Microsoft Hits Rough Waters

Microsoft has employed Steve Ballmer for the past 30 years, but he has recently decided to resign from his position as CEO of the company. After his long tenure, many with stakes in Microsoft feel uneasy, and many in Microsoft are unsure of the future direction of the company.

Ballmer said he had decided to resign because he was unhappy with the culture of the company and he wanted to change it, but the culture of a company that size isn’t easy to turn around, especially when you’ve held a big hand in creating it.

Microsoft’s co-founder, Paul Allen, has very radical ideas following the resignation of Microsoft’s CEO. Allen said that he thought a split was in the best interest of the company, as some sections like Xbox and Bing were taking revenue and attention away from the larger sections of the company like software and services.

With or without a split, Microsoft will be facing some major changes in the coming future, as the current strategy is no longer seen as functional by those in control. Changing the strategy of a company like Microsoft will be no small task, considering the size of the organization, radical maneuvers might need to be made to point the company in the right direction.

Stack Rating System Loses Popularity

Many companies have used the stack rating system as a method to weed out unproductive and unfit employees, such as Microsoft and Yahoo!, but many are now opposed to this system. Microsoft, who used the system for ten years, decided to drop it at the beginning of the year because they were unhappy with the result it had on the company culture. Employees felt that it created a cannibalistic culture that, “encouraged people to back stab their co-workers.” This left employees feeling helpless, knowing that if they had two bad reviews then they would have their position viewed and possibly fired, and also knowing that someone had to get a bad review every time in order to maintain the bell curve requirement of the stack rating system.

Yahoo!, who still uses this system, has had to layoff 600 people in the past couple weeks because of the Stack Rating’s structure. Managers are forced to give people negative reviews even if they don’t feel like they deserve it because they have to give the review to someone.

This type of system creates a negative environment to work in because it takes the power away from the employees, making them feel helpless about their jobs, which demotivates them and prevents them from doing their best work for the company.

http://www.infoq.com/news/2013/11/stack-ranking-microsoft-yahoo

Employee Satisfaction Surrounding the Holidays

In the United States, Thanksgiving is just around the corner, and with this national holiday comes the question of how will companies keep their employees happy through this date. For many companies the answer is easy, give them the day off, but for other companies, such as major retailer or grocery stores, this is a harder question. It’s a tradition for families to do their shopping for Christmas presents during Thanksgiving, since everyone is together and the stores all have blowout sales, so many retailers decide to stay open for Thanksgiving.

One example is Walmart, who attempts to keep employees happy while the rest of the country has a day off by offering three different incentives to work on Thanksgiving, an extra day’s pay, 25 percent off their next Walmart purchase and a traditional Thanksgiving dinner at work. Walmart is trying to use extrinsic motivators to get their employees to stay satisfied.

Another major retailer, Costco, has a different strategy, take the day off. Costco is breaking the mold of retailers by giving their employees the holiday to spend with their loved ones.

Differences like this reflect the public’s opinion of these companies, where Costco is known for taking good care of their employees and Walmart is thought of as treating theirs more poorly.

Starbucks Faces Major Fine After Terminating Contract With Kraft

In March of 2011, Starbucks terminated its contract with Kraft Foods for the distribution and marketing of Starbucks merchandise to grocery and convenience stores; however, the contract was not due to expire until 2014. In the following law suit, Starbucks was sentenced to pay 2.76 billion dollars to compensate for damages, interest and legal fees. While Starbucks was gathering expendable money to pay for the fees, they were much larger than anticipated, forcing Starbucks to add 750 million dollars to their debt.

The choice to sever the contract was obviously a monetary risk for Starbucks, but they decided to go forth anyway. This is because Starbucks believed that Kraft wasn’t pushing their products in the right direction, and were lacking on some of their contractual obligations, therefore preventing Starbucks from reaching its potential by not achieving the maximum amount of sales and growth thought attainable.

CEO Howard Schultz, while unhappy with the outcome of the court’s decision, stands his ground saying that their choice to leave Kraft was, “without question, the right strategic decision for Starbucks, our brand and our shareholders.”

http://www.chicagotribune.com/business/breaking/chi-starbucks-kraft-grocery-fight-20131112,0,4766900.story

Emirates Airlines Collects Capital

Following the release of the new Boeing 777x long-haul jet, Emirates Airlines has signed over 100 billion dollars in deals between Boeing and Airbus in a move to massively raise the size of their current fleet, purchasing 150 Boeing 777xs and 50 Airbus A380 airliners.

This move shows an aggressive attempt by Emirates to take over the air in the heavily trafficked routes through the Middle East as passengers travel from East to West. A purchase of this much capital will allow Emirates to have massive growth in the coming years, while competitors, such as Etihad and Qatar Airways, made smaller purchases of 25 and 50 planes respectively, leaving a huge gap between Emirates Airlines and the competition.

With these Gulf Airlines already having a strong history of growth, this may be the move to really leave Qatar and Etihad Airways in the lurch as Emirates Airlines surges ahead with this tremendous gain of capital.

Huy Fong Foods Inc. facing possible shutdown

Huy Fong Foods Inc, famous for its immensely popular Sriracha Hot Chili Sauce, could be facing a possible shutdown as on the 22nd of November a United States Court judge will hear a case attempting to close Huy Fong Foods’ factory.

Huy Fong has been in operation since 1980, but since the release of its Sriracha sauce, Huy Fong has been greatly expanding every year. Unfortunately, in the recent past, complaints of those living near the factory have surmounted enough backing to start a legal ordeal between the City of Irwindale, California and Huy Fong Foods, in an attempt to shut down operations at Huy Fong Foods’ factory in Rosemead, California because of the smell the factory produces.

If the judge rules in favor of the townspeople, Huy Fong will find themselves in a tough situation, having either to move to a new location (Huy Fong Foods currently only has one factory to work from) or shut down operations completely. This first option might not be as easy as it sounds, since the company’s limited supply of ingredients leads to an inability to satisfy the demand of customers, which has been hindering growth and preventing Huy Fong Foods from being able to collect the maximum amount of revenue.