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| COURSE CONNECTOR |
| ARTICLE SUMMARIES AND QUESTIONS |
"America's Most Admired Companies: The Trouble with Steve" pp. 88-98, 156-160: Few CEOs are as closely identified with their company as Steve Jobs is with Apple, which tops this year's list of America's Most Admired Companies. One of the first true business celebrities, Jobs' early successes, fall from grace, and heroic comeback are the stuff of legend. But is Jobs as much a liability as an asset to Apple? Possibly. There's no debating that Jobs is an artistic wunderkind, whose innovative thinking has vastly influenced computing, entertainment, and even retail over the past three decades. It is also indisputable that Jobs became a far better leader during the 12-year period between his two stints at Apple. Nevertheless, the ways that Jobs manipulates his world pose risks for Apple and its investors. His smug willfulness to play only by his own rules (or whims) makes business partnerships difficult — a tricky prospect for a large public company. His deployment of stock options at Apple and Pixar exposed both companies to backdating scandals. Even the way he handled his brush with mortality, in the form of pancreatic cancer four years ago, is questionable, considering that investors' confidence in Apple is largely a reflection of their faith in Jobs himself. Apple faces some challenges in the down economy. Whether Steve Jobs proves to be the wonder or the worry this time around remains to be seen.
Students take a closer look at Steve Jobs, who has pushed Apple to both astounding heights and the edge of significant risk.
Discussion Questions:- How would you describe Steve Jobs' management style? What are the advantages of working for someone like Jobs? The disadvantages? Would you want to work for Jobs? Why or why not?
- How did Jobs change as a manager between 1985, when he was forced
out of Apple, and 1997, when he returned as "interim CEO?" What steps
did he take to restore luster to the company he co-founded?
- According to Apple, Jobs' involvement in the stock options backdating scandal didn't amount to misconduct because he "was unaware of the accounting implications." Given what you know about Jobs, do you find that statement believable? Explain your answer.
"America's Most Admired Companies: 'The Consumer Is Boss,'" pp. 120-126: When A.G. Lafley was suddenly and unexpectedly named CEO of Procter & Gamble in June 2000, the company was in trouble. Profits were way down and market cap was plunging. Meanwhile, the company was struggling to adjust to changes in the industry, such as increased global competition and the challenges of the Internet. So how did Lafley in less than eight years take P&G from that tough spot to No. 8 on this year's list of America’s Most Admired Companies (and No. 1 in the Household Products — Soap and Cosmetics industry sector)? He paid attention to his bosses — not the company's board or investors, but consumers. While P&G has always been known for its strong emphasis on market research, under Lafley's guidance the company has moved away from conventional behind-the-mirror focus groups to more immersive research techniques, increasing its spending on such research more than fivefold during Lafley's tenure. Through these new programs, P&G employees actually live and work with real-life consumers for a period of time to understand their needs more fully. The findings have proven to be invaluable in helping the company innovate products, especially for emerging but still somewhat unfamiliar global markets, including China, India, Russia, and Mexico.
In this article, students read about how Procter & Gamble and its CEO, A.G. Lafley, learned to rethink market research by making the consumer the boss.
Discussion Questions:
- A.G. Lafley and Ram Charan declare that innovation must be consumer-led but not consumer-decided. How would you translate this statement in practical terms? Do you agree with it? Why or why not?
- How did Procter & Gamble previously conduct its market research?
Why wasn't it working? Give an example from the article of a P&G product
that failed due to misinterpreted market research.
- Why has Downy Single Rinse been a particular success in Mexico? What vital consumer information was culled through P&G's "Living It" research that may have been missed through more traditional market research practices?
"America's Most Admired Companies: The Man Who Must Keep Goldman Growing," pp. 130-140: There are a lot of cautionary adages about being at the top. It's lonely there, says one. It's easier to get there than to stay there, says another. Lloyd Blankfein is acutely aware of all of them. As CEO of Goldman Sachs (No. 10 on the list of America's Most Admired Companies, and No. 1 in its sector, Financial Industry — Securities), Blankfein stands at the summit of the financial world, and just led his firm to its best year ever — an especially impressive feat in light of the subprime mortgage crisis that brought down much of the financial industry. But all that power and success just makes Blankfein worry, as he waits for the other shoe to drop. And drop it may. Analysts are predicting that the first quarter will bring an end to Goldman's string of stellar results. In and of itself, that shouldn't be a big deal, but Blankfein also has to strike a delicate balance between competing strains of Goldman's culture (aggression and caution, entrepreneurship and teamwork, the firm's interests and its clients' interests) while under the microscopic scrutiny of the business media and rival firms. At Goldman, performance is paramount, and Blankfein doesn't want to be the chief who breaks that tradition.
Students examine the challenges Lloyd Blankfein faces as CEO of Wall Street's most successful investment bank, Goldman Sachs.
Discussion Questions:
- How is the Goldman Sachs of today different than the firm of yesteryear? To what bank does Lloyd Blankfein compare it? Describe its range of operations.
- Goldman has been accused of putting its own profits first, to the detriment of clients. In what ways is this a valid criticism? On the whole, do you agree with it? Why or why not?
- Do you think it is a wise move for Goldman to stake so much of its future growth on emerging global economies? Explain your answer.
"Why McCain Has the Best Health-Care Plan," pp. 143-146: Democrats and Republicans may not agree on much, but in this election season they both recognize the need for serious health-care reform. Currently, 47 million Americans are uninsured and costs are out of control, leading the U.S. Department of Health and Human Services to warn that if things continue as they are, health spending will almost double by 2017 to $4.3 trillion, or one-fifth of GDP, vs. 16% today. How to deal most effectively with this colossal problem is where the two parties predictably diverge. Both parties have a plan, and each has flaws. Republicans, under the presumptive nominee, Sen. John McCain, want to eliminate the entire employer-provided health benefits system and allow employees to shop for insurance policies that suit their own needs. The problem with McCain's plan is that it ventures so far toward laissez-faire liberty that it risks leaving the poor and sick behind. Democrats want to introduce a "pay or play" option for employers that would require them to provide benefits for employees or pay a mandatory payroll tax to support a government-administered health system. Aside from increasing the taxpayer burden, this plan would treat health care as a costless entitlement, and make it impossible for Americans to buy insurance tailored to their needs. Neither plan is perfect, but on economic merits, McCain's plan wins.
This article compares the plans being put forth by Democrats and Republicans to reform the broken American health-care system.
Discussion Questions:
- According to the article, what negative effect has the tax exclusion for employer-provided health care had on Americans? In your opinion, would John McCain's plan help mitigate that effect? How?
- What is "community rating?" How do the Republican and Democratic
plans address it? Which plan do you consider more fair to a majority
of Americans?
- What is author Shawn Tully's biggest concern about the Democrats' plan? Despite that, why does Tully believe it is probably more politically viable?
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