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G 202

by: Edward Wuckert I

G 202 BUS

Edward Wuckert I
GPA 3.89

Steven Kreft

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Date Created: 11/01/15
G202 Exam 3 Study Guide Topic 7 4292010 70500 AM Topic 7 Understanding NGO Behavior A NoniGovernmental Organizations NGOs and NoniMarket Forces 0 i NGOs Usually nonpro t organizations that are formed Without participation of any government 0 Usually the NGO forms around a social movement to organize members around the cause I NGOs are thus also o en referred to as civil society organizations 0 NGOs are very narrowly focused to one issue which gives them an advantage over rms that have many issues to think about 0 ii NoniMarket Forces B Examples of NGO Campaigns Environmental 0 i Greenpeace o AntiAirport Expansion 0 AntiSUV Campaign 0 Apple Campaign and Apple Response I Apple Went from the bottom of the list to the top 0 ii Rainforest Action Network 0 Eco Barbie 0 Billionaire s for Coal 0 iii Sierra Club 0 2dirty4college o Campuses Beyond Coal l39UBloomington Targeted C Private Politics 0 i Private Politics 0 When NGO activists directly engage private rms With their concerns instead of or in addition to trying to in uence policy formation 0 ii Recall the Normal Political Issue Stages 0 1 Development o 2 Politicization o 3 Legislative o 4 Implementation 0 iii In Private Politics the last 2 stages are replaced with NGO Engagement of Firms 0 iv Changes to the Normal Political Issue Stages Last 2 Stages of Normal Pol Issues 0 Legislative Stag 7 Replaced with NGOs making direct demands on rms I Issue Threats boycotts or negative PR I Promise Reward PR endorsements or funding 0 Implementation Stage 7 Replaced with Resolution of the NGO rm dispute I Bargaining by the two sides to come to an agreement I May result in rm action or may agree to disagree 0 NGO Gets Everything 6 l 9Firm Does Nothing Compromise I More In Favor of the Firm 0 In Starbucks NGO and Starbucks Compromised but was more in favor of Starbucks D The Rise of the NGO NGO 7 International Regulator 0 Why is there a rise in NGO Campaigns 0 i C 39 39 Technologv Costs Are Rapidlv Decreasing o Easier to organize and manage campaigns 0 Communication is more sophisticated more interesting more likely to receive positive media attention I CAN act with SWIFTNESS that corporations cannot 0 ii Public Trust in C 39 is Declining o Easier to sway public opinion against rms 0 Score higher over govt rms etc in environmental issues human rights health I EMOTIONAL NOT FACTUAL 0 iii C is Getting Thicker 0 Policy option can involve long delays 0 iv Businesses are Becoming More Global 0 Intergovernment action is hard to bring together Media will favor NGOs Lobbying can take almost 10 years whereas going directly after the rm takes about 1 year So 9 Going directly after the rm is a better option E Targeting Behavior why they target the businesses they do 0 i What Characterizes a Good Target 0 Well recognizable brand name 0 Firms that have a leadership position in the industry I Take down the leaders and others will follow 0 Consumer product rms downstream rms Home Depot w rainforest wood 0 Firms producing products with low switching costs I Verizon bad target high switching costs 0 Sometimes the worst o enders are targeted but not always I We want victory moving worst rm will be costly 0 Firms that have shown interest in the NGO s issue in the past 0 Targets Are Picked Speci cally to Fit Each NGO Campaign 0 The More INELASTIC DEMAND you have the LESS Likely You re a Target 0 When domestic governments paid to take care of social issues NGO s have taken over 0 NGOs Revenue comes from Membership Fees and Donations gt 90 of funding 0 Lifeblood of NGO is being able to claim victories F Takeaways from Starbucks o Socially responsible companies are likely targets but also attractive collaborators 0 Don t wait for a crisis to collaborate 0 Think strategically about relationships with NGOs o Recognize that collaboration comes with some compromise o Appreciate the value of the NGOs independence 0 Understand that building relationships with NGOs takes time and effort 0 Think more like an NGO by using communication strategically G Readings o i The Starbucks Case 0 ii OPTIONAL Private Politics THE STARBUCKS CASE 0 Power mapping uses the stake holder s technique 0 Price they pay for beans In 2000 Starbucks paid 120 while the industry average was 064 so Starbucks is already paying above the average Starbucks runs a very high cost structure Business Drivers 1 Brand differentiation Starbucks Employee Partner Turnovers rate 60 9 GOOD 85 were Very Satis ed 0 Industry Norm 200 0 Fair Trade Coffee 0 Minimum Price 126 006 more than Starbucks already paid 0 LongTerm Direct Buyer Relationship 0 Environmental Standards Producers must integrate crop management and environmental protection plans 0 Credit Available to Farmers during down times 0 Democratic Organization Producers must belong to cooperatives or associations that are transparent and democratically controlled by their members 0 What makes Starbucks an easy target 0 They have STORES unlike competitors that sell in supermarkets I Stores are everywhere and make it easy to ef ciently protest outside them 0 Shown willingness to work with NGO s in past 0 US Based I Open shareholder meetings Global EX could come and make scene I Ubiquitous Everywhere retail locations places to gather for rallies and demonstrations Potential RisksBene ts of Successful Global Ex Campaign 0 EmployeePartner Concerns o m I If GE was successful could lose faith in integrity amp values of company 0 Bene ts I Employees would likely embrace move to sell Fair Trade Coffee as yet another sign of caring 0 Customers o Risks I Protests could at a minimum damage image of socially responsible comp I Extreme 7 Disrupt business operations making it physically dif cult for customers to access Starbucks I DEMAND WAS UNKNOWN 0 Bene ts I Attract a socially responsible following and would serve Fair Trade coffee if there was a market for it o Suppliers 0 m Concern for how Current Supplier would react when nding out they are receiving the same price wo being held to Starbucks quality standards Fair Trade Suppliers less stable less mature unsure if they can give necessary volume 0 Community 0 m I Switching suppliers could cause drop of current suppliers thereby causing economic and social disruption 0 Bene ts I Starbucks was a community gathering spot that supported their producing countries and coffee communities both scally and socially o Shareholders o m I Starbucks wasn t sure they could change its product offerings as quickly as outsiders thought they could I Effectively communicating marketing message was in question 0 The Media 0 m I Media casts activists as good guys working for human rights and villainizing big business Starbucks Media could quickly pick up message and reinforcecommunicate it nationally much faster than Starbucks Starbucks Decision 0 l Ignore the NGO amp Do Nothing 0 Knew Global Exchange was tenacious and would not disappear so ignoring was not a valid option 0 2 Fight Back amp Defend Position 0 Could ght Global EX On Fair Trade issue but would not always know if farmers got their fair share of the high prices 0 3 Negotiate for a Compromised Agreement 0 Could not Capitulate Give In bc if it succumbed to one NGO pressure it would be an easy target for other NGOs o Ultimately Starbucks pursued a middle ground alternative bw ghting back against Global Exchange and completely giving in to the NGOs demands I Agreed to sell in domestic stores w reevaluation of decision in 1 year I PUT SB IN GOOD POSITION D ShortTerm Reduced likelihood of Global EX Conducting national campaign amp allowed SE to maintain rep both for selling high quality coffee and for social responsibility a Bought Company More Time to EXplore All Areas of FT Developments Since Fair Trade Decision 0 Continued to eXpand upon its social responsibility programs and eXplored several alternatives to Fair Trade in an effort to reach the same Goal Improve Livelihoods for the Small Farmer 0 Now 0 Largest roaster and retailer of Fair Trade coffee in the US 0 Starbucks consumer demand has been virtually at although increased from 653000 lbs in 2001 to 11 million in 2003 G202 Exam 3 Study Guide Topic 8 4292010 70500 AM Topic 8 Greening of Corporations A Strategic Sustainability and Protit Drivers i Sustainable Business into business practices while still maintaining pro tabilig ii Strategic Sustainability Pro t Enhancing O mm Improve internal ef ciencies cost reductions First Mover Cost Advantage w Industry Techno1ogy ManageRegulatoryRisks Preeme stall or shape future regulation Take advantage ofGovI Subsidies Manage growing social risks NGOs Enhance brand equity and corporate reputation Differentiate from competitors n Tap into new customer markets a Employee retentionrecruiting concerns a Amact Green SociallyMinded Venture Funds B External Damages A lm s production imposes costs on a 3quot Party WITHOUT their consent 0 Supply Unde Estimates the True Production Costs 0 From the 39 Many Units are Produced M50 we MEC Mn MP8 a MP0 Fe MPH MSB as 039 ottptt i lications for Ef cienc Prices andOu uts o E Iciency Occurs from producing too many unit 0 Prices Lower Price Morc Quantity Output 9 Causing inef ciency o Outpuu Greater ofoiitputs the More Inef ciency Caused IfQ Increases P Decreases Inef cimcy Increases IfQ Decreases P Increases Inef cimcy Decreases ll Efflclengy Versus groflt max behavlor o o c Green Incentive Mechanisms r 7v ii i Government Taxation o o 0 Government Re Govt wlll Q to Decrease Supply and Increase Consumer Prlces a Tax Set Optrmally at Qe etth Ta Marmal 0e MSC MPO o MEC MPE MSE lndustry Output lations and Tradable Pollution Permits 0 nvt Regulation A p uutl t r Pmm nt appl TT rm m an rhdustry a Establrsh a permrssrble pollutlon level and enforce rt across all fllms Posslble Problems a 1 Some rms wlll have very hlgh compllance costs relatrve to some otherfrrms a 2 The Hrga CostFrrms may CHEAT the regulatlon Posslble Sol E 5 1 Allow hlgh cost fllms to pollute more by buylng pollutlon permrts under a cap htrade system a Set U2 The Model ohe umt of output produces one out ofpollutlon Q Pollutlon I Mar lnzl output Ab amment Term for reduclng pollutroh Firm 1 7 Ab atement Cost ls qulte Small Flrm 2 7 Has large abatement cost 9 More llkely to be cheatlng flrm Industry Industry Standaxd 5mm Total Aharemenl Cosr Tulal Fur Fimlr1 Abatement Cost For Firml I Mariamrmcg on Q1 a MMUVIPByMPCJ at 2 o Tradable pollution Permit Heavy polluters MiningElectiicity get most permits Govt ISSUES pollution permits that pertain to a permissible level of pollution and then Govt lets the iirms TRADE the permits as needed a 39 39 39 39 and mp period of use a Permits can be given out to iirms for m OR they can be initially auctioned or sold to the rms in the industry W 7 Mn MPEMPC 0 0 Q1 Permits Pm39chaud Permiu Snld O b Advantages The overall level of pollution will be reduced Low abatement cost rms gain proiit from selling them Environmental groups can buy the permits and not use them a Reduces pollution more c Implications for When to B y and When to Sell 0 Ifyou want to pollute more buy more permits The permits are distributed equally and given free to industry 0 iii Assign Accountability For Waste 0 Assigning accountability for a rm s waste can alleviate external damages I Secondary markets for waste products will evolve I Example Beer for Bessie I Stuff left over from producing beer cannot be used by beer company so they sell it to the farms and produce revenue and the FARMS GAIN b c they are getting cheap food for the animals 0 iv Government Incentive Programs 0 Govt can offer subsidies to rms to encourage more investment in green technology 0 Examples I Tax Credits for Green Investments I Grant Money for Green RampD I GovemmentIndustry Partnerships o v Green Non Governmental G 39 39 NGOs 0 Green NGOs strategically target companies to evoke industry wide movement toward green technology I 1 Some green NGOs partner with industry to collaborate on green technology B Share in RampD expenditure D Example Environmental Defense I 2 Other green NGOs attack industry to force green technology adoption D Negative PR campaigns and Boycotts D Example Greenpeace and Rainforest Action Network D Readings o i REQUIRED Beer for Bessie and The FedEx and Environmental Defense Case 0 ii OPTIONAL Protecting the Environment and Modeling Market Failure G 202 Exam 3 Study Guide Topic 9 4292010 70500 AM Topic 9 Asymmetric Information and Quality Regulation A Uninfor med Demand and Uninfor med Supply Example Uninl39ormed DEMAND Examnle 0 U ed m 39 con umer Consumers pay too much Oi die products From the View ofEf ciency too much is consumed 0 a i Implications for Prices Oumut andEf ciency Price When Uninfor med Consumer Price is Higher causing Inef ciency When Informed Consumer Price is Lower and causing Ef ciency Output When Uninfor med Consumer Q is Greater causing Inef ciency When Informed Consumer Q is Lower causing Ef ciency E 39iciency my 39 chiem a When Consumers are Uninfor med p amp Q are at Higher causing Inef ciency Uninl39ormed SUPPLY Examnle Worker afefv 39 not revealed to weikeis I Workers will be UnderCompensated From the View ofEf ciencv v too much LABOR 39s Supp 39 0 ii Implication for Price Onmnt and Ef ciency I Price B When Uninfomied Worker Price i Lower canng Inef ciency B When m Worker Price i Higher and canng Ef ciency I Output B When Uninfomied Worker Labor i Greater canng Inef ciency B When m Worker Labor i Lower canng Ef ciency I Ef ciency B When Worker are mi Wage Earned i above Wage Cot paid are i Ef cient B When Worker are Uninfomied Wage Cot paid i below Wage Earned and i Inef cient quot 39 39 39 39 39 quotquot min die right O I The Wc i lower than the We and the Lc i higher than the Le o The worker who remain in the market will want higher wage to compen ate for the rik aociated with theirjob B Role of Government Government regulate Comumer and Worker Safety Quality 0 Example FTC Shun down Mi Cleo for fale promie of free pychic readng abnive telemarketing and tricky billing tactic 0 Average FREE call cotmore than 60 How Much Regulation is Ef cient 0 Individual bene t om enuring afety in conumer product amp working condition 0 However eachlevel of afety i cotly to obtain Is it Ef cient to Obtain 100 Safety om 39f 39H Him 0 Regulate to the point where MB MC Marginal bene FMarginal Cot Efficient Amount of Safety at I ll1 39 Regulation Sescape doors C Markets for Quality Regulation Private Regulation 0 Private Regulation Forms when customers perceive that ernment qualitv insuf cient o IMPORTANT Private Regulation will be pro table for rms if the market values the additional regulation over the cost of providing it 0 Examples of Private Regulation 0 Best Western I Owns no actual hotels but allows hotels to use its logo for a fee if it meets its own quality standards 0 Underwriters Laboratories I Private rm that establishes standards for electrical equipment and then tests equipment for a fee to see if it meets their standards I Ensures that the equipment is safer so customers will buy unlike certi cation 0 CARFAXcom I Provides information about a car s history for a fee 0 Brands and Franchises 0 Generally brand names and ranchises provide incentive to ensure product quality protect reputation D Public vs Private Regulation 0 Public gGovernment Regulation 0 Don t always consider the costs of regulation 0 Funded through taxes paid by ALL individuals 0 Tend to respond to only media scares 0 Private Regulation 0 Pro tabili depends on the ef ciency of their regulation I Costs are considered bc effects pro t 0 People that bene t from regulation pay for it I Funded by industries that bene t from it 0 Based on the need for regulation from Within the industry I NOT based on media wants E Additional Social Pressures NGOs o Socially minded NGOs will take action Whenever they believe public and private regulation are insuf cient at ensuring quality 0 Green phase gives the opportunity to make a lot of money off regulations When reading the Nike Case Pay attention to the notion of Public Regulation m Regulation and NGO Pressure as all 3 are intertwined 0 Public Regulation 7 Caused by media wants 0 Private Regulation 7 Implemented when neededbene t company 0 NGO Pressure 7 Makes rms respond to their wantsneeds G Readings o i REQUIRED The Nike Case 0 ii OPTIONAL The regulation of quality standards NIKE CASE 0 1 How were Nike s operations different from other sports apparel producers Why were Nike s practices under criticism What were the major concerns of the labor activists o 100 outsourcing saves cost in production and they used the savings for more advertisingpromotion o Outsourcing I Cheap labor I Little government regulationinvolvement I Docile easily managed or handled workforce doesn t collectively bargain 0 Under Criticism I Paid low wages below living standards I Unsafe working conditions I Child labor I Unfair Pro ts 0 2 Did any of the labor activist s criticisms apply directly to Nike s operations What made Nike a strategic target for the activist were there other Viable targets Was it fair to target Nike for labor abuses given its unique business model 0 Apply to Nike s Operations I We don t produce anything we contract with them which makes us uninvolved I Nike doesn t have to worry about working conditions they don t buy machines or factories the government regulates them 0 Strategic Target I Powerful Brand Image I Nike was opening up NikeTown so there was a solid ground for them to attack I They were targeting the Nike endorsers celebrities I They were the leader in their industry 0 Fair To Target Nike I Doesn t matter they did it they accepted the risk bc they believed it was greater than the reward 3 What was Nike s initial public relations response and was it adequate Did Nike eventually do any internal or eXtemal monitoring of its business practices during the controversy If yes eXplain the steps that were taken 0 Public Relations Response I More advertising forget about that look at this I Don t talk to us about that situation I Kind of pushed it aside not a good idea didn t go away 0 Monitoring of Business Practices I Internal a Brought in Ernst and Young to do internal Audit and ndings were only made available to Nike a Safety of factories was leaked out deaths had occurred and conditions were unsafe D Blew up in Nike s face I External D EXMayor of Atlanta Andrew Young was brought in to do strategic review produce reports and give to activist and the public a Nike s doing a good job could have done more but didn t have to a He spent a total of ONLY 10 days including travel time at the factories so he was not there long 4 Did Nike ever admit labor violations What changes did Nike implement in response to the controversy Did they satisfy all the labor activists demand 0 Admit Labor Violations I Nike is synonymous with this slave labor and abuses I Not an admission of guilt I But actions say we have to change 0 Changes I Raise minimum working age D 16 for apparel manufacturing D 18 for shoe manufacturing I Government supported FLA I Never touched wages 2202010 103100 PM Topic 1 The Non Market Business Environment 0 A Corporate Social quot quotquot CSR 1 Firms are responsible for their ENTIRE value chain beg of production to end of product life and 2 Firms should think about ALL stakeholders Market amp NonMarket o i Nonmarket versus market stakeholders I Market 7 Customers clients employees shareholders etc I Non Market 7 Communities Governments sociallyminded non governmental organizations NGOs etc 0 ii Meaning of Strategic CSR I Pro t Enhancing I Manage NonMarket threats and look for NonMarket opp to exploit I Evaluate current amp proposed government regulation I Monitor interest group activity and changing social demands 0 iii Nonmarket forces on the rm 0 B Market Forces Firm Managers Public Policy Makers and SociallyMinded NGOs o i Demand 7 Value to Customers I Consumer Surplu 7 Difference between Price customer is willing to pay and Price they have to pay 0 ii Supply 7 Cost to Producers I Producer Supplu 7 Difference bw selling price amp min to cover cost 0 C Market equilibrium and productive ef ciency 0 i Laws governing the socially ef cient output level Qe I 1 Produce products when Customer Value is GREATER THAN the Costs to Produce I 2 DON T Produce when Customer Value is LESS THAN Costs to Produce 0 ii Inef ciency bel Qe I You are giving up producing some units that are valued more than their productive costs I Customer Value is GREATER THAN Productive Costs 0 iii Inef ciency beyond Qe I You are producing in a range where the units are valued less than their productive costs I Customer Values is LESS THAN Productive Costs 0 iv Ef ciency and Public Policy I Firms often take political action that results in market inef ciencies I Inefficiency Limited Competition Increased Market Power I NGOs NonGovemmental Organization usually take political action when market inefficiencies exist I Lack of property rights market power abuse externalities such as pollution quality concerns I Policy change can correct inefficiency OR be the cause of inefficiency D The effect of taxes 0 O i Effects on Price Output CS and PS I Tax imposed on sellers cause inward shift of the supply curve decreased supply Also M the costs of production I General Results of a Tax I Government revenue is collected I Reduced Quantity bought and sold I Increased Prices to buyers Consumer Surplus DECREASES I Decreased Prices to sellers Producer Surplus DECREASES ii Efficiency implications I Inefficiency can be reduced or increased depending on the state of the market before the tax E Laffer Curve relationship between the tax rate tax base and tax revenue 0 O O O O O O Laffer Curve 7 Limit on the amount of tax revenue government can generate Tax Revenue Tax Base Tax Rate I Tax Rate 7 Percentage rate at which an economic activity is taxed I Tax Base 7 The economic activity being taxed I The Tax Base is INVERSELY related to Tax Rate RateBase move in opposite directions Tax Revenues are lowest for both low tax rates and high tax rates There is one tax rate that maximizes tax revenues T represents how responsive tax rate is to base and R is Max Tax Revenue Inelastic 7 HIGH T change in base gt change in rate BASE beats RATE Elastic 7 LOW T change in rate gt change in base RATE beats BASE F The Effects of Subsidies O i Effects on Price Output CS and PS I Subsidies given to sellers cause outward shift of supply curve increased supply Also effectively lower the costs of production I General Results of a Subsidy I Increased Quantity bought and sold bc of lower buyer price I Decreased Prices to Buyers Consumer Surplus INCREASES I Increased Prices to Sellers Producer Surplus INCREASES 0 ii Efficiency implications I Inefficiency can be reduced or increased depending on the state of the market before the subsidy o G The effect of Productive Regulation specify specific way business conduct bus 0 i Effects on Price Output CS and PS I Productive Regulation on sellers causes inward shift of supply curve decreases supply Also causes sellers to incur higher operating costs compliance costs I General Results of a Subsidy I Reduced Quantity bought and sold I Increased Prices to Buyers Consumer Surplus DECREASES I Decreased Prices to Sellers Consumer Surplus DECREASES 0 ii Efficiency implications I Inefficiency can be reduced or increased depending on the state of the market before the productive regulation 0 H Nonmarket Strategy Outcomes versus Process 0 Outcomes 7 Competition tends to make managers think in terms of outcomes 0 Process 7 Absolutely CRUCIAL in interactions with NonMarket players I Oversight Quality Assurance Social Welfare etc I Even companies w stellar financial performances WalMart often stumble when if comes to dealing w social and regulatory change I WalMart 7 Should have established city council relationship from the beginning 0 I Readings o i REQUIRED Wal Mart s Business Environmen I They have lower costs for better efficiencies I How I Dictate Price from suppliers and draws in customers Low Prices come from lower labor costs etc I Business Model is LOW COST DRIVEN I Lowest cost in town comes from lowest Price in town I Stakeholders I Other competition Costco Mom and Pop Shops I Customers shareholders environmental impact interest groups unions labor activists I Traditionally Open Look to Open WhereWhy I Look for High Unemployment Rate need a lot of employees quick also minimum wage looks better than ZERO wage I Relatively Low Income Areas bc customers NEED WalMart I Close To Big City distribution is easy I Low Union Density 7 Unions were close to Cali High I Cali had 71 Billion annual grocery sales 9 WalMart wanted 20 of share I Govt Responsive to Union Concerns I 50 Reduction in Earnings Small groups are more likely to act take political action 0 ii OPTIONAL The analysis of competitive markets and Tax Rates Tax Revenues and the Laffer Curve Topic 2 Public Policy Formation and Special Interests 0 A Public Sector Participants 0 i Voter Taxpayers I Assumed to be Rationally Ignorant 7 Because 1 Costly to become informed amp 2 Not likely that your individual vote will make diff 0 ii Politicians elected of cials I Assumed to be Vote Maximizers I Regardless of ultimate motivation ability of Politicians to achieve own goals depends on their 39 quot election THUS try to provide info about self and rivals at no charge to voters 0 iii Bureaucrats civil servants I Assumed to be Budget Maximizers I Not elected but hired into of ce Seek higher pay promotions prestigejob security etc which are all possible w bigger budget 0 B Possible Government Inef ciencies o i The Shortsightedness Effect I Politicians support projects that have I Clearly de ned current bene ts I Future costs that are dif cult to identify I Maximized in uence on current voters at the expense of future generations politicians are biased towards such even if inef cient 0 ii Operational Inefficiency I The public sector has no pro t motive I Reduces the incentive of govt to keep costs low I Bureaucrats are seldom in a position to personally gain from reducing costs I Since Bureaucrats spend other people s money they are less conscious of costs than if it were their own monev Evolution of Police Car 0 iii Lobbying Rent Seeking I Devoting resources to in uencing public policy formation in order to bring more income to your interests I Cost of Lobbying can produce signi cant inef ciencies if its main affect is solely income redistribution I a Function of lobbyists I 1 Find Political Opportunities and Threats I 2 Inform Politicians and In uence Public Opinion I 3 Form Coalitions Identify Groups w Similar Interests 0 iv The Special Interest Effect I Small group of people receive bene ts at the expense of a large group I 1 Large widely dispersed groups rarely gain political power 0 Individual costs of taking action EXCEED potential I 2 Small concentrated groups can gain political power 0 Individual bene ts of taking action EXCEED potential 0 v For each government failure you should know the causes of the government failure and the implications for ef ciency C Types of political actions Widely Dispersed Bene ts Concentrated Bene ts Widely Dispersed Costs Majoritarian Client Concentrated Costs Entrepreneurial Interest Group o i Majoritarian Dispersed Bene ts Dispersed Costs I No special interest groups take part on either side of the issue I Example 7 Social Security I Lobbying DOES NOT OCCUR D 0 ii Client Concentrated Bene ts Dispersed Costs I One special interest group is active in FAVOR of an issue I Example 7 Subsidizing foreign advertisements I Lobbying Will LIKELY be Successful 0 iii Interest Group Concentrated Bene ts Concentrated Costs I Active special interest groups are on sides of an issue I Example 7 Minimum Drinking Age I Lobbying Outcomes depend on Relative Strength of Lobb 39ng 0 iv Entrepreneurial Dispersed Bene ts Concentrated Costs I One special interest group is active AGAINST an issue I Example 7 Nuclear Waste Dumps I Lobbying Successful Lobbying Will Be COSTLY o v For each political issue you should know the implications for interest group activity and implications for lobbying Life Cycle of an Issue 7 4 Stages 0 1 Development I Concern about an issue develops from dissatisfaction of an interest group I Initially the issue lacks broad appeal or Widespread public support 2 Politicization O I Issue commands more public attention I Politicians publically adopt issue as a campaign platform 3 Legislative I Bill moves through the political process House and Senate to become law 0 I Majority les votes needed to pass the legislation 4 Implementation 0 I Regulators introduce implement and enforce nal rules I Rules and interpretations can be challenged in the courts Implications for an interest group s ability to in uence the issue an m In unnce A Panqu Issue 0 Time o E Readings o i REQUIRED The Power of Organized Interests and Fuel Economy Standards 2007 0 ii OPTIONAL The Economics of Collective Decision Making and Political Analysis for Business Topic 3 Property Rights Entrepreneurs and Economic Freedom 0 A Three types of Property Rights 0 i Communal I OverUtilization occurs and no one has incentive to conserve for the future 0 ii Government I Decisions made by a small group of elected political representatives 0 iii Secure Private Property Rights I a Secure Private Property give incentive to I 1 Create Value with property bene t others 2 Maintain property and Conserve for the future 3 Innovate and m new technologies and 4 Engage in Volunta Exchange I b Intellectual Property Rights I Patents Exclude all others from using producing or selling an invention Ex Medicine home appliances etc I Copyrights Exclude all others from reproducing distributing or performing a m Ex writings music software art movie I Trademarks Wordnamesymboldevice used in trade with goods to indicate their source Distinguish from competitor o B Profits revenues and costs 0 i Explicit Costs I When a monetary payment is made Example 7 Wages paid to labor 0 ii Implicit Costs I Involve the rm s resources but do not have a moneta payment I When calculating economic pro t they are valued at Normal ROR I Example 7 Opportunity cost of the owner s investment 0 iii Normal Rate of Return I What rm s could get by investing in businesses w a similar risk 0 iv Economic pro t versus accounting pro t 0 C How Pro t Motive gives owner s incentives to 0 Produce in accordance with customers 0 Improve Cost Structures and Ef ciency 0 D Role of Entrepreneurs and Intrepreneurs o Entrepreneur I Someone who tries to exploit opportunities that eXist within markets I Offer new products to open markets create lower cost technology nd new resources 0 Intrepreneur I An Entrepreneurial individual that is employed by a rm I Needed to keep ahead of rival rms improve overall ef ciency An effort to keep the brightest minds within the corporation incentive to incorporate more pro table projects 0 E Successful entrepreneurs and economic growth 0 Successful Entrepreneurism 7 Growth by nding new resources or creating new technologies 0 F Concept of Economic freedom 0 i Economic Freedom I Highest w low taxes low regulation secure property and consistent legal structure 0 Link Between Economic Growth and Economic Freedom I Entrepreneurs 9 Economic Freedom created an environment that is conducive to entrepreneurship o G Concept of creative destruction 0 Creative Destruction I New Industries Technologies and Products make older industries obsolete I Less ef cient technology and industries are left behind o H Readings D Dying industries free resources that can go to new more efficient technologies Government cant act as impediment to the process D Enacting policies to protect dying industries 0 i REQUIRED The Napster Case Napster Business Model was UpAndComing Napster created a younger demographic under 30 but also included 42 of users between the ages 30 and 49 Mainly college though Napster operated under a central server which allowed users to view and search the hard drives of all other users signed on for music chat and more However when music was transferred the les would NOT pass through central server rather they went from comp to comp P2P RIAA claimed copyright infringement using revenues sales profits blank CD sales as evidence Napster s defense argued the Audio Home Recording Act Also Napster argued that they didn t actually control or store the music in question on its central servers RIAA won 7 Courts shut Napster down NO legitimate Business Model if 90 of music traded was illegal to begin with 2quotd Generation Services D File sharing is now a PURE P2P Exchange that does NOT require a central server to operate D Services are based in Netherlands or the West Indies places beyond the reach of the US Courts Recording Industry s Fight D Creating own Sites Expensive Restricted Limited D Legal Action D Make CDs with copy protection D Uploading corrupted funny sounding files 0 ii OPTIONAL Private property freedom and the west Topic 4 Crime and Con icts of Interest 0 A Criminal Incentives as modeled by Gary Becker o i Cost bene t analysis to crime given an individual s utility is dependent on their income level Y0 the decision to commit a crime is dependent on the Payoff of Crime G the Probability of Getting Caught 7t and if caught the Punishment 1 F 1 I Current Utility U Yo I Expected Utility EU l 7 TEY0 G 7tY0 7 F o B Criminal decision rule what will rational criminals do under different situations 0 i EU lt U Expected Utility is LESS than Current Utility DO NOT Commit 0 ii EU U 0 iii EU gt U Expected Utility is GREATER than Current Utility COMMIT 0 iv Implications if the standard rule is changed to be dependent on a percent gain in expected income 0 C Variables of Interest 0 i Size of The Punishment F I Strategic variable for Government 0 ii Probability of Being Caught 71 I Government can affect this with detection technology I Criminals can affect this with their technology 0 iii Payoff of The Crime G I Once a particular crime is chosen the payoff is M so this is not considered strategic to anyone 0 iv Income Yo I Changes in Income DO NOT affect the decision to commit a crime in this simple model 0 v Application to relevant topics I Fake IDs I Punishment Larger penalties for bars honoring fake IDs I Response Many bars are beginning to use ID scanners increasing probability of minors getting caught I Response Fake ID manufacturers are investing in more advanced forging devices I Online File Sharing I Probability of Being Caught Can govt significantly affect this w hundreds of millions of users worldwide For the average user probably NOT it is pretty close to zero I Punishments Government can affect this and make examples of the few they catch to deter others 0 Jamie Thomas is paying 220000 for sharing 24 songs 0 192 million in retrial o IDIOT I Corporate Crimes 7 Sarbanes Oxley Act I Punishment Holds CEOs and CFOs personally liable for accuracy of nancial disclosures 7 HAVE TO SIGN OFF 0 Imposes new criminal penalties for violating security laws I Probability of Being Caught Provides job protection to and prohibits organizational retaliation against whistleblowers o Mandates that lawyers report evidence of corporate of cer misconduct to audit committees and corporate boards 0 D De nition of Con ict of Interest 0 Con ict of Interest I When a professional individual has a private or personal interest suf cient enough to in uence the pursuit of their of cial duties 0 E Types of Con ict of Interest 0 O O O O Self Dealing I Use your position to secure personal bene ts In uence Peddling I Use your position to secure bene ts for a 3mm Accepting Bene ts I Receiving Bribes or NonMonetary Gifts Using Your Employer s Property For Private Gain I Personally gaining from employer s property wout consent Using Con dential Information I Misuse of Inside Information Outside Employment or Moonlighting BIG PT IN ENRON CASE I Holding multiple emplovment positions at one time which biases professional behavior Post Employment BIG POINTS IN ENRON CASE I Holding a seguence of employment positions where you carry a M from one job to the next F Enron 7 Why did con icts of interest exist with following parties 0 Andersen Accountants 0 O O O O I Provided intemal external auditing nancial consulting would bill Enron 25 Mil for accounting and 27 Mil for consulting Had Postemployment Bias People would leave EnronAndersen and go to the other company Moonlighting as well Sell Side Analysts I Rate stocks on a scale of Sell 9 Strong Buy Enron at their peak 65 1922 rated it Strong Buy Enron breaks after fraud to 075 at which l2l7 still said Hold 9 Strong Buy Investment Bankers I Provides loans for Enron underwriting fees pressured sellside analysts to say YES Moonlighting Lawyers I Enron had 250 inhouse lawyers and 850 lawyers from outside law rms Postemployment Bias they did legal review for Enron and said they were good and there were no legal concerns Consultants I McKinsey amp Co was Enron s main consultant of which Jeffrey Skilling was an employee of and provided consulting on behalf of the company to Enron Skilling was eventually hired as Enron s CEO Mixing of corporate cultures giving national seminars about adopting their business model they found ways to make personal success Credit Raters I Did consulting based on risk management systems only 3 credit raters not as much competition I Enron had all 3 credit rating firms provided some consulting and risk management did it more for consulting than anything G Readings i REQUIRED The Enron Case ii OPTIONAL Customized Class Notes and Ethics and Con ict of Interest 2202010 103100 PM 2202010 103100 PM G202 Exam 2 Study Guide 3242010 91700 PM Topic 5 Market Power and Antitrust A Firms with Market Power B Strategies to Restrict Competition 0 i Marketbased strategies 0 ii Governmentbased strategies C Pro t Maximization o i Concept of marginal revenue and marginal cost 0 ii Optimal sales target selection 0 iii Market power pricing behavior 0 iv Monopoly output and price versus efficient output and price D Price Discrimination o i Perfect price discrimination versus imperfect price discrimination 0 ii Implications for CS PS and efficiency relative to the single price outcomes E Basics of Game Theory 0 i Players 0 ii Strategies 0 iii Payoffs 0 iv Dominant Strategy 0 v Secure Strategy 0 vi Thinking Like your Rivals 0 vii Nash Equilibrium F Normal Form Game SimultaneousMove One iShot Games 0 i Strategic Pricing Example 0 ii Monitoring and Mixed Strategy Example 0 iii Airline Dilemma example G Extensive Form Game Multistage Sequential Move Games 0 i Coke and Pepsi Entry Game Example 0 ii Subgame Perfect Equilibrium H Govemment s role 0 i Promote and monitor competition 0 ii Antitrust policies and monitoring MampA activity 0 iii Interpreting the C4 and HHI measures of competition I Readings o i REQUIRED The DeBeers Case 0 ii OPTIONAL Monopoly and Game Theory Topic 6 The Political Economy of Trade A Supply Demand and Trade i When domestic producers have the comparative advantage exports ii When foreign producers have the comparative advantage imports iii Implications for prices quantities and efficiency iv Who bene ts and who loses from trade v Explain the gains from trade B Impact of Import Trade Restrictions i Tariffs o a Implications for prices 0 b Implications for Qs Qd and imports domestically o c Implications for efficiency I l Overproduction I 2 Underconsumption o d Government revenue ii Quotas o a Implications for Qs Qd and imports domestically o b Implications for prices 0 c Implications for efficiency I l Overproduction I 2 Underconsumption I 3 Lobbying 0 iii Similarities in tariffs and quotas 0 iv Differences in tariffs and quotas o v Who benefits and who loses from trade restrictions C Why do nations adopt trade restrictions D Implications of the potential for saving jobs E Readings i REQUIRED The Chiquita Case ii OPTIONAL Application International Trade 3242010 91700 PM 3242010 91700 PM Topic 7 Understanding NGO Behavior Starbucks Case Basic NGO Background Information In US and Europe distrust in corporations is at an all time high accounting scandals and CEO packages Public attitudes towards business in downward spiral since 1960 quotNGO s are the moral compass and ethical watchdogs against the forces of government and capitalism that seek to despoil the planet and crush the faceless majority NGO Leader In surveys by Environics and Gallup Organization the public shows more trust in NGOS over global organizations and large national firms 0 Most people seem only to question the credibility of an NGO when the N60 has partnered with a corporation that the public views as having suspicious motives NGO s were initially developed to target government As the balance of power shifted from governments to multinational corporations NGOS had no choice but to change their approach to social problems and target corporations and key constituents NGO s numbers have nearly quadrupled in the past decade According to institutional organization theory an organizations actions fall into two categories performative and institutional actions 0 Performative assortment of merchandise competitive prices and convenient locations 0 Institutional demonstrate the company s adherence to unwritten social rules such as donating to charity I Institutional actions may take place over performative actions because negative institutional actions harmed the performance of even high performative firms and lowerperformative firms with highinstitutional orientations could outperform high performative firms NGOS focus on single specific issuesdubbed quotCategory Killers 0 quotCategory killer refers to the ability of an N60 to focus on one issue at a time just as some retailers are able to beat competitors with multiple products by only selling one kind of product and thus gaining a competitive advantage According to UK based consulting firm NGOS scored much higher than corporations governments and the media across a wide variety of issues including the environment human rights and health 0 Credibility stems in part from the emotional rather than factbased appeals and the impassioned nature of their arguments NGOS are also typically better at building coalitions than are corporations enabling them to gain allies for their quotselfless crusades against what they portray as corporate greed NGOS are by no means created equal NGO s approaches to social issues and therefore the threats they pose to big business differ greatly based on their philosophies and historical practices Therefore threats carry varying levels of credibility Some act with violence while others do not FIVE COMMON APPROACHES NGOS USE TO THREATEN CORPORATIONS o l Develoging Camgaigns Against Business These campaigns typically focus on a single issue target companies with successful and wellknown brands such as McDonald s and Nike and are augmented by market trends such as the homogenization created by chains like WalMart NGOS now realize that anticorporate campaigns can be far more powerful than antigovernment campaigns Nike best example 0 2 Attempting to Build Market Intelligence These NGOs have developed a more sophisticated understanding of the value chain key business drivers and market behavior They tend to target key constituencies as they try to change how business acts Example infiltratingjob fairs to not get people to work for ExxonMobil 3 Engaging Business Many NGOs have discovered that the best way of leveraging corporate and market change is to get directly involved Often work in collaboration with company Example McDonalds and changing from foam to paper packaging 4 Strive to Make Market 39 39 More IntelligentThis strategy focuses on trying to change the entire market They believe that NGOs need to operate higher up in the organizations they target to be most effective Example Development of certification standards for industries such as the forest products industry in Pacific Northwest influence by a group of NGOs addressing O 0 environmental and social concerns 5 Disrupting Markets Major market changes are atypical in most developed markets in the short term but some markets are disrupted over time as a result of changing attitudes Example Tobacco industry and coalition of multiple NGOs involved with multiple issues such as O obesity and climate change I NGOs standard responses usually reflective of their underlying philosophies dictate the kind of relationships they develop with businesses 0 Categorized by degree of intended disruption and level of discrimination between targets I The more collaborative organizations tend to have a greater capacity to learn adapt strategies easily are creative and tend to fend off more aggressive NGOs focused on disruption Starbucks and Global Exchange The Battle over Fair Trade I Starbucks began working with NGOs in 1996 Though Starbucks has been the recipient of numerous accolades for social responsibility the company s visibilig in the marketplace makes it a target for NGOs the media and consumers I Global Exchange first focused spotlight on Starbucks in 2000 criticizing it for not buying fair trade coffee I Basic Overview of the Market for Coffee I By 2000 coffee was the second most traded commodity on worldwide markets after oil and an 80 billion industry I Market is fragmented with many layers In 2001 between 50 and 70 of global coffee came from smallscale farms Smallscale usually do not own mill to process some collaborate and collectively own mill Often mills are owned by large farms and small farms have little leverage when negotiating prices Small farmers commonly accept a considerably lower price just to get their coffee to market Small producers often sell their crop prior to harvest for a cash advance to middlemen known as quotcoyotesquot Coyotes provide small farmers with credit at high interest rates for bringing their beans to the market Smallscale farmers are often caught in a perpetual gcle of poverg low production levels limit their access to cash which in turn hinders the potential for increasing output The cyclical nature of the coffee market also does not favor small farmers who are forced out during times of overproduction Supply and Demand I By 2000 coffee prices had reached the lowest levels in more than 50 years as a result of oversupply Also the percentage of the coffee price that ended up in the hands of the farmers was usually very low due to layers I In the long term the hope of coffee prices rising was dim I Starbucks focuses heavily on quality and therefore paid an average of 120 per pound well above the market price of 64 cents in 2000 I Starbucks and Social Responsibility I Number one principle in Starbucks mission statement is to quotprovide a great work environment and treat each other with respect I Starbucks Mission Statement Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow I Follow 6 Guidelines Provide a great work environment and treat each other with respect and dignity Embrace diversity as an essential component in the way we do business I Apply the highest standards of excellence to the purchasing roasting and fresh delivery of our coffee I Develop enthusiastically satisfied customers all of the time I Contribute positively to our communities and our environment I Recognize that profitability is essential to our future success Howard Schultz purchased Starbucks from its founders in 1987 and was Chairman and Chief Global Strategist in 2000 Starbucks had a turnover rate rate at which employer gains or loses employees ofjust 60 in 2000 compared to the restaurant industm average of 220 82 of workers claimed to be quotvery satisfied and 15 quotsatisfiedquot with theirjobs when asked by outside auditing agencies Starbucks made commitment to contribute positively to community and environment On communitylevel Starbucks store managers have discretion to donate to local causes and provide coffee to local fundraisers To support coffeeproducing countries Starbucks contribute to CARE a worldwide relief and 39 39 foundation specifying that its support go to coffee producing nations By 2001 Starbucks had contributed more than 18 million to CARE In 1998 Starbucks began a partnership with Conservation International a nonprofit org that promotes biodiversity in coffee growing regions to support producers of shadegrown coffee which protects the environment Focused in Chiapas Mexico shade acreage increased by 220 percent while farmers received a price premium of 65 above the market price and increased exports by 50 I Starbucks also did many things inhouse such as developing an environmental mission statement to articulate more clearly how it interacts with the environment Also hired Sue Mecklenburg in 94 as the first Director of Environmental Affairs where she was given task of developing environmental responsible corporate policies and minimizing company s economic quotfootprintquot In 99 created a Corporate Social Responsibility department and named Dave Olsen as departments first Senior Vice President of CSR I Global Exchange and Fair Trade Coffee I Starbucks commitment to social responsibility did not go unnoticed I In 2000 46th on the list of quot100 Best Corporate Citizens by Business Ethics and 88th of the Fortune s list of quot100 Best Companies to Work For I DESPITE these 39 Global Exchange launched campaign against Starbucks in early 2000 I Global Exchange as the popular leader of the quotcorporate accountability movement primarily targets companies that move their assets toward the cheapest labor sources to maximize profits Supporters claim corporations have helped widen the divide between the worlds rich and poor One of GE main focuses is fair trade I Concept of fair trade began after World War 2 Fair trade is an economic model based on fair labor compensation and mutual respect between producers and consumers By late 1990 s the fair trade movement had gained foothold in US In 1999 TransFair USA a thirdparty licensing organization launched its Fair Trade Certified coffee label According to TF USA impact for US consumers is minimal because it isjust pennies per cup of brewed coffee That summer GE began campaign to educate consumers and the media about labor conditions in coffee industry focusing on getting message to specialty coffee consumers I TransFair USA defines Fair Trade coffee according to five basic guidelines I A Fair Price Producer cooperatives are guaranteed a fair price floor price of 126 per pound of regular coffee and 141 for certified organic coffee or 5 cents above prevailing market price Democratic Organization Producers must belong to coops that are transparent and democratically controlled by their members Direct Trade and LongTerm Relationships Importers must purchase coffee directly from FT certified producers and agree to establish long term and stable relationships Access to Credit When requested by producers importers must provide pre harvest financing or credit up to 60 of each order Environmental Protection Producers must implement integrated crop management and environmental protection plans Through price incentives producers are encouraged to work toward organic I GE s fair trade campaign initially had no corporate angle While successful in educating pockets of consumers the realized they could increase consumer awareness by directing blame for the farmer s woes and linking poor labor conditions to a company s core product I GE focused its attention on the most visible brand in specialty coffee STARBUCKS which met several criteria for a target company I Large company that could make a big difference in the Fair Trade coffee industry I Starbucks based in the US making it an easier target for GE which uses tactics such as demonstrations in front of retail locations and attendance at shareholder meetings I Strong brand name yet another reason to target company Ranked 88th in Best Global Brands in 2000 and also named it the fastestgrowing brand Bus Week While respected there was also criticism of Starbucks pointed to questionable real estate practices which they claimed put local establishments out of business and focused on Starbucks as main reason for this homogenous culture I GE believed Starbucks claimed to socially responsible when they weren t and was also attracted to large number of retail locations in US Rallies and Demonstrations Sue Mecklenburg said GE s targeting of Starbucks as an attempt to pick quotlow hanging fruit Because roasters and retailers of the specialty coffee industry were already accustomed to paying a premium for their coffee they were perceived as more likely to agree to purchase Fair Trade coffee I GE s campaign took Starbucks by surprise In November 1999 TransFair USA pitched FT coffee to Starbucks representatives Paul Rice rep of TF USA said quotI didn t have any expectation that they would sign immediately They had concerns and I knew it would take a couple of months to address them I However in Feb 2000 GE turned up the heat and hosted its first protest in front ofa local Starbucks in downtown San Francisco the day after a local TV station aired the first of a twopart segment on child labor in coffee farms I A few days later they attended Starbucks annual shareholders meeting Things got heated and they were forcefully removed however they talked to Sue afterwards and explained demands fStarbucks didn t offer FT coffee in all retail stores GE would conduct campaign 0 Addressing the Global Exchange Threat Evaluation Starbucks Alternatives In the face of GE s threat Starbucks had to assess the NGO s credibility then evaluate the potential ramifications of this threat to the company and then finally how to respond As evidenced in GE s campaign against NIKE this NGO had established a reputation for successfully executing unrelenting aggressive and damaging campaigns that ended in the targeted company s capitulation to its demands Starbucks struggle with how to integrate FT coffee while also focused being high quality and socially responsible Their chief concern with FT coffee was finding top quality beans from coops that had not demonstrated ability to produce beans to Starbucks quality standards 39 Treating employees customers suppliers and communities with respect was essential to Starbucks and their reputation for both quality coffee and social responsibility on the line Since Starbucks already paid 120 per pound on Average vs 126 stipulated in FT that was not a prohibitive cost However Starbucks would have to incur the cost of identifying new suppliers and the possible disruption of its business operations ifdeliveries did not meet expectations AKA HIGHER TRANSACTION COSTS Starbucks concerned FT coffee quality would differ highly from other coffee beans it uses Did not want to be forced out of high quality niche because its competitive advantage would erode Also claims of human rights violations would smear company s reputation and damage brand Starbucks realized this threat would affect major constituents company reputation and business model Starbucks had to evaluate many different groups of people Employees Customers Suppliers Community Shareholders and Media 0 Starbucks Decision Good Faith Effort or quotToo Little Too Latequot Starbucks CEO Orin Smith pursued a middle ground alternative between fighting back against GE and completely giving in to the NGOs demands To appease GE Starbucks agreed to sell FT coffee in its domestic companyowned stores with the understanding that they would reevaluate the decision in a year and decide whether to continue serving FT coffee This compromise reduced GE s likelihood of conducting national campaign and allowed Starbucks to maintain its rep for high quality coffee and social responsibility 39 This bought Starbucks more time to assess the consumer demand for Fair Trade coffee while providing an opportunity to explore how FT coffee would fit with its sourcing strategies 0 Developments since Fair Trade decision Not only did Starbucks actively pursue and evaluate the FT model but the company also continued to expand its social responsibility programs and explored alternatives to improve the livelihoods for the small farmer Starbucks is now the largest roaster and retailer of certified FT coffee in the US increasing their initial purchase of 653000 pounds to 11 million pounds in 2003 Yet Starbucks customer demand for FT coffee has been flat Huge supplydemand imbalance Starbucks found that many FT certified coops do not have the volume or consistency of quality that Starbucks requires Also a number of Starbucks large suppliers cannot become certified FT due to their size Finally the current FT system neither provides Starbucks with sufficient economic transparency nor does it have welldefined environmental criteria to help ensure sustainability Believing that FT was not the most effective way for the company to help farmers Starbucks has embarked on other initiatives to increase stability and predictability at the producer level purchasing green coffee at outright prices creating direct relationships where possible and implementing long term contracts with suppliers Starbucks goal is to be able to trace the flow of money to ensure that producers are earning enough to stay in business and earn a living wage The company has continued to receive numerous accolades and awards for social responsibility Despite achievements GE still does not believe Starbucks is responsible enough Claims company quotnegotiated in bad faith because it has not achieve FT coffee sales of five percent Global exchange now demands FT coffee is brewed in its domestic stores once a week instead of once a month the current standard Some NGOs have piggybacked GE including Organic Consumers Association TransFair USA and Coop America Also NGOs have raised new complaints such as reprimanding the company for purchasing milk that may or may not contain recombinant Bovine Growth Hormone 0 Collaboration The HardEarned WinWinquot Not all NGOs take such a hardlined stance as GE Increasingly NGOs and business are exploring an alternative approach collaboration Many orgs have found that each party can move beyond their respective organizational constraints to achieve results that exceed what each can individually


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