In 1982, the West German company Henkel relaunched Pattex, an internationally accepted but stagnating contact adhesive. The relaunch was successful and Henkel attempted to duplicate it with Pritt, its glue stick. The strategy failed. The experience illustrates two pitfalls of global marketing: insufficient use of research and poor follow-up. Other pitfalls include overstandardization, narrow vision, and inflexibility in implementation. A committee of managers from headquarters and subsidiaries should oversee the global marketing process.
Bellcore's four service centers were charging unrealistically high prices internally. The transfer pricing system was at fault. Its four service centers were people intensive, and overhead costs were allocated on the basis of total head count. Rental rates were a companywide average and did not distinguish open space from labs or computer rooms, which are more expensive to maintain. By making some simple adjustments, Bellcore made the system more accurate, allocating overhead according to the proportion of technical and administrative professionals in a department and rental rates according to the kind of building space.
Velcro USA received a complaint from a customer that it was inspecting quality into its products rather than manufacturing it in. Velcro was given 90 days to start putting its house in order. The company installed statistical process control for data feedback, drew up a quality manual, put its employees through a quality course, and set up a management steering committee. In the first year of the program, Velcro reduced waste by 50%; in the second year, by 45%.
Semco S/A is a manufacturing company in Brazil where workers make corporate decisions, set their own hours, and have access to monthly financial figures. The company's management philosophy is antihierarchical and perhaps unorthodox, but its profits are handsome. The company operates on the basis of three key principles: work force democracy, profit sharing, and free access to information. Democracy lets employees set their own working conditions; profit sharing rewards them for doing well; information tells them how they are doing.
In Women's Quest for Economic Equality, Victor R. Fuchs argues that women's continued economic inequality is a reflection of the conflict they experience between family and work. He is encouraged by the number of women investing in their careers, but alarmed by the country's low birthrate and the number of children whose futures are at risk. In the Second Shift, Arlie Hochschild finds that women do most of the "second shift" work of caring for children and home. She looks at how and why and suggests ways to improve hours at home for everyone. Both authors support public policies to help children and working families. They challenge readers to examine some prevailing norms.
Paul Ballisarian, owner of Ballisarian Beef, hired Mike Post in the 1960s when his children were too young to enter the business. Mike is an innovator whose contributions have resulted in more than half the business's profits. Now Mike wants half ownership of his part of the business. Paul's son, Gregory, would rather see Mike leave than give him part of the business, while Paul's daughter, Katherine, believes Mike should be made CEO. Five family business experts - John A. Welsh, formerly of Southern Methodist University's Caruth Institute of Owner-Managed Business and founder of Flow Laboratories; Joseph A. Baute, Markem Corp.; Charles E. "Gus" Whalen, Jr., Warren Featherbone Co.; Wendy C. Handler, Babson College; and Harry Levinson, The Levinson Institute - discuss the issues presented.
This article, originally printed in March-April 1972, analyzes the plight of middle managers--they have a boss's responsibility without a boss's authority; they function as specialists and generalists at the same time; and they must meet the conflicting demands of superiors, subordinates, and peers. Although middle management positions are increasingly common in divisionalized corporations, they are often misunderstood. The author looks at the job requirements from both top and middle management perspectives and includes a commentary outlining his perspective 17 years later.
This is an enhanced edition of HBR article 98301, originally published in May/June 1998. John F. Welch, Jr. believes that GE must operate with the flexibility and agility of a small company. In this interview he explains how he is building a revitalized "human engine" to match GE's "business engine." Welch champions a companywide drive to eliminate unproductive work and energize employees and leads a transformation of attitudes at all levels. The centerpiece of this process is "Work-Out"--an intense multiyear program through which representatives of GE's 14 businesses meet regularly to identify sources of frustration and inefficiency and to overhaul evaluation and reward systems.
This note provides a brief history of the origins of return-on-investment measurement at Du Pont and its close link with operations management. The Du Pont chart approach to calculating return on assets is described, and the chart is presented in work-sheet form to facilitate application by persons unfamiliar with the financial concepts. Use of ROA and ROE for performance measurement is discussed, and average measures of two samples of top U.S. and Japanese companies are presented.
A considerable amount of our working lives is spent in meetings. However, as most managers will attest, meetings are often inefficient and tedious and fail to accomplish their intended objectives. Fortunately, these problems can often be avoided by carefully considering several important issues when planning and conducting a meeting. This note summarizes these issues.
Dick Dublin believes he has designed a townhouse development which will appeal to mobile young professionals. Dublin has removed some market risk by locking in a forward commitment for low interest rate loans for future purchasers at Grosvenor Park. The pricing strategy calculated to ensure a quick sell-out may be foiled by the expensive demands of the local planning department. Grosvenor Park is a good case study in residential project management, spanning the life cycle from pre-development to sell-out.
Bill Hassett, a partner in the Nelson Companies, has to make some important decisions regarding the expansion of Prospect Hill Executive Office Park in Waltham, Massachusetts. The pre-development issues concerning him about the Hillside Building include how to position Hillside in a softening market, how to handle certain parking issues, and whether expanded day care facilities would enhance lease-up or increase expenses. He is also considering arranging an interest rate hedge on the adjustable rate interest. This case deals with suburban development issues, and focuses on adapting to possible structural changes in the real estate industry.
The owner of the Fan Pier site in South Boston has been found legally responsible for blocking the efforts of his development partner in attaining the approval necessary to build the $800 million megaproject they had planned together. It was believed that the owner hoped to structure a new relationship with some other partner who would share more of the economic benefits. The feuding partners need to decide how to handle the recent ruling. This case provides an opportunity to expose students to megaprojects: issues of partnership, design, architecture, changing marketing, and local politics play large roles.
Describes the evolution of the airline industry in the first decade after deregulation (1978-88). Looks at the primary areas of operation in which managers can effect change (planes, people, routes, marketing). The basic teaching objective is to cover industry structure with emphasis on competitive advantage, commitment, and sustainability. May be used with U.S. Airline Industry--1978-88 (B).
Examines the airline industry's primary competitors (Texas Air, United, American, Delta, Northwest, TWA, USAir, and Pan Am) and traces their strategic moves in the areas of planes, people, routes, and marketing. Teaching/learning emphasis is on finding out who wins, who loses, and why. Provides a follow-up to U.S. Airline Industry--1978-88 (A).
Covers the history of Tylenol from the autumn of 1982 through the second tampering incident in February 1986. Also deals with other developments in the history of Johnson & Johnson, especially the acquisition and divestiture of Technicare.
A company acquires the rights to a mineral with potential uses in the ceramic and paint industries. After many years, sales are still far below expectations and the company considers selling the whole operation to a potential customer. Rewritten version of an earlier case.
Provides additional quantitative exhibits, including a pro forma income statement and break-even calculations for the operation and makes assumptions about marketing strategy. A rewritten version of an earlier case.
Avon engineers developed a new type of electric adjustable speed drive. Executives began to make long-range plans for production and marketing. Members of the sales department wondered what pricing recommendations they should make to management on the basis of estimates of market size at different price levels and Avon's market share. A rewritten version of an earlier case.