This case deals with responsible business and the impact of firm actions on different stakeholders. In November 2019, the last operating units of the Navajo Generating Station (NGS) in Page, Arizona, were shut down. The plant was losing money and was no longer economically viable or necessary for Arizona's power grid. As the largest coal-fired power plant west of the Mississippi and one of the largest emitters of carbon dioxide (CO2) in the continental United States, the closure was seen by many environmental groups as a success for sustainability and climate change. For the communities that depended on the plant and associated coal mine for jobs and taxes, the impact of the plant closure was less positive. Although the air would be cleaner and water resources better protected, the plant and mine closures meant that the Navajo Nation and Hopi Tribe faced large cutbacks in their budgets. The plant and mine workers, almost all Native American, lost their jobs. The closure left a legacy of health issues on the reservations and unknown environmental issues from the abandoned coal mine.
In September 2019, Elliott Management (Elliott), a hedge fund manager and activist investor, disclosed that it had acquired a $3.2 billion position in AT&T and was seeking strategic and operational change. In a letter to the AT&T board, Elliott accused the company of becoming "a sprawling collection of businesses battling well-funded competitors, in new markets, with different regulations, and saddled with the financial repercussions of its choices." Elliott outlined the areas of concern and a set of recommendations, including divestments of non-core businesses and a cessation in acquisitions. AT&T must now decide if the recommendations are valid and what actions, if any, are warranted.
The economic woes of 2008 gave a boost to budget retailers such as Dollar General, Aldi, and these retailers have unleashed significant change in the retailing industry in general and the grocery business sin particular. The case focuses on the hard-discounters from Germany, Aldi and to a lesser extent on Lidl to describe their operating models and their relative impact on the strategies adopted by their US peers. The case provides a rich discussion of the industry environment in the U.S. grocery business and the key trends that were shaping organizational strategies. It follows with an in-depth examination of the cornerstones of the hard-discount model and how the German companies have been successfully implementing this approach in the U.S. As the case closes, the US retailers had started to respond to the new competitors while firms such as Aldi had moved more deliberately into the realm of service innovation to retain an edge over peers. It appeared as if the hard-discounters were trying to reach into the upper tiers of customers by tailoring their choices to suit such an audience. They were locating in richer neighborhoods, providing a more sophisticated product assortment, and some were even rethinking their store layouts. These changes seemed to be going against the grain of conventional budget operators. It remained to be seen whether the sources of competitive advantage built by firms such as Aldi would prove resilient against the much larger peers who enjoyed much greater advantages of scale and resources.
In July 2019, Pfizer announced that it would spin off its Upjohn division and merge it with Mylan, a specialty and generic drugs firm. Within Pfizer, the Upjohn business unit was a conduit for Pfizer drugs going off-patent. Divesting the Upjohn business would allow Pfizer to focus on innovative drugs and exit the generics sector. Combining Upjohn with Mylan would create a new company that would compete in branded prescription drugs, generics, biosimilars, and over-the-counter medicines. Cost synergies from the merger of $1 billion were projected. Under the terms of the agreement, each Mylan share would be converted into one share of the new company. Pfizer shareholders would own 57% of the combined new company and Mylan shareholders would own 43%.
Many of the changes seemed to occur at the confluence of three major trends that characterized the industry; namely, (1) the advent of extremely cheap computing power and ubiquitous connectivity; (2) the increasing impact of customer centricity, and (3) the rising influence of wide-ranging new technology tools such as predictive data analytics, artificial intelligence, and neural networks that promised to reduce operating costs while at the same time making a quantum leap in product design and customization. Loosely referred to as the 4thIR (4th Industrial Revolution), these technologies were a small subset of fundamental shifts that were reshaping the industrial world. The financial services industry in the United States was dominated by a handful of very large players who dominated both the active management as well as the passive fund management sides of the business. Most of the industry revenues originated from the fee income for investment advisory services and active fund management services that the companies provided through its legions of financial advisors and branch networks that spread across the country. Black Rock, Vanguard, State Street, JP Morgan, and Fidelity managed approximately $23 trillion. However, life at the top was far from secure. The advent of distributed payment systems, new investment opportunities and approaches such as blockchain-powered Bitcoin and Ethereum, along with the rise of chat bots and digitally enabled user-friendly advisory interfaces, threatened to upset the balance in this once staid industry. The case discusses attempts by Fidelity Investments to navigate the changing landscape through the establishment of Fidelity Labs, an in-house innovation engine that was chartered to experiment, validate, and develop new technological solutions that would allow Fidelity to retain its edge in the changing world of financial services.
This case study focuses on enterprise considerations when entering into new sales modalities. Retail shopping models had long been considered binary - either e-commerce or brick and mortar. In practice the retail industry involved a long spectrum with pure e-commerce on one end and pure brick and mortar on the other end. In between, many different models were emerging like ordering online and picking up in-store (Walmart's Grocery Pickup), shopping in-store and ordering online (Warby Parker and Bonobos made their name in this space - largely facilitating the showroom behavior of consumers), digitally-enhanced physical shopping (several companies hold patents in this space with virtual reality promising to push this model), and many others. By 2019 Amazon, was the world's most valuable online retailer at around $1 trillion (USD). So, when the company announced the purchase of Whole Foods and further committed to the expansion of Amazon Go store locations many questioned the strategic value. Why would a company so clearly successful in the digital realm seek to enter the more traditional brick and mortar space?
The case focuses on the efforts of Helena Borenius, an Executive Director of Scandinavian Building Group (SBG) Sweden who is in-charge of the company's civil engineering and construction work in Sweden. SBG is the disguised name of a major global construction and engineering company that was dealing with similar issues described in the case study. Borenius is under pressure to bid on work for a major expansion of the Arlanda Airport in Stockholm. However, she feels that the project is inconsistent with the company's as well as her own values.
This case examines General Motors' (GM) global strategy. From a manufacturing presence in 34 countries in 2007 to only eight countries in 2020, GM has dramatically changed its global strategy. GM has withdrawn from many regions and countries, including Europe, India, Australia, and Indonesia. Many assembly plants have been closed and sales are now heavily concentrated in the United States. Was GM retreating to its profit sanctuary in the United States and giving up on global business? How would GM's strategy fare against more global competitors such as Toyota, Volkswagen, and growing Chinese companies like Geely and Great Wall?
The case tells the story of Chris Freund, the co-founder of Mekong Capital, a Vietnam-based private equity firm established in 2001 when the country began its transition to a market-based economic model. Mekong initially focused its investment strategy on small and medium enterprises in the export manufacturing sector. However, over the first five years of the company's history, the investment strategy shifted to a greater focus on rapidly expanding consumer businesses to take advantage of the broad economic prosperity arising in the Vietnamese marketplace. Where most private capital firms added value through financial engineering or operational expertise, Mekong had taken a different tack, choosing to employ what it called Vision Driven Investing (VDI). At the core of the vision driven approach was what Mekong and its consulting partner, the Vanto Group, describe as "transformation." As Freund explained, "Where other PE firms choose to be really good at transactional stuff and deal making, that's not inspiring to us. It's fulfilling to add value to companies and see them empowered. It's adding value through transformation." Transformation describes a framework intended to foster high-performance leadership and organizational cultures in investee companies intended to produce breakthrough results. The case presents several examples of the transformational approach and opens opportunities to discuss its efficacy and broader applicability for organizational management and leadership.
The European Union rarely saw hostile corporate takeovers. The structure of corporate ownership and governance across most of Western Europe made gaining control - without the cooperation of the target firm - exceedingly difficult. Despite the challenge, Mittal Steel, the world's largest steel producer, was determined to acquire Arcelor, the world's second largest steel maker. The very public hostile acquisition of Arcelor by Mittal Steel in 2006 was a study in the complexity of crossborder acquisitions. The fight-and it may be best described as a fight-involved Arcelor, a Luxembourg-based multinational steel company, deploying nearly every known defense mechanism to stave off Mittal Steel's hostile acquisition. Legal, societal, political, strategic, national, and even possibly ethnic differences and issues were deployed. In the end, despite larger-than-life personalities and the differences in corporate takeover law across countries, the outcome was driven by shareholder rights and returns.
The case deals with the challenges faced by Anglo American mining corporation in managing local community relations where it has mining operations. The issues are complex and threaten the ability of the company to operate and even the viability of mining operations directly. The complexity is primarily due to the government policies that require mining companies to take on responsibilities for infrastructure and service delivery as a condition for obtaining a mining license. At the same time, the government does not actively support either local communities or the mines and is largely a passive observer. And, there are historical problems concerning land ownership (by individuals or by communities) as well as the challenge of resettling the people displaced by mining operations.
In 2020 TRX Industrial (TRX) was close to finalizing its acquisition of Wilson Technology Group (Wiltec). Brad Hunter, TRX Chief Operating Officer and head of the acquisition integration steering committee, was planning for a one-day team session to examine the post-merger structure for TRX and Wiltec. One of Hunter's objectives for the session was a decision about how much organizational autonomy, if any, would be retained by Wiltec. Hunter saw various options for Wiltec that ran along a spectrum. Wiltec could retain its independence and continue to operate much as it had before the acquisition. At the other end of the spectrum was absorption - Wiltec would be folded into TRX culture and operating processes and give up its autonomy. Wiltec and TRX could also seek to take the best of both firms in terms of culture, processes, and people and create something new.
The Desertec Foundation was established in 2009 to pursue a lofty vision: to power Europe by harnessing the renewable energy of the deserts of North Africa. The Foundation hoped to organize governments and organizations throughout Europe, the Middle East, and North Africa (EUMENA), to create a structure that would use both wind and solar power to generate electricity which would then be transmitted to Europe for distribution across multiple countries and markets. It was an extremely ambitious vision based on advances in technology in energy production and cooperation across many countries. It seemed a very good idea.
The case presents the history of a socially innovative start-up restaurant business, Pixza, that was created as a mixed-motive firm with both internal business objectives and external economic, social and environmental objectives. Founded by the entrepreneur and case protagonist Alejandro Souza, Pixza planned to sell an original style of pizzas produced with locally grown, organic, and traditionally Mexican ingredients and flavors. At the same time, Pixza had a social purpose and was designed as a social reinsertion vehicle for the economically disadvantaged, providing psychological support and job training that permitted formerly homeless men to obtain an income, a residence and an opportunity to achieve personal independence. Alejandro Souza is one of the outstanding examples of social entrepreneurship in Mexico, with experience in designing and implementing projects around the world on issues of impact evaluation, international development and social innovation. The case catches up with Souza in 2017, when Pixza is running two locations in Mexico City and is putting in place a new iteration of its social empowerment program. The restaurants are a hit with locals and are seeing a huge demand and acceptance of the new pizza recipes like blue corn, huitlacoche and epazote. However, running the pizza business and managing the social reinsertion programs is taking a toll on the physical and emotional well-being of Alejandro. Despite the obvious success of the enterprise, the case begins with Alejandro confessing to a close friend that he intends to close the business.
In January 2020 South Africa was once again suffering an electrical power crisis as a series of rolling blackouts, load-shedding, crippled the people and the economy. This was the latest in a series of power crises dating back to 2007. These chronic shortages were the result of failures on the part of the national electrical power producer, Eskom, and its owner, the South African government. The costs to the people of South Africa and the South African economy were enormous. Eskom was now suffering what many termed a death spiral. Its failure to produce sufficient and reliable electricity was causing its financial performance to deteriorate, calling for higher and higher electrical power rates, leading to more and more customers reducing demand and even leaving the grid. Now in the throes of leadership change, corruption investigations, and potential insolvency, it and the country was in trouble. The people of South Africa wondered when their never-ending power crisis - now in its thirteenth year - would end.
This case provides insights into the job of a manager of a large retail store. John Hernandez is the store manager of a 200,000 square foot Walmart store with 300 associates. As the day progresses John must deal with various issues, including an open door meeting with an employee, shrink and theft protection, change management, and the store's financial performance.
This case regards the perils of ineffective management and design that led to an organizational crisis. The setting is an amusement park where a water slide thrill ride was created in pursuit of a world record. Signals and warnings that should have been recognized, assessed and fixed to operate successfully and prevent a crisis were ignored. The park and stakeholders paid ultimate costs for their oversights.
In 2019, members of the U.S. Women's National Soccer Team (WNT) filed a gender discrimination lawsuit against the U.S. Soccer Federation. The case describes the history of the WNT's quest for equal pay leading up to this event.
The case describes how the design thinking mentality and management process drives Asia Miles' leadership, innovation, organization structure and behaviour, and the enterprise planning process to enhance customer experience (members of the rewards programme) and new product & service development, as well as to improve value delivered to all other stakeholders and the branding of the company. The transformation of Asia Miles via a change management process aims to inculcate design thinking into their culture, systems and employees -becoming an insights-driven organization via a quantitative-qualitative continuum.