American Home Products' (AHP) $9 billion hostile takeover of American Cyanamid (Cyanamid) was the largest mergers and-acquistions transaction in 1994, and made AHP the fourth largest pharmaceutical firm in the United States. At the time of AHP's offer, Cyanamid had already begun to restructure by selling its consumer products businesses, spinning off its chemicals division, and entering into asset swap negotiations with SmithKline Beecham. AHP entered the fray, at least in part, to block the asset swap deal. The case takes students inside the board room and describes the tension generated by the fact that Cyanamid's management and its outside directors had different views on the desirability of the takeover. At issue is whether Cyanamid's board will endorse AHP's hostile offer in spite of the fact that management does not support the offer, and instead supports a lower-valued friendly asset swap with SmithKline Beecham. After a tense and painful board meeting that lasted several days, the board voted unanimously to support the offer.
Presents the results of a national survey of environmental manufacturing practices. Efforts by firms to improve manufacturing processes and increase productivity create substantial opportunities for environmental improvement. The adoption of advanced manufacturing process innovations provides incentives for the adoption of environmentally conscious manufacturing strategies. Close relationships across the production chain, between end-users and suppliers in particular, facilitate the adoption of this related bundle of environmental and industrial innovations. Firms and plants that are R&D-intensive and manufacturing innovators possess the capacity to both improve productivity and reduce environmental costs and risks.
Although many firms enter strategic alliances with specific learning objectives, these objectives are often not realized. Drawing on a study of North American-Japanese joint ventures, this article analyzes the question of why some firms are more effective than others at exploiting alliance learning opportunities and develops a framework for alliance learning. The framework incorporates knowledge management processes--a set of organizational actions that establish the basis for accessing and exploiting alliance knowledge--and facilitating factors--the conditions that promote a favorable climate for effective alliance knowledge management. The primary obstacle to successfully learning from alliances is a failure to execute the specific organizational processes necessary to access, assimilate, and disseminate alliance knowledge.
The quality of both strategic thinking and action rely, in important ways, on the quality of the strategic conversations underway at all levels in the organization. The design of these conversations is the defining contribution of the strategy-making process. When these strategic conversations about the design of the future operate successfully at both local and organizational levels, they create a "meta-capability" for strategy-making capable of both furthering intended strategy and for recognizing opportunities for emergent strategy.
The nonprofit performing arts industry in America, along with many performing arts organizations around the world, are facing crises on a variety of fronts. Accordingly, arts organizations must learn new ways to attract the resources they need to sustain their mission and quality. Arts managers must improve their skills in increasing and broadening their audience base, improving accessibility to various art forms, and learning how to better meet the needs of specific audience segments and contributors. To accomplish this, they must develop a better understanding of their own business and of the interests, attitudes, and motivations of their customers. They must professionalize their marketing and management skills and learn to be accountable to all their publics: their artists, their funders, and their audiences. Then they can create offerings, services, and messages to which the target audience will enthusiastically respond, without compromising their artistic integrity.
The Balanced Scorecard was developed to measure both current operating performance and the drivers of future performance. Many managers believe they are using a Balanced Scorecard when they supplement traditional financial measures with generic, non-financial measures about customers, processes, and employees. But the best Balanced Scorecards are more than ad hoc collections of financial and non-financial measures. The objectives and measures on a Balanced Scorecard should be derived from the business unit's strategy. A scorecard should contain outcome measures and the performance drivers of those outcomes, linked together in cause-and-effect relationships.
This is an MIT Sloan Management Review article. Why do so many organizations fail to learn? According to the author, such failures may be caused not by resistance to change, human nature, or poor leadership, but by the lack of communication among three cultures: operating, engineering, and executive. The culture of operators is based on human interaction. Operators may use their learning ability to thwart management's efforts to improve productivity. The engineering culture represents the design elements of the technology underlying the organization and how the technology is to be used. The executive culture revolves around maintaining an organization's financial health and deals with boards, investors, and capital markets. According to the author, when organizations attempt to redesign or reinvent themselves, the cultures collide and failure occurs. Executives and engineers are task focused and assume that people are the problem. Executives band together and depersonalize their employees. Executives and engineers can't agree on how to make organizations work better while keeping costs down. Each culture must learn how to learn and to analyze its own culture. Then enough mutual understanding must be created among the cultures to evolve solutions that all groups can commit to.
This is an MIT Sloan Management Review article. Provides an overview of the future role of the IT organization, examining the business and technological changes that effect change in many IT units. The four major process changes in the way firms operate all have a major impact on the IT unit: reengineering operational processes, reengineering support processes, rethinking managerial information flows, and redesigning network processes. A distributed computing environment, new development software methods, capabilities like the Internet and other networks, new entrants in the computer industry, and outsourcing are the technological changes affecting the IT organization. The authors cite eight imperatives in which IT organizations must excel to succeed: achieve two-way strategic alignment; develop effective relationships with line management; deliver and implement new systems; build and manage infrastructure; reskill the IT organization; manage vendor partnerships; build high performance; and redesign and manage the federal IT organization.
This brief problem can be used to cover the concepts discussed in UV0415, "Process Performance Measures." Calculations required include capacity, bottlenecks, utilization, the effects of setup reduction, and batch size.
This note defines a variety of performance measures that are useful in process analysis. It explains the meaning and usefulness of these concepts through a list of definitions followed by examples.
After the release of the "Challenge" computer in 1993, Silicon Graphics executives meet to discuss the follow-up project. Should they pursue an incremental improvement to the Challenge, or opt for a radically new design recently demonstrated at Stanford University?
A manufacturing manager has been asked to develop an estimate of the production cost of a therapeutic wrist exerciser prototype. Automated assembly was possible long-term, but a manual assembly and test procedure was necessary until the product was firmly established. Teams of students can be asked to develop an assembly process for the new product using either an assembly line or single operator configuration. Hands-on experience in job design can be provided to the students. Students must use job design and work measurement methods to estimate overall product cost and propose alternative prototype designs that might reduce assembly costs. The performance of the two process configurations can be compared during an in-class student demonstration. Subsequent discussion can focus on the challenges of work design for an assembly line or single operation configuration, along with the quality, cost and management challenges implicit in each.
Simulation is commonly used as a decision tool by managers in marketing, engineering, production, finance and many other disciplines. Managers simulate processes to gain a better understanding of their processes, diagnose problems, train new employees, and explore possibilities. Both the advent of powerful personal computers and the development of graphically driven simulation packages have contributed to this greater adoption. This note describes process simulation and illustrates the techniques with a tutorial model of a deli operation. (An Extend simulation file, product 7A96D009, is available for this case.)
The owner of a rapidly growing retail lumber company is considering the financial implications of continued rapid growth. The magnitude of the company's future financing requirements must be assessed in the context of the company's access to bank finance and/or equity finance. A rewritten version of an earlier case.
A small manufacturing company plans and budgets sales and expenses to ensure that its strategy is feasible. It must trace costs of manufacturing through work-in-process to finished goods and cost of goods sold, and project cash flows and income.