Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 4 focuses on human relations work done in the twentieth and twenty-first centuries by younger colleagues, including Kotter, Gabarro, and Hill, as well as Lorsch's research on white-collar workplace management problems. The evolution of the medical model is tracked across generations along with the usefulness of it. The medical model was used to better comprehend behavior of successful managers, the relationship between leadership and management, and the various skills and emotional resources needed for successful management transitions. The refinement of the medical model over the years allows for testing the findings of research that has grown out of the idea of "walking sticks" (i.e., real-world data gathering).
Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 5 explores the field of human relations today. Examples discussed include Lorsch's work on boards of directors, Thomas and Gabarro's work on the obstacles African-American executives face and what helped them reach upper levels of management, and Neeley's work on English as a lingua franca in relation to the Japanese company Rakuten. How business scholarship and education have changed since the height of the medical model's popularity is also discussed. Influences from other fields, such as economics, have surpassed that of the human relations paradigm in business education, but problems have arisen because of this shift.
CEO Tim Höttges had successfully led Deutsche Telekom (DT) on an ambitious mission to become Europe's leading telecommunications service provider. All the more impressive, the company had achieved this goal while also navigating the expansion of T-Mobile's network in the United States, and merger with Sprint. What would be DT's next strategic challenge? In late 2023, Höttges and his executive team were scrutinizing the next frontiers in digitalization, as well as assessing ongoing challenges from hyperscalers. It was time to set new goals, Höttges believed, and lead the sector by continuing to build and operate best-in-class, integrated digital networks. This meant investing more in cloud-based service platforms, continuing the rollout of fiber optic networks in Germany, and realizing the full potential of monetizing DT network assets in conjunction with 5G technology. This case describes the strategic challenges facing DT in 2023 and beyond. Boundaries between industries such as telecommunications, software, artificial intelligence, data storage, chip technology, digital security, and cloud platforms were rapidly blurring. How would DT position itself as an industry leader in new areas-and fend off competition from traditional telecom providers?
This case concerns the Patient Care Intervention Center (PCIC) a values-based health technology social enterprise in Houston, Texas. This organization was founded to tackle fundamental problems in social and health services in the United States. It was initially focused on homeless superusers of the health system, that received inadequate care at high cost, notably through frequent use of emergency rooms. However, it became clear that this was only a symptom of broader system issues, especially around coordination failures across siloed health and social services and failures in case management. PCIC designed an approach that integrated two innovative features: values-based client diagnosis and case management, based on the values, concerns, and aspirations of individual clients, and a platform-based approach to sharing data both on clients and services, with tailored technological solutions for individual health and social organizations. It has been highly successful both in outreach and contract growth. By 2022, 850 agencies were providing data, involving six million individuals, with some 1,500 referrals within the system each month within the Houston area. However, PCIC faced challenges in further scaling, with respect to finance for developmental needs, human resources, and the threat of competition from large private players that offered platforms that were significantly inferior in terms of tackling the underlying system failures, but potentially attractive to health and social organizations. The case frames both the strategic questions for PCIC and the challenges of changing an essentially dysfunctional system. HKS Case No. 2271.0
Recent sustainability regulations in the EU and some U.S. states hold consumer packaged goods brands responsible for the environmental impact of the materials in their products. For brands with a complex web of suppliers across the globe, gaining visibility into the chemical composition of their products is a major challenge, and most available tools are insufficient for the task. The authors explain how brands can improve supply chain transparency to adapt to this emerging regulatory landscape.
In September 2023, Brighter Bites, a Houston-based non-profit that distributed fresh produce and nutrition education in underserved communities across 11 cities and 5 states, grappled with identifying the best path forward for continued growth. Brighter Bites proved that their program effectively changed behavior with participating families developing and sustaining healthier eating habits and consuming more fruits and vegetables each week, two years after they completed the program. Brighter Bites wanted to change the trajectory of health across low-income and food insecure households and had to navigate the program's dependency on produce and logistics partners and restricted funding sources.
In 2023, the co-CEOs of Team Liquid, one of the world's most prominent Esports organization, are deciding whether and how to evolve their business model to include (1) a greater focus on enterprise revenue; and (2) more direct-to-consumer activity. Team Liquid has one of the largest global fanbases in the world. The case is an exploration of how an organization can build a business that is anchored by its FANS, as opposed to customers per se. The learnings are applicable to any organization with a strong fanbase--including sports teams, social media influencers, and the like.
Over a 105-year span, the ErmÃrio de Moraes family built Votorantim, one of Latin America's largest industrial conglomerates, and among Brazil's topmost businesses, also credited for helping "build" the country over decades. By early 2023, Votorantim included diversified operations in 19 countries worldwide, with a net income above $1 billion. The conglomerate was privately owned by the ErmÃrio de Moraes family, with its ownership evenly split across four family branches. Over time, the family established a corporate governance structure with separate boards for ownership, business, and family affairs, leaving business operations to a professional management team. At the heart of this governance structure was the family board, viewed by many family members as the "glue and honey" bringing them together. Despite running multiple initiatives, Luciana Domit chair of the family board and a fifth-generation member, acknowledged, it was becoming increasingly hard to get its over 170 family members to spend time together and to engage in the activities they promoted. As the family enlarged and interests diverged, fostering its long-term unity could become more challenging. Were the family board's current strategies and overall governance structure at Votorantim conducive towards keeping the family united in its values and preserving its legacy? Or would a transformation be needed if the ErmÃrio de Moraeses were committed to remaining at the forefront of the Votorantim's governance structure?
RideAlly, a ride-hailing platform headquartered in Bangalore, India, catered to the business-to-consumer and business-to-business segments. It operated in Bangalore and Hyderabad. Hariprakash Agrawal, the chief executive officer and founder, needed to devise a plan to sustain the business in India's highly competitive ride-hailing market. It was time to think about scaling up the business, which needed significant investment and the right strategy to gain a solid foothold in the industry. Agrawal's team needed to prepare a pitch for investors and present a strategy for penetrating the market and expanding the business.
Acen Haitao Jiang, founder and chief executive officer of Aomi, faced a dilemma. Founded in 2016, Aomi was an online food delivery platform in Macao with a local market share of over 90 per cent. Nevertheless, Macao was a small market with a population of about 680,000 and an area of 32.9 square kilometres, which was becoming a bottleneck for Aomi's growth. Jiang was considering a Y-strategy, composed of three business development strands: food delivery (i.e., maintaining the core business); business diversification (e.g., livestream commerce and online supermarket services); and international expansion to new, larger markets (e.g., Hong Kong). With limited resources and potential risks, however, Jiang was struggling to choose between diversification and market expansion. June 1, 2022, would mark Aomi's sixth anniversary and Jiang had to decide on a growth strategy before then.
The mission of Fairphone, an Amsterdam, Netherlands-based social enterprise company, was to design, produce, and sell smartphones that had a more positive impact on the environment and society. Fairphone was rated as the most sustainable smartphone in 2021 and was considered as a champion for the circular economy in the smartphone industry. Since 2018, Fairphone had been headed by Eva Gouwens. Under Gouwens’s leadership, Fairphone had more than doubled sales between 2018 and 2019. Sales were an important measure of impact for Fairphone and a driver for much of its strategy. In 2021, Fairphone announced a distribution agreement with Vodafone Group plc, the launch of a new flagship phone, and expanded recycling services. Fairphone now wanted to consider how to rapidly scale its impact in 2022 and beyond, and determine how it could increase sales. Should it consider new markets or new offerings? Or should Gouwens shift Fairphone’s focus from sales to some other strategic goal?
Cashify, a start-up incorporated in 2013, is a reverse commerce (re-commerce) company in India with first-mover advantage in the re-commerce of electronic goods. In its contribution to the circular economy (CE), it claims to handle 100,000 used smart phones a month and plans to grow the figure to 200,000 by 2023. The company contributes to the CE by adding value to used electronic devices, particularly smart phones, and extending their lifespans. This ensures that products enter into repeat economic transactions before finding their way to landfills. However, the re-commerce model that gave Cashify a competitive edge became obsolete in 2022 because of emerging competition that leveraged technological advancements to create value in the sector. The company’s founders now find themselves facing difficult questions: Should they include new electronic products in their portfolio? In 2022, after two years of COVID-19-related impacts on the economy, overall circular growth was slipping, as consumers preferred to buy new products instead of recycled, refurbished, and reused goods. Can consumers be incentivized to return to the CE and appreciate the value of remodelled goods? Should the company diversify into new products entirely, including automobiles, home appliances, textiles, apparel, and plastic packaging?
Already a leader in the edtech space since its 2008 launch, Khan Academy was now one of the first edtech organizations to embrace generative artificial intelligence ("genAI"). In March 2023, Khan Academy began beta testing Khanmigo, a genAI "guide" and tutor built with ChatGPT, a technology developed by the San Francisco-based AI research lab OpenAI. In addition to simulating historical and fictional characters, Khanmigo assisted students with learning math, debugging code, writing, and completing other learning exercises. Khanmigo was also designed to help teachers develop lesson plans and quizzes, brainstorm creative teaching approaches, and evaluate students' progress, among other tasks. As the Founder and CEO of Khan Academy, Sal Khan felt that Khanmigo might just be "that holy grail we've all been reading about in science fiction for years, about an artificial intelligence that could emulate a human tutor." However, he pondered what the societal-and, for Khan Academy, organizational-risks might be of using OpenAI's ChatGPT. Was it possible that Khanmigo would introduce new problems or exacerbate existing problems in classrooms around the world? If so, what more could Khan Academy do to prevent such outcomes? How might Khan Academy itself need to evolve to support and shepherd this new tool? At the most extreme, might genAI increase Khan Academy's impact manifold, or might the new technology diminish its impact?
The Human Resources and Social Development Ministry (HRSD) was one of the largest and most important ministries in Saudi Arabia, with 22,000 employees serving more than 30 million customers and beneficiaries. The ministry consisted of four sectors - labor which served and regulated the private and non-profit sectors; civil service which served government entities and employees; social development which served disadvantaged groups; and shared services which served the three customer-facing sectors. The three customer-facing sectors had been separate ministries until they were merged, and still operated mostly in silos. A new minister appointed in 2018 determined that the ministry had to be transformed to allow it to play its part in meeting Saudi Arabia's Vision 2030 roles. He brought in Mohammed Al Jasser in 2019 as Assistant Minister for Shared Services to spearhead the transformation. Customer experience (CX) transformation was a key part of this. The case describes the initial phase of the ministry's CX transformation. It included creating a CX deputyship, putting CX strategy and governance in place, and carrying out pilot projects to address immediate problems and build support within the organization. The next phase of the CX transformation would be scaling up and implementing it across the ministry. The case discusses the challenges the ministry will face in this phase, including initiative fatigue, limited interest in improving CX, policy changes not aligned with CX, and fragmented service ownership. The case ends by mentioning two important issues for a successful CX transformation: Ensuring that the outsourcing of customer-facing activities, which was happening in parallel, supported this; and engineering a mindset and cultural shift among ministry officials. Although the first phase of the CX transformation had been successful, scaling up across the ministry would be challenging. How should Al Jasser and his team proceed to achieve this objective?
On July 2022, Signify Health, a health care services company that was disrupting the US health care market with its value-based care provision, announced the opening of a new technology centre outside the United States. This was a significant first step for the company beyond its home country. The company had an ambitious plan to develop an international centre of excellence for innovation that it expected would grow to employ more than 125 people by the end of 2023. The new technology centre was seen as a critical step to develop new solutions and provide technologies that would enable the platform to scale up its business. However, the company had to make some important and urgent decisions, including where to locate the international technology centre and how to integrate the new centre into the wider domestic organization.
After importing three hundred bags of ground sacha inchi, a seed with promising nutritional benefits, from Peru, Kayla Gray has important decisions to make. Her new venture, Sachi Superfoods, is ready to launch; however, she does not have a clear plan on how to best market her product. Gray must decide on the best market segment to pursue in addition to the most effective marketing channel for her product.
Hope Medicals owner, Shiva Aruguman, was considering entering the online pharmacy market. Hope Medicals was a local pharmacy in Madurai, India's Tamil Nadu state, and Aruguman was at a strategic crossroads-he had to decide whether to expand into the online pharmacy market. With the challenges (financial and non-financial) of integrating the "brick" and "click" modes of his pharmacy business, Aruguman had to conduct an analysis based on capital budgeting and run a Monte Carlo simulation to determine the potential profitability and risks of such a venture.
In April 2023, Will Anderson, managing partner of SummitStone Capital, LP (SummitStone), received a copy of the management service agreement (MSA) between Artemis Capital (Artemis), a private equity firm, and Lucky Dice Casinos Inc., one of Artemis' recently acquired portfolio companies. SummitStone had invested in Artemis buyout funds since 2011 and was in the due diligence phase of allocating $75 million to Artemis' newest vehicle, Artemis Fund VII. But before Anderson could recommend the fund to his investment committee, he needed to understand the implications of the MSAs that Artemis was forging with its portfolio companies. The case allows students to (i) evaluate a typical MSA contract; (ii) analyze the existing evidence and academic research on MSAs; and (iii) explore possible avenues to adjust limited partnership agreements (LPAs) to align limited partners' (LPs') and general partners' (GPs') incentives in the presence of MSAs. Students can analyze the qualitative and quantitative implications of MSAs on all private equity fund stakeholders and develop a recommendation to an LP investment committee.