On January 20, 2017, Moody’s Investors Service, an American credit rating agency, downgraded the Corporate Family Rating for Sears Holdings Corporation from Caa1 to Caa2, stating that the company did not have enough money to stay in business and was relying on outside funding or sale of assets to sustain operations. The leading US retail chain had a revenue turnover of US$22.14 billion in Fiscal Year (FY) 2016–17. However, beginning in FY 2011–12, it had suffered losses year after year. Its stock had fallen 38 per cent between April 2016 and April 2017. The retail chain’s majority shareholder, chair, and chief executive officer was making some changes, but critics questioned his motives and retail acumen. With falling share prices, continuous losses, decreasing assets, and a decided shift in the industry away from traditional retail, it seemed that it would be only a matter of time before Sears Holdings Corporation reached its end. In light of its poor financial performance and consecutive losses on a yearly basis, a new Master of Business Administration graduate and junior analyst was assigned the task of analyzing the retail chain’s financial status and assessing the possibility of its bankruptcy.
Quess Corp Limited acquired Magna Infotech, an IT contract staffing company in 2009 to go beyond general staffing and get into professional staffing. Magna, founded in 1997 by Pradeep Mittal had achieved the status of being the market leader in IT staffing in India by being highly entrepreneurial, consistently focused on business development, delivery and automation of core staffing processes. Quess carried out a thorough diagnosis of Magna after acquisition. The diagnosis helped identify specific areas where potential for performance improvement existed. Priorities were worked out and systematic efforts were taken up to focus on those areas. Planning and execution of action steps created effective alignment of thought processes among key stakeholders and high levels of engagement and employee motivation. The various interventions resulted in Magna tripling its revenues; the operating profits grew six-fold. But by 2017, the business context had changed for Magna and there were totally new set of challenges that confronted the organization. The case presents a story of an acquisition where despite taking over a successful high-performing company with high levels of motivation, the new leadership team still managed to substantially improve both the topline and bottom line performance through effective execution of a carefully planned change agenda. In the following 8 years, the company retained its market leadership and become much larger. But it now confronted far-reaching changes in business context. How should the leaders reignite the entrepreneurial zeal in a much bigger, more stable and more successful organization?
While financial reporting standards under U.S. GAAP and IFRS are fundamentally similar, differences do exist that may affect our analysis of company financial statements. This is particularly true when comparing a U.S. company following U.S. GAAP to a firm that uses IFRS. To illustrate, we compare research and development (R&D) accounting methods under both sets of standards and illustrate how they affect the analysis of financial results of firms in a specific industry-automotive manufacturers. Our results provide insight into settings in which differences in R&D accounting may have the greatest impact on financial analysis.
Public entrepreneurship is much like its private sector counterpart; however, public entrepreneurs face additional challenges due to weaker competitive forces in the public as compared to private sector, with objectives that often are poorly defined and performance that is difficult to measure. Despite the impact on public good, how to enact changes successfully in public sector organizations to be more entrepreneurial is poorly understood. This article summarizes current research on public entrepreneurship and presents a detailed case study of a successful entrepreneurial change in a public sector organization. A five-step change process used to enhance entrepreneurial behaviors was implemented in a public sector organization and the qualitative and quantitative results demonstrated substantial performance improvements over 4 years (i.e., quantitative performance in some areas was more than 10 times greater). We explain key steps that produced successful outcomes and how to avoid common challenges in the implementation of ongoing entrepreneurial behaviors in public sector contexts.
Individuals and organizations cannot learn perpetually. Managers should be aware that unlearning becomes necessary to discard obsolete and outdated mental models, assumptions, behaviors, or routines. We investigated new product development teams and interviewed change consultants to explore the phenomenon of unlearning in real-life contexts. We particularly focus on examples of cases in which these steps have been used and implemented successfully. In order to make room for new knowledge and foster innovations more efficiently, we identify and suggest four critical steps managers can introduce to help their employees unlearn: creating situational awareness, providing islands of temporal and spatial freedom, encouraging an error-forgiving and stop-doing culture, and reducing the influence of old knowledge over time. Fostering unlearning can prevent rigidity and stagnation while opening up room for innovation. This article adds an important practical dimension to the mainly theoretical ideas in the field of unlearning and provides strong implications for managers and other practitioners.
Managing meetings effectively is vital in the fast-paced, complex environment of the modern workplace. However, direct scholarly attention to work meetings is still limited, making an understanding of what makes meetings successful elusive. In this article, we examine the particulars of successful and unsuccessful meetings from a participant's perspective. Employing a conceptual mapping approach, we analyze open-ended statements collected from meeting participants to identify three broad themes associated with meeting success: (1) participant learning and development; (2) the coordination of performance, including the creation of links between meeting episodes; (3) and the development of common understanding and alignment among attendees. By more fully taking these themes into account, managers can be better equipped to design, organize, and manage their work meetings successfully.
It is not unusual for companies to generate substantial revenue through alliances. However, alliance failure rates are high, leaving much revenue at risk and value unrealized. The big challenge facing managers is to align company interests with alliance interests. Such alignment can only be achieved when executives pay considerable attention to building the right collaborative business model. In this article, we synthesize the insights of the existing literature to arrive at three collaborative business models-sharing, specialization, and allocation-that managers can use to address the specific requirements of their alliances. Because the literature provides limited insight into how to operationalize these models, we highlight what managers need to focus on when operationalizing each of these models. We find that the choice for an overall business model is relatively straightforward in most cases but that operationalization of business models requires more complex combinations of management techniques. Finally, we show how the three collaborative business models can be combined to build hybrid models
The video game industry has ignited a global controversy surrounding microtransactions in gaming, especially the use of loot boxes: randomized rewards with potential real-world value. Consumers and legislators are calling for the regulation of these revenue models on the grounds that they are unfair, predatory, or could be considered gambling. This article examines the controversy from a management perspective. First, I introduce current regulatory responses to the controversy and what they mean for business practices. Then, I explain ongoing industry-level and firm-level attempts to self-regulate as a way to placate consumers and governments. These tactics highlight a wide range of broader strategies that game developers and other stakeholders can pursue in order to improve customer relations and, more publicly, signal their commitment to self-regulation and avoiding consumer harm. These practices can be applied more broadly to firms that offer controversial products or services that do not yet fit within current regulatory frameworks.
New ventures are increasingly internationalizing from emerging economies, but the role of their home country and any associated within-country regional differences are not well understood. In this article, we look at a new venture in China and how its headquartered region promotes its internationalization. We present empirical evidence that shows the interrelatedness between a venture's region and internationalization: When institutional development in a region is strong, the impact of foreign firm presence on venture internationalization becomes even stronger. We discuss implications for managers of multinational enterprises and new ventures operating in emerging economies as well as policymakers in these economies.
While we understand well how social media channels sway consumers, there is little understanding of their influence on online trading behavior. We argue that social media are creating a new class of self-directed online traders by simultaneously encouraging and biasing trading decisions. Through an empirical study, we show that heavy social media users are more likely to engage in online trading but are largely affected by online herding behavior, and are four times more likely to blindly follow other traders. Bloggers, influencers, social network contacts, and social media news shape these users' online trading behaviors. As online traders influenced by social media are unlikely to receive adequate returns, companies face an ethical dilemma: They could leverage social media to efficiently access funds but they risk inappropriately exploiting the inexperience of online traders biased by social media. We offer a set of nine practical recommendations for organizations to respond to these new challenges.
Service systems are inherently subject to variability, whether through customers, service providers, suppliers, or unexpected events. Yet, customers demand excellence and consistency regardless of this variability. In general, there are two ways to handle this variability: with people or with processes. We use the concept of robustness to describe these two approaches and address when one or the other might be appropriate and discuss how and why one might transition from one approach to the other. The relationship between robust people and robust processes within a system can inform and build upon one another in a cycle that mirrors that of continuous improvement. Investing in this cycle can help an organization move toward a system that relies more on robust processes and less on hiring and training robust people, allowing the organization to be scalable while simultaneously creating new opportunities for incumbent robust people.
In many firms, strategic initiatives lead to frustration rather than performance improvements and strategic renewal. One frequently overlooked key to driving value through strategic initiatives lies in shifting the focus from launching disconnected individual strategic initiatives to managing an integrated portfolio of initiatives. This article identifies five key management practices that allow firms to address obstacles to effective initiative management and to enhance value creation through the deliberate management of initiative portfolios.
The U.S. healthcare sector is inadequately prepared to deal with the reality of cyber threats. The increasing use of smart medical equipment and mobile devices is making healthcare organizations more susceptible to ransomware and other types of malware. The size and complexity of operations, coupled with the presence of numerous legacy and incompatible systems, make it difficult to implement effective cybersecurity measures. The daunting nature of the problem often results in an if-it-ain't-broke-don't-fix-it stance among senior healthcare leaders. The preponderance of healthcare related laws, compliance regulations, and security guidance frameworks serve to complicate the cybersecurity challenge further and too often results in senior leadership assuming a state of blissful ignorance. This study sheds light on the key factors contributing to the chaotic state of affairs and presents a roadmap to a more deliberate and proactive approach to cybersecurity risk management.
On January 20, 2017, Moody's Investors Service, an American credit rating agency, downgraded the Corporate Family Rating for Sears Holdings Corporation from Caa1 to Caa2, stating that the company did not have enough money to stay in business and was relying on outside funding or sale of assets to sustain operations. The leading US retail chain had a revenue turnover of US$22.14 billion in Fiscal Year (FY) 2016-17. However, beginning in FY 2011-12, it had suffered losses year after year. Its stock had fallen 38 per cent between April 2016 and April 2017. The retail chain's majority shareholder, chair, and chief executive officer was making some changes, but critics questioned his motives and retail acumen. With falling share prices, continuous losses, decreasing assets, and a decided shift in the industry away from traditional retail, it seemed that it would be only a matter of time before Sears Holdings Corporation reached its end. In light of its poor financial performance and consecutive losses on a yearly basis, a new Master of Business Administration graduate and junior analyst was assigned the task of analyzing the retail chain's financial status and assessing the possibility of its bankruptcy.
In July 2017, the government of India implemented goods and services tax (GST), which brought uniformity in the tax rates on all types of biscuits. Compared to the pre-GST regime, the uniform tax rate resulted in a higher tax rate on mass-market biscuits and a lower tax rate on premium biscuits. Parle-G, the most popular brand of Parle Products Private Limited (Parle), fell into the mass-market biscuit category. The Parle-G brand had 75 to 80 per cent market share in the mass-market biscuit category, and it contributed nearly 33 per cent of Parle's total revenue. The brand was sold at a very low price point and was highly price sensitive. To mitigate the tax rate increase, one option was to raise Parle-G prices; however, any price increase or change in package size for a product in the highly price-sensitive category could reduce company revenue. Therefore, new business strategies were needed under the new tax regime and amid the country's overall changing business and economic scenario so that Parle's margins and leading position were retained.
This case uses the context of a recently acquired computer animation start-up, Drawn, Inc., to surface the tension around the differences between team members' backgrounds and their experiences within an organization. When the raw data from a weekly internal pulse survey reveals a response accusing an unnamed colleague of being a gossip, sharing negative feedback, and embellishing details to make for more riveting stories, a group of employees took to Slack to discuss the response and whether to share raw survey data in the future. Some argued that transparency was the most important thing and that anything less would be censorship, and others considered the raw survey data an unchecked potential avenue for public shaming, hate speech, and general potential to do harm to or exclude others. The employees' debate offers an opportunity for students to discuss team performance, diversity, transparency, and ways to cultivate a psychologically safe environment. It allows for unfolding a framework such as Henrik Bresman and Amy C. Edmondson's work on psychological safety so students can unpack the issues and discuss difference. It works well in a module on teams and organizations.
This is a two-part case series. Case A begins in October 2012, when Encompass Singapore has introduced innovative ways to increase the capacity of its facility to cope with its fierce growth over the past few years in the Pay-tv industry. The company has captured over 50% of the market for outsourced digital playout services in Asia. The sheer speed of growth that Encompass Singapore is experiencing calls for an innovative, solutions-driven approach to almost all aspects of the business. Growth in the media industry is costly and capital intensive. At the same time, the group is facing increased competition. Process innovation has been critical in supporting the growth of the company since 2009, but can that alone continue to fuel double-digit growth? Case B is set in April 2019, when the media industry has shifted gear, and Pay-tv demand is declining. Online television content and Video on Demand services have instead started to see a growing demand in the market and Encompass is forced to adjust its strategy to cope with changing industry and market. Can process innovation continue to support the growth of the company amidst technology disruption and changing trends? What can be Encompass's growth strategy moving forward?