Carnegie welcomes changes and adapts to change when others cant or wont. Some of his first jobs that he was good at…was able to do morse code by sound. Carnegie started in the railroad businees, the big business of the cutting edge industry. The telegraph was useful for trains to know when the train is coming through the line in an area. The telegraph was useful in spacing the trains out. To prevent deaths and damaging property. Deals with speed and deals with safety. Connection of steel to the railroad industry in the railroad tracks.

On the ethical side, Tedlow views Carnegie as both good and bad. Gives money to build libraries on college campuses. Said you should be disgraced if you die with money in the bank, though he himself died with $40 million in the bank. Signed a telegraph message with his bosses name, an unethical lie but turned out fine and his boss Scott approved of it. Being a leader in a difficult situation and making a good decision. He had told the truth it could have potentially changed his future.

Tedlow criticized him for his attitude toward labor and employees. In the 19th centuries there are pitch battles and violence over working conditions in steel mills. They work long hours doing dangerous and dirty work. Carnegie’s attitude toward labor, during Homestead the strike that calls out troops. Henry Frick, no-nonsense guy that doesn’t deal with the union but suppresses it left in charge when Carnegie leaves for Scotland. Doesn’t have entirely successful labor relationships.

The advantage to the business in taking the hard line in labor is to lower the cost of employees. Labor is a large part of cost and needs to be minimized. If jobs continue they will need to minimize labor costs. Another story is where Tom Scott the man at the railroad got him started at the higher level. Scott goes to Carnegie to ask for a loan to prevent company from going into bankruptcy. Carnegie says no to his mentor and tells him that he can go bankrupt. Wound up being a good decision because the company was doomed to fail anyways. Business and friendship are too different things. Carnegie did invest in the project but then later told Scott no. It’s more complicated than just turning down a friend, but it says something about Carnegie. His father would have done the ethical thing and helped a friend in need.

Tedlow discusses the derangement of power of Henry Ford. Opens with a trick to motivate a decision to ultimately get power. Betting $10 to get her son to write to her and then telling her son that he’s enclosed a check and then not including it and paying the son with the check from the won bet. Tedlow says he’s a fool to his own wealth. Good at dealing with people like JP Morgan. But will not bring about world peace, corrupted by power, not many people telling him that he is wrong. Not able to be criticized like most of us are. You can surround yourselves with yes men but you’re still just Andrew Carnegie, one person in the world. Can’t be told that your decisions are wrong or that bad things are happening in the world.

The motivation for Andrew Carnegie is it ethical or not? His primary motivating values would be that he was set as an egomaniac, not really for the world to be at peace. They are extremely focused on themselves and success pushing friends and family members out of the way. Makes up things in his own autobiography to make him look better. The great industrialist of American society is not ethical from some of the decisions that he made by hurting a few people along the way. Tedlow becomes this guardian of peace, but steel becomes a large player in warfare. He acts in a more self-interested way than his father does. Looks out for himself pushing people out of his way in the process. Firing people who don’t achieve for you in your corporation.

Adam Smith believes that government should be hands off, laissez-faire. Efficiencies will be realized by using this approach. Monopolies are bad, competition is good, and consumers will benefit. Government will not set trade barriers or labor rules. Government should build roads, schools and enhance the position of the consumer. Sees the system that is defined by the market, consumers, and business people. In Smith’s time no one cared about consumers. He’s skeptical of business leaders and realizes that they will act in their own self-interest. Ironically creating a good condition for consumers. Adam Smith was studying this for the purpose of taxing methods. He was interested in finding out how the economy keeps society together. Wanted to know why this prevented people from stealing from one another and going back to tribal warfare. Sees that society is held together by the notion of the invisible hand. Greed or self-interest in the market of goods and services in the market. The self-interest of goods in the market place.
No limitations ends up with stealing and cheating and Somalia doing better with the company without a government. Make your factory bigger the more you make the more you can buy. Thinking of self-interest in the legitimate market, it’s not a free for all and is not without limitations. What is good ethical behavior? If it’s not anything goes then what is it? I think he does present a system that in general is ethical.

Moving on to Wal Mart, a late twentieth century corporation from the present to the past. This case is case 1 in your text and starts on pg. 292. The case is interested in giving you some facts about the case the most significant retialer in the world. Introduces the concept of a stakeholder: the owners, the consumers, the competitors, Employers, Suppliers, Customers, Investors, Society, environmental, towns community the media and the government. Wal Mart has the whole gambit of stakeholders. All have different interests there will be winners and losers. Motivated to make their customers happy to wreak the benefits themselves.

Positives: 1. Lower prices for consumers. Adam Smith would view Wal Mart positively, the more efficient producer would come in and run the rest out of business. Suppliers benefit through technology for the RFIDs. Clorox is sold 23% of their sales. Revlon, 22% Proctor and Gamble is 17% sold at Wal-Mart. Overseas reduction. Wal Mart alone has driven American companies to perform at Chinese efficiencies through Wal Mart alone. Brings job to a community.

Negatives: Loss of competing small businesses. Suppliers become dependent on Wal Mart and effects their other sales. Snapper doesn’t want to be the Snapper brand of lawn mowers. Overseas workers.
Loss of jobs from lost businesses. Employees are not treated well, many of them not on insurance, and taxes need to be picked up by the government. Only require 28 hours to be considered full time. 60% of their employees make less than full time hours. Environmental fines are attempted to make them look pretty. There is some self interest in promoting green interests.

The key stakeholders are the customers and the investors.