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| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
| "The
Contender: Jamie Dimon, The New CEO of J.P. Morgan Chase," pp.
54-66: Stories about Jamie Dimon are traded regularly on Wall Street
for two reasons — there are so many of them and they're so
unbelievable. The brash CEO of J.P. Morgan Chase isn't afraid to
tell it like it is, and that strategy has helped make him the most
watched, most discussed, most loved and most feared banker in the
world today. A one-time protégé of Sandy Weill, Dimon
helped turn an obscure Baltimore loan company called Commercial
Credit into Citigroup, the world's largest financial services company.
After being unexpectedly shoved aside by Weill, he reemerged at
Bank One and sold it in the deal that made him, as of January,
the top man at J.P. Morgan Chase, the third-largest financial corporation
in the U.S. His goal? Expand his company's reach and perfect the
one-stop-shop financial firm model he developed at Citi. He has
his work cut out for him. J.P. Morgan consists of a mishmash of
businesses from multiple mergers that were never fully integrated.
While it ranks at the top in many key categories, the giant bank
is burdened with a lazy culture, underperforming stock, tepid growth,
and mediocre profitability. If anyone can turn it around, however,
investors, industry watchers, and fellow CEOs are betting Dimon — who
has already made important inroads through cost-cutting, upgrading
technology and seeding new growth — is the right man for
the job. In this article, students evaluate J.P. Morgan Chase CEO Jamie Dimon's experience, objectives, and management style. Discussion Questions:
"Best Buy's Giant Gamble," pp. 68-75: It takes a lot of guts to tamper with a successful business model, but Brad Anderson, CEO of consumer electronics retailer Best Buy, believes that not taking risks is far more distressing. He's been with the company since it was a small, Midwestern chain in the early 1970s, and he has seen it through one innovation after another, all of which have helped put Best Buy at the top of its field for the past decade. Now, with a saturated North American market, soaring Wall Street expectations, and competitors like Wal-Mart and Circuit City nipping at his heels, Anderson must gamble again to maintain Best Buy's primo position. So the company is shifting its focus from pushing gadgets to catering to customers. Known internally as customer-centricity, the plan includes significantly ramping up the company's Geek Squad service division and targeting favored shoppers with tailored products and services. "Centrized" stores have been successful in a few large markets, handily paying off the huge investment involved. However, the company has learned that converting to centricity isn't like flipping a switch, and was forced to freeze centricity rollouts for the fourth quarter when third-quarter sales growth at renovated stores was unusually sluggish. Nevertheless, Anderson remains undeterred — centrizing resumed in March, this time with more attention to detail — and convinced that this latest innovation is his best bet to stay among retail's elite. Students analyze how Best Buy is reinventing itself to increase profits and stay No. 1 in an increasingly competitive market. Discussion Questions:
"C-Suite Strategies: The Colvin Interview: The FedEx Edge," pp. 77-84: Being CIO — chief information officer — of any company is an intimidating prospect in today's world, with terrorism, identity theft, the dizzying pace of technology innovation, and of course, rising costs being just a few of your everyday concerns. How much more difficult is it, then, for Rob Carter, CIO of FedEx, who is also responsible for all the computer and communication systems that keep the complex package-delivery service running? He has to connect 39 hubs around the world with 677 airplanes, more than 90,000 vehicles, and more than 200,000 employees delivering six million packages a day in 220 countries. Fortunately, Carter's boss, Fred Smith, founder and CEO of FedEx, appreciates what he is up against, and bestows upon him a $1 billion annual budget. That bounty has allowed FedEx to offer web-based, customer-friendly technology that enables it to stay one step ahead of its primary competitor, UPS. In addition to his other duties, Carter plays a central role in protecting sensitive customer information from computer hackers, and he works with the U.S. Homeland Security Department to help protect the public from potentially dangerous shipments. All in a day's work for Carter, who defines his business as "engineering time," an important element to manage in a small, competitive, and ever-changing world. Students take a closer look at the job of chief information officer through the thoughts and experiences of FedEx CIO Rob Carter. Discussion Questions:
"Man on a Mission," pp. 86-92: It's not often you hear a CEO express goals in humanitarian, not bottom-line, terms, but that's precisely what Bruce Karatz of KB Home has been doing since those earliest media reports of the destruction that was Hurricane Katrina. The successful homebuilder is on a mission to build thousands of new homes in New Orleans not only for profit, but also, in his words, "to impact people's lives." This is a much larger gamble than it may seem to be at first glance. Even before Katrina, Louisiana and Mississippi had been off the radar of national homebuilders because of their poor school systems and sleepy local economies. In the wake of the storm, no one is really certain how many displaced residents are able to return — or even want to. That hasn't stopped Karatz. Spurred by moral obligation, KB has established a major unit in New Orleans, dedicated to rebuilding the Gulf Coast. Reaction is mixed. KB's own board of directors was skeptical when plans were announced last October, but Wall Street has been largely supportive, particularly in light of KB's past earnings. And so KB will build on Karatz's faith that it is on the leading edge of a New Orleans rebuilding explosion and that the ravaged city will finally get to participate in the population boom the rest of the Sunbelt has enjoyed for years. This article reveals how CEO Bruce Karatz of KB Home hopes to rebuild New Orleans in the aftermath of Hurricane Katrina. Discussion Questions:
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