Three experts on corporate governance lend their views to the Working Group on Corporate Governance's "New Compact for Owners and Directors." Clifton R. Wharton, Jr., chairman and CEO of TIAA-CREF, offers refinements to the Compact's proposals and describes how TIAA-CREF is trying to use its leverage to bring delinquent directors to task. Harvard Business School professor Jaw W. Lorsch explains why institutional investors neither can nor should function as owners and why the key to developing more effective corporate control is to strengthen the role of outside directors. Lord Hanson, chairman of Hanson PLC, reaffirms the importance of two traditional corporate governance principles: maintaining a unitary board of directors and maximizing shareholder value.
The developed countries need a productivity revolution in knowledge and service work. The country that first achieves such gains will dominate the economic landscape in the next century. The key to this new productivity revolution is closely examining work in five distinct steps: 1) defining the task; 2) concentrating on the task; 3) defining performance; 4) getting worker input on productivity improvement; and 5) building continuous learning into the organization.
The Malcolm Baldrige National Quality Award is the most important catalyst for transforming U.S. business. But since its inception four years ago, the award has been the target of increasingly acrimonious criticism. Most of the criticism is based on misunderstanding. To get to the "truth," the best available source of information on the award was tapped: judges, examiners, and senior examiners. In-depth interviews with 20 of these insiders led to a clear definition of the award's real purpose and the value contained within its seven categories.
An analysis of the problems of interpersonal communication, as viewed from a human behavior standpoint. Real communication occurs when one listens to another person's viewpoint with empathic understanding. It is possible to facilitate achievement of this communication breakthrough by summarizing the speaker's thoughts and feelings to his or her satisfaction before presenting a rebuttal. This procedure leads to the reduction of defensiveness and gradual achievement of mutual communication. A second analysis deals with communication in an industrial context. An example illustrates how differently two supervisors interpret an employee's reaction to a suggestion. This article, first published in 1952, is reprinted to include a retrospective commentary by John J. Gabarro.
In this three-part case, the authors explore how an HIV-infected employee should be managed over time. Manager Greg van de Water must make a series of decisions regarding Joe Collins. Three AIDS-in-the-workplace experts recommend action to Greg at each decision point. They are: Lee Smith of Levi Strauss; Jim Nichols of American Security Bank (where he is on long-term disability leave as a result of HIV infection); and Jonathan Mann of the Harvard School of Public Health.
Describes a new entry into the $8 billion flower industry in the United States. Combining the use of overnight air freight (Federal Express), information technology, an 800 number, and a catalog, Calyx & Corolla was changing the way flowers had traditionally been distributed, bypassing three layers of distribution, and providing very fresh flowers directly from the growers to consumers. Frames the question of how this start-up venture should grow.
Introduces the reasons for and basics of cost accounting and cost management systems. Simple definitions of forms used in cost accounting are included. Cost behavior is discussed. Questions to which answers are needed when analyzing or designing a cost system are summarized.
The president of a toy company is considering the adoption of level production in a business characterized by highly seasonal sales. The issues include balancing the cost savings and the inventory risk, estimating the seasonal financing need, and determining the appropriate approach to the bank. A rewritten version of an earlier case.
A senior loan officer is reviewing the recent performance of a company that has failed to repay its loan as scheduled. The failure results from a cyclical downturn in sales, coupled with a lag in cutting back production. Inventory risk is minimal. Teaching objective: Practice in financial analysis and in understanding the impact of business cycle on durable goods companies. Also an opportunity to evaluate the situation from a lender's perspective. A rewritten version of an earlier case.
The Butler Lumber Co. is faced with a need for increased bank financing due to its rapid sales growth and low profitability. Students must determine the reasons for the rising bank borrowing, estimate the amount of borrowing needed, and assess the attractiveness of the loan to the bank. A rewritten version of an earlier case. Allows students to practice ratio analysis, financial forecasting, and evaluating financing alternatives.
Examines the challenge facing the managers of a large aluminum manufacturing plant in its drive to improve workplace safety. The CEO of the company has made safety a top priority. The plant has made good progress in reducing the injury rate, but now confronts the need to accelerate its improvement. Doing so requires the safety director to consider progress to date and analyze the opportunities for improvement, many of which involve fundamental changes in behavior at all levels of the organization. Progress has not been uniform throughout the plant and past approaches may not be adequate in meeting the challenge. As the case comes to a close, these issues come to a head because a superintendent wants to fire a supervisor who has failed to adhere to safety procedures. Designed to introduce students to the issues of safety in its operating context. Students have information available that allows them to analyze underlying causes and identify major opportunities for improvement. However, the interactions between safety and other dimensions of manufacturing performance are evident in developing and implementing a plan for improvement.
Describes a situation in which the manager in charge of a major development project at Honda needs to make a decision about the technical specification of the product. The decision has profound implications for the product concept and strategy, as well as for the technical feasibility and challenges of the design. The students need to evaluate different options and estimate their impact on the success of the final product. Underlines the importance of choosing an option that is consistent with the overall concept of the product and the company's design and philosophy.
A Houston-based LBO firm makes two petrochemical acquisitions that benefit from improved industry conditions and improved organizational performance. The LBOs generate huge increases in value, creating problems for managers, who have large, undiversified equity holdings. The firm decides to sell one company after a year, and to take the other company public after two. Allows students to examine the causes of organizational change, the difficulties of managing success in closely held LBO companies, and the relative merits of various exit strategies.
An introduction to, and summary of the laws, rules, and procedures established in the United States for settling the claims of creditors on a bankrupt company. Covers both Chapter 7 liquidations and Chapter 11 reorganizations.
Requires students to consider Philip's options in 1991, when it unveiled its digital compact cassette, the next generation in audio technology for the firm. Reinforces the generality of issues described in the (A) case and draws attention to the analytics required for their resolution.
Asks that students adopt the perspective of Philips in 1979, after technical development of the CD was complete, but three years before it was introduced commercially. At that time, Philips' management had to decide whether to attempt to establish a CD standard through an alliance with another consumer electronics firm. Raises questions regarding the costs and benefits of standardization, optimal pricing of CD players and discs (given their complementarity), optimal pricing of a durable good, and the effects of proprietary information on entry strategies. Also requires analysis of several related industries, with special attention to opportunities to invest in product-specific capital.
Updates students to 1982. Asks students to consider Philips' best strategy for investing in disc-pressing capacity dedicated to the United States market. The analysis draws on game theoretic techniques (in normal form with subgame perfection as the governing equilibrium principle). The analysis illustrates the tension between competitive pressure to preempt and the value of flexibility in the presence of uncertainty about demand.