In our case study, HKT's managers have made a number of important investments in an effort to replace anticipated lost revenues from deregulation. Have these managers identified the best uses for HKT corporate funds? How can we evaluate this? What criteria should we use?
 
 

What are the constraints on HKT's managers in making decisions about new corporate investments?  Have they missed any options that you have identified?  What are the pros and cons of those options?  Did HKT's managers leave themselves enough flexibility?
 
 

Any spending that is intended to enhance shareholder wealth is investment.  In the pure economic use of the word, investment is spending on inputs that will produce new or more outputs.  Both these ways of using the term investment could include a wide range of investments beyond hiring more labor hours, buying more physical inputs and machinery, or brick and mortar expansion of plant, such as employee training, research and development, and hiring consultants to help with reorganization of the work place.

How have investments in computer technology (hardware and software) made it more difficult to measure productivity?  (Or was it that productivity was always very difficult to measure, but economists just ignored this problem?)  Is worker productivity enhanced by this new technology?  If so, who reaps the benefits of this enhancement?  HKT management unsuccessfully attempted to get the firm's workers to accept lower wages so the firm could remain "competitive" with new telecoms entering the deregulated Hong Kong market.  What are HKT management's options for lowering labor costs in the face of resistance to wage reductions?  Is it possible that the downward stickiness of HKT workers' wages could be a "blessing in disguise."  How?