It was June 9, 1998, and Charles Elson, a law professor and Director on Sunbeam's Board, had just left a distressing board meeting. The board had met suddenly because, the previous day, Barron's had published an article suggesting that Al Dunlap, CEO of Sunbeam, had been manufacturing earnings since he joined the company in July 1996. This disturbing article came shortly after other bad news. Two months earlier, on April 3, Sunbeam had warned the market that it would report a surprise first quarter loss and, as a result, the stock dropped 25 percent to $34.38 from the previous day's close of $45.56. Sunbeam was now at about $20, 62 percent off its high of $52 achieved just three months earlier. Elson had been confident in Dunlap's ability as a turnaround specialist, especially after his success turning around Scott Paper. But between the recent earnings disappointment and the Barron's article, Elson was beginning to question his friend's actions. Elson needed to confirm for himself if the accusations detailed in the Barron's article were true or not. Was Sunbeam's first quarter earnings shortfall a one-time hiccup to be expected in a turnaround situation or an indication of the larger problems detailed in the Barron's article? He took home the most recent annual report to determine for himself.
It was June 9, 1998, and Charles Elson, a law professor and Director on Sunbeam's Board, had just left a distressing Elson and the other outside directors met with outside legal and public relations advisors on June 13, 1998. After discussion of the events, the outside directors voiced that they had lost faith in Dunlap. They contacted the other directors and then called Dunlap to tell him he was terminated. Because of his apparent failure in his duties, Dunlap was fired without a severance package.
By the mid-1990s, a few years into Vietnam's tentative market-oriented reforms, Vietnam's newborn private sector was at a crucial point. The government had gradually loosened its communist-era prohibitions on market activities, but had left in place most of the machinery of the old planned economy and had done little to build the institutions needed to underpin a market-oriented economy. Interestingly, facing impediments such as the lack of commercial law and contracts, entrepreneurship flourished. The protagonists in the case, owner-managers of three relatively young firms, discuss their initial success in such an unreceptive setting.
Aaron Kennedy has successfully grown Noodles & Co. from a single global noodle shop to a chain of 58 restaurants spanning six states in seven years. In the face of increasing competition, Kennedy has plans to roll out 240 new stores in the next four years. He must develop a growth strategy that will allow Noodles & Co. to achieve these aggressive objectives as well as maintain the company's unique culture. Kennedy must decide among several alternative growth strategies, with a particular emphasis on the decision of whether to franchise. Includes color exhibits.
Captures the efforts of newspaper publisher Knight Ridder to create a digital venture. Knight Ridder proves to be a pioneer in digital publishing, launching the first online newspaper site; builds a network of newspaper sites called Real Cities; and invests in Careerbuilder, the second largest career site after Monster.com. However, the company has cumulatively lost over $100 million in its core Internet operations, is missing important categories of advertising revenue, and is operating in an ad recession at the time of the case. Tracks the evolution of the venture that spans nearly a decade and can be summarized in three distinct periods: 1) initial launch and experimentation, 2) rapid expansion within the newspaper organization vs. operation as a separate venture, and 3) managing the venture after the Internet bubble has burst.
Examines the federal financial response to September 11, 2001: the airline bailout, the victim compensation fund, emergency aid to New York and Washington, and terrorism reinsurance. Less than two weeks after the attacks, the government had committed almost $40 billion to relieving the victims and safeguarding the economy. A little over a year later, these measures were joined by the creation of a federal terrorism reinsurance program, originally proposed by the White House in October 2001. On the surface, the federal financial response to September 11 was puzzling. Did the enormity of the attacks weaken the country's commitment to laissez-faire principles? Or is the traditional attitude toward government economic intervention in the United States more complicated than the phrase "laissez-faire" (or "free market") implies? Explores the appropriate role of government in managing risk and responding to disasters and then asks students to consider whether each of the various initiatives--and indeed the program as a whole--was a success or a failure.
On July 28, 2002, Bertelsmann announced the firing of its CEO, Thomas Middelhoff, in a move that surprised industry observers, analysts, and many employees. Bertelsmann, a privately held company headquartered in Germany, was one of the largest global media conglomerates, with businesses spanning book publishing, printing, music, and television. Between 1998 and 2002, Middelhoff had initiated a series of strategic initiatives aimed at fostering greater integration among its diverse business units and strengthening their competitive positions, articulated a series of guidelines that would reevaluate Bertelsmann's portfolio mix, and looked to prepare Bertelsmann for a transition to a planned initial public offering in 2005. This case describes these initiatives in detail and the decision of the supervisory board to effect a change in leadership. The new CEO, Gunter Thielen, had to decide whether to effect a fundamental shift in the company's corporate strategy or a more modest reinterpretation of the course charted by Middelhoff. Includes color exhibits.
Describes the success and rapid growth of a real estate entrepreneurial firm, SOHO China. As the firm enters into a new stage, its founders, Xin Zhang and Shiyi Pan, consider their next big strategic move.
The founder and CEO of Trend Micro is seeking to develop an effective decision-making process for the company's multicultural executive team as part of his effort to develop a more cohesive and focused global organization. This case describes the company's growth and development, including the efforts made to develop an approach to decision making that melds the best of Eastern and Western cultures.
SMaL Camera Technologies CEO Maurizio Arienzo was trying to decide what market opportunities SMaL should target. The company had developed a revolutionary imaging technology that powered small digital still and video cameras. Its first-generation product--a kit to power a credit-card-size consumer camera--was a success. Now, Arienzo had to decide whether to focus on beating back emerging competitors in the consumer space, stepping up efforts to crack the security and surveillance market, trying to reach the automotive market, developing a cellular phone camera offering, or making a "left turn." The decision would determine whether SMaL ever hit it big.
Traces changes in P&G's international strategy and structure, culminating in Organization 2005, a reorganization that places strategic emphasis on product innovation rather than geographic expansion and shifts power from local subsidiary to global business management. In the context of these changes introduced by Durk Jager, P&G's new CEO, Paolo de Cesare is transferred to Japan, where he takes over the recently turned-around beauty care business. Within the familiar Max Factor portfolio he inherits is SK-II, a fast-growing, highly profitable skin care product developed in Japan. Priced at over $100 a bottle, this is not a typical P&G product, but its successful introduction in Taiwan and Hong Kong has de Cesare thinking the brand has global potential. As the case closes, he is questioning whether he should take a proposal to the beauty care global business unit to expand into Mainland China and/or Europe.
This case engages students in a real decision context: an electric utility evaluates the opportunities in emissions trading. It exposes students to fast-changing markets for pollution credits and to the environmental and economic benefits thereof.
The growing impact of toxic chemical use is a major issue corporations face in the 21st century. This note offers an overview of the effects of toxins on human health and the natural environment: Cancer, nervous system disorders caused by workplace exposure. Impaired endocrine, reproductive, and immune systems. Impeded physical nad intellectual development. All are attributed to toxic exposure-sometimes even at very low levels. Toxic chemicals-ubiquitous in industrial processes and consumer products-represent both challenges and opportunities for business. One approach reduces a company's use of chemicals identified as problematic for human and ecosystem health. A second approach designs hazardous materials out of products or recaptures toxins in closed-loop cycles to be productively used again. Companies moving from a reactive stance to the redesign of products and processes not only reduce liability but differentiate their products and brands for competitive advantage.
Maple Leaf Foods is a leading global food processing company with operations in Canada, the United States, Europe, and Asia. The CEO and vice-president of Six Sigma (an approach and methodology for eliminating defects in any process) embarks on a revolutionary journey in this previously change-resistant multinational food business to upgrade the firm's leadership capabilities. The project was rolled out to three of the 10 independent operating companies, and he must analyze the launch to determine whether it is on track and what can be done differently or better.
Global Traffic Inc. (GTI) is a U.S.-based sign manufacturer. The vice-president of the company must recommend a human resources strategy for possible entry in the Russian market. This involves developing a plan for an expatriate assignment, selecting and compensating personnel as well as coming up with training needs and outlining the organizational culture.
Presents an overview of a method for diagnosing and developing an organization's capability to achieve its goals and implement its strategy, with exercises for application. A rewritten version of an earlier exercise.