MGT 4450
JUUL mechanism of responsibility: Capability (the power or ability to do something)
JUUL did the bare minimum to make it look like they "do superficial reactions: to create the allusion that they're taking action" they put an age restriction on their products and warning labels
Discuss the role of Cognitive Bias in this case. Did warning signs exist? Why were the warning signs ignored? Apply the following to the BP case: Sunk Cost Fallacy
The ability of bp to not be able to walk away from the 75M that they could have gained from the investment They should have taken the loss of that but they could not let go that they were wrong.
Who is "harmed" and what is the nature (physical, economic, societal) of that harm? The natural environment: environmental disaster
The involuntary stakeholders like the birds or the fish 1.8 million gallons of toxic dispersant to clean the oil and control the oil 5 million barrels of crude lost into the water
Be familiar with the details in BP exhibit 3 What went wrong? #3
staff misread a key pressure test thinking high readings were an error
JUUL mechanism of responsibility: Culpability (responsibility for a fault or wrong; blame)
teen vaping Addiction guilty of intentionally marketing to teen at the beginning of the story did they cross the line on what is legal at the beginning of the launch (social media, tv ad's, influencers glorifying juuls)
Be familiar with the details in BP exhibit 3 What went wrong? #2
the cement and valve at the bottom of the drill pipe failed to stop oil and gas of the drill pipe failed to stop oil and gas bursting into the well pipe.
Be familiar with the details in BP exhibit 3 What went wrong? #1
the cement that was supposed to stop oil and gas reaching the well pipe casing did not work. The report blames the type of cement used.
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Run a test of the kill line to see if the sensor is working or not
1. Zero pressure combined with zero mud and then they allowed them to conclude the well was safe to drill. 2. Amplified information that supports the thesis that you want Anchoring bias to make the leap that this is the right thing
Who is "harmed" and what is the nature (physical, economic, societal) of that harm? (Employees)
11 fatalities, many injuries Emotional trauma Ptsd for survivors
Who is "harmed" and what is the nature (physical, economic, societal) of that harm? Shareholders
5 million barrels of crude lost into the water ($400Million at $80/barrel) there was more lost but case says 5 million Horizon rig destroyed ($350 million) Transocean stock has never recovered BP pays $billions in fines and penalties ($60 billion) CEO loses job even though he came in in 2006 to "make it safer " Sell assets to cover legal costs They haven't made profits in a long time Stock declines- shareholders are hurt ($60 in 4/2010$28 today)
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Behind on maintenance
9-year-old rig that didn't dry dock to fix all the problems because they wanted to push through Unresolved maintenance issues Warning signs were down Fire alarms down; turned off the alarms because they didn't want to wake up employees for false alarm The mud was blowing up for 45 mins before action was taken because of the lack of warning signs
Discuss the role of Cognitive Bias in this case. Did warning signs exist? Why were the warning signs ignored? Apply the following to the BP case: Group-Think
All consolidate around an idea that was to There was dissent before but got stifled
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Workers often reported false data on safety
Because they thought it wasn't a big deal, did it all the time, and basically just didn't want to cause a problem for the executives They didn't want to lose their jobs because they set the thing behind if they reported a safety concern. Stifled dissent/group think
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Loyd's Report
Had an outside safety procedures company come do an assessment The executives on land were disconnected from what is on the rig Stifled dissent Employees believed that if they had a concern about safety then they would be in trouble but if they did there wasn't anything that would be anything done This could lead to group think and the culture that facilitates the stifling
Discuss the role of Cognitive Bias in this case. Did warning signs exist? Why were the warning signs ignored? Apply the following to the BP case: Confirmation Bias
Ignore evidence based on our preconceived notions We ignored the warning sign/pressure test because of the want to drill and make money
Is the JUUL case buyer beware or seller beware?
In this particular case I believe it is about seller beware, it is a predatory product marketing to impressionable teens and nicotine addicts to make money. Sellers beware: duty Under common law, there is no legal requirement for the seller to provide replies to pre-contract inquiries Information asymmetry exists The firm is being held liable for risks (tobacco) Does addiction change: Freeness of the buyer Predatory product?
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Failed negative pressure test******
Run a test on the main drill line 1. Way too much pressure to be safe (~1300 PSI) is shown that there is a problem down there, but mud should be flooding up the pipe but its not 2. The no mud lets them rationalize that there was a problem with the sensor which creates a factual uncertainty to have a confirmation bias that there is no mud so its okay. 3. This allows them to all agree (group think) to minimize negative information (confirmation bias) and look for some other confirmatory information.
JUUL mechanism of responsibility: Complicity (the state of being involved with others in illegal activity or wrongdoing)
Selling to underaged kids Selling to addicts Partnered with the largest tobacco company Put a product on the market w/o fda approval ~ The precautionary principle (shouldn't put a product in the market without studying the harm and approval of fda) Competitive realities Innovate a new thing and want to be the first to market Can't just wait this is why the gray area exists The strength of the addiction is the reason for their success/ business
Who is "harmed" and what is the nature (physical, economic, societal) of that harm? Local industries/ Community
Small business owners (fishing, tourism) This is almost when the summer is here which is how they make it throughout the year These are involuntary stakeholders and they were set back in a way that they didn't see or prepare for Ptsd for the survivors and the emotional trauma
Explain the rapid viral growth at JUUL. How did it become the market leader, despite its late over status? What role does social media play in the JUUL growth story?
Social media plays a huge role in the juul growth story because they became a viral sensation by spending a lot of money advertising to make a profit (weren't afraid to lose money at first). Targeted teens by having a vaporize party, social media, celebrities doing brand deals. Once people found out that juul was harmful, JUUL "tried" to do damage control but they had so many fans/followers that it was hard to control what teens post on social media. The vaporized campaign (viral momentum, didn't have to spend a lot of money, marketing was word of mouth) Targeted Younger audience Partying Katy perry Social media Lifestyle brand (cool and hip) Celebrity Pop culture socialites/ new york city B. early marketing C. free advertising Social media (younger) (can't control what teens put on social media) -youtube videos -social media cases -juul cases Word of mouth (WOM) Fear of missing out (FOMO)
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? groupthink
The rubber grab when they floated up and the ignored report Siloed responsibility Everyone has their own job and its not all your responsibility so basically nothing was anyone's responsibility Ambiguity of the responsibility If they should cut the pipe to stop it; didn't want to take the responsibility If I don't have to do it then someone who is in charge of it will get to it...
What were the underlying causes of the BP accident/spill? Discuss the chain of events (the decisions, actions, choices, mistakes) that led to the blowout. How did this happen? Why did this happen? Cement Job/Test
Was supposed to come out to do a cement test but they didn't because the executives told them not to because they might be set behind schedule Confirmation bias went against protocol because they didn't want to know the response. This is ignoring influential information in a decision.
Discuss the role of Cognitive Bias in this case. Did warning signs exist? Why were the warning signs ignored? Apply the following to the BP case: Anchoring Bias
Weigh one piece of information too heavily Making a leap to connect the abc to make the "right" decision You believe the assumptions making the decision is the right one because you have an inflated sense of the importance of one detail.
Describe the evolution of the various issues (social, legal, medical) over the timeline of the case: Emerging
increasing awareness; some stakeholders beginning to ask questions; warning signs appear; JUUL issue is being "shaped" by a. the firm b. external constituents Innovation is ahead of the law which causes JUUL to be in a grey area
Describe the evolution of the various issues (social, legal, medical) over the timeline of the case: Latent
issue remains "hidden" below the surface; risk is growing but no one is actually paying attention yet; low awareness among stakeholders
Be familiar with the details in BP exhibit 3 What went wrong? #4
oil and gas were now pouring up the well but it took 40 minutes for this to be noticed
Be familiar with the details in BP exhibit 3 What went wrong? #5
once oil and gas stated flooding to the surface, they were not diverted overboard but swept on to the rig
Be familiar with the details in BP exhibit 3 What went wrong? #8
the failsafe blowout preventer (BOP) failed. Fire on the rig stopped it being remotely shut down, while an automated system also failed. the BOP had flat batteries in one control pod and a faulty solenoid valve in another.
Be familiar with the details in BP exhibit 3 What went wrong? #7
the fire prevention system on the rig failed. The report says the heating ventilation and air conditioning system transferred a gas rich mixture into the engine rooms. two huge explosions followed killing 11 crew members
Describe the evolution of the various issues (social, legal, medical) over the timeline of the case: Consolidating
the issue becomes more "salient" (more important to the firm and more established); generates broader awareness among more diverse constituents; becomes a concern for customers, employees, shareholders
Describe the evolution of the various issues (social, legal, medical) over the timeline of the case: Institutionalized
the issue becomes part of the social/competitive landscape; firm experiences tangible reaction from stakeholders; a. customer boycotts (like the sweatshops) b. Employee strike/walkout c. shareholders resolutions, sanctions on management, divestment d. government revokes license to operate (September 9th FDA decision will make many vape products illegal (what will they do to enforce it?))
Be familiar with the details in BP exhibit 3 What went wrong?#6
the oil and gas 'vented directly on to the rig'. This made an explosion was investable