Information Technology Management – Another new product of Lawson is Service Automation. Would you recommend it to Dollar General Why or why not

Information Technology Management – Another new product of Lawson is Service Automation. Would you recommend it to Dollar General Why or why not

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Information Technology Management

CASE – 4   Dollar General Uses Integrated Software

Dollar General (dollargeneral.com) operates more than 6,000 general stores in the United States, fiercely competing with Wal-Mart, Target, and thousands of other stores in the sale of food, apparel, home-cleaning products, health and beauty aids, and more. The chain doubled in size between 1996 and 2002 and has had some problems in addition to the stiff competition, due to its rapid expansion. For example, moving into new states means different sales taxes, and these need to be closely monitored for changes. Personal management also became more difficult with the organization’s growth. an increased number of purchasing orders exacerbated problems in the accounts payable department, which was using manual matching of purchasing orders, invoices, and what was actually received in the “receiving” department before bills were paid.

The IT department was flooded with request to generate long reports on topics ranging from asset management to general ledgers. It became clear that a better information system was needed. Dollar General started by evaluating information requirements that would be able to solve the above and other problems that cut into the company’s profit.

A major factor in deciding which software to buy was the integration requirement among the existing information systems of the various functional areas, especially the financial applications. This led to the selection of the Financials suite (from Lawson Software). The company started to implement applications one at the time. Before 1998, the company installed the suite’s asset management, payroll, and some HR applications which allow the tens of thousands of employees to monitor and self-update their benefits, 401k contributions, and personal data (resulting in big savings to the HR department). After 1998, the accounts payable and general ledger modules of Lawson Software were activated. The accounting modules allow employees to route, extract, and analyze data in the accounting/finance area with little reliance on IT personnel. During 2001-2003, Dollar General moved into the sales and procurement areas, thus adding the marketing and operation activities to the integrated system.

Here are a few examples of how various parts of the new system work: All sales data from the point-of-sale scanners of some 6,000 stores are pulled each night, together with financial data, discounts, etc., into the business intelligence application for financial and marketing analysis. Employee payroll data, from each store, are pulled once a week. This provides synergy with the sales audit system (from STS Software). All sales data are processed nightly by the STS System, broken into hourly journal entries, processed and summarized, and then entered into the Lawson’s general ledger module.

The original infrastructure was mainframe based (IBM AS 400). By 2002, the 800 largest suppliers of Dollar General were submitting their bills on the EDI. This allowed instantaneous processing in the accounts payable module. By 2003, service providers, such as utilities, were added to the system. To do all this the system was migrated in 2001 from the old legacy system to the Unix operating system, and then to a Web-based infrastructure, mainly in order to add Web-based functionalities and tools.

A development tool embedded in Lawson’s Financials allowed users to customize applications without touching the computer programming code. This included applications that are not contained in the Lawson system. For example, an employee-bonus applications was not available at Lawson, but was added to Financial’s payroll module to accommodate Dollar General’s bonus system. A customized application that allowed additions and changes in dozens of geographical areas also solved the organization’s state sales-tax collection and reporting problem.

The system is very scalable, so there is not problem in adding stores, vendors, applications, or functionalities. In 2003, the system was completely converted to Web-based, enabling authorized vendors, for example, to log on the Internet and view the status of their invoices by themselves. Also the Internet/EDI enables small vendors to use the system. (An EDI is too expensive for small vendors, but the EDI/Internet is affordable.) Also, the employment can update personal data from any Web-enabled desktop in the store or at home. Future plans call for adding an e-purchasing (procurement) module using a desktop purchasing model.

Questions

1. Explain why the old, nonintegrated functional system created problems for the company. Be specific.

2. The new system cost several millions dollars. Why, in your opinion, was it necessary to install it?

3. Lawson Software Smart Notification Software (lawson.com) is being considered by Dollar General. Find information about the software and write an opinion for adopting or rejection.

4. Another new product of Lawson is Service Automation. Would you recommend it to Dollar General? Why or why not?

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Indian Steels Limited (ISL) is a Rs. 6000 crore company established in the year 1986. The company envisaged being a continuously growing top class company

Indian Steels Limited (ISL) is a Rs. 6000 crore company established in the year 1986. The company envisaged being a continuously growing top class company

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Logistics Management

CASE IV – LOGISTICS OUTSOURCING

Company Profile

Indian Steels Limited (ISL) is a Rs. 6000 crore company established in the year 1986. The company envisaged being a continuously growing top class company to deliver superior quality and cost effective products for infrastructure development. With major customers being from Public Sector Undertakings, the company has established itself well and is said to be considering its expansion plan and proposed merger with another steel making giant in the country.

In 1996, owing to the cut throat competition in the emerging dynamic global markets, ISL emphasized on both effectiveness and efficiency. The company strongly believed in focusing on its core competency (i.e. manufacturing of steel) and outsourcing the rest to its reliable partners. Outsourcing of its outbound logistics was one such move in this direction. ISL out sourced its stockyards and other warehousing services to a third party called Consignment Agent, who was selected on an annual basis through a process of competitive bidding. The CA was responsible for the entire distribution of the products within the geographical limits of the allotted market segment and was paid by the company according to the loads of transaction (measured in metric tonnes) dealt by him. The company also believed in maintaining long-term relationships with the suppliers as well as the buyers. It always prioritized the needs of its regular and important customers over others and this worked out to be a win-win strategy. The case brings out the model of outsourcing logistics the company has adapted for the enhancement of its supply chain competency and thus leveraging more on its core competency which led to increased productivity.

Indian Steels Limited (ISL) is a Rs. 6000 crore company established in the’ year 1986. The company envisaged being a continuously growing top class company to deliver superior quality and cost effective products for infrastructure development. The company performed with a mission to attain 7 million ton liquid steel capacity through technological up-gradation, operational efficiency arid expansion; to produce steel with international standards of cost and quality; and to meet the aspirations of the stakeholders. The production started in the year 1988 and initially, it manufactured Angles, Pig Irons) Beams and Wire Rods that were mainly used for constructing roads) dams and bridges. These products were mainly supplied to Public Sector Undertakings such as Railways, Public Works Department (PWD) Central Public Works Department (CPWD) Rashtriya Setu Nigam Limited, Audyogik Kendra Vikas Nigam Ltd. and various foundry units. The company had its headquarters at Raipur with three stockyards (a kind of warehouse with a huge land to store the products).

The company has established itself well and is said to be considering its expansion plan and proposed merger with another steel making giant in the country. The company was awarded ISO 9001, ISO 14001 and ISO 18001 certifications. The temperature in the plant premises is reportedly about 6°C lesser than that of the township, thanks to the greenery being maintained therein.

Logistics Outsourcing

Outbound logistics which basically connects the source of supply with the sources of demand with an objective of bridging the gap between the market demand and capabilities of the supply sources was always a problem for companies operating in this industry. Consisting of components like warehousing network, transportation network) inventory control system and supporting information systems outbound logistics was always playing a key role in making the right product available at the right place, at the right time at the least possible cost. In 1996 owing to the cut throat competition in the emerging dynamic global markets, ISL emphasized on both effectiveness and efficiency. The company strongly believed in focusing on its core competency (Le. manufacturing of steel) and outsourcing the rest to its reliable partners. Outsourcing of its outbound logistics was one such move in this direction.

Recognizing the growing demand for its products from the big, diversified and geographically­dispersed customers, the company started expanding the number of warehousing stockyards. From a humble beginning, the company today has 26 stockyards; most of them are outsourced. Each of the outsourced stockyards was managed by a third party, which the company referred to as Consignment Agent (hereafter referred to as CA) in the area. The CA was selected on an annual basis through competitive bidding process. The performance of CA was closely monitored by a company representative (full time employee of ISL working in the site of CA). The CA was responsible for the entire distribution of the products within the geographical limits of the allotted market segment and Was paid by the company according to the loads of transaction (measured in metric tonnes) dealt by him. Based on their sales turnover CAs were trifurcated into A, Band C categories. The CAs with a monthly turnover of Rs. 150-200 crore fell under A category) whereas those with Rs. 100 – 150 crore were B and less than Rs. 100 \ crore were C category.

In addition to the company representative) a team of marketing division operated in the town where, the site of CA was located. This department was responsible or estimating the future demand, translating it into orders and sending to the manufacturing plant. Material dispatch was done using either one or a combination of the two modes: Rail, Road. While using rail as the mode of transportation, the company had a choice to book a Normal Rake (a full train with about 35 wagons, each wagon with an approximate capacity of 60 tonnes) or a Jumbo Rake (a full train of about 52 wagons, each wagon with an approximate capacity of 60 tonnes). At times, the company was engaging the services of the CONCOR (Container Corporation of India) where a train of 62 to 70 wagons, each wagon with about 26 tonnes capacity was used for transportation. Instead, if the company decided to send the material by road, the company had a choice between Trailor (25-30 tonnes} and Truck (15-20 tonnes). The choice of transportation mode was based on the quantity of dispatch.

As soon as the material was dispatched from the manufacturing plant, the respective CA used to get a Stock Transfer Chalaan electronically through Virtual Private Network, which was developed by a professional software service provider. In-transit, monitoring was generally done with the help of Indian Railways, if the mode was Rail. Otherwise, truck/trailor drivers were contacted through mobile phone. Transit generally took five to six days, providing time for CA to plan for receiving materials. The CA used to utilize this time for arranging material handling devices like heavy cranes and required labour. The material thus unloaded was reaching the warehousing stockyard where CA was responsible for arranging the materials as per the warehousing norms of ISL.

The company broadly classified materials into Long Products and Rounds. Products falling into each category were further classified by their size, shape and utility and the company used a distinct colour code for this purpose. Each subcategory of material had a specific place for downloading. The company used Bin System for this purpose. While downloading the material in stockyard, the company norms insisted that CA arrange for providing Dunnagt Material. This enabled the CA to store material without 1 direct contact with the land surface and thus reduced the probability of material deterioration. Material was stored in the stockyard until an authorized representative of the customer used to come and collect it. While dispatching material to the customer, a Loading Slip was generated against the Delivery Order. The company” also believed in maintaining long-term relationships with the suppliers as well as the buyers. It always prioritized the needs of its regular and important customers over others and this worked out to be a win-win strategy.

Operational problems were majorly because of uncertainties in transportation, fluctuation in supply of electricity and the load bearing capacity of the soil in the stockyard. Some: more problems were encountered whenever there was a change in CA and these were overcome by training the employees of the new CA and keeping the old CA responsible for the: material in his stockyard for six months after the contract as well. Observations reveal that, at times there were situations wherein CAs had to do those things which they were not legally supposed to do (like subcontracting) because of the pressures mounted by political leaders with selfish interests.           

Despite these problems, this model of outsourcing logistics was working out very well for the company. The practices, which were started in the year 1996 have sustained major changes in the environment and are being practiced even in 2006. It has enhanced the supply chain competency of the company by enabling it leverage more on its core competency, which leads to increased productivity.

Questions:

1. Analyze the case in view of the logistics outsourcing practices of the ISL.

2. Discuss the importance of logistics outsourcing with reference to supply chain management.

3. Suggest strategies for further strengthening the supply chain of ISL.

4. The participants/students are expected to have a clear understanding of Supply Chain and Logistics Management concepts.

5. The issues involved in the case are Sales Forecasting, Strategic Sourcing, Selection of Warehousing Service Provider, Transportation Mode and other nuances in Logistics Management.

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India is not known as the ‘nation of shopkeepers’, yet it has as many as 5 million retail outlets of all shapes and sizes. Some other optimistic estimates “place the number at as high as 12 million.

India is not known as the ‘nation of shopkeepers’, yet it has as many as 5 million retail outlets of all shapes and sizes. Some other optimistic estimates “place the number at as high as 12 million.

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Strategic Management

Case II- WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?*

India is not known as the ‘nation of shopkeepers’, yet it has as many as 5 million retail outlets of all shapes and sizes. Some other optimistic estimates “place the number at as high as 12 million. Whatever be the number, India can claim to have the highest number of retail outlets per capita in the world. But almost all of these are small outfits occupying an average of 500 square feet in size, managed by family members, having negligible investment in land and assets, paying little or no tax and known as the kirana dukaan (‘mom and pop’ stores in the U.S or the corner grocery stores in the U.K.). These outlets offer mainly food items and groceries—the staple of retailing in India. Customer contact is personal and one-on-one, often running through generations. There are a limited number of items offered! often sold on credit—the payment to be collected at the end of the month. The quality of items standard, with moderate pricing.

       There is great hype about the growth and prospects of organised retailing industry in India. It must be noted, however, that organised retailing constitutes barely 2 per cent of the total retailing industry in India, the rest 98 percent being under the control of the unorganised, informal sector of’ kirana dukaans. Market research agencies and consultants come up with encouraging forecasts about this segment of the retailing industry. For instance, AT. Kearney’s Global Retail Development Index ranks 30 emerging countries on a 100- point scale. Its 2007-ranking places India at number one for the third consecutive year, with 92 points, fol­lowed by Russia and China. The size of the organised retailing industry is estimated at US $8 billion and projected to grow at a compound annual growth rate of 40 per cent to US $22 billion by 2010. Overall, the Indian retailing industry is expected to grow from the current US $350 billion to US $427 billion by 2010 and US $635 billion by 2015.

The economic environment in the post-liberalisation period after 1991, has created several factors that have made this high growth of the organised retailing industry possible. India’s impressive economic growth rate of 9 per cent is the prime driver of increasing disposable incomes in the hands of the consumer. The growing size of the consuming class in India, in tandem with the entry and expansion of the organised sector players in recent years, has set the pace for corporate investment in retail business. Practically, every major Indian business group is looking for opportunities in the growing retailing industry. Among them are the big names in the Indian corporate sector such as the AV Birla group, Bharti, Godrej, ITC group, Mahindras, Reliance, Tatas and the Wadia group.

The international environment presently is replete with examples of the fast-paced growth of the retailing industry in many developing countries around the world. In the post-liberalisation period, there is more openness and awareness of the international developments among Indians. The ease of travel abroad and the exposure through television and Internet have increase the awareness of the urban Indian consumer to the convenience of modern shopping. The modern retail formats thus have gained acceptance in India. Carrefour, Tesco and Wal-Mart are the international players already operating in India, with several others like Euroset, Supervalue and Starbucks having plans to enter soon. These international companies bring to India the latest developments in the retailing industry and help to set up a benchmark for the domestic player.

       The market environment is one of the most significant in terms of the growth and prospects of the retailing industry in India. In terms of geography, the reach of the organised retailing industry has been growing. In addition to the mega-cities of Mumbai and Delhi, cities such as Bangalore, Pune, Hyderabad, Kolkata and Chennai are also witnessing a boom in organised retail activity. Retailers are now trying to focus on smaller cities such as Nagpur, Indore, Chandigarh, Lucknow or Cochin. There are interesting possibilities regarding the re­tail formats. Traditionally, street carts, pavement shops, kirana stores, public distribution systems, kiosks, weekly markets and such other formats unique to India, have been in existence for a long time. At present, most organised retail formers are imitations of those used abroad. These include hyper and supermarkets, convenience store, department stores and specialty chains. Among these formats, a notable trend has been the development of integrated retail-cum-entertainment centres and malls as opposed to stand-alone developments. Besides these, there are some attempts at indigenous formats aimed at the rural markets-such as those by ITC’s Choupal Sagar, DSCL’s Hairyali Kisaan Bazaar and Godrej group’s Godrej Aadhar. Pricing is an important issue in the retailing industry. Generally, the bulk buying yield lower costs of procurement for the big retailers—a part of which they pass on to the customer in the form of lower prices. In food retailing, for instance, there is a clear trend of low prices being the determining factor in purchase decisions by the cost-conscious Indian consumer. But, lower prices may not be a major issue with the higher-income groups that may place greater emphasis on the quality of products and retail service, store ambience and convenience of shopping. For the majority of Indian consumers however, price is likely to remain a significantly important issue in the purchase decision. Competition has already accelerated with many Indian business groups having entered or likely to enter this booming industry.

The political environment in India is ambiguous! in terms of its support to the organised retailing industry. This is obvious as the unorganised sector employs nearly 8per cent of the Indian population and is widely spread geographically. The whelming presence in terms of 98 per cent of the total retailing industry also is a significant political issue. In a democracy, the politics of numbers makes it imperative for the political class to adopt an ambiguous stand. In some cases, politicians have acted in favour of the unorganised sector by disallowing the setting up of large retail some states. Overall, however, there is ambiguity as there are several environmental trends in favor of the development of the organised retailing industry.

       In the regulatory environment, there has gradual easing of the restrictions albeit at a slow pace, in view of the ambiguous political stance as indicated above. Interestingly, the retailing industry, is still not recognised as an industry in India, Foreign direct investment of up to 100 per cent is not permitted though it is possible for foreign players to enter through the routes of agreements, cash-and-carry wholesale trading and strategic licensing agreements. Another problem area is of the real estate laws at the level of state governments that are yet to be clear on the issue of allowing large stores. Restructuring of the tax structure for the retailing industry is another regulatory issue requiring governmental action. However, tariffs on imported consumer items have been gradually aligned to meet the prescribed WTO norms and reduction of import restrictions are likely to help the growing organised retailing industry.

      The socio-cultural environment offers many interesting insights into the changing tastes and references of the urban and semi-urban Indian consumer. There is a large rural market consisting of nearly 720 million consumers, spread over more 600,000 villages. India’s consumers are young: 70 percent of the country’s citizens are low the age of 36 and half of those are under 18 years of age. These people have deep roots in the local culture and traditions, yet are eager to get connected with and know the outside world. According to a DSP Merrill Lynch report, the key factor providing a thrust to the retail boom in India the changing age profile of spenders. A group of seven million young Indians in their mid-twenties, learning over US$ 5000 per year, is emerging every year. This group constitutes people who are enthusiastic spenders and like to visit the new format retail outlets for the convenience and time saving they offer. Malls are also being perceived as just places for shopping, but for spending leisure time and as meeting places. There has been an emergence of a combination of the retail outlet and entertainment centres having multiplexes, with food courts and video game parlours.

      But there are some pitfalls too. For instance, organised retailing in India has had to deal with the misconception among middle-class consumers that the modern retail formats being air conditioned, sophisticated places are bound to be more expensive.

       The supplier environment probably offers the biggest constraint on the growth of the retailing industry in India. Reaching India’s consumers cost effectively is a distribution nightmare, owing to the sheer geographical size of the country and the presence of traditional, fragmented distribution and retailing networks and erratic logistics. For instance, the apparel segment that is one of the two top segments, the other being food, have had to invest in back-end processes to support supply chains. Supply chain management and merchandising practices are increasingly converging and apparel retailers are establishing collaborations with their vendors. Another area of concern is the severe shortage of skills in retailing. Human resource development for the retailing industry has picked up lately but may take time to fill the gap caused due to the shortage of personnel.

       The technological environment for the organised retailing industry straddles many areas such as IT support to supply chain management, logistics, transportation and store operations. Some global retailers have demonstrated that an innovative use of technology can provide a substantial strategic advantage. The large number of store items, the diversity of sourcing and the gigantic effort required to coordinate actions in a large retail context is ideal for using IT as a support function. For instance, an innovative use of IT can help in a wide variety of functions such as quick information processing and timely decision-making, reduction in processing costs, real-time monitoring and control of opera­tions, security of transactions and operations inte­gration. The availability of supply chain management, customer relationship management an merchandising software can help much while performing activities such as ordering and tracking inventory items, warehousing, transportation and customer profiling.

       Overall, the Indian scenario offers an interesting mix of possibilities and challenges. A successful model of large-scale retailing appropriate for the Indian context is yet to emerge. The modern retail formats accepted globally are in the process of implementation and their acceptability is yet to be established.

Questions:

1. Identify the opportunities and threats that the retailing industry in India offers to local and foreign companies.

2. Prepare an ETOP for a company interested in entering the retailing industry in India.

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In your view, should the government have sued Microsoft for violation of the antitrust laws? In your view, was Judge Jackson’s order that Microsoft be broken into two companies fair to Microsoft? Was Judge Kollar-Kotelly’s November 1, 2004 decision fair? Was the April 2004 decision of the European Commission fair to Microsoft? Explain your answers.

In your view, should the government have sued Microsoft for violation of the antitrust laws? In your view, was Judge Jackson’s order that Microsoft be broken into two companies fair to Microsoft? Was Judge Kollar-Kotelly’s November 1, 2004 decision fair? Was the April 2004 decision of the European Commission fair to Microsoft? Explain your answers.

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Business Ethics

Case – 2 Playing Monopoly: Microsoft

On November 5, 1999, then the richest man in the world, learned that a federal judge, Thomas Jackson, had just issued “findings of fact” declaring that his company, Microsoft, “enjoys monopoly power” and that it had used its monopoly power to “harm consumers” and crush competitors to maintain its Windows monopoly and to establish a new monopoly in Web browsers by bundling its Internet Explorer with Windows. On the day the judgment was issued, Microsoft stock began its decline. The decline was hastened by an announcement in February  2000 that the European Commission, which enforces European Union lows on competition and monopolization, had been investigating Microsoft’ anticompetitive practices in server software since 1997 and was extending its investigation to look into Microsoft’s bundling of its Windows Media Player with Windows. Two months later, on April 3,2000,U.S. judge Thomas Jackson issued a second verdict, concluding on the basis of his earlier findings of fact that Microsoft had violated U.S. antitrust low and was subject to the penalties allowed by the low. The price of Microsoft stock plunged, bringing the entire stock market down with it. Two short months later, on June 7,2000, Judge Jackson ordered that Microsoft should be broken up into two separate companies-one devoted to operating systems and the other to applications such as word processing, spreadsheets, and Web browsers. With the price of Microsoft stock now skidding, Gates, who was no longer the richest man in the world, vowed that Microsoft would appeal this and any similar verdict and would never be broken apart.¹  

      Bill Gates was born in 1955 in Bremerton, Washington. When he was 13 years old, his grammar school acquired a computer terminal, and by the end of the year he had written his first software program (for playing tictac-toe). During high school, he held a few entry-level programming jobs. Gates enrolled in Harvard University in 1974, but quickly lost interest in classes and quit to start a software business in Albuquerque, New Mexico, with a friend, Paul Allen, whom he had known since grammar school in Seattle. At the time, the first small but primitive personal computers were being manufactured as kits for hobbyists. These computers, like the Altair 8080 computer (which used Intel’s new 8080 microprocessor, had no keyboard, no screen, and only 256 bytes of memory), had no accompanying software and were extremely difficult to program because they had to use “machine code” (consisting entirely of sequences of zero and ones), which is virtually incomprehensible to humans. Gates and  Allen together revised a program called BASIC (Beginner’s All – Purpose Symbolic Instruction Code, a program written several years earlier by two engineers who gave it away for free), which allowed users to write their own programs using an understandable set of English instructions, and they adapted it so that it would work on the Altair 8080. They sold the adaptation to the maker of the Altair 8080 for $3,000.

         In 1977, Apply Computer marketed the first personal computer (PC) aimed at consumers, and by 1978, more than 300 dealers were selling the “Apply II.” That year, Gates and Allen began writing software programs for the Apply II, renamed their company Microsoft, and moved it to Seattle, where, with 13 employees, it ended the year with revenues of $1.4 million. In 1979, two hobbyists developed VisiCalc, the first spreadsheet program, for the Apply II, and Microsoft developed MS Word, a rudimentary word processor for the Apply II. With these new software “applications,” sales of the Apply II took off and the personal computer market was born. By 1980, Microsoft, which continued writing programs for the growing personal computer market, had earning of $8 million.

         In 1980, IBM belatedly decided to enter the growing market for personal computers. By now many other companies had flocked into the PC market, including Radio Shack, Commodore, COMPAQ, AT&T, Xerox, DEC, Data General, and Wang. By 1984, some 350 companies around the world would be making PCs. Because IBM needed to enter the market quickly, it decided to assemble its computer from components that were readily available on the market. A key component that IBN needed for its computer was an operating system. An operating system is the software that allows application programs (like a world processor, spreadsheet, browser, or game) to run on a particular machine. Every computer must have an operating system or it cannot run any application programs. The operating system coordinates the various components of the computer (keyboard inputs, monitor, printer, ports, etc. and contains the application programming interface (API), which consists of the codes that application use to “command” the computer to carry out its function. Application programs, such as a games or world processors, are written so that they will run on a specific operating system by making use of that operating system’s API to make the computer carry out the program’s commands. Unfortunately, a program written for one operating system will not work on another operating system. Most of the companies making PCs had developed their own operating systems, although several made use of one called CP/M, which was written to work on many different computers, applications developed to run on CP/M. This meant that an application did not have to be rewritten for each different kind of computer, but could be written once for CP/M and would then on any computer using CP/M.

         IBM needed an operating system quickly and approached the maker of CP/M for a license to use CP/M but was turned down. The somewhat desperate IBM representatives then met with Bill Gates to ask whether Microsoft had one available. Although Microsoft at the time did not own an operating system, Bill Gates told IBM that he could provide one to them. Immediately after the IBM meeting, Bill Gates went to a friend who he knew had written an operating system that was a “knock-off of CP/M” and that could work on the computer IBM was planning. Without telling his friend about the meeting with IBM, Gates offered to buy his friend’s operating system for $60,000. The friend agreed. After some tweaking, Microsoft licensed the system to IBM as MS-DOS, with the proviso that Microsoft could also license MS-DOS to other computer manufactures. When IBM started mass-producing its personal computer in 1981 (IBM’s share of the market went froe nothing in 1981, to 10 percent in 1983, and 40 percent in1987) and other computer makers began producing copies of IBM’s computer, MS-DOS become the standard operating system for personal computers built according to IBM’s standards. Bill Gates’s company was on its way to becoming a billion-dollar firm.

          Because an application program has to be written to work on a specific operating system, and because so many personal computers were now using the MS-DOS operating system, software companies were much more willing to created programs for the large market of MS-DOS users than for the much smaller numbers of people using other competing operating system numbers of people using other competing operating systems. As thousands of new software programs were developed for MS-DOS-including Microsoft’s own spreadsheet, Multiplan, and its word processor, MS Word even more people adopted MS-DOS, initiating what economists call a network effect. A product creates a network effect when the value of the product to a buyer depends on how many other people have already bought the product. A standard example of a product that creates a network effect is a communication network like a telephone network. The more people that are connected to a telephone network, the more valuable it will be for a new subscriber to be connected to the network since he can communicate with more people. Many products besides communication networks can give rise to network effects, including, of course, operating systems. The more people that own an operating system, the more that software companies are willing to write programs for that operating system. The more software program they write for the operating system, the more people want to buy that operating system. Because of this network effect, the proportion of computers using MS-DOS quickly increased, and the proportion of computers using other operating systems (such as CP/M, Apply computer’s, or Atari’s or commodore’s) declined.

          However, in 1984, Apple Computer developed an innovative new operating system for its own computers that used intuitive graphics or pictures that let users issue commands to the computer by selecting icons and pull-down manus on the screen using the mouse. The new operating system was tremendously popular, and Apple sales began to climb. In 1987, however, Microsoft began selling Windows, a new operating system for IBM-compatible computers that copied Apple’s operating system. Unlike MS-DOS, which had used obscure combinations of characters to issue commands to the computer, Windows used graphics that were similar to Apple’s, had virtually the same pull-down menus and icons, and the same usage of the same mouse. Apple sued Microsoft on      the grounds that, in copying the “look and feel” of their operating system, Microsoft had stolen a key piece of their copyrighted property. Apple lost the suit and, with the loss of its key software advantage, its market share withered away. 

             Although early versions of Windows were not very good  quality improved over the years. In 1995 Microsoft issued Windows 95, in 1998 it issued windows 98, in 2000 it issued the Millennium version of Windows, and two years later it   issued Windows XP. The next version of Windows was code-named “Longhorn.” As the new millennium began, Microsoft controlled 90 percent of the personal computer operating system market-a virtual monopoly- and Bill Gates was fabulously rich.   .        

              In the early 1990s, however, two threats to Microsoft’s monopoly had emerged.2 one was Netscape, an Internet browser, and the other was Java, a programming language. The Internet is a network through which digital information, pictures, sounds, text, and other digital data can be sent from one computer to another. To make these data usable, a user’s computer must be connected to the Internet and must have a software program called a browser. The browser takes the digital data that come through the Internet and transforms them into an intelligible picture or text that can be displayed on the user’s computer screen or into a sound that can be played on the computer’s speakers. However, a browser is not only capable of interpreting digital data that come over the Internet, it can also execute the instructions of software programs, whether those programs are sent over the Internet or reside in the user’s own computer. In this respect, a browser functions much like an operating system. Some people predicted that someday every computer might rely on a browser instead of an operating system to run software programs. Although the browser would still need some rudimentary operating system to run, this operating system did not have to be Windows. Windows could become obsolete. Netscape, a company that began selling a browser named Navigator on December 15, 1994, quickly captured 70 percent of the browser market. In May 1995, Bill Gates wrote an internal memo to his executives, warning:

         A new competitor “born” on the Internet is Netscape. Their browser is dominant, with a 70% usage share, allowing them to determine which network extension will catch on. They are pursuing a multi-platform strategy where they move the key API [applications programming in derlying operating system.]

         In addition to the browser threat, Microsoft was also worried about Java, a programming language that Sun Microsystems, a manufacture of computer hardware and software, had developed in May 1995. programs that are written in the Java language can operate on any computer equipped with java software, regardless of the operating system the computer used. In this respect, java software also could function like an operating system and also threatened to make Widows obsolete. In an internal memo, a Microsoft senior executive stated that Java was “our major threat,” and in September 1996, Bill Gates wrote an e-mail saying, “This scares the hell out of me,” and asked manager a to make it a top priority to neutralize Java.

         To make matters worse, Java and Netscape joined forces. Netscape agreed to incorporate the Java software into its Navigator browser so that any programs written in Java would work on a computer that was using Netscape. This meant that short programs written in Java could be sent over the Internet and then run on the user’s computer through its Netscape browser. This also meant that Java programs did not need windows, but could run on any computer using any operating system so long as it was also using Netscape’s Navigator Browser. Because Java was now being distributed together with Netscape, the number of computers equipped with Java rapidly multiplied. A Microsoft had become the “major distribution vehicle” for Java.

         According to the “findings of fact” accepted by the judge presiding over the” major distribution vehicle” for Java.

          According to the “findings of fact” accepted by the judge presiding over the Microsoft antitrust trial, Microsoft quickly embarked on a campaign to undercut the threat that Netscape now posed to its monopoly. First, a team of Microsoft executives met with Netscape’s executives in June 1995. Microsoft’s people proposed that Microsoft should provide the browser for Windows computers while Netscape should provide browsers for all other computers essentially the 10 percent of computers that ran on Apple’s operating system, on OS/2, or on other relatively minor operating system. A memo written the next day by a Microsoft executive who was percent stated that a goal of the meeting was to “establish Microsoft ownership of the Internet client platform for Win95.” Netscape refused to go along with this plan to divide the browser market. Microsoft then refused to share the codes for Windows 95 so that Netscape would be unable to develop a browser for Windows 95. Netscape had to wait several months after Windows 95 was released before it finally got hold of its codes and was finally able to develop a new version of Navigator that would take advantage of the Windows 95 applications interface.

           Microsoft also develop its own browser by borrowing a  browser program it had earlier licensed from Spy-glass Inc, renaming it  Interner Explorer, and copying many of Netscape’s features onto its. (The chairman of Spyglass later complained that “whenever you license technology to Microsoft, you have to understand it can someday build it itself, drop it into the operating system, and put you out of that business.” Unfortunately, when Microsoft tried to sell its browser in 1995, users felt it was inferior to Netscape and sales lagged. Microsoft continued working on its browser and its fourth version, Internet Explorer 4.0, released in late 1997, finally began to be compared favorably to Netscape’s browser. Still, few people were buying internet Explorer. Microsoft then decided to use its operating system monopoly to undercut Netscape. In February 1997, Christian Wildfeuer, a Microsoft executive, suggested in an internal memo that it would “be very hard to increase browser share on the merits’ of internet Explorer 4 alone. It will be more important to leverage our Operating System asset to make people use Internet Explorer instead of Netscape’s Navigator.” If Internet Explorer was bundled together with Windows, so that when Windows was installed on a computer Internet Explorer was also automatically installed, then users would tend to use Internet Explorer rather then go through the expense and trouble of purchasing and installing Netscape. Accordingly, Microsoft incorporated a copy of Internet Explorer into Windows 95 that automatically installed itself when Windows was installed. Windows 98 went farther by integrating Internet Explorer into the operating system so that it was extremely difficult for a user even to remove Internet Explorer. Moreover, when a user “uninstalled” Internet Explorer, it stayed in the computer and still appeared when Windows 98 was running certain commands. Although this integration made Windows 98 run more slowly and consumed resources on the user’s computer, it also made it much more difficult and risky for users to try to replace Internet Explorer with Netscape Navigator. Microsoft claimed that it was now giving Internet Explorer away “for free,” but skeptics pointed out that the costs of developing the browser had to be recovered from sales of Windows and so a portion of what the consumer paid for a copy of Windows went to pay for the costs of developing the browser.

         Microsoft did more than bundle Internet Explorer with Windows. According to the court’s “findings of fact,” Microsoft required any computer maker that wanted Windows on its computers to agree that it would not remove Windows Explorer and would not promote Netscape’s browser. If a computer maker also agreed to not even give its customers a copy of Netscape, Microsoft discounted the price of Windows. Because Microsoft’s monopoly meant that computer manufacture either had to install Windows on their computers or make them virtually useless, manufactures had no choice but to sign the agreements that shut Netscape out of the market. Although users were still able to buy a copy of Netscape from a retailer, the number of users doing this declined. Not only would purchasing a copy of Netscape require paying extra for software that would do much of what their installed Internet Explorer could already do but also required that trick task of removing Internet Explorer from their computers and in selling Netscape in its place. Not surprisingly, Netscape’s share of the market rapidly dropped, and Internet Explorer’s rapidly rose- a successful outcome of Wildfeuer’s strategy “to leverage our Operating System asset to make people use Internet Explorer instead of Navigator.”

          Microsoft dealt with its Java threat by asking Sun Microsystems for the right to license and distribute Java with its Windows system. Sun Microsystems gave Microsoft that right, not knowing that Microsoft was planning to change Java. The version of Java that Microsoft distributed was a version that incorporated several changes that would no longer allow regular Java programs to run on computers using Microsoft’s Java. Thus, there were now two versions of  Java, and the version that most users were getting installed with their Windows computers was a version that was incompatible with the regular version of Java  and that Microsoft now owned. Microsoft had apparently planned this move because an earlier internal Microsoft document stated that it was a “strategic objective” for Microsoft to “Kill cross-platform Java” by expanding the “polluted Java market”- a reference to Microsoft’s own “polluted” version of Java. Because all Windows-based computers now incorporated a copy of Microsoft’s Java, not Sun’s. Microsoft encouraged these developers by offering them special technical support and inducements. In effect, Microsoft had turned Java into a part of Windows so that there was now little threat that Windows would be rendered obsolete by Java.

         But on May 18, 1998, the U.S. Department of Justice (DOJ), then headed by U.S. Attorney General Janet Reno (an appointee of Democratic President Bill Clinton), filed an antitrust suit Microsoft in Judge Jackson’s court, claiming that the company had violated the Sherman Antitrust Act by engaging in “a pattern of anticompetitive practices designed to thwart browser competition on the merits, to deprive customers of choice between alternative browsers, and to exclude Microsoft’s Internet browser competitors,” especially Netscape and java.³ the DOJ claimed that Microsoft had violated the antitrust act in four ways: (a) Microsoft had forced computer companies that used its Windows operating system to sing agreements that they would not license, distribute, or promote software products that competed with Microsoft’s own software products; (b) Microsoft “tied” its own browser, Internet Explorer, to its Windows operating system so that customers who purchased Windows also had to get Internet Explorer, although these were separate products and tying the two products together degraded the performance of Windows; (c) Microsoft had attempted to use its operating system monopoly to gain a new monopoly in the Internet browser market by forcing computer companies that used its Windows operating system to agree to leave Internet Explorer as the default browser and to preinstall or promote the browser of any other company; and (d) Microsoft had a monopoly in the market for PC operating system and had used anticompetitive and predatory tactics to maintain its monopoly power. As a penalty to ensure that Microsoft not engaged in such behaviors again, the DOJ recommended that that the part of the company devoted to cresting Windows should be spun off and separated from the part that developed browsers and other software applications.

       On June 7, 2000, Judge Jackson found Microsoft guilty of counts b, c and d, and ordered that the company be broken up into two separate companies-one to develop and market operating systems and the other to develop and market all other Microsoft programs. Although the judge could have simply ordered Microsoft to cease engaging in the illegal practices, he feared that policing such an order would require so much government oversight that it was simply not practical. The judge also ruled that the two new companies would not be allowed to share any technical information with each other that they did not share with all their other customers. Not could Microsoft punish or threaten any computer manufacturers for distributing or promoting the products or services of its competitors. Finally, Judge Jackson ordered that Microsoft had to let computer manufactures remove any Microsoft applications from its Windows operating system.⁴ the Judge ruled, however, that Microsoft would not have to implement his orders until it had time to appeal his decision. In a defensive “white paper,” Microsoft stated:

Antitrust policy seeks to promote low prices, high output, and rapid innovation. On all three measures, the personal computer software industry generally-and Microsoft in particular-is a model of competitiveness…. Market share numbers do not reflect the highly dynamic nature of the software industry, where entire business segment can disappear virtually overnight as new technologies are developed.

Microsoft claimed that it was responsible for much of the innovation that characterized the software industry. In addition, it claimed that its actions, including its decision to bundle Internet Explorer with Windows and its decision to “improve” Java by changing it, were all done to help consumers and give them more value for their money.

       Microsoft appealed the judge’s verdict, and on June 28, 2001, a federal appeals court reversed Judge Jack-son’s breakup penalty. The federal appeals court held that, based on interviews he gave to the news media during the case, Jackson appeared to be biased against Microsoft, and this bias might have affected the severity of the penalty he had imposed on the company. Although Jackson’s findings of fact were to remain in place, the appeals court held that a new penalty would have to be devised for the company.

        The previous year, however, George W. Bush had been inaugurated president and his administration had as signed a new person, John Ashcroft, as the new attorney general to head up the Department of Justice. According to Edward Roeder, an expert on corporate political contributions, in the previous 5 year Microsoft had begun contributing heavily to the Republican Party’s election campaigns, contributing about 75 percent of its $6million-dollar-a-year 2000 political contributions to Republicans, creating “an unprecedented campaign to influence the new Administration’s antitrust policy,” and to “escape from the trial with its monopoly intact.”⁵ on September 6,2001, the new Republican-appointed head of the DOJ announced that it would no longer seek the breakup of Microsoft but would, instead, seek a lesser penalty. Two months later, on November 2,2001, the DOJ announced that it had reached a settlement with Microsoft. According to the agreement, Microsoft would share its application programming interface with other rival software companies who wanted to write applications (such as word processing programs or games) that could run on Windows; it would have to give computer makers and users the ability to hide icons for Windows applications, such as the icon for Internet Explorer  or for Microsoft’s digital media player; it could not prevent competing programs from being installed on a Windows computer; it could not retaliate against computer makers who used competing software. A three-person panel would be given complete access to Microsoft’s records and source code for the next 5 years to ensure that Microsoft complied with the agreement. Microsoft; however, would not be prevented from bundling whatever software programs it wanted with its Windows operating system. The new judge appointed to case, Judge Colleen Kollar-Kotelly, reviewed the settlement and on November 1,2003, she handed down a decision essentially ratifying the settlement between Microsoft and the DOJ. The state of Massachusetts and two computer trade groups, however, who objected to the settlement as a mere slap on the wrist, filed an appeal, arguing that Microsoft’s monopolistic behaviors drserved tougher sanctions. That appeal came to an end on June 30, 2004, when a federal appeals court ruled that the 2001 settlement satisfied the legal requirements for addressing Microsoft’s violations of antitrust laws. By that time,, when a federal appeals court ruled that the 2001 settlement satisfied the legal requirements for addressing Microsoft’s violations of antitrust laws. By that time,, when a federal appeals court ruled that the 2001 settlement satisfied the legal requirements for addressing Microsoft’s violations of antitrust laws. By that time, Microsoft had settled several suits with other states and companies and had paid a total of $1.5 billion to these parties.                                                   

          Microsoft’s monopoly woes were not quite over, however. In 1997, the European Union’s “Competition Commissioner” had announced that the European Union was investigating allegations that Microsoft had illegally used its Windows monopoly power to try to establish a new monopoly in the server market by refusing to share its Windows application programming interface with companies making software for servers (servers are computers that connect several other computers together). If other companies are not given the Windows application programming interfaces, they cannot write server programs that can smoothly connect computers running Windows. Since only Microsoft had full access to its Windows application programming interface, only Microsoft would be able to write server programs for Windows computers, thereby giving it a new monopoly in the server market.

          In 2000, the European Commission expanded its investigation to look into how Microsoft had bundled its Windows Media Player together with the company’s new Widows 2000 operating system. Because all buyers of Windows 2000already had Microsoft’s Digital Media Player installed on their computers, they were not likely to buy a competitor’s digital media player. In this way, suggested the commission, Microsoft would gain a new monopoly in the market for digital media players.

          In April 2004, the European Commission issued its final ruling on its investigations. It concluded that “Microsoft Corporation broke European Union competition law by leveraging its near monopoly in the market for PC operating systems onto the markets….for servers…and for media players.” The commission fined Microsoft 497 million euros (equivalent to about $613 million) and ordered it (1) to disclose to competitors the interface required for their server software to work with Windows computers and (2) to offer a version of Windows without Microsoft’s own Digital Media Player.

          Microsoft immediately appealed this ruling to the European Court of First Instance. In addition, it asked that the second order be suspended until the European Court of First instance had ruled on its appeal. In June 2004, the European Commission agreed that until the court ruled on the appeal, Microsoft did not have to offer a version of Windows without its Digital Media Player. Experts on European law said the appeal could take several years.

          Meanwhile, some government had stopped purchasing Windows and had instead adopted Linux, a free “open source” operating system. Among these were Italy, Germany, Great Britain, France, India, South Korea, China, Brazil and South Africa. Several Companies, including Amazon.com, FedEx, and Google, had moved to Linux. A study by Forrester Research found that 72 percent of companies it surveyed were increasing their use of Linux, and over half of them were planning to replace Windows with Linux.

Questions                                         

1. Identify the behaviors that you think are ethically questionable in the history of Microsoft. Evaluate the ethics of these behaviors.

2. What characteristics of the market for operating systems do you think created the monopoly market that Microsoft’s operating system enjoyed? Evaluate this market in terms of utilitarianism, rights, and justice (your analysis should make use of the textbook’s discussion of the effects of monopoly markets on the utility of participants in the market, on the moral rights of participants in the market, and on the distribution of benefits and burdens among participants in the market), giving explicit examples from the operating systems industry to illustrate your points.

3. In your view, should the government have sued Microsoft for violation of the antitrust laws? In your view, was Judge Jackson’s order that Microsoft be broken into two companies fair to Microsoft? Was Judge Kollar-Kotelly’s November 1, 2004 decision fair? Was the April 2004 decision of the European Commission fair to Microsoft? Explain your answers.

4. Who, if anyone, is harmed by the kind of market that Microsoft’s operating system has enjoyed? Explain your answer. What kind of public policies, if any, should we have to deal with industries like the operating system industry?

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In your opinion, will similar training initiative be successful in the service sector? Explain in the context of a few service industries that you are familiar with.

In your opinion, will similar training initiative be successful in the service sector? Explain in the context of a few service industries that you are familiar with.

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Corporate HRM

SECTION I: Solve any 2 Case Studies:

CASE – 1   Toyota Motor Company’s Toyota Technical Training Institute in India

In August 2007, one of the world’s leading automobile manufacturers, Toyota Motor Corporation (TMC), announced that its joint venture in India, Toyota Kirloskar Motor Private Limited (TKM) had set up a technical school called Toyota Technical Training Institute (TTTI), on the outskirts of Bangalore, India. The company said that TTTI was meant for those who had passed out of middle school (Class 10) but could not continue their education due to financial or other constraints. TMC projected the setting up of this institute as a corporate social responsibility initiative that was aimed at benefiting a disadvantaged section of Indian society by increasing their employability. At the institute’s opening ceremony held on August 1, 2007, TMC’s Executive Vice President, Mitsuo Kinoshita, said, “I am confident that the establishment of TTTI will contribute to the betterment of Indian society by cultivating the power of the nation’s youth.”

The seeds of this institution were reportedly sown in the year 2005, when Atsushi Toyoshima (Toyoshima), Managing Director, TKM, visited a number of technical institutes in India. He felt that the curriculum in these institutions was outdated and not in sync with the requirements of the industry. Analyst noted that despite the 4,500-odd technical institutes in the country, the kind of products they were churning out were not of much use to the manufacturing companies. For a company like Toyota, which had aggressive growth plans in the rapidly growing Indian automobile market, this was a major hindrance as the company had little talent to choose from. This prompted Toyoshima to ask the management at Japan to set up a technical institute in India on the lines of Toyota Technical Skills Academy (TTSA).

The company’s decision to start the TTTI in India was first announced in March 2007. “In addition to making automobiles, we believe in proactively contributing to society by consolidating the knowledge and know-how within Toyota to develop capable human resources and thus contribute to the development of a prosperous society,” said Toyoshima. The company placed advertisements for a three-year technical skills program in the local newspapers and started accepting applications from the next month for the selection of the first batch of 60 students. The institute would provide the courses, boarding, and lodging free-of-cost, and also pay each trainee a stipend in the range of Rs. 1,800-2,200 per month. Promising trainees would also be provided with fellowships (US$180 AND US$230) and a chance to join the company after successfully completing the course. Around 5,000 applicants applied for the program. Subsequently in June 2007, an admission test was held and 64 trainees were selected for the first batch.

The TTTI was established at a cost of Rs. 220 million (US$5.6 million). The institute was spread across a 48,726 square meter area within the premises of the TKM facility at Bidadi, Bangalore. It initially started its operations with a total staff strength of 25, including 17 teaching staff, headed by V Ramamurthy and T Somanath (Somanath) as Dean and Principal respectively. Through the three-year residential program, the company sought to provide the trainees with the skills of Monozukuri. The institute offered four practical-oriented courses in painting, welding, automobile assembly, and mechatronics. The courseware was similar to that of TTSA, but was adapted keeping the Indian market in mind. The students were also provided lessons in subjects such as English, and History, self-improvement courses such as Yoga and Home Science, and lessons in cleanliness, grooming and discipline.

In addition to academic sessions, the trainees would gain significant exposure to the company’s famous Toyota Production System and the Toyota Way. Toyoshima said, “We hope the students will be able to appreciate various aspects of Monozukuri or skilled manufacturing in the Toyota Way. They will not just learn but also practice Monozukuri.

Though the company hoped to employ all the trainees once they had completed the program, the trainees were not under any compulsion to join the company. Somanath said, “It is a corporate social responsibility initiative for us. Analysts too agreed that the company was indeed making a positive difference in the life of the trainees. They were not only getting a taste of a better life and had a better future to look forward to, but were also in a position to send home a part of their stipend.

According to the company, TTTI was still in the testing phase and the first batch would be like a test case for the future. The institute would train approximately 180 trainees across three academic years. The management at the company felt that keeping the future growth of the Indian market in mind, setting up the TTTI in India made good business sense. India was one of the world’s fastest growing car markets and was poised to grow at an astounding 14.9 percent through 2010, according to Frost & Sullivan. According to some estimates, by 2010, the number of cars sold in India annually would double to 3 million, compared to 2007. In such a scenario, TKM had to quickly ramp up its presence in the market. As of 2007, TKM had a mere 4 percent market share in India.

Analyst noted the company was lagging far behind its competitors and felt that this initiative would TKM become more competitive in the future. They expected TTTI to play a key role in the development of human resources at the company and to help bolster the company’s production operations in India in the future. Some industry watchers also pointed out that between 2002 and 8 Monozukuri is a Japanese word consisting of two words mono (products) and zukuri (process of making). But the meaning of the word goes beyond the combined meaning of the two words to encompass ‘excellence, skill, spirit, zest, and pride in the ability to make things very well.’ (Source: Kozo Saito, “Development of the University of Kentucky – Toyota Research Partnership: Monozukuri: PART I,” Energia, Vol.17.No.4, 2006.)

2007, TKM had suffered due to labor unrest in its facilities in India, and viewed this initiative as an attempt by the company to breed loyalty on the shop floor. Business Week noted, “Another, ulterior motive was ensuring labor loyalty. For the past five years, Toyota India has suffered a series of strikes and a lockout, with labor unions protesting in support of better wages and against the dismissal of two of their members. Training youth in-house helps build loyalty for Toyota on the assembly line.

Questions

1. Describe the probable reasons for the setting up of the TTTI in India. Describe the direct and indirect benefits accruing to TKM by running the TTTI. What, according to you, are the short-term and long-term benefits to the company?

2. The TTTI trainees were not under any compulsion to join the company (TKM) once they had completed the training program. What are the possible advantage(s) and disadvantage(s) of such a policy?

3. In your opinion, will similar training initiative be successful in the service sector? Explain in the context of a few service industries that you are familiar with.

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In your opinion, what is the distinctive competence of HelpAge India? The distinctive competence of HelpAge India are

In your opinion, what is the distinctive competence of HelpAge India? The distinctive competence of HelpAge India are

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Business Strategy Management

CASE – 1    HELPAGE INDIA

The developments in medical sciences—the lowering of mortality rates and the increase in life expectancy—have ironically led to a situation where there are increasingly, a larger number of aged people in the society. The situation in most countries of the world is that the number of ageing people is increasing. India too, like other developing countries, experiences a rapid ageing of the population, with an estimated 80 million aged people. Almost eight out of ten of these aged people live in rural areas.

The challenges that the elderly people in the society face are many. For instance, a report in the Indian context indicates the following challenges:

• 90% of senior citizens receive no social security or medical cared.

• 73% of senior citizens are illiterate and can only earn a livelihood through physical labour, which is possible only if they are healthy in their old age.

• 80% of senior citizens live in rural areas with inadequate or inaccessible medical facilities; many are unable to access the medical facilities because of reduced mobility in the old age.

• 55% of women over the age of 60 are widows with no means of support.

The elderly people, or senior citizens, are the fastest growing segment of the Indian society. By 2025, the population of the elderly is expected to reach 177 million.

Unlike many developed countries, India does not have an effective security net for the elderly people. There have been sporadic attempts by governments at the central and state levels to pay old-age pensions, but like most government schemes, there is a lot of leakage of funds and inefficiency. There is also a lack of post-retirement avenues for re-employment.

Socio-economic developments such as urbanisation, modernisation, and globalisation have impacted the economic structure and led to an erosion of societal values and the weakening of social institutions such as the joint family. The changing modes of society have created a chasm between generations. The intergenerational differences have created a situation where the younger people are involved in education, career building and establishing themselves in life, ending up ignoring the needs of the elderly among them. The older generation is caught between a society which cares little for them and the absence of social security, leading them to a situation where they are left to fend for themselves. It is in this context that institutions such as HelpAge India play a positive role in society.

HelpAge India, established in 1978, is a secular, not-for-profit, non-governmental organisation, registered under the Societies Registration Act of 1860. Its mission is stated as: ‘to work for the cause and care of the disadvantaged older persons and to improve the quality of life’. The three core values that guide HelpAge India’s work are rights, relief and resources. HelpAge India is one of the founder-members of HelpAge International, a body of 51 nations representing the cause of the elderly at the United Nations. It is also a member of the International Federation on Ageing.

The organisation of HelpAge India consists of a head office at New Delhi, with four regional and thirty-three area offices situated all over India. The governing body of the organisation consists of ten distinguished people from different walks of life. Besides the governing body, there are three committees: the operations committee, the business development committee, and the audit committee. The CEO, Mr Mathew Cherian oversees the planning and implementation of policies and programmes, with the support of five directors. The regional directors are responsible for their own regions. The program division at the head office chooses the partner agencies to provide the services to the elderly people.

HelpAge India raises resources to perform three types of functions:

• Advocacy about policies for the elderly persons with the national and local governments

• Creating awareness in society about the concerns of the aged and promote better understanding of ageing issues

• Help the elderly persons become aware of their own rights so that they get their due and are able to play an active role in society

The major programmes undertaken by HelpAge India include mobile medicare units, ophthalmic care for performing cataract surgeries, Adopt-a-Gran, support to old-age homes, day care centres, income generation and disaster relief.

The business model of HelpAge India is based on revenue generation through grants and donations from International and national sources. Nearly half of the donations come from International donors. About a fifth of the donors are individuals. The sources of contributions come from fund-raising activities that include direct mail, school fund-raising, corporate fund-raising, sale of greeting cards, acting as corporate agent for insurance, organising events and establishing a shop-for-a-cause that sells gifts made by disadvantage people.

A review on the activities of HelpAge India enumerates its strong points as below:

• Wide Reach and Impact HelpAge India has been able to impact the lives of a large number of elderly people and their families by adopting a holistic approach that provides immediate relief as well as long-term sustainable improvement.

• Effective Partnerships in Development HelpAge India has evolved as a development support agency through creating partner agencies, that is funded to implement the projects.

• High Degree of Charitable Commitment Typically non-profit organisations spend a lot of on overhead and administrative costs. But HelpAge India is able to put nearly eighty-five per cent of the funds towards actual project implementation.

• Focus on Efficiency and Transparency The partner agencies are chosen carefully and monitored thoroughly. This results in increased efficiency and low overheads. Project implementation through partnerships increases efficiency and cuts down on overhead costs.

• Quality of Management The management quality of HelpAge India is good and there are a lot of committed people. new employees are also trained to be sensitive to the mission of the organisation.

With a wide spread of activities and being a non-governmental organisation have limited funding, HelpAge India has adopted modern means of information technology and networking. Most of the HelpAge executives work in the field and have no direct access to the office network. They have to use e-mail in order to maintain contact with their regional or area offices. They use cyber-cafés or handheld devices for sending and receiving e-mails. HelpAge has installed a secure connection at an initial cost of Rs. 4 lakh and annual upgradation cost of Rs. 75,000 to access e-mail from anywhere, with a high level of security and protection of data and contents.

The nature of non-profit organisations demands certain requirements. Among these, transparency of operations and funds management is a major one. There are many NGOs that are accused or suspected of misappropriating funds for personal benefit. HelpAge India is conscious of this fact and gives high priority to information disclosure. The audited financial statements and the annual report are available on its website. The financial statements give a detailed account of the expenditure on individual projects. The expenses on travel and salaries of its employees and CEO are also mentioned. The individual donors are provided information regarding the use of the funds donated by them.

 The functional approach at HelpAge India consists of developing projects based on the assessment of the needs of its target community rather than on implementing them directly. The implementation takes place through the partner agencies. Rather than outright grants, it supports income generation projects for the elderly people. The success of implementation critically depends on the identification and appointment of partner agencies. The officers of HelpAge India physically inspect the proposed agencies and check on their management to ensure that they are not family-run-set-ups established for personal gains. HelpAge India works presently, for instance, about 150 charitable eye hospitals that act as partner agencies for the ophthalmic care programme.

HelpAge India with its slogan of ‘fighting isolation, poverty and neglect’ moves on its mission of providing ‘equal rights, dignity for elders’. It foresees its future activities in the area of rights based advocacy for a better life for the elderly people by bringing them into the mainstream of society rather than being marginalised to the fringes.

Questions:

1. In your opinion, what is the distinctive competence of HelpAge India? The distinctive competence of HelpAge India are:

2. Prepare a strategic advantage profile for HelpAge India.

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In your judgment, who was morally responsible for Maryann Rockwood’s accidental needlestick Maryann Rockwood The clinic that employed her The government agencies that merely issued guidelines

In your judgment, who was morally responsible for Maryann Rockwood’s accidental needlestick Maryann Rockwood The clinic that employed her The government agencies that merely issued guidelines

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Business Ethics

Case – 4 Becton Dickinson and Needle Sticks

During the 1990s, the AIDS epidemic posed peculiarly acute dilemmas for health workers. After routinely removing an intravenous system, drawing blood, or delivering an injection to an AIDS patient, nurses could easily stick themselves with the needle they were using. “Rarely a day goes by in any large hospital where a needle stick incident is not reported. “ In fact, needlestick injuries accounted for about 80 percent of reported occupational exposure to the AIDS virus among health care workers.² It was conservatively estimated in 1991 that about 64 health care workers were infected with the AIDS virus each year as a result of needlestick injuries.³

AIDS was not the only risk posed by needlestick injuries. Hepatitis C, and other lethal diseases were also being contracted through accidental needlesticks. In 1990, the Center for Disease Control (CDC) estimated that at least 12,000 health care workers were annually exposed to blood contaminated with the hepatitis B virus, and of these 250 died as a consequence.⁴ Because the hepatitis C virus had been identified only in 1988, estimates for infection rates of health care workers were still guesswork but were estimated by some observers to be around 9,600 per year. In addition to AIDS hepatitis B, and hepatitis C, needlestick injuries can also transmit numerous viral, bacterial, fungal, and parasitic infection, as well as toxic drugs or other agents that are delivered through a syringe and needle. The cost of all such injuries was estimated at $400 million to $1 billion a year.⁵

Several agencies stepped in to set guidelines for nurses, including the Occupational Safety and Health Administration (OSHA). On December 6, 1991, OSHA required hospitals and other employers of health workers to (a) make sharps containers (safe needle containers) available to workers, (b) prohibit the practice of recapping needle by holding the cap in one hand inserting the needle with the other, and (c) provide information and training on needlestick prevention and training on needlestick prevention to employees.⁶    

        The usefulness of these guidelines was disputed.⁷ Nurses worked in high-stress emergency situations requiring quick action, and they were often pressed for time both because of the large number of patients they cared for and the highly variable needs and demands of these patients. In such workplace environments, it was difficult to adhere to the guidelines recommended by the agencies. For example, a high-risk source of needlesticks is the technique of replacing the cap on a needle (after it has been used) by holding the cap in one hand and inserting the needle into the cap with the other hand. OSHA guidelines warned against this tow-handed technique of recapping and recommended instead that the cap be placed on a surface and the nurse use a one-handed “spearing” technique to replace the cap. However, nurses were often pressed for time and, knowing that carrying an exposed contaminated needle is extremely dangerous, yet seeing no ready surface on which to place the needle cap, they would recap the needle using the two-handed technique.

        Several analysts suggested that the nurse’s work environment made it unlikely that needlesticks would be prevented through mere guidelines. Dr. Janine Jaegger, an expert on needlestick injuries, argued that “trying to teach health care workers to use a hazardous device safely is the equivalent of trying to teach someone how to drive a defective automobile safely…. Until now the focus has been on the health care worker, with finger wagging at mistakes, rather than focusing on the hazardous product design…. We need a whole new array of devices in which safety is an integral part of the design.”⁸ The Department of Labor and Department of Health and Human Services in a joint advisory agreed that “engineering controls should be used as the primary method to reduce worker exposure to harmful substances.”⁹

        The risk of contracting life-threatening diseases by the use of needles and syringes in health care setting had been well documented since the early 1980s. articles in medical journals in 1980 and 1981, for example, reported on the “problem” of “needle stick and puncture wounds” among health care workers.¹⁰ Several articles in 1983 reported on the growing risk of injuries hospital workers were sustaining from needles and sharp objects.11 Articles in 1984 and 1985 were sounding higher-pitched alarms on the growing   number of hepatitis Band AIDS cases resulting from needlesticks.

          About 70 percent of all the needles and syringes used by U.S. health care workers were manufactured by Becton Dickinson. Despite the emerging crisis, Becton Dickinson decided not to change the design of its needles and syringes during the early 1980s. To offer a new design would not only   require major engineering, retooling, and marketing investments but would mean offering a new product that would compete with its flagship product, the standard syringe. According to Robert Stathopulos, who was an engineer at Becton Dickinson from 1972 to 1986, the company wanted “to minimize the capital outlay” on any new device.¹² During most of the 1980s, therefore, Becton Dickinson opted to do no more than include in each box of needles syringes an insert warning of the danger of needlesticks and of the dangers of two-handed recapping.

       On December 23, 1986, the U.S. Patent office issued patent number 4,631,057 to Norma Sampson, a nurse, and Charles B. Mitchell, an engineer, for a syringe with a tube surrounding the body of the syringe  that could be pulled down to cover and protect the needle on the syringe. It was Sampson and Mitchell’s assessment that their invention was the most effective, easily usable, and easily manufactured device capable of protecting users from needlesticks, particularly in “emergency periods or other time of high stress”¹³ Unlike other syringe designs, theirs was shaped and sized like a standard syringe so nurses already familiar with standard syringe designs would have little difficulty adapting to it.

       The year after Sampson and Mitchell patented their syringe, Becton Dickinson purchased from them an exclusive license to manufacture it. A few months later, Becton Dickinson began filed tests of earl models of the syringe using a 3-cc model. Nurses and hospital personnel were enthusiastic when show the product. However they warned that if the company priced the product too high, hospital, with pressures on their budgets rising, could not buy the safety. With concerns about AIDS rising, the company decided to market the product.

      In 1988, with the filed test completed, Becton Dickinson had to decide which syringe would be market with the protective sleeves. Sleeves could be put on all of the major syringe sizes, including 1-cc, 3-cc, 5-cc, and 10-cc syringes. However, the company decided to market only a 3-cc version of the protective sleeve. The 3-cc syringes accounted for about half of all syringes used, although the larger size-5-cc and 10-cc syringes-were preferred by nurses when drawing blood.

        This 3-cc syringe was marketed in 1988 under the trademarked name Safety-Lok Syringe and sold to hospitals and doctors’ offices for between 50 and 75 cent, a price that Becton Dickinson characterized as a “premium” price. By 1991, the company had dropped the price to 26 cents a unit. At the time, a regular syringe without any protective device was priced at 8 cents a unit and cost 4 cents to make. Information about the cost of manufacturing the new safety syringe was proprietary, but an educated estimate would put the costs of manufacturing each Safety-Lok syringe in 1991 at 13 to 20 cents. ¹⁴                  

         The difference between the price of a standard syringe and the “premium” price of the safety syringe was an obstacle for hospital buyers. To switch to the new safety syringe would increase the hospital’s costs for 3-cc syringes by a factor of 3to 7. An equally important impediment to adoption was the fact that the syringe was available in only one 3-cc size, and so, as one study suggested, it had “limited applications.”¹⁵ Hospitals are reluctant to adopt, and adapt to, a product that is not available for the whole range of applications the hospital must confront. In particular, hospitals often needed the larger 5-cc and 10-cc sizes to draw blood, and Becton Dickinson had not made these available with a sleeve.    

          In 1992, a nurse, Maryann Rockwood (her name is disguised to protect her privacy), was working in a San Diego, California, clinic that served AIDS patients. That day she used a Becton Dickinson standard 5-cc syringe and needle to draw blood from a patient known to be infected with AIDS. After drawing the blood, she transferred the AIDS-contaminated blood to a sterile test tube called a Vacutainer tub by sticking the through the rubber stopper of the test tube, which she was holding with her other hand. She accidently pricked her finger with the contaminated needle. A short time later, she was diagnosed as HIV positive.   

           Maryann Rockwood sued Becton Dickinson, alleging that, because it alone had an exclusive right to Sampson and Mitchell’s patented design, the company had a duty to provide the safety syringe in all size and that by withholding other size from the market it had contributed to her injury. Another contributing factor, she claimed, was the premium price Becton Dickinson had put on its product, which prevented employers like hers from purchasing even those size that Becton Dickinson did make. Becton Dickinson quietly settled this and several other, similar cases out of court for undisclosed sums.

           By 1992, OSHA had finally required that hospitals and clinics give their workers free hepatitis B vaccines and provide safe needle disposal boxes, protective clothing, gloves, and masks. The Food and Drug Administration (FDA) also was considering requiring that employers phase in the use of safety needles to prevent needlesticks, such as the new self-sheathing syringes that Becton Dickinson was now providing. If the FDA or OSHA required safety syringes and needles, however, this would hurt the U.S. market for Becton Dickinson’s standard syringes and needles, forcing in to invest heavily in new manufacturing equipment and a new technology. Becton Dickinson, therefore, sent its marketing director, Gary Cohen, and two other top executives to Washington, D.C., to convey privately to government officials that the company strongly opposed a safety needle requirement and that the matter should be left to “the market.” The FDA subsequently decided not to require hospitals to buy safety needles.¹⁶

           The following year, a major competitor of Becton Dickinson announced that it was planning to market a safety syringe based on a new patent that was remarkably like Becton Dickinson’s. Unlike Becton Dickinson, however, the competitor indicated that it would market its safety device in all sizes and that it would be priced well below what Becton Dickinson had been charging. Shortly after the announcement, Becton Dickinson declared that it, too, had decided to provide its Safety-Lok syringe in the full range of common syringe sizes. Becton Dickinson now proclaimed itself the “leader” in the safety syringe market.

           However, in 1994, the most trusted evaluator of medical devices, a nonprofit group named ECIR, issued a report stating that after testing it had determined that although Becton Dickinson’s safety-Lok syringe was safe that Becton Dickinson’s own standard syringe, nevertheless the safety-Lok “offers poor needlesticks protection.” The following year this low evaluation of the safety –Lok syringe was reinforced by the U.S. veteran’s Administration, which ranked the Safety – Lok Syringe below the safety products of other manufacturers.

             The technology for safety needles took a giant step forward in 1998 when Retractable Technologies,                

Inc., unveiled a new safety syringe that rendered needlesticks a virtual impossibility. The new safety, invented by Thomas Shaw, a passionate engineer and founder of Retractable Technologies, featured a syringe with a needle attached to an internal spring that automatically pulled the needle into the barrel of the syringe after it was used. When the plunger of the syringe was pushed all the way in, the needle snapped back into the syringe faster then the eye could see. Called the vanishpoint syringe, the new safety syringe required only one hand to operate and was acclaimed by nursing groups and doctors. Unfortunately, it was difficult for Retractable to sell its new automatic syringe because of a new phenomenon that hand emerged in the medical industry.   

         During the 1990s, hospitals and clinics had attempted to cut costs by reorganizing themselves around a few large distributors called Group Purchasing Organizations or GPOs. A GPO is an agent that negotiates prices for medical supplies on behalf of its member hospitals. Hospitals became members of the GPO by agreeing to buy 85 percent to 95 percent of their medical supplies from the manufacturers designated by the GPO, and their pooled buying power then enabled the GPO to negotiate lower prices for them. The two largest GPOs were Premier, a GPO with 1,700 member hospitals, and Novation, a GPO with 650 member hospitals. GPOs were accused, however, of being prey to “conflicts of interest” because they were paid not by the hospitals for whom they worked, but by the manufacturers with whom they negotiated prices (the GPO received from each manufacturer a negotiated percentage of the total purchases its member companies made from that manufacturer). Critics claimed that manufacturers of medical products in effect were paying off GPOs to get access to the GPO member hospitals. In fact, critics alleged, GPOs such as Premier and Novation no longer tried to bring their member hospitals the best medical products nor the lowest-priced products. Instead, critics alleged, GPOs chose manufacturers for their members based on how much a manufacturer was willing to pay the GPO. The more money (the higher percentage of sales) a manufacturer gave the GPO, the more willing the GPO was to put that manufacturer on the list of manufacturers from which its member hospitals had to buy their medical supplies. ¹⁷

            When Retractable tried to sell its new syringe, which was recognized as the best safety syringe on the market and as the only safety syringe capable of completely eliminating all needlesticks in a nursing environment, it found itself blocked from doing so. In 1996, Becton Dickinson had gotten Premier GPO to sign an exclusive, 7 ½-year, $1.8 billion deal that required Premier’s member hospitals to buy at least 90 percent of their syringes and needles from Becton Dickinson. Around the same time, Becton Dickinson had signed a similar deal with Novation that required its member hospitals to buy at least 95 percent of their syringes and needles from Becton Dickinson. Because hospitals were now locked into buying their syringes and needles from Becton Dickinson, or suffer substantial financial penalties, they turned away Retractable’s salespeople, even when their own nursing recommended Retractable’s safety product better as and more cost-effective than Becton Dickinson’s.

             Although Retractable’s safety syringe was almost double the cost of Becton Dickinson’s, hospitals that adopted Retractable’s syringe would save money over the long run because they would not have to pay any of the substantial costs associated with having their workers suffer frequent needlesticks and needlestick infections. The Center for Disease Control (CDC) estimated that each needlestick in which the worker was not infected by any disease cost a hospital as much as $2,000 for testing, treatment, counseling, medical costs, and lost wages, plus unmeasurable emotional trauma, anxiety, and abstention from sexual intercourse for up to a year. Those needlesticks in which the victim was infected by HIV, hepatitis B or C, or some other, potentially lethal infection, cost a hospital between $500,000 to more than $1 million and cost the victim anxiety, sickness from drug therapy, and, potentially, life itself. Retractable’s syringe completely eliminated all of these costs. Because all of the other syringes then on the market, including Becton Dickinson’s Safety-Lok, still allowed some needlesticks to occur, they could not completely eliminate all the costs associated with needlesticks and so were not as cost-effective. (A CDC study found that Becton Dickinson’s Safety-Lok, when tested by hospital health workers in three cities from 1993 to 1995, had cut needle-stick injuries only from 4 per 100,000 injections down to 3.1 per 100,000 injections, a reduction of only 23 percent, the worst performance of all the safety devices tested.) An econometric study commissioned by Retractable proved that its safety syringe was the most cost effective syringe on the market.                

          In October 1999, ECRI, the nation’s most respected laboratory for testing medical products, rated Becton Dickinson’s Safety-Lok syringe “unacceptable” as a safety syringe, saying it might actually cause an increase in needlesticks because it required two hands to use it and one hand might accidentally touch the needle. It simultaneously gave Retractable’s Vanishpoint syringe its highest rating as a safety syringe, the only safety syringe to achieve this highest level. Becton Dickinson objected strenuously to the low rating of its own syringe, and in 2001, the testing lab raised the rating for the safety-Lok a notch to “not recommended.” Retractable’s Vanishpoint syringe, however, continued to receive the highest rating. In spite of being recognized as the best and most cost-effective technology for protecting health care workers from being infacted through needlesticks, Retractable still found itself blocked out of the market by the long-term deals that Becton Dickinson had negotiated with the major GPOs.¹⁸

       In1999, California became the first state to require its hospitals to provide safety syringes to its workers. Then, in November 2000, the Needlestick safety and Prevention Act was signed into low. The act required the use of safety syringes in hospitals and doctor’s offices. In 2001, OSHA incorporated the provisions of the Needlestick Safety and Prevention Act, finally requiring hospitals and employers to use safety syringes and significantly expanding the market for safety syringes, a development that is expected to bring lower prices. None of this legislation required a specific type or brand of syringe and Becton Dickinson’s safety devices were stocked by most GPO member hospitals. 

         Continuing to find itself locked out of the market by Becton Dickinson’s contracts with Premier and Novation, Retractable sued Premier, Novation and Becton Dickinson in federal court alleging that they violated antitrust laws and harmed consumers and numerous health care workers by using the GPO system to monopolize the safety needle market.¹⁹ In 2003, Premier and Novation settled with Retractable out of court, agreeing to henceforth allow its member hospitals to purchase Retractable’s safety syringes when they wanted. In 2004, Becton Dickinson also settled out of court, agreeing to pay Retractable $ 100 million in compensation for the damage Becton Dickinson inflicted on Retractable. During the 6 years that Becton Dickinson’s contracts prevented Retractable and other manufacturers from selling their safety needles to hospitals and clinics, thousands of health workers continued to be infected by needlesticks each year.

     Questions    

1. In your judgment, did Becton Dickinson have an obligation to provide the safety syringe in all its sizes in 1991? Explain your position, using the materials from this chapter and the principles of utilitarianism, rights, justice, and caring.

2. Should manufacturers be held liable for failing to market all the products for which they hold exclusive patents when someone’s injury would have been avoided if they had marketed those products? Explain your answer.

3. In your judgment, who was morally responsible for Maryann Rockwood’s accidental needlestick: Maryann Rockwood? The clinic that employed her? The government agencies that merely issued guidelines? Becton Dickinson?

4. Evaluate the ethics of Becton Dickinson’s use of the GPO system in the late 1990s. Are the GPO’s monopolies? Are they ethical? Explain.

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In what ways is the Wi-Fi technology changing the life of Dartmouth students? Relate your answer to the concept of the digital society.

In what ways is the Wi-Fi technology changing the life of Dartmouth students? Relate your answer to the concept of the digital society.

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Information Technology Management

Attempt Any Four Case Study

CASE – 1   Dartmouth College Goes Wireless

Dartmouth College, one of the oldest in the United States (founded in 1769), was one of the first to embrace the wireless revolution. Operating and maintaining a campuswide information system with wires is difficult, since there are 161 buildings with more than 1,000 rooms on campus. In 2000, the college introduced a campuswide wireless network that includes more than 500 Wi-Fi (wireless fidelity) systems. By the end of 2002, the entire campus became a fully wireless, always-connected community—a microcosm that provides a peek at what neighborhood and organizational life may look like for the general population in just a few years.

To transform a wired campus to a wireless one requires lots of money. A computer science professor who initiated the idea at Dartmouth in 1999 decided to solicit the help of alumni working at Cisco Systems. These alumni arranged for a donation of the initial system, and Cisco then provided more equipment at a discount. (Cisco and other companies now make similar donations to many colleges and universities, writing off the difference between the retail and the discount prices for an income tax benefit.)

As a pioneer in campuswide wireless, Dartmouth has made many innovative usages of the system, some of which are the following:

• Students are continuously developing new applications for the Wi-Fi. For example, one student has applied for a patent on a personal-security device that pinpoints the location of campus emergency services to one’s mobile device.

• Students no longer have to remember campus phone numbers, as their mobile devices have all the numbers and can be accessed anywhere on campus.

• Students primarily use laptop computers in the network. However, an increasing number of Internet-enabled PDAs and cell phones are used as well. The use of regular cell phones is on the decline on the campus.

• An extensive messaging system is used by the students, who send SMSs (Short Message Services) to each other. Messages reach the recipients in a split second, any time, anywhere, as long as they are sent and received within the network’s coverage area.

• Usage of the Wi-Fi system is not confined just to messages. Students can submit their classwork by using the network, as well as by watching streaming video and listening to Internet radio.

• An analysis of wireless traffic on campus showed how the new network is changing and shaping campus behaviour patterns. For example, students log on in short burst, about 16 minutes at a time, probably checking their messages. They tend to plant themselves in a few favorite spots (dorms, TV room, student center, and on a shaded bench on the green) where they use their computers, and they rarely connect beyond those places.

• Some students invented special complex wireless games that they play online.

• One student has written a code that calculates how far away a networked PDA user is from his or her next appointment, and then automatically adjusts the PDA’s reminder alarm schedule accordingly.

• Professors are using wireless-based teaching methods. For example, students can evaluate material presented in class and can vote online on a multiple-choice questionnaire relating to the presented material. Tabulated results are shown in seconds, promoting discussions. According to faculty, the system “makes students want to give answer,” thus significantly increasing participation.

• Faculty and students developed a special voice-over-IP application for PDAs and iPAQs that uses live two-say voice-over-IP chat

Questions

1. In what ways is the Wi-Fi technology changing the life of Dartmouth students? Relate your answer to the concept of the digital society.

2. Some say that the wireless system will become part of the background of everybody’s life—that the mobile devices are just an afterthought. Explain.

3. Is the system contributing to improved learning, or just adding entertainment that may reduce the time available for studying? Debate your point of view with students who hold a different opinion.

4. What are the major benefits of the wireless system over the previous wireline one? Do you think wireline systems will disappear from campuses one day? (Do some research on the topic.)

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In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector.

In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector.

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Human Resources Management

CASE V  – HE WHO RIDES A TIGER

In the Year of the Youth, the author took up a research project on young industrial workers. It involved comparing young and old workers. Two industries producing the same machines at similar technological level were selected. One belonged to the private sector and the other to the public sector. While the latter was started a decade later than the former, it had achieved greater expansion. Both were located in the same state.

After we obtained necessary permission to conduct our study, we reached the mofussil town where the private sector industry was located. Before we could launch our study, as a matter of principle, we wanted to meet the General Secretary of the workers’ union. The Personnel Department was not willing for this. On our insistence they called the union official. We talked to him for about half an hour but Personnel Department people were all the time hovering around. So we fixed a time in the evening to meet him in the union office in the town. We visited the union office in the evening. The union was having problem regarding wage deduction of some workers who did not show up for overtime. The overtime notice was short and they had not consented either, even then the management was threatening wage deduction for one week. The union could hardly do a thing’ as they in the past had burnt their hands when they had to unilaterally call off the 106 day old strike in which even their Treasurer had committed suicide. They were scared to the extent that they had productivity linked bonus agreement for even 12% bonus. Moreover, a new minuscue union was recently started in the company.

We visited the new union’s office next evening and held a long discussion. They asked for’ our suggestions. The union believed in legal battles more than agitations. After a visit to the industry the author visited the state headquarters of the new union. There every office bearer was surprisingly a lawyer. In the HQ we learnt that after we left, their union took out a procession and held a meeting in the temple. Perhaps this was the result of our discussion. While the older union was a prisoner of its past, the new union was free to write its own history. Workers’ interests were being served perhaps by both.

QUESTIONS:

1. Discuss merits/demerits of the role of strike, agitation and legal approach in union­management relations.

2. What role does mutual trust play in building union-management relations?

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In the NUMMI joint venture, what did Toyota gain? What were the benefits for General Motors

In the NUMMI joint venture, what did Toyota gain? What were the benefits for General Motors

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Principles of Management

Case No.: 6 Quality as the Key Success Factor In Winning the Global Car War

        Massachusetts institute of Technology (MIT) conducted an extensive study of the global car industry that compared operations at General Motors, Toyota, and the joint venture between GM and Toyota, the New United Motor Manufacturing Inc. (NUMMI) plaint in Fremont, California. The result of the study should raise some very disturbing questions about the quality and productivity of American operations, namely:

• Why did GM’s Framingham plant require 31 hours to assemble a car when the Toyota plant only required 16 hours- or roughly half the time?

• Why did the GM plant average 135 defects per car when Toyota had only 45 defects – or about one-third the number?

• Why did GM require almost twice as much assembly space as the Toyota facility?

• Why did GM require to a two-week parts inventory when Toyota only needed a two-hour supply of parts for its assembly line? As one might suspect, the cost of maintaining a large parts inventory inflates product costs.

       Obviously GM did not fare well in the direct comparison to Toyota, but there are also signs of encouragement in the MIT study. Although American auto makers had fallen behind their foreign rivals, they have taken active steps to improve product quality and respond to customer wants. These companies have not been defeated; rather they have been revitalized by the competition.

       GM joined forces with Toyota to create the NUMMI plant in order to improve the quality and efficiency of its manufacturing operations. The old GM plant in Fremont, California, was one of the car maker’s worst performing facilities before the NUMMI operation was initiated. As a result of the joint venture, assembly time has been greatly reduced and quality, measured in terms of total number of defects per car, has equaled the performance of Toyota in Japan. Although assembly space is still relatively high by Japanese standards, NUMMI’s inventories have been reduced from two weeks to just two days. In short, the solution to many of GM’s production problems could be traced to a need of eliminating waste, focusing on value-added process, and enforcing more stringent quality controls.   

    In some ways, the European car industry is even in a less competitive position than U.S. companies. The quality, measured by assembly defects for 100 vehicles, is worse in Europe. European car manufacturers had 97 defects per 100 cars, compared to 82.3 by American firms operating in the United States. Japanese companies operating in North America had only 65 such defects and Japanese firms in Japan had only 60. In productivity, European car firms also did poorly, requiring 36.3 hours to assemble a car compared with 25.1 hours of U.S. companies in North America, 21.2 hours of Japanese car makers in North America and only 16.8 hours of Japanese firms operating in Japan. Clearly, U.S. and especially European firms need much improvement in productivity and quality to be competitive in the global market.

Questions:

1. In the NUMMI joint venture, what did Toyota gain? What were the benefits for General Motors?

2. As a consultant, what strategies would you recommend for European carmakers to improve their competitive position in the global car industry?

Welcome to Case Study Help

We at Case Study offer all types of online academic assistance, be it homework help, coursework help, case study help, Assignment help, Project Reports, Thesis, Research paper writing help.

And for each service, each subject and each topic, we dedicate an expert writer who has knowledge in that specific field of study. Experience impeccable academic writing service like never before.

Our experts understand that the time of the customers is very precious. The professors of universities and colleges are very rigorous about the submission deadlines of projects or assignments. Hence, the key objective of our case study help service is to deliver the assignments to the customers even before the promised submission deadlines.

We keep the quality measures for all papers which mean we will provide best essays. Our editing services are also excellent. Before submitting any essays, we will check whether the papers writer well or not. The high standards of academic writing will exceed your expectations. With our quality service, we have satisfied more number of people across the world and also work with different universities in Australia, UK, USA, Dubai, Oman, etc.

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