Case Study - Coursework Example

Case Study 5.3- A Divided: SDG&E Takeover of the of the Case Study 5.3- A Divided: SDG&E Takeover Was it fair to SDG& E stockholders, who might have benefited financially by selling their stock in the proposed takeover, for other parties to intervene? Why or why not? The case in point clearly shows that shareholders are not the only stakeholders in the fate of a corporation. San Diego Gas & Electric was a utility company providing these services to a lot of San Diegans- hence they needed to be considered in case of a merger or takeover and the effect it would have on them.

The merger would cause a movement of the head office from San Diego to Los Angeles, result in downsizing and job losses of between 1000-1600 positions, and also increase the pollution level of Los Angeles. It was reminiscent of the 1930s when a lot of utility companies had to be broken up. So clearly this matter needed participation from stakeholders like the public, the Mayor’s office and the PUC (Case Study, p 2). 2. Make a point- by- point case, pro or con, on a situation in which people who own shares in a company nonetheless have a voice in its destiny.

Justify your position with comparative examples in other areas of public policy. a. People who own shares in a publicly floated company do have a voice in its destiny and should. This is only fair and has a legal basis as well (PRO). b. The problem is that majority shareholders are heard most of the time, to the exclusion of smaller and minority shareholders (CON).c. Just like in a democracy, the weights given to the votes of a PhD and a college dropout are the same. Votes are counted, not weighed for their merit (CON).d. In Court decisions, a person’s guilt or innocence and ultimate fate is decided by a jury of their peers.

Casey Anthony and Conrad Murray trials are cases in point (PRO).3. Compare the key messages from CFLC and Edison. How are they dissimilar or similar? What is the specific strategy behind each of the messages? What publics might find each appealing or persuasive? Each of the stated parties- CFLC and Edison- adopted strategies and took out messages that looked at the case from their own point of view. The objective was to gain sympathy in the right quarters and among the most effective parties so that the decision would be in their favor.

While Edison came out with very general statements, they were also hiding some truths. The merger and downsizing would result in loss of employment and the economic viability of San Diego would also be threatened, the SDG&E case coming up soon after the loss of South Pacific Airlines Corporation. CFLCs strategy was more effective since it appealed to the PUC and used the Mayor and the media to present its case more effectively. It was thus able to garner enough support to triumph over Edison’s bid for the merger.

Obviously the PUC committee was also against the merger as it would not serve the larger public interest.4. How was the public served in this case?Common sense prevailed eventually and after a 3 year battle, the decision was awarded in favor of CFLC and the citizens of San Diego- to do away with the merger. CFLC was in fact against the movement of business from San Diego and welcomed ENOVAs merger with Pacific Enterprises in 1996 to form Sempra Energy, which is still located in San Diego. The public needs job opportunities as well as affordable electricity and SDG& E would provide them with both.

Thus the decision not to allow the merger was in the public interest (Case Study, p3). 5. How ethical was Edison’s decision to fund San Diegans for the Merger?Unfortunately the business world is full of corporate raiders waiting to make a bid for a company they deem attractive in terms of its business or balance sheet value. Edison made offers of $2 billion, $2.15 billion and ultimately $2.5 billion for SDG&E. But what really turned matters around was that while the shareholders initially opposed the merger, at the very end they relented and would have gone through with the merger had the Mayor’s office and the general public not reacted and taken note.

This resulted in the CFLC, the PUC, the media and others getting involved with an outcry against the merger in the larger public interest. ReferencesAuthor Unknown (n.d). Case Study 5.3- A City Divided: SDG&E Takeover.