During the past two decades, the number of charitable foundations in the United States has doubled while the value of their assets has increased more than 1,100%. As new wealth continues to pour into foundations, the authors take a timely look at the field and conclude that radical change is needed. First, they explain why. Compared with direct giving, foundations are strongly favored through tax preferences whose value increases in rising stock markets. As a nation, then, we make a substantial investment in foundation philanthropy that goes well beyond the original gifts of private donors. We should therefore expect foundations to achieve a social impact disproportionate to their spending. If foundations serve merely as passive conduits for giving, then they not only fall far short of their potential but also fail to meet an important societal obligation. Drawing on Porter's work on competition and strategy, the authors then present a framework for thinking systematically about how foundations create value and how the various approaches to value creation can be deployed within the context of an overarching strategy. Although many foundations talk about "strategic" giving, much current practice is at odds with strategy. Among the common problems, foundations scatter their funding too broadly, they overlook the value-creating potential of longer and closer working relationships with grantees, and they pay insufficient attention to the ultimate results of the work they fund. This article lays out a blueprint for change, challenging foundation leaders to spearhead the evolution of philanthropy from private acts of conscience into a professional field.
In 1988, less than 2% of large deals were paid for entirely in stock; by 1998, that number had risen to 50%. The shift has profound ramifications for shareholders of both the acquiring and acquired companies. In this article, the authors provide a framework and two simple tools to guide boards of both companies through the issues they need to consider when making decisions about how to pay for--and whether to accept--a deal. First an acquirer has to decide whether to finance the deal using stock or pay cash. Second, if the acquirer decides to issue stock, it then must decide whether to offer a fixed value of shares or a fixed number of them. Offering cash places all the potential risks and rewards with the acquirer--and sends a strong signal to the markets that it has confidence in the value not only of the deal but in its own stock. By issuing shares, however, an acquirer in essence offers to share the newly merged company with the stockholders of the acquired company--a signal the market often interprets as a lack of confidence in the value of the acquirer's stock. Offering a fixed number of shares reinforces that impression because it requires the selling stockholders to share the risk that the value of the acquirer's stock will decline before the deal goes through. Offering a fixed value of shares sends a more confident signal to the markets, as the acquirer assumes all of that risk. The choice between cash and stock should never be made without full and careful consideration of the potential consequences. The all-too-frequent disappointing returns from stock transactions underscore how important the method of payment truly is.
Many policy makers at the Fed contend that the new economy is a fragile bubble--and that with the "irrational exuberance" of the capital markets, the sky is going to fall on the U.S. economy. That couldn't be further from the truth, according to William Sahlman. As long as the government doesn't interfere, he argues, the economy is sturdy, resilient, and raring to grow. The new economy is strong for several reasons. First, it is based on a business model that works. Any business system that relentlessly drives out inefficiency, forces intelligent business-process reengineering, and gives customers more of what they want will be sustainable. Second, it is built on America's admiration for entrepreneurs and its tolerance for failure, not to mention its easy access to capital. Third, the new economy is attracting the best and brightest minds in the country. And finally, says Sahlman, the new economy is strong because it is spreading. It may be primarily an American phenomenon now, but in a few short years it will start to show its effects everywhere, making the whole world a more productive place. Still, Sahlman believes, the road ahead is not without potholes and sharp curves. But that is what the new economy is all about, he maintains--companies attacking the status quo and entrenched players, companies experimenting to find new technologies that improve or replace earlier ones. Such activity presents no cause for alarm. The economic, social, and cultural factors undergirding the new economy are rock solid. It's simply a matter of letting them stand.
Many companies have succeeded in reengineering their core processes, combining related activities from different departments and cutting out ones that don't add value. Few, though, have aligned their organizations with their processes. The result is a form of cognitive dissonance as the new, integrated processes pull people in one direction and the old, fragmented management structures pull them in another. That's not the way it has to be. In recent years, forward-thinking companies like IBM, Texas Instruments, and Duke Power have begun to make the leap from process redesign to process management. They've appointed some of their best managers to be process owners, giving them real authority over work and budgets. They've shifted the focus of their measurement and compensation systems from unit goals to process goals. They've changed the way they assign and train employees, emphasizing whole processes rather than narrow tasks. They've thought carefully about the strategic trade-offs between adopting uniform processes and allowing different units to do things their own way. And they've made subtle but fundamental cultural changes, stressing teamwork and customers over turf and hierarchy. These companies are emerging from all those changes as true process enterprises--businesses whose management structures are in harmony, rather than at war, with their core processes. And their organizations are becoming much more flexible, adaptive, and responsive as a result.
Many managers feel overwhelmed. They have too many problems--too many monkeys--on their backs. All too often, they say, they find themselves running out of time while their subordinates are running out of work. Such is the common phenomenon described by the late William Oncken, Jr., and Donald L. Wass in this 1974 HBR classic. They tell the engaging story of an overburdened manager who has unwittingly taken on all of his subordinates' problems. If, for example, an employee has a problem and the manager says, "Let me think about that and get back to you," the monkey has just leaped from the subordinate's back to the manager's. This article describes how the manager can delegate effectively to keep most monkeys on the subordinate's back. It offers suggestions on the care and feeding of monkeys and on how managers can transfer initiative. In his accompanying commentary, Stephen R. Covey discusses both the enduring power of this message and how theories of time management have progressed beyond these ideas. Management thinkers and executives alike now realize that bosses cannot just give a monkey back to their subordinates. Subordinates must first be empowered, and that's hard and complicated work. It means bosses have to develop their subordinates and establish trust. Perhaps even more important and relevant than it was 25 years ago, Covey says, this article is a powerful wake-up call for managers at risk for carrying too many monkeys.
In preparation for the opening of a new canoe manufacturing shop, the owner has developed a business plan. He plans to manufacture 30 canoes per year out of a small rented shop. He has accumulated fixed and variable cost data, and now must decide what price he should charge for the canoes. He must also solidify his marketing strategy and set an advertising budget.
The senior market associate of Trojan Technologies reflected on the water shortages anticipated in developing countries created by their explosive economic growth. Trojan sold water disinfecting equipment, and the senior market associate's job was to find new areas for growth. China was particularly intriguing because it had as much water as Canada, but 40 times the population, and its economic boom would further stress current water resources. Trojan had set growth hurdles of 30% per year, and it needed new markets to reach that objective. The task in new market development was to determine whether Trojan should enter China and, if so, when, where, and how. The associate knew little of China: how decisions were made for water disinfecting equipment, whether Trojan's patents would be protected, and what level of resources would be required. The vice president of new business development wanted to see recommendations within the month.
One of Dow Jones & Co.'s most respected brands, The Wall Street Journal, is threatened by Internet news providers, including their own Interactive Edition. The company is unsure whether the Interactive Edition will be a substitute or a complement to the print edition. This case focuses on changing industry boundaries, new technology, potential cannibalization, and a threat to the company's traditional business model. Industry analysis of both print and interactive publishing is discussed, as is resource leveraging across the two formats.
<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER -Regional Asia-Pacific Case Writing Competition</strong></p><br>Grey China is a subsidiary of Grey Advertising, based in New York. Established in 1917, Grey Advertising offered a variety of marketing and corporate services through its 377 branches in 88 countries, which employed 10,000 people. The case provides an overview of how an advertising agency functions, as well as illustrating timely advertising industry issues such as specialization and globalization. The CEO of Grey China must decide whether or not to launch an interactive services department to capitalize on the potential for a first mover advantage. Many marketing managers in Hong Kong and China were unaware of how interactive marketing could be integrated into their marketing communications programs. Grey China had the daunting task of building primary market demand for interactive marketing communications.
In preparation for the opening of a new canoe manufacturing shop, the owner has developed a business plan. He plans to manufacture 30 canoes per year out of a small rented shop. He has accumulated fixed and variable cost data, and now must decide what price he should charge for the canoes. He must also solidify his marketing strategy and set an advertising budget.
The new program director at an indoor soccer facility must rethink his marketing strategy if the company is to break even. This case is suitable for an introductory marketing class.
This note presents the basic statistical concepts used to describe and analyze a collection of observations. It describes the differences between empirical distributions and mathematical (or theoretical) distributions, and illustrates the shortcomings of relying on a single statistical measure to draw conclusions. The advantages and disadvantages of histograms and bar charts are also discussed.
<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Second place winner of the MDC of Hong Kong Case Writer of the Year Award</strong></p><br>The senior market associate of Trojan Technologies reflected on the water shortages anticipated in developing countries created by their explosive economic growth. Trojan sold water disinfecting equipment, and the senior market associate's job was to find new areas for growth. China was particularly intriguing because it had as much water as Canada, but 40 times the population, and its economic boom would further stress current water resources. Trojan had set growth hurdles of 30 per cent per year, and it needed new markets to reach that objective. The task in new market development was to determine if Trojan should enter China, and if so, when, where and how. The associate knew little of China: how decisions were made for water disinfecting equipment, whether Trojan's patents would be protected, and what level of resources would be required. The vice-president of new business development wanted to see recommendations within the month.
One of Dow Jones & Company's most respected brands, The Wall Street Journal, is threatened by Internet news providers, including their own Interactive Edition. The company is unsure whether the Interactive Edition will be a substitute or a complement to the Print Edition. The case focuses on changing industry boundaries, new technology, potential cannibalization, and a threat to the company's traditional business model. Industry analysis of both print and interactive publishing is discussed, as is resource leveraging across the two formats.
This case provides a detailed description of Tandy Corporation's Incredible Universe stores from 1992 to 1995: layout, major departments, advertising and promotion, location, staff and customers. These very large consumer electronics stores were launched in the belief that incredible selection, entertainment and service would be a formula that customers would love; however, the unprofitable performance of the chain to date raises questions about the future of this venture.
This note describes and interprets accounting standards for future employee benefits. Adoption of these new standards must occur no later than fiscal years beginning in 2000. These accounting rules will result in greater harmonization of Canadian and U.S. accounting standards. The note details the components of pension expense and provides an illustration of a public company's note disclosure. This disclosure is used to provide an explanation of how to interpret the data that is disclosed about pensions in a company's financial statements and notes.
The assembly supervisor at Navistar faces a critical supply problem; one that not only affects the bottom line but more importantly the customer. This case requires a student to determine what is and is not important, to think creatively about how to use the information provided, and to formulate a recommendation with respect to solving the current supply problem. The student must review: (1) a process flow chart in detail, (2) numerical data with respect to costs and frequency of specific causes for trim shortages, and (3) a number of identified causes for the supply problem. Navistar must look at value added activities, its internal policies and practices, storage of materials, a Just-In-Time inventory system that may be too tight, and communication difficulties that arise when last minute design changes occur.
The assistant brand manager for DayQuil cold medication is under the gun to meet the deadline for a sampling experiment designed to increase DayQuil's market share. The case discusses managing timelines, identifying bottlenecks, and developing project management skills. DayQuil Sampling Operations serves to introduce students to project management issues and the decisions that have to be made, including crashing timelines and identifying parallel processes. This case can also serve as an excellent introduction to the use of Microsoft Project. DayQuil Sampling Operations is part of a three-case series about the DayQuil brand of cold medication made by Procter & Gamble. The other cases are Procter & Gamble Canada: DayQuil Brand Sampling (9A98A029) and Procter & Gamble Canada: Managing DayQuil Sampling (9A98C015).