Preface xiximportance of not only knowing how to apply accounting concepts learned in
the course, but also how to apply those concepts ethically, with integrity and
objectivity.- New Chapter OpenersEach chapter opens with a unique company scenario re-
vised to speak directly to student interests and experiences. The chapter openers
tie directly to the chapter topics providing students with the invaluable experience
of seeing how theory translates into real practice. The revised opening scenarios
are written to relate to students, using real-life examples, such as playing football,
receiving birthday money, subscribing to magazines, and organizing music on an
MP3 player. - “How Businesses Make Money” boxed featureFormerly called “Strategy in
Business,” this feature emphasizes practical ways in which businesses generate
profits and make money. The boxes help generate student interest in business and
accounting.
Integrity and Honesty Make a Difference
Herb Kelleher, chairman and former chief executive of
Southwest Airlines, is known for his honesty and integrity
among Southwest employees. In the mid-1990s, Kelleher ne-
gotiated a 10-year union contract with Southwest pilots in
which the pilots agreed to freeze their wages for the first five
years of the contract. A primary reason Kelleher was able to
successfully negotiate the contract was that he constantly
worked at building trust among his employees. When he was
negotiating the contract, he told the pilots he would freeze his
own pay for the same five years. The pilots’ union believed
him, knowing that Kelleher wouldn’t ask them to do something
he wouldn’t do. Jackie Freiberg, co-author of the book, Nuts!
Southwest Airlines’ Crazy Recipe for Business and Personal
Success, says: “Kelleher is a man of his word. He thinks straight
and talks straight, so people respect and trust him.”Source:Steve Watkins, “Leaders and Success,” Investor’s Business
Daily, November 5, 2004.INTEGRITY, OBJECTIVITY, AND ETHICS IN BUSINESS
FROM PAGE 153
FROM PAGE 213
Under One Roof at JCPenney
HOW BUSINESSES MAKE MONEY
Most businesses cannot be all things to all people. Busi-
nesses must seek a position in the marketplace to serve
a unique customer need. Companies that are unable
to do this can be squeezed out of the marketplace.
The mall-based department store has been under pres-
sure from both ends of the retail spectrum. At the dis-
count store end of the market, Wal-Marthas been a
formidable competitor. At the high end, specialty re-
tailers have established a strong presence in identi-
fiable niches, such as electronics and apparel. Over
a decade ago, JCPenneyabandoned its “hard
goods,” such as electronics and sporting goods, in favor of
providing “soft goods” because of the emerging strength of spe-
cialty retailers in the hard goods segments. JCPenney
is positioning itself against these forces by “exceed-
ing the fashion, quality, selection, and service com-
ponents of the discounter, equaling the merchandise
intensity of the specialty store, and providing the se-
lection and ‘under one roof’ shopping convenience
of the department store.”JCPenney merchandise
emphasis is focused toward customers it terms the
“modern spender” and “starting outs.” It views these
segments as most likely to value its higher-end mer-
chandise offered under the convenience of “one roof.”