carriers who's business model is based on low fares. JetBlue, AirTran, Spirit, and Southwest Airlines have all up their fairs. In some instances, even making them higher than the major carriers on some of those roots. In this week's destination CEO, Jeff Flock, sat down to talk with the man of the controls of Southwest Airlines, Gary Kelly, to find out how in these turbulent times he's able to keep his company at a safe cruising altitude and as the most profitable airline in the country. Thank
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Bank of America’s CEO and Chairman Ken Lewis, in an effort to purchase Merrill Lynch at the cost of $50 billion misled shareholders by not disclosing all the facts pertaining to the merger. CEO and Chairman Ken Lewis could not have known the controversy and ramifications that would follow his deception or neglect. Or, as he stated himself, there was no intent of deception. The ethical issue here is whether or not Ken Lewis intentionally deceived the shareholders of Bank of America in order to acquire
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companies that applied corporate strategies to their business and with success, turned their business around for the better. Corporate Strategies Coca-Cola Neville Isdell was asked to come back from retirement to Coca-Cola in June of 2004 as CEO. Isdell was tasked to assist Coca-Cola with diversification so that they could remain competitive with Pepsi. The company purchased Glaceau, maker of Vitaminwater and added new non-carbonated drinks such as Envigo and Blak to their product line up.
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Accounting scandals CEO Bernard Ebbers became very wealthy from the rising price of his holdings in WorldCom common stock. However, in the year 2000, the telecommunications industry entered a downturn and WorldCom’s aggressive growth strategy suffered a serious setback when it was forced by the US Justice Department to abandon its proposed merger with Sprint in mid 2000. By that time, WorldCom’s stock was declining and Ebbers came under increasing pressure from banks to cover margin calls on his
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5S SUMMARY 5S is a systematic approach to good house keeping. It is gaining a strong supporting most industries in Japan today, and there is an increasing number of companies which are implementing 5S with greater involvement of people within the organisation. Why is it becoming popular among companies in Japan? Simply because: 1) Workplaces become clean and better organised. 2) Shopfloor and office operation become easier and safer. 3) Results are visible to everyone – Insider and
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Team Case 2: SMA: Micro-Electronic Products Division (A) Executive Summary This paper analyzes the problems facing SMA: Micro-Electronic Products Division (A) as requested by Guido Spichty, vice president and general manager. After a rough period in 2008, sales are finally back up but the company is still facing a time of high competition, low morale, lack of confidence, trust, and coordination. Divisions are constantly arguing with each other, which is affecting sales and profits. Key managers
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The role of exogenous risk in structuring contracts Objectives: • To illustrate a kind of transaction cost driven by information asymmetry and differential preferences with respect to risk allocation • Logical sequence Information asymmetry impossible to contract on effort contract on results or performance Inefficient risk allocation emerges when: • Performance not fully under the control of agent • Agent more risk averse than principal need to • Importance of risk in economic life • Scarce
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Enron Corporation 1. Why did the company collapse? Enron In order to understand what happened within the company we need to start with its origins. Enron Corporation Inc. (later became Enron) begun operating in Huston Texas in 1985. It started from a merger of two natural gas companies, becoming the largest commercial, natural gas pipeline operating in the United States at that time. Throughout Enron’s humble beginnings it generally centred in the delivery of gas to utilities or businesses at
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op y “Today, we take an important step towards a governance architecture with standards of independence and disclosure that are comparable to or stronger than those we require of our listed companies.” C - John Reed, Interim Chairman & CEO – New York Stock Exchange (NYSE) commenting on the proposed NYSE reforms, in November 2003.2 ot PAYBACK TIME AT NYSE o N On September 18, 2003, Richard Grasso
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Extra Credit Assignment – Earn up to 50 points towards homework grade Due by April 29, 2014 Chapter 6: Firms, the Stock Market and Corporate Governance 2. What is limited liability? Why does the government grant limited liability to owners of corporations? Answer:- Limited liability is a legal provision that shields owners of a corporation from losing more than they have invested in the firm. The government grants this privilege to corporations because investors are more likely to buy
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