Describes three different product development efforts at the Residential Controls division of Honeywell, Inc. Each of the three projects was for a different market and competitive environment. Each was tackled in a somewhat different way within the Honeywell Engineering organization, and the results from each were quite different. Also describes the new product development procedures that have been used historically at the Residential Division, and some of the current thinking regarding future changes in these procedures. Provides an opportunity to contrast the factors that impact success of product development across three quite different projects and to see how the organization's approaches to product development impact the success in those varying environments. Also provides an opportunity for students to examine the engineering function and some of the key issues in managing that functional group. Finally, the path for changing the approaches to product development can be addressed, contrasting an incremental evolutionary approach to such procedures versus a complete replacement of those procedures by a new set.
Concerns the first leveraged buyout to occur in Japan. Analytic tasks include a valuation of the company and an assessment of its debt capacity. Also provides opportunities to discuss agency costs associated with alternative capital and equity ownership structures, differences between U.S. and Japanese corporate finance practices, and the potential role of leveraged buyouts in the restructuring of Japanese manufacturing.
Because technology now develops faster than before, in the future managers will be able to choose the kind of organization they want. New structures, associated with adhocracies, networks, or "cluster organizations," will spring up around old ones. Information technology will enable cluster-type organizations to have the benefits of small scale and large scale simultaneously. Teams will accomplish most work, with leadership shared among members, and workers will be better trained, more autonomous, and more transient. Finally, expert systems will make decision making better understood, and computers will allow control to be exercised separately from reporting relationships.
Today time is a source of competitive advantage. Through new organization practices and design, companies can take time out of operations and provide customers with better products and services and lower costs. Fast-cycle companies: 1) organize as much work as possible around small, self-managing, multifunctional teams; 2) track cycle times for individual activities and for the delivery system as a whole; and 3) build learning loops to inform everyone about customers, competitors, and the company's operations.
When a customer turns combative during a negotiation, it is important to avoid confrontation or compromise. Instead, a salesperson should lure the customer into a search for creative solutions to tough problems. To do this, salespeople should: 1) increase their variables and know their walkaway, because the more options, the greater the chances of success; 2) keep aggressive customers talking and listen for valuable information about the customer's business; 3) pause often and summarize the progress to reassure the customer; 4) assert their own company's needs to prevent making concessions; 5) try to make the customer commit to a full solution that works for both partners; 6) save the hardest issues for last; 7) start high, concede slowly, and know the value of every concession; and 8) avoid giving in to emotional blackmail and always refuse to fight.
Leaders and followers are often the same people, since most managers have both bosses and subordinates. But while companies often nurture leadership skills, they ignore good followership skills. Four steps that can develop good followers are: 1) redefining followership and leadership roles as equal but different activities, 2) teaching the skills that make effective followers, 3) carrying out performance evaluation on the basis of followership capacities, and 4) building organizational structures (like leaderless groups and rotating leadership assignments) that encourage followership.
When the product market changes quickly, companies have to respond fast if they want to preserve their positions. But being fast to market is no advantage if the product isn't right. A better approach is to determine what the entry risks and opportunity costs are, and then use the appropriate strategy plotted on the product development map. For some products, it makes sense to use a step-by-step approach that breaks the development task into smaller, more manageable steps. For others, it may be better to develop a hybrid product. At other times, the best plan is to acquire the needed technology or to exit the market completely.
The plan meeting is where a project becomes real; it is where people make the decision to go forward with an idea or not. Yet managers often overload a plan presentation with unimportant facts or simply supply inadequate information. CEOs want four questions answered before they'll approve a plan: What is the plan? Why is it recommended? What are the goals? How much will it cost? You should be able to answer each of these questions clearly and in a way that can lead to an agreed-on course of action.
In today's competitive environment, strategy means paying painstaking attention to customers' needs: rethinking what your product is; what it does; and how you design, build, and market it. It is also about avoiding competition wherever and whenever possible. The problem of strategy is acute for Japanese companies. The Germans have captured the high-cost, top-of-the-line market, and the Koreans are attacking the low-cost, high-quality, entry-level market. The Japanese answer is to get back to strategy by creating value for customers.
This article explains the concept of market orientation in a new unconventional way. It helps the reader to understand that market orientation is a process with distinct characteristics and much more than "being or getting close to the customer." It stresses data gathering, the nature of the decision making process, and implementation.
Describes a corporation that switches its philosophy of budgeting from "stretch" targets to "minimum performance standard" targets. The change has implications for management incentives, compensation, and corporate planning. Early results suggest the concept was not implemented well, even if it was a good idea.
Florida Power and Light (FPL) has developed a widely acclaimed quality improvement program (QIP). This exercise leads the students through the process that a division of FPL utilized in an attempt to "improve service." Specifically, the process requires students to define "better service" in terms applicable to the utility company, determine the causes of less than perfect service, choose what causes to attack, generate a list of potential solutions, and determine a plan of action. Students employ a variety of frameworks and statistical tools to complete each step of the process. Provides a good understanding of the QIP that is attributed with taking this utility company from a state of near-crises to a highly respected operation, and that has served as a model for many other successful domestic QIP's. Designed to introduce students to the process and prepare them for class. A rewritten version of an earlier case by the same authors.
Designed to be used as an in-class handout after Florida Power Light Quality Improvement (QI) Story Exercise (A). A rewritten version of an earlier case by the same authors.
Discusses certain general issues that affect sales-management requirements in most companies: 1) the nature of the salesperson's "boundary role" in the organization, and 2) the relevance and limits of compensation policies as a key means of affecting the salesperson's effective performance of that role. Also presents concepts and perspectives useful in analyzing sales situations encountered in case studies and on the job.
Discusses the typical strengths, vulnerabilities, and key management skills associated with three common forms of marketing organization: a product-focused organization, a market-focused organization, and a functionally-focused organization. It considers how the nature of marketing activities varies in each form, the types of skills that are (and are not) developed in each form, and key success factors required to manage within each organization of marketing activities.
Explores how a cost system can help support a firm's decision to change strategies. In the process, the students are introduced to a simple activity-based cost system. Siemens Electric Motor Works found itself facing an increasingly competitive environment and so made a decision to move from mass production of specialty motors to the production of small lots of custom motors. In doing so, they found their old cost system led them to poor decision making. By switching to a simple activity-based system, more accurate product costs were computed, facilitating better divisional performance.
Examines Siemens' policy for pricing products transferred between the manufacturing and sales divisions of their Electric Motor Works, where both are profit centers. It is unique in that the organizational linkage between the product costing system and the transfer pricing system is highlighted. The issues raised center around the behavior induced by the transfer pricing system coupled with each manager's incentive to increase divisional profits. In addition the students will have an opportunity to discuss the appropriateness of both the transfer pricing system and the profit center structure of the organization.
Updates developments in the industry. Included among these are GE's reinvestment program, GE and Whirlpool's bidding war for Roper, Sears' expansion into selling brand names, Whirlpool's expansion into the European markets, and a number of other examples of this kind of consolidation, globalization, and expansion. May be used with Maytag in 1984.
Highlights Maytag's unique position in the industry in 1984. Maytag, a much smaller player than its competitors has prior to 1984 been successful in producing high quality merchandise and charging a premium for it. By 1984 Maytag is also attempting expansion. Traditionally a producer of laundry equipment, Maytag has made two key acquisitions--expanding its product line to include kitchen appliances. Reviews this situation an also discusses its two closest competitors, GE and Whirlpool. Provides a follow-up to Major Home Appliance Industry in 1984 (Revised) and its Supplement, Major Home Appliance Industry in 1988.