topics related to the course: strategic management, leading strategically, external analysis, internal analysis, performance management system, generic business strategies, business model, innovation, industry dynamics, blue ocean strategy, and corporate strategy
two examples of guidance
RUBRIC FOR BUSINESS NEWS EVENT ANALYSIS
Provides superficial summary of the business news event
Summarizes business news event but misses some elements or does not provide adequate detail.
Summarizes business news event clearly and with sufficient detail to support subsequent application of management concepts
Draws on concepts from one chapter
Applies broad concepts– e.g., strategy, ethics, leadership
(0 – 19 pts)
Draws on concepts from two chapters
Speculates/ Force fits a framework — e.g., This merger took planning
Demonstrates adequate understanding of applied concepts
(20 – 34 pts)
Draws on concepts from three or more chapters
Utilizes specific concepts – e.g., triple bottom line, divestment, operational excellence
Demonstrates deep understanding of applied concepts
(35 – 40 pts)
Provides no personal lessons learned
Makes general statements about management
Lessons learned do not logically flow from application of management concepts
(0 – 9 pts)
Provides only one personal lesson learned
Focuses on what will happen to organization in the future or what the it should have done
Does not sufficiently develop ideas — e.g., explains a lesson in 2-3 sentences
(10 – 19 pts)
Provides at least two lessons learned
Demonstrates significant reflection about the implications of business news event on student’s future professional decisions and actions
(20 – 25 pts)
Grammar and Style
Paper is disorganized, has numerous grammar errors, and/or APA citation mistakes
(0 – 5 pts)
Paper is reasonably well written, but has grammar and/or style issues
Paper is well written and has minimal, if any, grammar and/or style issues
(9 – 10 pts)
Deductions (if any – see below)
OTHER REASONS POINTS WILL BE DEDUCTED
As discussed in class, effectiveness means doing the right task. Therefore, to write an effective business news write-up, you must choose a recent business news event related to management about a specific organization. If you do not, then you cannot earn full credit no matter how well your analysis is formulated and written. Moreover, you need to follow the specific formatting requirements, which are designed to facilitate your successfully completing this assignment and/or my assessing your performance. Below are the points that will be deducted from the total score above if you do not follow these guidelines.
· Did not choose a business news event focused on a specific company (100 pts deducted – no credit earned)
· Did not chose a timely business news event
· Event occurred between four and six months prior to write-up (5-10 pts deducted)
· Event occurred between seven and eleven months prior to the write-up (15-25 pts deducted)
· Event occurred over eleven months prior to the write-up (100 pts deducted – no credit earned)
· Drew on three acceptable sources (5-10 pts deducted)
· Drew on two acceptable sources (20-30 pts deducted)
· Drew on one acceptable source (40-50 pts deducted)
· Drew on no acceptable sources (no credit earned)
· The following sources are can be supplemental sources but are NOT considered an acceptable source: information from textbooks, articles in academic and case journals, articles that are less than 400 words long, articles that do not relate to the news event, more than one blog from an expert, articles from a news source with limited credibility, and publications issued by the company. (Note: A company-issued press release or internet posting can provide insights and can be included as a fifth source.)
· References not properly cited using APA formatting (1 pt deducted per cite)
Did not follow formatting instructions
· Included a cover sheet (1 pt deducted)
· Did not include your name on the document (1 pt deducted)
· Did not single-space the document (1 pt deducted)
· Did not double-space between paragraphs (1 pt deducted)
· Did not use the specified headings (3 pts deducted)
· Did not italicize management terms used (2-10 pts deducted)
· Did not create a Word document (10 pt deducted)
Plagiarism and other academic integrity violations (such as submitting a paper that was written for another course) will result in an F in the course. You are responsible for knowing what constitutes an academic integrity violation. The policy is posted on UT’s Office of the Provost web page (http://www.ut.edu/provost/).
Final Note: The points deducted are based on a paper worth 100 points. If the paper is worth less or more, then the points are adjusted accordingly. (e.g., If the paper is worth 50 points, then 5 points would be deducted for not creating a Word document. If the paper is worth 150 points, then 15 points would be deducted for not creating a Word document.)
A True Worldwide Web: SpaceX’s Mission
In February 2018, SpaceX captivated the attention of major news networks across the globe after the first, spectacular, and successful launch of Falcon Heavy, the world’s largest rocket. Several weeks later, the company accomplished another breakthrough with the successful launch of its first two internet test-satellites in low-earth orbit alongside an intelligence satellite, which will be used by the Spanish ministry of defense (Waters, 2018).
The company’s test-satellites launch followed the authorization from the top United States communication regulator – the Federal Communication Commission – to build a broadband network using low-earth orbit satellites. SpaceX’s internet satellite service is one of twelve ventures endorsed by the commission in the past twelve months including projects from the European OneWeb, the Canadian Telesat, and Space Norway (Shepardson and Vengattil, 2018).
While broadband satellite communication was first introduced by Boeing fifteen years ago, SpaceX’s endeavor is significantly more ambitious. The California-based company plans to deploy 800 satellites in low-Earth orbit – between 684 and 823 miles high – to reduce the latency time and provide internet services to rural areas in the United States. However, the deployment of such a large number of satellites poses a series of challenges, which the firm needs to address to succeed, including the close proximity with existing communication satellites (Meyer, 2018).
The cost of such ambitious endeavor can be astronomical. The current price tag to launch a payload of several satellites into orbit is on average $62 million when using SpaceX’s Falcon 9 rocket, one of the most competitive price in the industry (SpaceX, 2018). However, costs become manageable to a company already in the business of launching items into space (Pasztor, 2018). Additionally, the California-based company’s biggest strength lies in its capability to reuse its rockets, hence significantly scaling-down on operating expenses.
SpaceX aims to develop a constellation of interconnected satellites to form “a so-called mesh network.” At first, the network would provide internet access to the most rural regions in the United States. In the long-term, the system is expected to satisfy the constantly increasing demand for high speed network and provide a true worldwide internet coverage. The company’s low-Earth orbit satellites project directly competes with substitute ventures led by Google with its high-altitude internet balloons or Facebook with its high-flying drones network. (Waters, 2018)
The California-based company expects its broadband satellite communication services to generate sufficient positive cash flow to ultimately finance Elon Musk’s ambition to establish a human colony on Mars in the next 50 to 100 years (Meyer, 2018).
II. Connection to Management Concepts
Fundamentally, the long-term vision of the privately owned space exploration company is the reflection of the strategy as a perspective embraced by its founder. Elon Musk is renowned for his visionary take on technology, the environment, and society. The series of company he founded have been aggressive pacesetters in their respective industries through the implementation of innovative technologies (e.g., Visa in the e-payments industry, and Tesla in the automotive industry), and SpaceX is no exception.
Since it was founded in 2002, the California-based company experienced a long succession of drawbacks and failures, which threatened the core existence of the company. However, the shared culture and ideology brought together the members of the organization to keep it afloat and live to fight another day. The more recent success of the business resides in the collective mind cultivated by the company’s ambition to settle a human colony on the red planet. Each individual within the company works united towards the next milestone in space exploration.
SpaceX’s core value of continuously pushing further the technological boundaries and exploring the depth of the universe do not rise from market demand but rather from its founder’s core belief in human’s nature to innovate and explore the unknown. The space exploration company’s core purpose is to connect each individual on the planet to the internet and provide them with the opportunity to travel beyond the skies.
The company’s envisioned future is to provide an internet access to all individuals around the globe, even in the most remote locations by 2030. Additionally, SpaceX aims to settle a small human colony on the red planet in the next 30 years by building the most powerful reusable rocket in the world to carry the spacecraft, which would propel the space crew towards Mars. The company states its BHAG as to “revolutionize space technology, with the ultimate goal of enabling people to live on other planets”.
In accordance to its title of aggressive pacesetter, SpaceX leads the radical change in the communication industry. The company is working towards re-inventing the method used to convey the information between two distinctive points in space. Rather than going through landlines, antennas, optic cables, and other methods, SpaceX aims to reconfigure the delivery system so as to provide equal speed internet to every regions of the globe, even the rural regions currently uncovered by regular service providers.
The significant amount of risk, high capital requirements, labor intensity, and level of expertise requirements all factor in to deter any organization or individual from entering either the communication or the space exploration industry, therefore minimizes the threat of new entrants. Nowadays, organizations in the communication also hold a noteworthy bargaining power over its customers in this constantly connected society as individuals in developed and developing countries can now barely go a day without a device with an internet connection.
The broadband internet satellite project undertaken by SpaceX clearly shows the business’s constant will to push further the boundaries of technology and space-related projects. The strategy initially implemented by its founder over fifteen years ago still subsists today within and beyond the walls of its research and development center, and rocket plants. From a personal standpoint, witnessing the ideology driving Elon Musk and his employees to constantly push away the limits is priceless. It continually reminds me how one’s perspective on the world can impact others.
Employees are the greatest resource of a company and they should continually be inspired to create and innovate. While human capital is the biggest asset of an organization and should never be neglected, a firm’s visions is what can motivate employees to go beyond their initial assignment. SpaceX’s vision aspires its employees to extend the boundaries of human travel. The company must and do understand that its power to remain the leader in innovation in space travel or disruptive technology in communication lies in its ability to engrain its vision in people.
The communication and space exploration industries are both undergoing radical changes while companies develop increasingly more innovative products. The threat of new entrants is limited but the threat of substitutes and level of rivalry remain consequent. Therefore, managers must acknowledge the new trends to stay ahead of the curve and deliver disruptive yet competitive products to the market. As a manager, I would lead the development teams towards continuous innovation throughout careful planning so as to limit the risk of falling behind the concurrence.
Meyer, David. “Here's What You Need to Know About SpaceX's Satellite Broadband Plans.” Fortune, 22 Feb. 2018,
Pasztor, Andy. “SpaceX Lifts Two of Its Own Prototype Satellites Into Orbit.” Wall Street Journal, 22 Feb. 2018.
Shepardson, David, and Munsif Vengattil. “SpaceX Gets U.S. Regulator to Back Satellite Internet Plan.” New York Times, 14 Feb. 2018.
“Capabilities & Services.” SpaceX, 2018.
Waters, Richard. “SpaceX Joins Race to Make Web Truly Worldwide.” Financial Times, 16 Feb. 2018.
Whole Foods New Stocking System Angers Customers and Frustrates Employees
Description of the Situation Comment by Susan Steiner: Clear description of the situation
Back in August, Amazon acquired supermarket chain Whole Foods for $13.7 billion (Grant, 2018). However, a recent expose by Business Insider revealed the tech giant may be left with more than they bargained for as employees and customers are now speaking out about the massive shortages that have plagued many stores following an operations change.
At the start of 2017, Whole Foods opted to switch to a new buying system, order-to-shelf (OTS). In theory, this would reduce time and improve efficiency by having the majority of goods move directly to shelves from the shipment truck (Grant, 2018). While designed to cut costs and better manage inventory, many stores have seen massive shortages as result of the system angering customers and frustrating managers. An employee in Sacramento, California, explained to Business Insider, “The system is now set up to pretty much only have enough product to keep the shelf full and no extra." As a result, her department’s back-stock area is now 25% of the size it was before the implementation of OTS (Peterson, 2018).
Other employees interviewed had similar complaints of continually running out of common produce items like potatoes and onions and, at times, have had entire aisles bare. According to an assistant manager in Chicago, "If a truck breaks down and you don't get a delivery, then you have empty shelves." (Peterson, 2018)
Even analysts monitoring Whole Foods have begun to take note of these shortages. Barclays’ Karen Short reports visiting a store that was missing cookies, crackers, popcorn, canned beans, canned peaches, seltzer, and water. In addition, she explained that employees were, “utilizing facing to make shelves appear more stocked than they actually were — so, the out of stocks could have been more pervasive than we were able to notice. We also note that frozen seafood out of stocks have persisted for many weeks at one store we routinely check." From their perspective, executive issues and broader price cuts must be implemented in order to avoid stalling traction on sales. (Meyer, 2018)
While Whole Foods executives have promised to take a deeper look at the issue, they still attribute a large portion of the problem to increased sales following price cuts after Amazon’s acquisition and recent weather issues affecting product delivery (Meyer, 2018). However, employees have noted that OTS has not only led to food shortages but also a decrease in employee morale due to its militaristic regulations (Bariromo, 2018). The system requires managers to regularly walk through store aisles and storage rooms with checklists to ensure every item is in its place and there is no excess stock. If there is, the manager of that area is written up. After three write-ups, the individual is liable to be fired. According to one employee, “It's like taking a really high-stakes exam with 100 questions every day, and if you miss a single question you fail” (Peterson, 2018).
Relation to Management Concepts
From a value propositions standpoint, Whole Foods has chosen to focus on operational excellence through the implementation of their OTS system. However, issues within the core processes of this system have led to major improvement challenges. A major component of Whole Foods’ core processes is their information technology systems which schedule and track food delivery. However, these systems lack the foresight and ability to accommodate for missed trucks and increased consumer demand for specific products. Comment by Susan Steiner: Bottom line: Operational excellence was not achieved. The concept of total cost includes employee and customer time, not just dollars and cents. It will be interesting to see if Amazon will be able to correct this Whole Foods initiated change. …. Whole Foods announced today (3/12) that it would be meeting with vendors to address the situation
Additionally, the new management system harshly punishes manager’s minuscule errors and has led to a shift in the company’s culture. Employees lack the motivation to truly “attack” the new system as it appears to focus more on inflicting consequences than promoting the rewards of a system that has dramatically reduced back stock. Employees are often scored based how well they stocked shelves and are quizzed on best-selling items and sales goals for the week with points being deducted if they answer a question incorrectly. Those who score less than an 89.9 are liable for termination. The stress and rigor of the new system has made employee meltdowns while on the job a common occurrence. Even at home, employees have still been known to feel the stress of the job with one describing, “I wake up in the middle of the night from nightmares about maps and inventory.” (Bartiromo, 2018).
While Whole Foods executives have promised to investigate the supply chain incompetencies caused by the implementation of OTS, the broader issue is less about operational excellence and more about restoring Whole Foods core vision and ideology internally. The declining employee culture has yet to be addressed. Two of Whole Food’s main core values are to “satisfy, delight, and nourish our customers” and to “support team members happiness and excellence,” (Whole Foods, 2018). Both of these values appear to be violated through the processes of OTS. If Whole Foods is unable to restore the relationship between their core ideology and this new operations system, the company is likely to collapse internally. Additionally, with such a variety of substitutes, the necessity of zero waste needs to be evaluated. As one customer explained, “There’re so many options now that it seems like a terrible idea to have your shelves understocked,” (Meyer, 2018). Comment by Susan Steiner: I think this is the crux of the matter
Takeaways/ Lessons Learned
One of the main lessons I took away from this situation is that people should always be a consideration when implementing wide scale operational changes. While OTS appears to provide many benefits, I am still confused as to why employee regulations had to take such a strong shift with it. Personally, I know I would not want to work for a company that left me in tears over something as simple as stocking a shelf! Comment by Susan Steiner: Yes! In MGT 330 we didn’t spend enough time on the organizational change chapter. I assume that you can now see its importance.
Additionally, efficiency must always be measured against effectiveness. While the newly implements OTS system is efficient, from a customer’s perspective it continues to be ineffective in enabling one to purchase everything on his shopping list, and from an employee’s perspective, it is ineffective in creating a safe and friendly work environment. While I believe the system can be updated and improved, is 100% efficiency the goal in an industry with such a variety of substitutes? Comment by Susan Steiner: Remember my discussion that an ineffective system can’t be efficient. The current situation at Whole Foods proves that point. Comment by Susan Steiner: It can be if the system is both efficient and effective. At one point in time, WalMart was the “gold standard” for inventory management, which allowed the company to keep prices low and shelves always stocked.
Bartiromo, M. (2018, February 2). Why Whole Foods employees are crying on the job. Retrieved form https://nypost.com/2018/02/02/why-whole-foods-employees-are-reportedly-crying-on-the-job/
Grant, M. (2018, January 18). Whole Foods customers angry over shortages; employees blame “militaristic” inventory system. Retrieved from http://www.foxnews.com/food-drink/2018/01/18/whole-foods-customers-angry-over-shortages-employees-blame-militaristic-inventory-system.html
Meyer, Z. (2018, February 8). Empty Whole Foods Market store shelves anger shoppers. Retrieved from https://www.usatoday.com/story/money/2018/02/08/empty-whole-food-market-store-shelves-anger-shoppers/308599002/
Peterson, H. (2018, January 18). “Entire aisles are empty”: Whole Foods employees reveal why stores are facing a crisis of food shortages. Retrieved from http://www.businessinsider.com/whole-foods-employees-reveal-why-stores-are-facing-a-crisis-of-food-shortages-2018-1
Whole Foods. (2018). Our Core Values. Retrieved from http://www.wholefoodsmarket.com/mission-values/core-values