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p. 1
Answers to Chapter 3: The Environment and Corporate Culture
If you were a manager at Gerber, how would you address this threat from the external
environment? How might managers gauge public feelings and anticipate future
problems?
If I were a manager at Gerber, I must clearly identify the threat first. In this case,
Gerber was accused by Greenpeace of using genetically altered corn that was toxic. Even
though there is no scientific proof that genetically altered crops would be harmful to human,
many customers believed so. Thus, the major threat in this incident is the loss of customers’
confidence in the products of Gerber. To solve this problem, I would suggest the Gerber to
cease using genetically altered ingredients, and announce to the public that Gerber will not
use genetically altered ingredients in the future. In reality, Gerber dropped some of its corn
and soybean suppliers who supplied genetically altered crops.
In the future, I would suggest setting up a competitive intelligence unit within the
company to monitor changes in customers’ expectations and tastes. Not only can it help
anticipate and prevent similar problems in the future, this unit can also provide insights on
how the products should be modified to satisfy the changing tastes of customers.
p. 2
List one action by each “Titan” that caused a reaction and ultimately an industry change
for Vanderbilt, Rockefeller and Carnegie.
Organization: Accessory Transit Company (founded by Vanderbilt)
Innovation: Passengers’ need for a fast and economical way to transport between west coast
and east coast of the United States.
General Environment:
• Economic – During the gold rush between 1848 and 1855, there was a high demand for
labor in California. Thus, the demand for transportation from and to California was very
high.
• Technological – Commercial ocean-going steamshipswere available in the United States at
that time.
Task Environment:
• Customers – During the gold rush, a large number of people, including foreigners, sought
ways to California for a chance to make a fortune. They demanded a safe and affordable
way to go to California.
• Competitors – Before Accessory Transit Company was incorporated, overland journey or
sea route to California took more than two months.
p. 3
Internal Environment:
• Culture –Accessory Transit Companywas facing high uncertainty, as it would be impossible
to know how long the gold rush would last at that time. The business must have an adaptive
culture that its management should pay close attention to the changes in external
environment.
Organization: Standard Oil (founded by John D. Rockefeller)
Innovation: To provide kerosene to average American homes at an affordable price
General Environment:
• Economic – In the 1870s, an average household in United States cannot afford candles or
whale oils to light their homes at night.
Task Environment:
• Customers – Customers wanted to light their homes at night as it could greatly increase their
productivity at home. However, most customers cannot afford to pay a high price in the
1870s. Thus, a kerosene lamp would satisfy their needs.
Internal Environment:
• Culture –Standard Oil would need to strive hard to lower the price of the kerosene lamps, as
an average customer in 1870s could not afford a high price.
p. 4
Organization: Carnegie Steel Company (founded by Andrew Carnegie)
Innovation: To provide cheap steel rails for railroad lines.
General Environment:
• Economic – In the 1890s, there was a large demand for steel as new railroad lines were
being built.
• Technological –Carnegie Steel Company invested in technological development in order to
lower the price of steel production.
Task Environment:
• Labor market –Carnegie Steel Company needed a large number of unskilled workers at low
costs, which were available in 1890s.
Internal Environment:
• Culture – The steel industry was stable. Management did not have to be highly adaptive to
the environment. They needed to focus on maintaining high efficiency in production, as
Carnegie Steel Company competed by providing steel with goods quality at a low price.
p. 5
Answers to Chapter 5:Managerial Ethics and Corporate Social Responsibility
Do you believe it is unethical for U.S. drug companies to file suit against poor nations
that cannot afford name-brand drugs? Where should managers draw the line between
protecting their organization’s intellectual property and bending the rules to alleviate
human suffering?
Taking the utilitarian approach, I believe it is ethical for the drug companies to file
suit against those nations. Under this approach, behavior would be considered moral if it
provides greatest good for the greatest number. If the drug companies do not take actions to
protect their intellectual property, their profits would suffer. As a result, drug companies
would have difficulties providing resources for developing new drugs, which would in turn
cause the human suffering throughout the whole world.
I believe managers of drug companies should try their best to protect their
organization’s intellectual property and save lives at the same time. I suggest the managers to
take legal actions to protect their intellectual property, and at the same time find ways to
promote and sell drugs at a discounted price in the developing countries.
p. 6
A top employee at your small company tells you he needs some time off because he has
AIDS. You know the employee needs the job as well as the health insurance benefits.
Providing health insurance has already stretched the company’s budget, and this will
send premiums through the roof. You recently read of a case in which federal courts
upheld the right of an employer to modify health plans by putting a cap on AIDS
benefits. Should you investigate whether this is a legal possibility of your company?
Step 1: Assuming the company is to provide full health insurance benefits to this
employee, I will estimate whether the potential increment in insurance premiums would
affect the survival of the business.
Step 2a: If it is estimated that survival of the business will be endangered by providing
full health insurance benefits to this ...