Video Case 6.3: Comet Skateboards: It's a Smooth Ride

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getting the message out—the Internet, video, music, and

photography—we can actually have a broad footprint and

make the idea of sustainability and social justice appealing to a broader market,” predicts Salfi. While the bottom

line—turning a profit—is vital to Comet’s survival and

growth, Salfi believes that this new way of doing business

is more important in the long run. “We like to think we’re

creating a blueprint for the kind of company that will be

around for 100 or 200 years,” he muses. Then the skateboarder emerges. With a grin Salfi adds, “At the end of the

day we’re making skateboards, and we don’t want to bum

anybody out.”



Questions for Critical Thinking

1. In which category (or categories) would you

place Jason Salfi as an entrepreneur? Why? Give

examples.



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2. Salfi notes that the use of information

technology—part of the environment for

entrepreneurs—can help Comet Skateboards

reach a broader audience. Can you identify any

demographic and economic trends that might

provide opportunities for Comet Skateboard’s

growth as a business?

3. Which of the traditional characteristics of entrepreneurs do you believe best describe Jason

Salfi? Why?

4. As Comet Skateboards reaches the next level

of growth, where might the firm have the best

chance of obtaining further financing? Why?

Sources: Comet Skateboards Web site, http://www.cometskateboards

.com, accessed February 27, 2012; “GOOD Products,” Halogen TV, http://

www.halogentv.com, accessed March 4, 2011; Nadia Hosni, “Triple Bottom

Line: Comet Skateboards,” Tonic, April 27, 2010, http://www.tonic.com.



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Kansas City

Salina



Smoky Hill River



Greensburg

den City



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Wichita



335



35



PART 2



KANSAS

Saline River

70



Greensburg: A Great Place to Start

Ashley Petty started taking massage therapy classes

while studying for her business degree. After graduating, she

worked for several years as a massage therapist, until the spa

where she worked closed. Petty was job hunting when the

tornado hit her hometown of Greensburg, Kansas. Watching

volunteers, residents, and relief workers exhaust themselves

cleaning up the devastated town, she saw an opportunity. She

would return home to start her own spa in Greensburg.

It was definitely a risky venture—the last thing she

would have expected to find in Greensburg before the storm.

Armed with a business plan she had written in college, Petty

drove to town hall and applied for one of the temporary

trailers that were brought in to house displaced businesses.

She got her trailer—a 1970s singlewide, complete with

imitation wood paneling, stinky carpet, and a leaky roof.

Not exactly the luxe spa she had envisioned in her business

plan, but a good enough start. With a fresh coat of paint,

some scented candles, and new drapes, she opened Elements

Therapeutic Massage and Day Spa.

Petty had expected that her spa would be a hard sell.

The storm had destroyed the town’s communications, so

traditional advertising was out. To build a client base, Petty

turned to word of mouth. She went to town meetings, talked

to old friends, met with volunteers from all over the country.

Still, months went by and she still had barely enough clients

to pay her expenses.

Winter hit. It was cold, the ancient furnace ran constantly, drafts blew in the new curtains, and rain soaked the



freshly steamed carpet. Elements was the last place anyone

would want to go to escape the stress of rebuilding—even

Petty couldn’t stand to be there. Under normal circumstances, she would have considered more extensive capital

improvements, but the trailer was only temporary and she

was out of money.

At one town meeting, green architecture firm BNIM presented a plan for the new Downtown Greensburg, including a

business incubator to sustain old businesses and promote new

ones. Traditionally, a business incubator is reserved for startups, but in Greensburg, once-successful businesses needed

help getting back on their feet. The incubator would be

housed in a totally energy-efficient retail/office building with

space for approximately 10 new businesses. The rent would

be reasonable, and the utility costs next to nothing. Petty

jumped at the chance to apply for a place in the building.

Questions

After viewing the video, answer the following questions:

1. What major challenges does Ashley Petty face in starting

her business?

2. How will Greensburg’s business incubator stimulate economic development?

3. What are some of the challenges Greensburg faces in

recruiting new businesses? What incentives would you

offer to encourage new business development there?

4. Would you start a new business in Greensburg? Why or

why not?



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LAUNCHING YOUR



Entrepreneurial Career

In Part 2, “Starting and Growing

Your Business,” you learned about

the many ways that business owners

have achieved their dreams of owning

their own company and being their

own boss. The part’s two chapters

introduced you to the wide variety

of entrepreneurial or small businesses; the forms they can take—sole

proprietorship, partnership, or corporation—and the reasons that some

new ventures succeed and others fail.

You learned that entrepreneurs are

visionaries who build firms that create

wealth and that they share traits such

as vision and creativity, high energy,

optimism, a strong need to achieve,

and a tolerance for failure. By now

you might be wondering how you can

make all this information work for

you. Here are some career ideas and

opportunities in the small-business

and e-business areas.

First, whatever field attracts you

as a future business owner, try to

acquire experience by working for

someone else in the industry initially.

The information and skills you pick

up will be invaluable when you start

out on your own. Lack of experience

is often cited as a leading reason for

small-business failure.1

Next, look for a good fit between

your own skills, abilities, and characteristics and a market need or niche.

For instance, the U.S. Department

of Labor reports that opportunities

in many healthcare fields are rising

with the nation’s increased demand

for health services.2 As the population

of older people rises, and as young



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families find themselves increasingly pressed for time, the need for

childcare and elder services will also

increase—and so will the opportunities for new businesses in those areas.

So keep your eyes on trends to find

ideas that you can use or adapt.

Another way to look for market

needs is to talk to current customers or business associates. When the

owner of Michigan-based Moon

Valley Rustic Furniture wanted to

retire, he went to see Rick Detkowski,

who was in the real estate business.

The owner intended to offer the

buildings to Detkowski and close the

business down. But the real estate

agent, who owned several pieces of

Moon Valley furniture himself, instead

decided to buy, not just the buildings,

but the furniture business, too. Before

the sale was completed—and to determine whether he could run Moon

Valley profitably—Detkowski talked

with existing customers and furniture

dealers, who had been hoping for

years that the company would expand

its line of sturdy cedar and pine items

from the traditional summer lawn furniture into more innovative designs.

Further research showed that the

general environmental trend among

consumers was boosting demand for

rustic furniture. So Detkowski took

the plunge and is now in the furniture manufacturing business. He has

expanded the company’s product lines

and reorganized the factory floor for

more efficiency—and cost savings.3

Are you intrigued by the idea

of being your own boss but worried



2

about risking your savings to get a

completely new and untried business off the ground? Then owning a

franchise, such as Quiznos or Dunkin’

Donuts, might be for you. The Small

Business Administration advises aspiring entrepreneurs that while franchising can be less risky than starting

a new business from scratch, it still

requires hard work and sacrifice. In

addition, you need to completely

understand both the resources to

which you’ll be entitled and the

responsibilities you’ll assume under

the franchise agreement. Again, filling

a market need is important for success. To find more information about

franchising, access the Federal Trade

Commission’s consumer guide to buying a franchise at http://www.ftc.gov/

bcp/edu/pubs/consumer/invest/inv05

.shtm.

Are you skilled in a particular

area of business, technology, or science? The consulting industry will

be a rapidly growing area for several

years, according to the Bureau of

Labor Statistics.4 Consulting firms

offer their expertise to clients in

private, government, not-for-profit,

and even foreign business operations.

Business consultants influence clients’ decisions in marketing, finance,

manufacturing, information systems,

e-business, human resources, and

many other areas including corporate

strategy and organization. Technology

consultants support businesses in all

fields, with services ranging from setting up a secure Web site or training

employees in the use of new software



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to managing an off-site help desk or

planning for disaster recovery. Science

consulting firms find plenty of work in

the field of environmental consulting,

helping businesses deal with pollution

clean up and control, habitat protection, and compliance with government’s environmental regulations and

standards.

But perhaps none of these

areas appeal to you quite so much

as tinkering with gears and machinery

or with computer graphics and code.

If you think you have the insight and

creativity to invent something completely new, you need to make sure

you’re informed about patents, trademarks, and copyright laws to protect

your ideas. Each area offers different

protections for your work, and none

will guarantee success. Here

again, hard work, persistence,

and a little bit of luck will help you

succeed.



Career Assessment Exercises in

Entrepreneurship and Business

Ownership

1. Find out whether you have what

it takes to be an entrepreneur.

Review the material on the

SBA’s Web site http://www.sba

.gov/smallbusinessplanner/index.

html. or take the Brigham Young

University’s Entrepreneurial Test

at http://marriottschool.byu.edu/

cfe/startingout/test.cfm. Answer

the questions there. After you’ve

finished, use the scoring guides

to determine how ready you

are to strike out on your own.

What weak areas did your results

disclose? What can you do to

strengthen them?

2. Find an independent business or

franchise in your area, and make

an appointment to talk to the

owner about his or her start-up



experience. Prepare a list of

questions for a 10- to 15-minute

interview, and remember to ask

about details such as the number of hours worked per week,

approximate start-up costs,

goals of the business, available

resources, lessons learned since

opening, and rewards of owning

the business. How different are the

owner’s answers from what you

expected?

3. Search online for information

about how to file for a patent,

trademark, or copyright. A good

starting point is http://www.uspto

.gov. Assume you have an invention you want to protect. Find

out which forms are required; the

necessary fees; how much time is

typically needed to complete the

legal steps; and what rights and

protections you will gain.



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Part 3



Management: Empowering People

to Achieve Business

Learning Objectives

1 Define management.

2 Explain the role of setting a vision and ethical standards for the firm.

3 Summarize the importance of planning.



Chapter



7



4 Describe the strategic planning process.

5 Discuss managers as decision makers.

6 Evaluate managers as leaders.

7 Discuss corporate culture.

8 Identify organizational structures.



RelaxFoto.de/iStockphoto



Management, Leadership, and

the Internal Organization



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Wegmans Food Markets Still

a Great Place to Work



I



f a company has spent 15 consecutive years on Fortune’s list

of 100 Best Companies to Work For and consistently ranks in

the top five, credit must go to its top management team for

creating a culture and policies that foster a great work environment. If that company is Wegmans Food Markets, the 79-store

family-owned grocery chain based in Rochester, New York, CEO

Danny Wegman probably explains it best: “I really believe if you

help others, give credit to others, and live with humility, you are

a success,” he told University of Rochester graduates recently.

“Is success what others think about you? I believe success is

how you feel about yourself.”

Wegman and his management team can feel pretty good about

what they’ve accomplished. While turnover among the 42,000

employees is already low, the $6.2 billion company constantly

adds new employee benefits, such as a 24-hour health hotline



introduced recently. Employees already enjoy job sharing,

compressed workweeks, subsidized gym membership, domesticpartner benefits, and free stop-smoking programs. In fact more

than 2,000 workers have enrolled in the stop-smoking program

over the past few years.

Giving back to its employees and surrounding communities is

also high on the company’s list. Since its start back in 1984,

the Wegmans scholarship program has awarded more than $80

million in scholarships to more than 25,000 employees. And

recently the company gave more than 16 million pounds of

food to local food banks.

More than 200,000 people apply for fewer than 900 job openings a year at Wegmans. The company emphasizes making the

right hires, but as CEO Wegman knows, management sets

the direction. “Make the people you work with successful,”

he says. “They will make you a superstar.”1



Overview

When asked about their professional

objectives, many students say, “I want to

be a manager.” You may think that the role

of a manager is basically being the boss. But

in today’s business world, companies are

looking for much more than bosses. They

want managers who understand technology,

can adapt quickly to change, can skillfully

motivate employees, and realize the importance of satisfying customers. Managers who

can master those skills will continue to be

in great demand because their commitment

strongly affects their firms’ performance.

And Danny Wegman’s management of his

family’s grocery chain has ensured the prosperity of the firm, still going strong after

almost 80 years.



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This chapter begins by examining how

successful organizations use management

to turn visions into reality. It describes the

levels of management, the skills that managers need, and the functions that managers

perform. The chapter explains how the

first of these functions, planning, helps

managers meet the challenges of a rapidly

changing business environment and

develop strategies that guide a company’s

future. Other sections of the chapter

explore the types of decisions that managers make, the role of managers as leaders,

and the importance of corporate culture.

The chapter concludes by examining the

second function of management—

organizing.



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1



What Is Management?

Management is the process of achieving organizational objectives through people and

other resources. The manager’s job is to combine human and technical resources in the best

way possible to achieve the company’s goals.



management process of

achieving organizational

objectives through people

and other resources.



Management principles and concepts apply to not-for-profit organizations as well as

profit-seeking firms. A city mayor, the president of the Appalachian Mountain Club, and

a superintendent of schools all perform the managerial functions described later in this

chapter. Management happens at many levels, from that of the manager of a family-owned

restaurant to a national sales manager for a major manufacturer.



The Management Hierarchy

Your local supermarket works through a fairly simple organization that consists of a

store manager, several assistant or department managers, and employees who may range

from baggers to cashiers to stock clerks. However, if your supermarket is part of a regional

or national chain, there will be corporate managers above the store manager. The Stop &

Shop Supermarket Company has more than 350 supermarkets located from New Hampshire

to New Jersey. It is headquartered in Massachusetts. Within each store there are managers

for everything from the meat department to human resources. But at Stop & Shop headquarters, you’ll find top-level managers for such functions as finance, consumer affairs, real

estate, information technology, sales and operations, and pharmacy among others.2

All of these people are managers because they combine human and other resources to

achieve company objectives. Their jobs differ, however, because they work at different levels

of the organization.

A firm’s management usually has three levels: top, middle, and supervisory. These levels

of management form a management hierarchy, as shown in Figure 7.1. The hierarchy is the

traditional structure found in most organizations. Managers at each level perform different

activities.

FIGURE



7.1



The Management Hierarchy



Top

Management



Middle



Management

Supervisory

(First-Line)

Management



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• Chief Executiv

e Officer,

• Chief Financia

l Officer,

• Governor, May

or

• Regional Man

ager,

• Division Head

,

• Director marke

d



• Supervisor,

• Shift Manag

er,

• Program Man

ager



The highest level of management is top management. Top

managers include such positions as chief executive offi cer

(CEO), chief fi nancial offi cer (CFO), and executive vice president. Top managers devote most of their time to developing

long-range plans for their organizations. They make decisions

such as whether to introduce new products, purchase other

companies, or enter new geographical markets. Top managers

set a direction for their organization and inspire the company’s

executives and employees to achieve their vision for the company’s future.

The job isn’t easy. Many top managers must steer their

firms through the storms of an economic downturn, a slump in

sales, a quality crisis, and the like. Sometimes the storm

involves selling a big dream to investors, stockholders, and

managers during a economic downturn. Laura Ipsen, senior

vice president and general manager of the Smart Grid Business

Unit of Cisco, has met with this challenge. Her idea for San

Jose–based Cisco is to create a new energy ecosystem for the



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21st century. If she’s successful, Ipsen’s firm could claim a significant

share of what is predicted to be a $100-billion smart-grid market. It’s

not easy to convince all parties that the gamble is a wise one when the

future isn’t clear. “My job is like having to put together a 1,000-piece

puzzle,” says Ipsen, “but I don’t have the box top with the picture of

what it looks like, and some pieces are missing.”3



kali9/iStockphoto



Middle management, the second tier in the management hierarchy,

includes positions such as general managers, plant managers, division

managers, and unit managers. Middle managers’ attention focuses on

specific operations, products, or customer groups within an organization. They are responsible for developing detailed plans and procedures to implement the firm’s strategic plans. If top management

decided to broaden the distribution of a product, a sales manager

would be responsible for determining the number of sales personnel

required. Middle managers are responsible for targeting the products and customers who are the source of the sales and profit growth

expected by their CEOs. To achieve these goals, middle managers

might budget money for product development, identify new uses

for existing products, and improve the ways they train and motivate

salespeople. Because they are more familiar with day-to-day operations than CEOs, middle managers often come up with new ways to

increase sales or solve company problems.

Supervisory management, or first-line management, includes positions such as supervisor, section chief, and team leader. These managers are directly responsible for assigning nonmanagerial employees

to specific jobs and evaluating their performance. Managers at this

Kohl’s Department Stores ranks in the top tier of the Temkin

first level of the hierarchy work directly with the employees who

Group’s annual top customer-service providing companies.

First-line managers make sure that customer service is a

produce and sell the firm’s goods and services. They are responsible

priority for all employees.

for implementing middle managers’ plans by motivating workers to

accomplish daily, weekly, and monthly goals. A recent survey by the

marketing research firm Temkin Group rated customer service at U.S. companies. All of

the top-ranked firms have first-line managers who implement the firms’ strategies to provide superior customer service. Amazon.com, Kohl’s Department Stores, and Costco all

have in common first-line managers who see that customer service is a top priority among

its employees.4



Skills Needed for Managerial Success

Managers at every level in the management hierarchy must exercise three basic types of

skills: technical, human, and conceptual. All managers must acquire these skills in varying

proportions, although the importance of each skill changes at different management levels.

Technical skills are the manager’s ability to understand and use the techniques, knowledge, and tools and equipment of a specific discipline or department. Technical skills are

especially important for first-line managers and become less important at higher levels of the

management hierarchy. But most top executives started out as technical experts. The résumé

of a vice president for information systems probably lists experience as a computer analyst

and that of a vice president for marketing usually shows a background in sales. Many firms,

including Home Depot and Dell have increased training programs for first-line managers to boost technical skills and worker productivity. Cold Stone Creamery, which operates

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franchises for its premium ice-cream stores nationwide, carefully trains managers and crew

members in the art of preparing its specialty ice cream for hungry customers. “We don’t

interview potential crew members, we audition them,” says the company.5

Human skills are interpersonal skills that enable managers to work effectively with and

through people. Human skills include the ability to communicate with, motivate, and lead

employees to complete assigned activities. Managers need human skills to interact with

people both inside and outside the organization. It would be tough for a manager to succeed

without such skills, even though they must be adapted to different forms—for instance, mastering and communicating effectively with staff through e-mail, cell phones, videoconferencing, and text messaging, all of which are widely used in today’s offices. As you can imagine, it

is important for managers of Cold Stone Creamery ice-cream stores to have excellent human

skills not only with customers but also with employees.

Conceptual skills determine a manager’s ability to see the organization as a unified whole

and to understand how each part of the overall organization interacts with other parts. These

skills involve an ability to see the big picture by acquiring, analyzing, and interpreting information. Conceptual skills are especially important for top-level managers, who must develop

long-range plans for the future direction of their organizations. After selling his own company, LinkExchange, to Microsoft for $265 million, Tony Hsieh joined Zappos as an advisor

and eventually became its CEO. Hsieh’s conceptual skills helped Zappos to grow sales to

more than $1 billion annually while at the same time winning accolades for being an excellent place to work. Recently, Hsieh helped engineer the sale of Zappos to Amazon in a deal

worth $1.2 billion.6



Managerial Functions

In the course of a typical day, managers spend time meeting and talking with people,

reading, thinking, and sending text or e-mail messages. As they perform all these activities,

managers are carrying out four basic functions: planning, organizing, directing, and controlling. Planning activities lay the groundwork, and the other functions are aimed at carrying

out the plans.

planning process of

anticipating future events

and conditions and determining courses of action

for achieving organizational

objectives.



Planning Planning is the process of anticipating future events and conditions

and determining courses of actions for achieving organizational objectives. Effective

planning helps a business focus its vision, avoid costly mistakes, and seize opportunities.

Planning should be flexible and responsive to changes in the business environment, and

should involve managers from all levels of the organization. As global competition intensifies, technology expands, and the speed at which firms bring new innovations to market

increases, planning for the future becomes even more critical. For example, a CEO and

other top-level managers need to plan for succession—those who will follow in their footsteps. Some CEOs resist this kind of planning, fearing that doing so might shorten their

time at the helm of a company. But management experts encourage planning ahead for the

next generation of management, in order to keep the company’s position in the marketplace strong.7

Business mogul Warren Buffet is now in his 80s and showing few signs of slowing

down. But it’s clear that someone (or several people) must be in place to take the reins of his

huge diversified company, Berkshire Hathaway, which has significant holdings in businesses

ranging from Geico Insurance to Helzberg Diamonds to NetJets. Recently Buffet tapped

Todd Combs, who is half Buffett’s age, as an investment manager and potential successor to



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manage Berkshire’s $100 billion investment portfolio, which includes holdings in American

Express, the Coca-Cola Company, Procter & Gamble, and other major firms. But no one has

yet been named to succeed Buffet as Berkshire’s CEO.8



Organizing Once plans have been developed, the next step in the management process typically is organizing—the process of blending human and material resources through

a formal structure of tasks and authority; arranging work, dividing tasks among employees,

and coordinating them to ensure implementation of plans and accomplishment of objectives. Organizing involves classifying and dividing work into manageable units with a logical

structure. Managers staff the organization with the best possible employees for each job.

Sometimes the organizing function requires studying a company’s existing structure and

determining whether to restructure it in order to operate more efficiently, cost effectively, or

sustainably.



organizing process of

blending human and material resources through a

formal structure of tasks

and authority; arranging

work, dividing tasks among

employees, and coordinating

them to ensure implementation of plans and accomplishment of objectives.



Directing Once an organization has been established, managers focus on directing,

or guiding and motivating employees to accomplish organizational objectives. Directing

might include training (or retraining), setting up schedules, delegating certain tasks,

and monitoring progress. To fulfill the objective of reducing the office electricity bill, an

office manager might have incandescent light bulbs replaced by compact fluorescents, ask

employees to turn off the lights when they leave a room or use occupancy sensors, and direct

the IT staff to program all the office computer screens to turn off after 10 or 15 minutes of

inactivity.9



directing guiding and

motivating employees to

accomplish organizational

objectives.



Often when managers take time to listen to their employees, the manager gains insight

and the employee gets a motivational boost. Fashion designer Eileen Fisher says, “Share

information and your own ideas. Be present. Be accessible. Listen.”10



Controlling The controlling function evaluates an organization’s performance



against its objectives. Controlling assesses the success of the planning function and provides

feedback for future rounds of planning.

The four basic steps in controlling are to establish performance standards, monitor

actual performance, compare actual performance with established standards, and make corrections if necessary. Under the provisions of the Sarbanes-Oxley Act, for example, CEOs

and CFOs must monitor the performance of the firm’s accounting staff more closely than

typically had been done in the past. They must personally attest to the truth of financial

reports filed with the Securities and Exchange Commission.



2



Assessment

Check

1. What is management?

2. How do the jobs of top

managers, middle managers, and supervisory

managers differ?

3. What is the relationship

between the manager’s

planning and controlling

functions?



Setting a Vision and Ethical Standards

for the Firm

A business begins with a vision, its founder’s perception of marketplace needs and

the ways a firm can satisfy them. Vision serves as the target for a firm’s actions, helping direct the company toward opportunities and differentiating it from its competitors.

While she was still in high school, Charlie Javice observed that a 5-year-old’s birthday

party at the movies cost $200—the same amount as a microloan in a developing country. Together with her brother Elie and two friends, she started PoverUP, a networking

Web site with the goal of enabling “socially minded students learn, connect, and invest in

microfinance and social businesses” around the world.11

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controlling function of

evaluating an organization’s performance against

its objectives.



vision perception of

marketplace needs and

the ways a firm can satisfy

them.



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Tom Schneider/Getty Images, Inc.



Since its inception, PoverUP has started working with other microlenders in the

United States and abroad. Recently, Inc. magazine named it one of America’s Coolest

College Start-Ups.12



After observing the cost of a child’s birthday

party, Charlie Javice, her brother and two

friends started PoverUP, a networking Web

site for socially minded students to learn,

connect, and invest in microfinance and

social businesses around the world.



A company’s vision must be focused and yet flexible enough to adapt to changes in

the business environment. Also critical to a firm’s long-term relationship with its customers, suppliers, and the general public are the ethical standards that top management sets.

Sometimes ethical standards are set in compliance with industry or federal regulations,

such as safety or quality standards. Sometimes new standards are set in response to unethical actions by managers, such as the financial accounting activities that resulted in the

Sarbanes-Oxley Act. Currently, firms are taking a closer look at large compensation packages received by their CEOs and other top executives. Due to public outcry, compensation committees are reevaluating their criteria for salaries, bonuses, and other benefits.13



The ethical tone that a top management team establishes can reap monetary as

well as nonmonetary rewards. Setting a high ethical standard does not merely restrain

employees from doing wrong, but it encourages, motivates, and inspires them to

achieve goals they never thought possible. Such satisfaction creates a more productive, stable

workforce—one that can create a long-term competitive advantage for the organization. In

practice, ethical decisions are not always clear-cut, and managers must make difficult decisions.

Sometimes a firm operates in a country where standards differ from those in the United States.

In other situations, a manager might have to make an ethical decision that undermines profits

or even causes people to lose their jobs. And while it’s tempting to think that a large firm—by

virtue of its size—will have a harder time adopting ethical practices than a small firm, consider

the retail giant Best Buy, which recently earned recognition for its ethical standards. Named

one of the World’s Most Ethical Companies by the Ethisphere Institute, the Minneapolis-based

Best Buy consistently demonstrates high standards in a number of areas.

Alex Brigham, executive director of the New York–based Ethisphere Institute, observes

the connection between ethics and good business. He said Best Buy’s ethical environment

“shows a clear understanding that operating under the highest standards for business behavior goes beyond goodwill and ‘lip-service’ and is linked to performance and profitability.”14



Assessment

Check



Sometimes taking an ethical stand can actually cost a firm in lost revenues and other

support. When Google announced a reversal of its original stance on censorship in China—

essentially shutting down operations there and rerouting traffic to an uncensored site in

Hong Kong—not only did the company lose business, it found itself standing eerily alone on

the issue. Sometimes, however, firms’ actions raise more ethical questions than they answer,

as the example in the “Solving an Ethical Controversy” feature shows.



1. What is meant by a

vision for the firm?

2. Why is it important for a

top executive to set high

ethical standards?



3



Importance of Planning

Although some firms manage to launch without a clear strategic plan, they won’t last

long if they don’t map out a future. Facebook’s founder Mark Zuckerberg says that he didn’t

have a major plan for the site at the beginning. But Facebook’s nearly global reach—and

membership of more than 800 million—means that Zuckerberg must plan the firm’s next

moves in order to outrun competitors and avoid major stumbles. Currently Zuckerberg is

studying the Chinese market. Although Facebook is currently blocked in China, 20 percent

of the company’s app developers live there. “We now have Chinese-language help pages for

developers, and we are working on giving them better support,” says David Lim of Facebook’s

mobile developer relations division. “Developers in mainland China are important to us.”15



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Part 3 Management: Empowering People to Achieve Business



23/08/12 1:25 PM