Module 2 Business Case Assignment Instructions: Read and analyze each business case (there are two). Individuals are required to use key concepts from Unit 2 and 3 to respond to the questions. Be sure to use APA Style 7th edition to cite sources from the e-textbook and any other additional resources. Refer to the grading assessment on Brightspace. PART 1: Let’s Be Honest (page 83) 1. Do you think the company’s reaction to reports of hazardous ingredients hurt its reputation for honesty and ethical behavior? 2. Do you think the company’s missteps caused Unilever to shy away from acquiring the company? 3. Or, do you take the stance that Alba’s entertainment background played a part in the press going after the company? 4. If you were an advisor to the new CEO, what suggestions would you give him for getting the company back on track, especially when it comes to corporate social responsibility? The Honest Company is a consumer-goods business that sells nontoxic, eco-friendly items for baby and personal care, household cleaning, and a healthy lifestyle. Cofounded by actress Jessica Alba a little more than six years ago, Honest Co. is built on the promise of “telling all and doing our best to live up to your expectations.” Over the years the company has received high praise and media buzz about its ethical approach to making products that are not only good for people but good for the environment. On its website, Honest Co. goes to great lengths to share with consumers its guiding principles that products are made without harming people or the planet. A little over two years ago, however, the company experienced some bad press when The Wall Street Journal reported that two independent lab tests found samples of Honest laundry detergent contained a cleaning agent on the list of chemicals the company pledged to avoid. At first, pushback from company officials was loud and clear: they denied their products were anything but eco-friendly and safe for consumers and went as far as calling the report “false” and “junk science.” Unfortunately, the reports about Honest products and their harmful ingredients didn’t go away. After the laundry detergent story faded, the company quietly reconfigured the ingredients that went into the detergent as well as other products. But that wasn’t the end of the story. Several months later, Honest Co. voluntarily recalled organic baby powder that might cause infections and more recently recalled diaper wipes that appeared discolored. Despite these recent challenges, Honest Co. continues to be successful and was rumored to be on the short list of possible acquisitions for global conglomerates such as Procter & Gamble, Johnson & Johnson, and Unilever. These consumer-good giants are snapping up smaller, eco-friendly firms that have blossomed into full-fledged ethically and environmentally conscious organizations with strong sales and solid reputations among consumers. Recently, however, Unilever acquired one of Honest Co.’s biggest rivals, Seventh Generation, Inc., leaving Honest Co. to again rethink its business strategies, including hiring a new CEO. PART 2: High Dollar, Low Dollar – Which Is Better? 1. What are the effects of a strong dollar for Canada? 2. What are the effects of a relatively weak dollar for Canada? 3. Which do you think is better—a strong dollar or a relatively weak dollar? In the 1950s, it took 4.2 German marks to equal a dollar. At that same time, a dollar was worth more than 350 Japanese yen. At this writing, a dollar is worth about 79 yen, and the German mark was replaced years ago by the European Union’s euro. One dollar is equivalent to about 0.77 euros. These figures reflect radical change. There are both benefits and negative consequences of this change. Consider the negative side of a declining dollar abroad. Because of the shrinking international value of the dollar, Canadian purchases of goods and services abroad are made more difficult. For example, an Canadian firm buying wool sweaters from a foreign firm for resale in the Canada will experience a significant rise in the cost of acquiring the sweaters. In addition, Canadian tourists will find that everything in a foreign country will cost more than it did in the earlier days of the strong dollar. There are positive aspects to a falling dollar. Although it makes it more difficult for Canadians to purchase foreign goods, at the same time, the declining dollar makes it easier for foreign firms or citizens to make purchases in the Canada. The increase in more foreign purchases of Canadian products (increased exports) helps Canadian business. If a low dollar persists over a long period of time, increased purchases by other countries and decreased buying of foreign products by Canadians will eventually help the trade balance. Improving the trade balance means helping to reduce the Canada’s balance of payments deficit. Today’s business firms must be competitive in the global economy. What is positive for one nation may be negative for another. Thus, one nation’s exchange rate in relation to the value of another nation’s currency continues to be a matter of debate. As arguments can be made for both the strong dollar and the weak dollar, most trade negotiators will probably seek a middle-of-the-road position. Ferrell, L., Hirt, G., & Ferrell, O. C. (2017). Chapter 3: Business in a Borderless World. In Business: A changing world. McGraw-Hill Education.