Recent Posts


  • Chick-fil-A Customers Help Recycle Millions of Foam Cups

    The video above highlights the efforts of Chick-fil-A customers recycling foam cups. Chick-fil-A researched other types of cups, but customers want the foam cups. Thus, a goal of Chick-fil-A is that "all packaging a guest uses can be recycled, composted or reused – with nothing going to landfill." The Metro Atlanta Chamber created a "sustainability snapshot" of businesses in their area (see attached). They reported that "Chick-Fil-A is the first restaurant chain in the industry to institute a sustainable solution via a large-scale foam cup recycling program. Recycling restaurants receive multiple new dual-opening recycling and waste receptacles as well as blue bags and separate, labeled covered containers for their dumpster pad. A major part of the recycling initiative includes training team members and customers to help educate them on this new recycling and waste process." How important is sustainability in corporate responsibility? How important is it for companies to recycle, compost, or reuse? What, if anything, should go to a landfill?
  • Apple Earth Day

    April 22 is Earth Day . Apple CEO Time Cook did the voice-over in the above video shot on location at Apple Facilities. Apple is striving to reduce their impact on climate change, find ways to use greener materials, and conserve resources for future generations. Lisa Jackson, Apple Vice President of Environmental Initiatives, wrote , "every Apple Retail Store will now take back Apple products for free and recycle them responsibly. We believe we must be accountable for every Apple product at every stage of its use." What is the significance of Cook's decision to perform the voice-over himself? Does this make the company better?
  • GM CEO Vows Changes Because of Recalls

    General Motors (GM) Chief Executive Mary Barra says the company will change. It took too long to tell owners to bring the cars in for repairs. The company learned about the ignition switch problems over 10 years ago, but failed to recall the cars. Ms. Barra did not know the details of defective cars until December or January, as she became CEO on January 15. Her first change was to appoint Jeff Boyer as the new global safety chief in charge of recalls and other safety issues. He will meet with her once a month to discuss issues. In addition, she discussed the issue in a news conference, as seen in the video below, and started an internal probe of the problem. Ben W. Heineman, Jr. in a post on HBR blog network questioned why these delays occurred in the first place and recommended that business leaders have "robust systematic processes in place for personally leading or overseeing these threats to people and to the company." He gives the following as an approach to managing this type of health and safety crisis. Preventive systems and testing should be in place to reduce the issues to an absolute minimum. As GM has belatedly done, the CEO should appoint a head of safety and rapid response teams to receive reports of serious harms to persons or property that may be linked to product issues. Just as the general company ombuds system reports concerns to the top of the company about serious commercial, legal or ethical issues, the rapid response team should take any issue of potential consequence to the CEO or other high business leaders. Most importantly, the CEO or top business leaders should then form appropriate multi-functional teams relating to: design problems and solutions; internal personnel and processes; duties to regulators; management of litigation; a communications strategy with various constituencies; and any other relevant functions. The CEO or top business leaders must have prompt, periodic, direct reports until there is a good understanding of the interrelated issues. Then they must make decisions on an appropriate response. On these important safety issues, the CEO should also keep the board informed. Both during formulation of the strategy and after, the CEO or top business leadership must ensure that all communications to all constituencies must be strictly accurate. It is better to say nothing—and develop accurate facts—than to issue deceptive or incomplete statements. Once decisions are made about strategy, the CEO must oversee implementation to make sure, as appropriate, that it is meticulously carried out, changing systems both with respect to specific issues and more broadly as necessary, dealing humanely with people injured, and communicating fully and transparently with regulators, media, and other constituents. Questions: What do you think about the CEO's attempts to become the voice to reassure customers that the crisis will be resolved? Are there ethical issues associated with the company's failure to deal with the ignition problem when it was first discovered? The past GM bankruptcy limits its financial responsibility to compensate victims. Should victims be compensated? How might the CEO make this decision?
  • Target CEO Apologizes for Breach

    Target's chief executive, Gregg Steinhafel, released a statement (see attached) Friday night apologizing for the credit and debit card data stolen from more than 40 million shoppers who shopped at Target stores between November 27 and December 15, 2013. Furthermore, he acknowledged that consumers calling or visiting Target's website were having trouble connecting and getting more information. Customers made their dissatisfaction known on Target's Facebook page, as well as other social media sites. Many discussed their frustration with local news media - television and newspapers. The CEO stated, "We understand it’s been difficult for some guests to reach us via our website and call center. We apologize and want you to understand that we are experiencing unprecedented call volume. Our Target teams are working continuously to build capacity and meet our guests’ needs." Then, the CEO offered a 10 percent discount on in-store purchases Saturday and Sunday. "We take this crime seriously. It was a crime against Target, our team members, and most importantly, our guests. We’re in this together, and in that spirit, we are extending a 10% discount – the same amount our team members receive – to guests who shop in U.S. stores on Dec. 21 and 22. Again, we recognize this issue has been confusing and disruptive during an already busy holiday season. We want to emphasize that the issue has been addressed and let guests know they can shop with confidence at their local Target stores." In the video below, the CEO discusses how corporate responsibility fits into Target's strategy, the role he plays, and his expectations. Do you think a 10 percent markdown will be enough to get customers back in Target stores? If so, why? If not, what percent markdown should Target have offered? Why?
  • Giving Tuesday Begins the Season of Helping Others

    Giving Tuesday is a day after Thanksgiving, Black Friday, and Cyber Monday. It is the beginning of the "giving" season and helping others. Giving Tuesday encourages people to make donations to charity. In the attached whitepaper, there are "8 Models for Community and Business Impact." For example, one model, "Loaned Employee," is based on Pfizer, Inc. which allows employees to be compensated to work on a pro bono project. Read the white paper and identify the model you would use if you were a manager. Explain your choice.
  • Wolf of Wall Street Trailer Named the Best of the Year

    Wolf of Wall Street Official Trailer Wolf of Wall Street Official Trailer #2 The Wolf of Wall Street won 2013's Grand Key Art Award for audio/visual as the best trailer of the year. This is the highest honor in the Hollywood Reporter's Key Art Awards. The film by Martin Scorsese's is based on the book by Jordan Belfort . The book is a memoir. His web site says the following about him. "In the 1990s, Jordan Belfort built one of the most dynamic and successful sales organizations in Wall Street history. During that time, he soared to the highest financial heights, earning over $50 million a year, a feat that coined him the name “The Wolf of Wall Street.” As the owner of Stratton Oakmont, Belfort employed over 1,000 stockbrokers and raised over $1.5 billion and started more than 30 million-dollar-companies from scratch. . . . Along the way, he succumbed to some of the traps of the high-flying Wall Street lifestyle, going through a spectacular—and well-publicized—fall from grace. Taking invaluable lessons from the mistakes he made and the prices he paid, he has re-emerged as a globally recognized potent force behind extraordinary business success." As a manager, what would you say if your company wanted to hire Jordan Belfort to train your employees or consult with your company on business strategies, sales training, ethics in business, or how to raise venture capital?
  • Jamie Dimon Is No Longer Chairman Of JPMorgan Chase Banking Unit

    Jamie Dimon CEO, JPMorgan Chase (Source: Wikipedia ) Jamie Dimon just lost his job as Chairman Of JPMorgan Chase Banking Unit, the nation’s largest bank. According to Mark T.Williams , a former Federal Reserve Bank examiner who teaches risk-management at Boston University School of Management, and author of Uncontrolled Risk about the rise and fall of Lehman Brothers, since Dimon became Chairman and CEO in 2005, JPMorgan Chase has had the following problems. Questionable mortgage practices $6 billion “London Whale” trading scandal Bribery of Chinese officials Shoddy debt collection practices Libor-fixing probe Violations of the federal mortgage insurance program Charging credit-card customers for services never received Manipulation of western electricity markets Compliance weaknesses in money laundering controls Settlement relating to client money taken by MF Global Potential damaging link to financial criminal Bernie Madoff Ben Heineman,a senior fellow at Harvard's Law and Kennedy Schools, in his blog post states , "at the end of the day, it is bank leaders and employees who must take the right business, legal and ethical actions under existing law." He then goes on to ask, "Are these huge major financial institutions not just too big to fail, their leaders “too big to jail” (as some critics charge), but also “too big to manage”? Why haven't the bank managers made the right ethical decisions? Are big banks, like JPMorgan Chase, unmanageable? What might happen to the economy the next time a big bank crashes?
  • Community Support Good for the Bottom Line

    Supporting the community aids a retailer’s bottom line, according to research co-authored by Timothy Landry, a University of Alabama in Huntsville associate professor. The lead article in the Journal of Marketing Theory and Practice, Vol. 21, No. 3, Summer 2013 demonstrates how retailers benefit from employment of four social functions associated with development of community. Socialization - Dr. Landry said , “In these types of studies we can show that as much as 40 percent of retailers’ support is due to these sociological factors. You’re willing to pay more at a retailer if they are actively supporting the community.” Mutual support - Dr. Landry said , “If you want to be a retailer that people feel really attached to, then your retail stores should reach out to the community through socialization. It tremendously affects your bottom line." Social participation - Dr. Landry said ,"The more of these you can do, the better off you are." Examples include a Little League team or a community-wide event, where the retailer facilitates interactions or gatherings between community members. Social control - "An example of social control would be a larger retailer requiring censorship of certain musical lyrics on compact discs it sells." Note: This did not result in greater loyalty or willingness to pay more. Dr. Landry says, “My research is headed toward answering the question, how do businesses play a role in supporting and bettering a community?” How do managers support a community? How can managers better a community?
  • Hype versus No Hype

    Managers decide what types of promotion will be used to inform customers about products and services. Find an advertisement representing an example of hype and an example of no-hype. Why is no-hype the ethical example?
  • Foreign Corrupt Practices Act Quiz

    Managers and employees of global operations must be familiar with the Foreign Corrupt Practices Act (FCPA). It is illegal to accept or offer a bribe. How well do you know the Foreign Corrupt Practices Act (FCPA)? Take this quiz, published by the Wall Street Journal . It was adapted from guidance published by the Justice Department and the SEC. 1. Gas Corp. is a large energy firm based in New York and listed on the New York Stock Exchange. It enters into a joint venture with a private European company, Euro Gas Ltd., to bid on a contract to develop an oil field in Nigeria. Senior vice presidents at Gas Corp. and Euro Gas meet in New York and decide to hire a consultant, Middleman Inc., to funnel payments on the joint venture's behalf to a deputy oil minister with influence over the bidding process. The payments are invoiced as consulting fees, but Middleman Inc. passes most of the money to the deputy minister. The joint venture wins the contract. Which entities are liable under the FCPA? A) Gas Corp. B) Gas Corp. and Euro Gas C) Middleman Inc. D) All of the above Answer: All of the above. Gas Corp. is both based in the U.S. and listed on a U.S. stock exchange, either of which means it is bound by the FCPA. Euro Gas is liable because its executives made the decision to pay the bribe while they were in New York. And Middleman Inc., even though it never took any actions in the U.S., could be charged with conspiring with the other two companies to violate the FCPA. (Euro Gas could be charged in the same conspiracy, even if its executives had never stepped foot in New York.) *** 2. At a trade show in Shanghai, Widgets Co., a Kansas City, Mo., company that wants to expand its presence in Asia, invites current and prospective customers out for drinks and pays the bar tab. Those invited include midlevel executives at companies owned or controlled by the Chinese government. Is this a violation of the FCPA? Answer : No, the FCPA doesn't prevent companies from promoting their businesses or providing legitimate hospitality. However, be mindful that the Justice Department and the SEC consider employees of state-owned enterprises to be foreign officials, meaning it is illegal to bribe them under FCPA. *** 3. After drinks, Widgets Co. executives invite executives at one of China's state-owned utility companies to the U.S. to talk about a lucrative contract with the utility on which the American firm is bidding. Widgets pays for the officials to fly first class with their spouses to Las Vegas and puts them up in a casino hotel for a week before meeting with the Chinese executives on the final day of the trip to discuss the contract. Is this a violation of the FCPA? Answer: Yes. The trip can barely be said to have a legitimate business purpose. It is extravagant and clearly meant to curry favor with the Chinese executives, who have influence over whether Widgets wins the contract. *** 4. Mining Corp., a mining company listed on the New York Stock Exchange, just identified a new mineral deposit in Afghanistan. The company needs to build a road from the deposit to a nearby port and hires a local agent to help it secure the necessary permits from Afghan authorities. The agent informs Mining Corp.'s international vice president that he plans to make a one-time small cash payment to an Afghan clerk, so the clerk will stamp and file the permit applications quickly. In the past, the clerk has sat on such applications for months. The vice president authorizes the payment. Does the payment violate the FCPA? Answer : No. The FCPA contains an exception for "facilitating payments"-a euphemism for grease bribes-that are paid to obtain a routine service. In other words, Mining Corp. is paying the clerk to do something the clerk is supposed to do-file applications for permits. A note of caution, however: Facilitating payments may be illegal in the country in which they are paid, and they have to be recorded accurately in a company's books and records. *** 5. A few months later, the agent tells Mining Corp.'s vice president that he can't get an environmental permit for the road because the planned route would cut through protected wetlands. Mining Corp. could build the road around the wetlands for about a million dollars more. Or, the agent says, the company could make a $3,000 cash payment to the director of the country's natural-resources department, who in return will sign the permit so the road can be built on the wetlands. The vice president authorizes the payment. Is this a violation of the FCPA? Answer: Yes. The payment is clearly designed to influence the director, a foreign official, into using his power improperly. Unlike the clerk, the director has discretion to approve or reject the application. Your score 5 out of 5 : You're practically a compliance officer. 4 out of 5 : Your company provides good FCPA training. 3 out of 5 : You ignored your company's FCPA training. 2 out of 5 :...
  • Creepy Loyalty Programs

    Managers reward loyal customers with discounts. But, first the customer must give the company his or her personal information (such as name, address, telephone number, driver's license number, and email address). Then, the customer gets a card or number. Each time the customer buys something, he or she shows the card or number. The company knows what customers buy, how often they buy, and how much they spend. One of the first and most successful loyalty programs is American Airlines' AAdvantage frequent flyer program , established in 1981. But a study by eMarketer says that many users report being wary of certain "creepy" behaviors. See the leading "creepy/weird" ways loyalty programs use personal information in the table below. Do you use loyalty cards or numbers when you shop? Why? What are the benefits of using loyalty cards or numbers when shopping? Are you concerned about your privacy? How can loyalty program managers keep consumer privacy in mind when targeting offers to customers?
  • Giving Tuesday

    Management decision making is influenced by the political environment, but managers also influence political decisions. President Abraham Lincoln declared Thanksgiving a national holiday on the last Thursday in November 1863, but in 1939 President Franklin D. Roosev elt moved the holiday to the fourth Thursday in November. Business leaders had asked President Roosevelt to move the date to allow an extra week in the holiday shopping season (between Thanksgiving and Christmas). Managers saw a shopping opportunity after Thanksgiving and decided to open early and offer specials. Black Friday , the day after Thanksgiving, is the day many retailers are profitable. In accounting, black ink denotes positive income, as opposed to red ink which denotes negative values. Thus "in the black" means making money. Cyber Monday is the Monday after Black Friday when most people go back to work after the four-day Thanksgiving holiday, and shop online. Giving Tuesday , is the day after Cyber Monday, for people to participate in holiday charitable giving. It is a new opportunity, maybe the start of a holiday tradition . Will you give today? How? What do you think about "Giving Tuesday"? How are managers incorporating "Giving Tuesday" into their business?
  • Leaders and Extra Marital Affairs

    Leaders have a responsibility to set an example in personal conduct for their followers. So, evidence of a leader's extra marital affair can lead to organizational conflict. Outcomes include complaints of favoritism by workers outside of the relationship, claims of sexual harassment, and decreased productivity of those involved in the office romance. Two recent investigations which led to proof of adultery and then loss of jobs headlined the news. The leader of the Central Intelligence Agency ( CIA ), Director David Petraeus resigned after an FBI inquiry into the use of one of his personal email accounts found that he was engaging in an extra marital affair. Actually, the Federal Bureau of Investigation ( FBI ) was investigating a harassment complaint against Paula Broadwell by another woman. Broadwell is Petraeus' biographer, and the email exchanges revealed that Patraeus and Broadwell were having an affair. General Patraeus resigned and wrote the following to his employees. "Yesterday afternoon, I went to the White House and asked the President to be allowed, for personal reasons, to resign from my position as D/CIA. After being married for over 37 years, I showed extremely poor judgment by engaging in an extramarital affair. Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours. This afternoon, the President graciously accepted my resignation." The other affair was at Lockheed Martin , the Pentagon's largest supplier. An internal whistleblower at Lockheed made the allegation. The investigation found that Christopher Kubasik, the President and future CEO had a close personal relationship with a subordinate employee, which is a violation Lockheed's code of ethics and business conduct. The subordinate employee has left the company. Kubasik said in a statement , "I regret that my conduct in this matter did not meet the standards to which I have always held myself." Both men knew of their organizations' strict relationship policies. What does it mean to adhere to a code of duty, integrity, and honor? If you were the manager, what would you do if you found out about an office romance?
  • Scaling Up Sustainability

    Many businesses have a genuine commitment to give back to society. But, others encounter roadblocks to scaling up business sustainability . A weak business case is a major limiting factor. A business may not understand natural assets. It may not give value to ecosystems. Furthermore, it may lack business knowledge of the importance of biodiversity. One solution to scale up business sustainability is to work in partnership with education, institutes, certification organizations, and partners to progress despite the obstacles. In this video, Sir Richard Branson talks to the IUCN World Conservation Congress . How can business "listen to Mother Nature"? How can business "learn from Mother Nature"? How can this scale up sustainability?
  • Sustainibility is Corporate Social Responsibility

    More and more companies are including sustainability in their visions of the future. Also, a company strategy may include a statement on corporate social responsibility (CSR)/sustainability. Many companies desire to invest in communities, care for the environment, and build a better society. This might be accomplished through actual business practices or through activities such as charitable donations or employees volunteering for charitable events. The annual conference for Business for Social Responsibility (BSR) is meeting in New York this week. BSR has "more than 250 member companies and develops sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. With six offices in Asia, Europe, and North America, BSR uses its expertise in the environment, human rights, economic development, and governance and accountability to guide global companies toward creating a just and sustainable world." Should the company care? Do we expect more of companies than maximizing profits? Should managers make decisions based on the impact on people and the planet or on profit?