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Labor Economics

1. General Electric and other firms have been doing well over the years.   Yet the railroad companies have declined and are not contributing to transportation the way they did 100 years ago.   How and why might this have happened?   Is this a natural decline in the product life cycle or did they bring this on themselves?   Discuss thoroughly.

General Electric and other firms decline of railroads is natural.   As with everything else, our country is changing more and more.   The railroad, like the rest of society, has seen major changes in technology.   Newer and better ideas and products are being invented.   There are a variety of reasons for the dramatic change in the fortunes of the railroads.   The biggest factor is that transportation technology overtook the trains.   In the early 1900s there were no paved highways and few cars and trucks.   Almost everyone traveled by train.   Today most people travel by automobile or airplane.   Trucks today haul much more freight than railroads.   The railroad still plays an important role in hauling coal, grain, and other freight, but it doesn't have the monopoly it enjoyed during the homestead era when people had no choice when it came to transporting themselves or their products.

2. The tobacco companies recently agreed to settle a government lawsuit that would cost them 360 billion dollars over the next 25 years.   Up until this time tobacco companies hired lawyers and fought each and every lawsuit, winning some and losing some.   From a strategic management perspective, why would the tobacco firms accept such a costly deal when they could have continued to fight in court?

Tobacco companies might be losing billions of dollars, but look at it from their view.   They can put up all of this money and not waste their time and more money paying out to lawyers.   They will be known for admitting that they were wrong.   They will be able to put more energy into fighting internal battles.   They can help produce "safer" tobacco...