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With one-quarter of the world's population, and consumer spending increasing by as much as 10% annually, China offers an opportunity that marketers of branded goods can't ignore. Foreign companies seeking to win a piece of this growing market must overcome nagging uncertainties about the country's stability. They must also understand guo qing ("Chinese characteristics" or "the special situation in China") in order to deliver a product with the value, quality, and convenience that will appeal to Chinese consumers. Given the fragmentation of most Chinese consumer markets, Western marketers should concentrate on 3 to 5 key cities and then build sales, distribution, and manufacturing capabilities over a wider area. Multinationals already operating in China should try to cover 15 to 20 key cities by the end of this century. The challenge for both new entrants and seasoned marketers is to continue adapting products and marketing practices to guo qing.

Many academics and public relations specialists have suggested that, when responding to crises, executives should make full and immediate disclosures about the circumstances surrounding the event. Corporate legal advisors, on the other hand, often caution their clients against unnecessary public statements. This article examines the pros and cons of a full disclosure policy and the circumstances in which it should or should not be used. In some instances, what you don't say can hurt you. For example, nondisclosure might lead journalists--hard pressed by deadlines--to seek other sources, many of which might have a vested interest in making the company appear in the worst light. But in other situations, what you do say can hurt you. Cases are cited in which organizations revealed information that shocked constituents, and such news became a separate and more damaging crisis in itself. The point is, we have scant knowledge about firms that managed crises successfully by withholding information; we see only those cases in which crises were played out in the media, so we have a distorted view of how crises should be handled. Disclosure is rarely an all-or-nothing choice; the decision-maker's goal should be that of finding the appropriate amount and pace of reporting to the public.

In this article, Stanford economist Paul Krugman argues that fears about the impact of Third World competition are questionable in theory and flatly rejected by the data. After examining the consequences of isolated productivity improvements in three increasingly realistic economic models, Krugman concludes that an increase in Third World labor productivity means an increase in world output. And an increase in world output shows up in higher wages for Third World workers, not in decreased living standards for the First World. Yet if the West responds to the widespread fears about Third World economic success by erecting import barriers, the effects could be disastrous--dashing any hope of a decent living standard for hundreds of millions of people throughout the developing world.

Responding to environmental problems has always been a no-win proposition for managers, report Noah Walley and Bard Whitehead in "It's Not Easy Being Green" (May-June 1994). Help the environment and hurt your own business, or irreparably harm your business while protecting the earth. Recently, however, a new common wisdom has emerged that promises the ultimate reconciliation of environmental and economic concerns. Being green is no longer a cost of doing business; it is a catalyst for constant innovation, new market opportunity, and wealth creation. This new vision sounds great, yet it is highly unrealistic. Environmental costs are skyrocketing at most companies, with little chance of economic payback in sight. Given this reality, should "win-win" solutions be the foundation of a company's environmental strategy? In this issue's Perspectives section, twelve experts assess both viewpoints.

Chandler, a large U.S. consumer products firm, is rationalizing its European operations. Tony Pesci, protagonist, is deciding which plants to close for maximum efficiency. The manufacturing/marketing relationship is strained as efficiency is being weighed against cross-cultural marketing.

Swissair established two alliance networks in 1989 in order to improve its competitiveness. In order to evaluate the benefits of the alliances, Swissair's history, products, and cost structure are described, as is the international airline industry and the major players. The challenge for Swissair is how to gain further economies of scale in an increasingly competitive global marketplace. A rewritten version of an earlier case.

Updates the company's progress in increasing cooperation with its partners in the European Quality Alliance and Global Excellence Alliance. A rewritten version of an earlier supplement.

Updates the (A) case.

In the 1980s, experts and executives alike heralded alternative dispute resolution (ADR) as a sensible, cost-effective way to keep corporations out of court and away from the kind of litigation that devastates winners almost as much as losers. But the great hopes for ADR faded quickly. What characterizes ineffective ADR? An emphasis on winning at any price, a lack of commitment to ADR on the part of both top-level management and company counsel, and the misconception that ADR is not really that different from litigation. But some companies are using ADR effectively--lowering costs, resolving disputes rapidly, and preserving business relationships. Few companies have made the commitment to ADR more effectively than NCR. In addition to boosting the commitment of top management to ADR, NCR has defined a number of goals to be pursued in the event of disputes.

Transforming inefficient bureaucracies into dynamic, customer-oriented organizations is challenging under any circumstances. It is particularly daunting when revamping an enterprise as vast and multidimensional as the federal government. Many argue that it can't be done. David Osborne disagrees. Coauthor of Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector and senior advisor to the Clinton Administration, Osborne believes that change at the federal level is not only possible but also inevitable. In fact, many of the tools used to improve the performance of companies--worker empowerment, internal competition, and measurement--can be marshaled to "reinvent" the federal government. Reinvention is not about cutting waste or finding fraud. Its about restructuring and replacing large, centralized command-and-control bureaucracies with decentralized, entrepreneurial, customer-driven agencies that are pushed by competition and accountable for the results they deliver.

Responding to environmental problems has always been a no-win proposition for managers. Help the environment and hurt your own business, or irreparably harm your business while damaging the earth. Recently, however, a new common wisdom has emerged that promises the ultimate reconciliation of environmental and economic concerns. The proponents of this new popular wisdom cite a mounting body of "win-win" projects that benefit the environment and create financial value. In this new world, managers might redesign a product so that it uses fewer environmentally harmful or resource-depleting raw materials--an effort that if successful could result in considerable cuts in direct manufacturing costs and inventory savings. This new vision sounds good, yet it is highly unrealistic.

Set in November 1993. Intended as a follow-up to the (A) case.

Set in April 1990, this case focuses on H.J. Heinz and its subsidiary, StarKist, the largest producer of canned tuna in the United States. During the 1980s, the public became increasingly concerned about tuna fishing practices that killed dolphins. StarKist was the target of a consumer boycott initiated by the environmental community. Worried that bad publicity from the boycott would threaten the StarKist brand name, as well as Heinz's other branded products, senior management at Heinz decided that StarKist would become the first tuna processor to no longer purchase tuna caught by methods that killed dolphins. In making the decision, Heinz executives were not sure how StarKist's two major competitors would react, or how the decision would impact the procurement of raw tuna, StarKist's single largest expense item. Discusses the harvesting (fishing) and processing (canning) sector of the tuna industry. Also discusses the Marine Mammal Protection Act, and U.S. trade sanctions against Mexico and other countries.

Describes energy and environmental policy in China during the period 1980-1993. China has implemented ambitious plans for electrification and the substitution of fossil fuels (mostly coal) for biomass. The environmental consequences of these changes, at the local and regional levels, have been pronounced; the long-term global consequences of Chinese energy development are also thought to be significant. Chinese environmental policy has been aimed largely at mitigating the worst local and regional impacts. Raises several questions: the degree to which energy shortages or environmental problems will constrain China's future growth; the degree to which environmental quality is an important objective of Chinese policy; and the possible roles that Western governments and firms might play in developing and implementing sound energy strategies for China. Teaching Objective: To analyze the effects of governmental energy policies on local air pollution and on global atmospheric problems, to think about problems of environment and development, and to analyze the relationships between host governments and foreign firms in the energy sector.

In 1988, Volkswagen (VW) consolidated its North American operations in Puebla, Mexico, after shutting down its plant in Pennsylvania. Volkswagen de Mexico had been in operation since the 1960s, but produced almost exclusively for the Mexican market. In the late 1980s, VW began to restructure the Mexican plant to supply the United States and Canada (which had been importing from Germany) and to maintain its dominance of the Mexican market. The North American Free Trade Agreement put additional pressure on VW to start sourcing in North America. The case traces the history of VW in the United States and Mexico and the company's strategy in the context of Mexican government regulations, free trade, and a weak presence in the U.S. market. Ends in August 1992, after VW had just resolved an unexpected and bitter month-long labor dispute that delayed the introduction of new cars to the United States. A rewritten version of an earlier case.

Supplements the (A) case.

Reading Energy builds facilities that produce energy from nontraditional fuels. A privately held, entrepreneurial organization, it has spent six years developing a plan to build a waste-to-energy plant in the town of Robbins, Illinois. The plant would burn municipal solid waste, producing electricity for sale to the local utility. Its economics are driven by the cost of alternative waste disposal technologies (mostly landfills) and by the Public Regulatory Policy Act of 1978, which ensures a market for the power. Reading's project has been delayed by political opposition at both the local and state levels. Robbins is a poor community, and some of Reading's antagonists have invoked environmental justice as a reason to oppose the project. Tom Cassel, the engineer who founded Reading, is negotiating contracts for waste with nearby municipalities. He needs to consider price, risk allocation, and other economic factors, in addition to political and social issues, in designing his firm's strategy and tactics.

In this fictional case study, Ann Reardon, CEO of the Eldora Co. (EDC), has led her organization to become the largest and most profitable bicycle maker in the U.S. market. When her competition was moving its operations overseas because of lower labor costs, she chose to keep EDC's plant on the same campus as corporate headquarters in Boulder, Colorado. She believes that decision has been the primary reason for EDC's success. With the marketing, engineering, and manufacturing staff having easy access to one another, the company has been able to take advantage of the latest technical and stylistic innovations and deliver a more timely product to the retailers. Now, however, the U.S. market is reaching saturation, and the Asian market is nearly doubling annually. EDC's vice president of manufacturing wants Ann to build a new plant in China, but the marketing vice president wants to put a direct sales operation in Asia and outsource production on either a short- or a long-term basis. Manufacturing experts give their views.

There's a difference between being an international company--selling globally, having global brands, or having operations in different countries--and being a global enterprise. Few companies leverage their capabilities around the world to create powerful, cohesive organizations. CEO David Whitwam's vision is for Whirlpool to become an integrated, global enterprise. But a CEO can't change a company's mission and mind-set by edict alone. He or she must be able to convince employees throughout the organization that such change is not only possible, but also the best course of action. Employees must want to change their beliefs and behavior. The CEO must then create crossborder processes that force that change to occur.

Addresses contingent environmental liabilities that are the result of unforeseen environmental risks where the dollar amount of such liabilities is unknown and depends on future events. In contrast, fines for violating environmental laws are liabilities, but are not considered contingent liabilities as such fines are relatively predictable. Covers liabilities under common law doctrines (including toxic torts), the Resource Conservation and Recovery Act (RCA), and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In particular, discusses lender liability issues as of 1993 and briefly discusses financial reporting requirements. Concludes with a discussion of strategies for managing such liabilities.