applied hw 1 - Siming Zhu (sz86) AEM 4260 HW #1 September...

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Siming Zhu (sz86) AEM 4260 – HW #1 September 4, 2008 1. Does the chapter present any information that would lead you to conclude that managers at Sun Microsystems were averse to a sure loss? Discuss Based on the information and examples in this chapter, an aversion to sure loss appears to be a contributing factor to the irrational decisions of Sun Microsystems’ managers. For examples, the lucrative bets made by Sun Microsystem’s CEO, Scott McNealy, during the 2001 recession indicate that he was averse to the sure loss that would result from the burst of the Internet bubble. While its major competitors (Microsoft, Cisco, etc) concentrated on cutting costs to mitigate lost revenues, Scott McNealy chose to bet against a prolonged recession and maintained spending levels at Sun Microsystems. McNealy’s aversion to a sure loss is demonstrated when he rejected cost cutting measure against the advice of his management team. Instead of accepting a sure loss in revenues
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applied hw 1 - Siming Zhu (sz86) AEM 4260 HW #1 September...

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