Deck 15: Control Essentials

Question 1

Provide an example of how feedback from customers can be used as part of a control system.

Answer 1

The control system can be upgraded with the help of the customer's feedback, for example, in the restaurant business customer's feedback helps to find out the points where the food might be lacking or the deviations in the services of the food joint.
Feedback can help to determine whether the customers are liking the food or not, whether the pricing of the food is appropriate or not, the service provided is on time or not and also suggestions to improve the qualities in which they lack.
Thus, this can help to determine the areas in which the restaurant is lacking and thus the control system can be implemented in such a manner that those loopholes are eliminated, and thus, help the restaurant to grow.

Question 2

Tony works full-time as a computer-repair technician who makes onsite repairs for individuals and small businesses. He says his gross profit margin is 94 percent because last year his total revenues were $100,000 and his expenses were $6,000. "I'm actually doing better than Microsoft. They talk about gross profit margins of 80 percent," says Tony. What is wrong with Tony's estimate of his gross profit margin?

Answer 2

Tony's estimate is wrong as the comparison of his gross profit margin with that of Microsoft's is totally baseless. The comparison should be based on the quantum of business both the firm have. Microsoft is a company working all over the world, and Tony's business is just in one town in one shop, so the comparison should be done between two companies that are performing at the same scale of business.
Moreover gross profit margin is computed using the formula:
In this case, the expenses of Tony's repair shop are given to be a total of $6,000, in which it is hard to say what is the cost of goods sold, thus the data is also insufficient to comment about the real gross profit margin of Tony's repair shop. Thus, it can be said that the statement given by Tony is baseless.

Question 3

How does EVA give a company a more accurate picture of its profitability than does profit margin?

Answer 3

Economic Value Added or EVA is the estimate of the economic profit of the firm.
EVA gives a better value creation than the other profit measures like profit margin as it recognizes the capital cost and thus takes into consideration the riskiness of the operations of the firm.
Other profitability measures like profit margin do not take into account the cost of capital and takes into account only the profits of the company, thus, not giving the true picture of the company's profitability.
EVA mainly aims at the maximization of the shareholder's wealth; it thus helps the managers to turn the investor of the money and capital into efficient profits, and thus, is a better measure than the other measures of profitability measures.

Question 4

Prominent CEOs and management scholars have often said, "You can't achieve greatness by cutting costs." What are these people talking about?

Question 5

Managers of some small businesses save costs by eliminating most of the land-line telephones and require that employees use their personal cell phones to make most business calls. What do you see as the advantages and disadvantages of this approach to cost cutting?

Question 6

What type of intellectual capital do you think you provide, or will be providing, an employer?

Question 7

In several companies, a performance standard for maintenance technicians is to have relatively few demands for service from the manufacturing department. Explain the logic behind this performance standard.

Question 8

Using in-person interviews, phone conversations, e-mail, blogs, or social networking sites, do some live research on cost cutting with several individuals. Ask your respondents for examples of useful, or constructive, cost cutting they have observed on the job. You might include yourself as an interviewee for this exercise. Do the same for useless, or destructive, cost cutting. Look for patterns. What type of cost-cutting measure is likely to be well accepted by workers? What type of costcutting measure is likely to be resisted by workers?

Question 9

Jessica Albanese invested a $50,000 inheritance as equity in a franchise print and copy shop. Similar to well-established national franchises, the shop also offers desktop publishing, digital printing, and computer graphics services. Jessica's revenue-and- expense statement for her first year of operation is in the previous page.

Working individually or in small groups, compute the following ratios: gross profit margin, profit margin (return on sales), and return on equity. Groups might compare answers. Discuss whether you think that Jessica is operating a worthwhile business.

Question 10

Potato Head Visits Starbucks
Starbucks Corp. built its business as the antifast food café. The Great Recession and growing competition a few years ago forced the coffeehouse giant to see the virtues of behaving like its streamlined competitors. Under an initiative put into practice at its U.S. stores, there would be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain, and no more dillydallying at the pastry case.
Pushing the Starbucks's drive is Scott Heydon, the company's "vice president of lean thinking." He and a 10-person "lean team" were going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and rebox in less than 45 seconds.
Heydon says reducing waste will free up times for baristas-or "partners"-to interact with customers and improve the Starbucks experience. "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, the talking, reaching, bending," he says. He wants to lower that. If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers. One of Starbucks' biggest expenses is store labor, which costs about 24 percent of revenue annually.
The company began testing lean methods in Oregon. One of the first stores was managed by Tara Jordan, in Oregon City. "In my eyes, we couldn't get better," says Jordan. Her store boasts one of the fastest Starbucks drivethrough windows in the company, with an average time per order of 25 seconds. To help her understand how work can be done more efficiently, Kim Landreth, a member of the lean team, brought a Mr. Potato Head to Jordan's store and sprinkled the ears, nose, lips, and other accessories across several tables.
Using a stop watch, Landreth timed how long it took Jordan to assemble the toy and place it in its box. It took more than a minute. Landreth than asked her to think about how she could complete the task faster. Moving items closer together shaved time, as did altering the order of assembly. Over the course of two hours, Jordan amended the time: about 16 seconds. "That really opened my eyes," she says.
The next project: observing the area where blended drinks, such as frappuccinos, are made. "I thought it was going to be the best station in my store," Jordan said. "What I saw was how much my partners were moving and reaching for things that were never made in the same place. It took way too long to make one beverage," she says.
They moved all but the most commonly ordered syrup flavors and store pitchers closer to where drinks are made. After learning that topping the drinks with whipped cream and chocolate or caramel drizzle at the drink station was slowing down production, they moved those items closer to where drinks are handed to customers. The changes shaved eight seconds off the 45-second process. "Just to top the beverage with whipped cream and drizzle took six seconds," Jordan says. In all, new methods have cut two seconds off the store's drive-through time-to an average of 23 seconds. Between September 2008 and June 2009, her store experienced a 10 percent increase in transactions. The company says that having food and drinks ready to go quickly can boost traffic because that keeps people from leaving stores.
At a lot of stores, Starbucks baristas used to grind all of the day's coffee in the morning and keep it under a counter. They had to bend over and scoop the grounds each time they made a new batch. The absence of grinding sounds and the fresh coffee aroma were among the things Howard Schultz criticized before he returned to the company as chief executive in January 2008 to try to turn things around.
Now baristas are required to grind beans for each batch and timers buzz every eight minutes to signal when it's time to make new coffee. At a busy downtown Chicago Starbucks, store manager Ryan Dobbertin says bins of beans are kept under the counter so barristas can find a particular roast without having to pause and read the label. They quickly differentiate between pitchers of soy, nonfat, and lowfat milk.
At the beginning of an April day a few years ago, Dobbertin's store had a customersatisfaction score of 56 percent; by June it had jumped to 76 percent. His store has seen a 9 percent increase in transactions between April and June. Not all stores are as far along. At a different downtown Chicago store, baristas one morning temporarily ran out of coffee around 7:45 a.m. Heydon observed two workers at the espresso machine and traced their movements on what's been called a "spaghetti map" because of all the lines.
Starbucks has faced some resistance to the program. "They're trying to turn workers into robots," says Erik Forman, a barista in Minneapolis. "It's going to essentially turn the café into a factory. They want to control our every move in order to pinch every possible penny."
To what extent has Starbucks caught on to a cost-effective way of reducing labor expenses in their stores (cafés)?

Question 11

Potato Head Visits Starbucks
Starbucks Corp. built its business as the antifast food café. The Great Recession and growing competition a few years ago forced the coffeehouse giant to see the virtues of behaving like its streamlined competitors. Under an initiative put into practice at its U.S. stores, there would be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain, and no more dillydallying at the pastry case.
Pushing the Starbucks's drive is Scott Heydon, the company's "vice president of lean thinking." He and a 10-person "lean team" were going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and rebox in less than 45 seconds.
Heydon says reducing waste will free up times for baristas-or "partners"-to interact with customers and improve the Starbucks experience. "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, the talking, reaching, bending," he says. He wants to lower that. If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers. One of Starbucks' biggest expenses is store labor, which costs about 24 percent of revenue annually.
The company began testing lean methods in Oregon. One of the first stores was managed by Tara Jordan, in Oregon City. "In my eyes, we couldn't get better," says Jordan. Her store boasts one of the fastest Starbucks drivethrough windows in the company, with an average time per order of 25 seconds. To help her understand how work can be done more efficiently, Kim Landreth, a member of the lean team, brought a Mr. Potato Head to Jordan's store and sprinkled the ears, nose, lips, and other accessories across several tables.
Using a stop watch, Landreth timed how long it took Jordan to assemble the toy and place it in its box. It took more than a minute. Landreth than asked her to think about how she could complete the task faster. Moving items closer together shaved time, as did altering the order of assembly. Over the course of two hours, Jordan amended the time: about 16 seconds. "That really opened my eyes," she says.
The next project: observing the area where blended drinks, such as frappuccinos, are made. "I thought it was going to be the best station in my store," Jordan said. "What I saw was how much my partners were moving and reaching for things that were never made in the same place. It took way too long to make one beverage," she says.
They moved all but the most commonly ordered syrup flavors and store pitchers closer to where drinks are made. After learning that topping the drinks with whipped cream and chocolate or caramel drizzle at the drink station was slowing down production, they moved those items closer to where drinks are handed to customers. The changes shaved eight seconds off the 45-second process. "Just to top the beverage with whipped cream and drizzle took six seconds," Jordan says. In all, new methods have cut two seconds off the store's drive-through time-to an average of 23 seconds. Between September 2008 and June 2009, her store experienced a 10 percent increase in transactions. The company says that having food and drinks ready to go quickly can boost traffic because that keeps people from leaving stores.
At a lot of stores, Starbucks baristas used to grind all of the day's coffee in the morning and keep it under a counter. They had to bend over and scoop the grounds each time they made a new batch. The absence of grinding sounds and the fresh coffee aroma were among the things Howard Schultz criticized before he returned to the company as chief executive in January 2008 to try to turn things around.
Now baristas are required to grind beans for each batch and timers buzz every eight minutes to signal when it's time to make new coffee. At a busy downtown Chicago Starbucks, store manager Ryan Dobbertin says bins of beans are kept under the counter so barristas can find a particular roast without having to pause and read the label. They quickly differentiate between pitchers of soy, nonfat, and lowfat milk.
At the beginning of an April day a few years ago, Dobbertin's store had a customersatisfaction score of 56 percent; by June it had jumped to 76 percent. His store has seen a 9 percent increase in transactions between April and June. Not all stores are as far along. At a different downtown Chicago store, baristas one morning temporarily ran out of coffee around 7:45 a.m. Heydon observed two workers at the espresso machine and traced their movements on what's been called a "spaghetti map" because of all the lines.
Starbucks has faced some resistance to the program. "They're trying to turn workers into robots," says Erik Forman, a barista in Minneapolis. "It's going to essentially turn the café into a factory. They want to control our every move in order to pinch every possible penny."
How should Starbucks managers deal with baristas who do not like the lean methods of working?

Question 12

Potato Head Visits Starbucks
Starbucks Corp. built its business as the antifast food café. The Great Recession and growing competition a few years ago forced the coffeehouse giant to see the virtues of behaving like its streamlined competitors. Under an initiative put into practice at its U.S. stores, there would be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain, and no more dillydallying at the pastry case.
Pushing the Starbucks's drive is Scott Heydon, the company's "vice president of lean thinking." He and a 10-person "lean team" were going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and rebox in less than 45 seconds.
Heydon says reducing waste will free up times for baristas-or "partners"-to interact with customers and improve the Starbucks experience. "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, the talking, reaching, bending," he says. He wants to lower that. If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers. One of Starbucks' biggest expenses is store labor, which costs about 24 percent of revenue annually.
The company began testing lean methods in Oregon. One of the first stores was managed by Tara Jordan, in Oregon City. "In my eyes, we couldn't get better," says Jordan. Her store boasts one of the fastest Starbucks drivethrough windows in the company, with an average time per order of 25 seconds. To help her understand how work can be done more efficiently, Kim Landreth, a member of the lean team, brought a Mr. Potato Head to Jordan's store and sprinkled the ears, nose, lips, and other accessories across several tables.
Using a stop watch, Landreth timed how long it took Jordan to assemble the toy and place it in its box. It took more than a minute. Landreth than asked her to think about how she could complete the task faster. Moving items closer together shaved time, as did altering the order of assembly. Over the course of two hours, Jordan amended the time: about 16 seconds. "That really opened my eyes," she says.
The next project: observing the area where blended drinks, such as frappuccinos, are made. "I thought it was going to be the best station in my store," Jordan said. "What I saw was how much my partners were moving and reaching for things that were never made in the same place. It took way too long to make one beverage," she says.
They moved all but the most commonly ordered syrup flavors and store pitchers closer to where drinks are made. After learning that topping the drinks with whipped cream and chocolate or caramel drizzle at the drink station was slowing down production, they moved those items closer to where drinks are handed to customers. The changes shaved eight seconds off the 45-second process. "Just to top the beverage with whipped cream and drizzle took six seconds," Jordan says. In all, new methods have cut two seconds off the store's drive-through time-to an average of 23 seconds. Between September 2008 and June 2009, her store experienced a 10 percent increase in transactions. The company says that having food and drinks ready to go quickly can boost traffic because that keeps people from leaving stores.
At a lot of stores, Starbucks baristas used to grind all of the day's coffee in the morning and keep it under a counter. They had to bend over and scoop the grounds each time they made a new batch. The absence of grinding sounds and the fresh coffee aroma were among the things Howard Schultz criticized before he returned to the company as chief executive in January 2008 to try to turn things around.
Now baristas are required to grind beans for each batch and timers buzz every eight minutes to signal when it's time to make new coffee. At a busy downtown Chicago Starbucks, store manager Ryan Dobbertin says bins of beans are kept under the counter so barristas can find a particular roast without having to pause and read the label. They quickly differentiate between pitchers of soy, nonfat, and lowfat milk.
At the beginning of an April day a few years ago, Dobbertin's store had a customersatisfaction score of 56 percent; by June it had jumped to 76 percent. His store has seen a 9 percent increase in transactions between April and June. Not all stores are as far along. At a different downtown Chicago store, baristas one morning temporarily ran out of coffee around 7:45 a.m. Heydon observed two workers at the espresso machine and traced their movements on what's been called a "spaghetti map" because of all the lines.
Starbucks has faced some resistance to the program. "They're trying to turn workers into robots," says Erik Forman, a barista in Minneapolis. "It's going to essentially turn the café into a factory. They want to control our every move in order to pinch every possible penny."
What would you think of Starbucks using instore coffee vending machines to save even more money?

Question 13

Potato Head Visits Starbucks
Starbucks Corp. built its business as the antifast food café. The Great Recession and growing competition a few years ago forced the coffeehouse giant to see the virtues of behaving like its streamlined competitors. Under an initiative put into practice at its U.S. stores, there would be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain, and no more dillydallying at the pastry case.
Pushing the Starbucks's drive is Scott Heydon, the company's "vice president of lean thinking." He and a 10-person "lean team" were going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and rebox in less than 45 seconds.
Heydon says reducing waste will free up times for baristas-or "partners"-to interact with customers and improve the Starbucks experience. "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, the talking, reaching, bending," he says. He wants to lower that. If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers. One of Starbucks' biggest expenses is store labor, which costs about 24 percent of revenue annually.
The company began testing lean methods in Oregon. One of the first stores was managed by Tara Jordan, in Oregon City. "In my eyes, we couldn't get better," says Jordan. Her store boasts one of the fastest Starbucks drivethrough windows in the company, with an average time per order of 25 seconds. To help her understand how work can be done more efficiently, Kim Landreth, a member of the lean team, brought a Mr. Potato Head to Jordan's store and sprinkled the ears, nose, lips, and other accessories across several tables.
Using a stop watch, Landreth timed how long it took Jordan to assemble the toy and place it in its box. It took more than a minute. Landreth than asked her to think about how she could complete the task faster. Moving items closer together shaved time, as did altering the order of assembly. Over the course of two hours, Jordan amended the time: about 16 seconds. "That really opened my eyes," she says.
The next project: observing the area where blended drinks, such as frappuccinos, are made. "I thought it was going to be the best station in my store," Jordan said. "What I saw was how much my partners were moving and reaching for things that were never made in the same place. It took way too long to make one beverage," she says.
They moved all but the most commonly ordered syrup flavors and store pitchers closer to where drinks are made. After learning that topping the drinks with whipped cream and chocolate or caramel drizzle at the drink station was slowing down production, they moved those items closer to where drinks are handed to customers. The changes shaved eight seconds off the 45-second process. "Just to top the beverage with whipped cream and drizzle took six seconds," Jordan says. In all, new methods have cut two seconds off the store's drive-through time-to an average of 23 seconds. Between September 2008 and June 2009, her store experienced a 10 percent increase in transactions. The company says that having food and drinks ready to go quickly can boost traffic because that keeps people from leaving stores.
At a lot of stores, Starbucks baristas used to grind all of the day's coffee in the morning and keep it under a counter. They had to bend over and scoop the grounds each time they made a new batch. The absence of grinding sounds and the fresh coffee aroma were among the things Howard Schultz criticized before he returned to the company as chief executive in January 2008 to try to turn things around.
Now baristas are required to grind beans for each batch and timers buzz every eight minutes to signal when it's time to make new coffee. At a busy downtown Chicago Starbucks, store manager Ryan Dobbertin says bins of beans are kept under the counter so barristas can find a particular roast without having to pause and read the label. They quickly differentiate between pitchers of soy, nonfat, and lowfat milk.
At the beginning of an April day a few years ago, Dobbertin's store had a customersatisfaction score of 56 percent; by June it had jumped to 76 percent. His store has seen a 9 percent increase in transactions between April and June. Not all stores are as far along. At a different downtown Chicago store, baristas one morning temporarily ran out of coffee around 7:45 a.m. Heydon observed two workers at the espresso machine and traced their movements on what's been called a "spaghetti map" because of all the lines.
Starbucks has faced some resistance to the program. "They're trying to turn workers into robots," says Erik Forman, a barista in Minneapolis. "It's going to essentially turn the café into a factory. They want to control our every move in order to pinch every possible penny."
What effect would the amount of store traffic at Starbucks stores have on the true cost savings derived from lean techniques?

Question 14

Potato Head Visits Starbucks
Starbucks Corp. built its business as the antifast food café. The Great Recession and growing competition a few years ago forced the coffeehouse giant to see the virtues of behaving like its streamlined competitors. Under an initiative put into practice at its U.S. stores, there would be no more bending over to scoop coffee from below the counter, no more idle moments waiting for expired coffee to drain, and no more dillydallying at the pastry case.
Pushing the Starbucks's drive is Scott Heydon, the company's "vice president of lean thinking." He and a 10-person "lean team" were going from region to region armed with a stopwatch and a Mr. Potato Head toy that they challenge managers to put together and rebox in less than 45 seconds.
Heydon says reducing waste will free up times for baristas-or "partners"-to interact with customers and improve the Starbucks experience. "Motion and work are two different things. Thirty percent of the partners' time is motion; the walking, the talking, reaching, bending," he says. He wants to lower that. If Starbucks can reduce the time each employee spends making a drink, he says, the company could make more drinks with the same number of workers or have fewer workers. One of Starbucks' biggest expenses is store labor, which costs about 24 percent of revenue annually.
The company began testing lean methods in Oregon. One of the first stores was managed by Tara Jordan, in Oregon City. "In my eyes, we couldn't get better," says Jordan. Her store boasts one of the fastest Starbucks drivethrough windows in the company, with an average time per order of 25 seconds. To help her understand how work can be done more efficiently, Kim Landreth, a member of the lean team, brought a Mr. Potato Head to Jordan's store and sprinkled the ears, nose, lips, and other accessories across several tables.
Using a stop watch, Landreth timed how long it took Jordan to assemble the toy and place it in its box. It took more than a minute. Landreth than asked her to think about how she could complete the task faster. Moving items closer together shaved time, as did altering the order of assembly. Over the course of two hours, Jordan amended the time: about 16 seconds. "That really opened my eyes," she says.
The next project: observing the area where blended drinks, such as frappuccinos, are made. "I thought it was going to be the best station in my store," Jordan said. "What I saw was how much my partners were moving and reaching for things that were never made in the same place. It took way too long to make one beverage," she says.
They moved all but the most commonly ordered syrup flavors and store pitchers closer to where drinks are made. After learning that topping the drinks with whipped cream and chocolate or caramel drizzle at the drink station was slowing down production, they moved those items closer to where drinks are handed to customers. The changes shaved eight seconds off the 45-second process. "Just to top the beverage with whipped cream and drizzle took six seconds," Jordan says. In all, new methods have cut two seconds off the store's drive-through time-to an average of 23 seconds. Between September 2008 and June 2009, her store experienced a 10 percent increase in transactions. The company says that having food and drinks ready to go quickly can boost traffic because that keeps people from leaving stores.
At a lot of stores, Starbucks baristas used to grind all of the day's coffee in the morning and keep it under a counter. They had to bend over and scoop the grounds each time they made a new batch. The absence of grinding sounds and the fresh coffee aroma were among the things Howard Schultz criticized before he returned to the company as chief executive in January 2008 to try to turn things around.
Now baristas are required to grind beans for each batch and timers buzz every eight minutes to signal when it's time to make new coffee. At a busy downtown Chicago Starbucks, store manager Ryan Dobbertin says bins of beans are kept under the counter so barristas can find a particular roast without having to pause and read the label. They quickly differentiate between pitchers of soy, nonfat, and lowfat milk.
At the beginning of an April day a few years ago, Dobbertin's store had a customersatisfaction score of 56 percent; by June it had jumped to 76 percent. His store has seen a 9 percent increase in transactions between April and June. Not all stores are as far along. At a different downtown Chicago store, baristas one morning temporarily ran out of coffee around 7:45 a.m. Heydon observed two workers at the espresso machine and traced their movements on what's been called a "spaghetti map" because of all the lines.
Starbucks has faced some resistance to the program. "They're trying to turn workers into robots," says Erik Forman, a barista in Minneapolis. "It's going to essentially turn the café into a factory. They want to control our every move in order to pinch every possible penny."
If you have visited a Starbucks store recently, can you suggest how the baristas can be even more productive, thereby earning or saving the company more money? Maybe you can patronize a Starbucks café just to complete this assignment. (The expense could be tax deductible!)

Question 15

MySpace is Our Place
A case is brewing in federal court in New Jersey that pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com. The case tests whether a supervisor who managed to log into the forum-and then fired employees who bad-mouthed supervisors and customers there-had the right to do so.
The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits. The question is whether employees have a right to privacy in their non-work-created communications with each other.
The case centers on two employees of Houston's restaurant in Hackensack, New Jersey: bartender Brian Pietrylo and waitress Doreen Marino. In 2006, the two workers created and contributed to a forum about their workplace on MySpace.com. Pietrylo e-mailed invitations to coworkers, who then had to log on using a personal e-mail address and a password.
"I thought this would be a nice way to vent … without any outside eyes spying on us. This group is entirely private," Pietrylo wrote in his introduction to the forum, according to court filings.
In the forum, Pietrylo and Marino, who was his girlfriend, made fun of Houston's décor and patrons and made sexual jokes. They also made negative comments about their supervisors. The supervisors were tipped off to the forum by Karen St. Jean, a restaurant hostess, who logged into her account at an after-hours gathering with a Houston's manager to show him the site. They all had a laugh, St. Jean said in a court deposition, and she didn't think about any more about it.
But later, another supervisor called St. Jean into his office and asked her for her e-mail and password to the forum. Then login information was passed up the supervisory chain, where restaurant managers viewed the comments.
The following week, Pietrylo and Marino were fired. Houston's managers have said in court filings that the pair's online posts violated policies set out in an employee handbook, which includes professionalism and a positive attitude.
In their lawsuit, Marino and Pietrylo claim that their managers illegally accessed their online communication in violation of federal wiretapping statutes. They also claimed that the managers violated their privacy under New Jersey law.
St. Jean said in a deposition that she feared she would be fired if she didn't give up her password, a twist in the case that could sway a jury against the company
You be the judge. Who is right in this case, the company or the two employees?

Question 16

MySpace is Our Place
A case is brewing in federal court in New Jersey that pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com. The case tests whether a supervisor who managed to log into the forum-and then fired employees who bad-mouthed supervisors and customers there-had the right to do so.
The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits. The question is whether employees have a right to privacy in their non-work-created communications with each other.
The case centers on two employees of Houston's restaurant in Hackensack, New Jersey: bartender Brian Pietrylo and waitress Doreen Marino. In 2006, the two workers created and contributed to a forum about their workplace on MySpace.com. Pietrylo e-mailed invitations to coworkers, who then had to log on using a personal e-mail address and a password.
"I thought this would be a nice way to vent … without any outside eyes spying on us. This group is entirely private," Pietrylo wrote in his introduction to the forum, according to court filings.
In the forum, Pietrylo and Marino, who was his girlfriend, made fun of Houston's décor and patrons and made sexual jokes. They also made negative comments about their supervisors. The supervisors were tipped off to the forum by Karen St. Jean, a restaurant hostess, who logged into her account at an after-hours gathering with a Houston's manager to show him the site. They all had a laugh, St. Jean said in a court deposition, and she didn't think about any more about it.
But later, another supervisor called St. Jean into his office and asked her for her e-mail and password to the forum. Then login information was passed up the supervisory chain, where restaurant managers viewed the comments.
The following week, Pietrylo and Marino were fired. Houston's managers have said in court filings that the pair's online posts violated policies set out in an employee handbook, which includes professionalism and a positive attitude.
In their lawsuit, Marino and Pietrylo claim that their managers illegally accessed their online communication in violation of federal wiretapping statutes. They also claimed that the managers violated their privacy under New Jersey law.
St. Jean said in a deposition that she feared she would be fired if she didn't give up her password, a twist in the case that could sway a jury against the company
You be the manager. What should the managers at Houston's have done when they learned about the negative comments on MySpace?

Question 17

MySpace is Our Place
A case is brewing in federal court in New Jersey that pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com. The case tests whether a supervisor who managed to log into the forum-and then fired employees who bad-mouthed supervisors and customers there-had the right to do so.
The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits. The question is whether employees have a right to privacy in their non-work-created communications with each other.
The case centers on two employees of Houston's restaurant in Hackensack, New Jersey: bartender Brian Pietrylo and waitress Doreen Marino. In 2006, the two workers created and contributed to a forum about their workplace on MySpace.com. Pietrylo e-mailed invitations to coworkers, who then had to log on using a personal e-mail address and a password.
"I thought this would be a nice way to vent … without any outside eyes spying on us. This group is entirely private," Pietrylo wrote in his introduction to the forum, according to court filings.
In the forum, Pietrylo and Marino, who was his girlfriend, made fun of Houston's décor and patrons and made sexual jokes. They also made negative comments about their supervisors. The supervisors were tipped off to the forum by Karen St. Jean, a restaurant hostess, who logged into her account at an after-hours gathering with a Houston's manager to show him the site. They all had a laugh, St. Jean said in a court deposition, and she didn't think about any more about it.
But later, another supervisor called St. Jean into his office and asked her for her e-mail and password to the forum. Then login information was passed up the supervisory chain, where restaurant managers viewed the comments.
The following week, Pietrylo and Marino were fired. Houston's managers have said in court filings that the pair's online posts violated policies set out in an employee handbook, which includes professionalism and a positive attitude.
In their lawsuit, Marino and Pietrylo claim that their managers illegally accessed their online communication in violation of federal wiretapping statutes. They also claimed that the managers violated their privacy under New Jersey law.
St. Jean said in a deposition that she feared she would be fired if she didn't give up her password, a twist in the case that could sway a jury against the company
You be the ethics specialist. How ethical were the managers in looking in the MySpace comments? How ethical were the employees in posting negative comments about their employer and its patrons on MySpace?

Question 18

MySpace is Our Place
A case is brewing in federal court in New Jersey that pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com. The case tests whether a supervisor who managed to log into the forum-and then fired employees who bad-mouthed supervisors and customers there-had the right to do so.
The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits. The question is whether employees have a right to privacy in their non-work-created communications with each other.
The case centers on two employees of Houston's restaurant in Hackensack, New Jersey: bartender Brian Pietrylo and waitress Doreen Marino. In 2006, the two workers created and contributed to a forum about their workplace on MySpace.com. Pietrylo e-mailed invitations to coworkers, who then had to log on using a personal e-mail address and a password.
"I thought this would be a nice way to vent … without any outside eyes spying on us. This group is entirely private," Pietrylo wrote in his introduction to the forum, according to court filings.
In the forum, Pietrylo and Marino, who was his girlfriend, made fun of Houston's décor and patrons and made sexual jokes. They also made negative comments about their supervisors. The supervisors were tipped off to the forum by Karen St. Jean, a restaurant hostess, who logged into her account at an after-hours gathering with a Houston's manager to show him the site. They all had a laugh, St. Jean said in a court deposition, and she didn't think about any more about it.
But later, another supervisor called St. Jean into his office and asked her for her e-mail and password to the forum. Then login information was passed up the supervisory chain, where restaurant managers viewed the comments.
The following week, Pietrylo and Marino were fired. Houston's managers have said in court filings that the pair's online posts violated policies set out in an employee handbook, which includes professionalism and a positive attitude.
In their lawsuit, Marino and Pietrylo claim that their managers illegally accessed their online communication in violation of federal wiretapping statutes. They also claimed that the managers violated their privacy under New Jersey law.
St. Jean said in a deposition that she feared she would be fired if she didn't give up her password, a twist in the case that could sway a jury against the company
You be the Internet researcher. What was the eventual outcome of this case?

Question 19

MySpace is Our Place
A case is brewing in federal court in New Jersey that pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com. The case tests whether a supervisor who managed to log into the forum-and then fired employees who bad-mouthed supervisors and customers there-had the right to do so.
The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits. The question is whether employees have a right to privacy in their non-work-created communications with each other.
The case centers on two employees of Houston's restaurant in Hackensack, New Jersey: bartender Brian Pietrylo and waitress Doreen Marino. In 2006, the two workers created and contributed to a forum about their workplace on MySpace.com. Pietrylo e-mailed invitations to coworkers, who then had to log on using a personal e-mail address and a password.
"I thought this would be a nice way to vent … without any outside eyes spying on us. This group is entirely private," Pietrylo wrote in his introduction to the forum, according to court filings.
In the forum, Pietrylo and Marino, who was his girlfriend, made fun of Houston's décor and patrons and made sexual jokes. They also made negative comments about their supervisors. The supervisors were tipped off to the forum by Karen St. Jean, a restaurant hostess, who logged into her account at an after-hours gathering with a Houston's manager to show him the site. They all had a laugh, St. Jean said in a court deposition, and she didn't think about any more about it.
But later, another supervisor called St. Jean into his office and asked her for her e-mail and password to the forum. Then login information was passed up the supervisory chain, where restaurant managers viewed the comments.
The following week, Pietrylo and Marino were fired. Houston's managers have said in court filings that the pair's online posts violated policies set out in an employee handbook, which includes professionalism and a positive attitude.
In their lawsuit, Marino and Pietrylo claim that their managers illegally accessed their online communication in violation of federal wiretapping statutes. They also claimed that the managers violated their privacy under New Jersey law.
St. Jean said in a deposition that she feared she would be fired if she didn't give up her password, a twist in the case that could sway a jury against the company
To what extent is Karen St. Jean a backstabber?