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Published: Saturday, 10/12/2002

Capitalism-education group grapples with post-Enron questions

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

Intoxicated by the success of their consumer products start-up, two young master of the universe wannabes hungered to gobble up a smaller fish about to go belly-up.

That's when Betty Wallace, Junior Achievement, Inc., coordinator in Bryan, stepped in with some words of caution to the high school boys: “I said, `Why do you want to do it? Does it have to do with selfishness on your part?' We had a big discussion. In the end, they chose not to do it.”

Junior Achievement has been teaching capitalism with a conscience to schoolchildren for more than eight decades.

Now, with corporate America immersed in an ethics crisis, the organization founded in 1919 by political and corporate leaders begins a new school year by arming its adult volunteers with new ammunition in the fight to defend and promote free enterprise.

An online business ethics center, unveiled last month, provides advisers and instructors with a place to find suggestions on teaching business ethics and answering expected questions in the aftermath of the scandal at Enron Corp. and other firms.

It is but one of the ways that “JA” is adapting to changing times.

Jeff Bosch is part of the new strategy of sending volunteers into younger children's classrooms to teach about free enterprise. Jeff Bosch is part of the new strategy of sending volunteers into younger children's classrooms to teach about free enterprise.
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Classroom lectures and activities have in Toledo and many other areas of the country supplanted a longtime strategy emphasizing formation of student-led companies that elected officers, solicited investors, and made and sold products such as cheese balls and coat hangers.

Even in places where that strategy survives, including the Findlay and Bryan areas, student companies are as likely to provide a service or to outsource production as they are to concentrate resources on the manufacture of widgets, according to adult coordinators.

Today, JA serves 6 million children around the world, including 4 million in the United States.

It began as a much smaller effort in Springfield, Mass., the year after the end of World War I.

With the exodus from farms to the city picking up steam, business leaders including the president of AT&T Corp. saw the need for after-school business clubs that would teach children how to “think and plan for a business, acquire supplies and talent, build their own products, advertise, and sell.”

The concept was a huge success. Alumni include Federick Deluca, founder of the Subway sandwich chain.

By the 1990s, however, changing lifestyles were having a negative impact on the organization in many areas of the country.

Toledo, where the first JA club started in 1946, was typical. “It was a combination of fewer participants and fewer volunteers,” recalled Jill Edwards, vice president for education locally.

Participating executives and business owners had to agree to put in 21/2 hours a week after work from the beginning of the school year until Christmas.

“With companies downsizing, those who were lucky enough to keep their jobs were working twice as hard,” she said. “They were tired when they came home and family time became more precious.”

The organization also found itself competing for high school participants with sports programs, jobs, and other after-school activities.

Increasingly, JA shifted focus to programs in which a volunteer from the business community goes into a class five times a year for a half hour to 50 minutes at a crack to teach about economics and free enterprise from a specially designed curriculum supplied by the organization's national office in Colorado Springs, Colo.

“Their materials are outstanding,” said Nancy Decker, a teacher at Wayne Trail School in Maumee.

Despite growing demands on classroom time, the program is popular with teachers, said Jeffrey Bosch, president of Junior Achievement of Northwestern Ohio, Inc.

Last year, it served 20,000 children from kindergartners to high school seniors in a 12-county area. Volunteers were in 900 classrooms in 157 schools.

“The demand for our program is greater than the supply of volunteers,” he said, noting that the organization had to turn down 50 teachers last year.

Veteran Springfield Township insurance agent Ev Harris leads a session on “community” for six classes of second graders in that school system. The sessions are aimed at teaching children about “the interdependent roles of workers in a community and how communities work.”

Mr. Harris said his primary goal “is to send them home each night with something that they can talk about with their parents.”

In northwest Ohio, JA has had the greatest difficulty penetrating high schools, which were once its greatest strength. It is in 18 high schools, but hopes to increase that by four schools annually.

Volunteers have been warned to expect questions about business ethics as a result of recent corporate scandals, said the northwest Ohio JA president.

An online survey of 1,449 teens nationwide that was conducted by the national organization this summer found that young people are concerned about the issue. Nine of 10 survey participants said they wouldn't work for a company accused of wrongdoing. The issue was bigger for girls than for boys, however. Ninety-four percent of girls - and 81 percent of boys - said they would shy away from an ethically challenged firm.

JA's new business ethics center includes an ethics quiz that volunteers can use to query students on such subjects as whether they would use a company phone to make a personal long distance call.

Other sections suggest participants write a personal and business code of ethics and conduct a class discussion on whether it is ethical to copy a report from the Internet when the student is having trouble completing an assignment.

Despite the shift in JA strategy, the traditional program, emphasizing student-run companies, is still strong in some places.

Erin Rath, a 17-year-old senior at Bryan High School, is chief financial officer of a company that, among other things, will produce and sell commercial sponsorship for a series of programs to be broadcast on a community radio station.

The first program will be centered on movie trivia involving Bryan's 10 favorite films, which will be determined by surveys at Bryan High School and elsewhere, Ms. Rath said.

Her company also plans to sell candy and candles.

When the company is liquidated after inventory is sold and bills are paid, she and other participants stand to make $50 to $100 through incentives for sales and attendance at meetings.

Ms. Rath is glad she joined JA. “Before, business was something that was foreign,” she said. “I had no understanding of it. Now, I think I could start a business if I wanted to.”

Another student-run company at the Williams County high school is making money trucking in doughnuts from a Toledo outlet of Krispy Kreme, which has no stores in Bryan.

Bryan executive Steve Rinell is adviser to a company whose enterprises include repackaging caramel corn bought in bulk from a popular producer in the area.

Mr. Rinell, who is finance director for the Bryan-based North Western Electric Cooperative, said students are learning valuable lessons in things like the importance of customer satisfaction. When one student hesitated to accept a large order he was unsure the company could fill, the adviser told the student: “If the customer wants 250 bags, we'll fill it; if they want 2,500 bags, we'll fill it. If you sell it, we'll fill it. When you're in business and a customer wants something, you provide it.”

Mr. Rinell doesn't believe the model is outdated in an era when many real companies hire others to manufacture goods and instead focus on marketing and sales.

“I don't think it's behind the times,” he said. “We're still doing our best to make a good product, keep it competitively priced, and supply a need to somebody.”

He encourages students to use local suppliers. That, he said, helps to promote business ethics. He explained:

“I tell the students, `We're local here. We're working with friends and neighbors. When you go out to present yourself, you need to do it in the best light. It's a reflection on our program.'”



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