A study of U.S., Japanese, and European companies shows that, contrary to the claims of some corporate critics, large companies can be as technologically innovative as small companies. The effective management of innovation is surprisingly similar in both. Founders of small companies pursue their technological goals over many years, keeping costs low, tolerating uncertainty and setbacks, and readily adapting their products to meet market needs. By contrast, many managers of large organizations emphasize orderly and predictable operations. Innovative large companies accept the tumultuous realities of the innovative process and behave much like their smaller counterparts. McKinsey Award Winner.
A well-conceived business plan is essential to the success of an enterprise. Whether you are starting up a venture, seeking additional capital for an existing product line, or proposing a new activity for a corporate division, you will have to write a plan detailing your project's resource requirements, marketing decisions, financial projections, production demands, and personnel needs. The plan must reflect the viewpoint of three constituencies: the customer, the investor, and the producer. Too many business plans focus excessively on the producer.
A cost center can take pride in the service it gives to the company, but it's difficult for managers to tell if the center is working at an efficient level. Xerox's answer is to use the yardstick applied in the profit center in the cost center. The Logistics and Distribution (L&D) cost center of the Business System Group has taken steps to emulate the behavior of the profit center.
Focuses on the industry's development and evolution in three principal watch producing countries: Switzerland, the United States, and Japan. Based in part on two earlier cases by F.T. Knickerbocker and H.E.R. Uyterhoeven.
Describes Lou Gerstner and his approach to managing entrepreneurship and organizational change at American Express Travel Related Services Company. Mr. Gerstner is chairman and CEO of the firm.
Involves the design and creation of a company with no formally-defined hierarchy. Describes the steps the founder takes to avoid the organizational politics he perceives as crushing the human contributions they were designed to harness.
Fifteen years later, the company has achieved widespread recognition in the industry for its innovative designs, its quality products, and its highly ethical standards for business dealings. This case describes the organization, the plant, and current concerns.
In 1979, Philip Morris acquired the Seven-Up Co., the number three concentrate producer in the U.S. After four years of losses, Seven-Up had registered an operating profit in 1984. Industry analysts were debating the role that Seven-Up would play in Philip Morris's future.
Contains a description of some issues confronting management of CML Group as the company progresses toward making an initial public offering. Among the issues and topics addressed in the case are: considerations in choosing an underwriting team, the initial public offering market; IPOs as a mechanism for private investors to harvest their investment; and short-term management reactions to changing conditions in the stock market.
Contains a description of a decision confronting two entrepreneurs in mid-1981. They are considering purchasing a small manufacturer of precision electromechanical parts. Among the issues in the case are the following: 1) Should Taylor and Grayson buy Precision Parts, Inc.? 2) Should Shawmut Bank provide the loan? 3) Should the venture capital firms invest? 4) What should Taylor and Grayson do? The case is designed to expose students to a different kind of opportunity. Also, students will have to ask and answer the questions: What can go wrong and what can go right? They must develop a plan for managing the risk-reward ratio in their favor.
New projects, especially those involving high technology, are prone to cost overruns that may double, triple, or even quadruple original estimates. An inadequate design is often the cause. If necessary, management should abandon a project, and corporate environments should encourage honest appraisals and courage in their project managers. Suggestions for solutions include: verifying the nature of the problem, reengineering the project, and identifying underestimated areas.
In a letter to outside counsel, a hypothetical CEO comments that although corporate lawsuits are expensive, time consuming, and often counterproductive, business people and lawyers alike assume that litigating rather than settling is the normal way to deal with disputes. To alter this pattern, the CEO proposes that executives and lawyers recast their assumptions, treating prompt settlement of disputes as a primary goal and litigation as a last resort, and viewing lawyers, not as warriors, but as cost-conscious mediators. A cooperative effort by business people and lawyers, the CEO concludes, best ensures a reasonable and cost-effective approach to resolving disputes.
Many managers see the experience curve as out of date, but experience curve strategies can improve competitive performance in some clearly defined situations. Successful use of the curve requires understanding why and how it works and when to apply it. Industry examples explain how products have different experience curve slopes, experience bases, and cost reduction sources. Managers should study three critical variables to discover both the opportunities and traps in putting the experience curve to work for their companies: industry structure, the relative position of key competitors, and government impact.
Buyers need to be sold first on the selling company and on the salesperson before a sale can be made, says this industrial sales executive. He introduces a planned sales approach that can cover a period of years and he details creative selling techniques that have succeeded for his group. The author believes companies should be customer-driven and all areas should get behind the sales effort.
Entrepreneurship is a trait that is confined neither to certain types of individuals nor to organizations. A society can do much to stimulate or inhibit the development of entrepreneurship. Government policy decisions in recent years to lower the capital gains tax and deregulate certain industries have been instrumental in encouraging establishing new businesses. College and university business programs are also instrumental in stimulation. But it's up to individual organizations to foster conditions that allow entrepreneurship to flourish.
There are two radically different strategies for managing a company's workforce--a strategy based on imposing control and a strategy based on eliciting commitment. At the heart of control strategy is the wish to establish order, exercise control, and achieve efficiency in operations. Underlying the commitment strategy is a management philosophy that acknowledges a company's multiple stakeholders--owners, employees, customers, and the public. At first, most organizations adopt a limited set of changes--that is, a "transitional" approach. Evidence suggests that the rate of such transformations will continue to accelerate and the move toward commitment will extend to a larger number of plants and offices.
Contains a description of a set of related decisions confronting the management and directors of Business Research Corp. (BRC) in April of 1984. BRC needs more capital to finance continued development of the market for a full-text database comprised of Wall Street research and to finance a new business opportunity entailing electronic delivery of Wall Street research to institutional investors. However, in order to attract new money, the capital structure of the company must be changed. The pedagogic objectives in the case include: exposing students to the consequences of certain early stage financing decisions; raising the issue of conflict of interest among various stakeholders; and exposing students to the necessity for convergent iteration and flexibility in business plans.
Applichem has six plants in different countries making the same chemical product. The purpose of this case is to allow students to think about what costs are relevant to management in this process industry environment, about how to define a comparison of costs and productivity across plants, and about how it happens that plants in different parts of the world come to have quite different costs of producing the same product. Finally they can begin to think about what management might do to ensure that productivity improvements made at one plant would be routinely useful for other plants.
The CAD/CAM market in Japan is about to take off. Computervision wants its exclusive distributor to dramatically expand its sales and service coverage. The distributor wants a joint venture with Computervision before expanding. Several distribution alternatives (including going direct) are presented.