Although the words "deceptive" and "advertising" are considered by many to be synonyms, there are certain industry standards that should be upheld for the good of the public. While mild exaggerations such as "the best" or "the brightest" are widely accepted, blatant lying is usually frowned upon. For example, it seems obvious that one should not advertise toothpaste as a cure for the common cold, nor life insurance as a retirement savings policy. However, the latter is exactly what MetLife did in the early 1990s to the dismay of many befuddled nurses.
But just how bad was telling nurses that a whole life insurance policy was actually a retirement savings plan? After all, whole life policies do have an investment aspect to them. In addition to the basic death benefit of all life insurance policies there is also a "cash value" with whole life policies. This cash value is made up of one's premium payments minus "administrative fees and a profit margin plus the cost of death protection" (Orman, 70, 2004). What's left after all these deductions and fees are taken out goes into a tax-deferred savings account.
That's right, a savings account...that could also be referred to as "retirement savings." By focusing on this aspect of the policy, all MetLife did was shift the focus from the insurance aspect of the policy to the savings aspect of the policy. So, was this really lying, or did MetLife just do what most advertisers do and cater their sales presentations to the expected needs or a particular group? Sure they may have used words like "contributions" instead of "premiums," but this is just a matter of semantics. After all, no one was being physically harmed or endangered by purchasing this product, and they were getting additional insurance coverage, something most people need anyway, even if they don't realize it. So, again, should this have been considered "lying"?
Apparently the courts thought so, and MetLife was ordered to pay out upwards of $2 billion dollars in damages (Hartley, 2005). Still I'm not convinced that what MetLife did was entirely wrong. Yes, it was first and foremost an insurance policy that they were selling, but it was also a savings account that could potentially be used for retirement. One could argue that advertisers and sales representatives need to disclose the entirety of a product to potential buyers rather than just one or two aspects, but in reality, what advertisers do that?
Sources:
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. Hoboken, NY. John Wiley & Sons Inc.
Orman, Suze. 2004. Ask Suze...About Insurance. Riverhead Books. New York.
Technorati tags:
abuse, advertising, business, ethics, insurance, lying, management, manipulation, MetLife, morality, opinion, techniques
Thursday, May 24, 2007
Tuesday, May 22, 2007
The Growing Obsession with Customization
The very foundation of value chain management is giving customers exactly what they want when they want it. With this end in mind, keeping up with the perpetually fluctuating whims and expectations of consumers can pose quite a challenge to the production side of both large and small companies. One of the most difficult trends to keep pace with is consumer's increasing expectation of product customization. "Most engineers are seeing requests for customized products increase year after year. And it's clear that increase is having an adverse impact on time available for product design changes, new product development, and innovation" (Market Wire, May 21, 2007).
From colors to functions to software, more and more people are approaching products with the expectation of being able to make it suit their particular needs. Rather than being pleasantly surprised with products that do offer customizable features, consumers are angrily surprised when confronted with products that don't.
Many companies, however, are jumping at the opportunity to fill niches that personalize everything including cookie tins with corporate logos, made-to-order bras, and high-end wrapping paper with specific names or slogans emblazoned on water-resistant paper (BusinessWeek Online, Spring 2007)! If a company does find a way to make their products quickly, efficiently, and fully customized they will undoubtedly reap the rewards in today's highly, and perhaps overly, personalized climate.
An example of true production innovation combined with complete customization is the Build-A-Bear company that has gained much popularity in the last five years. Instead of having customers instruct the company on exactly what kind of stuffed animal to make via an online form or the like, the Build-A-Bear company has made making the customized bear itself an integral part of the shopping experience. In malls all across the United States, Build-A-Bear stores entice shoppers in to physically make the stuffed animal of their choice. Customers proceed along a pre-arranged "assembly-line" that starts with the selection of a plain stuffed animal and ends at the check-out counter with a fully personalized product, including clothes, shoes, accessories, and a name. Customers not only end up with exactly what they want, but the activity of putting the product together is an enjoyable and memorable experience. Of course this particular production model can only work with a very specific product type (obviously it would not work with anything that requires technical skills), but the Build-A-Bear company does illustrate the advantage of "thinking outside the box" and can be used as an inspiration when necessary.
Sources:
Breaking the Mold. Spring, 2007. Business Week Online. Reference URL: http://www.businessweek.com/magazine/content/07_17/b4031445.htm?chan=
innovation_innovation+%2B+design_innovation+strategy
Current State of Build-to-Order Practices Hinder Product Development and Innovation. May 21, 2007. Market Wire Online. Reference URL: http://www.marketwire.com/mw/release_html_b1?release_id=255119
Build-A-Bear Official Website: http://www.buildabear.com/
Technorati tags:
build-a-bear, business, customization, generation y, management, Needs, opinion, techniques, value , value chain
From colors to functions to software, more and more people are approaching products with the expectation of being able to make it suit their particular needs. Rather than being pleasantly surprised with products that do offer customizable features, consumers are angrily surprised when confronted with products that don't.
Many companies, however, are jumping at the opportunity to fill niches that personalize everything including cookie tins with corporate logos, made-to-order bras, and high-end wrapping paper with specific names or slogans emblazoned on water-resistant paper (BusinessWeek Online, Spring 2007)! If a company does find a way to make their products quickly, efficiently, and fully customized they will undoubtedly reap the rewards in today's highly, and perhaps overly, personalized climate.
An example of true production innovation combined with complete customization is the Build-A-Bear company that has gained much popularity in the last five years. Instead of having customers instruct the company on exactly what kind of stuffed animal to make via an online form or the like, the Build-A-Bear company has made making the customized bear itself an integral part of the shopping experience. In malls all across the United States, Build-A-Bear stores entice shoppers in to physically make the stuffed animal of their choice. Customers proceed along a pre-arranged "assembly-line" that starts with the selection of a plain stuffed animal and ends at the check-out counter with a fully personalized product, including clothes, shoes, accessories, and a name. Customers not only end up with exactly what they want, but the activity of putting the product together is an enjoyable and memorable experience. Of course this particular production model can only work with a very specific product type (obviously it would not work with anything that requires technical skills), but the Build-A-Bear company does illustrate the advantage of "thinking outside the box" and can be used as an inspiration when necessary.
Sources:
Breaking the Mold. Spring, 2007. Business Week Online. Reference URL: http://www.businessweek.com/magazine/content/07_17/b4031445.htm?chan=
innovation_innovation+%2B+design_innovation+strategy
Current State of Build-to-Order Practices Hinder Product Development and Innovation. May 21, 2007. Market Wire Online. Reference URL: http://www.marketwire.com/mw/release_html_b1?release_id=255119
Build-A-Bear Official Website: http://www.buildabear.com/
Technorati tags:
build-a-bear, business, customization, generation y, management, Needs, opinion, techniques, value , value chain
Friday, May 18, 2007
Positive Manipulation & The Seven Habits of Highly Effective People
Stephen Covey - The Seven Habits of Highly Effective People, 1989
When it comes to the genre of self-improvement and self-help books, Stephen Covey's classic The Seven Habits of Highly Effective People
is unquestionably one of the most influential. Although Crainer's review of the book, as well as the self-improvement genre in general, is decidedly negative and cynical, many people have found a lot of merit in what Covey, and others like him, have to say.
Admittedly, The Seven Habits offers advice that is double-edged; instructing people on how to act as though they genuinely care about others but only to the extent that it will make them money (Crainer, 2006). At first glance this type of advice may seem distasteful, as it appears to promote dishonesty. However, this book is not about how to be virtuous, but about how to be successful, and part of being successful is knowing how to use those around you to achieve the best results.
This idea manifests in many forms, such as how to best motivate employees or how to tell someone bad news without making it seem so bad. All of these techniques are examples of subtle manipulation. But manipulation is not a negative thing if that manipulation is being used to better the situation *for everyone.* Of course any manipulation that is solely for self-gain and at the expense of those being manipulated should be avoided, if for no other reason than this type of manipulation tends to have negative consequences for the manipulator in the long run.
Another point Crainer dislikes about Covey is the fact that “Covey suppresses his own negative feelings while at the same time preaching honest communication…The aim is to achieve the desired outcomes with minimal resistance” (Crainer, 2006). Just because someone chooses not to express his/her feelings does not mean he/she is lying. If one’s goal is to find a quick and effective solution to a problem, and introducing personal feelings into the conversation will only serve to unnecessarily complicate the situation, then not communicating those feelings is helping the communication process, not distorting it. Open communication does not have to include personal feelings for it to be open. Instead it can include ideas, perspectives, argumentative points, etc. Feelings are only useful to an open line of communication if those feelings are central to the discussion.
Although Crainer’s portrayal of The Seven Habits is undoubtedly biased and unfavorable, this classic has become an icon of the self-improvement genre for a reason, and has resonated with millions of people who believe that success is realistically attainable by following some very simple, and usually obvious, social rules.
Sources:
Crainer, Stuart. Active Learning. (2006).The Ultimate Business Library. Capstone Publishing Limited.
Technorati tags:
advice, books, business, collaboration, Covey, Effective People, ethics, management, manipulation, morality, nagotiate, opinion, self-help, self-improvement, Seven Habits
When it comes to the genre of self-improvement and self-help books, Stephen Covey's classic The Seven Habits of Highly Effective People
is unquestionably one of the most influential. Although Crainer's review of the book, as well as the self-improvement genre in general, is decidedly negative and cynical, many people have found a lot of merit in what Covey, and others like him, have to say. Admittedly, The Seven Habits
offers advice that is double-edged; instructing people on how to act as though they genuinely care about others but only to the extent that it will make them money (Crainer, 2006). At first glance this type of advice may seem distasteful, as it appears to promote dishonesty. However, this book is not about how to be virtuous, but about how to be successful, and part of being successful is knowing how to use those around you to achieve the best results. This idea manifests in many forms, such as how to best motivate employees or how to tell someone bad news without making it seem so bad. All of these techniques are examples of subtle manipulation. But manipulation is not a negative thing if that manipulation is being used to better the situation *for everyone.* Of course any manipulation that is solely for self-gain and at the expense of those being manipulated should be avoided, if for no other reason than this type of manipulation tends to have negative consequences for the manipulator in the long run.
Another point Crainer dislikes about Covey is the fact that “Covey suppresses his own negative feelings while at the same time preaching honest communication…The aim is to achieve the desired outcomes with minimal resistance” (Crainer, 2006). Just because someone chooses not to express his/her feelings does not mean he/she is lying. If one’s goal is to find a quick and effective solution to a problem, and introducing personal feelings into the conversation will only serve to unnecessarily complicate the situation, then not communicating those feelings is helping the communication process, not distorting it. Open communication does not have to include personal feelings for it to be open. Instead it can include ideas, perspectives, argumentative points, etc. Feelings are only useful to an open line of communication if those feelings are central to the discussion.
Although Crainer’s portrayal of The Seven Habits
is undoubtedly biased and unfavorable, this classic has become an icon of the self-improvement genre for a reason, and has resonated with millions of people who believe that success is realistically attainable by following some very simple, and usually obvious, social rules.Sources:
Crainer, Stuart. Active Learning. (2006).The Ultimate Business Library. Capstone Publishing Limited.
Technorati tags:
advice, books, business, collaboration, Covey, Effective People, ethics, management, manipulation, morality, nagotiate, opinion, self-help, self-improvement, Seven Habits
Thursday, May 17, 2007
The Farmer in the Dell, The Farmer in the Dell, All Praise the Farmer in the Dell!
The amazing success of Dell computers seems contrary to many of today's business trends. In a field where innovation is key, and being "the first" to introduce new technology into a market appears to be crucial for success, Dell managed to reign supreme by doing exactly the opposite. Instead of spending large amounts of money toward product development, Dell allocated only 10% of its revenues for research and development, while competitors such as Gateway, Compaq, HP, and Cisco budgeted between 20-45% of their revenues for research and development (Hartley, 2005). Dell patiently waited for its competitors to spend their money and time in product development, and would scoop up the "new" technology only after it entered a market. Not only was Dell able to save on R&D, but it could offer the "new" technology at lower prices. Apparently many consumers were more than willing to wait for the less expensive Dell versions to become available rather than buying the newest innovations right away.
The second important way that Dell saved money was in the production process. Dell was vigilant in continually streamlining the production process, making sure production details were communicated, and using machines and computers whenever possible, thereby reducing costs associated with employees (Hartley, 2005).
These cost saving measures on the production side, as well as being the first computer company to offer direct sales to consumers, saving greatly in the process, has kept Dell a leader in the computer sales market.
Today, Dell is still striving to provide consumers with the least expensive computers possible. Dell's latest move has been to announce that they will be offering Linux, the free open-source operating system, rather than Microsoft's Windows, as an option during the customization process (Zachary, 5/16/2007). Dell is also leading the way in the rapidly developing country of India, where it is already one of the fastest growing companies. In fact, Dell's plan is to target the Educational, Governmental, and Public Sectors (ITVar News, 5/17/2007). Dell is once again positioning itself to outdo its competition, especially now that Michael Dell has returned to the helm.
Sources:
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition.
Hoboken, NY. John Wiley & Sons Inc.
Dell Aims for Government Business. May 17, 2007. IT Varns News Online. Reference URL: http://www.itvarnews.net/news/journal_comments.asp?JournalID=4746&
PagePosition=1&sTitle=Dell%20aims%20for%20government%20business
Zachary, Daniel. May 16, 2007. Dell Backs Open Source Operating System.
City on a Hill Press Online. Reference URL: http://www.cityonahillpress.com/article.php?id=650
Technorati tags:
computers, Dell, generation y, India, Linux, management, michael dell, open source, opinion
The second important way that Dell saved money was in the production process. Dell was vigilant in continually streamlining the production process, making sure production details were communicated, and using machines and computers whenever possible, thereby reducing costs associated with employees (Hartley, 2005).
These cost saving measures on the production side, as well as being the first computer company to offer direct sales to consumers, saving greatly in the process, has kept Dell a leader in the computer sales market.
Today, Dell is still striving to provide consumers with the least expensive computers possible. Dell's latest move has been to announce that they will be offering Linux, the free open-source operating system, rather than Microsoft's Windows, as an option during the customization process (Zachary, 5/16/2007). Dell is also leading the way in the rapidly developing country of India, where it is already one of the fastest growing companies. In fact, Dell's plan is to target the Educational, Governmental, and Public Sectors (ITVar News, 5/17/2007). Dell is once again positioning itself to outdo its competition, especially now that Michael Dell has returned to the helm.
Sources:
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition.
Hoboken, NY. John Wiley & Sons Inc.
Dell Aims for Government Business. May 17, 2007. IT Varns News Online. Reference URL: http://www.itvarnews.net/news/journal_comments.asp?JournalID=4746&
PagePosition=1&sTitle=Dell%20aims%20for%20government%20business
Zachary, Daniel. May 16, 2007. Dell Backs Open Source Operating System.
City on a Hill Press Online. Reference URL: http://www.cityonahillpress.com/article.php?id=650
Technorati tags:
computers, Dell, generation y, India, Linux, management, michael dell, open source, opinion
Tuesday, May 15, 2007
Are Corporate Blogs Becoming Necessary?
One of the most exciting trends in the world of internet communication is the growing use and influence of blogs. Short for "web logs," these online journals are not only growing in numbers, but also in influence. Unlike the older "gripe sites" which were relatively isolated websites that allowed people to comment or complain about a company's management, procedures, or work environment (Robbins, 2005), blogs are very interconnected, particularly due to their integration with social networking sites such as Technorati and MyBlogLog. Once someone publishes a blog entry it has the potential to reach thousands of people within minutes. "Some bloggers have "viewership" in the millions, rivaling some television program audiences" (Voigt, 2006). This can either be very good or very bad from a business perspective.
Rather than trying to silence this type of public scrutiny, many companies have decided to create their own blogs. By doing this they can stay on top of what is being said about them in the ever-growing "blogosphere" and can quickly correct any misinformation or false accusations that appear on the web. Just as "grips sites" were and are useful for a company to gauge the overall mood and discontents of its employees, blogs are a perfect way to widen the scope of feedback from employees to the general public.
Other uses for blogs are public relations, a medium for dispensing new company information or products, and as a way to make the company seem "user-friendly" or accessible. This latter point is becoming increasingly important for maintaining a good reputation, as many young people expect immediate corporate responses to their complaints. "As a public relations tool, a quick, honest blog response from the company CEO "is better than the polish of a press release," Ito (head of Technorati) said. "Speed and tone of response is critical ... even if it's just, `I'm sorry, we don't know what's going on, we're looking into it'" (Voigt, 2006).
Perhaps blogs are the future of corporate public relations, and companies would be better off asking themselves *when* they will launch their own blog, rather than *if* they will launch a blog.
Sources:
Robbins, Stephen P. and Mary Coulter. 2005. Management.
Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
Voigt, Kevin. (December 20, 2006). Companies Ponder the Blog Option.
CNN Online. Reference URL: http://www.cnn.com/2006/BUSINESS/
11/07/digitalbiz.blogging/index.html
Other:
Technorati URL: http://www.technorati.com
MyBlogLog URL: http://www.mybloglog.com
Technorati tags:
blogging, blogosphere, blogs, business, generation y, management, opinion, public relations
Rather than trying to silence this type of public scrutiny, many companies have decided to create their own blogs. By doing this they can stay on top of what is being said about them in the ever-growing "blogosphere" and can quickly correct any misinformation or false accusations that appear on the web. Just as "grips sites" were and are useful for a company to gauge the overall mood and discontents of its employees, blogs are a perfect way to widen the scope of feedback from employees to the general public.
Other uses for blogs are public relations, a medium for dispensing new company information or products, and as a way to make the company seem "user-friendly" or accessible. This latter point is becoming increasingly important for maintaining a good reputation, as many young people expect immediate corporate responses to their complaints. "As a public relations tool, a quick, honest blog response from the company CEO "is better than the polish of a press release," Ito (head of Technorati) said. "Speed and tone of response is critical ... even if it's just, `I'm sorry, we don't know what's going on, we're looking into it'" (Voigt, 2006).
Perhaps blogs are the future of corporate public relations, and companies would be better off asking themselves *when* they will launch their own blog, rather than *if* they will launch a blog.
Sources:
Robbins, Stephen P. and Mary Coulter. 2005. Management.
Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
Voigt, Kevin. (December 20, 2006). Companies Ponder the Blog Option.
CNN Online. Reference URL: http://www.cnn.com/2006/BUSINESS/
11/07/digitalbiz.blogging/index.html
Other:
Technorati URL: http://www.technorati.com
MyBlogLog URL: http://www.mybloglog.com
Technorati tags:
blogging, blogosphere, blogs, business, generation y, management, opinion, public relations
Monday, May 14, 2007
Making the Psychology of Sunk Costs Work for You
When making a decision, one of the worst errors is that of sunk costs; continually investing time, energy, and money into a project or course of action that is not meeting its performance expectations or goals (Robbins, 2005). Sunk cost errors are rooted in the human psychological need to persevere and succeed regardless of insurmountable obstacles. This need is emotionally compounded as more and more resources are invested into attaining an outcome that is logically implausible.
From a purely economic perspective, sunk costs refer to costs that have "already been committed and cannot be recovered" (Mankiw, 2007, 297). These costs should be ignored when making future decisions because there is no course of action that would be able to recover these resources, especially the time that has already been lost. Although this concept is easy to understand, people do not always make decisions rationally. Instead many allow feelings of regret to cloud their better judgment, and continue on a failing path instead of admitting defeat, letting go, and avoiding future losses.
For astute managers, and people in general, however, understanding the psychology behind sunk costs can be very beneficial. A shrewd negotiator, for example, can deliberately cause someone to feel as though they have already invested a great deal into a project so that they will be more willing to settle on less-than-desirable terms. In fact, this negotiation technique is used by real estate moguls, such as Donald Trump. Better known as the “Invested Time Principle,” this technique states that one of the best ways to get a seller to lower their price is by asking a lot of questions, having many meetings, and waiting to make an offer. The goal is to make the seller spend as much time as reasonably possible trying to sell the property to you. This works because “the more time a person has invested in a transaction, the less likelihood he or she is going to give it up…People hate the idea of having wasted time on something that doesn’t work out, after they have spent enough time on something, they’ll do anything they can to salvage the transaction” (Ross, 2005, 66). In other words, the best resource to make an opponent waste is their time, because they will almost always make the sunk costs error and agree to a course of action that they should logically not agree to.
Sources:
Mankiw, N. Gregory. (2007) Principles of Economics. Forth edition. Thomson South-Western.
Robbins, Stephen P. and Mary Coulter. (2005) Management. Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
Ross, George H. (2005) Trump Strategies for Real Estate; Billionaire Lessons for the Small Investor. John Wiley & Sons, Inc.
Technorati tags:
advice, business, management, nagotiate, opinion, sunk costs, techniques
From a purely economic perspective, sunk costs refer to costs that have "already been committed and cannot be recovered" (Mankiw, 2007, 297). These costs should be ignored when making future decisions because there is no course of action that would be able to recover these resources, especially the time that has already been lost. Although this concept is easy to understand, people do not always make decisions rationally. Instead many allow feelings of regret to cloud their better judgment, and continue on a failing path instead of admitting defeat, letting go, and avoiding future losses.
For astute managers, and people in general, however, understanding the psychology behind sunk costs can be very beneficial. A shrewd negotiator, for example, can deliberately cause someone to feel as though they have already invested a great deal into a project so that they will be more willing to settle on less-than-desirable terms. In fact, this negotiation technique is used by real estate moguls, such as Donald Trump. Better known as the “Invested Time Principle,” this technique states that one of the best ways to get a seller to lower their price is by asking a lot of questions, having many meetings, and waiting to make an offer. The goal is to make the seller spend as much time as reasonably possible trying to sell the property to you. This works because “the more time a person has invested in a transaction, the less likelihood he or she is going to give it up…People hate the idea of having wasted time on something that doesn’t work out, after they have spent enough time on something, they’ll do anything they can to salvage the transaction” (Ross, 2005, 66). In other words, the best resource to make an opponent waste is their time, because they will almost always make the sunk costs error and agree to a course of action that they should logically not agree to.
Sources:
Mankiw, N. Gregory. (2007) Principles of Economics. Forth edition. Thomson South-Western.
Robbins, Stephen P. and Mary Coulter. (2005) Management. Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
Ross, George H. (2005) Trump Strategies for Real Estate; Billionaire Lessons for the Small Investor. John Wiley & Sons, Inc.
Technorati tags:
advice, business, management, nagotiate, opinion, sunk costs, techniques
Saturday, May 12, 2007
In Defense of Gen Y
"The Gen Y'ers I know are all about 'me', from what I have seen, they are selfish and very self-centered, and they will do anything to get ahead of everyone else, no matter who they hurt or step on on the way there. They use enviromentalism as a way to make themselves feel better, and feel that they are actually doing something to positively contribute to society, and to make up for past transgressions. Yes there are some out there that truly believe in these special causes, but they are few and far between in this new generation. You ended it with a statement that Gen Y has 'high ethical standards', I have to say that I disagree with you on that statement, the Gen Y'ers that I know are far from ethical..." (Kristofer, Commenting on the Gen Y Shift)
First, when I speak of the "Gen Y Workforce" I am indeed referring to those in the corporate business world who are college educated and primarily middle to upper class in the United States.
Now, I completely agree with you when you call this generation selfish and self-centered. No doubt we have grown up in a world where everything is adaptable and catered to us. When we use a computer, we customize it to our needs. When we use the internet, we customize everything about our experience of it. We expect everything we touch to come with switchable features, different colors, sounds, and extensions.
When it comes to the way we work, we translate these tangible customizations into the expectation of intangible flexibilities, such as flexible working hours and environments.
"Generation Y is much more proactive in assuming they can have flexibility," said Betty Purkey, manager of work-life strategies at Texas Instruments, where 60 to 70 percent of its U.S. tech workers and managers telecommute using PDAs, laptop computers and remote access to the company's network. Companies increasingly see flexibility as a necessity if they hope to fill vacancies as baby boomers begin to retire en masse" (Sidime, May 9, 2007).
These kinds of expectations are selfish, as Gen Y assumes that they we be able to make our own hours and work from wherever we choose - even if it's in the middle of a relaxed cafe half way around the world.
We are not, however, cut throat or immoral in our approach to those we work with. In fact honesty and trust is the very essence of our culture. "...generation Y like to trust people, so if managers can build that trust they will benefit from young people than experience a lack of benefit" (Gedda, May 12, 2007). Because we don't believe in hierarchical leadership, open communication is vital for our respect. If a company, and those in management positions, don't satisfy our "need to know every detail" philosophy, then we will leave and look to organizations that will. Of course, from a management perspective needing to keep up this intense level of communication is new, and can seem incredibly time and energy consuming. So it is understandable why older managers who are used to the "just do as I say because I am your boss" work environment will think this new group of employees are very arrogant in their way of thinking. But this is a misconception. We are not arrogant, but need this transparency to foster feelings of trust and collaboration. Without this, we have no motivation to work for this particular person or company. We will just quit and move on.
When it comes to philanthropy and generosity, of course we devote ourselves to causes that make us feel good about ourselves. But everyone throughout time has run on such internal reward systems! Instead of looking at our volunteerism and contributions from an individual perspective, we have to look instead at what we are actually doing, what kinds of impacts are we actually having on society. Not only are we using our own free time to give back to our communities, but we expect the companies we work for to give back as well.
"A survey conducted by Deloitte & Touche USA LLP shows that Generation Y workers want the companies they work for to offer volunteer programs. The survey, which polled workers 18-26 years old, shows that 97 percent of respondents believe companies should offer employees opportunities to contribute their work-related talents. However, only 39 percent of respondents said their companies provide such opportunities. When asked why volunteering was important, those polled said because they wanted to have a meaningful impact on their communities" (insideindianabusinessreport.com).
97 percent is a very high number! We feel that companies have a moral obligation to be positive influences on their communities, and the more we enter the business world, the more we are demanding businesses "step up" and do more with their money and positions. We are actively seeking out employment at such companies. I think this says a lot about our high ethical standards and expectations.
Like every generation, there are many individuals who do not uphold or display the dominant traits of the larger group. Overall I strongly believe that Generation Y is selfish in our expectations regarding day-to-day activities. We want our working environment to be completely catered to our individual tastes and needs. On the other hand, we are very just in our treatment of others, demand honesty among co-workers, and feel that giving back to our communities is a responsibility rather than an option.
Technorati tags:
business, collaboration, ethics, generation y, management, morality, Needs, opinion, team work, volunteer
First, when I speak of the "Gen Y Workforce" I am indeed referring to those in the corporate business world who are college educated and primarily middle to upper class in the United States.
Now, I completely agree with you when you call this generation selfish and self-centered. No doubt we have grown up in a world where everything is adaptable and catered to us. When we use a computer, we customize it to our needs. When we use the internet, we customize everything about our experience of it. We expect everything we touch to come with switchable features, different colors, sounds, and extensions.
When it comes to the way we work, we translate these tangible customizations into the expectation of intangible flexibilities, such as flexible working hours and environments.
"Generation Y is much more proactive in assuming they can have flexibility," said Betty Purkey, manager of work-life strategies at Texas Instruments, where 60 to 70 percent of its U.S. tech workers and managers telecommute using PDAs, laptop computers and remote access to the company's network. Companies increasingly see flexibility as a necessity if they hope to fill vacancies as baby boomers begin to retire en masse" (Sidime, May 9, 2007).
These kinds of expectations are selfish, as Gen Y assumes that they we be able to make our own hours and work from wherever we choose - even if it's in the middle of a relaxed cafe half way around the world.
We are not, however, cut throat or immoral in our approach to those we work with. In fact honesty and trust is the very essence of our culture. "...generation Y like to trust people, so if managers can build that trust they will benefit from young people than experience a lack of benefit" (Gedda, May 12, 2007). Because we don't believe in hierarchical leadership, open communication is vital for our respect. If a company, and those in management positions, don't satisfy our "need to know every detail" philosophy, then we will leave and look to organizations that will. Of course, from a management perspective needing to keep up this intense level of communication is new, and can seem incredibly time and energy consuming. So it is understandable why older managers who are used to the "just do as I say because I am your boss" work environment will think this new group of employees are very arrogant in their way of thinking. But this is a misconception. We are not arrogant, but need this transparency to foster feelings of trust and collaboration. Without this, we have no motivation to work for this particular person or company. We will just quit and move on.
When it comes to philanthropy and generosity, of course we devote ourselves to causes that make us feel good about ourselves. But everyone throughout time has run on such internal reward systems! Instead of looking at our volunteerism and contributions from an individual perspective, we have to look instead at what we are actually doing, what kinds of impacts are we actually having on society. Not only are we using our own free time to give back to our communities, but we expect the companies we work for to give back as well.
"A survey conducted by Deloitte & Touche USA LLP shows that Generation Y workers want the companies they work for to offer volunteer programs. The survey, which polled workers 18-26 years old, shows that 97 percent of respondents believe companies should offer employees opportunities to contribute their work-related talents. However, only 39 percent of respondents said their companies provide such opportunities. When asked why volunteering was important, those polled said because they wanted to have a meaningful impact on their communities" (insideindianabusinessreport.com).
97 percent is a very high number! We feel that companies have a moral obligation to be positive influences on their communities, and the more we enter the business world, the more we are demanding businesses "step up" and do more with their money and positions. We are actively seeking out employment at such companies. I think this says a lot about our high ethical standards and expectations.
Like every generation, there are many individuals who do not uphold or display the dominant traits of the larger group. Overall I strongly believe that Generation Y is selfish in our expectations regarding day-to-day activities. We want our working environment to be completely catered to our individual tastes and needs. On the other hand, we are very just in our treatment of others, demand honesty among co-workers, and feel that giving back to our communities is a responsibility rather than an option.
Technorati tags:
business, collaboration, ethics, generation y, management, morality, Needs, opinion, team work, volunteer
Friday, May 11, 2007
Maslow's Hierarchy of Needs and the Gen Y Shift
Maslow - Motivation and Personality, 1954
According to psychologist Abraham Maslow, all people have a hierarchy of needs that begins at the bottom with physiological needs, such as food and shelter, and moves upward through safety, love, and esteem needs toward the pinnacle of self-actualization. When this hierarchy is used practically by managers it allows them to make note of exactly where their employees fall and what needs are most important to them at that time. By identifying these needs, managers have a better understanding of what will motivate a particular group of workers. For example, in a country where food is scarce employees would very likely fall on the very bottom of the Maslow's hierarchy, and would be wholly concerned with their physiological needs. Offering these employees a course on respecting one's self and others would not contribute to their overall well-being or job satisfaction because such a course would only appeal to those in a higher needs category, such as esteem.
However, identifying which need category employees are in at any given time is not always as simple as in the above example. In the United States, for instance, Generation Y is just beginning to enter the work force, and many well established companies are finding it very difficult to retain new recruits. Some of this may be due to the fact that Generation Y is in a different needs category than were previous generations. Things that used to motivate new employees, such as high pay, good benefits, and high status positions don't seem to be enough anymore.
The answer to why could be seen as a generational shift from the Esteem category to the Self-Actualization category. In the esteem category, people "have a need or desire for a stable, firmly based, (usually) high evaluation of themselves, for self-respect, or self-esteem, and for the esteem of others. By firmly based self-esteem, we mean that which is soundly based upon real capacity, achievement and respect from others." (Maslow 1943) Today, many companies try to recruit and keep employees by appealing to these needs. After all, high pay and high positions are all valuable to someone who needs to feel like they are an important contributing factor to a company's success. And while these needs may have been the driving force for previous generations, it is not for Generation Y.
One reason is because Generation Y has grown up in an environment that stressed the importance of self-esteem, self-respect, and respect for others from the very beginning of their educations. (Business Week 2005) Movements such as feminism and anti-discrimination laws have all helped to shape the idea that they are valuable and worthy. Unlike in the past, Generation Y does not need that kind of validation from their employers.
Instead, Generation Y is approaching employment with the goals and needs espoused in the Self-Actualization category, which "refers to the desire for self-fulfillment, namely, to the tendency for him to become actualized in what he is potentially. This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming." (Maslow 1943) In fact, this definition is precisely what many Generation Y employees say they are looking for from their professions. Many are consciously leaving or turning down high-paying, prestigious jobs in order to follow their individual dreams. (Business Week 2005) By seeking out opportunities for self growth, even as unpaid volunteers, Generation Y is posing a challenge to the way many in corporate America reward and motivate employees.
Rather than quickly labeling Generation Y as selfish or fickle, companies should instead focus on ways to challenge new recruits on more personal levels by offering opportunities for self-directed work, entrepreneurship, or by working toward larger goals such as environmentalism. Companies that realize and exploit this shift in needs will surely benefit from Generation Y's creativity, high ethical standards, and innovations.
Sources:
Crainer, Stuart. March 2006. The Ultimate Business Library. Capstone Publishing Limited.
Maslow, A. H. A Theory of Human Motivation. Jul 1943. Psychological Review, Vol 50(4), pp. 370-396.
Reference URL: http://ebsco.waldenu.edu/ehost/detail?vid=10&hid=113&sid=
767b414a-568f-4622-a74f-ea5544ae2784%40sessionmgr102
Welcome to the Gen Y Workplace. May 4, 2005. Business Week Online. Reference URL: http://www.businessweek.com/bwdaily/dnflash/may2005/nf2005054_4640_db_083.htm
?chan=search
Technorati tags:
advice, business, generation y, management, Maslow, opinion
According to psychologist Abraham Maslow, all people have a hierarchy of needs that begins at the bottom with physiological needs, such as food and shelter, and moves upward through safety, love, and esteem needs toward the pinnacle of self-actualization. When this hierarchy is used practically by managers it allows them to make note of exactly where their employees fall and what needs are most important to them at that time. By identifying these needs, managers have a better understanding of what will motivate a particular group of workers. For example, in a country where food is scarce employees would very likely fall on the very bottom of the Maslow's hierarchy, and would be wholly concerned with their physiological needs. Offering these employees a course on respecting one's self and others would not contribute to their overall well-being or job satisfaction because such a course would only appeal to those in a higher needs category, such as esteem.
However, identifying which need category employees are in at any given time is not always as simple as in the above example. In the United States, for instance, Generation Y is just beginning to enter the work force, and many well established companies are finding it very difficult to retain new recruits. Some of this may be due to the fact that Generation Y is in a different needs category than were previous generations. Things that used to motivate new employees, such as high pay, good benefits, and high status positions don't seem to be enough anymore.
The answer to why could be seen as a generational shift from the Esteem category to the Self-Actualization category. In the esteem category, people "have a need or desire for a stable, firmly based, (usually) high evaluation of themselves, for self-respect, or self-esteem, and for the esteem of others. By firmly based self-esteem, we mean that which is soundly based upon real capacity, achievement and respect from others." (Maslow 1943) Today, many companies try to recruit and keep employees by appealing to these needs. After all, high pay and high positions are all valuable to someone who needs to feel like they are an important contributing factor to a company's success. And while these needs may have been the driving force for previous generations, it is not for Generation Y.
One reason is because Generation Y has grown up in an environment that stressed the importance of self-esteem, self-respect, and respect for others from the very beginning of their educations. (Business Week 2005) Movements such as feminism and anti-discrimination laws have all helped to shape the idea that they are valuable and worthy. Unlike in the past, Generation Y does not need that kind of validation from their employers.
Instead, Generation Y is approaching employment with the goals and needs espoused in the Self-Actualization category, which "refers to the desire for self-fulfillment, namely, to the tendency for him to become actualized in what he is potentially. This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming." (Maslow 1943) In fact, this definition is precisely what many Generation Y employees say they are looking for from their professions. Many are consciously leaving or turning down high-paying, prestigious jobs in order to follow their individual dreams. (Business Week 2005) By seeking out opportunities for self growth, even as unpaid volunteers, Generation Y is posing a challenge to the way many in corporate America reward and motivate employees.
Rather than quickly labeling Generation Y as selfish or fickle, companies should instead focus on ways to challenge new recruits on more personal levels by offering opportunities for self-directed work, entrepreneurship, or by working toward larger goals such as environmentalism. Companies that realize and exploit this shift in needs will surely benefit from Generation Y's creativity, high ethical standards, and innovations.
Sources:
Crainer, Stuart. March 2006. The Ultimate Business Library. Capstone Publishing Limited.
Maslow, A. H. A Theory of Human Motivation. Jul 1943. Psychological Review, Vol 50(4), pp. 370-396.
Reference URL: http://ebsco.waldenu.edu/ehost/detail?vid=10&hid=113&sid=
767b414a-568f-4622-a74f-ea5544ae2784%40sessionmgr102
Welcome to the Gen Y Workplace. May 4, 2005. Business Week Online. Reference URL: http://www.businessweek.com/bwdaily/dnflash/may2005/nf2005054_4640_db_083.htm
?chan=search
Technorati tags:
advice, business, generation y, management, Maslow, opinion
Thursday, May 10, 2007
Action Learning Poised for Takeoff
Action Learning, 1979, Reg Revans
For anyone who has ever sat through a three hour lecture, bored beyond comprehension, and thought to themselves 'there must be a better way,' Reg Revans' learning theory is for you. Revans believed in learning through active collaboration and "doing" things in small groups rather than by passively listening to the "wisdom" of an expert. Instead of lectures and books, Revans expounded upon the insights that could be gained via questioning and critical thinking. His theory eliminated the traditional hierarchies of education (teacher/student, expert/non-expert) and instead focussed on the unique ideas, insights, and innovations that could be garnered from each individual. In this way, no one was held above the rest as an "authority" on a subject. As expected, traditional learning institutions in Revans' home country of Britain did not appreciate his radically different ideas, and for the most part, rejected them during the 1970s.
However, in today's social and business climate of egalitarianism, team-orientation, and instant communication across hierarchical boundaries, Revans' active learning theory could be poised for serious reconsideration, particularly among generation Y-ers. His fundamental idea that one should share failures and weaknesses, as well as strengths and knowledge is very inspiring to a generation that already views "complete privacy" as a rather antiquated value. Leaders are no longer being judged by their stoic veneers of strength and omnipotence, but instead by their ability to admit flaws and acknowledge personal vulnerabilities. In fact, the recent biographical movie "The Queen" is a perfect example of Britains' changing outlook on leadership as it tries to explain why the emotionally open Princess Diana was so beloved while the traditionally detached Queen was despised. This shift in values is prime to support Revans' belief that only through honesty can real learning take place, and real solutions be found.
Sources:
Crainer, Stuart. Active Learning. (2006).The Ultimate Business Library. Capstone Publishing Limited.
the Queen. (2006). Movie. Reference URL: http://www.imdb.com/title/tt0436697/
Technorati tags:
advice, business, generation y, opinion, revans, team work, the queen
For anyone who has ever sat through a three hour lecture, bored beyond comprehension, and thought to themselves 'there must be a better way,' Reg Revans' learning theory is for you. Revans believed in learning through active collaboration and "doing" things in small groups rather than by passively listening to the "wisdom" of an expert. Instead of lectures and books, Revans expounded upon the insights that could be gained via questioning and critical thinking. His theory eliminated the traditional hierarchies of education (teacher/student, expert/non-expert) and instead focussed on the unique ideas, insights, and innovations that could be garnered from each individual. In this way, no one was held above the rest as an "authority" on a subject. As expected, traditional learning institutions in Revans' home country of Britain did not appreciate his radically different ideas, and for the most part, rejected them during the 1970s.
However, in today's social and business climate of egalitarianism, team-orientation, and instant communication across hierarchical boundaries, Revans' active learning theory could be poised for serious reconsideration, particularly among generation Y-ers. His fundamental idea that one should share failures and weaknesses, as well as strengths and knowledge is very inspiring to a generation that already views "complete privacy" as a rather antiquated value. Leaders are no longer being judged by their stoic veneers of strength and omnipotence, but instead by their ability to admit flaws and acknowledge personal vulnerabilities. In fact, the recent biographical movie "The Queen" is a perfect example of Britains' changing outlook on leadership as it tries to explain why the emotionally open Princess Diana was so beloved while the traditionally detached Queen was despised. This shift in values is prime to support Revans' belief that only through honesty can real learning take place, and real solutions be found.
Sources:
Crainer, Stuart. Active Learning. (2006).The Ultimate Business Library. Capstone Publishing Limited.
the Queen. (2006). Movie. Reference URL: http://www.imdb.com/title/tt0436697/
Technorati tags:
advice, business, generation y, opinion, revans, team work, the queen
Wednesday, May 9, 2007
Ask Yourself, What Would Machiavelli Do?
The Prince - Machiavelli, 1513
When we here the name "Machiavelli" or the term "Machiavellian" used to describe someone, it is often considered a negative attribute or characteristic. Famous for his (a)moral stance of "the ends justify the means," Machiavelli has become a symbol for unethical or shady practices, both in business and life decisions.
In his book, "The Prince," Machiavelli outlines many of the principals on which he based his seemingly ruthless approach to diplomacy and leadership. He stresses the need for appearance over quality, force over reason, and stealth over honesty.
Although these tactics are overtly frowned upon in today's business world, they are nevertheless used effectively. For instance, if a top manager projects confidence, he or she has a greater ability to garner employee trust and loyalty. This in turn could lead to higher productivity, less employee turnover, and a general state of well-being for the company...regardless of whether or not the manager is actually confident in themselves or the company.
Interestingly, as more organizations push for an open, honest, and supportive company culture, employees are becoming happier and more productive, leading to higher profits. (Robbins, 2005) It is possible then to assume that if Machiavelli were alive today, he would choose to appear "nicer" or "more supportive" to his followers or employees, as this type of "means" would produce the most effective and lucrative "ends." Therefore, being called Machiavellian might not be so bad after all.
Sources:
Crainer, Stuart. The Ultimate Business Library. Capstone Publishing Limited, March 2006.
Robbins, Stephen P., Coulter, Mary. Management, Eight Ed. Pearson Education, Inc., 2005. Ch. 3.
When we here the name "Machiavelli" or the term "Machiavellian" used to describe someone, it is often considered a negative attribute or characteristic. Famous for his (a)moral stance of "the ends justify the means," Machiavelli has become a symbol for unethical or shady practices, both in business and life decisions.
In his book, "The Prince," Machiavelli outlines many of the principals on which he based his seemingly ruthless approach to diplomacy and leadership. He stresses the need for appearance over quality, force over reason, and stealth over honesty.
Although these tactics are overtly frowned upon in today's business world, they are nevertheless used effectively. For instance, if a top manager projects confidence, he or she has a greater ability to garner employee trust and loyalty. This in turn could lead to higher productivity, less employee turnover, and a general state of well-being for the company...regardless of whether or not the manager is actually confident in themselves or the company.
Interestingly, as more organizations push for an open, honest, and supportive company culture, employees are becoming happier and more productive, leading to higher profits. (Robbins, 2005) It is possible then to assume that if Machiavelli were alive today, he would choose to appear "nicer" or "more supportive" to his followers or employees, as this type of "means" would produce the most effective and lucrative "ends." Therefore, being called Machiavellian might not be so bad after all.
Sources:
Crainer, Stuart. The Ultimate Business Library. Capstone Publishing Limited, March 2006.
Robbins, Stephen P., Coulter, Mary. Management, Eight Ed. Pearson Education, Inc., 2005. Ch. 3.
Negligent Consumers vs. Unethical Companies
Can any company "really expect the average consumer to act with strict prudence" and do companies need to take precautions "with the worst case scenario in mind as to consumer behavior" (Hartley, 33, 2005)?
These two questions illustrate one of the most striking ethical issues that face every product-based company in operation. In the particular case of Firestone and Ford, consumers were held partly responsible for their tire blowouts and Explorer roll-overs because they did not check their tire pressures before driving, over-loaded their vehicles, and drove at high speeds for long periods of time. According to Firestone and Ford, the results of this consumer negligence was not something their companies should be held accountable for. Not surprisingly, this stance did not sit well many of their consumers, nor the general public. And although checking tire pressure before driving is commonly recommended in vehicle operation manuals, rarely, if ever, does anyone follow this guideline.
But does having this disclaimer in an operations manual eliminate manufacture culpability completely, or should a company go further to protect consumers when the potentially negligent behaviors of consumers (such as not checking tire pressure consistently) is known beforehand by the manufacturing company? Perhaps in the Firestone/Ford case the answer to this question seems simple because the consequences of the known consumer negligence could result in consumer fatalities.
But what of companies whose products, when and if misused, have less dire consequences? For example, consumers commonly use Q-tips to clean their ears despite the many health warnings against this practice. In fact, Q-tips makes it very clear on their packaging that using their product to clean ears is not recommended, and goes further by suggesting other, more appropriate, ways to use Q-tips. Now suppose a law suit is filed claiming that someone has lost part of their auditory abilities due to repeatedly using Q-tips to clean their ears. Is this person's hearing loss the responsibility of the Q-tips manufacturers, or of the consumer?
An even more extreme case would be the now famous McDonald's Hot Coffee Incident (Lectric Law Library) that resulted in warning labels being placed on all hot beverage containers stating that the contents of the container was indeed "hot" and could potentially cause burns. Was it McDonald's fault that this particular consumer was burned when she spilled hot coffee on herself? Are these warning labels ethically necessary from McDonald's perspective?
Using these three cases as examples, it is possible to see how fine a line there exists between what consequences are the responsibility of a manufacturing company verses the responsibility of a negligent consumer. Like most ethical issues, the answer to this question seems to be a matter of degree - How likely is it that consumers will improperly use the product? How severe are the consequences of its improper use? - In today's litigious society, failing to address these questions before incidences arise will be costly at best.
Sources:
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. Hoboken, NY. John Wiley & Sons Inc.
The Actual Facts About the McDonald’s Coffee Case. Lectric Laws Library Stacks. Reference URL: http://www.lectlaw.com/files/cur78.htm
These two questions illustrate one of the most striking ethical issues that face every product-based company in operation. In the particular case of Firestone and Ford, consumers were held partly responsible for their tire blowouts and Explorer roll-overs because they did not check their tire pressures before driving, over-loaded their vehicles, and drove at high speeds for long periods of time. According to Firestone and Ford, the results of this consumer negligence was not something their companies should be held accountable for. Not surprisingly, this stance did not sit well many of their consumers, nor the general public. And although checking tire pressure before driving is commonly recommended in vehicle operation manuals, rarely, if ever, does anyone follow this guideline.
But does having this disclaimer in an operations manual eliminate manufacture culpability completely, or should a company go further to protect consumers when the potentially negligent behaviors of consumers (such as not checking tire pressure consistently) is known beforehand by the manufacturing company? Perhaps in the Firestone/Ford case the answer to this question seems simple because the consequences of the known consumer negligence could result in consumer fatalities.
But what of companies whose products, when and if misused, have less dire consequences? For example, consumers commonly use Q-tips to clean their ears despite the many health warnings against this practice. In fact, Q-tips makes it very clear on their packaging that using their product to clean ears is not recommended, and goes further by suggesting other, more appropriate, ways to use Q-tips. Now suppose a law suit is filed claiming that someone has lost part of their auditory abilities due to repeatedly using Q-tips to clean their ears. Is this person's hearing loss the responsibility of the Q-tips manufacturers, or of the consumer?
An even more extreme case would be the now famous McDonald's Hot Coffee Incident (Lectric Law Library) that resulted in warning labels being placed on all hot beverage containers stating that the contents of the container was indeed "hot" and could potentially cause burns. Was it McDonald's fault that this particular consumer was burned when she spilled hot coffee on herself? Are these warning labels ethically necessary from McDonald's perspective?
Using these three cases as examples, it is possible to see how fine a line there exists between what consequences are the responsibility of a manufacturing company verses the responsibility of a negligent consumer. Like most ethical issues, the answer to this question seems to be a matter of degree - How likely is it that consumers will improperly use the product? How severe are the consequences of its improper use? - In today's litigious society, failing to address these questions before incidences arise will be costly at best.
Sources:
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. Hoboken, NY. John Wiley & Sons Inc.
The Actual Facts About the McDonald’s Coffee Case. Lectric Laws Library Stacks. Reference URL: http://www.lectlaw.com/files/cur78.htm
Tuesday, May 1, 2007
The Problem with Snapple, Part II
Do you think Snapple should have been sold for $300 million?
Yes, I think Snapple should have been sold for $300 million. By the time Quaker Oats decided to give up its rejuvenation efforts and sell Snapple, the continued losses of keeping Snapple would have been more than the immediate loss of selling Snapple for such a low price. Although Quaker Oats did not recoup much of its investment, the sale did allow the company to stop losing money, which was more important at that time.
What are the social implications related to this case? What did you learn that might be helpful in your work?
The main social implication related to the acquisition of Snapple was the overall negative effect it had on Quaker Oats’ profitability, and therefore the financial well-being of Quaker Oats’ shareholders. If the main responsibility of managers is to the owners, or shareholders, of a company, then making a large purchase, such as purchasing Snapple for $1.7 billion, without considering all of the financial ramifications of the purchase is very socially irresponsible. According to the Classical view of social responsibility, managers are supposed to maximize shareholder’s profits (Robbins, 2005). Clearly in the case of Snapple, this did not happen as profits decreased as a result of the acquisition.
By reviewing this case I learned that top level managers are just as likely to allow their egos to intervene in their decision-making as is everyone else who achieves a certain level of success. No matter what field one is in, previous successes have a tendency to overshadow the hard and clear facts of future decisions. In this example, the success of Gatorade overshadowed the practicality that was needed when reviewing the clearly declining financial situation of Snapple before its purchase.
To Sum Up...
Smithburg’s purchase of Snapple illustrates the necessity of fully evaluating any major acquisition. This includes knowing the current competitive market, understanding the production and distribution methods, and having a financially sound plan in place to make a declining company profitable, or to raise the demand for products of an already profitable company. If after the purchase has been made and the plans have been carried out, the acquisition is still not profitable, then it is also vitally important to realize that less money will be lost by selling the failing company quickly for a relatively low price than by keeping the failing company and continuing to lose money.
Bibliography
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. John Wiley & Sons, Inc.
Mankiw, Gregory N. 2007. Principles of Economics. Fourth edition. Thomson South-Western.
Robbins, Stephen P., Coulter, Mary. 2005. Management. Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
Yes, I think Snapple should have been sold for $300 million. By the time Quaker Oats decided to give up its rejuvenation efforts and sell Snapple, the continued losses of keeping Snapple would have been more than the immediate loss of selling Snapple for such a low price. Although Quaker Oats did not recoup much of its investment, the sale did allow the company to stop losing money, which was more important at that time.
What are the social implications related to this case? What did you learn that might be helpful in your work?
The main social implication related to the acquisition of Snapple was the overall negative effect it had on Quaker Oats’ profitability, and therefore the financial well-being of Quaker Oats’ shareholders. If the main responsibility of managers is to the owners, or shareholders, of a company, then making a large purchase, such as purchasing Snapple for $1.7 billion, without considering all of the financial ramifications of the purchase is very socially irresponsible. According to the Classical view of social responsibility, managers are supposed to maximize shareholder’s profits (Robbins, 2005). Clearly in the case of Snapple, this did not happen as profits decreased as a result of the acquisition.
By reviewing this case I learned that top level managers are just as likely to allow their egos to intervene in their decision-making as is everyone else who achieves a certain level of success. No matter what field one is in, previous successes have a tendency to overshadow the hard and clear facts of future decisions. In this example, the success of Gatorade overshadowed the practicality that was needed when reviewing the clearly declining financial situation of Snapple before its purchase.
To Sum Up...
Smithburg’s purchase of Snapple illustrates the necessity of fully evaluating any major acquisition. This includes knowing the current competitive market, understanding the production and distribution methods, and having a financially sound plan in place to make a declining company profitable, or to raise the demand for products of an already profitable company. If after the purchase has been made and the plans have been carried out, the acquisition is still not profitable, then it is also vitally important to realize that less money will be lost by selling the failing company quickly for a relatively low price than by keeping the failing company and continuing to lose money.
Bibliography
Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. John Wiley & Sons, Inc.
Mankiw, Gregory N. 2007. Principles of Economics. Fourth edition. Thomson South-Western.
Robbins, Stephen P., Coulter, Mary. 2005. Management. Eighth edition. Upper Saddle River, NY. Pearson Education Inc.
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