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| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
| "Dell in the Penalty Box," pp. 70-78: Right now, Dell Computer isn't looking like one of America's fastest-growing or most-admired companies, as it once was. In close succession, Dell recalled 4.1 million laptop batteries because of fears they might ignite, announced a shockingly bad quarter — profits down 51% from a year earlier — and disclosed that the SEC has launched an informal investigation of its accounting. In response to these woes, the company's stock, already down 25% for the year, has fallen even further, and some business pundits have called for the firing of Kevin Rollins, Michael Dell's longtime right-hand man and handpicked successor as CEO. While it's clear the company's fortunes have taken a bad turn, Michael Dell insists it's just that — a bad turn — and not the beginning of the end for the computer giant. Moreover, he has a plan to get the company back on the right track. That plan includes tweaking what made Dell so strong in the first place. While just about everyone continues to admire Dell's logistical efficiency, its business model — selling direct to the customer instead of through retailers and resellers — no longer sets it apart as it once did. To avoid being superseded by stylish competitors like Apple and Hewlett-Packard, Dell is shifting its focus away from marketing cost-effective but generic products to connecting with customers by offering more personalized computing solutions. While its efficiency and tenacity will continue to keep Dell in the game, real growth will only come when it finds its heart. Students analyze how Dell Computer is working to restore its former glory in the wake of an exceptionally poor quarter. Discussion Questions:
"The Power of Philanthropy," pp. 82-98: Just when you thought Bill Clinton was down, there he is smiling on the cover of FORTUNE magazine. The seemingly ubiquitous former President didn't let his serious health issues drag him down for long. Fit again and back on the circuit, Clinton has been almost absurdly active running his William J. Clinton Foundation, along with other philanthropic endeavors. At the top of his agenda is his effort to fight AIDS and improve health care in Africa—a mission for which he has been knighted by the government of Lesotho — but that is by no means his only undertaking. Indeed, Clinton has borrowed best practices from the business world to provide rapid aid in an assortment of areas where it is needed most. Some of his charities include initiatives aimed at reversing global warming, supporting economic growth in underserved urban neighborhoods, and stemming the tide of childhood obesity. Of course, this is Bill Clinton, so criticisms abound — he's a publicity hound, he's just doing it to help his wife with her political aspirations, he overpromises and underdelivers, he grabs credit for the work of others, he's searching for redemption. There may be a kernel of truth to all of these, but no one can argue with the fact that he gets results. Clinton may not have oodles of money or the power of the presidency anymore, but as Doug Band, a former aide and current Clinton counselor, remarks, he has the uncanny "ability to motivate people and move mountains." This article reveals how former President Bill Clinton is using his knowledge, talents, and connections to support philanthropic causes. Discussion Questions:
"Tale of Two Factories," pp. 118-126: For many American workers in manufacturing industries, China poses a real threat to both jobs and living standards. After all, the Chinese are hard workers who manage to scrape by on a tenth of U.S. wages, often toiling in less than hospitable working conditions. Who can compete with that? Apparently, Americans can. Take the case of Tenneco, an auto-parts maker based in Lake Forest, Ill., which has operated a manufacturing plant in Shanghai since 1998. While labor accounts for a far smaller percentage of production costs at the company's Shanghai plant than at its Stateside plant in Litchfield, Mich. (1% vs. 12%), in terms of profit, the Litchfield plant wins hands-down, reporting gross operating margins that are a third higher. Productivity has been on the rise in the U.S. for the past decade, and that also is reflected in Litchfield’s numbers — 1.4 million units produced in 2005 by 296 employees compared to just 400,000 units by 225 employees in Shanghai. This is not to suggest that China isn't a genuine economic competitor; it is. But some companies, like Tenneco, are discovering that the value of cheap labor is important but limited. For the time being, workers at Tenneco's Litchfield and Shanghai plants can co-exist peacefully, each reasonably content with their lot, as the impact on the global economy of China's impressive rise continues to play itself out. Students take a closer look at the Chinese threat to American manufacturing by focusing on one company's experience. Discussion Questions:
"The 100 Fastest-Growing Companies: Growing Into Middle Age," pp. 169-177: Cracking FORTUNE's annual list of America’s fastest-growing companies is no small feat. It means a company is serving its customers and taking market share from its competitors. Some companies ride a wave of cyclical growth (i.e., today's energy companies); others get out ahead of a trend or create their own. Regardless of the path to success, it's nearly impossible for any business to sustain the 25%-plus growth that lands them on the list in the first place. That's where an even bigger challenge comes in — staying successful despite market changes, management blunders, and a host of other problems that can (and do) bring down even the most promising companies. Five former fastest-growing companies that have managed to mature gracefully include software designer Adobe Systems (class of '91), teen clothing retailer American Eagle Outfitters (class of '99), pharmaceutical developer Amgen (class of '91), pizza seller Papa John's International (class of '94), and health insurer Wellpoint (class of '03). Whether through organic growth, acquisition, customer research, or even a passing of the management baton, these companies are still relevant and still making strides in their respective industries. The fastest-growers in the class of '06 would do well to take a lesson or two from these titans of staying power. In this article, students evaluate different strategies five companies have employed to remain successful after the bloom of mega-growth is off the rose. Discussion Questions:
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