Business Driven Technology 6th Edition by Paige Baltzan

Exercise 15

Business 2.0: Bad Business Decisions
Business 2.0 magazine looked at the top 100 bad business decisions of all time including bungled layoffs, customer-service snafus, executive follies, and other madness. Five of the top 10 bad business decisions of all time were made because business personnel did not understand information technology; these five are highlighted below. Perhaps one good reason to pay attention in this course is so that you will not end up on Business 2.0' s bad business decisions!
Bad Business Decision 3 of 10: Starbucks
Winner: Dumbest Moment-Marketing
Starbucks directs baristas in the southeastern United States to email a coupon for a free iced coffee to friends and family members. But email knows no geographic boundaries and, worse, can be printed repeatedly.
After the email spreads to every corner of the country and is reproduced en masse, Starbucks yanks the offer, leading disgruntled customer Kelly Coakley to file a $114 million classaction lawsuit.
Bad Business Decision 4 of 10: Radioshack
Winner: Dumbest Moment-Human Resources
From: RadioShack
To: RadioShack employees
Subject: Your former job
RadioShack fires 400 staffers via email. Affected employees receive a message that reads, "The work force reduction notification is currently in progress. Unfortunately your position is one that has been eliminated."
Bad Business Decision 7 of 10: AOL
Winner: Dumbest Moment-Data Security
In an "attempt to reach out to the academic community with new research tools," AOL releases the search queries of 657,000 users.
Though AOL insists that the information contains no personally identifiable data, The New York Times and other news outlets promptly identify a number of specific users, including searcher No. 4417749, soon-to-be-ex-AOL-subscriber Thelma Arnold of Lilburn, Georgia, whose queries include "women's underwear" and "dog that urinates on everything."
The gaffe leads to the resignation of AOL's chief technology officer and a half-billion-dollar class-action lawsuit.
Bad Business Decision 8 of 10: UCLA
Winner: Dumbest Moment-Ecommerce
On the morning of April 3, 2006, Amazon.com sends an email headed "UCLA Wins!" to virtually everyone to whom it has ever sold a sports-related item, attempting to hawk a cap celebrating the Bruins' stirring victory in college basketball's championship game.
Just one problem: The game isn't scheduled to be played until later that night. When it is, UCLA is trounced by Florida, 73-57.
Bad Business Decision 9 of 10: Bank of America
Winner: Dumbest Moment-Outsourcing
After Bank of America announces plans to outsource 100 tech support jobs from the San Francisco Bay Area to India, the American workers are told that they must train their own replacements in order to receive their severance payments.
Here are a few other bad ones that did not make the top 10, but are worth mentioning.
Bad Business Decision: McDonald's
Guess the translator took the phrase "viral marketing" a bit too literally. McDonald's runs a promotional contest in Japan in which it gives away 10,000 Mickey D's-branded MP3 players.
The gadgets come preloaded with 10 songs-and, in some cases, a version of the QQPass family of Trojan horse viruses, which, when uploaded to a PC, seek to capture passwords, user names, and other data and then forward them to hackers.
Bad Business Decision: General Motors
Then again, viral marketing can be messed up in English too. As part of a cross promotion with the NBCTV show The Apprentice, GM launches a contest to promote its Chevy Tahoe SUV. At Chevyapprentice.com, viewers are given video and music clips with which to create their own 30-second commercials.
Among the new Tahoe ads that soon proliferate across the web are ones with taglines like "Yesterday's technology today" and "Global warming isn't a pretty SUV ad-it's a frightening reality."
Bad Business Decision: New York Times Company
We were wondering how Billy the paperboy could afford that gold-plated Huffy. News carriers and retailers in Worcester, Massachusetts, get an unexpected bonus with their usual shipment of the Telegram Gazette: the credit and debit card numbers of 240,000 subscribers to the paper and its sister publication, the Boston Globe, both owned by the New York Times Co.
The security breach is the result of a recycling program in which paper from the Telegram Gazette 's business office is reused to wrap bundles of newspapers.
Bad Business Decision: Sony
PC-B-Q. Defects in batteries made by Sony for portable computing cause a handful of notebooks to burst into spectacularly photogenic flames.
The end result is the biggest computer-related recall ever, as Dell replaces the batteries in more than 4 million laptops. In short order, Apple (1.8 million), Lenovo/IBM (500,000), and others do the same.
Explain why understanding information technology and management information systems can help you achieve business success-or more importantly, help you avoid business disasters-regardless of your major.