repatriation of the initial investment, making this capital illiquid. To avoid this problem, firms make initial capital investments in stages to minimize the risk of not being able to withdraw overinvested funds. Fortunately, China is gradually relaxing its restrictions, and franchisors have been reinvesting their profits back into China to continue to fund the growth of their operations. Reinvesting profits also provides a natural hedge against exchange rate fluctuations.

Learning from the Success of Others

Experience has shown that new entrants to China often benefit from establishing a presence in Hong Kong and then moving inland to the southern provinces. Before it was absorbed by mainland China, Hong Kong was one of the world’s leading capitalist economies. It is an excellent pro-business location to gain experience for doing business in China. In other cases, franchisors have launched stores in smaller Chinese cities, gaining experience there before expanding into more costly, competitive urban environments such as Beijing and Shanghai.

Franchisors typically must adapt offerings to suit local tastes. Appropriate suppliers and business infrastructure are often lacking. Franchisors spend much money to develop supplier and distribution networks. They also may need to build logistical infrastructure to move inputs from suppliers to individual stores. McDonald’s has replicated its supply chain, bringing its key suppliers, such as potato supplier Simplot, to China. There is no one best approach in China. For instance, TGI Friday’s imports roughly three-quarters of its food supplies, which helps maintain quality, but heavy importing is expensive and exposes profitability to exchange rate fluctuations.

Assignment Questions:

1. Subway brings to China various intellectual property in the form of trademarks, patents, and an entire business system.

1.1. What are the specific threats to Subway’s intellectual ­property in China? (20 points)

1.2. What can Subway do to protect its intellectual ­property in China? (20 points)

2. Franchising has both advantages and disadvantages.

2.1. What are the advantages and disadvantages of franchising in China from Jim Bryant’s perspective? (25 points)

2.2. What can Bryant do to overcome the disadvantages? (25 points)

4. Grammar, spelling, and organization (10 points).

Grading Criteria:

1. Clarity and specificity of arguments. You should clearly answer whether Rob Parson should be promoted or not.

2. Soundness of arguments presented.

3. Quality of writing.

4. Grammar and spelling.

NOTE #2: DUE DATE: APRIL 17, 2020.

In: Operations Management

this there any way to shorten the line of  code. Right now it about 300 line of...

this there any way to shorten the line of  code. Right now it about 300 line of code is there anyway to shorten it to 200 or so line of code?

import java.awt.*;
import java.awt.Color;
import java.awt.Desktop;
import java.awt.Font;
import java.awt.event.*;
import java.net.URL;
import java.io.BufferedReader;
import java.io.BufferedWriter;
import java.io.FileReader;
import java.io.FileWriter;
import javax.swing.JCheckBox;
import javax.swing.JColorChooser;
import javax.swing.JFileChooser;
import javax.swing.JFrame;
import javax.swing.JMenu;
import javax.swing.JMenuBar;
import javax.swing.JMenuItem;
import javax.swing.JOptionPane;
import javax.swing.JRadioButton;
import javax.swing.JScrollPane;
import javax.swing.JTextArea;
import javax.swing.KeyStroke;
//MyMenuFrame will use Jframe with actionlistener
class MyMenuFrame extends JFrame implements ActionListener{

//creating the main menu items
JMenu menuEdit = new JMenu("Edit");
JMenu menuPrint = new JMenu("Print");
JMenu mnFile = new JMenu("File");
JMenu menuHelp = new JMenu("Help");


//creating the submenu items here because we are gonna use these across the code
JRadioButton subMenuItem1 = new JRadioButton("Times New Roman");
JRadioButton subMenuItem2 = new JRadioButton("Arial");
JRadioButton subMenuItem3 = new JRadioButton("Serif");
JCheckBox subMenuItem4 = new JCheckBox("Bold");
JCheckBox subMenuItem5 = new JCheckBox("Italic");

//provide scrollable view of a component
JScrollPane scrollPane;

//creating notePadArea for notepad to input the text
JTextArea notePadArea;

public MyMenuFrame() {

//setting the border layout for JFrame
this.setLayout(new BorderLayout());

// create menu bar named menuBar

JMenuBar menuBar = new JMenuBar();

this.setJMenuBar(menuBar);//adding the menubar to JFrame

// create File menu
mnFile.setMnemonic(KeyEvent.VK_F);//Alt+F

menuBar.add(mnFile);//adding the menufile

// create Open menu item

JMenuItem mntmOpen = new JMenuItem("Open");//creating the Open menu

mntmOpen.setMnemonic(KeyEvent.VK_O);//Alt+O command

mntmOpen.setActionCommand("open");//when the command equals to 'open' then the corresponding action will be performed

mntmOpen.setAccelerator(KeyStroke.getKeyStroke('O', KeyEvent.CTRL_DOWN_MASK));//respond when user clicks Ctrl+O

mntmOpen.addActionListener(this);//adding actionLister to the Menu Option Open


// create Save menu item

JMenuItem mntmSave = new JMenuItem("Save");//creating the Save menu

mntmSave.setMnemonic(KeyEvent.VK_S);//Alt+S command

mntmSave.setActionCommand("save");//when the command equals to 'save' then the corresponding action will be performed

mntmSave.setAccelerator(KeyStroke.getKeyStroke('S', KeyEvent.CTRL_DOWN_MASK));//respond when user clicks Ctrl+S

mntmSave.addActionListener(this);//adding actionLister to the Menu Option Save

// create Exit menu item

JMenuItem mntmExit = new JMenuItem("Exit");//creating the Exit menu

mntmExit.setMnemonic(KeyEvent.VK_X);//Alt+X command

mntmExit.setActionCommand("exit");//when the command equals to 'exit' then the corresponding action will be performed

mntmExit.setAccelerator(KeyStroke.getKeyStroke('X', KeyEvent.CTRL_DOWN_MASK));//respond when user clicks Ctrl+X

mntmExit.addActionListener(this);//adding actionLister to the Menu Option Exit

// add open, save and exit menu to menu-bar

mnFile.add(mntmOpen);

mnFile.addSeparator();//adding separator between open and save

mnFile.add(mntmSave);

mnFile.addSeparator();//adding separator between save and exit

mnFile.add(mntmExit);

// create Edit menu

menuEdit.setMnemonic(KeyEvent.VK_E);//creating shortcut menu when user press Alt+E

menuBar.add(menuEdit);//adding the Edit to the menubar

JMenu submenu1 = new JMenu("Color");//creating the new menu which comes under Edit
submenu1.setMnemonic(KeyEvent.VK_C);//creating shortcut menu when user press Alt+C
JMenuItem menuItem0 = new JMenuItem("Change Color");//creating submenu item called change color
menuItem0.setAccelerator(KeyStroke.getKeyStroke('C', KeyEvent.CTRL_DOWN_MASK));//it responds when user click Ctrl+C
menuItem0.setActionCommand("color");//setting the command used to call the correcponding action when user click this
menuItem0.addActionListener(this);//adding actionlistener
submenu1.add(menuItem0);//adding this menu item to submenu
menuEdit.add(submenu1);//adding this submenu to editmenu
menuEdit.addSeparator();//creating separator between Color and Font

ActionListener sm1 = new ActionListener() {
public void actionPerformed(ActionEvent actionEvent) {
subMenuItem1.setSelected(true);
subMenuItem2.setSelected(false);
subMenuItem3.setSelected(false);
notePadArea.setFont(new Font("Times New Roman", Font.PLAIN, 20));
}
};

ActionListener sm2 = new ActionListener() {
public void actionPerformed(ActionEvent actionEvent) {
subMenuItem2.setSelected(true);
subMenuItem1.setSelected(false);
subMenuItem3.setSelected(false);
notePadArea.setFont(new Font("Arial", Font.PLAIN, 20));

}
};

ActionListener sm3 = new ActionListener() {
public void actionPerformed(ActionEvent actionEvent) {
subMenuItem3.setSelected(true);
subMenuItem2.setSelected(false);
subMenuItem1.setSelected(false);
notePadArea.setFont(new Font("Serif", Font.PLAIN, 20));

}
};

JMenu submenu = new JMenu("Font");//creating the new menu which comes under Edit
submenu.setMnemonic(KeyEvent.VK_F);//creating shortcut menu when user press Alt+F
subMenuItem1.setMnemonic(KeyEvent.VK_T);//creating shortcut menu when user press Alt+T for Times New Roman
subMenuItem1.setActionCommand("times_new_roman");//setting the command used to call the correcponding action when user click this
subMenuItem1.addActionListener(sm1);//adding actionlistener
submenu.add(subMenuItem1);//adding to the submenu


subMenuItem2.setMnemonic(KeyEvent.VK_A);//creating shortcut key Alt+A
subMenuItem2.setActionCommand("arial");//respond when the command equals to arial
subMenuItem2.addActionListener(sm2);//adding action listener
submenu.add(subMenuItem2);//adding it to the submenu

subMenuItem3.setMnemonic(KeyEvent.VK_S);
subMenuItem3.setActionCommand("serif");
subMenuItem3.addActionListener(sm3);
submenu.add(subMenuItem3);

submenu.addSeparator();

subMenuItem4.setMnemonic(KeyEvent.VK_B);
subMenuItem4.setActionCommand("bold");
subMenuItem4.addActionListener(this);
submenu.add(subMenuItem4);

subMenuItem5.setMnemonic(KeyEvent.VK_I);
subMenuItem5.setActionCommand("italic");
subMenuItem5.addActionListener(this);
submenu.add(subMenuItem5);

menuEdit.add(submenu);


// create Print menu


menuPrint.setMnemonic(KeyEvent.VK_P);

menuBar.add(menuPrint);

JMenuItem menuItemPrint = new JMenuItem("Send To Printer");

menuItemPrint.setAccelerator(KeyStroke.getKeyStroke('P', KeyEvent.CTRL_DOWN_MASK));

menuItemPrint.setActionCommand("print");

menuItemPrint.addActionListener(this);

menuPrint.add(menuItemPrint);

// create Help menu

menuHelp.setMnemonic(KeyEvent.VK_H);


menuBar.add(menuHelp);

JMenuItem menuItemHelp = new JMenuItem("About");

menuItemHelp.setAccelerator(KeyStroke.getKeyStroke('A', KeyEvent.CTRL_DOWN_MASK));

menuItemHelp.setActionCommand("about");
menuItemHelp.addActionListener(this);

JMenuItem menuItemVisitHomePage = new JMenuItem("Visit Home Page");

menuItemVisitHomePage.setAccelerator(KeyStroke.getKeyStroke('V', KeyEvent.CTRL_DOWN_MASK));

menuItemVisitHomePage.setActionCommand("visithomepage");
menuItemVisitHomePage.addActionListener(this);

menuHelp.add(menuItemHelp);

menuHelp.addSeparator();

menuHelp.add(menuItemVisitHomePage);

notePadArea = new JTextArea();

// set no word wrap

notePadArea.setWrapStyleWord(false);

// create scrollable pane

scrollPane = new JScrollPane(notePadArea, JScrollPane.VERTICAL_SCROLLBAR_ALWAYS , JScrollPane.HORIZONTAL_SCROLLBAR_NEVER);

this.add(scrollPane,BorderLayout.CENTER);

}


@Override

public void actionPerformed(ActionEvent e) {

if(e.getActionCommand().equals("exit")) {

System.exit(0);

}else if (e.getActionCommand().equals("open")) {

JFileChooser file = new JFileChooser();

String fileName = "";//initial filename was empty

// show open file dialog

if (file.showOpenDialog(this) == JFileChooser.APPROVE_OPTION) {

fileName = file.getSelectedFile().getAbsolutePath();

} else {

return;

}

try(BufferedReader bufferedReader = new BufferedReader(new FileReader(fileName));) {

// load file content into text area

StringBuffer stringBuffer = new StringBuffer();//creating a string buffer for reading data from file

String lines = "";//for reading the lines from the selecting file

while((lines = bufferedReader.readLine() ) != null) {//it'll read untill the file ends

stringBuffer.append(lines).append("\n");//for every line read insert new line in stringBuffer

}

bufferedReader.close();//after reading of file done, the bufferedReader will be close

notePadArea.setText(stringBuffer.toString());//converting the read text to string and inserting this text into textArea

} catch (Exception error1) {//if any exception occures

System.out.println(error1.toString());//convert the expection into string and print it

}

} else if (e.getActionCommand().equals("save")) {//if the user click the save command then the file will gonna saved


JFileChooser file = new JFileChooser();//creating the file chooser

String fileName = "";//initial file name is empty

// show open file dialog

if (file.showSaveDialog(this) == JFileChooser.APPROVE_OPTION) {//if the user select file and clicks OK button

fileName = file.getSelectedFile().getAbsolutePath();

} else {//other wise will be closed
return;
}

try(BufferedWriter bufferedWriter = new BufferedWriter(new FileWriter(fileName));) {

// write editor's content to selected file.

bufferedWriter.write(notePadArea.getText());//get the text entered in textarea
bufferedWriter.flush();//clear the writer
} catch(Exception ex1) {}

} else if (e.getActionCommand().equals("color")) {

Color select_color = JColorChooser.showDialog(this, "Select a color", Color.RED);
notePadArea.setForeground(select_color);

} else if (e.getActionCommand().equals("times_new_roman")) {
if(subMenuItem1.isSelected())
notePadArea.setFont(new Font("Times New Roman", Font.PLAIN, 20));

} else if (e.getActionCommand().equals("arial")) {
if(subMenuItem2.isSelected())
notePadArea.setFont(new Font("Arial", Font.PLAIN, 20));

} else if (e.getActionCommand().equals("serif")) {
if(subMenuItem3.isSelected())
notePadArea.setFont(new Font("Serif", Font.PLAIN, 20));

} else if (e.getActionCommand().equals("bold")) {
if(subMenuItem4.isSelected()){
if(subMenuItem5.isSelected()){
notePadArea.setFont(new Font("Serif", Font.BOLD+Font.ITALIC, 20));
}else{
notePadArea.setFont(new Font("Serif", Font.BOLD, 20));
}
}else{
if(!subMenuItem5.isSelected())
notePadArea.setFont(new Font("Serif", Font.PLAIN, 20));
}

} else if (e.getActionCommand().equals("italic")) {

if(subMenuItem5.isSelected()){
if(subMenuItem4.isSelected()){
notePadArea.setFont(new Font("Serif", Font.BOLD+Font.ITALIC, 20));
}else{
notePadArea.setFont(new Font("Serif", Font.ITALIC, 20));
}
}else{
if(!subMenuItem4.isSelected())
notePadArea.setFont(new Font("Serif", Font.PLAIN, 20));
}

} else if (e.getActionCommand().equals("print")) {

int output = JOptionPane.showConfirmDialog(this, "Do you want to print the File","Confirmation", JOptionPane.YES_NO_OPTION);
if(output==0){
JOptionPane.showMessageDialog(this, "The file is successfully printed","Confirmation", JOptionPane.INFORMATION_MESSAGE);
}
} else if (e.getActionCommand().equals("changecolor")){
System.out.println("Color clicked");
}
else if (e.getActionCommand().equals("about")) {

JOptionPane.showMessageDialog(this, "This software is developed in 2019\nVersion is 1.0","About", JOptionPane.INFORMATION_MESSAGE);

} else if (e.getActionCommand().equals("visithomepage")) {

openWebpage("http://www.microsoft.com");

}

}

private void openWebpage (String urlString) {

try {

Desktop.getDesktop().browse(new URL(urlString).toURI());

}

catch (Exception e) {

e.printStackTrace();
}
}
}

import javax.swing.JFrame;
public class MyMenuFrameTest {
public static void main(String[] args) {
MyMenuFrame frame = new MyMenuFrame();
frame.setTitle("MyNotepad");
//for the title of the box
frame.setSize(600, 400);
//for the size of the box
frame.setDefaultCloseOperation(JFrame.EXIT_ON_CLOSE);

frame.setVisible(true);
}
}

In: Computer Science

Question: Summarize the below case study by stating what happened, where it happened, who was involved,...

Question: Summarize the below case study by stating what happened, where it happened, who was involved, and the significance of the event in 300-400 words.

Case Study: Alan Cohen still remembers the first time he heard the word ” Apache” as an adult, and it wasn’ t while watching a cowboys-and-Indians movie. It was the 1990s, the dot-com market was booming, and he was a senior manager for IBM, helping to oversee its emerging e-commerce business. ”1 had a whole team with me and a budget of about $8 million, ” Cohen recalled. ”We were competing head-to-head with Microsoft, Netscape, Oracle, Sun-all the big boys. And we were playing this very big-stakes game for e-commerce. IBM had a huge sales force selling all this e-commerce software. One day I asked the development director who worked for me, ’ Say, Jeff, walk me through the development process for this e-commerce systems. What is the underlying Web server?’ And he says to me, It’ s built on top of Apache.’ The first thing I think of is John Wayne. ’What is Apache?’ I ask. And he says it is a shareware program for Web server technology. He said it was produced for free by a bunch of geeks just working online in some kind of open-source chat room. I was floored. I said, ’ How do you buy it?’ And he says, Tou download it off a Web site for free.’ And I said, ’Well, who supports it if something goes wrong?’ And he says, ’ I don’ t know~it just works! ’ And that was my first exposure to Apache . . .
"Now you have to remember, back then Microsoft, IBM, Oracle, Netscape were all trying to build commercial Web servers. These were huge companies. And suddenly my development guy is telling me that he’ s getting ours off the Internet for free! It’s like you had all these big corporate executives plotting strategies, and then suddenly the guys in the mail room are in charge. I kept asking, ’Who runs Apache? I mean,
who are these guys?’ ”
Yes, the geeks in the mail room are deciding what software they will be using and what you will be using too. It’ s called the open-source movement, and it involves thousands of people around the world coming together online to collaborate in writing everything from their own software to their own operating systems to their own dictionary to their own recipe for cola-building always from the bottom up rather than accepting formats or content imposed by corporate hierarchies from the top down.
The word ”open-source” comes from the notion that companies or ad hoc groups would make available online the source code-the underlying programming instructions that make a piece of software work-and then let anyone who has something to contribute improve it and let millions of others just download it for their own use for free. While commercial software is copyrighted and sold, and companies guard the source code as they would their crown jewels so they can charge money to anyone who wants to use it and thereby generate income to develop new versions, opensource software is shared, constantly improved by its users, and made available for free to anyone. In return, every user who comes up with an improvement-a patch that makes this software sing or dance better-is encouraged to make that patch available to every other user for free.
Not being a computer geek, I had never focused much on the open-source movement, but when I did, I discovered it was an amazing universe of its own, with communities of online, come-as-you-are volunteers who share their insights with one another and then offer it to the public for nothing. They do it because they want something the market does n’ t offer them; they do it for the psychic buzz that comes from creating a collective product that can beat something produced by giants like Microsoft or IBM, and-even more important-to earn the respect of their intellectual peers. Indeed, these guys and gals are one of the most interesting and controversial new forms of collaboration that have been facilitated by the flat world and are flattening it even more.
In order to explain how this form of collaboration works, why it is a flattener and why, by the way, it has stirred so many controversies and will be stirring even more in the future, I am going to focus on just two basic varieties of open-sourcing: the intellectual commons movement and the free software movement.
The intellectual commons form of open-sourcing has its roots in the academic and scientific communities, where for a long time self-organized collaborative communities of scientists have come together through private networks and later the Internet to pool their brainpower or share insights around a particular science or math problem. The Apache Web server had its roots in this form of open-sourcing. When I asked a friend of mine, Mike Arguello, an IT systems architect, to explain to me why people share knowledge or work in this way, he said, "IT people tend to be very bright people and they want everybody to know just how brilliant they are. " Marc Andreessen, who invented the first Web browser, agreed: " Open-source is nothing more than peer-reviewed science. Sometimes people contribute to these things because they make science, and they discover things, and the reward is reputation. Sometimes you can build a business out of it, sometimes they just want to increase the store of knowledge in the world. And the peer review part is critical~and open-source is peer review. Every bug or security hole or deviation from standards is reviewed. I found this intellectual commons form of open-sourcing fascinating, so I went exploring to find out who were those guys and girls in the mail room. Eventually, I found my way to one of their pioneers, Brian Behlendorf. If Apache-the open-source Web server community-were an Indian tribe, Behlendorf would be the tribal elder. I caught up with him one day in his glass-and-steel office near the San Francisco airport, where he is now founder and chief technology officer of CollabNet, a start-up focused on creating software for companies that want to use an open-source approach to innovation. I started with two simple questions: Where did you come from? and: How did you manage to pull together an open-source community of online geeks that could go toe-to-toe with IBM?
"My parents met at IBM in Southern California, and I grew up in a town just north of Pasadena, La Canada, " Behlendorf recalled. "The public school was very competitive academically, because a lot of the kids’ parents worked at the Jet Propulsion Laboratory that was run by Caltech there. So from a very early age I was around a lot of science in a place where it was okay to be kind of geeky. We always had computers around the house. We used to use punch cards from the original IBM mainframes for making shopping lists. In grade school, I started doing some basic programming, and by high school I was pretty into computers. . . I graduated in 1991, but in 1989, in the early days of the Internet, a friend gave me a copy of a program he had downloaded onto a floppy disk, called ’ Fractint. ’ It was not pirated, but was freeware, produced by a group of programmers, and was a program for drawing fractals. [Fractals are beautiful images produced at the intersection of art and math. ] When the program started up, the screen would show this scrolling list of e-mail addresses for all the scientists and mathematicians who contributed to it. I noticed that the source code was included with the program. This was my first exposure to the concept of open-source. Here was this program that you just downloaded for free, and they even gave you the source code with it, and it was done by a community of people. It started to paint a different picture of programming in my mind. I started to think that there were some interesting social dynamics to the way certain kinds of software were written or could be written-as opposed to the kind of image I had of the professional software developer in the back office tending to the mainframe, feeding info in and taking it out for the business. That seemed to me to be just one step above accounting and not very exciting. "
After graduating in 1991, Behlendorf went to Berkeley to study physics, but he quickly became frustrated by the disconnect between the abstractions he was learning in the classroom and the excitement that was starting to emerge on the Internet.
"When you entered college back then, every student was given an e-mail address, and I started using it to talk to students and explore discussion boards that were starting to appear around music, " said Behlendorf. "In 1992, 1 started my own Internet mailing list focused on the local electronic music scene in the Bay Area. People could just post onto the discussion board, and it started to grow, and we started to discuss different music events and DJs. Then we said, ’Hey, why don’ t we invite our own DJs and throw our own events?’ It became a collective thing. Someone would say, ’ I have some records, ’ and someone else would say, ’ I have a sound system, ’ and someone else would say, ’ I know the beach and if we showed up at midnight we could have a party.’ By 1993, the Internet was still just mailing lists and e-mail and FTP sites [file transfer protocol repositories where you could store things]. So I started collecting an archive of electronic music and was interested in how we could put this online and make it available to a larger audience. That was when I heard about Mosaic [the Web browser developed by Marc Andreessen. ] So I got a job at the computer lab in the Berkeley business school, and I spent my spare time researching Mosaic and other Web technologies. That led me to a discussion board with a lot of the people who were writing the first generation of Web browsers and Web servers. "
(A Web server is a software program that enables anyone to use his or her home or office computer to host a Web site on the World Wide Web. Amazon. com, for instance, has long run its Web site on Apache software.
When your Web browser goes to www.amazon.com, the very first piece of software it talks to is Apache. The browser asks Apache for the Amazon Web page and Apache sends back to the browser the content of the Amazon Web page. Surfing the Web is really your Web browser interacting with different Web servers. )
"I found myself sitting in on this forum watching Tim Berners-Lee and Marc Andreessen debating how all these things should work, " recalled Behlendorf. '"It was pretty exciting, and it seemed radically inclusive. I didn’t need a Ph. D. or any special credentials, and I started to see some parallels between my music group and these scientists, who had a common interest in building the first Web software. I followed that [discussion] for a while and then I told a friend of mine about it. He was one of the first employees at Wired magazine, and he said Wired would be interested in having me set up a Web site for them. So I joined there at $10 an hour, setting up their e-mail and their first Web site-HotWired ... It was one of the first ad-supported online magazines. "
HotWired decided it wanted to start by having a registration system that required passwords-a controversial concept at that time. "In those days, noted Andrew Leonard, who wrote a history of Apache for Salon,com in 1997, "most Webmasters depended on a Web server program developed at the University of Illinois’ s National Center for Supercomputing Applications (also the birthplace of the groundbreaking Mosaic Web browser). But the NCSA Web server couldn’ t handle password authentication on the scale that HotWired needed. Luckily, the NCSA server was in the public domain, which meant that the source code was free to all comers. So Behlendorf exercised the hacker prerogative: He wrote some new code, a ’ patch’ to the NCSA Web server, that took care of the problem. " Leonard commented, "He wasn’ t the only clever programmer rummaging through the NCSA code that winter. All across the exploding Web, other Webmasters were finding it necessary to take matters into their own keyboards. The original code had been left to gather virtual dust when its primary programmer, University of Illinois student Rob McCool, had been scooped up (along with Marc Andreessen and Lynx author Eric Bina) by a little-known company in Silicon Valley named Netscape. Meanwhile, the Web refused to stop growing-and kept creating new problems for Web servers to cope with. " So patches of one kind or another proliferated like Band-Aids on bandwidth, plugging one hole here and breaching another gap there.
Meanwhile, all these patches were slowly, in an ad hoc open-source manner, building a new modern Web server. But everyone had his or her own version, trading patches here and there, because the NCSA lab couldn’ t keep up with it all.
"I was just this near-dropout, explained Behlendorf. "I was having a lot of fun building this Web site for Wired and learning more than I was learning at Berkeley. So a discussion started in our little working group that the NCSA people were not answering our e-mails. We were sending in patches for the system and they weren’t responding. And we said, ’ If NCSA would not respond to our patches, what’ s going to happen in the future?’ We were happy to continue improving this thing, yet we were worried when we were not getting any feedback and seeing our patches integrated. So I started to contact the other people I knew trading patches. . . Most of them were on the standards working groups [the Internet Engineering Task Force] that were setting the first standards for the interconnectivity between machines and applications on the Internet. . . And we said, ’Why don’ t we take our future into our own hands and release our own [Web server] version that incorporated all our patches?’ "We looked up the copyright for the NCSA code, and it basically just said give us credit at Illinois for what we invented if you improve it-and don’ t blame us if it breaks, " recalled Behlendorf. "So we started building our own version from all our patches. None of us had time to be a full-time Web server developer, but we thought if we could combine our time and do it in a public way, we could create something better than we could buy off the shelf-and nothing was available then, anyway. This was all before Netscape had shipped its first commercial Web server. That was the beginning of the Apache project. "
By February 1999, they had completely rewritten the original NCSA program and formalized their cooperation under the name "Apache. "
"I picked the name because I wanted it to have a positive connotation of being assertive, " said Behlendorf. "The Apache tribe was the last tribe to surrender to the oncoming U. S. government, and at the time we worried that the big companies would come in and ’ civilize’ the landscape that the early Internet engineers built. So ’Apache’ made sense to me as a good code name, and others said it also would make a good pun"-as in the APAtCHy server, because they were patching all these fixes together.
So in many ways, Bellendorf and his open-source colleagues-most of whom he had never met but knew only by e-mail through their open-source chat room-had created a virtual, online, bottom-up software factory, which no one owned and no one supervised. "We had a software project, but the coordination and direction were an emergent behavior based on whoever showed up and wanted to write code, " he said.
But how does it actually work? I asked Behlendorf. You can’ t just have a bunch of people, unmonitored, throwing code together, can you?
"Most software development involves a source code repository and is managed by tools such as the Concurrent Versions System, " he explained. "So there is a CVS server out there, and I have a CVS program on my computer. It allows me to connect to the server and pull down a copy of the code, so I can start working with it and making modifications. If I think my patch is something I want to share with others, I run a program called Patch, which allows me to create a new file, a compact collection of all the changes. That is called a patch file, and I can give that file to someone else, and they can apply it to their copy of the code to see what impact that patch has. If I have the right privileges to the server [which is restricted to a tightly controlled oversight board], I can then take my patch and commit it to the repository and it will become part of the source code. The CVS server keeps track of everything and who sent in what. . . So you might have ’ read access’ to the repository but not 'commit access’ to change things. When someone makes a commit to the repository, that patch file gets e-mailed out to all the other developers, and so you get this peer review system after the fact, and if there is something wrong, you fix the bug." So how does this community decide who are trusted members?
”For Apache, said Behlendorf, "we started with eight people who really trusted each other, and as new people showed up at the discussion forum and offered patch files posted to the discussion form, we would gain trust in others, and that eight grew to over one thousand. We were the first open-source project to get attention from the business community and get the backing from IBM."
Because of Apache’ s proficiency at allowing a single-server machine to host thousands of different virtual Web sites-music, data, text, pornography-it began to have "a commanding share of the Internet Service Provider market," noted Salon’ s Leonard. IBM was trying to sell its own proprietary Web server, called GO, but it gained only a tiny sliver of the market. Apache proved to be both a better technology and free. So IBM eventually decided that if it could not beat Apache, it should join Apache. You have to stop here and imagine this. The world’ s biggest computer company decided that its engineers could not best the work of an ad hoc open-source collection of geeks, so they threw out their own technology and decided to go with the geeks! IBM ^initiated contact with me, as I had a somewhat public speaker role for Apache, said Behlendorf. IBM said, ’We would like to figure out how we can use [Apache] and not get flamed by the Internet community, [how we can] make it sustainable and not just be ripping people off but contributing to the process. . . ’ IBM was saying that this new model for software development was trustworthy and valuable, so let’ s invest in it and get rid of the one that we are trying to make on our own, which isn’t as good.
John Swainson was the senior IBM executive who led the team that approached Apache (he’ s now chairman of Computer Associates). He picked up the story: There was a whole debate going on at the time about open-source, but it was all over the place. We decided we could deal with the Apache guys because they answered our questions. We could hold a meaningful conversation with these guys, and we were able to create the [nonprofit] Apache Software Foundation and work out all the issues. "
At IBM’ s expense, its lawyers worked with the Apache group to create a legal framework around it so that there would be no copyright or liability problems for companies, like IBM, that wanted to build applications on top of Apache and charge money for them. IBM saw the value in having a standard vanilla Web server architecture-which allowed heterogeneous computer systems and devices to talk to each other, displaying e-mail and Web pages in a standard format-that was constantly being improved for free by an open-source community. The Apache collaborators did not set out to make free software. They set out to solve a common problem-feb serving-and found that collaborating for free in this open-source manner was the best way to assemble the best brains for the job they needed done.
"When we started working with Apache, there was an apache, org Web site but no formal legal structure, and businesses and informal structures don’ t coexist well, " said Swainson. "You need to be able to vet the code, sign an agreement, and deal with liability issues. [Today] anybody can download the Apache code. The only obligation is that they acknowledge that it came from the site, and if they make any changes that they share them back. " There is an Apache development process that manages the traffic, and you earn your way into that process, added Swainson. It is something like a pure meritocracy. When IBM started using Apache, it became part of the community and started making contributions.
Indeed, the one thing the Apache people demanded in return for their collaboration with IBM was that IBM assign its best engineers to join the Apache open-source group and contribute, like everyone else, for free. "The Apache people were not interested in payment of cash," said Swainson. "They wanted contribution to the base. Our engineers came to us and said, ’ These guys who do Apache are good and they are insisting that we contribute good people. ’ At first they rejected some of what we contributed.
They said it wasn’t up to their standards! The compensation that the community expected was our best contribution. "
On June 22, 1998, IBM announced plans to incorporate Apache into its own new Web server product, named WebSphere. The way the Apache collaborative community organized itself, whatever you took out of Apache’ s code and improved on, you had to give back to the whole community. But you were also free to go out and build a patented commercial product on top of the Apache code, as IBM did, provided that you included a copyright citation to Apache in your own patent. In other words, this intellectual commons approach to open-sourcing encouraged people to build commercial products on top of it. While it wanted the foundation to be free and open to all, it recognized that it would remain strong and fresh if both commercial and noncommercial engineers had an incentive to participate.
Today Apache is one of the most successful open-source tools, powering about two-thirds of the Web sites in the world. And because Apache can be downloaded for free anywhere in the world, people from Russia to South Africa to Vietnam use it to create Web sites. Those individuals who need or want added capabilities for their Web servers can buy products like WebSphere, which attach right on top of Apache. At the time, selling a product built on top of an open-source program was a risky move on IBM’ s part. To its credit, IBM was confident in its ability to keep producing differentiated software applications on top of the Apache vanilla. This model has since been widely adopted, after everyone saw how it propelled IBM’ s Web server business to commercial leadership in that category of software, generating huge amounts of revenue.
As I will repeat often in this book: There is no future in vanilla for most companies in a flat world. A lot of vanilla making in software and other areas is going to shift to open-source communities. For most companies, the commercial future belongs to those who know how to make the richest chocolate sauce, the sweetest, lightest whipped cream, and the juiciest cherries to sit on top, or how to put them all together into a sundae. Jack Messman, chairman of the Novell software company, which has now become a big distributor of Linux, the open-source operating system, atop which Novell attaches gizmos to make it sing and dance just for your company, put it best: "Commercial software companies have to start operating further up the [software] stack to differentiate themselves. The open source community is basically focusing on infrastructure* (Financial Times, June 14, 2004).
The IBM deal was a real watershed. Big Blue was saying that it believed in the open-source model and that with the Apache Web server, this open-source community of engineers had created something that was not just useful and valuable but "best in its class. " That’ s why the open-source movement has become a powerful flattener, the effects of which we are just beginning to see. "It is incredibly empowering of individuals, " Brian Behlendorf said. "It doesn’ t matter where you come from or where you are-someone in India and South America can be just as effective using this software or contributing to it as someone in Silicon Valley. " The old model is winner take all: I wrote it, I own it-the standard software license model. "The only way to compete against that, " concluded Behlendorf, "is to all become winners. "
Behlendorf, for his part, is betting his career that more and more people and companies will want to take advantage of the new flat-world platform to do open-source innovation. In 2004, he started a new company called CollabNet to promote the use of open-sourcing as a tool to drive software innovation within companies. "Our premise is that software is not gold, it is lettuce-it is a perishable good, " explained Behlendorf. "If the software is not in a place where it is getting improved over time, it will rot. " What the open-source community has been doing, said Behlendorf, is globally coordinated distributed software development, where it is constantly freshening the lettuce so that it never goes rotten. Behlendorfs premise is that the open-source community developed a better method for creating and constantly updating software. CollabNet is a company created to bring the best open-source techniques to a closed community, i. e. , a commercial software company.
"CollabNet is an arms dealer to the forces flattening the world, " said Behlendorf. "Our role in this world is to build the tools and infrastructure so that an individual-in India, China, or wherever-as a consultant, an employee, or just someone sitting at home can collaborate. We are giving them the toolkit for decentralized collaborative development. We are enabling bottom-up development, and not just in cyberspace... We have large corporations who are now interested in creating a bottom-up environment for writing software. The old top-down, silo software model is broken. That system said, ’ I develop something and then I throw it over the wall to you. You find the bugs and then throw it back. I patch it and then sell a new version. ’ There is constant frustration with getting software that is buggy-maybe it will get fixed or maybe not. So we said, ’Wouldn’t it be interesting if we could take the open-source benefits of speed of innovation and higher-quality software, and that feeling of partnership with all these stakeholders, and turn that into a business model for corporations to be more collaborative both within and without?’ "
I like the way Irving fladawsky-Berger, IBM’ s Cuban-born vice president for technical strategy and innovation, summed open-sourcing up: "This emerging era is characterized by the collaborative innovation of many people working in gifted communities, just as innovation in the industrial era was characterized by individual genius. "
The striking thing about the intellectual commons form of open-sourcing is how quickly it has morphed into other spheres and spawned other self-organizing collaborative communities, which are flattening hierarchies in their areas. I see this most vividly in the news profession, where bloggers, one-person online commentators, who often link to one another depending on their ideology, have created a kind of open-source newsroom. I now read bloggers (the term comes from the word "Weblog") as part of my daily information-gathering routine. In an article about how a tiny group of relatively obscure news bloggers were able to blow the whistle that exposed the bogus documents used by CBS News’ s Dan Rather in his infamous report about President George W. Bush’ s Air National Guard service, Howard Kurtz of The Washington Post wrote (September 20, 2004), "It was like throwing a match on kerosene-soaked wood. The ensuing blaze ripped through the media establishment as previously obscure bloggers managed to put the network of Murrow and Cronkite firmly on the defensive. The secret, says Charles Johnson, is ’open-source intelligence gathering.’ Meaning: ’We’ve got a huge pool of highly motivated people who go out there and use tools to find stuff. We’ve got an army of citizen journalists out there. ’ "That army is often armed with nothing more than a tape recorder, a camera-enabled cell phone, and a Web site, but in a flat world it can collectively get its voice heard as far and wide as CBS or The New York Times. These bloggers have created their own online commons, with no barriers to entry. That open commons often has many rumors and wild allegations swirling in it. Because no one is in charge, standards of practice vary wildly, and some of it is downright irresponsible. But because no one is in charge, information flows with total freedom. And when this community is on to something real, like the Rather episode, it can create as much energy, buzz, and hard news as any network or major newspaper.
Another intellectual commons collaboration that I used regularly in writing this book is Wikipedia, the user-contributed online encyclopedia, also known as "the people’s encyclopedia. " The word "wikis" is taken from the Hawaiian word for "quick. "Wikis are Web sites that allow users to directly edit any Web page on their own from their home computer. In a May 5, 2004, essay on YaleGlobal online, Andrew Lih, an assistant professor at the Journalism and Media Studies Center at the University of Hong Kong, explained how Wikipedia works and why it is such a breakthrough.
"The Wikipedia project was started by Jimmy Wales, head of Internet startup Bomis.com, after his original project for a volunteer, but strictly controlled, free encyclopedia ran out of money and resources after two years, " wrote Lih. '"Editors with PhD degrees were at the helm of the project then, but it produced only a few hundred articles. Not wanting the content to languish, Wales placed the pages on a wiki Website in January 2001 and invited any Internet visitors to edit or add to the collection. The site became a runaway success in the first year and gained a loyal following, generating over 20,000 articles and spawning over a dozen language translations. After two years, it had 100, 000 articles, and in April 2004, it exceeded 250, 000 articles in English and 600, 000 articles in 50 other languages. And according to Website rankings at Alexa. com, it has become more popular than traditional online encyclopedias such as Britannica. com. "
How, you might ask, does one produce a credible, balanced encyclopedia by way of an ad hoc open-source, open-editing movement? After all, every article in the Wikipedia has an "Edit this page" button, allowing anyone who surfs along to add or delete content on that page.
It starts with the fact, Lih explained, that "because wikis provide the ability to track the status of articles, review individual changes, and discuss issues, they function as social software. Wiki Websites also track and store every modification made to an article, so no operation is ever permanently destructive. Wikipedia works by consensus, with users adding and modifying content while trying to reach common ground along the way.
"However, the technology is not enough on its own, " wrote Lih. "Wales created an editorial policy of maintaining a neutral point of view (NP0V) as the guiding principle. . . According to Wikipedia’ s guidelines, The neutral point of view attempts to present ideas and facts in such a fashion that both supporters and opponents can agree . . . ’ As a result, articles on contentious issues such as globalization have benefited from the cooperative and global nature of Wikipedia. Over the last two years, the entry has had more than 90 edits by contributors from the Netherlands, Belgium, Sweden, United Kingdom, Australia, Brazil, United States, Malaysia, Japan and China. It provides a manifold view of issues from the World Trade Organization and multinational corporations to the anti-globalization movement and threats to cultural diversity. At the same time malicious contributors are kept in check because vandalism is easily undone. Users dedicated to fixing vandalism watch the list of recent changes, fixing problems within minutes, if not seconds. A defaced article can quickly be returned to an acceptable version with just one click of a button. This crucial asymmetry tips the balance in favor of productive and cooperative members of the wiki community, allowing quality content to prevail. " A Newsweek piece on Wikipedia (November 1, 2004) quoted Angela Beesley, a volunteer contributor from Essex, England, and self-confessed Wikipedia addict who monitors the accuracy of more than one thousand entries: "A collaborative encyclopedia sounds like a crazy idea, but it naturally controls itself. "
Meanwhile, Jimmy Wales is just getting started. He told Newsweek that he is expanding into Wiktionary, a dictionary and thesaurus; Wikibooks, textbooks and manuals; and Wikiquote, a book of quotations. He said he has one simple goal: to give "every single person free access to the sum of all human knowledge."
Wales’ s ethic that everyone should have free access to all human knowledge is undoubtedly heartfelt, but it also brings us to the controversial side of open-source: If everyone contributes his or her intellectual capital for free, where will the resources for new innovation come from? And won’ t we end up in endless legal wrangles over which part of any innovation was made by the community for free, and meant to stay that way, and which part was added on by some company for profit and has to be paid for so that the company can make money to drive further innovation? These questions are all triggered by the other increasingly popular form of self-organized collaboration-the free software movement. According to the open knowledge. org Web site, "The free/open source software movement began in the ’hacker’ culture of U. S. computer science laboratories (Stanford, Berkeley, Carnegie Mellon, and MIT) in the I960’ s and 1970’ s. The community of programmers was small, and close-knit. Code passed back and forth between the members of the community-if you made an improvement you were expected to submit your code to the community of developers. To withhold code was considered gauche-after all, you benefited from the work of your friends, you should return the favor. "
The free software movement, however, was and remains inspired by the ethical ideal that software should be free and available to all, and it relies on open-source collaboration to help produce the best software possible to be distributed for free.
This a bit different from the approach of the intellectual commons folks, like Apache.
They saw open-sourcing as a technically superior means of creating software and other innovations, and while Apache was made available to all for free, it had no problem with commercial software being built on top of it. The Apache group allowed anyone who created a derivative work to own it himself, provided he acknowledge the Apache contribution.
The primary goal of the free software movement, however, is to get as many people as possible writing, improving, and distributing software for free, out of a conviction that this will empower everyone and free individuals from the grip of global corporations. Generally speaking, the free software movement structures its licenses so that if your commercial software draws directly from their free software copyright, they want your software to be free too.
In 1984, according to Wikipedia, an MIT researcher and one of these ex-hackers, Richard Stallman, launched the "free software movement" along with an effort to build a free operating system called GNU. To promote free software, and to ensure that its code would always be freely modifiable and available to all, Stallman founded the Free Software Foundation and something called the GNU General Public License (GPL). The GPL specified that users of the source code could copy, change, or upgrade the code, provided that they made their changes available under the same license as the original code. In 1991, a student at the University of Helsinki named Linus Torvalds, building off of Stallman’ s initiative, posted his Linux operating system to compete with the Microsoft Windows operating system and invited other engineers and geeks online to try to improve it - for free. Since Torvalds’ s initial post, programmers all over the world have manipulated, added to, expanded, patched, and improved the GNU/Linux operating system, whose license says anyone can download the source code and improve upon it but then must make the upgraded version freely available to everybody else. Torvalds insists that Linux must always be free. Companies that sell software improvements that enhance Linux or adapt it to certain functions have to be very careful not to touch its copyright in their commercial products.
Much like Microsoft Windows, Linux offers a family of operating systems that can be adapted to run on the smallest desktop computers, laptops, PalmPilots, and even wristwatches, all the way up to the largest supercomputers and mainframes. So a kid in India with a cheap PC can learn the inner workings of the same operating system that is running in some of the largest data centers of corporate America. Linux has an army of developers across the globe working to make it better. As I was working on this segment of the book, I went to a picnic one afternoon at the Virginia country home of Pamela and Malcolm Baldwin, whom my wife came to know through her membership on the board of World Learning, an educational NGO. I mentioned in the course of lunch that I was thinking of going to Mali to see just how flat the world looked from its outermost edge-the town of Timbuktu. The Baldwins’ son Peter happened to be working in Mali as part of something called the GeekCorps, which helps to bring technology to developing countries. A few days after the lunch, I received an e-mail from Pamela telling me that she had consulted with Peter about accompanying me to Timbuktu, and then she added the following, which told me everything I needed to know and saved me the whole trip: ’’Peter says that his project is creating wireless networks via satellite, making antennas out of plastic soda bottles and mesh from window screens! Apparently everyone in Mali uses Linux. . . ”
’’Everyone in Mali uses Linux. ” That is no doubt a bit of an exaggeration, but it’s a phrase that you’d hear only in a flat world. The free software movement has become a serious challenge to Microsoft and some other big global software players. As Fortune magazine reported on February 23, 2004, ’’The availability of this basic, powerful software, which works on Intel’ s ubiquitous microprocessors, coincided with the explosive growth of the Internet. Linux soon began to gain a global following among programmers and business users . . . The revolution goes far beyond little Linux . . . Just about any kind of software [now] can be found in open-source form. The SourceForge. net website, a meeting place for programmers, lists an astounding 86, 000 programs in progress. Most are minor projects by and for geeks, but hundreds pack real value ... If you hate shelling out $350 for Microsoft Office or $600 for Adobe Photoshop, OpenOffice. org and the Gimp are surprisingly high-quality free alternatives. ” Big companies like Google, E*Trade, and Amazon, by combining Intel-based commodity server components and the Linux operating system, have been able dramatically to cut their technology spending-and get more control over their software.
Why would so many people be ready to write software that would be given away for free?
Partly it is out of the pure scientific challenge, which should never be underestimated. Partly it is because they all hate Microsoft for the way it has so dominated the market and, in the view of many techies, bullied everyone else. Partly it is because they believe that open-source software can be kept more fresh and bugfree than any commercial software, because of the way it is constantly updated by an army of unpaid programmers. And partly it is because some big tech companies are paying engineers to work on Linux and other software, hoping it will cut into Microsoft’ s market share and make it a weaker competitor all around. There are a lot of motives at work here, and not all of them altruistic. When you put them all together, though, they make for a very powerful movement that will continue to present a major challenge to the whole commercial software model of buying a program and then downloading its fixes and buying its updates.
Until now, the Linux operating system was the best-known success among open-source free software projects challenging Microsoft. But Linux is largely used by big corporate data centers, not individuals. However, in November 2004, the Mozilla Foundation, a nonprofit group supporting open-source software, released Firefox, a free Web browser that New York Times technology writer Randall Stross (December 19, 2004) described as very fast and filled with features that Microsoft’ s Internet Explorer lacks. Firefox 1.0, which is easily installed, was released on November 9. ”Just over a month later, " Stross reported, ”the foundation celebrated a remarkable milestone: 10 million downloads.” Donations from Firefox’ s appreciative fans paid for a two-page advertisement in The New York Times. ”With Firefox, " Stross added, ”open-source software moves from back-office obscurity to your home, and to your parents’, too. (Your children in college are already using it.) It is polished, as easy to use as Internet Explorer and, most compelling, much better defended against viruses, worms and snoops. Microsoft has always viewed Internet Explorer’ s tight integration with Windows to be an attractive feature. That, however, was before security became the unmet need of the day. Firefox sits lightly on top of Windows, in a separation from the underlying operating system that the Mozilla Foundation’s president, Mitchell Baker, calls a ’natural defense.’ For the first time, Internet Explorer has been losing market share. According to a worldwide survey conducted in late November by OneStat. com, a company in Amsterdam that analyzes the Web, Internet Explorer’ s share dropped to less than 89 percent, 5 percentage points less than in May. Firefox now has almost 5 percent of the market, and it is growing. "
It will come as no surprise that Microsoft officials are not believers in the viability or virtues of the free software form of open-source. Of all the issues I dealt with in this book, none evoked more passion from proponents and opponents than open-source. After spending time with the open-source community, I wanted to hear what Microsoft had to say, since this is going to be an important debate that will determine just how much of a flattener open-source becomes.
Microsoft’ s first point is, How do you push innovation forward if everyone is working for free and giving away their work? Yes, says Microsoft, it all sounds nice and chummy that we all just get together online and write free software by the people and for the people. But if innovators are not going to be rewarded for their innovations, the incentive for path-breaking innovation will dry up and so will the money for the really deep R & D that is required to drive progress in this increasingly complex field. The fact that Microsoft created the standard PC operating system that won out in the marketplace, it argues, produced the bankroll that allowed Microsoft to spend billions of dollars on R & D to develop Microsoft Office, a whole suite of applications that it can now sell for a little over $100.
Microsoft would admit that there are number of aspects of the open-source movement that are intriguing, particularly around the scale, community collaboration, and communication aspects, " said Craig Mundie, the Microsoft chief technology officer. "But we fundamentally believe in a commercial software industry, and some variants of the open-source model attack the economic model that allows companies to build businesses in software. The virtuous cycle of innovation, reward, reinvestment, and more innovation is what has driven all big breakthroughs in our industry. The software business as we have known it is a scale economic business. You spend a ton of money up front to develop a software product, and then the marginal cost of producing each one is very small, but if you sell a lot of them, you make back your investment and then plow profits back into developing the next generation. But when you insist that you cannot charge for software, you can only give it away, you take the software business away from being a scale economic business. "
Added Bill Gates, ”You need capitalism [to drive innovation. ] To have [a movement] that says innovation does not deserve an economic reward is contrary to where the world is going. When I talk to the Chinese, they dream of starting a company. They are not thinking, ’ I will be a barber during the day and do free software at night. ’ . . . When you have a security crisis in your [software] system, you don’ t want to say, ’Where is the guy at the barbershop ?’ "
As we move into this flat world, and you have this massive Web-enabled global workforce, with all these collaborative tools, there will be no project too small for some members of this workforce to take on, or copy, or modify-for free. Someone out there will be trying to produce the free versions of every kind of software or drug or music. "So how will products retain their value?’’ asked Mundie. "And if companies cannot derive fair value from their products, will innovation move forward in this area, or others, at the speed that it could or should?” Can we always count on a self-organizing open-source movement to come together to drive things forward for free?
It seems to me that we are too early in the history of the flattening of the world to answer these questions. But they will need answers, and not just for Microsoft. So far-and maybe this is part of the long-term answer-Microsoft has been able to count on the fact that the only thing more expensive than commercial software is free software. Few big companies can simply download Linux off the Web and expect it to work for all their tasks. A lot of design and systems engineering needs to go around it and on top of it to tailor it to a company’ s specific needs, especially for sophisticated, large-scale, mission-critical operations. So when you add up all the costs of adapting the Linux operating system to the needs of your company and its specific hardware platform and applications, Microsoft argues, it can end up costing as much as or more than Windows. The second issue Microsoft raises about this whole open-source movement has to do with how we keep track of who owns which piece of any innovation in a flat world, where some is generated for free and others build on it for profit. Will Chinese programmers really respect the rules of the Free Software Foundation? Who will govern all this?
’’Once you start to socialize the global population on the idea that software or any other innovation is supposed to be free, a lot of people will not distinguish between free software, free pharmaceuticals, free music, or free patents on car designs, ” argued Mundie. There is some truth to this. I work for a newspaper, that is where my paycheck comes from. But I believe that all online newspapers should be free, and on principle I refuse to pay for an online subscription to The Wall Street Journal. I have not read the paper copy of The New York Times regularly for two years. I read it only online. But what if my daughters’ generation, which is being raised to think that newspapers are something to be accessed online for free, grows up and refuses to pay for the paper editions? Hmmm. I loved Amazon. com until it started providing a global platform that wasn’ t selling only my new books but also used versions. And I am still not sure how I feel about Amazon offering sections of this book to be browsed online for free Mundie noted that a major American auto company recently discovered that some Chinese firms were using new digital-scanning technology to scan an entire car and churn out computer-aided design models of every part within a very short period of time. They can then feed those designs to industrial robots and in short order produce a perfect copy of a GM car - without having to spend any money on R & D. American automakers never thought they had anything to worry about from wholesale cloning of their cars, but in the flat world, given the technologies that are out there, that is no longer the case.
My bottom line is this: Open-source is an important flattener because it makes available for free many tools, from software to encyclopedias, that millions of people around the world would have had to buy in order to use, and because open-source network associations-with their open borders and come-one-come-all approach-can challenge hierarchical structures with a horizontal model of innovation that is clearly working in a growing number of areas. Apache and Linux have each helped to drive down costs of computing and Internet usage in ways that are profoundly flattening. This movement is not going away. Indeed, it may just be getting started - with a huge, growing appetite that could apply to many industries. As The Economist mused (June 10, 2004), ’’some zealots even argue that the open-source approach represents a new, post-capitalist model of production.”
That may prove true. But if it does, then we have some huge global governance issues to sort out over who owns what and how individuals and companies will profit from their creations.

In: Psychology

C++ Data Structures: Use Huffman coding to encode text in given file (Pride_and_Prejudice.txt). TO_DO: Define a...

C++ Data Structures:

Use Huffman coding to encode text in given file (Pride_and_Prejudice.txt).

TO_DO:

Define a struct for Huffman tree node. This struct contains links to left/right child nodes, a character, and its frequency.Define a function for file reading operation. This function should take in a filename (string type) as parameter and return a proper data structure object that contains characters and their frequencies that will be used to generate Huffman tree nodes.The construction of Huffman tree requires taking two nodes with smallest frequencies. Select a proper data structure to support this operation. Note this data structure object could be different to the object from step 2.

Design a function that takes in the root of Huffman coding tree, prints, and returns the encoding scheme in a data structure object.Design a function that takes in the encoding scheme and filename (string type), output encoded content (bit-string) to a file named pride.huff

Pride_and_Prejudice.txt:

Chapter 1

It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife. However little known the feelings or views of such a man may be on his first entering a neighbourhood, this truth is so well fixed in the minds of the surrounding families, that he is considered the rightful property of some one or other of their daughters. “My dear Mr. Bennet,” said his lady to him one day, “have you heard that Netherfield Park is let at last?” Mr. Bennet replied that he had not. “But it is,” returned she; “for Mrs. Long has just been here, and she told me all about it.” Mr. Bennet made no answer. “Do you not want to know who has taken it?” cried his wife impatiently. “You want to tell me, and I have no objection to hearing it.” This was invitation enough. “Why, my dear, you must know, Mrs. Long says that Netherfield is taken by a young man of large fortune from the north of England; that he came down on Monday in a chaise and four to see the place, and was so much delighted with it, that he agreed with Mr. Morris immediately; that he is to take possession before Michaelmas, and some of his servants are to be in the house by the end of next week.” “What is his name?” “Bingley.” “Is he married or single?” “Oh! Single, my dear, to be sure! A single man of large fortune; four or five thousand a year. What a fine thing for our girls!” “How so? How can it affect them?” “My dear Mr. Bennet,” replied his wife, “how can you be so tiresome! You must know that I am thinking of his marrying one of them.” “Is that his design in settling here?” “Design! Nonsense, how can you talk so! But it is very likely that he may fall in love with one of them, and therefore you must visit him as soon as he comes.” “I see no occasion for that. You and the girls may go, or you may send them by themselves, which perhaps will be still better, for as you are as handsome as any of them, Mr. Bingley may like you the best of the party.” “My dear, you flatter me. I certainly have had my share of beauty, but I do not pretend to be anything extraordinary now. When a woman has five grown-up daughters, she ought to give over thinking of her own beauty.” “In such cases, a woman has not often much beauty to think of.” “But, my dear, you must indeed go and see Mr. Bingley when he comes into the neighbourhood.” “It is more than I engage for, I assure you.” “But consider your daughters. Only think what an establishment it would be for one of them. Sir William and Lady Lucas are determined to go, merely on that account, for in general, you know, they visit no newcomers. Indeed you must go, for it will be impossible for us to visit him if you do not.” “You are over-scrupulous, surely. I dare say Mr. Bingley will be very glad to see you; and I will send a few lines by you to assure him of my hearty consent to his marrying whichever he chooses of the girls; though I must throw in a good word for my little Lizzy.” “I desire you will do no such thing. Lizzy is not a bit better than the others; and I am sure she is not half so handsome as Jane, nor half so good-humoured as Lydia. But you are always giving her the preference.” “They have none of them much to recommend them,” replied he; “they are all silly and ignorant like other girls; but Lizzy has something more of quickness than her sisters.” “Mr. Bennet, how can you abuse your own children in such a way? You take delight in vexing me. You have no compassion for my poor nerves.” “You mistake me, my dear. I have a high respect for your nerves. They are my old friends. I have heard you mention them with consideration these last twenty years at least.” “Ah, you do not know what I suffer.” “But I hope you will get over it, and live to see many young men of four thousand a year come into the neighbourhood.” “It will be no use to us, if twenty such should come, since you will not visit them.” “Depend upon it, my dear, that when there are twenty, I will visit them all.” Mr. Bennet was so odd a mixture of quick parts, sarcastic humour, reserve, and caprice, that the experience of three-and-twenty years had been insufficient to make his wife understand his character. Her mind was less difficult to develop. She was a woman of mean understanding, little information, and uncertain temper. When she was discontented, she fancied herself nervous. The business of her life was to get her daughters married; its solace was visiting and news. Chapter 2 Mr. Bennet was among the earliest of those who waited on Mr. Bingley. He had always intended to visit him, though to the last always assuring his wife that he should not go; and till the evening after the visit was paid she had no knowledge of it. It was then disclosed in the following manner. Observing his second daughter employed in trimming a hat, he suddenly addressed her with: “I hope Mr. Bingley will like it, Lizzy.” “We are not in a way to know what Mr. Bingley likes,” said her mother resentfully, “since we are not to visit.” “But you forget, mamma,” said Elizabeth, “that we shall meet him at the assemblies, and that Mrs. Long promised to introduce him.” “I do not believe Mrs. Long will do any such thing. She has two nieces of her own. She is a selfish, hypocritical woman, and I have no opinion of her.” “No more have I,” said Mr. Bennet; “and I am glad to find that you do not depend on her serving you.” Mrs. Bennet deigned not to make any reply, but, unable to contain herself, began scolding one of her daughters. “Don’t keep coughing so, Kitty, for Heaven’s sake! Have a little compassion on my nerves. You tear them to pieces.” “Kitty has no discretion in her coughs,” said her father; “she times them ill.” “I do not cough for my own amusement,” replied Kitty fretfully. “When is your next ball to be, Lizzy?” “To-morrow fortnight.” “Aye, so it is,” cried her mother, “and Mrs. Long does not come back till the day before; so it will be impossible for her to introduce him, for she will not know him herself.” “Then, my dear, you may have the advantage of your friend, and introduce Mr. Bingley to her.” “Impossible, Mr. Bennet, impossible, when I am not acquainted with him myself; how can you be so teasing?” “I honour your circumspection. A fortnight’s acquaintance is certainly very little. One cannot know what a man really is by the end of a fortnight. But if we do not venture somebody else will; and after all, Mrs. Long and her nieces must stand their chance; and, therefore, as she will think it an act of kindness, if you decline the office, I will take it on myself.” The girls stared at their father. Mrs. Bennet said only, “Nonsense, nonsense!” “What can be the meaning of that emphatic exclamation?” cried he. “Do you consider the forms of introduction, and the stress that is laid on them, as nonsense? I cannot quite agree with you there. What say you, Mary? For you are a young lady of deep reflection, I know, and read great books and make extracts.” Mary wished to say something sensible, but knew not how. “While Mary is adjusting her ideas,” he continued, “let us return to Mr. Bingley.” “I am sick of Mr. Bingley,” cried his wife. “I am sorry to hear that; but why did not you tell me that before? If I had known as much this morning I certainly would not have called on him. It is very unlucky; but as I have actually paid the visit, we cannot escape the acquaintance now.” The astonishment of the ladies was just what he wished; that of Mrs. Bennet perhaps surpassing the rest; though, when the first tumult of joy was over, she began to declare that it was what she had expected all the while. “How good it was in you, my dear Mr. Bennet! But I knew I should persuade you at last. I was sure you loved your girls too well to neglect such an acquaintance. Well, how pleased I am! and it is such a good joke, too, that you should have gone this morning and never said a word about it till now.” “Now, Kitty, you may cough as much as you choose,” said Mr. Bennet; and, as he spoke, he left the room, fatigued with the raptures of his wife. “What an excellent father you have, girls!” said she, when the door was shut. “I do not know how you will ever make him amends for his kindness; or me, either, for that matter. At our time of life it is not so pleasant, I can tell you, to be making new acquaintances every day; but for your sakes, we would do anything. Lydia, my love, though you are the youngest, I dare say Mr. Bingley will dance with you at the next ball.” “Oh!” said Lydia stoutly, “I am not afraid; for though I am the youngest, I’m the tallest.” The rest of the evening was spent in conjecturing how soon he would return Mr. Bennet’s visit, and determining when they should ask him to dinner. Chapter 3 Not all that Mrs. Bennet, however, with the assistance of her five daughters, could ask on the subject, was sufficient to draw from her husband any satisfactory description of Mr. Bingley. They attacked him in various ways—with barefaced questions, ingenious suppositions, and distant surmises; but he eluded the skill of them all, and they were at last obliged to accept the second-hand intelligence of their neighbour, Lady Lucas. Her report was highly favourable. Sir William had been delighted with him. He was quite young, wonderfully handsome, extremely agreeable, and, to crown the whole, he meant to be at the next assembly with a large party. Nothing could be more delightful! To be fond of dancing was a certain step towards falling in love; and very lively hopes of Mr. Bingley’s heart were entertained. “If I can but see one of my daughters happily settled at Netherfield,” said Mrs. Bennet to her husband, “and all the others equally well married, I shall have nothing to wish for.” In a few days Mr. Bingley returned Mr. Bennet’s visit, and sat about ten minutes with him in his library. He had entertained hopes of being admitted to a sight of the young ladies, of whose beauty he had heard much; but he saw only the father. The ladies were somewhat more fortunate, for they had the advantage of ascertaining from an upper window that he wore a blue coat, and rode a black horse. An invitation to dinner was soon afterwards dispatched; and already had Mrs. Bennet planned the courses that were to do credit to her housekeeping, when an answer arrived which deferred it all. Mr. Bingley was obliged to be in town the following day, and, consequently, unable to accept the honour of their invitation, etc. Mrs. Bennet was quite disconcerted. She could not imagine what business he could have in town so soon after his arrival in Hertfordshire; and she began to fear that he might be always flying about from one place to another, and never settled at Netherfield as he ought to be. Lady Lucas quieted her fears a little by starting the idea of his being gone to London only to get a large party for the ball; and a report soon followed that Mr. Bingley was to bring twelve ladies and seven gentlemen with him to the assembly. The girls grieved over such a number of ladies, but were comforted the day before the ball by hearing, that instead of twelve he brought only six with him from London—his five sisters and a cousin. And when the party entered the assembly room it consisted of only five altogether—Mr. Bingley, his two sisters, the husband of the eldest, and another young man. Mr. Bingley was good-looking and gentlemanlike; he had a pleasant countenance, and easy, unaffected manners. His sisters were fine women, with an air of decided fashion. His brother-in-law, Mr. Hurst, merely looked the gentleman; but his friend Mr. Darcy soon drew the attention of the room by his fine, tall person, handsome features, noble mien, and the report which was in general circulation within five minutes after his entrance, of his having ten thousand a year. The gentlemen pronounced him to be a fine figure of a man, the ladies declared he was much handsomer than Mr. Bingley, and he was looked at with great admiration for about half the evening, till his manners gave a disgust which turned the tide of his popularity; for he was discovered to be proud; to be above his company, and above being pleased; and not all his large estate in Derbyshire could then save him from having a most forbidding, disagreeable countenance, and being unworthy to be compared with his friend. Mr. Bingley had soon made himself acquainted with all the principal people in the room; he was lively and unreserved, danced every dance, was angry that the ball closed so early, and talked of giving one himself at Netherfield. Such amiable qualities must speak for themselves. What a contrast between him and his friend! Mr. Darcy danced only once with Mrs. Hurst and once with Miss Bingley, declined being introduced to any other lady, and spent the rest of the evening in walking about the room, speaking occasionally to one of his own party. His character was decided. He was the proudest, most disagreeable man in the world, and everybody hoped that he would never come there again. Amongst the most violent against him was Mrs. Bennet, whose dislike of his general behaviour was sharpened into particular resentment by his having slighted one of her daughters. Elizabeth Bennet had been obliged, by the scarcity of gentlemen, to sit down for two dances; and during part of that time, Mr. Darcy had been standing near enough for her to hear a conversation between him and Mr. Bingley, who came from the dance for a few minutes, to press his friend to join it. “Come, Darcy,” said he, “I must have you dance. I hate to see you standing about by yourself in this stupid manner. You had much better dance.” “I certainly shall not. You know how I detest it, unless I am particularly acquainted with my partner. At such an assembly as this it would be insupportable. Your sisters are engaged, and there is not another woman in the room whom it would not be a punishment to me to stand up with.” “I would not be so fastidious as you are,” cried Mr. Bingley, “for a kingdom! Upon my honour, I never met with so many pleasant girls in my life as I have this evening; and there are several of them you see uncommonly pretty.” “You are dancing with the only handsome girl in the room,” said Mr. Darcy, looking at the eldest Miss Bennet. “Oh! She is the most beautiful creature I ever beheld! But there is one of her sisters sitting down just behind you, who is very pretty, and I dare say very agreeable. Do let me ask my partner to introduce you.” “Which do you mean?” and turning round he looked for a moment at Elizabeth, till catching her eye, he withdrew his own and coldly said: “She is tolerable, but not handsome enough to tempt me; I am in no humour at present to give consequence to young ladies who are slighted by other men. You had better return to your partner and enjoy her smiles, for you are wasting your time with me.” Mr. Bingley followed his advice. Mr. Darcy walked off; and Elizabeth remained with no very cordial feelings toward him. She told the story, however, with great spirit among her friends; for she had a lively, playful disposition, which delighted in anything ridiculous. The evening altogether passed off pleasantly to the whole family. Mrs. Bennet had seen her eldest daughter much admired by the Netherfield party. Mr. Bingley had danced with her twice, and she had been distinguished by his sisters. Jane was as much gratified by this as her mother could be, though in a quieter way. Elizabeth felt Jane’s pleasure. Mary had heard herself mentioned to Miss Bingley as the most accomplished girl in the neighbourhood; and Catherine and Lydia had been fortunate enough never to be without partners, which was all that they had yet learnt to care for at a ball. They returned, therefore, in good spirits to Longbourn, the village where they lived, and of which they were the principal inhabitants. They found Mr. Bennet still up. With a book he was regardless of time; and on the present occasion he had a good deal of curiosity as to the event of an evening which had raised such splendid expectations. He had rather hoped that his wife’s views on the stranger would be disappointed; but he soon found out that he had a different story to hear. “Oh, my dear Mr. Bennet,” as she entered the room, “we have had a most delightful evening, a most excellent ball. I wish you had been there. Jane was so admired, nothing could be like it. Everybody said how well she looked; and Mr. Bingley thought her quite beautiful, and danced with her twice! Only think of that, my dear; he actually danced with her twice! and she was the only creature in the room that he asked a second time. First of all, he asked Miss Lucas. I was so vexed to see him stand up with her! But, however, he did not admire her at all; indeed, nobody can, you know; and he seemed quite struck with Jane as she was going down the dance. So he inquired who she was, and got introduced, and asked her for the two next. Then the two third he danced with Miss King, and the two fourth with Maria Lucas, and the two fifth with Jane again, and the two sixth with Lizzy, and the Boulanger—” “If he had had any compassion for me,” cried her husband impatiently, “he would not have danced half so much! For God’s sake, say no more of his partners. Oh that he had sprained his ankle in the first dance!” “Oh! my dear, I am quite delighted with him. He is so excessively handsome! And his sisters are charming women. I never in my life saw anything more elegant than their dresses. I dare say the lace upon Mrs. Hurst’s gown—” Here she was interrupted again. Mr. Bennet protested against any description of finery. She was therefore obliged to seek another branch of the subject, and related, with much bitterness of spirit and some exaggeration, the shocking rudeness of Mr. Darcy. “But I can assure you,” she added, “that Lizzy does not lose much by not suiting his fancy; for he is a most disagreeable, horrid man, not at all worth pleasing. So high and so conceited that there was no enduring him! He walked here, and he walked there, fancying himself so very great! Not handsome enough to dance with! I wish you had been there, my dear, to have given him one of your set-downs. I quite detest the man.”

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