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Creating Effective Corporate Social Media Policies
Elon Musk was charged with contempt-of-court for tweeting that Tesla would produce about 500,000 vehicles in 2019. The lesson is obvious—even a rocket scientist can get into trouble using social media. However, seemingly rational social media interactions can also land a brand in hot water with consumers. While an organization can still exert some control over who speaks to the press, it is nearly impossible to control employees’ use of social media. Thus, the next best thing is a social media policy vetted and implemented by the board to provide guidelines. The goal of the authors’ research was to identify themes and elements of effective policies in order to offer a best-practice guide to help companies better manage the risks they face. Using corporate social media policies from 85 publicly traded firms in North America, they performed content analysis to identify keywords and phrases related to the use of social media by members of the firms. As the authors examined the social media policies, four themes emerged: representation, legal, control, and judgement. During a social media controversy, if it can be demonstrated that a) the employee was speaking on her or his own behalf, and that b) the employee was not following the company’s communicated policy, then the firm can limit its liability. -
Canada's Cleaners
Canada's Cleaners Inc. is a dry cleaning company. The owner is considering selling a piece of shirt-pressing equipment and investing in one of three available machines. The current machine's quality is no longer meeting the company's standards and most likely will only last for another three years. He must do a cost and benefit analysis to determine which machine he should purchase. -
Corporate Promotion Incorporated
Corporate Promotions Incorporated, a small merchandising company producing specialty advertising products, custom clothing and pre-printed paper for promotional campaigns, had an opportunity to bid on a sales contract of two to five million dollars. Serious cash flow problems threatened to prevent the company from servicing the customer, and the company's president approached the Bank of Ontario to request a $75,000 increase to its working capital loan. The loan manager must review the company's past and future financial positions before deciding on the requested loan increase.