Concerns the decision by Brett Keith and Owen Colligan to purchase Hudson Manufacturing, a maker of heaters and air filtration units for the military. Keith and Colligan have organized a search fund and identified Hudson as a potential buyout. The decline in the trucking market and potential environmental contamination, however, stand to stop the deal.
Chrysler and Daimler-Benz shareholders approved the largest corporate merger in history. After months of talks, the chairman of the German-based Daimler-Benz management board and the chairman and CEO of the U.S.-based Chrysler Corp. were preparing for when the two companies would officially combine forces to create the fifth largest automobile company in the world. These two managers were officially charged with the responsibility of amalgamating two enterprises that were vastly different from each other. Chrysler was known for its efficient production and economically priced vehicles. Daimler-Benz sold only luxury vehicles, and its reputation was based on craftsmanship, quality, and safety. Chrysler executives were in the habit of limiting business expenses; Daimler-Benz executives were not. Between the two companies, there were huge discrepancies in cultures, market segments, product lines, salaries, and attitudes. Aware of the excitement of their investors and the concern of their critics, the two leaders are expected to forge and promote the vision on which Daimler-Chrysler will base its future.
Describes the complex and challenging process by which social and environmental concerns are integrated into the existing strategy of a large, multinational firm. Details the circumstances leading up to a large-scale effort to transform Shell's strategy to take into account principles of sustainable development. This case describes corporate-level sustainable development initiatives and the process through which a comprehensive sustainable development strategy was initiated and developed.
The case describes the complex and challenging process by which social and environmental concerns are integrated into the existing strategy of a large, multinational firm. This case focuses on a specific business within Shell Chemicals, the Close Looped Cleaning technology, that has a strong business/economic basis and, sustainable development component. It shows how corporate-level sustainable development initiatives affect actual business practice and, in particular, the challenge that managers face in responding to multiple and sometimes competing expectations.
Provides an overview of antitrust law as it relates to competitive strategy. Discusses the problem of managing antitrust risk and provides a guide to business actions that pose antitrust risk.
This case discusses why economies (and diseconomies) of scale and scope exist in professional service firms (PSFs) and how they influence the amount and range of services that PSFs offer. It is distributed with a case that focuses on determining the optimal scale/scope of a PSF.
The companies that are most successful at creating long-term shareholder value tend to be those that systematically make acquisitions through good times and bad.
Companies typically divide up the aspects of major marketing campaigns, assuming that the efforts of a half-dozen or more specialty agencies and internal groups will reinforce one another. But a better approach is to "systems engineer" a campaign, which may require that each component be compromised to serve the needs of the whole.
When Bruce Chizen took over as president and CEO from Adobe's legendary founders in 2000, he knew he had to confront the skeptics who doubted he had the technological grounding to lead the company. In this interview, Chizen describes how he won converts by acknowledging his shortcomings and discusses the leadership lessons he learned along the way.
Some public pension funds aggressively pursue their pro-labor or social-issue agendas by submitting proxy proposals on topics ranging from employment practices to environmental concerns. But research shows that the stock market reacts negatively to corporations that receive such proposals.
In the spring of 2000, planners at Dallas Area Rapid Transit (DART), the regional public transit agency serving the Dallas metropolitan area, had to decide whether to cancel or modify a poorly performing bus route serving the suburban cities of Garland and Rowlett. The route was typical of many that DART operated in the suburbs, so the decision raised basic questions about DART's strategy as a public agency, and particularly whether it could design suburban services that were useful and cost-effective enough to maintain the political and financial support it received from Dallas' suburbs. The fact that the route is performing so poorly-losing $27 per passenger, for example-encourages students to think about more radical service and political strategies for the agency. HKS Case Number 1696.0
This is the first of a two-case series. When Renault sent Carlos Ghosn to turnaround its alliance partner Nissan, observers were skeptical of his chances. After soliciting recommendations from the employees, he unveiled a three-year plan involving plant closures, job cuts, and a refocus on design. Within two years, the company had achieved a dramatic recovery, posting record profits and proposing a dazzling array of new models. Note that there are two versions of the case: 'Redesigning Nissan (A) & (B)' covers the dynamics of taking charge (case A) and the process of leading change (case B). There is also a combined and condensed version of the cases: 'Nissan's U-Turn: 1999-2001', for instructors wishing to cover the material in a single session.
Tom Rose was about to listen to his marketing head, Cassie Martin, make a major presentation on the biggest strategic initiative in Rose Partyware's history: the launch of a branded line of party ware. Rose had manufactured paper goods for parties and other social events for many years. But Tom had recently spotted an opportunity to break out of the pack: a new printing technology that would improve quality and reduce costs. When Rose test-marketed the new line, consumers loved it, and retailers pledged their support. Tom felt that the new technology would give Rose the edge it needed to establish its own brand, which would, in turn, allow the company to stay ahead of its rivals. In her presentation, Cassie reported that customers loved the brand concept. However, it was going to be more expensive than she had originally thought. And Hank Lewis, Rose's national accounts manager, further complicated matters when he told Tom that one of Rose's biggest customers, Party!, had just decided to offer customers a complete line of party goods under its own name and wanted Rose to manufacture it. The management team is split on whether Rose should launch its own line. Tom needs to decide: What's the best marketing strategy for Rose Partyware? In R0303A and R0303Z, commentators Frank Weise III, Cott CEO; Micky Pant, Reebok chief marketing officer; Stephen J. Hoch, a marketing professor at Wharton; Judith Corstjens, head of Cubiculum Consultancy; and Marcel Corstjens, a marketing professor at Insead, offer advice in this fictional case study.
Some brands become icons. Think of Nike, Apple, Harley-Davidson. But they are not built according to the principles of conventional marketing, says Harvard Business School marketing professor Douglas Holt. Iconic brands beat the competition not just by delivering innovative benefits, services, or technologies, but by forging a deep connection with the culture. A brand becomes an icon when it offers a compelling myth. In America, the most potent myths are depictions of rebels. Mountain Dew has long offered a rebel myth in ads showing exciting, vital men who are far from the ideological model of success. Loyal customers drink the beverage to consume the myth. But Mountain Dew's greatest achievement is that it has retained its iconic power by creating fresh rebel myths to suit the tensions of each era. Holt says marketers can learn from Mountain Dew and other iconic brands if they are willing to move beyond conventional brand management. They must learn to target national contradictions instead of just consumer segments, create myths that make sense of confusing societal changes, and speak with a rebel's voice.
Marketing experts tell companies to analyze their customer portfolios and weed out buyer segments that don't generate attractive returns. Loyalty experts stress the need to aim retention programs at "good" customers--profitable ones--and encourage the "bad" ones to buy from competitors. And customer relationship management software provides evermore sophisticated ways to identify and eliminate poorly performing customers. On the surface, the movement to banish unprofitable customers seems reasonable. But writing off a customer relationship simply because it is currently unprofitable is at best rash and at worst counterproductive. Executives need to ask, "How can we make money off the customers that everyone else is shunning?" Consider Paychex, a payroll-processing company that built a nearly billion-dollar business by serving small companies. Established players had ignored these customers on the assumption that small companies couldn't afford the service. When founder Tom Golisano couldn't convince his bosses at Electronic Accounting Systems that they were missing a major opportunity, he started a company that now serves 390,000 U.S. customers, each employing around 14 people. In this article, the authors look closely at bottom-feeders--companies that assessed the needs of supposedly unattractive customers and redesigned their business models to turn a profit by fulfilling those needs. And they offer lessons that other executives can use to do the same.
Should stock options be recorded as an expense on a company's income statement and balance sheet, or should they remain where they are, relegated to footnotes? The authors believe the case for expensing options is overwhelming. In this article, Nobel laureate Robert Merton, one of the inventors of the Black-Scholes option-pricing model; his co-author on the classic textbook Finance, Zvi Bodie; and Robert Kaplan, creator of the Balanced Scorecard, examine and dismiss the principal claims put forward by those who continue to oppose options expensing. They demonstrate that stock-option grants have real cash-flow implications that need to be reported and detail the distortions that relegating stock-option accounting to footnotes creates. The authors agree that options are a powerful incentive, and failing to record a transaction that creates such powerful effects is economically indefensible. Worse, it encourages companies to favor options over alternative incentive systems.
Think hard about the problems in your organization or about potential upheavals in the markets in which you operate. Could some of those problems--ones no one is attending to--turn into disasters? As Harvard Business School professors Michael Watkins and Max Bazerman illustrate in this timely article, most of the "unexpected" events that buffet companies should have been anticipated--they're "predictable surprises." Such disasters take many forms, from financial scandals to disruptions in operations, from organizational upheavals to product failures. The bad news is that all companies, including your own, are vulnerable to predictable surprises. The good news is that recent research helps explain why that's so and what companies can do to minimize their risk. The authors contend that organizations' inability to prepare for predictable surprises can be traced to three sets of vulnerabilities: psychological, organizational, and political. To address these vulnerabilities, the authors recommend the RPM approach. More than just the usual environmental scanning and contingency planning, RPM requires a chain of actions--recognizing, prioritizing, and mobilizing--that companies must meticulously adhere to. Failure to apply any one of these steps, the authors say, can leave an organization vulnerable.
The causes of many corporate governance problems lie well below the surface--specifically, in critical relationships that are not structured to support the players involved. In other words, the very foundation of the system is flawed. And unless we correct the structural problems, surface changes are unlikely to have a lasting impact. When shareholders, management, and the board of directors work together as a system, they provide a powerful set of checks and balances. But the relationship between shareholders and directors is fraught with weaknesses, undermining the entire system's equilibrium. As the authors explain, the exchange of information between these two players is poor. The authors suggest several ways to improve the relationship between shareholders and directors: Increase board accountability by recording individual directors' votes on key corporate resolutions, separate the positions of chairman and CEO, reinvigorate shareholders, and give boards funding to pay for outside experts who can provide perspective on crucial issues.
Hardly anyone has a good word to say about hierarchies. They routinely transform motivated and loyal employees into disaffected Dilberts. Yet, the intensity with which we struggle against hierarchies only serves to highlight their durability. In this article, organizational behavior expert Harold J. Leavitt presents neither a defense of human hierarchies nor another attack on them. Instead, he offers a reality check, a reminder that hierarchy remains the basic structure of most, if not all, large, ongoing human organizations. That's because although they are often depicted as being out of date, hierarchies have proved to be extraordinarily adaptive. Over the past 50 years, for example, they have co-opted the three major managerial movements--human relations, analytic management, and communities of practice. Hierarchies also persist because they deliver real practical and psychological value, and they fulfill our deep need for order and security. Despite the good they may do, however, hierarchies are inevitably authoritarian.