This week’s paper is required to be approximately 4 -6 pages in length, not including the title page and the reference page. No paper should be fewer than 1400 words. Double space your work, cite your work, limit quotes, and edit your work well for spelling, grammar, and punctuation errors. If you have quotes included in your paper, you should have more than 1400 words to compensate. Your work will be automatically reviewed by Turnitin upon submission. Please make sure you have cited your work properly. Utilize the APA resource material provided in the lessons section of the classroom under course materials. After reading chapters 9 & 10 from week 6 and reading chapters 11 & 12 from week 7 you should have an understanding of the types of strategic control, the need for balance between rewards, culture, and boundaries, the pros and cons of different organizational structures, the elements of effective leadership, ethics programs, the types of risk a company may take. After reading the attached articles below, you then can incorporate all of these strategies with the managerial economic impact certain decisions will have on a company. Read the two articles attached about managerial economics. Discuss six selected topics from our studies throughout weeks six and seven (chapters 9 – 12)(HERE THEY ARE: building a strong and effective culture; setting boundaries and constraints; creating an effective structure; creating an ethical organization; staffing to capture value from innovation;; motivating with rewards in incentives; Discuss these six topics in relation to your company and also incorporate the issue of managerial economics within your company and how the economic situation of today influences the strategic decisions your company is making. Each of the six topics discussed should be in bold print. For example, one topic you may choose may be how your company attains balance between culture, rewards, and boundaries. Another topic may be your company’s organizational structure and why they have the structure they have. Give examples using the terms and concepts in your textbook and your research articles. (Terms to choose from from text: strategic control,traditional approach to strategic control informational control,behavioral control,organizational culture reward system,boundaries and constraints,corporate governance corporation,agency theory,board of directorsshareholder activism external governance control mechanisms,market for corporate control,takeover constraint,principal-principal conflicts,expropriation of minority shareholders,business groups,organizational structure,simple organizational structure,functional organizational structure,divisional organizational structure,strategic business unit (SBU) structure,holding company structure,matrix organizational structure,international division structure,geographic-area division structure,worldwide matrix structure,worldwide functional structure,worldwide product division structure,global start-up,boundaryless organizational designs,barrier-free organization,modular organization,virtual organization,horizontal organizational structures,adaptability,alignment,ambidextrous organizational designs, B. What is the importance of each of the six topics within your company? C. What is the usefulness of understanding this topic in today’s corporate structure? D. How does managerial economics fit into your topic? Paper Format (no abstract is necessary): -Title Page – Include a title page with your name, student number, title of your paper, course number, course name, & date. -Introductory Paragraph – Include an introductory paragraph that states your company and your six topics and why you selected them. -Font and Spacing – Use Times New Roman 12 pitch font with double-spaced lines. -Length – Write a 4 to 6 page essay not including the title page and citation page. Make sure you have at least 1400 words, not including the title and reference page. -Reference Page – Include all sources including your textbook on a separate reference page. Use references with authors, not websites. All references must have citations within your paper. -Utilize the APA Style for documenting sources. You will need to include at least 2 sources in additional to your textbooks. – Finally, remember Wikipedia is NOT a scholarly source. Punctuation, essay format (thesis, supporting paragraphs with transition and topic sentences, and summary) grammar and documentation count toward your grade. THE CASINO INDUSTRY* On February 21, 2013, Revel, the only new casino built in Atlantic City in almost a decade, was preparing to file for bankruptcy. The $2.4 billion megaresort built on 20 acres of beachfront had opened only eight months earlier. “We will continue to improve customer service and roll out new amenities for our guests,” said Kevin DeSanctis, the casino’s chief executive officer.1 The fate of the Revel has reflected the effect of the recent economic crunch on casinos, particularly in places like Las Vegas and Atlantic City, as people have been forced to cut back on their spending. Even as casinos struggle to show profits, there are growing concerns about the growth potential of places such as Las Vegas and Atlantic City over the longer term (see Exhibit 1). The economic slowdown forced potential visitors to put off their travel plans and find some type of casino activity closer to where they live. As economic conditions improve, it is not clear how many of these patrons will return to these two major casino destinations. With some form of casino now allowed in over half of the states (see Exhibit 2), competition is developing all over EXHIBIT 1 U.S. Casino Industry Gaming Revenues* Billions of Dollars2012†36.71201135.64201034.60200934.28200836.22200737.52200635.27200532.77200431.17200328.72200228.07 * Gaming revenues include the amount of money won by casinos from various gaming activities such as slot machines, table games, and sports betting. † 2012 figure is author estimate, based on recent industry trends. Source: State Gaming Regulatory Agencies * Case developed by Professor Jamal Shamsie, Michigan State University, with the assistance of Professor Alan B. Eisner, Pace University. Material has been drawn from published sources to be used for purposes of class discussion. Copyright © 2013 Jamal Shamsie and Alan B. Eisner. EXHIBIT 2 Breakdown of Gaming Revenues by State, 2012 StateRevenue (billions of dollars)Number and Type of CasinosNEVADA10.70*256 land-basedNEW JERSEY3.32†11 land-basedINDIANA2.721 land-based, 10 riverboats, 2 racetrack casinosMISSISSIPPI2.2430 land-based docksideLOUISANA2.371 land-based, 13 riverboats, 4 racetrack casinosPENNSYLVANIA3.024 land-based, 6 racetrack casinosMISSOURI1.8112 riverboatsILLINOIS1.4810 riverboatsIOWA1.427 land-based, 7 riverboats, 3 racetrack casinosMICHIGAN‡1.423 land-basedNEW YORK1.269 racetrack casinosWEST VIRGINIA0.964 racetrack casinosCOLORADO0.7540 land-basedDELAWARE0.553 racetrack casinosRHODE ISLAND0.512 racetrack casinosNEW MEXICO0.255 racetrack casinosFLORIDA0.385 racetrack casinosSOUTH DAKOTA§0.1035 land-based (limited stakes)OKLAHOMA0.102 racetrack casinosMAINE0.061 racetrack casinoKANSAS0.052 land-based * $5.50 billion of this revenue comes from the Las Vegas strip. † All of this revenue comes from Atlantic City. ‡ All of this revenue comes from Detroit. § All of this revenue comes from Deadwood. Source: 2012 AGA Survey of Casino Entertainment. C12 the country, led by riverboat casinos and Native American casinos (see Exhibit 3). Similar concerns are being raised about the growth of competition in various locations outside the United States. Over the years, casinos have been developed in various parts of Europe and Asia, and these compete for the high rollers who have been frequent visitors to Las Vegas and Atlantic City in the past. In 2007, Macau replaced Las Vegas as the leading casino gambling center, after the opening of Sands Macao, Macau’s first Las Vegas-style casino, three years ago. Other Las Vegas-based casinos have also entered this market with lavish properties, such as MGM Macau and Wynn Macau. EXHIBIT 3 States With Native American Casinos, 2012 StateNumber of CasinosAlabama3Alaska2Arizona25California70Colorado2Connecticut2Florida8Idaho8Iowa1Kansas4Louisiana3Michigan24Minnesota38Mississippi3Missouri1Montana13Nebraska6Nevada3New Mexico22New York7North Carolina2North Dakota10Oklahoma114Oregon9South Dakota11Texas1Washington34Wisconsin29Wyoming4 Source: 2012 AGA Survey of Casino Entertainment. For years, casinos in Las Vegas and Atlantic City have fought back by developing extravagant new properties. But it has been harder to obtain financing as the latest additions, such as the Revel in Atlantic City and the Palazzo in Las Vegas, have failed to draw enough clients. MGM Mirage had to search for new partners to push ahead with its ambitious City Center, which was completed in 2012, although work on one of the luxury hotel towers has been abandoned. Covering 67 acres, this $8.5 billion minicity includes luxury hotels, condominium units, a convention center, and retail space. Most indicative of the downturn in Las Vegas is the half-completed Echelon Place, on which work has been suspended since 2009. At more than $4 billion, the 5,000-room hotel and retail complex was expected to be far more expensive than the previous record for a single casino, which was set when Steve Wynn built his $2.7 billion Wynn Las Vegas. “The last four or five years showed our dependence on the national economy. We always knew it, but this is the first time it really hit us,” said Billy Vassiliadis, the head of an advertising agency that represents the Las Vegas Convention and Visitors Authority.2 Riding the Growth Wave Although some form of gambling in the United States can been traced back to colonial times, the recent advent of casinos began with the legalization of gaming in Nevada in 1931. For many years, this was the only state in which casinos were allowed. As a result, Nevada still retains its status as the state with the highest revenues from casinos, with annual gambling revenues rising to over $10 billion by 2004. After New Jersey passed laws in 1976 to allow gambling in Atlantic City, the large population on the East Coast gained easier access to casinos. The further growth of casinos to other areas has occurred since 1988, as more and more states have legalized the operation of casinos because of their ability to help generate commercial activity and create jobs, in large part by increasing tourism. The greatest growth has come in the form of waterborne casinos that have begun to operate in six states that have allowed casinos to develop at waterfronts such as rivers and lakes. By 2012, over 80 such casinos were generating about $10 billion in annual revenues. Several of the casinos along the Gulf Coast were destroyed or severely damaged by Hurricane Katrina. To encourage casinos to rebuild, Mississippi lawmakers passed a law in 2005 allowing casinos to operate up to 800 feet from the shore, allowing them to have a stronger foundation to withstand future hurricanes. Most of the damaged casinos in the area had reopened by early 2007. C13 As casinos have spread to more states, there has also been a growing tendency to regard casino gambling as an acceptable form of entertainment for a night out. Although casinos have tended to draw players from all demographic segments, a recent national survey found that their median age was 47 and their median household income was around $50,000. On the whole, casino gamblers tended to be better educated and more affluent than those who bought lottery tickets. In fact, the bigger casinos attracted a high-roller segment, which could stake millions of dollars and included players from all over the world. Many of the casinos worked hard to obtain the business of this market segment, despite the risk that the sustained winning streak of a single player could significantly weaken the earnings for a particular quarter. The growth of casino gambling has also been driven by the significantly better payouts that they give players compared with other forms of gambling. Based on industry estimates, casinos typically keep less than $5 of every $100 that is wagered. This compares favorably with racetrack betting, which holds back over $20 of every $100 that is wagered, and with state-run lotteries, which usually keep about $45 of every $100 that is spent on tickets. Such comparisons can be somewhat misleading, however, because winnings are put back into play in casinos much faster than they are in other forms of gaming. This provides a casino with more opportunities to win from a customer, largely offsetting its lower retention rate. Finally, most of the growth in casino revenues has come from the growing popularity of slot machines. These coin-operated slot machines typically account for almost two-thirds of all casino gaming revenues (see Exhibit 4). A major reason for their popularity is that it is easier for prospective gamblers to feed a slot machine than to learn the nuances of various table games. Slot machines were also less labor intensive than table games. Major slot machine manufacturers, such as International Game Technology, have been making the transition to cashless or coin-free gaming by switching to the use of tickets. With the advent of new technology, server-based gaming will allow games on these machines to be changed or updated from a central system. EXHIBIT 4 Top Five Favorite Casino Games, 2012 Game Slot machines53%Blackjack23%Poker7%Roulette3%Craps3% Betting on a Few Locations Although casinos have spread across much of the country, two cities still dominate the casino business. Both Las Vegas and Atlantic City have seen a spectacular growth in casino gaming revenues over the years. Although Las Vegas has far more hotel casinos, each of the dozen casinos in Atlantic City typically generates much higher revenues. Over the last couple of decades, these two locations accounted for almost a third of the total revenues generated by all forms of casinos throughout the United States. Las Vegas clearly acts as a magnet for the overnight casino gamblers, offering several high-end casino hotels with many choices for fine dining, great shopping, and top-notch entertainment. This allows the casinos to generate revenues from offering a wide selection of activities apart from gambling. At MGM Mirage, for example, revenue from nongaming activities has typically accounted for almost 60 percent of net revenue in recent years. Visitors find it easy to travel to Las Vegas, as it is linked by air to many major cities both in the United States and around the world. During the 1990s, Las Vegas tried to become more receptive to families, with attractions such as circus performances, animal reserves, and pirate battles. But the city has been very successful with its recent return to its sinful roots, with a stronger focus on topless shows, hot night clubs, and other adult offerings that have been highlighted by the new advertising slogan: “What happens in Vegas, stays in Vegas.” Paul Cappelli, who creates advertising messages, believes that Las Vegas lost its way with the effort to become family friendly. “People don’t see Vegas as Jellystone Park. They don’t want to go there with a picnic basket,” he explained.3 For the most part, Las Vegas has continued to show a consistent pattern of growth in visitors. “We still compete with Orlando and New York,” said Terry Jicinsky, head of marketing for the Las Vegas Convention and Visitors Authority. “But based on overnight visitors, we’re the top destination in North America.”4 In order to accommodate this growth, several of the major resorts, such as Bellagio, Venetian, and Mandalay Bay, have added new wings. Even some of the older properties have been given expensive renovations, such as Caesars Palace, which was expanded to include a new Colosseum and a new Roman Plaza. By comparison, Atlantic City cannot compete with Las Vegas in terms of the broad range of dining, shopping, and entertainment choices. It does, however, offer a beach and a boardwalk, along which its dozen large casino hotels are lined. Atlantic City attracts gamblers from various cities in the Northeast, many of whom arrive by charter bus and stay for less than a day. Atlantic City officials point out that one-quarter of the nation’s population lives sufficiently close so that they can drive there with just one tank of gas. The opening of the much-ballyhooed Revel was part of a drive to try and make Atlantic City much more competitive with Las Vegas. But it failed to replicate the success of (Dess C11-C14) Dess, Gregory, G.T. Lumpkin, Alan Eisner, Gerry McNamara. Strategic Management: Text and Cases, 7th Edition. McGraw-Hill Learning Solutions, 09/2013. VitalBook file. The citation provided is a guideline. Please check each citation for accuracy before use.
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