Again, Starbucks Denies Giving Support to Israel
Starbucks just updated a statement on its website denying giving support to Israel. This isn't the first time the company is responding to similar claims.
Starbucks' Jim Olson told CNN Money that the decision to close Israeli stores in 2003 "was not related to political issues" but was for "operational challenges." This month, Olson said that the statement, written in 2010, was updated because of an "uptick in false rumors out there about Starbucks and the Middle East."
Some of the rumors were about the possibility of Starbucks investing in SodaStream. The Palestinian BDS National Committee (BNC) threatened boycotts if this were true because SodaStream is manufactured in, according to the group, an illegal Israeli settlement in the West Bank.
Facts about Starbucks in the Middle East
Facts about Starbucks in the Middle East (UPDATED August 2014)
Though our roots are in the United States, we are a global company with stores in 65 countries, including nearly 600 stores in 12 Middle Eastern and North African countries employing more than 10,000 partners (employees). In countries where we do business, we are proud to be a part of the fabric of the local community – working directly with local business partners who operate our stores, employing thousands of local citizens, serving millions of customers and positively impacting many others through our support of local neighborhoods and cities.
Our 300,000 partners around the globe have diverse views about a wide range of topics. Regardless of that spectrum of beliefs, Starbucks has been and remains a non-political organization. We do not support any political or religious cause. Additionally, neither Starbucks nor the company's chairman, president and ceo Howard Schultz provide financial support to the Israeli government and/or the Israeli Army in any way.
What we do believe in, and remain focused on, is staying true to our company's long-standing heritage – simply connecting with our partners and customers over a cup of high quality coffee and offering the best experience possible to them – regardless of geographical location.
Questions and Answers:
Is it true that Starbucks or Howard Schultz provides financial support to Israel?
No. This is absolutely untrue. Rumors that Starbucks or Howard provides financial support to the Israeli government and/or the Israeli Army are unequivocally false. Starbucks is a publicly held company and as such, is required to disclose any corporate giving each year through a proxy statement.
Has Starbucks ever sent any of its profits to the Israeli government and/or Israeli army?
No. This is absolutely untrue.
Is it true that Starbucks closed its stores in Israel for political reasons?
No. We do not make business decisions based on political issues. We decided to dissolve our partnership in Israel in 2003 due to the on-going operational challenges that we experienced in that market. After many months of discussion with our partner we came to this amicable decision. While this was a difficult decision for both companies, we believe it remains the right decision for our businesses.
Do you have plans to re-open should the opportunity arise?
We decided to dissolve our partnership in Israel in 2003 due to the on-going operational challenges that we experienced in that market.
When and where the business case makes sense and we see a fit for the Starbucks brand in a market we will work closely with a local partner to assess the feasibility of offering our brand to that community. We will therefore continue to assess all opportunities on this basis. At present, we will continue to grow our business in the Middle East as we have been very gratified by the strong reception of the brand in the region. We continue to work closely with our business partner, the Alshaya Group, in developing our plans for the region.
Do you work with a Middle East partner to operate Starbucks stores?
Through a licensing agreement with trading partner and licensee MH Alshaya WLL, a private Kuwait family business, Starbucks has operated in the Middle East since 1999. Today Alshaya Group, recognized as one of the leading and most influential retailing franchisees in the region, operates nearly 600 Starbucks stores in the Middle East and Levant region. In addition to its Starbucks stores, the Alshaya Group operates more than 2,600 retail stores in the Middle East, Russia and North Africa, providing jobs for more than 40,000 employees of more than 110 nationalities.
We are extremely fortunate and proud to have forged a successful partnership for the past fifteen years and look forward to building on this success.
In which Middle Eastern and North African countries do you operate?
We partner with Alshaya Group to operate Starbucks stores in Bahrain, Cyprus, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and United Arab Emirates in the Middle East and North Africa region. We are fortunate to have the opportunity to work with so many communities, and we are committed to providing the Starbucks Experience while respecting the local customs and cultures of each country we are a part of. We are also committed to hiring locally, providing jobs to thousands of local citizens in the countries where we operate.
This updates a statement originally posted to the Starbucks Newsroom in 2010.
Discussion Starters:
- Do you believe that Starbucks invests in Israel? If not, why would these rumors get started?
- Assess Starbucks' statement: the messaging, organization, tone, and so one. What works well, and what could be improved?
- What are the most and least convincing claims in the statement?
How (Not) to Avoid Reporters' Questions
Technical glitch or avoiding the question? Pundits are debating whether former Israeli Ambassador to the United States Michael Oren really couldn't hear Andrea Mitchell's question.
Mitchell (MSNBC): "And I just have to ask you very briefly, in ten seconds, were you aware any of eavesdropping on John Kerry by Israeli intelligence?"
Oren: "Andrea, I cannot hear you. I'm sorry." [ear piece touch] "[utterances] I'm in Tel Aviv. I cannot hear you. I'm sorry."
Oren was still the Israeli ambassador at the time of the alleged eavesdropping.
Huffington Post compiled a video of embarrassing question evasions. And this reminds me of the woman who hid under her desk to avoid a reporter. Not the best option.
Discussion Starters:
- Do you believe that Oren couldn't hear? Explain your response with evidence from the video.
- If Oren was simply evading the question, what would have been a better strategy for managing the question?
Hotel Fines Guests for Negative Reviews
So much for embracing feedback. The Union Street Guest House in Hudson, NY, implemented a policy of fining wedding bookers $500 for negative reviews.
The Guest House seems to miss the point about social media, and the policy itself is silly: couples are responsible for each negative review posted by their guests. Imagine a wedding gone bad, which could, theoretically, inspire hundreds of guests to post to TripAdvisor or Yelp. There goes the new house fund.
The policy was as follows:
"If you have booked the Inn for a wedding or other type of event anywhere in the region and given us a deposit of any kind for guests to stay at USGH there will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any internet site by anyone in your party and/or attending your wedding or event. If you stay here to attend a wedding anywhere in the area and leave us a negative review on any internet site you agree to a $500. fine for each negative review."
A scan of the Guest House's Yelp reviews indicates a service issue, with an average of 2 stars out of 5.
The owners haven't handled these reviews very well, on one occasion replying, "I know you guys wanted to hang out and get drunk for 2 days and that is fine. I was really really sorry that you showed up in the summer when it was 105 degrees . . . I was so so so sorry that our ice maker and fridge were not working and not accessible."
The Guest House fares better on TripAdvisor (4 out of 5), but the reviews are still spotty.
After some backlash about the policy, the owners posted on Facebook (since removed) that the policy was a "tongue-in-cheek response to a wedding many years ago." This is almost as good as Amy's Baking Company claiming that its Facebook page was hacked and was being investigated by the FBI.
Discussion Starters:
- What advice would you give the owners of the Guest House about managing social media and, specifically, about responding to negative online reviews? (See Chapter 7 for tips.)
- Practice responding to reviews on behalf of the owner. Choose two or three on Yelp and draft responses.
Airbnb Sells Sustainability
In its latest advertising campaign, Airbnb is pushing its role in sustainability. Taking lessons from Chapters 5 and 7 in the textbook, Airbnb boasts saving the planet in concrete terms.
According to a recent report, published with the Cleantech Group, "In one year alone, Airbnb guests in North America saved the equivalent of 270 Olympic-sized pools of water while avoiding the greenhouse gas emissions equivalent to 33,000 cars on North American roads." The company also says that North American Airbnb guests use 63% less energy than do hotel guests, while European guests use 78% less.
The report results are summarized in an infographic on Airbnb's blog.
Discussion Starters:
- Read Airbnb's report summary. Which statistics make sense to you, and which are perhaps overstated or irrelevant?
- What do you think of Airbnb's marketing approach? Do you find it effective? Why or why not?
- Asses the company's infographic. What principles from Chapter 9 are followed effectively?
SeaWorld and Southwest End 26-Year Partnership
In a joint statement, SeaWorld and Southwest Airlines announced the end of a promotional partnership started in 1988. The companies aren't answering questions beyond the scant (and dare I say, loose) explanation in the release:
Joint Statement on Southwest and SeaWorld Partnership
Southwest and SeaWorld have mutually decided not to renew their partnership when the contract expires at the end of the year. Our promotional marketing relationship began in 1988 and was one of the first of its kind – focused on co-marketing opportunities between Southwest passengers and SeaWorld visitors.
The companies decided not to renew the contract based on shifting priorities. Southwest is spreading its wings with new international service, and increased focus on local market efforts. With an increasing international visitor base, SeaWorld is looking to focus on new and growing markets in Latin America and Asia, among others.
The companies will continue to work together through Southwest Vacations. Southwest's three specialty airplanes will return to the company's traditional livery.
Southwest and SeaWorld have enjoyed their long relationship, and wish each other continued success.
The more obvious reason, which The Wall Street Journal, Los Angeles Times, and others point to, is backlash from "Blackfish." The movie questioned SeaWorld's treatment of killer whales at theme parks and blamed several trainers' deaths on how the animals are held in captivity.
In the statement, the companies mention "shifting priorities." Although both have an increasingly international focus, Southwest is looking towards more local marketing. Huh?
Discussion Starters:
- Another option for the companies is to announce the decision without giving a reason at all. What do you think of this strategy?
- The companies aren't giving statements beyond this joint message. Is that a wise decision? Why or why not?
Malaysia Airlines Representative Speaks Out
Hugh Dunleavy, commercial director of Malaysia Airlines, wrote an editorial in The Telegraph to defend the airline's flight path for MH17 and ponder the future of the company. Twice this year, Malaysia Airlines flights have crashed. MH17 was struck down over Ukraine, and earlier this year, MH370 was lost between Kuala Lumpur and Beijing.
Now, the airline is in jeopardy. Cancellations are up to 20 % in some regions, and the company seems to be running out of cash.
In his editorial, Dunleavy says that was happened to MH17 could have happened to any airline and defers responsibility for flight paths away from the industry:
"For too long, airlines have been shouldering the responsibility for making decisions about what constitutes a safe flight path, over areas in political turmoil around the world.
"We are not intelligence agencies, but airlines, charged with carrying passengers in comfort between destinations.
"Against the backdrop of areas with increasingly volatile political situations, such as Ukraine and Gaza, we as an industry must act now to create a system of approval that guarantees safe air passage for all commercial airlines."
Dunleavy admits that the Malaysian government, which owns a majority stake in the company, was already in "a process of assessing the future shape of our business" before the more recent MH17 loss. PR Daily wonders whether a name change and repositioning of the brand would help save the airline.
Discussion Starters:
- If you had a scheduled flight on Malaysia Airlines, would you cancel it? Discuss your rationale.
- What do you think would help the struggling airline at this point?
- When PR Daily proposes a name change and a "radical brand overhaul," what do you think they mean? What would this look like? What other companies have done something similar?
Malaysia Airlines' Communications About MH17
After harsh criticism of Malaysia Airlines' communications when MH370 disappeared, the airline may be under a microscope for how it handles the recent tragedy, MH17 shot down over eastern Ukraine. The company's home page has this simple message:
Following a link to "Latest Updates on Flight MH17" brings this media statement:
Friday, July 18, 08:20 PM GMT +0800 Media Statement 4 : MH17 Incident
Media Statement 4: MH17 Incident
1. Flight plan
MH17's flight plan was approved by Eurocontrol, who are solely responsible for determining civil aircraft flight paths over European airspace. Eurocontrol is the air navigation service provider for Europe and is governed under ICAO rules.
The route over Ukrainian airspace where the incident occurred is commonly used for Europe to Asia flights. A flight from a different carrier was on the same route at the time of the MH17 incident, as were a number of other flights from other carriers in the days and weeks before. Eurocontrol maintains records of all flights across European airspace, including those across Ukraine.
In April, the International Civil Aviation Organization identified an area over the Crimean peninsula as risky. At no point did MH17 fly into, or request to fly into, this area. At all times, MH17 was in airspace approved by the ICAO.
2. Altitude
MH17 filed a flight plan requesting to fly at 35,000ft throughout Ukrainian airspace. This is close to the ‘optimum' altitude.
However, an aircraft's altitude in flight is determined by air traffic control on the ground. Upon entering Ukrainian airspace, MH17 was instructed by Ukrainian air traffic control to fly at 33,000ft.
3. Nationalities
Following this afternoon's press conference, Malaysia Airlines can confirm that a further 16 passengers' nationalities have been verified. The latest breakdown of nationalities of those on board the flight is as follows:
· 189 Netherlands
· 44 Malaysia
· 27 Australia
· 12 Indonensia
· 9 UK
· 4 Belgium
· 4 Germany
· 3 Philippines
· 1 Canada
· 1 New Zealand
Four passengers' nationalities remain to be verified.
4. New flight route
Following this incident, Malaysia Airlines now avoids Ukrainian airspace entirely, flying further south over Turkey.
-end-
Friday, July 18, 06:40 PM GMT +0800 Cargo Manifest and Airway Bill for MH17
Discussion Starters:
- Who are the audiences for Malaysia Airlines' communications?
- What's your view of the simple posting on the airlines' homepage?
- The statement, above, certainly gives the facts, but should it include some emotional appeal as well? What is appropriate at this point?
- What other communications do you think we'll see from the airline? What do you think the public expects to see?
- What are the similarities and differences in MH370 and this situation? How should this background influence how the airline executives should handle their communications?
- What can the airline executives learn from their experience with MH370?
Claim Against KFC Was a Hoax
Kelly Mullins wrote a sad story on Facebook about how her granddaughter, Victoria, was shunned at a Jackson, Mississippi KFC. The little girl was attacked by three pit bulls, which left her with scarring and a bandage on her face. The grandmother claimed that Victoria was asked to leave the KFC while eating: "We have to ask you to leave because her face is disrupting our customers."
As you can imagine, the response on Facebook and other social media sites was enormous, and news outlets were all over the story. KFC gave the family $30,000 for medical bills and issued this statement:
"KFC launched an investigation as soon as we were made aware of this report. We take this very seriously, as we have zero tolerance for any kind of hurtful or disrespectful actions toward our guests. Our investigation is ongoing, but we have been in touch with the family and are committed to doing something appropriate for this beautiful little girl and her family. We will also work with the franchisee to take appropriate action at the restaurant once the specifics of the incident are determined."
But the story didn't stack up. The family said they ordered mashed potatoes and iced tea, but there were no such orders that day, and the restaurant video showed no record of Victoria and her grandmother entering the building.
Discussion Starters:
- Let's put the grandparenting question aside because I don't want to judge(!). What about the responsibility of reporters? Huffington Post, CNN, and others reported the story with only the grandmother's evidence.
- Should KFC ask for the $30,000 back? Should the company press criminal charges?
- The family raised an additional $135,000 for the girl as a result of this publicity. Should they be forced to return the donations?
JetBlue Apologizes to Mother
Three-year-olds aren't very good at "holding it." That's what JetBlue found out after refusing to allow a young girl to use the restroom, even though the plane was delayed on the turmac. After about a half-hour, the girl urinated in her seat.
When the mother, Jennifer Devereaux, was trying to clean the seat, the flight attendant told her curtly to sit down. Eventually, the pilot turned around the plan and said they were going back to the gate because of a "non-compliant" passenger.
A JetBlue representative called Devereaux to apologize. She told CNN, "She said, 'I am a mom, too. I understand what you [are/were] going through, and I am so sorry this happened to you.'"
The airline also offered Devereaux a $500 voucher for a future fight and $5,000 to a charity of her choice. But she said, "I didn't care about a voucher. That kind of stuff doesn't matter to me. But I did want an apology for my family because we really felt we were mistreated and felt awful."
JetBlue replied to at least one comment on Twitter:
However, some question whether the FAA regulations speak directly about bathroom use.
On the other side, we have comments criticizing the mother for bringing a three-year-old on a plane without pull-ups.
Discussion Starters:
- The simple apology seemed to work for Devereaux, even more than the voucher and, particularly, THE charity donation, which she didn't mention at all. Did JetBlue waste its money? Should the company have offered something else?
- What, if any, responsibility did Devereaux have in this situation?
GM Terminates 15 People
GM is cleaning house, hoping to rid itself of criticism about delaying recalls, which caused 13 deaths. CEO Mary Barra announced the decision after an internal investigation revealed that several executives knew about an ignition switch problem for years and avoided a fix that would have cost 57 cents.
In a message to employees, captured on video, Barra says she is guided by two principles: "doing the right thing for those who were harmed" and taking responsibility "to make sure this never happens again." She also blames the actions of "a few people," a strategic move to separate the company from a few bad apples who have since left.
Fifteen people were terminated and another five were disciplined, some for misconduct and others for not taking enough action. One email showed that several people were aware of the problem, which persisted for another nine years. A GM parts manufacturer wrote, Chevy "Cobalt is blowing up in their face in regards to turning the car off."
Discussion Starters:
- How do you assess GM's decision to terminate 15 people and discipline another five? Is this enough?
- What other persuasive strategies is Barra using in her presentation to employees? What key messages do you take from the video?
Walmart Apologizes for Truck's Role in Crash
Actor Tracy Morgan is in critical condition after a limo accident involving a Walmart truck. Morgan is most famous for his TV roles in 30 Rock and Saturday Night Live.
The crash caused one death (Morgan's mentor, James "Jimmy Mack" McNair) and two other critical injuries. The Walmart driver is facing criminal charges and is accused of driving after not sleeping for 24 hours. In a statement, Walmart President Bill Simon extended the company's concern:
Discussion Starters:
- It's still unclear what role the Walmart driver played in the crash. Is Walmart's apology premature?
- Assess the statement. Is it appropriate coming from the CEO? What changes, if any, would you suggest the company make?
NRA's Statement Asks Gun Activists to Consider Consequences of Their Behavior
In a statement that surprised some, the National Rifle Association asked gun owners "to consider the effect their behavior has on others, whether fellow gun owners or not." The statement, "Good Citizens and Good Neighbors: The Gun Owners' Role," implies that some gun advocates have gone too far:
"In summary, NRA certainly does not support bans on personalized guns or on carrying firearms in public, including in restaurants. We think people are intelligent enough to resolve these issues in a reasonable way for themselves. But when people act without thinking, or without consideration for others – especially when it comes to firearms – they set the stage for further restrictions on our rights. Firearm owners face enough challenges these days; we don't need to be victims of friendly fire."
The NRA statement gave two examples of when "poor judgement" may run counter to NRA goals. The first is supporting "smart" guns that can be fired only by an authorized user, a technology the NRA says has "darker implications."
The second example is openly carrying long guns in public places, particularly in Texas. Although the statement applauds the state's "robust gun culture" and acknowledges that carrying is legal, the NRA criticizes the "attention-hungry few"-"a small number have recently crossed the line from enthusiasm to downright foolishness."
In a Facebook response, Open Carry Texas explained its position:
"Open Carry Texas members have always sought permission to enter an establishment prior to going in with our firearms. This has been part of our philosophy since day one and it has worked, with hundreds of businesses across the state 100% in support of what we do and how we do it."
Read the full Open Carry Texas statement.
Discussion Starters:
- Assess persuasive strategies used in the NRA statement. How does the NRA use logical argument, emotional appeal, and credibility to make its case?
- What are the strongest and weakest arguments in the statement?
- Is the apostrophe in the NRA statement title correct: "Good Citizens and Good Neighbors: The Gun Owners' Role"?
Snapchat's FTC Settlement and Admission
Snapchat has entered into an agreement with the Federal Trade Commission, which accused the app of violating its own privacy policies, but critics say that agreement will have little impact. The FTC found Snapchat guilty of claiming that "snaps" would disappear when they are actually quite easy to store forever and of transmitting users' locations when its policy claims that user information is not tracked.
Although the settlement does put restrictions on Snapchat, ZDNet, for example, questions the effectiveness:
"With this settlement agreement, the FTC is sending a message - just not one that makes us feel any better about Snapchat, and all the other Snapchats out there.
"And that message is: Party on with your bad self, Snapchat.
"It's not like anyone's going to stop you."
On its blog, Snapchat interpreted the agreement:
Our Agreement with the FTC
When we started building Snapchat, we were focused on developing a unique, fast, and fun way to communicate with photos. We learned a lot during those early days. One of the ways we learned was by making mistakes, acknowledging them, and fixing them.
While we were focused on building, some things didn't get the attention they could have. One of those was being more precise with how we communicated with the Snapchat community. This morning we entered into a consent decree with the FTC that addresses concerns raised by the commission. Even before today's consent decree was announced, we had resolved most of those concerns over the past year by improving the wording of our privacy policy, app description, and in-app just-in-time notifications. And we continue to invest heavily in security and countermeasures to prevent abuse.
We are devoted to promoting user privacy and giving Snapchatters control over how and with whom they communicate. That's something we've always taken seriously, and always will.
Discussion Starters:
- What's your experience with Snapchat? Does this news change your opinion of the company, or will you stop using the service?
- Assess Snapchat's response. On Twitter, @PatrickVitalone called it a "non-apology." What do you think?
Chipotle Bags and Cups Go Literary
Chipotle Founder and CEO Steve Ells liked a customer's idea to change its white, boring cups and bags to something more interesting. Frustrated at Chipotle without reading materials (or a smartphone?), Jonathan Safran Foer pitched the idea for getting writers to submit text. In a Vanity Fair article, Foer described his email to Ells:
"I said, ‘I bet a s***load of people go into your restaurants every day, and I bet some of them have very similar experiences, and even if they didn't have that negative experience, they could have a positive experience if they had access to some kind of interesting text,'" Foer recalled. "And unlike McDonald's, it's not like they're selling their surfaces to the highest bidder. They had nothing on their bags. So I said, ‘Wouldn't it be cool to just put some interesting stuff on it? Get really high-quality writers of different kinds, creating texts of different kinds that you just give to your customers as a service.'"
The project, called Cultivating Thought, has already garnered quite the list of celebrity authors, including Foer, who bills himself as curator. Foer authored Everything Is Illuminated, Extremely Loud and Incredibly Close, and Eating Animals.
Discussion Starters:
- What do you think of the idea? As you can imagine, not everyone loves it.
- Why would Steve Ells be interested in this project? What does Chipotle-and possibly Ells personally-have to gain?
Commencement Speakers Nixed Because of Protests
Several universities have changed plans for commencement speakers, succumbing to student and faculty protests. In some cases, the speaker withdrew. Here are the latest and relevant communications:
- Former Chancellor at the University of California, Berkeley, Robert J. Birgeneau, has withdrawn as this year's speaker for Haverford College. A letter from students and a few faculty speaks of Haverford's "Quaker Values," including pacifism. It compliments Birgeneau's work on LGBT issues but criticizes his involvement in an event at Berkeley: "You supported UC Berkeley police in the use of extreme force against non-violent protestors..." Birgeneau did not appreciate the letter and the group's demands and responded with a missive of his own.
- Rutgers found a similar fate after announcing that Condoleeza Rice would speak at its commencement. Rice resigned, announcing the decision on her Facebook page.
- Christine Lagarde, president of the International Monetary Fund (IMF), withdrew her plans to speak at Smith College. Kathleen McCartney, president of the college, wrote a sharply worded letter about the protests, including these excerpts:
"Those who objected will be satisfied that their activism has had a desired effect. But at what cost to Smith College? This is a question I hope we will ponder as a community in the months ahead."
. . . .
"I want to underscore this fact: An invitation to speak at a commencement is not an endorsement of all views or policies of an individual or the institution she or he leads. Such a test would preclude virtually anyone in public office or position of influence. Moreover, such a test would seem anathema to our core values of free thought and diversity of opinion. I remain committed to leading a college where differing views can be heard and debated with respect."
Discussion Starters:
- Read all of the communications associated with these decisions. What themes emerge in tone, organization, word choice, and so on?
- Which of these communications is the best example, and what makes it the best?
- Condeelza Rice's Facebook page has a serious punctuation error. Did you notice it?
Pom Wonderful Steals the Show
Pom Wonderful did a great job responding to criticism from HBO talk show host John Oliver. According to an Adweek article, Oliver had "dismissed Pom Wonderful as snake oil and suggested putting stickers on Pom's juice bottles saying it contains dogs." This was after showing a clip from a TV show, on which Pom was promised to reduce the possibility of prostate cancer.
Pom responded by sending Oliver a refrigerator, a case of the juice, and a clever letter, which he read on air.
Discussion Starters:
- What's your view of Pom's response? In what ways was it effective, or not?
- The Adweek article referred to Pom's "strangely stilted letter ('We like to think we're able to take a joke. It was very funny. We laughed hard')." Do you agree with this assessment?
Target CEO Resigns
Gregg Steinhafel, who was Target's chairman and chief executive since 2008, has resigned. According to a New York Times article, the data breach earlier this year and overexpansion in Canada, which has led to low margins and inventory problems, contributed to the decision. The Times describes one analyst's view that Steinhafel was partly to blame for the security break that affected millions of customers because of system vulnerabilities caused, in part, by underinvestment in technology.
A message posted on the company's website directs visitors to a full statement from the board:
May 5, 2014
Today we are announcing that, after extensive discussions, the board and Gregg Steinhafel have decided that now is the right time for new leadership at Target. Effective immediately, Gregg will step down from his positions as chairman of the Target board of directors, president and CEO. John Mulligan, Target's chief financial officer, has been appointed as interim president and chief executive officer. Roxanne S. Austin, a current member of Target's board of directors, has been appointed as interim non-executive chair of the board. Both will serve in their roles until permanent replacements are named. We have asked Gregg Steinhafel to serve in an advisory capacity during this transition and he has graciously agreed.
The board is deeply grateful to Gregg for his significant contributions and outstanding service throughout his notable 35-year career with the company. We believe his passion for the team and relentless focus on the guest have established Target as a leader in the retail industry. Gregg has created a culture that fosters innovation and supports the development of new ideas. Under his leadership, the company has not only enhanced its ability to execute, but has broadened its strategic horizons. He also led the company through unprecedented challenges, navigating the financial recession, reacting to challenges with Target's expansion into Canada, and successfully defending the company through a high-profile proxy battle.
Most recently, Gregg led the response to Target's 2013 data breach. He held himself personally accountable and pledged that Target would emerge a better company. We are grateful to him for his tireless leadership and will always consider him a member of the Target family.
The board will continue to be actively engaged with the leadership team to drive Target's future success and will manage the transition. In addition to the appointments of the exceptional leaders noted above, we have also retained Korn Ferry to advise the board on a comprehensive CEO search.
The board is confident in the future of this company and views this transition as an opportunity to drive Target's business forward and accelerate the company's transformation efforts.
The announcement comes on Target's new CIO's first day on the job.
Discussion Starters:
- Assess the board's statement: what works well and what could be improved about the content, organization, tone, and so on?
- Why do you think the board waited so long? Target learned of the breach in mid-December 2013. What factors might have played into the decision?
Taco Bell: "Those Other Ingredients"
After criticism of its meat in 2011, Taco Bell came out fighting with a video message from CEO Greg Creed (who kindly gave permission for the video to be included with Chapter 7 of the textbook). Now, Taco Bell further explains its ingredients in response to the false-advertising lawsuit claiming that the company uses "taco meat filling" rather than "seasoned beef."
Taco Bell has said that its meat is "88% Premium Beef and 12% Signature Recipe," which includes seasonings, spices, water and other ingredients. This week, the company revealed the 12% in a graphic posted on its website:
Although these ingredients don't sound very appetizing, a Popular Science article tells us not to worry: "...the ingredients in them are not scary poison that the average person will never understand. Most are fine in small amounts or when consumed in infrequent treats."
Discussion Starters:
- Go to the Taco Bell's graphic and click on each box. How effective are the explanations of these other ingredients?
- Why do you think the company took two years to reveal the rest of its recipe?
AOL Tells Customers to Change Their Password
The latest hacking victim is AOL, which urged users to change their password even though the risk sounds small.
 |
| Dear AOL User,
At AOL, we care deeply about the safety and security of your online experience. We are writing to notify you that AOL is investigating a security incident that involved unauthorized access to AOL's network and systems. Recently, our systems alerted us to an increased incidence of email users receiving spam emails from "spoofed" AOL email addresses. AOL's security team immediately began investigating the cause of the spoofed emails. Spoofing is a tactic used by spammers to make it appear that the message is from you in order to trick the recipient into opening it. These emails do not originate from the AOL Mail system – the addresses are just edited to make them appear that way. AOL is working with other email providers like Gmail, Yahoo! Mail and Outlook·com to stamp out spoofing across the industry, and we have implemented measures that will significantly limit its future occurrence. Although our investigation is still underway, we have determined that there was unauthorized access to AOL users' email addresses, postal addresses, contact information (as stored in the AOL Mail "Address Book"), encrypted account passwords, and encrypted answers to security questions that we ask when a user resets his or her password. We believe spammers have used this contact information to send spoofed emails that appeared to come from roughly 2% of our email accounts. Importantly, at this point, we have no indication that the encryption on the passwords or the answers to security questions was broken. Likewise, there is no indication that this incident resulted in disclosure of users' financial information, including debit and credit cards, which is also fully encrypted. Nevertheless, as a precautionary measure, we strongly encourage you to reset your password used for any AOL service and, when you do so, you should take the time to change your account security question and answer. You may reset your password and account security question at account.aol.com. In addition, there are steps you can take to protect yourself from cyber risks. They include:
We place a premium on the security of our systems and our users' information. We are implementing additional measures to address this incident, and we are working with law enforcement to pursue the matter. If you have any further questions, additional information and an extensive Q&A can be found at faq.aol.com. We apologize for any inconvenience, and we are addressing the situation as quickly and forcefully as we can. |
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Privacy Policy | Customer Support |
According to PC Magazine, AOL also updated its email policy. An announcement on its blog says the company is working with other email providers to reject spoofed emails:
"AOL Mail is immediately changing its policy to help mail providers reject email messages that are sent using forged AOL Mail addresses. By initiating this change, AOL Mail, along with other major email providers will reject these spoofed email messages, rather than deliver them to the recipient's inboxes."
Discussion Starters:
- Analyze AOL's audience: who is the typical user (other than my 86-year-old father)?
- How well does AOL describe the technical problem to this audience? What else about the email is tailored to this audience?
- What, if anything, could be improved about the email?
- What's your assessment of AOL's blog post about working with other email providers?
Board Terminates RadiumOne CEO After Felony Charges
Former RadiumOne CEO and Founder Gurbaksh Chahal is disputing his termination. The board of directors may have supported Chahal as he was charged with assaulting his girlfriend and plead guilty to two misdemeanors. But after more reporting and social media activity, apparently, the board made its decision.
RadiumOne, an advertising platform, announced the termination in a short press statement on its website:
"At a board meeting yesterday evening, RadiumOne's board of directors voted to terminate the employment of Gurbaksh Chahal as CEO and Chairman of the company. Bill Lonergan, the company's COO, will take over as CEO of the Company immediately. Bill has an extraordinary professional background and has helped build BlueLithium and RadiumOne into industry leading brands. We are confident he will continue Radium One's impressive trajectory."
In a blog post, "Can You Handle the Truth?" Chahal admits to losing his temper but denies claims that he hit his girlfriend 117 times. He also protests the media attention and social media attacks. Chahal includes an email he says he received from one of his board members two days before he was terminated:
"Been thinking some more. Absolutely don't do anything. Let the haters hate ad move on. This will blow over very quickly and we focus on the IPO. Don't let them get to you. Don't respond. I know it sucks but i think this is the right way fwd. Stay strong amigo. I feel for you."
In the meantime, at least two reporters had called for the board to terminate Chahal: Kara Swisher and CNN Money writer Dan Primack.
Discussion Starters:
- Did the board make the right decision? Why or why not? What does one's personal life have to do with the business? Does his position as CEO and/or founder affect your view?
- How do you assess the email Chahal posted? If it's real, does it help his case?
- How, if at all, does the image of Chahal with President Obama affect your opinion of him?