Based on a preliminary analysis, the inventor of a licence plate protector believes the product would be viable. He collects information on the investments and costs necessary for production, and develops a selling price. But has he correctly identified the fixed, variable and step costs in his analysis?
Mencotti Wine is considering a new bottle labelling machine. The president wants to analyze a number of alternative investment decisions using the net present value approach. He must consider the income tax effects including the capital cost allowance on fixed assets.
Focuses on the management style of Fred Henderson in the context of a relatively stable business environment within Xerox Corporation. To be contrasted with the case, Renn Zaphiropoulos and the videotape, A Day with Renn Zaphiropoulos (9-881-501), which are appropriate for a more dynamic environment.
Coordination between advertising and price strategies may lead to higher profits. Analyses of data from 227 businesses show the price-advertising relationship. The results show that companies with higher advertising budgets charge premium prices; consumers are willing to pay more for a perceived "high quality" product; and the association between advertising expenditures and price is strongest in the last stage of the product cycle. The price-advertising consistency principle is important for attaining a substantial return on investment.
Managers enhance their understanding of communication by attending to images, settings, and body language. The imagery people use in their speech offers important clues regarding the world they inhabit. Because words are symbols, their meaning varies greatly depending on who is using them. A failure to understand this often results in misunderstandings between managers. The use of concrete as opposed to abstract words, of joking as a method of communicating risky statements, and of "I" rather than "we," often reveals important clues to meaning as does labeling, certain question-asking techniques, and evidence of either-or thinking.
Covers history of PC&D from 1960 to 1975 as it grows from a single business firm to a diversified firm. Emphasizes the use of subsidiaries for product development and fast growth. Other issues include problems of a new CEO in keeping control of fast growing divisions.
Contains four sections: 1) measuring the performance of queuing systems; 2) types of queuing systems; 3) the behavior of simple systems (elementary queuing theory); and 4) the management of queues (including a discussion of their psychology).
The need for the effective management of stagnant industries will grow as more and more industries decline or increase only modestly. A study investigating 12 stagnant industries focuses attention on strategies determining the success or failure of those industries. Research reveals three common characteristics of the strategies of businesses successful in stagnant industries: 1) they identify, create, and exploit growth segments within their industries; 2) they emphasize product quality and innovative product improvement; and 3) they systematically and consistently improve the efficiency of their production and distribution systems.
Originally published in the January/February 1964 issue of HBR, this article presents an innovative approach for calculating the risks entailed in projects such as modernizing a plant or launching new products. The technique determines a frequency distribution for each of the factors influencing the rate of return and focuses on specific combinations of variables. Computer runs and data comparisons are an inherent part of the analysis. This approach allows management to understand the nature of the data being used, and thereby results in wiser investment decisions. The retrospective commentary is an informative update on the subject of risk analysis.
Research indicates that manipulation of subordinates by their superiors occurs because of the structure of the superior-subordinate relationship. Subordinates must recognize and resolve eight dilemmas of self-protection derived from the theory of individual development (formulated by Erik Erikson), which arise in a hierarchical organization. A superior who displays qualities of introspection, empathy, preparedness, commitment, and hope will be able to discuss the dilemmas with the subordinate and aid in the resolution of problems.
Describes the situation faced by a young MBA with an economics background who is offered the opportunity to manage a high technology fiber optics business. Designed to facilitate exploring the skills and knowledge that the general manager of a technology-based firm needs to be effective.
Presents a model for understanding the behavior and evolution of primary, stable work groups over time. Model describes contextual factors, design factors and emergent culture as determinants of group behavior and performance. In addition, describes emergent behavior, norms, roles, and rituals as aspects of group life.
Every real-estate transaction is affected by the tax consequences that result from its form and substance. Structuring a transaction without a thorough understanding of its tax considerations is likely to reduce the transaction's potential value. The failure to utilize the available tax benefits eliminates one of the major reasons for making a real-estate investment.
Power, the critical element in managerial behavior, is representative of efficacy and capacity, as well as dominance and oppression. An individual's power comes from his or her position in an organization and access to resources, information, and organizational support. Power positions allow job discretion, recognition, and task relevance. The more communication with superiors, peers, and subordinates, the more powerful the position is. Powerlessness is characteristic of task and routine oriented jobs. Managerial skills must be communicated to subordinates to ensure greater effectiveness in supervision. McKinsey Award Winner.
Accurate and rapid analysis of the risks and future benefits of an acquisition is necessary in today's market. The planning of corporate strategy with a view toward the economic and technological environment is the initial step of the analysis. The subsequent search and screen process establishes a list of candidates. The financial evaluation process includes an analysis of the worth and future value of both companies according to several hypothetical scenarios. The "discounted cash flow" (DCF) evaluation technique is useful because it includes the acquisition's added cash flow and the cost of capital. Use of such evaluation techniques can determine maximum acceptable acquisition prices quickly and serve as a catalyst for reexamining a company's overall strategy.
Companies achieve marketing success by being active in profitable markets, concentrating on doing important tasks well, and doing these tasks well consistently. The identification of points of leverage in a market depends on the relationship between manufacturing and marketing. The degree of product customization directly influences the manufacturing, inventory, and sales functions. Consistency of purpose and strategy in the product, pricing, communication, and marketing channels yields a synchronized effort which results in a successful production/marketing effort.
Develops a conceptual framework for financial analysis of real estate investments, taking into consideration the necessity for baseline data, project trends, and forecast discontinuities.
For use on the second day of a two-day sequence on the U.S. chain saw industry. Describes the evolution of the industry since 1974. Illustrates issues in industry evolution, the forces causing evolution, and the strategic issues raised by evolution. The discussion can center around understanding the 1974-78 time period, and then on an analysis of the future. The class can be asked to take the perspective of different major competitors.