Deck 2: The Environment of Organizations and Managers

Question 1

What are the trade-offs in the fair-trade process? Do you think that fair trade promotes fair tradeoffs? Why or why not?

Answer 1

A tradeoff is a situation that involves losing one quality of something in return to gain another, after carefully examining all the options. There are many tradeoffs in the fair trade process:
• Morality : Morality is one of the important trade-off. It's very necessary that the products are produced as per the stated standards.
Customers are educated and hence, they study the product trends before making a purchase. Every consumer checks for the product's ethical sources and sees to it that no unethical means has been used by the producer to make goods.
• Profitability : Every organization revolves around the primary goal of making maximum profits and deciding the appropriate price of products. A company often compromises their profits in order to have smooth and fair trade.
• Pricing : Given that, a company procures products at a fair price, the pricing of its products tends to be higher than the competitors, who are not procuring products through fair trade.
Fair trade do promotes fair trade offs. It can be justified in the following way:
A tradeoff is basically treated as an opportunity cost. Under tradeoff , an alternative is given by choice to attain something in return. However, in fair trade , several options are given to the trade partners and the best one is taken up.
Fair trade in an organizations leads to increased awareness among customers about the conditions in which a producer grows products; an artisan creates designs. They check, whether unethical elements such as child labor have not been utilized in production of products.
If some organizations adhere to fair trade practices, it creates a pressure on other organizations to follow the same practice.

Question 2

Shifting Gears in the Auto Industry
In November 2008, U.S. automaker Chrysler announced that it was cutting 25 percent of its workforce and acknowledged that domestic sales had dropped 35 percent in 12 months. CEO Robert Nardelli also admitted that the company could survive only by means of an alliance with another automaker and an infusion of government cash. In December, Chrysler announced that it would shut down all production through January 2009, that it planned to file for bankruptcy, and that it ultimately expected to cease production permanently. Federal aid to both Chrysler and General Motors was authorized in the same month and had topped $17 billion by March 2009, when the Obama administration gave Chrysler 30 days to finalize a previously announced merger agreement with the Italian carmaker Fiat or face the loss of another $6 billion in government subsidies.
Fiat? Things, it seems, had changed since the days when, for many American car buyers, Fiat stood for "Fix it again, Tony." As recently as 2005, GM had been only too happy to pay $2 billion to bail out of a joint venture with Fiat, which was wallowing in debt after accumulated losses of $14 billion. A year later, however, Fiat had actually shown a profit-its first since 2000-and its stock price had doubled. By 2009, it was on Fortune magazine's list of the "World's Most Admired Companies." It's now Europe's third-largest car company, behind only Volkswagen and Peugeot Citroën and ahead of Renault, Daimler (Mercedes- Benz), and BMW, and number nine in the world, producing more cars than Hyundai, Mitsubishi, or Chrysler.
The credit for this remarkable turnaround goes to CEO Sergio Marchionne, an accountant and industry outsider who, in 2004, became Fiat's fifth CEO in two years. Billie Blair, a consultant specializing in corporate change management, reports that Marchionne brought an "unconventional approach" to the task of managing a car company in the twenty-first century. In the process, she says-citing Marchionne's own explanation of his success at Fiat-he "revolutionized the [Fiat] culture in a way that will keep the company competitive in the long term." Adds David Johnston, whose Atlanta-based marketing company has worked with Chrysler, Marchionne "has been able to garner respect for Fiat again after its down years and reestablish it as a business leader."
What was Marchionne's "unconventional approach"? It's the same approach that he plans to take at Chrysler. Taking over Fiat after nearly 15 years of continuously poor performance, Marchionne was forced to lay off employees, but he focused his job-cutting strategy on longer-term goals: He cut 10 percent of the company's white-collar workforce of about 20,000, stripping away layers of management and making room for a younger generation of managers with experience in brand marketing rather than engineering. Refocusing the company on market-driven imperatives, he cut the design-to market process from four years to 18 months, and, even more importantly, he spurred the introduction of a slew of new products. The Grande Punto, which was launched in mid-2005, was the bestselling subcompact in western Europe a year later and spearheaded the firm's resurgence. The Fiat Nuova 500, a subcompact with a distinctive retro look (think Volkswagen's New Beetle), was first introduced in 2007. Both the car and its marketing launch were designed with heavy customer involvement, and the 500, like the Grande Punto, was an immediate success, with first-year sales outstripping Fiat's original target by 160 percent.
Under the merger agreement reached with Fiat in June 2009, the 500 is one of at least seven Fiat vehicles that Chrysler will begin building and selling in the United States by 2014. Produced in four versions- hatchback, sporty hatchback, convertible, and station wagon-the U.S. adaptation of the 500 went to market in 2011, and Marchionne is convinced that, with a full range of body styles, "the 500 … will be a smash if we do it right." Strategically, Marchionne knows that he has to reposition Chrysler from a maker of clunky gas guzzlers to a marketer of stylish, energy-efficient technology, and the 500, which one marketing association in Japan has declared "the sexiest car in the world," has been designated the flagship of Fiat Chrysler's new North American fleet.
Many analysts, however, remain skeptical about Marchionne's prospects for turning Chrysler around even if the 500 turns out to be "a smash." A big issue, they say, is time: Can "New Chrysler" (officially Chrysler Group LLC) hang on financially until projected new-product revenues start filling the company coffers? Completely new and improved Chryslers won't hit showrooms until 2013, but the new management has managed to roll out some new products, including a revamped Jeep Compass and an all-new Chrysler 300 sedan. "We've attacked the bulk of the product portfolio," says Marchionne. "What we've got now is a commercially viable set of products in the marketplace." He also points out that Chrysler sales are ahead of internal targets and claims that he's more confident now about the prospects for a turnaround than he had been when the merger plans were being drawn up. "We've been sticking to our guns," he says, "and it's worked well so far."
Case Questions
What challenges in the U.S. cultural environment do you expect Fiat to face as it uses its Chrysler connection to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing, and leading?

Answer 2

The work cultures of USA and Europe are quite different from each other. Company F has traditionally been based in Italy while Company C was an American organization.
Company F may face various cultural challenges in the U.S American market. Some of the prominent differences are mentioned below:
• American work culture is more open than European work culture. Americans follow an open communication system and Europeans are more closed and procedural in their communication system.
• Americans prefer an informal work culture; Italians are used to a very formal setting in their office spaces.
• Concepts like work from home, flexible working hours, addressing superiors by first names are all American practices though they are rapidly being accepted throughout the world now.
• American employees are more likely to report for work on time and leave on time. Italians on the other hand are more informal and less likely to call their bosses by their names.
Mr. M might face several management challenges in the areas of planning, decision-making, organizing and leading. They are mentioned below:
• As outlined above, Italians and Americans are different from each other due to differences in their cultural backgrounds. Mr. M would have to make genuine efforts and make his employees understand and appreciate the differences on a regular basis.
• The American Unions have a different way of functioning as compared to the collective bargaining process, prevalent in Italian companies.
• The prevalent business scenarios have increasingly become competitive and may lead to volatile economic landscape and harsh sales environment. This is an additional challenge for a new business entity like FC, which is also tackling its own identity issues.
• Over the years, corporate governance has become tighter and more demanding. Company F owns a 35% stake in Company C. This puts it in a challenging position. Company F does not have required leverage to accomplish thorny issues.
• Due to their diverse backgrounds, Americans tend to be transactional and think from business point of view while Italians are more relationship oriented. Americans give foremost importance to tasks and analyzes human relationship from business point of view. Italians will always put the relationship first.
• Americans are much more process and system driven than Italians, who are more situational.
Hence, the above differences will create an impact on all management perspectives like leadership, planning and organizing.

Question 3

What is your opinion of whistleblowing? If you were aware of criminal activity in your organization but knew that reporting it would probably cost you your job, what would you do?

Answer 3

Whistle blowing is when one discovers any wrong-doing in one's organization and reports the same to the concerned authorities so that necessary steps can be taken against the concerned person. This is an essential part of corporate governance and many organizations have evolved processes by which employees are encouraged to report wrong-doing without any fear of any reprisals as the employees are guaranteed their anonymity. One feels that if more organizations implemented this in the corporate world, it would be a better place for it.
One would report any such criminal activity since one's moral compass would not permit one to turn a blind eye towards it. Regarding the fear of losing one's job, one is better off, not working for a company where illegal activities are condoned and carried out.

Question 4

What are the arguments for and against social responsibility on the part of businesses? In your opinion, which set of arguments is more compelling?

Question 5

Do you pay attention to fair-trade products in your own purchasing behavior? For what kind of products might you be willing to pay premium prices?

Question 6

Exercise Overview
Communication skills consist of a manager's ability to effectively receive information and ideas from others and to effectively convey information and ideas to others. This exercise will help you develop your communication skills, while also helping you to understand the importance of knowing the customer segments in an organization's task environment.
Exercise Background
Assume that you are a newly hired middle manager in the marketing department of a large food manufacturer. You have just completed your formal study of management and are excited about the opportunity to apply some of those theories to the real-life problems of your firm. One problem in particular intrigues you. Your boss, the marketing vice president, recently developed a consumer survey to solicit feedback about products from customers. The feedback the firm has received varies considerably, ranging from 2 to 5 on a scale from 1 to 5, which gives your firm no helpful data. In addition, sales of your company's products have been slowly but steadily declining over time, and the marketing department is under some pressure from upper management to determine why.
You have an idea that the survey is not an accurate reflection of consumer preferences, so you make a suggestion to your boss: "Why don't we gather some information about our customers, in order to understand their needs better? For example, our products are purchased by individual consumers, schools, restaurants, and other organizations. Maybe each type of consumer wants something different from our product." Your boss's response is to stare at you, perplexed, and say, "No. We're not changing anything about the survey." When you ask, "Why?" the boss responds that the product has been a bestseller for years, that "good quality is good quality," and thus that all customers must want the same thing. He then says, "I'll spare you the embarrassment of failure by refusing your request."
Exercise Task
With this background in mind, compose a written proposal for your boss, outlining your position. Be sure to emphasize your fundamental concern- that the marketing department must understand the needs of each customer segment better in order to provide products that meet those needs. Consider ways to persuade your boss to change his mind. (Hint: Telling him bluntly that he is wrong is unlikely to be effective.)

Question 7

What industries do you think will feel the greatest impact of international business in the future? Will some industries remain relatively unaffected by globalization? If so, which ones? If not, explain why not.

Question 8

Exercise Overview
Interpersonal skills reflect the manager's ability to communicate with, understand, and motivate individuals and groups. Managers in international organizations must understand how cultural manners and norms affect communication with people in different areas of the world. This exercise will help you evaluate your current level of cultural awareness and develop insights into areas where you can improve.
Exercise Background
As firms become increasingly globalized, they look for managers with international experience or skills. Yet many American college graduates do not have strong skills in foreign languages, global history, or international cultures.
Exercise Task
Take the "International Culture Quiz" that follows. Then, on the basis of your score, answer the questions at the end. In order to make the quiz more relevant, choose your answers from one or more of the ten largest countries (by population) in the world. In order, these are China, India, the United States, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia and Japan.
The International Culture Quiz
1. Name the major religion practiced in each of the ten largest countries.
2. When greeting a business associate, in which country or countries is it proper to shake hands? To bow? To hug or kiss?
3. In which country or countries should you avoid wearing the color purple?
4. In which country or countries would smiling be considered suspicious?
5. In which country or countries are laughter and smiling often used as a way of covering up feelings of embarrassment or displeasure?
6. Which part of someone else's body should you never touch in Indonesia? In India? Which part of your own body should you never touch in China?
7. In which country or countries would a server or small-business person require that a tip be paid before the service is rendered?
8. In which country or countries would it be an insult to address someone in Spanish?
9. In which country or countries is whistling considered bad luck?
10. In which country or countries is it important to give printed business cards to all business associates?
11. In which country or countries might you be asked your family size or income upon first meeting with a new business associate?
12. In which country or countries should gum not be chewed at work?
Your instructor will provide the answers. Was your score high or low? What does your score tell you about your cultural awareness?
What do you think you could do to improve your score? Share your ideas with the class.

Question 9

Describe the basic levels of international business involvement. Why might a firm use more than one level at the same time?

Question 10

Shifting Gears in the Auto Industry
In November 2008, U.S. automaker Chrysler announced that it was cutting 25 percent of its workforce and acknowledged that domestic sales had dropped 35 percent in 12 months. CEO Robert Nardelli also admitted that the company could survive only by means of an alliance with another automaker and an infusion of government cash. In December, Chrysler announced that it would shut down all production through January 2009, that it planned to file for bankruptcy, and that it ultimately expected to cease production permanently. Federal aid to both Chrysler and General Motors was authorized in the same month and had topped $17 billion by March 2009, when the Obama administration gave Chrysler 30 days to finalize a previously announced merger agreement with the Italian carmaker Fiat or face the loss of another $6 billion in government subsidies.
Fiat? Things, it seems, had changed since the days when, for many American car buyers, Fiat stood for "Fix it again, Tony." As recently as 2005, GM had been only too happy to pay $2 billion to bail out of a joint venture with Fiat, which was wallowing in debt after accumulated losses of $14 billion. A year later, however, Fiat had actually shown a profit-its first since 2000-and its stock price had doubled. By 2009, it was on Fortune magazine's list of the "World's Most Admired Companies." It's now Europe's third-largest car company, behind only Volkswagen and Peugeot Citroën and ahead of Renault, Daimler (Mercedes- Benz), and BMW, and number nine in the world, producing more cars than Hyundai, Mitsubishi, or Chrysler.
The credit for this remarkable turnaround goes to CEO Sergio Marchionne, an accountant and industry outsider who, in 2004, became Fiat's fifth CEO in two years. Billie Blair, a consultant specializing in corporate change management, reports that Marchionne brought an "unconventional approach" to the task of managing a car company in the twenty-first century. In the process, she says-citing Marchionne's own explanation of his success at Fiat-he "revolutionized the [Fiat] culture in a way that will keep the company competitive in the long term." Adds David Johnston, whose Atlanta-based marketing company has worked with Chrysler, Marchionne "has been able to garner respect for Fiat again after its down years and reestablish it as a business leader."
What was Marchionne's "unconventional approach"? It's the same approach that he plans to take at Chrysler. Taking over Fiat after nearly 15 years of continuously poor performance, Marchionne was forced to lay off employees, but he focused his job-cutting strategy on longer-term goals: He cut 10 percent of the company's white-collar workforce of about 20,000, stripping away layers of management and making room for a younger generation of managers with experience in brand marketing rather than engineering. Refocusing the company on market-driven imperatives, he cut the design-to market process from four years to 18 months, and, even more importantly, he spurred the introduction of a slew of new products. The Grande Punto, which was launched in mid-2005, was the bestselling subcompact in western Europe a year later and spearheaded the firm's resurgence. The Fiat Nuova 500, a subcompact with a distinctive retro look (think Volkswagen's New Beetle), was first introduced in 2007. Both the car and its marketing launch were designed with heavy customer involvement, and the 500, like the Grande Punto, was an immediate success, with first-year sales outstripping Fiat's original target by 160 percent.
Under the merger agreement reached with Fiat in June 2009, the 500 is one of at least seven Fiat vehicles that Chrysler will begin building and selling in the United States by 2014. Produced in four versions- hatchback, sporty hatchback, convertible, and station wagon-the U.S. adaptation of the 500 went to market in 2011, and Marchionne is convinced that, with a full range of body styles, "the 500 … will be a smash if we do it right." Strategically, Marchionne knows that he has to reposition Chrysler from a maker of clunky gas guzzlers to a marketer of stylish, energy-efficient technology, and the 500, which one marketing association in Japan has declared "the sexiest car in the world," has been designated the flagship of Fiat Chrysler's new North American fleet.
Many analysts, however, remain skeptical about Marchionne's prospects for turning Chrysler around even if the 500 turns out to be "a smash." A big issue, they say, is time: Can "New Chrysler" (officially Chrysler Group LLC) hang on financially until projected new-product revenues start filling the company coffers? Completely new and improved Chryslers won't hit showrooms until 2013, but the new management has managed to roll out some new products, including a revamped Jeep Compass and an all-new Chrysler 300 sedan. "We've attacked the bulk of the product portfolio," says Marchionne. "What we've got now is a commercially viable set of products in the marketplace." He also points out that Chrysler sales are ahead of internal targets and claims that he's more confident now about the prospects for a turnaround than he had been when the merger plans were being drawn up. "We've been sticking to our guns," he says, "and it's worked well so far."
Case Questions
According to a major economics consulting firm, Fiat's "South American operations are the jewel in the Italian company's global operations."* Fiat has plants in Brazil and Argentina, and Brazil is its biggest market, well ahead of its home country market. In 2011, with the Chrysler venture taking up more and more of the firm's attention-and as European sales suffered a steep decline-rumors began to circulate that Marchionne might move Fiat headquarters from Italy to the United States. Discuss Fiat's takeover of Chrysler as part of a strategy to transform itself from an international business into a multinational or global business.

Question 11

Under what circumstances might fair trade actually cause harm? To whom? At what point would fair-trade trade-offs no longer be acceptable?

Question 12

Can you think of dimensions of the task environment that are not discussed in this chapter? Indicate their linkages to those that are discussed.

Question 13

What is the culture of your college or university? How clear is it? What are its most positive and its most negative characteristics?

Question 14

Identify and discuss each major dimension of the general environment and the task environment.

Question 15

Describe various barriers to international trade.

Question 16

Global Awareness
Introduction: As we have noted, the environment of business is becoming more global. The following assessment is designed to help you assess your readiness to respond to managing in a global context. Instructions: You will agree with some of the following statements and disagree with others. In some cases you may find it difficult to make a decision, but you should force yourself to make a choice. Record your answers next to each statement according to the following scale:
4 Strongly agree
3 Somewhat agree
2 Somewhat disagree
1 Strongly disagree
_______ 1. Some areas of Switzerland are very much like Italy.
_______ 2. Although aspects of behavior such as motivation and attitudes within organizational settings remain quite diverse across cultures, organizations themselves appear to be increasingly similar in terms of design and technology.
_______ 3. Spain, France, Japan, Singapore, Mexico, Brazil, and Indonesia have cultures with a strong orientation toward authority.
_______ 4. Japan and Austria define male and female roles more rigidly and value qualities such as forcefulness and achievement more than do Norway, Sweden, Denmark, and Finland.
_______ 5. Some areas of Switzerland are very much like France.
_______ 6. Australia, Great Britain, the Netherlands, Canada, and New Zealand have cultures that view people first as individuals and place a high priority on their own interests and values, whereas Colombia, Pakistan, Taiwan, Peru, Singapore, Mexico, Greece, and Hong Kong have cultures in which the good of the group or of society is considered of greatest importance.
_______ 7. The United States, Israel, Austria, Denmark, Ireland, Norway, Germany, and New Zealand have cultures with a low Orientation toward authority.
_______ 8. The same manager may behave differently in different cultural settings.
_______ 9. Denmark, Canada, Norway, Singapore, Hong Kong, and Australia have cultures in which employees tolerate a great deal of uncertainty, but such high levels of uncertainty are not well tolerated in Israel, Austria, Japan, Italy, Argentina, Peru, France, and Belgium.
_______ 10. Some areas of Switzerland are very much like Germany.

Question 17

How does the environment affect fair trade?

Question 18

Exercise Overview
Communication skills consist of a manager's ability to effectively receive information and ideas from others and to effectively convey information and ideas to others. This exercise will help you develop your communication skills, while also helping you to understand the importance of knowing the customer segments in an organization's task environment.
Exercise Background
Assume that you are a newly hired middle manager in the marketing department of a large food manufacturer. You have just completed your formal study of management and are excited about the opportunity to apply some of those theories to the real-life problems of your firm. One problem in particular intrigues you. Your boss, the marketing vice president, recently developed a consumer survey to solicit feedback about products from customers. The feedback the firm has received varies considerably, ranging from 2 to 5 on a scale from 1 to 5, which gives your firm no helpful data. In addition, sales of your company's products have been slowly but steadily declining over time, and the marketing department is under some pressure from upper management to determine why.
You have an idea that the survey is not an accurate reflection of consumer preferences, so you make a suggestion to your boss: "Why don't we gather some information about our customers, in order to understand their needs better? For example, our products are purchased by individual consumers, schools, restaurants, and other organizations. Maybe each type of consumer wants something different from our product." Your boss's response is to stare at you, perplexed, and say, "No. We're not changing anything about the survey." When you ask, "Why?" the boss responds that the product has been a bestseller for years, that "good quality is good quality," and thus that all customers must want the same thing. He then says, "I'll spare you the embarrassment of failure by refusing your request."
Exercise Task
On the basis of what you wrote in response to Exercise Task 1, do you think your boss will change his mind? If yes, exactly what will persuade him to change his mind? If no, what other actions could you take in a further effort to have your ideas adopted by the firm?

Question 19

Shifting Gears in the Auto Industry
In November 2008, U.S. automaker Chrysler announced that it was cutting 25 percent of its workforce and acknowledged that domestic sales had dropped 35 percent in 12 months. CEO Robert Nardelli also admitted that the company could survive only by means of an alliance with another automaker and an infusion of government cash. In December, Chrysler announced that it would shut down all production through January 2009, that it planned to file for bankruptcy, and that it ultimately expected to cease production permanently. Federal aid to both Chrysler and General Motors was authorized in the same month and had topped $17 billion by March 2009, when the Obama administration gave Chrysler 30 days to finalize a previously announced merger agreement with the Italian carmaker Fiat or face the loss of another $6 billion in government subsidies.
Fiat? Things, it seems, had changed since the days when, for many American car buyers, Fiat stood for "Fix it again, Tony." As recently as 2005, GM had been only too happy to pay $2 billion to bail out of a joint venture with Fiat, which was wallowing in debt after accumulated losses of $14 billion. A year later, however, Fiat had actually shown a profit-its first since 2000-and its stock price had doubled. By 2009, it was on Fortune magazine's list of the "World's Most Admired Companies." It's now Europe's third-largest car company, behind only Volkswagen and Peugeot Citroën and ahead of Renault, Daimler (Mercedes- Benz), and BMW, and number nine in the world, producing more cars than Hyundai, Mitsubishi, or Chrysler.
The credit for this remarkable turnaround goes to CEO Sergio Marchionne, an accountant and industry outsider who, in 2004, became Fiat's fifth CEO in two years. Billie Blair, a consultant specializing in corporate change management, reports that Marchionne brought an "unconventional approach" to the task of managing a car company in the twenty-first century. In the process, she says-citing Marchionne's own explanation of his success at Fiat-he "revolutionized the [Fiat] culture in a way that will keep the company competitive in the long term." Adds David Johnston, whose Atlanta-based marketing company has worked with Chrysler, Marchionne "has been able to garner respect for Fiat again after its down years and reestablish it as a business leader."
What was Marchionne's "unconventional approach"? It's the same approach that he plans to take at Chrysler. Taking over Fiat after nearly 15 years of continuously poor performance, Marchionne was forced to lay off employees, but he focused his job-cutting strategy on longer-term goals: He cut 10 percent of the company's white-collar workforce of about 20,000, stripping away layers of management and making room for a younger generation of managers with experience in brand marketing rather than engineering. Refocusing the company on market-driven imperatives, he cut the design-to market process from four years to 18 months, and, even more importantly, he spurred the introduction of a slew of new products. The Grande Punto, which was launched in mid-2005, was the bestselling subcompact in western Europe a year later and spearheaded the firm's resurgence. The Fiat Nuova 500, a subcompact with a distinctive retro look (think Volkswagen's New Beetle), was first introduced in 2007. Both the car and its marketing launch were designed with heavy customer involvement, and the 500, like the Grande Punto, was an immediate success, with first-year sales outstripping Fiat's original target by 160 percent.
Under the merger agreement reached with Fiat in June 2009, the 500 is one of at least seven Fiat vehicles that Chrysler will begin building and selling in the United States by 2014. Produced in four versions- hatchback, sporty hatchback, convertible, and station wagon-the U.S. adaptation of the 500 went to market in 2011, and Marchionne is convinced that, with a full range of body styles, "the 500 … will be a smash if we do it right." Strategically, Marchionne knows that he has to reposition Chrysler from a maker of clunky gas guzzlers to a marketer of stylish, energy-efficient technology, and the 500, which one marketing association in Japan has declared "the sexiest car in the world," has been designated the flagship of Fiat Chrysler's new North American fleet.
Many analysts, however, remain skeptical about Marchionne's prospects for turning Chrysler around even if the 500 turns out to be "a smash." A big issue, they say, is time: Can "New Chrysler" (officially Chrysler Group LLC) hang on financially until projected new-product revenues start filling the company coffers? Completely new and improved Chryslers won't hit showrooms until 2013, but the new management has managed to roll out some new products, including a revamped Jeep Compass and an all-new Chrysler 300 sedan. "We've attacked the bulk of the product portfolio," says Marchionne. "What we've got now is a commercially viable set of products in the marketplace." He also points out that Chrysler sales are ahead of internal targets and claims that he's more confident now about the prospects for a turnaround than he had been when the merger plans were being drawn up. "We've been sticking to our guns," he says, "and it's worked well so far."
Case Questions
What benefits does Fiat hope to gain from its arrangement with Chrysler? What potential drawbacks does it face? Judging from your analysis of benefits and drawbacks, explain why the Fiat-Chrysler arrangement might best characterized as a strategic alliance? In what sense is it best characterized as a direct investment?

Question 20

What is the relationship between the law and ethical behavior? Can a behavior be ethical but illegal at the same time?

Question 21

Do organizations have ethics? Why or why not?