978-1337116848 Chapter 11 Solutions Manual

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REVIEW QUESTIONS & SUGGESTED ANSWERS

1 How does a report writer decide the best organization for a formal report and

determine which preliminary or addenda parts to include in a report?

1. How does a report writer decide the best organization for a formal report and

determine which preliminary or addenda parts to include in a report?

2. Briefly discuss the primary principles involved in writing an executive summary. What

is the significance of other names given to this preliminary report part?

The executive summary, also called the abstract, overview, or précis, summarizes the essential

3. What purposes are served by the findings, conclusions, and recommendations sections?

How are they related, yet distinctive?

Findings are the facts (evidence) uncovered by the research. Conclusions are interpretations of the

4. Give two or three examples of emotional terms that should be avoided in a formal

report. Why is impersonal, third person style frequently used in formal reports? How is

it achieved?

publicly accessible website, in whole or in part.

5. Explain the relationship between the content outline of a report and the placement of

headings within the body of a report.

6. In addition to length, what are the differences between long and short reports?

7. How are memorandum, letter, and email reports similar? In what ways are they

different?

8. What is the primary purpose of a proposal, and what can the writer do to assure that

the purpose is achieved?

9. What is meant by RFP? Why is it important to the preparation of a proposal?

10. How does team preparation of a proposal differ from preparation by an individual?

How can technology assist in team writing?

Original writing of sections of a long proposal is typically divided among the members of a

publicly accessible website, in whole or in part.

11. How do diversity considerations impact the choices made in report style and and

format?

FEATURED ASSIGNMENTS

1Researching Information Security: Use the selection of databases to which the campus

library subscribes to find three articles on firewalls as a means to secure a company’s

intranet. Mark the main points of each article and create a bibliographic citation for each.

12. Practicing an Audit: Visit a computer lab on your campus. Through observation and

interviews, you should prepare an audit report of the lab’s offerings and include the following

items in your report: (1) the types of equipment available (e.g., PCs, Macs, mainframe

terminals), (2) the quantity of each type, and (3) the operating systems and applications

software available (product, version). Attach a table that summarizes their analysis and

submit their work as a letter report.

13. Experiencing Meetings: Attend a professional meeting of a campus or community

organization and take notes on the program presented, the issues discussed, and so on. You

should submit a short report summarizing the events of the meeting and include a section that

describes the benefits that might be derived from membership in that organization.

14. Obtain a copy of a report prepared by an organization and analyze it in the following ways:

a. Purpose

b. Intended audience

c. Degree of formality

d. Use of graphic support

e. Parts included (see Figure 12-1)

f. Referencing method

publicly accessible website, in whole or in part.

15. Assemble a team of three to four students. Read the scenario below and then complete the

related exercise.

Your team plans to open a business establishment in your city. Do you obtain a franchise or

start your own independent restaurant? Select a franchise opportunity and research it. Include

in your findings the initial investment cost, start-up expenses, franchise requirements and

fees, and success and failure rate.

Exercise:

Using the information on team writing, prepare a report that compares the options of franchising

versus independent ownership. Make a recommendation as to the more desirable action to take.

ADDITIONAL ASSIGNMENTS

1Gathering Background Information for a Report: Using databases available through your

campus library, locate and read three articles on firewalls as a means of securing a

company’s intranet. Mark the main points of each article and prepare a bibliographic

citation for each.

Solutions will vary.

16. Developing a Report Outline: Think of and develop an outline for the described report.

Identify possible sources for locating the necessary information.

17. Summarizing a Professional Meeting: Attend a professional meeting of a campus or

community organization. Take notes on the program presented, the issues discussed, and so

on. Submit a short report to your instructor summarizing the events of the meeting, and

include a section that describes the benefits that might be derived from membership in that

organization.

18. Evaluating the Performance of a Stock Portfolio: Create a stock portfolio of ten stocks on a

financial website. Assume that you will purchase 100 shares of each of the ten stocks at the

prices listed at the market close on a particular day. The stock portfolio will record the

changes in each of the ten stocks for each trading day. Print this report for a one-week period

—five trading days.

Submit a memorandum report to your instructor on the purchase date reporting your ten

stocks according to the following format:

publicly accessible website, in whole or in part.

Name of Stock Price per Share Total Cost (X 100)

19. Promoting International Understanding: Research the cultural differences between business

executives in the United States and China; write a memorandum report communicating this

information to U.S. managers working in China. Write another memo to Jeanne Pitman,

director of international assignments, persuading her to develop other ways to promote

international understanding in the company. You may vary this case by selecting a country of

your choice.

20. Communicating Concern for Employees: Review research related to cell phone safety and

identify ways to solve businesses’ problems resulting from accidents among workers. Write a

short informational report. To make the case more meaningful, address the issue in an

employee group or environment with which you are familiar.

21. Communicating During a Crisis: Review research and write an informational report related

to crisis communication and the sharing of information with employees about a financial,

ethical, health, or environmental crisis. Your instructor may vary this assignment so that your

report will be directed to stockholders, the public, or another specified group.

22. Assessing the Feasibility of Constructing a Recreational Complex: Read the following

scenario then complete the exercise below.

1. On average, how often do you exercise each week?

2. During a week, in which of the following activities do you participate? Check all that

apply.

publicly accessible website, in whole or in part.

3. If you had access, in which of the following activities would you participate? Check all

that apply.

4. If a recreation center were constructed for employees, what is the maximum amount you

would be willing to pay per month to provide use of the center to your immediate family

members?

Exercise:

As a member of the committee, prepare a short report for the president, Michelle Karratassos.

You asked respondents to estimate the amounts they would be willing to pay a month for their

families to use the center as $0 to $10, $11 to $20, and so on. If you were to do mathematical

computations, you would probably use midpoints such as $5, $15.50, $25.50, and so on as values

for each class. In this case, however, write in generalities simply using percentages.

23. Preparing an Analytical Report: In teams of three or four, prepare a short report on one of

the following cases. Make any assumptions and collect any background information needed

to make an informed decision. Reviewing this list may help you identify a business-related

problem you have encountered that you would like to investigate; evaluate possible

alternative solutions, and make a recommendation.

a. Recommend a digital camera for your regional quality assurance inspectors of a

national convenience store chain. The inspectors will use the camera to enhance the

quality of periodic reports documenting each store’s adherence to company policies (e.g.,

visibility of company signage, friendliness of staff, cleanliness of restrooms).

b. Recommend one of three laptop computers for use by the company’s sales staff. The

computer must have wireless capability for transmitting and retrieving data from the

central office.

c. After suffering catastrophic losses following Super Storm Sandy, an insurance company

is seeking your advice on its plan to withdraw coverage from counties within the

devastated areas. Provide the insurance company with an analysis of the significant

issues and any ethical and legal implications of the decision.

d. As director of human resources, investigate the merits of adopting a corporate policy

banning cell usage by employees driving company vehicles. The legislature of your state

has not banned cell phone usage while driving.

publicly accessible website, in whole or in part.

e. A local orchard has sold its line of jellies and jams only to specialty retailers. Consider

the feasibility of launching a website with online ordering capability for individual

consumers.

f. A national study suggests that employees who participate regularly in formal fitness

programs file fewer health insurance claims than those who do not. As a member of the

board of directors, weigh alternatives and present a plan that would provide employees

an incentive to participate actively in a fitness program.

g. As vice president of operations in a major hotel chain, investigate whether providing

housekeeping staff with MP3 players would improve productivity and employee morale.

h. Recommend how you would invest $2 billion of excess cash that your company will not

need until the plant expands in two more years.

i. Your government agency has always purchased the automobiles used by its social

workers. The cars are typically driven approximately 30,000 miles a year and are sold

for about 20 percent of their purchase value at the end of three years. Consider the cost

effectiveness of the current policy and a car dealer’s offer to lease the cars and

recommend appropriate action.

j. One of your sales staff has provided literature that cites health problems related to the

use of cellular telephones. Study the issue and make a recommendation to the company

as to how to respond to this issue.

SUGESSTED SOLUTIONS:

24. Considering Adoption of Linux Operating System: Read the scenario then complete the

exercise below.

Your company, Support, Inc., is considering the possibility of adopting Linux as your network

operating system. You have been asked by the owner and president of your organization to

research the possibility of converting from Windows 7 to Linux. You have surveyed 66

companies that are using the Linux operating system and have obtained the following results:

1. What operating system were you using prior to Linux? (Check one)

publicly accessible website, in whole or in part.

2. In general, how would you rate the quality of Linux as compared to your previous

operating system? (Check one)

3. What, if anything, do you like about Linux? (Check all that apply)

4. What, if any, complaints do you have about Linux? (Check all that apply)

5. Where have you used Linux? (Check one)

6. How did you obtain your Linux operating system? (Check one)

7. What is your advice to a company considering converting to the Linux operating system?

(Circle one)

Exercise:

As director of information systems, write a report with findings, conclusions, and

recommendations. Prepare any preliminary and addenda parts you believe will enable the reader

to understand the report.

publicly accessible website, in whole or in part.

25. Studying the Merits of Mentoring: Read the scenario below, then complete the related

exercise.

Your company, Ultron Oil, is considering implementing a formal mentoring program as a means

for developing managerial talent. Your supervisor, the division director, has commissioned you to

prepare a report on the effectiveness of mentoring. As a part of the study, you have surveyed 70

managers representing a variety of businesses; 44 were male, and 26 were female. They ranged in

age from 22 to 69, with the median age being 45. Their responses follow:

1. In your career development, have you ever had a mentor?

2. Which of the following describes your mentoring relationship(s)?

3. How long did the typical mentoring relationship last?

4. Did you perceive that you benefited from the mentoring relationship?

5. Did you perceive that your mentor benefited from the relationship?

6. Have you ever been a mentor to another person?

7. Does your company have a mentoring program in place?

Exercise:

Prepare the report for the division director. Present your findings, draw conclusions, and make

recommendations. Prepare any preliminary and addenda parts you believe will enable the reader

to understand the report.

In your evaluation of reports, consider how well students have integrated primary and secondary

data into the findings section. Require at least two types of graphic aids from the primary data; for

example, a pie chart, a bar chart, or a table. Conclusions and recommendations should reflect a

careful consideration of research gathered through both primary and secondary means.

publicly accessible website, in whole or in part.

26. Assessing Attitudes Toward Software Piracy: Read the scenario, then complete the related

exercise.

You are conducting a study of college seniors concerning their awareness of and attitudes toward

software piracy. You have surveyed 100 students as a part of your project. The first category of

questions dealt with their knowledge of software piracy. The correct answer to each of these

questions is “true.” Their responses are as follows:

1. Purchased software is covered by copyright law and generally allows for only a backup

copy to be made by the purchaser.

2. Making copies of copyrighted software for distribution to others (software piracy) is a

federal crime.

3. Making a copy of a software program owned by my company for use at home, unless

expressly allowed, is a violation of copyright law.

4. Software piracy is punishable by both fine and imprisonment.

The second category of questions dealt with specific situations. To each, students were instructed

to give their honest responses. Their responses are as follows:

1. Your employer has purchased Visual Communicator for use on your computer at work.

You have a computer at home and would like to have a copy of the program for you and your

family’s personal use. You would

2. You visit a local computer software store and see Visual Communicator with a price of

$149. You would

3. You obtain a copy of Visual Communicator. A friend asks you for a copy of it. You would

Exercise:

Present your findings, conclusions, and recommendations in a formal report to your college

administrators. Prepare any preliminary and addenda parts you believe will enable the reader to

understand the report.

publicly accessible website, in whole or in part.

In your evaluation of reports, consider how well students have integrated primary and secondary

data into the findings section. Require at least two types of graphic aids from the primary data; for

example, a pie chart, a bar chart, or a table. Conclusions and recommendations should reflect a

careful consideration of research gathered through both primary and secondary means.

27. Solving a Business Problem: Select one of the following problems to solve. Provide the

necessary assumptions and background data. Then write a formal report of your analysis,

conclusions, and recommendations. Include preliminary and ending parts you believe

appropriate. You may need to design a questionnaire and administer it to an appropriate

sample. Reviewing this list may help you identify a business-related problem you have

encountered during your employment or cooperative education and intern experiences. If you

choose to solve your own problem, provide the necessary assumptions and background data.

a. Investigate the feasibility of your company becoming the corporate sponsor of a

professional athletic team that is located in the same city as the company’s corporate

headquarters. The stadium name would be named for the company and the company

would control all advertising rights within the stadium.

b. You have read articles about the advantages of having Global Positioning Satellite (GPS)

trackers in automobiles to help stranded motorists. Propose how GPS trackers could be

used to monitor the movement of remote employees and investigate the implications of

this action.

c. Your human resources department is considering the implementation of a full criminal

background check in the selection of employees. Study the advisability of this practice.

d. Your department handles highly sensitive information and, as a result, requires extremely

reliable user identification. You are considering ocular scanning or perhaps some other

type of biometric identification. Investigate the advantages and disadvantages of such a

system and recommend whether your organization should pursue it.

e. Since its inception, your company has paid full employee health insurance premiums.

Because of spiraling premiums, the company is considering requiring a 20 percent

co-payment from employees for each medical claim. Investigate the implications of this

action.

f. Investigate the possibility of enlisting senior citizen volunteers to staff a city welcome

center scheduled to open next year.

g. A committee of employees has recommended that the company establish a hazardous

waste depository where employees can discard items not accepted in the landfill (e.g.,

paint, batteries, and insecticides). The president has asked you to think the idea through

and present a report of the cost, public relations implications, employee relations, and

logistics of operating the depository.

h. You have received reports that several of your major competitors have installed

electronic auditing procedures to monitor employees’ computer usage. The president

wants your immediate attention on this issue. Investigate the implications of using

technology to monitor employees’ computer activities. Will employees consider this

procedure an invasion of privacy? Anticipate all possible problems and present strategies

for dealing with them.

i. Although no employees have made formal complaints of sexual harassment in the

workplace, information from the grapevine has convinced you that the company needs a

formal policy concerning sexual harassment. To develop this company policy, research

the legalities related to this issue and gather information (strategies) from other

companies with sexual harassment policies.

j. The upcoming downsizing of your company will result in the displacement of

approximately 10 percent of your middle- and upper-level managers. Investigate

publicly accessible website, in whole or in part.

strategies for supporting these managers in their search for new employment. Many of

these managers have worked for your company 15 to 20 years; therefore, they are quite

apprehensive about the job search process.

k. A client has $10,000 to invest for her children’s college education. Their ages are 12, 9,

and 4. Investigate alternatives and prepare a proposal for her consideration.

Students answers will vary. Evaluate based on, among other criteria, the thoroughness of their

analysis and inclusion of appropriate parts.

28. Bidding for a Convention Site: Read the following scenario and complete the activity below.

The National Insurance Appraisers Association is planning an upcoming convention. This

association of 500 members conducts a three-day conference during late October that

includes at least one general session and as many as five breakout groups of 50–75

participants. The chair of this group’s convention site committee has invited your city

(instructor will assign) to submit a proposal bidding for the convention’s 2010 national

convention.

Activity:

As executive director of the Economic Development Council, write a proposal including specific

information to convince the group that your city (choose a location) can provide the needed

meeting facilities, hotel accommodations, economical transportation from major U.S. cities, and

a variety of social and recreational activities for members and guests. Obtain your information

via the Internet.

29. Applying for a Franchise to Open a Coffee Shop: Read the following scenario and complete

the activity below.

Interested in opening a gourmet coffee shop, Leigh Holland wrote Oasis, Inc., a popular

franchiser of gourmet coffee shops, to solicit franchise information. In answer to his request,

Holland received an extremely receptive letter requesting standard information designed to

help Oasis determine the economic viability of the proposed location. After analyzing this

preliminary information, Oasis will decide whether to accept Holland’s franchise application.

Oasis has requested preliminary information regarding the economic and social environment

of the proposed site. Specifically, Holland must provide valid, objective data concerning the

population of the service area, the economic status of the population, the traffic flow in front

of the proposed site, the nature and extent of competing specialty franchises that offer patrons

publicly accessible website, in whole or in part.

a place to socialize, and any other information that would support the economic success of

the proposed franchise.

Activity:

30. Proposing Additional Employee Benefit to Management: Read the following scenario and

complete the activity below.

As human resources manager at Innovative Solutions, you are preparing a proposal to be

submitted to company management that would institute a tuition reimbursement program for

employees who complete work-related college courses.

Activity:

Write a proposal that includes the following information: (1) an explanation of how the tuition

reimbursement program described in your proposal would increase overall morale and

productivity of employees, (2) a complete explanation of how the reimbursement program would

work, and (3) a budget for anticipated costs.

31. Responding to Problem of Computer Virus Hoaxes: Prepare an oral report on computer

virus hoaxes and the appropriate response to them. Include the following parts in your report

outline: (1) Why are virus hoaxes problematic for individuals and organizations? (2) What

are some common virus hoaxes? (3) How can virus hoaxes be “checked out”? Prepare

appropriate visuals for your presentation. End your report with a recommendation as to how

to best respond to virus hoaxes. Submit your report outline and a copy of your visuals to your

instructor after delivering your presentation.

CASE ASSIGNMENT 1

CYBERTHEFT: IT’S A BIG DEAL

One of the World Wide Web’s most attractive features, easy access to a universe of information

and data, is also one of its greatest vulnerabilities. Computer users can easily access, download,

copy, cut, paste, and publish any of the text, pictures, video, sound, program code, and other data

publicly accessible website, in whole or in part.

forms available on the Internet. An inherent conflict of interest prevails because of the consumer’s

appetite for data and the creator’s right to remuneration for original work.

Copyrights provide an economic incentive for the development of creative works in

literature, computer applications, and the performing arts. For instance, songwriters in the United

States are paid royalties by radio stations for broadcasting their copyrighted musical works.

Because of copyrights, it is illegal to make and sell an authorized duplicate of a commercial CD,

video, or DVD. The law assures that creators receive remuneration from sales for their investment

of time, talent, and energy. The information superhighway, however, crosses borders where U.S.

cyberfans can make high-quality digital copies of downloaded music and movies, effectively

bypassing copyright requirements.

Passage of the Patriot Act gave the FBI easier access to information about cyberspace

theft by allowing examination of Internet databases without search warrants. Internet service

providers have been compelled to turn over the names of subscribers traced by the music industry

to their IP addresses. The Recording Industry Association has also targeted college campuses in

its aggressive campaign to curtail unauthorized music downloading. In recent years, for example,

students have agreed to pay fines promised to stop illegally downloading music on their campus

computer servers as part of an out-of-court settlement. Some universities are also denying Internet

access to students who download films and music illegally.

Web pages are another type of creative expression falling victim to cybertheft. Dealernet,

an organization that helps car dealers sell vehicles over the Internet, was shocked to discover that

a Southern California company had downloaded Dealernet web pages and reproduced them on its

own website. The competing site deleted the pages when Dealernet threatened legal action.

Cybertheft deprives musicians, artists, and other creative parties from the income that

would otherwise result from the sale and licensing of their artistic works. The World Intellectual

Property Organization, sponsored by the United Nations, is working to ensure copyright

protection worldwide. Representatives of the United States and 183 other countries who are

members of the group have signed treaties that extend copyrights to the Internet and strengthen

computer industry have joined entertainment groups such as the Recording Industry Association

of America and the Motion Picture Association of America to form the Creative Incentive

Coalition; a major activity of the group is to lobby Congress for legislation and treaties that would

provide better copyright protection.

Every business entity has a responsibility to avoid situations of copyright infringement

and to ensure that its employees do so as well. Companies are legally responsible for violations if

the copyright owner can prove that they knew or should have known about the infringement.

Texaco, for instance, agreed to a $1 million settlement after a federal appellate court ruled that it

was liable for copyright violations. While it is rare for employees to be taken to court for

organizations to develop policies against copyright violation and to provide training to employees

about the risks and responsibilities.

Sources: Download Uproar: Record Industry Goes After Personal Use, Marc Fisher, Washington Post, Sunday,

December 30, 2007, see http://www.washingtonpost.com/wp-dyn/content/article/2007/12/28/AR2007122800693.html;

Guilty Until Proven Innocent, By Sean Poulter, 26 June 2012, read more:

http://www.dailymail.co.uk/news/article-2165004/Illegal-downloading-Families-illegally-download-music-movies-onli

ne-face-court-action-copyright-theft.html#ixzz2McdZTaAJ; Jeff Stone,| September 12, 2012, How People Are Caught

Illegally Downloading Music, Movie Torrent, International Business Times.

Activities

publicly accessible website, in whole or in part.

1. Locate websites with articles about current international copyright issues or cases. Provide a

one-page written summary to your instructor that describes the issue and the country(ies)

involved.

2. Write a short, informative report describing how a company’s website can violate the

copyrights of others and giving advice to organizational web page developers for avoiding

possible copyright infringement.

3. “The nature of cyberspace defies copyright enforcement.” In a one- to two-page report,

justify or refute this statement, giving reasons and/or examples.

CASE ASSIGNMENT 2

Summary

This case highlights the outstanding annual reports of Aflac Incorporated, spotlights Sid Cato,

judge for Chief Executive magazine’s annual report recognitions and author of the Official

Annual Report Website, and allows students to analyze the winning features of Aflac’s annual

report.

Annual reports guide investor decisions by offering a valuable glimpse into the workings and

financial performance as well as articulating company personality and philosophy. Aflac

Incorporated has received repeat recognition from Chief Executive magazine for its

accomplishments in producing one of the ten best annual reports. Aflac’s careful design and

organization of its report have led to positive public recognition and likely improved its

competitive edge. What do potential investors want to see in an annual report? Why is

organization and design so important?

AFLAC INCORPORATED: CAPITALIZING ON THE COMMUNICATION POWER OF

THE ANNUAL REPORT

Of all the documents corporations publish, none receives as much attention as the annual report.

Offering a valuable glimpse into the workings and financial performance of companies, these

annual scorecards guide investors’ decisions. Annual reports guide investor decisions by offering

a valuable glimpse into a company’s workings and financial performance as well as articulating

its personality and philosophy. Organizing the report’s information around a theme and providing

attractive visual elements assist in reading comprehension. Furthermore, annual reports serve as

an ideal public relations mechanism to influence various stakeholders, including employees and

the general public. Many managers are seizing the apparent opportunity to articulate their

company’s corporate personality and philosophy effectively.

publicly accessible website, in whole or in part.

One company that is successfully capitalizing on the communication power of its annual

report is Aflac Incorporated. A Fortune 500 company, Aflac insures more than 40 million people

worldwide and is the largest life insurer in Japan. It has made its marketing fame as a leading

underwriter of supplemental insurance. While the Aflac duck catapulted the company’s brand

recognition from 12 percent to nearly 90 percent following its introduction in 2000, research has

shown that consumers want to learn more about the company’s products and services.

The annual report is an important tool Aflac is using to convey its positive message.

Aflac’s annual reports have been honorably recognized every year since the inception of Chief

Executive magazines’ rating system of the best annual reports. Aflac’s reports have consistently

been assigned “World-Class” status by scoring at least 100 of a potential 135 points on the

evaluation system. Commenting on the outstanding recognition, Aflac’s CEO Dan Amos said:

“We are extremely pleased to see Aflac’s annual report at the top of the list of the best annual

reports. Our shareholders are our most valuable customers, and we believe that effective

communication with our customers is crucial to the success of our business.”

The annual report rating is based on a 135-point copyrighted evaluation system that

factors in elements ranging from extensive CEO involvement to more financial disclosure than is

required by the Securities and Exchange Commission. According to Sid Cato, contributing editor

and judge for Chief Executive’s annual report listing, Aflac’s exemplary reports include

multiple-year financial data, biographical information on company officers, and fully captioned

graphs, all of which helped place it as one of the best.

Careful design and organization of Aflac’s annual report have led to positive public

recognition and likely improved the company’s competitive edge. In speaking of the annual

report, Sid Cato says, “This is the No. 1 document a company can produce. It’s the key corporate

communiqué. It indicates how the company feels about itself.” As contributing editor and the

judge for Chief Executive magazine’s annual report listing, Sid Cato is recognized by many as the

world’s foremost authority on annual reports. The annual listing, which has appeared in the

magazine’s November issue for over 20 years, is based on evaluations of reports submitted from

around the world, according to a 135-point copyrighted evaluation system.

Important factors that Cato looks for in effective annual reports include clear financial

disclosures, biographical data on corporate officers and board members, a brief and

forward-looking letter from the company’s chair, and design continuity that suggests the

company’s accountants work well with its communication people. The use of understandable

language with average sentence length of 16 words or less is important and four-color artwork

and photos are also valued. These design factors helped propel Aflac to the top of the numeric

scoring. Cato says, “If a company doesn’t know enough to produce an annual report that says

‘Open me, read me,’ you should toss it in the wastebasket.”

In addition to his annual report rating, Cato authors a monthly newsletter on annual

reports and provides report critiques at the request of companies that include tips for

improvement. While encouraging companies to develop a clear theme and to use their reports to

document their competitive advantages, Cato recognizes that the companies often fear revealing

so much that they erode their competitive edge. Instead of attempting to satisfy so many different

audiences with one annual report, some companies are spending time and energy breaking

information into component parts. Digital media such as the Internet and CD-ROMs have the

facility to present large amounts of information in different ways.

Cato feels that the worst thing that can happen in an annual report is for management not

to explain the numbers. According to Cato, a glossary of terms should be included, and every

graph should be fully captioned. He cautions readers of annual reports: If you see something in

the financial data that raises questions, such as an operating loss, and it’s not explained anywhere

in the report, that should raise suspicion.

Sources: Aflac takes next step in defining brand: Brand evolution of AFLAC. (2004, December 2). PR Newswire US.

Retrieved March 27, 2006, from LexisNexis database; Aflac’s annual report ranked first in Chief Executive magazine’s

publicly accessible website, in whole or in part.

listing of 10 Best (1999, November 17). PR Newswire, Financial News; Aflac’s annual report ranked first in Chief

Executive magazine’s listing of 10 Best (1999, November 17). PR Newswire, Financial News; 7Moyer, L. (1999,

December 2). Ads libs: Annual report guru ranks those that measure up, or don’t. The American Banker, 4; Critic of

annual report hails Manitowoc Co. for readability, information. (1999, October 11). Milwaukee Journal Sentinel, p. 4;

Cato, S. (2006). Cato positive index. Retrieved May 30, 2006, from http://www.sidcato.com/ positiveindex.html.

Activities

1 Visit the Aflac website at http://www.aflac.com to identify the theme used in the

award-winning Aflac report and the strategies for reflecting company values throughout the

report.

32. Visit Sid Cato’s website at http://www.sidcato.com to read about his view of what makes a

good annual report.

33. Following instructions given by your instructor, electronically post your response to this

question: While Cato recommends full explanation of financial information, how much is too

much?

34. How does an annual report reveal what a company feels about itself?

35. What additional communication options are possible when annual reports are delivered over

the Internet or by CD-ROM instead of in traditional paper form?

36. What would cause you to want to open and read an annual report?

publicly accessible website, in whole or in part.