The military general is the newly appointed prime minister of Thailand as of May 2014. The country is developing and needs support from its government in making it more efficient. The former prime minister was ousted, after less than three years in office, under the assumption that their government was spending itself into a hole and that the rice subsidy program was inept and hurting the country. The former prime minister was accused of launching the program in large part to win over the farming community and party votes for the August 2011 election. It is now the decision of the new prime minister whether he will continue on with the government purchase of rice, above market price, or should he break the promise made by the former government and stop the subsidy program from continuing.
Dr. Jonathan Strauss, Accounting Professor was contacted by a group of attorneys and asked to be an expert witness in the Jefferson County Bankruptcy Filing case. The situation had been in the news for over two years. Corruption of every kind had led to several Commissioners, contractors and others being fined and/or sent to jail for their part in the corruption. JPMC was sanctioned by the SEC and fined for their involvement in the case. Strauss discovered there was more than one interpretation of how GASB 34 and GASB 58 could be applied to issues that were integral to the Jefferson County bankruptcy trial. Strauss was being asked to testify as an expert witness on those very issues. While Strauss found the issues being evaluated interesting and the work financially rewarding, he had to decide whether he could support the particular position on those issues that the attorney's representing Jefferson County wanted him to take. He knew if he did decide to testify, his testimony would be subjected to detailed scrutiny by highly skilled professionals representing the counter parties in the litigation. He also knew that if he made a mistake in developing the support for his position, it was very likely that his errors would be highly publicized in the national financial press because of the significance of the case. Users of this case will be asked to put themselves in Strauss's shoes and determine whether a particular position can be sufficiently supported to justify the risk of testifying in bankruptcy court in such a high profile litigation.
greeNEWit is an energy audit company in Columbia, Maryland. The firm's three founders financed their start-up through loans from friends and family and an aggressive use of credit cards. Now the business is established, showing an exponential growth in revenues in a short time. Founder Josh Notes believes there is a billion dollar market available for the tak-ing in the area of smart grid integration. greeNEWit has been able to obtain limited bank financing but may need more to move into nationwide smart grid integration. Possibilities include additional bank loans, angel investors or venture capital, an equity partner, or perhaps generating additional revenues. A good estimate of firm value is needed in order to correctly price the share value. Josh needs to investigate all sources of financing before choosing the right next step for the firm.
On a bright July morning in 2013, the incoming President of the Stoli Group USA, John Esposito, was alarmed to learn that one of his company's most popular products was being bombarded by heavy criticism from social media. The hashtag, #DUMPSTOLI, coined by Dan Savage, a prominent gay rights blogger, had gone viral overnight. Savage claimed that Stoli Vodka, because of its Russian heritage, should be subjected to an outright boycott, along with all other Russian-made products. In Savage's view, it was important to launch a vocal protest and to show solidarity with the gay community in the aftermath of a series of discriminatory laws that were passed by the Russian government under the direction of Vladmir Putin. Esposito was well aware of Stoli's historical support of the lesbian, gay, bisexual, and transgender (LGBT) community and more importantly, he knew that the brand had no influence on, or relationship with the Putin government. In fact, both the owner and top executives at SPI Group, the parent company of Stoli Group USA, had progressively adversarial relationships with the Putin government for over 10 years. Nonetheless, the #DUMPSTOLI hashtag had gained followers and bars across the country began to ban Stoli vodka. Esposito hurried over to the office of Lori Tieszen, Stoli's senior vice president and chief marketing officer. He put her in charge of a team effort responsible for coming up with a response and protecting their iconic brand from the boycott. What should they do?
It was April 2014 and Reverend Canon Dr. Judy Rois (Rois), CEO and Executive Director of the Anglican Foundation of Canada (AFC), was preparing for the upcoming Board meeting in May. At that meeting Rois intended to present a strategic measurement framework to align with AFC's strategic priorities. AFC's Strategic Roadmap for 2012-2017 was approved on May 31, 2012 and it outlined five priorities including, branding, marketing, funding for impact, operational adjustments and fundraising. While much had been accomplished in the last two years, Rois felt they needed to be more intentional in assessing the implementation of the plan and determining how best to allocate people, money and time resources to achieve the strategic priorities. She wanted to develop a measurement framework that would provide direction in determining how to allocate resources among the five priorities and permit a systematic evaluation of AFC's success moving forward for the last three years of the Roadmap.
During the 2000s, in one of the largest commodity booms in history, Rio Tinto allowed itself to be swept up along with other mining companies in the mad rush for growth. Although the smart allocation of capital had traditionally been a strength at the 140-year-old company, Rio Tinto suffered multibillion-dollar write-downs of two of its boom-time acquisitions, and in 2012 it reported a net loss for the first time in 25 years. Early in 2013 the board of directors called on Walsh to take over as CEO. He knew that to succeed in such a turbulent environment, he would need to reconnect Rio Tinto with its core balance-sheet discipline and put it back on a path of measured, sustainable growth. He and the CFO decided to focus on three initiatives: tighten up investment decisions, allowing only the best projects to proceed; run the entire organization for cash; and drive efficiency throughout the company by cutting costs, exiting businesses, and rationalizing the workforce. But they also chose to pull best practices from other industries and fully harness the efficiency gains from new technology.
Social media was supposed to usher in a golden age of branding. But things didn't turn out that way. Marketers originally thought that Facebook, YouTube, and Twitter would let them bypass mainstream media and connect directly with customers. Hoping to attract huge audiences to their brands, they spent billions producing their own creative content. But consumers never showed up. In fact, social media seems to have made brands less significant. What happened? The issue is, social media has transformed how culture works, in a way that weakens certain branding techniques. It has united once-isolated communities into influential "crowdcultures." Crowdcultures are very prolific cultural innovators. Their members produce their own content--so well that companies simply can't compete. Consider that people making videos in their living rooms top the charts on YouTube, which few companies have managed to crack. While they diminish the impact of branded content, crowdcultures grease the wheels for an alternative approach, "cultural branding." In it, a brand sets itself apart by promoting a new ideology that springs from the crowd. Chipotle did this successfully when it made two short films critiquing industrial food, tapping into a movement that began in the organic-farming subculture and blew up into a mainstream concern on social media. Other good examples come from personal care. Axe revived its brand by becoming an over-the-top cheerleader for the "lad" crowd that arose as a response to politically correct gender politics. Dove championed the other side of the divide, with campaigns that spoke to crowdculture concerns about unhealthy beauty standards for women. Brands succeed when they break through in culture, and crowdcultures are a great vehicle for doing that. But firms can't identify the critical opportunities by relying on traditional segmentation and trend reports.
Why do so many promising start-ups go off the rails? Often they have trouble scaling. Founders may resist imposing discipline for fear of losing agility and control--but the price may be chaotic operations and unpredictable performance. Drawing on extensive case studies and 75 years of research, the authors outline four activities that can help companies handle greater complexity as they seek new avenues for growth. Firms should: (1) Hire specialists in functions such as sales, HR, marketing, R&D, and manufacturing. This lets them tackle work more efficiently and catalyzes future growth by creating slack in the rest of the organization. (2) Add management structure. A few people at the top can't effectively supervise everyone's increasingly specialized daily work--and it's hard for employees to stay focused and engaged without guidance and processes. (3) Establish a framework of plans and goals. Otherwise, improvisation may amount to aimless riffing. (4) Sustain the culture. Articulate the founding values in mission statements and job descriptions, and hire and reward for cultural fit. Between the extremes of ad hoc and prescriptive organizing lies a useful middle ground--and leaders who can find it gain an important edge on their rivals.
Strategy and entrepreneurship are often seen as polar opposites. Strategy means rigorously defining and pursuing one clear path, while entrepreneurship involves continually changing direction to take advantage of new opportunities. Yet the two desperately need each other: Strategy without entrepreneurship is central planning; entrepreneurship without strategy leads to chaos. There is a way to reconcile the two, through the "lean strategy process." It ensures that start-ups innovate in a disciplined fashion so that they make the most of their limited resources. Lean strategy helps company builders choose viable opportunities, stay focused, and align the entire organization. The process begins with setting the venture's vision, or ultimate purpose--perhaps the only aspect of strategy that should be permanent. To deliver on it, senior executives agree on a deliberate strategy, defining the firm's objective (the near-term goal that describes success), scope (what the firm will and will not do), and competitive advantage (how it will win). The deliberate strategy sets the bounds within which experiments will take place and guides daily decisions. But the results of those experiments and decisions lead to learning that reshapes the strategy. Though priorities evolve, at each point in time it's clear to everyone in the firm which ones take precedence.
Most successful new companies eventually face a predictable crisis that the authors call "stall-out"--a sudden large drop in revenue and profit growth or a collapse of once high shareholder returns to well below the cost of capital. Stall-out occurs when the growth engine that powered companies to success stops working. This rarely happens because the business model has suddenly become obsolete--a common misconception. Rather, research by Zook and Allen shows that the business has almost always become too complex, most often owing to bureaucracy that slows the company's metabolism, or internal dysfunction that distorts information and hampers managers' ability to make rapid decisions and take swift action on them. But stall-out can be overcome. The authors find that most companies that achieve sustainable growth share attitudes and behaviors: (1) They view themselves as business insurgents, fighting in behalf of underserved customers; (2) They have an obsession with the front line, where the business meets the customer; and (3) They foster a mindset that includes a deep sense of responsibility for how resources are used and for long-term results. Those qualities can help any company restart its growth engine by removing gunk and complexity that have built up over the years, inhibiting the clean execution of strategy.
Most managers are well versed in the defensive playbook for confronting disruptive innovation. Most commonly, they either acquire the new entrants or "disrupt themselves" by setting up autonomous units charged with developing their own new technology that can be rolled into their principal operations once the disruptive innovation begins to dominate the industry. But quite often, adopting a new technology requires companies to fundamentally change their mainstream operations--the way they manufacture and distribute their products. In these cases where the organizational model changes along with customer expectations and preferences, the playbook often falls short. In this article Joshua Gans of the University of Toronto's Rotman School of Management identifies three prescriptions for surviving "supply side" disruption: Companies must have an integrated organizational model, ownership of a product feature important to the end customer, and a broad and flexible sense of corporate identity. Though less commonly understood, supply-side disruption is arguably more dangerous than the kind described by Clayton Christensen in his book "The Innovator's Dilemma"; indeed, disruption of a product's architecture threatens a company's very survival in a way that changes in customer demands do not.
Fresh, innovative thinking is essential for business growth, and most people--not just a few gifted "visionaries"--are capable of it. So says the Wharton School's Adam Grant, whose research shows that you can develop this skill in your organization by creating a culture of nonconformity. Start by giving employees license to let their imaginations run wild: A large quantity of diverse ideas will ultimately yield the highest-quality ones. To help people dream up a multitude of new products, strategies, or solutions, encourage them to adopt the mindset of a competitor, for example, and have them generate ideas privately (group brainstorming tends to conform to the majority's taste). Once lots of ideas are in, get feedback on which one to pursue from the right people: other innovators with a track record of spotting winners. You might even stage a contest to find the best ideas, and have peer judges and other subject-matter experts vet the submissions and suggest improvements. Sustaining a culture of originality is as important as building it. So focus, too, on balancing cultural cohesion (which can improve decision making) with creative dissent (which prevents a strong culture from becoming a cult). Long-term, it's the combination of the two that brings great ideas to the table.
The ever-increasing pace of change in today's organizations requires that executives understand and then quickly respond to constant shifts in how their businesses operate and how work must get done. That means you must resist your innate biases against doing new things in new ways, scan the horizon for growth opportunities, and push yourself to acquire drastically different capabilities--while still doing your existing job. To succeed, you must be willing to experiment and become a novice over and over again, which for most of us is an extremely discomforting proposition. Over decades of work with managers, the author has found that people who do succeed at this kind of learning have four well-developed attributes: aspiration, self-awareness, curiosity, and vulnerability. They have a deep desire to understand and master new skills; they see themselves very clearly; they're constantly thinking of and asking good questions; and they tolerate their own mistakes as they move up the curve. Andersen has identified some fairly simple mental strategies that anyone can use to boost these attributes.
Martin Winterkorn, CEO of Volkswagen Group, has just been notified that the U.S. Environmental Protection Agency and California Air Resource Board will begin investigating claims that some of the company's diesel engine vehicles have violated emissions standards. It seems that workers installed defeat devices on the vehicles, allowing them to pass emissions tests and meet the tough standards of the U.S. market. The questions students will need to answer are: Who is responsible? And Does Volkswagen take sustainability seriously or has it just been green-washing all along?
Electrolux's valuation team was trying to finish its valuation of GE Appliances in August 2014. The GE Appliance valuation team was working out of Electrolux's corporate headquarters in Stockholm, Sweden. Its task was to complete both a valuation and suggested final offer for GE's appliance unit. The team's challenge was in separating the value of GE's appliance unit from its value to Electrolux, for the two were quite different. GE knew this, and would be building that differential into its asking price. At the same time, GE's new industrial strategy, to move away from consumer products and financial services, left no place for appliances in its corporate future.