The CEO of Bausch & Lomb is contemplating replacing an international division with three regional divisions to sustain the company's growth, especially in international markets, and to add value to customers.
William Anders became CEO of defense giant General Dynamics in 1991 as the Cold War was ending and as the industry became saddled with excess capacity. Observing that the company was underserving shareholders and required a massive change in its culture, Anders brought in a new management team and introduced a new compensation system that better aligned the interests of managers and shareholders. Particularly controversial was the Gain/Sharing system, which paid large cash bonuses for each $10 increase in the stock price. The plan was widely criticized for rewarding top executives for manipulating stock prices through public announcements of layoffs and divestitures. Still, by the end of 1991, the stock price had climbed 113%, representing a $1.2 billion increase in shareholder wealth during the year. Teching Purpose: This case can serve several purposes. First, it provides an introduction to executive compensation. Second, it highlights the importance of linking incentives and corporate strategy in the context of a declining industry. Finally, the case can motivate discussions of downsizing and unemployment and the merits of rewarding top executives for cutting excess capacity.
Describes the work of Jack Welch as CEO of General Electric from 1981 to 1992, focusing particularly on his transformation of the company's portfolio through extensive dispositions and acquisitions and the company's culture through a mandated process called "work out." To a considerable extent, the case tells the story in Welch's own words drawing on earlier cases on Welch prepared by Richard Hammermesh and Frank Aguilar, as well as a 1991 interview with Welch in the Harvard Business Review and an article in Fortune, "GE Keeps Those Ideas Coming."
Describes Becton Dickinson's evolving attempt to develop products and strategies to meet worldwide competitive and market needs. Traces the evolution of a classic parent company-led product-market strategy to truly transnational product and strategy development. Explores the use of an integrative team as the organizational means of achieving global integration while preserving local flexibility.
Management must decide which first quarter's earnings numbers to report. The company is classified by its securities market as a "growth" company. The corporate controller prefers a quarterly earnings figure that represents a decline in earnings.
Provides students with a workable framework for analyzing new ventures. Stresses the importance of matching analytical tasks to the type of venture contemplated.
A junior salesperson on FirstAmerica Bank's trading floor is assisting a top salesperson, Linda, on a deal to finance the construction of a new cruise ship for Poseidon Cruise Lines. While the terms of the deal are being worked out, he realizes Linda has taken advantage of the Poseidon executives' unfamiliarity with complex financial structures to build an outrageously high profit margin into the deal. When the executives become suspicious of the prices FirstAmerica is quoting, Linda asks the protoganist to send them an intentionally misleading fax so that the deal will not be held up. Holding the personal belief that "before a blind man you shall not put a stumpling block," he does not know if he can bring himself to send the information.
This exercise briefly describes the assembly of a fictional product, X500. The student must construct a structured bill of materials and an MRP plan for ten weeks for X500 and seven components in four levels. The student must then interpret the MRP plan and take action on stockouts.
From a small local bank, Banc One has grown to one of the largest and most profitable banks in the United States under the leadership of its CEO, John B. McCoy. It has an impressive track record of improving the performance of its acquisitions while retaining the previous management and transferring its corporate culture. Banc One's uncommon partnership and its "share and compare" practices are viewed as key to its success. How long will it be able to sustain its stellar track record, particularly when confronted with mounting industry pressures? It has broadened its strategy, resulting in a number of organizational challenges. What lessons can be learned, particularly in terms of Banc One's acquisition approach? How is Banc One responding to the changing industry and how does it organizationally manage this change?
In an economy marked by severe inflation, a balance of payments problem, and large investment needs for modernization, the Minister of Finance has been asked to design a remedial program that cannot include borrowing abroad. He does so, and the case describes the outcome of the policies in the early 1880's. Discussion is expected to focus mainly on the long-term institutional spin-offs from these policies, and on the appropriateness of these institutions to the needs of a developing country.
As Brazil begins lowering its tariffs on imports, Microlite S.A., the country's largest producer of dry-cell batteries, is faced with becoming internationally competitive. It is consolidating production of zinc-carbon batteries in its northeast plant, presenting the opportunity to replace its batch assembly machines with an automated assembly line for its AA-size products.
Michigan Manufacturing is a broad-line maker of components for the automotive industry. It has developed a network of nine plants as its product line has grown. Newer, higher-volume products tend to be made in newer, focused, high-volume plants, while older product lines tend to be assigned to the Pontiac plant, the oldest one in the system. Because Pontiac produces such a wide variety of products, its overhead costs are very high. Management needs to decide whether to close the Pontiac plant or find a way to make it profitable.
Introduces students to the arithmetic of the accounting for national productivity growth. It defines labor productivity, capital productivity, and total factor productivity, describes the relationships among them, and discusses the phenomena that cause them to change over time. Exhibits include data for the United States and other industrial countries, which both show the relationships among the various measures and allow comparison across time and space. The end of the note discusses the 1992 controversy over productivity growth in Singapore. Productivity is an important phenomenon, widely discussed in the newspapers, but rarely even defined. Business students, especially those engaged in country analysis, need to understand the various ways in which it is measured and why those various quantities have changed over time in different nations. Intended for an introductory MBA course.
Dendrite International is a $23 million (1992 revenues) supplier of sales automation software to pharmaceuticals companies in Europe, Japan, and the United States. The firm's strategy has depended on being a full-service supplier to multinational firms. Impending changes in the pharmaceuticals industry, as well as technological and competitive developments, have raised issues concerning the best means of future growth and accompanying account-management procedures.
A medical supplies sales representative discusses how to identify potential managers and what he considers to be an organization's responsibility for developing its people. This interview offers students an intimate view of how an outstanding salesman thinks and feels about himself, his job, his company, and what motivates him.
This case deals with the termination of a sales representative, Dick Hobart, who claims that he was unfairly terminated and sues both the company and the man that fired him. The case raises issues related to the criteria for discharge, probationary practices, termination policies, discharge techniques, and the legal implications of firing someone. Students should take away from a good discussion of this case an improved understanding of good termination procedures and of the techniques and timing involved in such action. Although the case is a classic example of how not to do it, the situation is sufficiently ambiguous to provoke a rich discussion of the key issues involved in terminating an unsatisfactory employee.
Furthers understanding of, and familiarity with, nonfinancial incentives. Describes major elements that go into making a high-performance sales force; the practices, policies, and philosophies that are revealed about ways to motivate people provide a basis for discussion. Also gives the instructor an opportunity to teach students about the unexciting but necessary side of managing a sales force with its quotas, contests, and sales standings.
The owner of a charter airline wishes to determine why the business experienced yet another unprofitable year of operations. He decides to produce an income statement reflecting the profits generated or losses incurred by each plane so that a decision could be made about the fleet mix for subsequent years.
Discusses the management practices of William Aramony at the United Way of America (UWA). First, the case describes the United Way movement, focusing on both the local chapters and the national organization. Second, it sets forth the Washington Post reports that lead to the UWA scandal. Third, it shows how the board of governors, the local chapters, Aramony, and donors responded to the scandal.