Management Chapter 3 Homework Jerry Married And Has Two Teenage Daughters

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Simulations 159

SIMULATION THREE

Videopolis*

Background

(Everyone reads)

Videopolis was founded as VideoNow in 1993 by two former employees of RCA, where they had

learned television broadcasting, electrical engineering, satellite downlinking, and telephone networking

applications. Today, Videopolis is a communications company that specializes in connecting

videoconferencing equipment over digital telephone lines to cities around the world. The company does

not produce meetings, conferences, or programs, but instead facilitates the videoconferencing process.

VideoNow became Videopolis after it was acquired by TeleWide Corp. fifteen months ago. When

VideoNow was started, the founders had a clear vision for growth, hiring only the best employees and

purchasing the best equipment in more than sufficient quantities to ensure a high level of service and

plenty of reserves for growth. Many of VideoNow’s original employees joined the firm with high hopes

of stock options, promotions, and bonuses based on future growth prospects. Many employees had

purchased expensive homes and cars in anticipation of these bonuses and promotions. Unfortunately,

the founding partners sold out directly to TeleWide before granting any options or bonuses to

* This simulation was created under the direction of O.C. and Linda Ferrell for classroom

discussion. The research and conceptual assistance of Dana Schubert, Brian Hayes, Carrieann

McDonough, Jeff Sawyer, and Jon Mullen is gratefully acknowledged.

160 Simulations

license distributed with a certain product or service or otherwise on a password protected website for classroom use.

Bryce Kerwin, Vice President of Marketing and Sales

(Only the student assigned to this role reads this page)

Bryce Kerwin is the vice president of marketing and sales for Videopolis. One of the first employees

hired by the VideoNow founders, Bryce was among the core group of employees who were promised

stock options and promotions if the company ever went public. Bryce is middle-aged, divorced, and has

two children. Bryce drives an old beat-up car and has used all the family’s financial resources to get

Bryce has been concerned recently by reports that operations can’t handle the current workload, and by

rumors that Videopolis has lost its edge. Bryce wonders if this is indeed the case and whether the

company can grow at all, let alone by the 100 percent target number set by the new CEO. Bryce’s sales

force is also young, inexperienced, and not very familiar with the company’s products. Bryce has been

driving the sales force very hard in an effort to reach the company’s goals (and because Alex has made

several threats referring to Bryce’s “lack of motivation”). Bryce senses the tension in employee morale,

but doesn’t know how to address the issues. Bryce was a pivotal employee who helped make the

company successful through hard work and wonders why, instead of rewards and recognition, the new

management delivers orders to work even harder.

Yesterday Bryce received an e-mail from M.J. Marshall, the company’s chief legal counsel, indicating

that there may be intellectual copyright infringement issues with the Broadcast Series and some of the

firm’s contracts with customers. The attorney has called a meeting with all of Videopolis’ upper

managers tomorrow to discuss the issues. The CEO has indicated that the vice president of human

resources also wants to address some employee issues at the meeting. Bryce hopes that the meeting

Simulations 161

Alex Rockwell, CEO

(Only the student assigned to this role reads this page)

Alex Rockwell was brought in by TeleWide as the CEO of Videopolis at the time of the VideoNow buy

out. Alex is a young executive whose entire seven-year professional career has been with TeleWide.

Upon graduation from the University of New Hampshire with a B.S. in Marketing and an MBA, Alex

began working in TeleWide’s marketing department and quickly worked his way up within the

organization.

Alex believes that this appointment to Videopolis will be the final stage of professional grooming prior

to landing a corporate vice presidency at TeleWide itself, with its greater responsibility and prestige.

After observing other successful executives being appointed to posh TeleWide corporate positions,

Alex believes that two to three successful years at Videopolis will guarantee Alex’s own appointment to

one of these coveted positions.

Alex is a loyal TeleWide employee to the bone. When a corporate mandate came down to increase

revenue by a minimum of 50 percent, Alex confidently replied that anything less than 100 percent

would be unacceptable. Alex claimed to have studied Videopolis’ bottom line and determined that it

Alex is quite excited about Videopolis’ new Broadcast Series of programming. The product involves an

employee putting a feature-length tape into a DVD (at the request of a client) and, with a few mouse

clicks, broadcasting the requested program to various videoconferencing facilities throughout the

country. The margins on this service are very high, and Alex believes that expanding the service could

greatly assist the company achieve its goal of a 100 percent increase in revenue. Unfortunately, he

questioned the legality of the service from its inception.

162 Simulations

license distributed with a certain product or service or otherwise on a password protected website for classroom use.

M.J. Marshall, Chief Legal Counsel

(Only the student assigned to this role reads this page)

M.J. Marshall is the bright young attorney hired by VideoNow’s founding partners to act as their chief

counsel just before the TeleWide buy out. M.J. is single and has been practicing law for just a few

years. Before coming to work at VideoNow, M.J. was on the fast track to a partnership in a firm that

Things have finally settled down after the merger, and M.J. is just now reviewing the contracts signed

by VideoNow’s founders in order to identify problems. Many of the old VideoNow deals were open

ended, based on a handshake, and some had strange provisions especially concerning copyright

violations. M.J. has identified some specific concerns about the company’s Broadcast Series. M.J. has

received complaints from some employees regarding the tapes that are being broadcast over company

lines. Being familiar with the laws surrounding intellectual property and copyright protection, M.J.

suddenly realizes that Videopolis could be liable for copyright infringement if the copyright owners

view the broadcasts and recognize their programs as unauthorized copies. M.J. also knows that the

Simulations 163

license distributed with a certain product or service or otherwise on a password protected website for classroom use.

Jerry Abacarian, Vice President of Operations

(Only the student assigned to this role reads this page)

Jerry Abacarian, another holdover from the old VideoNow days, is the vice president of operations for

Videopolis. Jerry came to the United States from the Middle East in search of riches and cherishes the

newfound successful American lifestyle. Jerry has come a long way from humble beginnings as the

child of a goat farmer. Jerry is married and has two teenage daughters. The girls attend the most

prestigious private school in the community. Jerry hopes that the investment in their primary education

As an upper manager at VideoNow, Jerry was promised future benefits such as stock options and a

dramatically increased salary. Jerry feels betrayed by the founders, believing they sold VideoNow

employees out for a fast buck and left them stuck with inadequate salaries and minimal chances for

attaining a higher financial status. Thus, Jerry’s loyalty to the new company is in question, and Jerry is

looking for any way to obtain the promised compensation. The only means for Jerry to reach the

expected compensation level is to achieve the new objectives and, hopefully, receive the huge promised

bonus.

Since the merger, Jerry’s job has become increasingly demanding as the pressure of the day-to-day

operations has increased dramatically. In Jerry’s opinion, the company is attempting to book too many

sales, creating unrealistic daily and quarterly objectives, and forcing the staff to work harder than ever.

Many key subordinates and lower-level employees have already left the company for more stable and

rewarding work environments. With the loss of these individuals, the operations department is having

trouble retaining competent employees. The high turnover and generally lower level of knowledge

164 Simulations

Sam Arnold, V.P. of Human Resources

(Only the student assigned to this role reads this page)

Sam Arnold was hired in 1997 as the new vice president of human resources after the previous V.P.

quit when, after the merger, the corporation failed to address promised pay raises and stock options.

This management position was the only one to be filled after the hiring freeze went into effect. CEO

Alex Rockwell hired the inexperienced Arnold instead of a seasoned HR manager in an effort to reduce

costs.

Sam graduated from Ohio State University in 1995. After two years at a pharmaceutical firm, Sam was

ready for a change. Sam was familiar with the company after using its services, and was strongly

A month into the new job, Sam began to understand why the former V.P. quit. Recently, Sam has been

completing several employee termination packets every month. Most are former VideoNow employees

who cite broken promises as their reason for quitting. It seems to Sam that Videopolis is hemorrhaging

employees, and the business is really starting to suffer from the high turnover. The company simply

cannot continue at this rate without lifting the hiring freeze.

In addition to the high turnover, Sam recognizes that many employees are disenchanted, demoralized,

and ready to quit. The climate at Videopolis has become negative, and many people dread coming to

work. Employees often speak of questionable management practices, possible copyright infringement,

Simulations 165

[SAMPLE STUDENT REPORT]*

TO: ALEX ROCKWELL (Annie Hodges)

FROM: M.J. MARSHALL (Louann De Coursey)

RE: MEETING 2/1/XX

Alex,

After meeting with Sam, Jerry, Bryce, and you on Thursday, Videopolis’ positions became much

clearer, and I know that we can resolve many of the issues facing this company.

All new employees will work under a tiered salary system with set benefits, bonuses, and stock

options. Previous employees will be placed appropriately on the scaled system also with benefits,

bonuses, and stock options. The longer you work for the company the more benefits you will

receive. Bonuses will be linked to concrete goals such as performance, sales, or efficiency and

will no longer be arbitrarily given.

We will schedule a companywide meeting to explain the new system and that previous promises

made with TeleWide are no longer valid but, under the new system, they should be receiving

comparable compensation in pay bonuses and stock options.

In regard to the copyright issues:

My team is developing two contracts, one for employees to sign and one for the customer that

includes copyright infringement issues as well as forbidding the copying of any portion of the

programs by the customer.

166 Simulations

HR is working on a job description to create tech support personnel to control the systems at job

sites. We will change the pricing structure to keep the same profit margins, but the customer will

be receiving better customer service.

There are a few other loose ends we need to tie up in regard to the Digital Millennium Copyright Act to

ensure compliance, and the legal team is reviewing those issues right now.

We also need to schedule the company meeting ASAP to start changing the negative climate.

Let’s schedule the meeting for later this afternoon or tomorrow to set a timeline and delegate jobs. One

other topic we need to discuss is the Federal Sentencing Guidelines for Organizations. Under these

guidelines we need to evaluate several things including our standards regarding misconduct (consistent

Simulations 167

TEACHING OVERVIEW ON SEXUAL HARASSMENT: CORDOZA V.

FOODSERVICE, INC., CREATIVE MARKETING SOLUTIONS, AND

HARRISON*

This education and training tool focuses on the issue of sexual harassment in the workplace.

Specifically, this role play exercise involves a jury deliberation on a sexual harassment case brought

before a civil court. Although the case is fictitious, actions and parameters have been drawn from recent

court cases in the United States. The jury situation creates a high level of responsibility and

accountability and ensures participant motivation and interest. In order to enhance the learning

experience, however, the exercise incorporates elements not normally allowed in jury deliberation or

* The research and conceptual assistance of Michael Benstock, Catherine Horton, Terry Lupo,

Kevin Sample, Stephen Stumpf, Gwyneth V. Walters, and Linda Wright is gratefully

168 Simulations

OTHER ISSUES ON SEXUAL HARASSMENT IN THE WORKPLACE

(Only instructor reads)

Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged

to take necessary steps to prevent sexual harassment from occurring. Companies should communicate

clearly to employees that sexual harassment will not be tolerated. They can do so by establishing an

effective complaint or grievance process and taking immediate and appropriate action when an

employee complains.

In addition, the court has also indicated, “An employer is subject to vicarious liability to a victimized

employee for an actionable hostile environment created by a supervisor with immediate (or

successively higher) authority over the employee. (The employer’s) defense comprises two necessary

elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually

harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any

preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” In the

past, sexual harassment lawsuits were dismissed by federal judges because the employer argued it was