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Supplemental Material


Starbucks Coffee

  • Very few companies are like Starbucks
    • 800 stores.
    • 15,000 employees.
  • Company offers:
    • Stock plans.
      • Even part-time employees.
    • Health, dental, & vision insurance.
      • All employees.
    • Career counseling.
    • Paid vacations.
    • Product discounts.
    • Every employee receives 25 hours of training.
  • Results:
    • Lower turnover rate.
    • Better customer service.
  • Many stores in U.S.
    • Offer poor compensation packages.
    • Employees:
      • Steal more than the customers.
      • Rude to customers.
      • High turnover rates.
Blue arrow Employees are the most important and most expensive resource in a business. Why do many businesses treat employees badly?

Costa Rica

  • Located in Central America.
  • Population 3.3 million.
  • Using export-growth strategy.
    • Firms and businesses create products specifically for exporting to other countries (i.e. U.S.).
    • Benefits:
      • Firms have higher production levels.
        • Supplying domestic & international markets.
        • Higher economies of scale.
        • Lower per-unit costs in the long run.
      • Export industries import technology (from U.S.) and more efficient management techniques.
    • Successful:
      • Intel:
        • Constructed two buildings.
        • Production and testing of high-performance microprocessors.
        • $300 million investment.
        • Employs approx. 2,000.
    • Externality - external benefits to Costa Rican economy:
      • More computer programmers.
      • Other firms hire computer programmers.
      • Become more high-tech and efficient.
      • Economy grows faster.
    • Costa Rica's exports in 1998.
      • Bananas $665 million.
      • Coffee $405 million.
      • Nontraditional exports $2,125 million.
      • Intel $987 million.
    • $1,367 million of goods was exported to the United States.
Blue arrow

Is the United States subsidizing the growth of Costa Rica?

If U.S. customers are subsidizing developing countries, what is the purpose of the World Bank, IMF, and other institutions, where they give loans to these countries ? (The U.S. helps fund these institution).

What if Intel located this facility in Stillwater, Oklahoma?


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