GSGM7223 MANAGING ORGANISATION

FINAL ASSESSMENT

INSTRUCTION:

1. This is an open book for individual final assessment. You may consult the learning
materials that are provided to you in UNIEC Virtual OL (UVOL) – the textbook and
reference book stated in the course plan, relevant statutes plus the notes and videos.

2. It is your responsibility to make sure that what you have submitted is the complete
FINAL version of your answer as no resubmission or correction is allowed.

3. Submit your answers in ONE (1) file. Do not submit multiple files. Submission must
only be in Microsoft Word via UVOL (Final Assessment).

4. On the top right-hand corner of every answer page, type the following:

o Student Matric No.:

o Course Code:
o Course Name:
o Section:

5. On the last page of your answer script, after the last line of your answer to Question
4, type “END OF ANSWER PAGE’ and centre it.

6. There are FOUR (4) questions in this question paper. You are required to answer ALL
questions. All the questions are based on a case study paper “ZINNACO: AN
ETHICAL PARADOXES”. You must support your answer with relevant points or
examples.

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SECTION A: CASE STUDY (30 MARKS)
There are FOUR (4) questions in this question paper. Answer ALL questions.

ZINNACO: AN ETHICAL PARADOXES

INTRODUCTION
Kenneth Frazier, network administrator for Zinnaco, laced his shoes as he prepared to
head out for his exercise break in China. It was February 7, 2011, and Frazier’s needed
to decide what to do with the information he had uncovered while performing a routine file-
clean of his company’s servers. Located in Yunnan’s trendy neighborhood, software
developer Zinnaco was preparing to present to venture capital firms for its first major round
of funding. Yunnan, located in Southwest China is the most diverse and colorful area with
features ranging from snowcapped mountains to tropical rain forests and from highland
lakes to canyons. It was also fielding media interview requests the following week from
the Yunnan’s citizen and The National Post, both interested in writing news stories about
Zinnaco phenomenal increase in software licenses for its Zinnaco App Creator, a mobile
application software development platform.
ZINNACO
Zinnaco was founded in March 2010 by two successful entrepreneurs to create software
applications for the Zinux platform. The founders had noticed the growing popularity of
Zinux devices and wanted to capitalize on the recent launch of the Zinux tab. Furthermore,
independent research by firms such as Cathaya Research and United Research China
Ltd. suggested that the consumer market would continue to demand these and other
products designed to access content on the Internet.
Fueling the popularity of Zinux OS-based devices was Zinux’s unique combination of
appealing design, intuitive user interfaces, and the proliferation of downloadable and
inexpensive applications (or “apps”) for entertainment, business, and other uses. Zinnaco
had developed an application development platform Zinnaco App Creator (ZAC) — that
allowed novice users to create their own Zinux app without any software training. They
began to popularize their product by allowing consumers to download a limited version of
their software free of charge.
In order to attract media attention, Zinnaco had been targeting business customers for
ZAC, reporting on December 15, 2010, that the number of business software licenses
awarded for both its rough and beta versions had jumped from 1,500 to 20,000 in the last
two months.
STAFFING ZINNACO
The founders had assembled their teams largely from personal connections, and Frazier’s.
was employee number two and their first engineer hired. Although hired as chief product
developer, Frazier’s. was initially tasked with everything from setting up desktop
computers for the public relations consultants and marketing personnel to fixing broken
light bulbs. His projects also included configuring Zinnaco’s hardware and software to run
its Web site and internal operations.

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EDWARD’S FIRST PROJECTS
Starting with personal funds of less than Chinese Yuan, CN¥20,000. Today, the term
"Yuan" usually refers to the primary unit of account of the renminbi (RMB), the currency
of the People's Republic of China. The two founders had intended to seek angel funding
immediately. In order to do that, they needed to show that they were on track to building
a viable business. First, they needed a Web site, and a staff of developers to create a
working model of their software program.
For Zinnaco’s software platform, the company asked Frazier’s to create a functioning
database on top of a ZUNIX-based operating system. Frazier’s realized that the 15-year-
old server and packet switching hardware that they had recently purchased to run the
software was outdated and inadequate. He convinced the founders that they would have
to acquire newer equipment to achieve the desired functionality.
Reluctantly, Frazier’s request was met after a week of indecision. When the new hardware
arrived in April 2010, Frazier’s offered to telephone the major software companies to
purchase the requisite software licenses. Thus, Frazier’s was surprised when the founders
decided to take the discussion out of the office by inviting him to a lunch meeting. Zinnaco
had been in operation for four weeks at this point, and had only five employees.
THE REQUEST
Over lunch at the “Market” (as the Wayward Market was known in Yunnan), Frazier’s was
informed that no more funds existed for the purchase of software. Frazier’s was told that
it was his responsibility to load software onto the machines.
Frazier’s had several other projects that were awaiting his attention, but he did not want
to disappoint his friends and new employers. Relying on several industry contacts,
Frazier’s acquired new, cracked versions of software required to run Zinnaco’s operations.
Known in the software industry as “Zarez,” these were fully functional software programs
made available to the public by software engineers who had cracked the software’s
security and validation codes. Legitimate users typically purchased a software license
from the supplier, who included a code to validate. He explained:
Of course, I know it is an ethical dilemma. But which side of
the line do I stand on? The white line, the black line, or do I
thread the fine line in the middle?
ACQUIRING FUNDING
One month later, in May 2010, Zinnaco secured CN¥3,000.000 in funding from various
angel investors in China and Canada. The founders were extremely proud of having
secured the amount, in spite of the fact that the continued downturn in the economy was
affecting investor confidence. Euphoric, they embarked on an office expansion, hired
another 45 people, and prepared a fall marketing campaign.
Frazier’s was rewarded with a bonus of CN¥5,000, payable upon completion of a year’s
work, but was reassigned as a network administrator. Frazier’s did not notice any attempt
by the founders to acquire software license agreements.

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RAPID GROWTH AT ZINNACO
With the infusion, a newly hired team of 8 engineers began coding the first beta release
of ZAC. The team of marketers were given the latest Zinux smartphones and travel
budgets to fly to seminars and conferences to promote ZAC at key industry conferences,
including Zinux ’s GDC (Global Developers Conference) in Ontario.
The Chinese media, hungry for stories in the slow August to September period, pounced
on the chance to tout Zinnaco as the most promising start-up in the app development
market, generating thousands of media impressions in the process.
SLOWED DEVELOPMENT
The internal climate at Zinnaco was different. The team of 8 engineers had split into two
fractions, bickering over creative control of the project. In the process, engineering work
for ZAC stalled, and key engineers tendered their resignations in frustration. By November
2010, Zinnaco had only a rough working model of CIC. However, plans were still in place
to approach venture capitalists in December for CN¥15,000,000, and interested parties
were still being promised a December beta release.
THE FOUNDERS STEP IN
The two founders began taking control of the situation in late November, firing 4 of the
software engineers and giving the remaining team new goals to meet. Within two weeks,
the situation stabilized and a climate of productivity returned. It seemed that a sense of
urgency at Zinnaco had re-emerged, and on the 21st of December, the founders
announced to employees that the beta version was ready.
A press release was issued on the 26th of December, announcing that a limited version
of Zinnaco’ ZAC was being rapidly adopted by consumers, reaching 15,000 licenses
awarded. The licenses for the limited versions had been awarded at no cost in order to
rapidly gain market share. Zinnaco, paraphrasing a company press release, explained
that it intended to charge developers for its 1.0 release.
THE UNEARTHING
As part of his monthly duties, Frazier’s performed a file clean-up of Zinnaco’s internal file
folders. One of the founders had purchased a new laptop and had asked Frazier’s to load
new software and transfer old files for him. While manually transferring the files on the
morning of December 28, Frazier’s recovered a deleted e-mail. In the e-mail fragment,
the founder outlined that 15,000 fake accounts had been created by him to download the
CIC program. The e-mail had apparently been written to the other founder in order to
inform him of this occurrence.
In China, employee and workplace safety is regulated by the PRC's State Administration
of Workplace Safety under the Workplace Safety Law of the People's Republic of China.

Scrolling further, he chanced upon a more recent e-mail fragment from Yunnan’s
Workplace Safety:
. . .You have not filled out the necessary forms to register your
company with the PRC's State Administration of Workplace

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 Safety . . . the employees of Zinnaco are not covered and cannot
claim benefits if they are involved in a workplace accident. You
are in direct violation of workplace safety standards.
Perplexed, Frazier’s shut down the computers and headed out for his break.
FRAZIER’S PARADOXES
Finishing his run, Frazier’s decided to take an extended lunch to stroll around Yunnan’s
historical buildings. Even though Frazier was not comfortable with the weather, he had
other things on his mind. Has Zinnaco paid for the software we use to create ZAC?
What do these e-mail fragments mean? We’re not covered under the WSIB. If I had fallen
and broken my neck while changing light bulbs or electrocuted myself while wiring
computers, I would have been finished. Calming himself, Frazier’ headed back to his desk
at Zinnaco. He had a lot to think about.
Source: Ivey Case, 2018-01-011

QUESTION 1
Recommend TWO (2) solutions on what should Frazier’s do pertaining to the dilemma he
faces? (10 Marks)

QUESTION 2
Propose an appropriate time for Frazier’s to take action. Support with ONE (1) justification.
(5 Marks)

QUESTION 3

Suggest to whom Frazier should speak to concerning the solution. Support your answer
with ONE (1) justification. (5 Marks)

QUESTION 4

Predict TWO (2) potential risks that might be faced by Frazier. (10 Marks)

[Total: 30 Marks]

*** END OF QUESTION PAPER ***