ACTIVITY 1 QUESTION 2
Working for My Cup or the House?For those who are not familiar with the service industry, employees are paid minimally by the company they work for, and their pay rate is determined by the tips received from customers. As a bartender, a person is exposed to having to deal with all sorts of peoples needs as well as employee competition and standard operating procedures set forth by management. Every time a drink is poured, a decision must be made whether to follow company standards or give away extra alcohol to receive a larger tip.When first being promoted to bartender at an established golf resort, I witnessed firsthand the varied factors that can affect ones pour. A pour can be defined as how much liquor is added to a customers drink. The three factors that affect ones pour are as follows: comparisons to other employees pours, the requests of customers for extra pours with compensation of a larger tip, and what the company designates as a pour.When working as a team or having repeat customers, bartenders are compared based on their pour. If one bar- tender uses two pours and another uses one pour (the latter is the standard for the company), the rule-following bartender is not viewed as favorably as the one using the larger pour. This is clearly reflected in tips from customers. Similarly, the customer might say, Put a little extra in there and Ill take care of you. The employee is put on the spot to choose between the company and him or herself.The bartender with the heavier pour or who gives away drinks for free may receive more money in their tip cup, but the company suffers from lost revenues. If a bartender makes an average of 100 drinks a night and uses two pours instead of one for each drink, that bar- tender is giving away 100 drinks worth of alcohol each night which reduces nightly revenues and has a huge effect on yearly liquor revenues.In this highly competitive and profitable industry, over pouring is a practice that can cripple a business. As the newest bartender, one wants to fit in with the other bartenders and earn as much money as possible though it costs the company or house profits. Which is more important, fill- ing your own tip cup or maximizing the houses profits that does not directly benefit the bartender?
Is it ethical to overpour customers drinks to develop better customer relations to earn more tips at the expense of company revenues? Are the bar- tenders using the entitlement mentality here to justify their self-serving actions? Do bartenders have a right to take care of their own cups?
- If the customer wants or expects an overpour, should the companies allow an overpour to satisfy the customers wants and desires?
Is it ethical to witness and not report over pouring on the part of fellow bartenders who have been there longer? Should I inform management what is happening?
There is no minimum or maximum required number of pages. Your analysis will be considered complete, if it addresses each of the 3 components outlined above.
- Include your best critical thinking and analysis to arrive at your justification.
- Approach the assignment from the perspective of the senior executive leadership of the company.
- PROBLEM SET #1 QUESTION3
Forcefield Energy Inc. is a public corporation registered in the State of Ohio to provide heavy-duty and aeroderivative gas turbines for utilities, independent power producers, and industrial applications for customers in the United States. The primary goal of the company is to maximize stockholder wealth by making financial and investment decisions that would increase cash flows and stock price. Last year, the companys stock price fell by 12% because of cash flow uncertainties, competitive markets, and unethical actions. The board of directors of the company has hired Joseph Sabatino, MBA to head the corporate finance department. Sabatino graduated from UC in 2016 with a masters degree in Strategic management. He has worked in the energy sector for 5 years and has experience in capital markets and financial institutions. To achieve the stated wealth maximization goal of Forcefield Energy, Sabatino has suggested to the board of directors of the company to expand its operations outside the United States to diversify risk, increase market share, and improve free cash flows. Forcefield Energy wants you to help them answer the following questions:1. Explain free cash flow and its relevance to Forcefield Energy.2. Explain to the board three properties of the companys cash flows that would likely help to increase the firms value.3. Forcefield Energy Inc. is a corporate legal entity created under Ohio laws, separate and distinct from its owners. List three advantages and two disadvantages of a corporation as a form of business organization.4. Agency problems and conflict of interest occur in corporations. What is an agency problem? What is corporate governance?5. Is the primary goal of maximizing stockholder wealth good or bad for the society at large? Explain.6. List four examples of unethical actions that could harm the stock value maximization goal of a business organization.7. Identify three attributes that Forcefield Energy Inc. should have to be successful as a corporation.8. i). Why is corporate finance important to the success of Forcefield Energy? ii). What financial skills should Sabatino have to help Forcefield Energy achieve its stated goals?9. Joseph Sabatino, the head of the corporate finance department, is planning to raise $10 million from the financial market to expand the business operations. Identify four major financial instruments that can be used to raise the needed long-term capital.10. Explain to the board of directors four economic conditions that can affect the cost of money raised from the financial market.