Case Study I
1. In your opinion, what actions taken by Ostertag stood the most chance of changing General Semiconductor’s culture?
He should have replaced the members of the company’s senior management team. It was the Internal Forces that Ostertag had to aim at changing for the company to survive. This way he could start from scratch, introduce the new workers to the company and provide them with the information that specifically told and taught them what to do from the start. This approach would be most effective rather than his attempt to change the workers who already worked in these positions. These former employees are used to the old culture styles of the company, and Ostertag had ideas for different skills and knowledge required for different cultures.
2. Do you think requiring everyone in a multinational firm to carry around a card with the firm’s core values on it can change a company’s culture? Why or why not?
This was a good idea because it provided good, easy information to the workers, however it was ineffective because of the lack of motivation it gave the workers. Rather than striving to improve their working culture through their actions, they simply had a card in their hands in which they were only entitled to memorize rather than physically show. Not only was this a bad decision, but it was chosen through “Group Decision Making.” Yes group decision-making has its advantages, however in this case, Ostertags intentions were to eliminate senior employees, and this could possibly be influencing the group’s decisions towards changing the culture. A flashcard is an easy change for the company’s employees, why would they want to make a huge change impacting their current working styles, when they can simply memorize a flashcard.
3. In your opinion, is Ostertag managing the cross-cultural operations effectively in the process of trying to change the firm’s culture? Explain.
His decision was for the best of the company, if he understood the advantages and disadvantages of the group. It seems he approached this in the wrong way, as I understand, there is a rational decision making model consisting of particular steps that must be followed for success. Ostertag identified the problem, developed key objectives, generated alternatives, however he did not analyze these alternatives nor did he select the best solution. We understand this because his changes did not occur quickly enough and was forced out from a hostile takeover.
4. Did Ostertag appear to have a global mind-set? Why or why not?
He did not have a global mind set in this situation, at least it did not seem like he did. He was more focused on changing the core of the company, he thought of replacing the senior management team, who are individuals in which have been working for the company for a long period of time I can imagine. These employees could response as defenders, they think they understand the company’s styles and are the most unwilling to change, that is, if Ostertag had chosen to actually make the change in the culture of the company, therefore these are the first he should have discussed with.
Case Study II: E. Coli
1. Imagine you are the owner of an expensive restaurant. Using the basic control process described in this chapter and the information from this case, describe how you would establish a set of controls to guard against an E. coli outbreak. What issues would be the most important in each step of the process?
Step 1.) I must guard my restaurant against E. coli and make sure that my customers are aware of my standards in which protect their food from this bacteria. I would follow the control policies and procedures used by jack in the box and fence off the fields of the vegetables we use, ensure the cooks understand how to cook meat thoroughly and done at the 160 degrees Fahrenheit standard. Provide this information in the menus the customers receive to ensure their complete trust in the food from my restaurant.
Step 2.) To ensure measurement performance, there will be routinely checks among the vegetable fields, as well as routinely checks among the locations in which our meat is being processed from. These will ensure that the sanitation continues and remains the same. When people or other restaurants have an E. coli outbreak, my restaurant will quickly contact the processing companies for the food and ensure they are aware of the situations and to be extra cautious about their work and sanitation.
Step 3.) By comparing performance against standards, I will research past E. coli outbreaks among restaurants, how they occurred, and how they were solved and how they were then prevented. This will allow me to avoid the tenants that allowed the E. coli outbreaks to occur and will educate me in different ways that E. coli can be avoided and prevented. I will educate myself about the issues, conflicts, and questions the public had to prepare myself for future questions anyone has for me about E. coli and treatment, prevention, etc.
Step 4.) Being the most difficult step, by evaluating the results and adjusting when needed, E. coli will be avoided at all costs. I will not make a big change or difference in my prevention procedures until an outbreak has occurred elsewhere. Once the public becomes affected by the information of an E. coli outbreak in the United States, I will take action. First I will make sure everything is smoothly running with my tenants we receive our food from, and then I will take action to ensure that the public knows my restaurants protection of E. coli from our foods.
2. If the federal and/or state governments were to impose stricter standards on each major component of the system (for example, growers, distributors, restaurants), could this result in unreasonable or unacceptable costs associated w/overcontrol? What would be examples? How would you weigh the possible costs against potential gains?
This could quite possibly result in unreasonable costs if they apply these standards to unnecessary components of the system. If our growers are fencing off and protecting our vegetables then I believe it is unnecessary to impose these stricter standards on an already strictly guarded area. If they were imposing these stricter standards on my chef’s within my restaurant on the other hand, I would ensure that this be done with great specificity. This seems to be the tactical control, it is a strategy by imposing strictness among the cooks within the restaurant, we can insure their education of the preventions and the results of E. coli and how we can avoid the under-cooked meats. The costs could begin to rise, however they will never overpower the amount it would cost me if E. coli emerged from my restaurant. This would either force me to close down the restaurant, deal with the VERY upset public, and/or pay exceedingly high fines.
3. What do you think of Taco Bell’s approach of shifting certain tasks and responsibilities from its restaurants to its vendors? Are any new control issues raised by this change?
I personally think that the processed meat is not as good tasting, OR as healthy as the freshly cooked meat at the restaurants, but if the cooks don’t think they are sufficient enough to ensure the meat is thoroughly cooked, then processed meat seems to be the only way to avoid any chance of E. coli. It is almost as if Taco Bell is putting the weight of avoiding E. coli among a different company, this way if E. coli ever occurred within the Taco Bell industry, they had someone else to blame. However, it is a good thing as well because the meat processors only focus on creating thoroughly cooked meat rather than cooking the meat, preparing the food, and ensuring happy customers like the Taco Bell restaurant has to do. Therefore processed meat provides a better chance that the meat is, in fact, completely cooked through, this way the restaurants do not have to worry about undercooked meat and just focus on preparing the food and satisfying their customers.
4. If you were the owner of the wholesale market described in the case, how would you work with your individual tenants (those who rent the 75 stalls to sell their particular produce items to restaurant buyers) to improve the overall level of sanitation control throughout the market to meet county health standards?
The way I would approach and work with my tenants is through a realistic approach. I will ensure them that I will be a loyal excellent customer if they simply follow my requests for sanitary protection of their crops. If I find out in any way that they aren’t abiding by my standards then I will find a different tenant to buy my produce from and make the same deal with them. I believe this approach will work because being the owner of a wholesale market gives me the manager position to make these decisions and I know that I will be providing excellent continual service for any tenant who agrees with my offer.
Advocacy Proposal: Global Warming
There are many proposals suggested to reduce our carbon dioxide emissions produced from vehicles and transportation. Organizations aim their objectives towards preventing this type of global warming and policies have been introduced to help improvement. Global warming is proven to be a human induced problem mainly caused by carbon dioxide and will continue to rise unless further action is to be made. Despite all these organizations and policies that aim their incentives towards minimizing the fuel consumption and carbon dioxide emissions, U.S. congress has proposed a different, more affective, approach towards our hope of reduction. On May 15, 2009, United States representative Henry Waxman presented the H.R. 2454 Bill; American Clean Energy and Security Act of 2009, aimed to improve the U.S. energy productivity. In this bill, there is a particular focus on the proposal that an increased tax on carbon dioxide will in fact reduce the amount of emissions being produced into the environment. Once thought of as just an annoyingly high price for gasoline has now become estimated and statistically proven to be the new way to decrease the amount people drive their cars, a decrease in driving therefore produces less carbon dioxide into our air. We can look at a carbon tax as a better way to regulate emission control, verses the idea of governmental rules, aimed at dictating people and trying to control their carbon dioxide use only through policies. Our public’s opinions are hard to abide by, supporting the fact that this bill could be the best proposal. It will maintain and decrease the amount of carbon dioxide emitted, more importantly, stimulating more energy-efficient alternatives allowing our environment to advance in further fuel emission conservation.
We can all relate negatively to this proposal; an increase in gasoline prices affects everyone with a vehicle, however Americans must understand the importance it is to reduce our fuel emissions. Transportation in the United States accounts for two thirds of the oil American’s consume. “Cars utilize oil to run their engines, the Journal of Political Economics notes that oil, coal, and natural gas create 90% of the world’s energy consumption (Chakravorty, Roumasset, Tse, Dec. 1997.) In 1990, 24.8% of our carbon dioxide emissions came from cars and transportation, it then rose to 29% in 2006 and will only continue to rise (Transportation GHG Emissions report, March 2006.) Since driving is such a normal thing to us, we never consider the deeper consequences” (Mittermiller, 2010.) An actual account for miles driven in the United States has reached one and a half trillion miles driven per year; this is equivalent to three million round trips to the moon (Nivola, Crandell, 1994.) This amount can and will be reduced if a carbon tax is enforced upon fuel prices. Three million round trips to the moon would empty out a pocket or two.
Being the frugal people American’s are, many fear this bill will lead to rising prices in other goods requiring carbon dioxide as well. Robert H. Frank, a professor of Economics at Cornell University, looks at peoples opinions in a more rhetoric way. He writes a monthly article, the “Economic Scene” in the New York Times, and relates the situation of a carbon tax to a subject more people can relate to, he believes “most people would pay a substantial share of their wealth — much more, certainly, than the modest cost of a carbon tax — to avoid having someone pull the trigger on a gun pointed at their head with one bullet and nine empty chambers. Yet that’s the kind of risk that some people think we should take” (Frank, 2010.) By Frank’s use of “risk,” he means if we do not pay this minimal tax now, we will suffer major pollution consequences in further years to come, not only harming the environment, but causing us to pay even greater amounts to the damages that will occur.
Global warming is a problem in which we must attack in the most effective way, and the most effective way to attack something is through targeting the main contributor of the problem, carbon dioxide. There are several environmental damages we can avoid through promoting this bill in which should be taken into consideration with the decisions made by producers and consumers throughout the economy (Christian, 1991-1992.) We can count on a reduction of harm enhancing further global warming, reduced health costs, decreased property values that could have been impacted from pollution, more importantly a healthy, long-lasting environment. Misguided assumptions are created through the idea of this tax proposed in the bill, yet its efficiency must be considered and its comparison to alternative strategies that have not shown improvement of anything, or this option of a risen tax would have never been presented to us. The Congressional Budget Office claims it is better to create carbon taxes rather than regulate the measures requiring government dictation towards people relating to how much carbon dioxide and/or fossil fuels they are allowed/permitted to use (Christian, 1991-1992.)
This bill hopes to transition into a clean energy economy, provided it becomes enact and informs people with the rising prices of oil as they make their decisions with carbon dioxide consumption. Particularly choices with transportation and their carbon dioxide consumption through oil used in automobiles. We have managed to create solar panels to help reduce electricity use, florescent light bulbs, recyclable plastics, but these are optional choices for the public that have not shown the same improvement that a carbon tax could provide. The proposal of a carbon tax presented in this bill will not only influence an individuals decision in carbon dioxide consumption, but will contribute to the option of other modes of transportations such as public transportation, carpooling, biking, or even walking from place to place. In the 1980s, companies argued that they would not be able to produce cars to be as fuel-efficient as society expects, they would be forced to recreate many automobiles and reconstruct their entire production system (Greene 1991.) By using the fuel-economy as a way to control citizen’s fuel-emissions will prove to be a more successful strategy when we begin to notice extreme changes with the amount cars are being driven; the bill states that the major improvements will begin to be greatly noticed between the years of 2020 and 2050. Despite this long distance in time, it is our children, our grandchildren living in these times. We do not want to put our future families in harms way, hence lets begin this step towards improvement now.
Mankiw, an American Macroeconomist working for president Bush’s Council of Economic Advisors, provided a convincing quote, saying that “basic economics tells us that when you tax something, your normally get less of it,” (Mankiw, 2007) proving to us the impacts a carbon tax would create upon our societies decisions. The idea of a tax instantly raises a burden upon the people. Hesitation will arise through a carbon tax becoming effective and rising fuel prices will impact the amount people choose to drive. This carbon tax would reach between $.30 and $.40 more per gallon, a simple small price that will result in a safer, cleaner environment that is soon to come! The small tax will not be as harmful to people as believed to be, critics hype up the idea that raised taxes will simply drive the whole economy to shambles, when in reality, this tax is in fact a solution to our cleaner future.
The carbon tax will begin a domino effect to our improvements of carbon dioxide emissions from vehicles. Beginning with a higher fuel price will result in less fuel consumption and a reduction in the amount our vehicles are being driven. This outcome could then encourage automotive companies to create more fuel-efficient cars and motivate many other smart ways to reduce energy consumption. Once these cars are provided for more of the public at a lower price than they are now, more people will be capable of buying the new type of cars. The domino effect will then result into our clean energy economy. Mankiw is a strong supporter of the carbon tax, and states that the increased carbon prices will impact car manufacturers to satisfy the public’s demands and develop more efficient vehicles. Mankiw believes a carbon tax to be the better option in reducing carbon dioxide consumption, due to the fact that fuel-efficient cars, in fact, encourage people to drive more, providing them with the mentality that their car is eco-friendly, therefore contradiction the reason these cars were created in the first place. Lower gas prices and/or fuel-efficient vehicles increase people’s motives to drive a proven 10-20% more (Holzman, 2005). We must reduce and limit overall driving in order to notice a reduction in our fuel emissions, this is how we can maintain a sustainable environment.
A policy that aims to reduce these emissions is called the Corporate Average Fuel Economy (CAFE). Created to minimize the United State’s oil consumption, CAFE encourages people to believe that their fuel-economy standards would help improve our environment’s air quality and support the prevention of further pollutant harm. Unlike the carbon tax raise in oil prices, CAFE promotes vehicles to drive more frequently but enforces a higher gas mpg. CAFE has been proven to contribute to the increase in overall miles driven throughout America, and is not the better decision for our communities to expect an improvement of our emissions. These mandatory car improvements congress implies have encouraged more driving for citizens (Nivola, Crandell, 1995.) It was enforced in 1975 after the Arab OPEC oil restriction; this had encouraged the congress to pass the Energy Policy and Conservation Act (Greene, 1991,) this act promoted the CAFE standards of a higher mpg for every automobile. We all understand and have witnessed the effectiveness of how increased oil prices impact the amount of oil we use due to its higher expenses (Nivola, Crandell, 1995.) Even with the CAFE policy in act and higher mpg rates, great improvements have yet to come.
Once creating a minimal mile per gallon policy, U.S. congress was convinced they would be capable of controlling the fuel economy in ways that aimed to encourage people to purchase fuel-efficient vehicles. A more efficient way to begin this control would be through this bill and its carbon tax that would be imposed upon society, as this tax can relate to everyone’s overall contribution to the emissions (Shelby, Cristofano, Brinner, Yanchar, Coulder, Jorgenson, Wilcoxen, Pauly, Kaufmann, 1993.) In relation to the idea of fuel-efficient cars, CAFE’s standards are not enforced upon already owned vehicles, leaving out all the hundreds of millions of people who already own old automobiles not reaching the current CAFE requirements. More so, a carbon tax will become effective to EVERY vehicle driving individual, allowing a more quick and noticeable improvement to our environment. In hope to take action quickly and make the soonest improvement, a carbon tax is the best approach.
It is expected to think that the low-income communities would be at high risk with a new tax and oppose to this bill with the fear of rising gasoline prices as well as energy prices all together forcing them to accompany a loss of money. In contrast however, the H.A. 2454 bill provides “fifteen percent of emissions allowance values to reimburse low-income households for higher energy-related costs. A tax credit would phase out at around $45,000-49,000 for a family of four, or a re-fund would be available through Food Stamp mechanisms” (EJ Matters, 2007.) By saying a “re-fund would be available through Food Stamp mechanisms,” means the families not reaching this assumption to a family of four, would be in consideration and provided with alternative sources of refundable money such as Food Stamp mechanisms. Food Stamps provide families of lower-income a substitutional way to purchase food in contrast to money itself, because it is feared that this raise in tax will negatively impact the amount of money these families would be receiving for their food (Cohen, Ohls, Andrews, Ponza, Moreno, Sanbrowski, Cohen, 1999.)
Author of The Impact of Carbon Control on Electricity and Gasoline Expenditures of Low-Income Households, Joel Eisenberg, has provided statistics proving that low-income households fortunate enough to own vehicles had average consumption of 902 gallons per year in 2001. Compared to the 1231 gallons for higher-income households in 2001, the average expenditures demonstrated by the lower-income households prove more minimal vehicle use than those of the higher-income households. Additionally, this difference is not related to the proportion difference in the lower income received by the lower-class households (Eisenberg, 2008.) Not only does Eisenberg make a reasonable statement, but we must also take into consideration the amount of low-income families in which own vehicles. The gasoline prices would hardly affect these families if an automobile is not present, therefore the tax may not have much of an impact on them after all.
Proposing that the carbon tax resided in the H.R. 2454 bill of the American Clean Energy and Security Act of 2009 provides the most efficient and quickest way to attack the growing problem of carbon dioxides contributions to global warming. This type of tax has appeared to be the best approach, therefore is something that should be implemented before society waits longer for any further options to be made. It will encourage the substitution of more energy-conserved products and more importantly forward the creation and use of fuel-efficient vehicles. Action must be taken as soon as possible and this is the first step. The carbon tax will be an increased tax for the people of America, however in the long run, it will decrease the costs we would face and suffer from continual, even increased, carbon dioxide emissions into our environment.
Global Warming: Works Cited
David Austin, Terry Dinan, “Clearing the Air: The Costs and Consequences of Higher CAFE Standards and Increased Gasoline Taxes.” Journal of Environmental Economics and Management, Volume 50, Issue 3, pp 562-582. November 2005
David L. Greene “Short-Run Pricing Strategies to Increase Corporate Average Fuel Economy,” Economic Inquiry, Volume 29. 1991
Robert W. Grandall, “Policy Watch Corporate Average Fuel Economic Standards,” Journal of Economic Prospective. Volume 6, Number 2, pp 171-180. Spring 1992
N.Gregory Mankiw. “One Answer to Global Warming: A New Tax”, New York Times, September 16, 2007
Atkinson Scott, and Tom Tietenberg. "Market Failure in Incentive-Based Regulation: The Case of Emissions Trading." Journal of Environmental Economics and Management, pp. 17-32. 1991.
Robert H. Frank, “A Small Price for a Large Benefit,” New York Times. February 2010
Mark Pearson, Stephen Smith, “The European Carbon Tax: An Assessment of the European Commission’s Proposals,” The Institute for Fiscal Studies. December 1991
Robert Shackleton, Michael Shelby, Alex Cristofano, Roger Brinner, Joyce Yanchar, Lawrence Goulder, Dale Jorgenson, Peter Wilcoxen, Peter Pauly, Robert Kaufmann, “The Efficiency Value of Caron Tax Revenues,” Energy Modeling Forum Terman Engineering Center Stanford University. January 1993.
Piet Rietveld, Stefan Van Woudenberg, “Why Fuel Prices Differ,” Energy Economics, pp. 79-92. December, 2004.
Alistar Ulph, David Ulph, “The Optimal Time Path of a Carbon Tax,” Oxford Economic Papers. Volume 46, pp. 857-868. October, 1994.
Pietro S.Nivola, Robert W. Crandell, “The Extra Mile; Rethinking Energy Policy for Automotive Transportation,” Brookings Review, volume 13. Winter 1995.
James Poterba, “Tax Policy to Combat Global Warming: On Designing a Carbon Tax,” Global Warming: Economic Policy Requirements. 1991
Amy C. Christian, “Designing a Carbon Tax: The Introduction of the Carbon-Burned Tax (CBT),” UCLA Journal of Environmental Law and Policy, Vol. 10, pp. 221-238 (1991-1992)
Eisenberg, Joel F, “The Impact of Forecasted Energy Price Increases On Low-Income Consumers.” ORNL/CON-495, Oak Ridge National Laboratory, October, 2005.
Barbara Cohen, James Ohls, Margaret Andrews, Michael Ponza, Lorenzo Moreno, Amy Zambrowski, Rhoda Cohen, “Food Stamp Participants’ Food Security and Nutrient Availability.” Mathematica Policy Research, Inc., Executive Summary. July 1999