summary of the case

公司项目的案例分析

Case 1

1. summary of the case
Hostess, a famous snack brand founded by Continental Baking Company, faced its bankruptcy in 2004 because of great debts and heavy load In pension but with infusion from hedge fund companies and private capital firms as well as cashes from Ripple wood and the concession of unions, Hostess struggled another 8 years. Nevertheless, the core problems in Hostess, enormous debts, stubborn delivery unions and tedious pension plants, have not been solved at all by the new management and led Hostess to bankruptcy and liquidation.
2. 6 questions
(1) Was the leadership of Hostess Brands to blame for the demise of the company? Why or why not?
Yes, the leadership in Hostess Brands should be blamed for the failure of the company. The main responsibilities for leadership are to make decisions correctly and guide the whole company in a right track. But in this case, the management in Hostess did not function well. For example, they did not set reasonable operation rules either for their employees or for their delivery. As can be seen in the case, there were 5,500 different delivery routes. To comply with existing agreements with the Teamsters Union, Hostess set separate deliveries for separate product lines to the same retail locations, which increased considerable operation costs. Even worse, they did not change out-dated trucks and production equipment and their pricing strategies could not follow the great change of market.
(2) What role did the unions play in the ultimate liquidation of Hostess Brands?
There were 12 unions in Hostess Brands comprised by 15770 employees. In the reconstruction of 2004, unions made compromise to help Hostess survive through giving up thousands of job positions and millions of benefits. But this time, they refused to do that again, saying Hostess owes about 200,000,000 dollars of pensions but four managers got a 80% rise in salaries. They thought it unreasonable. Their refusal was one of the most important reasons why the ultimate liquidation happened.
(3) Private equity firms and hedge funds are being singled out in this case. Was their conduct unethical? Why or why not?
Personally, I think their conduct was unethical. The reasons why Hostess Brands trapped in the crisis of bankruptcy for the first time was quite obvious but when the private hedge funds took over the rights of management, they did not do any improvement on the production lines, the delivery systems, the pension systems and the operation of the company though they had promised to change the future of the company by innovation and enhancement of employees’ efficiency. Because of this, Hostess did not create new value and the capitals were used in paying debts. Hostess’s paying debt benefited those creditors. Also if Hostess was bankrupt, the biggest beneficiary would be them.
(4) What could have been done differently by the ownership and management of Hostess Brands? 
Ownership should not consider the short-term profits that they could gain, but they should think about the long-term development. Only when the company develops stably and sustainably can ownership gain long-term revenuer. Therefore ownership should. As for management, they should adjust their product lines, delivery systems and the human resources management. 
(5)Was there a long-term future for Hostess Brands? Why or why not? 
If they did not solve those fatal problems, there was not a long-term future for Hostess Brands. Twice bankruptcies were caused by the same problems. What is worse is that the current economic environment in USA is not promising though it indeed recovering.

(6) What do you think will happen now?
Liquidation cannot be avoided. At present, there are acrimonious suits among all the players in this case. Personally, I think Hostess is experiencing debate with the unions. But I think this debate will not last for a long time. Hostess will reconcile with the unions first promising a certain number of employee transference to other sub-brand of Continental Baking Company and making the new rules for human resources management including the pension systems. After liquidation, the debts will be paid first to those private equity firms and hedge funds through auctioned and then the rest should be compensated to those dismissed employees. 
3. Discuss the pros and cons of ALL possible decisions/choices/outcomes relating to your case. 
For the employee transference and compensation, the advantages include relaxing the relationship with the unions, satisfying parts of employees who were dismissed by the Hostess and keeping talented employees for Continental Baking Company. But the disadvantages are involving costing Continental Baking Company a great deal of money. 

Case 2
1. What accounting irregularities did Michael Woodford uncover at Olympus?
There are at least three accounting irregularities have been uncovered at Olympus. First, there was a fraud in the balance sheet. Olympus had made four separate acquisitions costing Olympus 1 billion, but their actual assets pretended to be no real value to the corporation in the balance sheet. Second, the three companies may be shell companies founded by Olympus because the three companies were registered in a tax haven where the tax rates were quite low but they were closed after being acquired. Third, when acquiring the company Gyrus, Olympus paid 687,000,000 dollars for the consulting fees to two investment banks one of which was registered in Cayman Islands. This method helped Olympus to cover high lost caused by previous operations.
2. How did the executive leadership respond to Woodford’s revelations?
To respond to Woodford’s revelations and to “protect” their benefits and the fame of the company, and to conceal the accounting irregularities, the executive leadership, Kikukawa and his board of directors kicked Woodford out of his position as CEO.
3. Critics argue that Woodford could have been more effective if he had taken a longer-term approach to addressing the accounting scandal, rather than the “showdown” approach he took with Kikukawa. Is that a fair assessment? Why or why not?
I think it is not a fair assessment. Indeed, the “showdown” approach used by Woodford contained his anger, but if he had taken a longer-term approach to addressing the accounting scandal, the old executive board would have tried to cover up the problem of capital loss and accounting irregularities again and again until all problems finally boom up. At that moment, the damage will be huger.
4. Can Olympus recover from this scandal? Why or why not?
Personally, I think Olympus can recover from this scandal. First, they changed their management and executive board. The board of directors of the company is mainly composed of highly independent outside directors, and the board chairman and general manager will be appointed to different people. Then they launched a Reformation plan and a medium-term strategy lasting for 5 years so as to regain public trust. Olympus is planning to reorganize its global productive resources, reduce 2,700 employees which accounts for 7% of the total. The new management stresses that Olympus will return to its basic value, re-construct the operating systems of the company. To solve its capital pressure, Olympus will invest more 6 million. Also it is said that other companies, such as Panic Sonic, will invest in Olympus. 



Case 3
1. What prompted Instagram to change the terms of service (TOS) agreement?
It was the possibility of selling its users personal information stated in the old terms of service that scared its users and they decided to closer their Instagram account and deleted all their information. Because of that, Instagram were prone to change its TOS to attract its users back.
2. Critics and many Instagram customers reacted very strongly to the TOS change. Was there an error of judgment on the company’s part? Why or why not?
There was no error of judgment on the company’s part. First, the company had the concrete and precise data about the number of its users. Second, the company can monitor the operations of users, such as deleting all photos. Last, the company can see a lot of comments and even rails from its users. Based on the this accurate evidence, Instagram did not make a wrong judgment.
3. Was Instagram’s response to the PR crisis over the change in the TOS appropriate? Why or why not? 
The response from Instagram to the PR crisis over the change in the TOS was appropriate. Taking the opportunity of the acquirement, Instagram can not only optimize its service, but also 
4. How could Instagram have handled this situation differently? What should the company do now?
First, Instagram should make a public declaration that all personal information of users will not be sold or used in any commercial processes. And at the same time, Facebook should advice users to read the TOS carefully through its social platform. Last, they can bind a little software similar to Docracy when users download and install their software so that users can use the little software to testify the TOS.

Case 4
1. Identify three factors that are driving pharmaceutical companies to host clinical drug trials overseas.
First, the costs of the trials in foreign countries are lower than those in North America. Second, the “pool of samples”, patients who are willing to take the trials especially the trials 1, is much bigger than that in USA, because fewer citizens in America are willing to take those experiments in the primary stage. Third, doctors can get a larger experimental data and have a longer period of experimental time.
2. What regulations are in place to oversee the professional and ethical management of these trials?
In some countries, the blood and tissue samples of patients are confined to a certain number. Some issued laws that restrict patients to participate in drug trials. Others, like FDA, increase the inspection to drug trials.
3. If patients lack the language skills or education to understand the significance of informed consent or the use of a placebo, is it ethical to allow them to participate in the drug trial? Why or why not?
Personally, I think it is not ethical to allow those patients who do not understand the significance of informed consent or the use of a placebo. If participants take part in the trials without understanding the consent, which means they do not know clearly the contents and the operations of the trials, this will violate their rights to be informed. Of course, if doctors have explain carefully to participants what the trials about but the participants still do not understand and sign the consent, participants should be responsible for themselves.
4. What proposals would you offer to make the offshoring of clinical drug trials a more ethical process for all the stakeholders involved?
In the process of recruiting patients, recruiters should tell the patients all the contents and operations of the trials and explain every question that the patients ask. Then, the trials should promise a follow-up health care service, that is, if patients do not feel well because of the trials, they can receive a cure or a health care service.