|
|
||
 |
|
|
|
||
|
|
||
|
|
|
|
||
| Note: The FORTUNE Preview Guide is created in HTML. If you are unable to properly view the cover image, Course Connector, or hyperlinks, please view the online version at http://www.fortuneeducation.com/preview_guides/index.html. |
| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
"Can BP Bounce Back?" pp. 90-99: How could a company that has gone to great lengths to meticulously craft a green image for itself suffer within one year both the worst oil spill in the history of Alaska's North Slope and the worst U.S. refinery accident in more than a decade? Ask John Browne, CEO of BP. The energy visionary who publicly broke with his industry to acknowledge a possible link between emissions and global warming has quickly become a scapegoat for Big Oil. It seems the company's cost discipline — a trait long admired by Wall Street — may be at least partly to blame. Current and former BP employees, union reps, and other whistleblowers report that, until very recently, BP's internal culture was characterized by intense pressure to keep costs down. Budgeting frequently took precedence over routine maintenance and even safety. Pipes became corroded, middle management ignored warnings from its own quality inspectors, and the company ended up losing billions of dollars when, in the words of a United Steelworkers leader, "the chickens came home to roost" in the form of the Texas City refinery explosion and Prudhoe Bay pipeline leak. Browne, who plans to retire in two years, has only a short time to mend BP's image and preserve his legacy. He has begun by intensifying safety efforts at BP facilities around the world and appointing additional engineers to address these areas. It's an encouraging move, but as Browne's own top brass admit, it's only the first step on a long road to recovery. Students take a closer look at the problems that have plagued BP and the company's efforts to rebound from them. Discussion Questions:
"The [Second] Worst Deal Ever," pp. 102-119: Ever since Boston Scientific acquired the medical-device maker Guidant for $27 billion in April 2006, following a fierce bidding war, it’s been all downhill for the company. In June, Boston issued recalls or warnings on almost 50,000 Guidant cardiac devices, and in September, Boston issued a profit warning that sent shares plunging 9.2% in a single day. Since announcing its bid in December 2005, Boston's stock has dropped a whopping 46%, wiping out $18 billion in shareholder value. To top it all off, Guidant's operations are producing zero profit for the company. In light of all this, it would seem that the loser in the bidding war — Johnson & Johnson — is actually the winner, but there's more to it than that. When J&J initially bid for Guidant, Federal Trade Commission rules required it to license Guidant's Rapid Exchange stent technology to one rival. It struck up a deal with Abbott Labs, a drugmaker that seemed the least threatening of the potential candidates. Unfortunately for J&J, its lawyers failed to include language in the company's agreement to block Abbott from helping Boston. When it was clear that things were going Boston's way, Abbott shrewdly switched teams, and wound up with not only Rapid Exchange but also additional Guidant technologies and operations. If Abbott can successfully establish that it did not violate the terms of the original deal when J&J takes the company, along with Boston and Guidant, to court, it may prove to be the only winner in one of the worst M&A deals ever. This article reveals who the big winners and the even bigger losers were in the complicated battle for Guidant. Discussion Questions:
"The New Face of Labor," pp. 122-132: If you think the heydays of organized labor are long since passed, then you haven't met Andy Stern. The colorful leader of the 1.8 million-member strong Service Employees International Union (SEIU) is almost single-handedly reinvigorating a national labor movement. Notably, Stern and the SEIU's manpower and money were behind California's recent decision to raise its minimum wage, the grassroots campaigns that have put Wal-Mart on the defensive over its pay and health benefits, and the huge pro-immigration rallies held in several large cities during the summer. But lest you think Stern is a standard, dyed-in-the-wool unionist, think again. He's managed to outrage more than one fellow union head by insisting on change, and he's even taken tips from fiscal conservatives like Stephen Moore and (gasp!) Newt Gingrich. Why? He’s responding to the economic revolution of the 21st century, in which American workers must compete globally to survive. To do that, Stern supports such initiatives as working with business to solve the health care crisis and organizing with international unions to increase worker protections. He showed how serious he is last year when he failed to persuade the AFL-CIO to adopt his policies and walked out on the powerful organization. He then formed Change to Win, the country's first new labor federation in 50 years, to further his agenda. Joined by the Teamsters and five other unions, Stern and Change to Win are poised to make organized labor relevant again, perhaps for more than just its due-paying membership. Students analyze how Andy Stern is revolutionizing organized labor so that it remains a vital force in the global economy. Discussion Questions:
"The Outsider," pp. 166-176: Patricia Woertz must be a pretty special manager. After all, she is the first outsider to take charge of the venerable food processor Archer Daniels Midland in 104 years — and a woman to boot. Her hiring as CEO in May made ADM the biggest company run by a woman (#56 on the FORTUNE 500), and catapulted Woertz into the fourth position on FORTUNE's annual listing of the 50 Most Powerful Women in Business. The Chevron alum has already won over ADM executives who were initially skeptical as to whether she possessed the qualifications to run the agribusiness giant. Of course, it helps that she comes to ADM at a time when the food market is strong and ethanol sales are booming, driving alternative-energy-crazed investors to bid up ADM's stock. Indeed, ethanol is all the rage right now, and ADM produces 1 billion gallons of it a year, accounting for an estimated 30% of its $2.1 billion in operating profit in fiscal 2006. But Woertz is wisely keeping ADM's product slate diverse. Realizing that a pure ethanol company would founder if the ethanol market goes bad, Woertz is maintaining the company's interests in food and feed. She's also putting R&D dollars into other alternative fuels. While the true test of ADM's new CEO's competence may only come with crisis — a continued drop in the price of oil, a sharp rise in corn or soy, a margin collapse in ethanol — for now, ADM appears to be in good hands. In this article, students examine Patricia Woertz's new position as CEO at Archer Daniels Midland and how it might affect the company's fortunes. Discussion Questions:
|
|
|
WHAT DO YOU THINK? CHANGE YOUR SUBSCRIPTION
OPTIONS CONTACT US |
|
© 2006, FORTUNE Education Program Read our Privacy Policy www.fortuneeducation.com |
