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As General Motors attempts to make a recovery, one key factor will be its leadership. Many critics argued that GM did not deserve a bailout because its leadership was “too stuck in the past.” Now the company has a CEO that admits he is not a “car guy.” Can the company succeed? Better yet, will Mr. Akerson be happy with a job that is considerably more demanding and pays substantially less than he made at the Carlyle Group. No doubt, there are tensions within the hierarchy of GM, but the initial public offering last November reduced the Government’s stake in the company by more than half.

QUESTIONS:

  1. Would you describe Daniel Akerson as a servant leader? Why or why not?
  2. Mr. Akerson admits he does not have much job-relevant knowledge, a key leadership trait. What traits does he appear to possess? Assess the likelihood of his success at GM.
  3. The article certainly does not depict Mr. Akerson as having a contemporary leadership style. Review the classic leadership styles and assign one to him. What are the reasons for your choice?

SOURCE: M. Langley & S. Terlep, “’I’m Not a Car Guy’: On the Road with the New Man at GM’s Wheel,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052970203525404576050070062206368.html)

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One of the provisions of the North American Free Trade Agreement (NAFTA) is that the United States is supposed to allow Mexican truck drivers the ability to transport freight in the U.S. as long as the trucks meet certain safety standards. The U.S. has yet to abide by the terms of this provision and in March of 2009 President Obama cancelled a small pilot program that allowed some Mexican truckers to transport goods in the U.S. The Mexican government retaliated against the trucking ban by imposing $2.4 billion in tariffs on U.S. paper, produce and other goods. The U.S. trucking industry and unions such as the Teamsters union are strenuously opposed to the provision that they contend would cost American jobs and result in more dangerous roads since Mexican trucks may not meet as stringent safety standards as their U.S. counterparts.

The Obama administration recently circulated in Congress a proposal which would open the U.S. trucking sector to Mexican trucking companies. The proposal indentifies conditions that Mexican long-haul truck carriers would have to meet, including safety audits, emissions standards and driver background checks. Mexican officials welcomed the proposal, which was viewed as a first step for attempting to resolve the longstanding trade dispute. President Obama is looking to get key Democrats and others on board before ending the trucking ban, but the White House faces increasing political and economic pressure to end the trade dispute. Many U.S. jobs have been lost and more are in jeopardy in the industries hurt by Mexico’s retaliatory tariffs.

QUESTIONS FOR DISCUSSION:

  1. What are the advantages and disadvantages of President Obama lifting the ban on Mexican trucks operating in the United States? Analyze the issue from the perspective of consumers, from employees and from the government.
  2. International Brotherhood of Teamsters President Jim Hoffa said in response to the proposal: “Why would the DOT [Transportation Department] propose to threaten U.S. truck drivers’ and warehouse workers’ jobs when unemployment is so high?” Evaluate the merits of his comments.
  3. President Barack Obama has called for doubling U.S. exports within five years. At the same time, he has moved to curb trade in certain areas under pressure from Congress and unions. The retaliatory tariffs imposed by Mexico may threaten thousands of U.S. jobs if the trade dispute is not resolved, but U.S. trucking jobs may in jeopardy in the trucking ban is lifted. How can President Obama protect one group of American workers without hurting another?

SOURCE: Mitchell, J. (2011, January 7). U.S. jump-starts bid to end truck dispute with Mexico. Wall Street Journal, p. A7. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704415104576065924125822128.html)


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The International Monetary Fund (IMF) seeks to play a more prominent role in regulating cross-border capital flows. The current patchy economic recovery, which has key emerging markets recovering faster than advanced economies, has contributed to an increase of funds flowing from the advanced to the emerging economies. Investors in advanced economies are seeking higher returns than are available in nations where interest rates are still low. The increase of capital flows into developing economies has contributed to an increase in their currency values and possible asset bubbles forming. Nations such as Brazil, South Korea and Thailand have imposed capital controls to stem the inflow of foreign funds, including taxes on capital inflows and policies designed to shift the length of investment maturities for foreign inflows to longer-term investments.

In a just-released report that was discussed at the December 17 meeting of the IMF’s executive board, IMF officials indicate that the organization should be playing a more active role in monitoring cross-border capital flows. Capital flow restrictions designed to address one nation’s domestic concerns can have significant effects on other countries. The IMF wants to develop guidelines on how nations can effectively use capital flow restrictions and wants increased power to oversee nations who may be misusing capital flow restrictions. Previously the IMF had opposed capital flow restrictions since the inflow of foreign funds helped to promote investment and growth in those economies, but the Asian financial crisis and the events of the current crisis highlighted the dangers to economies when too much foreign capital pulls out of a market at once.

QUESTIONS FOR DISCUSSION:

  1. Analyze the advantages and disadvantages for nations of implementing capital flow restrictions. What are the benefits of allowing foreign capital inflows?
  2. The global economy seems to be moving away from a spirit of cooperation with nations less willing today than they were in 2008 to work collaboratively to find solutions to the economic crisis. Is it likely that nations would support the IMF taking a lead role in crafting policies for cross-border capital flows?
  3. Some of the recommendations proposed by the IMF would require changes to IMF bylaws to give the organization more power. Given that outright opposition by the United States could doom any plan because of the concentration of U.S. voting power for IMF affairs, how could the IMF convince the United States to accept an increased role for the IMF in monitoring the international monetary system?

SOURCE: Talley, I. (2011, January 6). IMF eyes more say over flow of capital. Wall Street Journal, p. C3.  (Retrievable online at: http://online.wsj.com/article/SB10001424052748703675904576064233644690302.html)

Related video clip available at:

http://www.imf.org/external/mmedia/index.aspx#

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For 75 years, the focus of the United Auto Workers has been on the Big Three Detroit auto makers. With two of those companies in bankruptcy and membership continuing to decline, the UAW now says it will target foreign-owned car plants for membership drives. Many of the plants are in right-to-work (protecting workers from being forced into unions) states. One labor expert says the move is critical to the UAW’s survival. One thing is certain, the UAW is willing to spend money in this effort. Members approved spending $60 million for organizing from a fund that contains more than $800 million.

QUESTIONS:

  1. Examine the legal protections for workers and legal issues that exist in the workplace. Take a position for or against labor unions and use the information in these sections to build your case.
  2. Review the information on labor unions in the chapter. Aside from being legally permitted to do so, what reasons are there for the UAW to target foreign-owned car plants? Are these reasons legitimate?
  3. Review the practices associated with maintaining a quality workforce. From your reading of the article, what things are foreign-owned car companies currently doing for their workers? Imagine you were the human resources manager at one of these facilities. What strategy would you develop to keep the UAW from being a threat?

SOURCE: M. Dolan, “UAW Sets a Strategy on Foreign Car Plants,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748704735304576057980652700842.html)

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Beginning with the new year, Marriott International is launching a sustainable seafood program called Future Fish. All Marriott hotels must purchase at least 50% of their seafood from certified sustainable vendors. A Marriott spokesperson says the move was driven partially by chefs and partially by customers that are concerned about green issues. The program means that Marriott will be changing its seafood menu, dropping some items it deems are not currently sustainable and adding new sustainable items, which may require educating customers.

QUESTIONS:

  1. There is little question that Marriott’s sustainable seafood program reflects values. Whose values? Are the values represented terminal or instrumental? Can both be represented in this initiative?
  2. What ethical view is represented by Marriott’s decision to launch Future Fish?
  3. Make a case that Marriott’s move to sustainable fish is corporate social responsibility. Defend both sides of the definition.
  4. What type of social responsibility strategy is Marriott following?

SOURCE: B. DeLollis, “Marriott International Launches Sustainable Seafood Program,” USA Today (Retrievable online at http://travel.usatoday.com/hotels/post/2010/12/marriott-international-launches-sustainable-seafood-program/134426/1)

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When the Penn State women’s volleyball team had their NCAA-record 109-match winning streak snapped in September, many volleyball insiders thought this might also signal the end of the Nittany Lion’s consecutive national championships streak. The Lady Lions lost five matches during the regular season – as many as they lost during the previous four seasons. The team was seeded 4th in NCAA Tournament, leaving few to predict they would win it all. Penn State advanced to the Final Four dropping only one of the 13 sets they played. They would not lose again. The team had plenty of senior experience, but were powered as much by freshmen Deja McClendon, the tournament’s Most Outstanding Player, and Katie Slay.

QUESTIONS:

  1. Review Coach Rose’s comments about his players. How does this reflect synergy?
  2. Many times, people judge team effectiveness solely on outcomes. Take a close look at the definition for an effective team. Undoubtedly, no team in the history of NCAA volleyball has outperformed Penn State. How would you assess them on the other two dimensions?
  3. Now review Figure 14.3. What inputs and throughputs contribute to Penn State’s team effectiveness?
  4. What are some of the team norms evident in the articles?

SOURCE: Associated Press, “Penn State Sweeps Cal to Win 4th Consecutive Volleyball Title,” USA Today (Retrievable online at http://www.usatoday.com/sports/college/volleyball/2010-12-18-penn-state-cal-championship_N.htm)

SEE ALSO: Associated Press, “Dynasty: Penn State Continues Dominance on Volleyball Court,” USA Today (Retrievable online at http://www.usatoday.com/sports/college/volleyball/2010-12-19-penn-state-dynasty_N.htm)

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The small Baltic nation of Estonia officially adopted the euro as its currency on January 1, 2011 and became the 17th member of the euro zone. Estonia is the first former Soviet state to adopt the common currency. Even though its national debt and deficit levels are among the lowest of the euro-zone members, Estonia will be the poorest member of the euro zone. Estonian Prime Minister Andrus Ansip was the first person in the country of 1.3 million to withdraw euro notes from a cash machine in a special celebration event. The prime ministers of Latvia and Lithuania, nations which hope to adopt the euro by 2014, attended the celebration events. The common currency was plagued by crisis for most of 2010 and it may be years before another nation joins the euro zone, either over the concerns about adopting the increasingly unpopular currency or due to an inability to meet the economic criteria for membership.

QUESTIONS FOR DISCUSSION:

  1. Nearly 70% of Estonia’s exports are to euro-zone members. How will adopting the euro help the nation’s economic growth?
  2. The Estonia currency, the kroon, had been a fixed currency for the last 18 years, first to the German deutschmark and then with the euro. What are the economic challenges the nation might face by entering the euro zone?
  3. Given the current crisis in the euro zone with Greece and Ireland needing bailouts from the International Monetary Fund and the European Union in 2010, some consider this to be the worst possible time for Estonia to join the euro zone. Prime Minister Ansip said that it was better for his country to be part of the decision-making process for the euro zone than to have no say at all. Is the cost of admission to the euro zone going to be worth it for Estonia?
  4. Estonia had its currency pegged to the euro. This gave the nation a stable exchange rate and the nation had conservative fiscal policies. Now the nation may be called upon to provide up to $800 million for its share of the euro-zone stability fee. Would it have been better for Estonia to continue to use a fixed exchange rate rather than officially adopt the euro?

SOURCE: Estonia adopts the euro. (2011, January 1). Wall Street Journal Online. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704450504576054971155706038.html)

RELATED ARTICLE: Fairclough, G. (2010, December 31). Estonia counts down to adopting euro. Wall Street Journal, p. A12. (Retrievable online at: http://online.wsj.com/article/SB10001424052970203574404576051522423996468.html)

Related video clip available at:
http://www.reuters.com/news/video?videoId=173062285

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You probably heard the phrase “starving artists.” For artists in Japan, the phrase is a little bit too true. Demand for art in the country has dried up to the point where Japanese artists are looking to other countries in the region (and beyond) for buyers. Demand is so tight that many up  and coming artists are not getting any recognition.

QUESTIONS:

  1. Take a look at the definition for entrepreneurship. Are the artists described in the article entrepreneurial? Defend your answer.
  2. Consider what you know about artists. What characteristics do they possess that match up well or do not match up well with the characteristics typically associated with entrepreneurs?
  3. Look at the section titled Entrepreneurship and Small Business in your text. Using the information provided there, suggest a way for Japanese artists to expand their business.

SOURCE: S. Sesser, “For Artists, A Chilly Landscape in Japan,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748704694004576020022791838068.html)

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Two corporate mainstays – one in the United States (Sara Lee) and one in Brazil (JBS) – are considering a deal to join the two companies. The move comes in a frenzy of acquisitions by foreign companies in the United States, with Brazilian companies leading the way. Markets reacted favorably to news of a possible acquisition. The deal is not done and Sara Lee is considering several options.

QUESTIONS:

  1. Use Porter’s Five Forces Model to analyze Sara Lee as a takeover target. What forces make it attractive? Unattractive?
  2. How did Sara Lee and JBS grow their companies? Does it make sense for JBS to depart from this strategy to acquire Sara Lee?
  3. Analyze the purchase of Sara Lee from the standpoint of global strategy.

SOURCE: G. Chon, A. Das, I. Brat, & J. Lublin, “Sara Lee Weighs Foreign Takeover,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748704034804576025920799954668.html)

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Japan’s Fast Retailing Co. plans to dramatically increase its number of Uniqlo stores in China and to expand into India and Brazil. Uniqlo aims to add over 900 stores in China during the next decade. Unlike other fast-fashion retailers such as Zara and H & M which focus on selling trendy items, Uniqlo focuses on selling well-made basic essentials such as tee-shirts, jeans, socks and underwear that last more than one season. Fast Retailing’s corporate culture is also different from its fellow Japanese firms with an emphasis on promoting a global workforce. English is the language used in meetings whenever foreigners are present and by 2012 all email correspondence will be written in English. For its continued expansion into the United States, Uniqlo is adjusting its strategy. It closed the stores it opened in suburban shopping malls and it currently only has one store in Manhattan’s SoHo neighborhood. Uniqlo plans to launch an online shopping site and to open a flagship store on New York’s Fifth Avenue to foster brand awareness in the States.

QUESTIONS FOR DISCUSSION:

  1. For its expansion into the United States, Fast Retailing is considering options for acquisitions. What would be the advantages and disadvantages of expanding in the United States via acquisition versus expanding alone with new stores?
  2. Will Uniqlo’s cost leadership business-level strategy continue to be appropriate as economies begin to recover from the current economic downturn? In the United States, do you think that as the economy recovers consumers will focus on purchasing timeless low-cost basics or will they focus on buying low-cost trendy items that may be only in fashion one season?
  3. Uniqlo aims to enter the Indian market within the next five years. Current government regulations dictate that a foreign retailer can only enter India as a minority stakeholder with a local partner. Would it be advantageous for Uniqlo to enter India now with a partner to achieve first-mover advantages ahead of its nimble international rivals or wait until current government restrictions on foreign ownership change?
  4. In order to effectively pursue its international expansion plans, Uniqlo will need leaders with the know-how and language skills required for successful global expansion. What could Uniqlo do to create the talent pool it will need for its expansion goals?

SOURCE: Sanchanta, M. (2010, December 19). Uniqlo makes global push. Wall Street Journal Online. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704368004576028453572446140.html)

Related video clip from November 5, 2010 available at: http://www.youtube.com/watch?v=SCOJcDvbPeo
World Business: Uniqlo Profile

Related video clip from December 9, 2010 available at: http://www.bloomberg.com/video/65138420/
Uniqlo’s Odake Interview on U.S. Growth