You Make the Call-Situation 1

question 72

Essay

You Make the Call-Situation 1
When they created Round Table Group (RTG) Inc., Russ Rosenstein and Robert Hull envisioned a company offering one-stop shopping for intellectual expertise. They wanted to help businesspeople, management consultants, and litigation attorneys get answers to important questions from top-notch thinkers anywhere in the world through the Internet.
RTG's plan was to have a kind of SWAT team of professors who would answer questions based on their expertise. A team might consist of one or two professors, who would communicate with the client via e-mail, phone, or videoconferencing on projects that might involve a few hours or a few weeks of input. In the traditional management-consulting model, work on a project often lasts as long as a couple of years, and the team consists of a group of junior analysts, managers, and partners.
RTG assembled a database made up mainly of 3,000 university professors available to consult on an as-needed basis. The firm's fixed costs would be low because the professors would be paid only when they did billable work. But an unexpected wrinkle soon emerged. RTG's customers wanted RTG to start acting more like a traditional consulting firm. Business executives wanted face-to-face contact with the professors giving the information. They also wanted number crunching and follow-up analysis. And they wanted current, customized research.
That has left RTG at a crossroads. Should it try to become a more traditional management-consulting firm or continue to pursue its original mission of providing advice through Internet content and virtual links?
Taking the first path would mean providing support to clients, adding infrastructure and formalizing its operation by dividing it into distinct specialties. That would have the downside of making RTG's competitive point of differentiation murky. But the second path would risk putting off clients who say they want more.
(Source: Elena De Lisser, "A Plan May Look Good, but Watch Out for the Real World," Startup Journal, The Wall Street Journal Online, http://www.startupjournal.com/howto/management/199908240948-lisser.html, January 15, 2004.)

Examine the role of peer-to-peer (P2P) networks in transforming how music and media are shared online.

Investigate how digital media and Internet technology have reshaped consumer behavior and expectations regarding access to content.

Discuss the legal and ethical considerations surrounding copyright infringement and digital content sharing on the Internet.

Assess the impact of digital distribution on the business models of traditional media companies and content creators.

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Definitions:

Unamortized Trademark

The portion of the trademark's cost that has not yet been expensed through amortization in the financial statements, representing the remaining value of the trademark.

Cash Dividends

Cash dividends refer to payments made by a corporation to its shareholders, usually out of its profits.

Goodwill

Represents the intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets.

Equity Method

An accounting technique used to record investments in other companies, recognizing income and changes in investment value in proportion to the ownership percentage.