ECON600 discussion response
Can you help me understand this Economics question?
Hello,
I need three responses of at least 150 words each for the below students discussions for this week. Also in the bold below are the questions the students at answering.
Small mistakes are the stepping stones to large failures. How might this saying apply to this lesson, and do you agree?
In your responses, provide an example of a real-life seemingly small mistake with large consequences. By real-life, I mean a situation that actually happened, not a theoretical one.
Student ont:
Hello everyone and welcome to week two!
When small mistakes become stepping stones leading to large failures, most look back in hindsight and realize the mistakes they have made. This is not always the case when the poor choices are actually being made. Mistakes may be due to laziness, misinformation, greediness, lack of luck, innovation or just poor planning on all the above. The mistakes are commonly small ones leading to large failures or it may be the one statistical outlier that causes the catastrophic failure, which is very rare.
Many times surveying the consumer is a great idea for product research and development. However, as discussed last week in my Marketing course, consumers do not always know what they desire, want, need (call it what you will) because they are stuck inside their box of thinking and conduct routine tasks on a routine basis without access to the newest technology and genius innovation.
Nokia is a prime example of many smaller mistakes leading to a large failure. They innovated the cellular phone game by creating the first cellular network in the world. The first of their mistakes was failure to continue innovation based on the abilities of experts and relied on the safety of consumers. They chose to stick with voice communication instead of investing in data because thats what the consumer was accustomed to, failing to see the future of cellular networks and devices. They found it easier to invest in hardware because they thought thats what the consumer wanted and missed out on quickly developing software. Then lastly they passed up the opportunity to develop a touch screen phone, without a keyboard, because they found that consumers could not type on them, let alone adequately use such an advanced device. By 2007, Steve Jobs launched the iPhone and it was one too many small mistakes on Nokias part which caused a large scale failure (Aaslaid, 2018). I think its safe to say, chances are that you own an iPhone or android with a touch screen and not a Nokia with a keyboard, right?
References
Aaslaid, K. (2018). 50 examples of corporations that failed to innovate. Valuer. Retrieved from https://valuer.ai/blog/50-examples-of-corporations…
Student two:
One of the main takeaways from this lesson was that marginal analysis plays a significant role in decision making for a firm or an individual. I do agree that small mistakes are the stepping-stones to large failures. According to Samuel and Marks (2015), marginal analysis is a process of implementing a small and what may seem insignificant change and observing it to determine if it will have a positive impact. Making changes in marginal costs and benefits that are determined to have a positive outcome often lead to optimal decision-making.
My real-life example where a small mistake led to large consequences, occurred during a family trip some years ago where I joined my mother, sister, bother, and their kids on a trip to Disneyworld down in Orlando, Florida. We were in a debate on whether we should stay in one of the resorts or in a nearby hotel that was within five miles of the main entrance. During the previous times we visited the theme parks, we always stayed in a resort since most are more conveniently located in relation to the theme parks. End the end, we decided that we would change it up and try to save some money and stay in a hotel that was within five miles at a price of about $109 per night.
If we stayed in a resort, it would have been about $129 per night. At the time, I surely did not try to determine if the marginal cost of staying in the cheaper priced hotel would end up being less or more than the marginal benefit of a more convenient location that would safe some travel time. Unfortunately, on our first night of arriving in Orlando we were scheduled to attend a Cirque Du Soleil show and did not make it in time due to the fact that we ended up changing after checking into the hotel upon arrival and did not factor how long it would take us to travel five miles in peak hour traffic.
Samuelson, W. & Marks, S. (2015). Managerial Economics. Hoboken, NJ: Wiley & Sons Inc.
Sherman, F. (n.d.). Importance of Marginal Costs and Benefits. Retrieved from https://small
business.chron.com/importance-marginal-costs-benefits-46506.html
Student three:
Boeing the airline giant had made a few small mistakes or miscalculations which could (still pending the FAA and congress assessments) be fined quite a bit of money for the messing up on judgment calls and trying to finish their Boeing 737 MAX. The aircraft development should have undergone many more hours and even year or more of testing to train and even make sure that the fabricated parts were not defective and not up to code due to failure of the strength test that they undergo before being used on a critical platform. The documents show that Boeing knew that the supplier had parts that consistently failed a strength test, which was also a repeat offence from the older model of the Boeing 737 that Southwest Airlines currently still flies. The parts are slat tracks and they are used to guide parts of the wing that help with the takeoff and landing of the aircraft.
An additional small mistake that Boeing did while developing the Boeing 737 MAX was to not properly train the pilots as to the new system that helps fly it. This computer system is called MCAS (Maneuvering Characteristics Augmentation System) steering system. This software system assists the pilots to fly the aircraft without much correcting or other interaction by the pilot, however the system has been known to flaw and be vulnerable to erroneous data. The company even went to the extreme to send inside emails discussing the fact that they needed to push the issue that they dont need a training simulator for this version of the plane, along with the other ways to manipulate the internal regulators for the US and other international countries.
This small mistake has actually grown to being a real large mess. The Boeing Company has messed up with all this coming to light with the internal documents displaying and seeing the cover up discussed and also implemented. There has been multiple crashes which resulted in multiple fatalities of just the Boeing 737 MAX and this has caused the opportunity of the families who lost someone to actually sue the company as well as the federal and probably international regulators to fine them for millions for the deceptive practices. Also another development from this will be the lost trust in the quality of the aircraft and many lost sales as well as the CEO being removed from his position. This all for saving a few dollars in different areas to build an aircraft that to some would be sub-quality and now many are thinking twice about booking an airline that has one of the Boeing 737 or the Boeing 737 MAX. The final results of this is still playing out currently so keep your eyes open to the news reguarding this topic.
Duncan, I. (2020, January 10). FAA proposes $5.4 million fine for Boeing over defective 737 Max wing parts. Retrieved from https://www.inquirer.com/business/boeing-737-max-jets-faa-fines-20200110.html
Duncan, I., Aratani, L., & Laris, M. (2020, January 10). Internal Boeing documents show employees discussing efforts to manipulate regulators. Retrieved from https://www.inquirer.com/news/nation-world/boeing-documents-manipulation-safety-regulators-20200110.html
Gates, D. (2020, January 13). Beyond pilot trash talk, 737 Max documents reveal how intensely Boeing focused on cost. Retrieved from https://www.inquirer.com/business/boeing-737-max-documents-costs-20200113.html
Gelles, D. (2019, December 24). Boeing Can’t Fly Its 737 Max, but It’s Ready to Sell Its Safety. Retrieved from https://www.nytimes.com/2019/12/24/business/boeing-737-max-survey.html
Wehrman, J. (2019, October 29). Boeing chief at Senate 737 Max hearing: ‘We made mistakes’. Retrieved from https://www.inquirer.com/business/boeing-chief-senate-737-max-hearing-we-made-mistakes-20191029.html
