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Fournier rejected Carlos' request to re-implement Wave II. Carlos visited Colombia and Dubai to determine whether to apply their telephone selling approach ("Telemarketing") elsewhere. Carlos had to decide whether to tell Fournier of Dubai's revolutionary tool that could transform Rank Xerox's sales operations or put the idea aside.

Carlos obtained Fournier's approval to implement "Telesales" (i.e., Carlos's renamed version of Dubai's Telemarketing). Telesales was successful within a year of launch. Success factors were: project's IT aspect; salespeople's acceptance of using computers; salespeople not resisting potential added control of Telesales; and offering of a complete package.

Set during the 2002 Southern Africa food crisis the case describes the design and implementation of a humanitarian logistics operation for the distribution of food donations in the Southern Africa Development Community (SADC). This complex operation affected by severe droughts, economic downturn, poor access to recipients and the HIV pandemic, takes an unexpected turn when Zambia rejects the donations upon finding traces of genetically modified organisms (GMO). This forces agencies to redesign their assistance strategy and challenges the ongoing plans with new bottlenecks, costs, and delays. In the end the operations succeeds in light of the coordination support provided by the implementing agency, World Food Program (WFP).

The sequel (1740.1) describes the emergence of a high-profile public lobbying effort called Save AmeriCorps. It details the full-court press effort-including the use of national and local media, political contacts of board members, and a range of public events-meant to convince Congressional appropriators to approve an emergency supplemental budget which would include additional funds for Americorps grants. Finally, the fact that the Coalition's effort falls short, at least in the near-term, raises questions about the long-term impact of such lobbying-as well as the more fundamental question about whether it makes sense for volunteers and nonprofit organizations to look to government for salaries and operating funds. HKS Case Number 1740.1

The (B) case, details the decisions which the Corporation for National and Community Service made as to how best to estimate the funding needs for the Trust. The (B) case (1740.0), however, goes on to frame political questions which develop when the National Service Trust is judged to be "under-funded". Specifically, it frames the question of whether and how organizations which receive federal grants to hire AmeriCorps "volunteers" should organize to resist budget reductions which appear to be in the offing as a result of the financial problems of the Trust. A field which had been relatively unorganized and, indeed, was notable for factions (eg. national versus local) and competing interests, must decide whether to seek to create a united front to lobby for higher funding. The case describes the range of obstacles to the construction of such a political coalition and raises questions both about the logistics and the wisdom of doing so. HKS Case Number 1740.0

The (A) case (1739.0) focuses on the early years of the program in the 1990s, providing a definitive account--based on interviews with those who drafted the authorizing legislation--on how the program was conceived and structured and how it gained Congressional approval, including the political reasons for directing some AmeriCorps grants to large, multi-state "national direct" organizations such as Teach for America, and others to small, local organizations funded through state "service commissions". Ultimately, the case narrows its focus to the public financial management question about how to fund a special trust fund from which education awards for AmeriCorps members are paid. The case raises the question of how to fund the National Service Education Trustthe mismanagement of which comes to spark the 2002-2003 budget crisis affecting the entire programin a way that is both prudential but not overly expensive. In combination with the beginning the of the (B) case, this case can be used to discuss estimation models for funding a wide variety of public benefits, including such analogues as public pension systems such as the US social security system. HKS Case Number 1739.0

The land of fried chicken and hush puppies likes its snacks steeped in fat, and Southland Baking Co. has always been happy to oblige. Its Chizzlewits are crumbly, full of saturated fat, and delicious. As a result, Southland has a solid foothold in its market. But to Peter Schmidt, Southland's vice-president and general counsel, every day seems to bring more evidence that products like Chizzlewits are becoming the new tobacco. A New York lawyer has just sued a company like Southland for supposedly making his client fat. A House subcommittee is holding hearings on the fat content of baked goods. And Mothers Opposed to Obesity in Kids is lobbying for warning labels on all foods containing sugars and saturated fats. Southland is trying to come up with a leaner version of Chizzlewits, but the results haven't been encouraging. As Arthur, a little boy in a test group, says with a scowl after taking a bite and spitting it out: "It looks like a Chizzlewit, but it doesn't taste like one!" Should Schmidt tell his CEO that Southland needs to recast its product lines? Commenting on this fictional case study in R0403A and R0403Z, are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C.

Ask most managers what gets in the way of their success, and you'll hear the familiar litany of complaints: Not enough time. Limited resources. No clear sense of how their work fits into the grand corporate scheme. These are, for the most part, excuses. What really gets in the way of managers' success is fear of making their own decisions and acting accordingly. Managers must overcome the psychological desire to be indispensable. In this article, the authors demonstrate how managers can become more productive by learning to manage demands, generate resources, and recognize and exploit alternatives. To win the support they want, managers must develop a long-term strategy and pursue their goals slowly, steadily, and strategically. To expand the range of opportunities, for their companies and themselves, managers must scan the environment for possible obstacles and search for ways around them. Fully 90% of the executives the authors have studied over the past few years wasted their time and frittered away their productivity, despite having well-defined projects, goals, and the necessary knowledge to get their jobs done. Such managers remain trapped in inefficiency because they assume they do not have enough personal discretion or control. They forget how to take initiative-the most essential quality of any truly successful manager. Effective managers, by contrast, are purposeful corporate entrepreneurs who take charge of their jobs by developing trust in their own judgment and adopting long-term, big-picture views to fulfill personal goals that match those of the organization.

Companies have focused so much on downsizing to contain costs that they've largely neglected a looming threat to their competitiveness: a severe shortage of talented workers. The general population is aging and with it, the labor pool. People are living longer, healthier lives, and the birthrate is at a historical low. During the next 15 years, 80% of the native-born workforce growth in North America--and even more in much of western Europe--is going to be in the over-50 age cohort. When these mature workers begin to retire, there won't be nearly enough young people entering the workforce to compensate. The Bureau of Labor Statistics projects a shortfall of 10 million workers in the United States in 2010, and in countries where the birthrate is well below the population replacement level (particularly in western Europe), the shortage will hit sooner, be more severe, and remain chronic. The problem won't just be a lack of bodies. Skills, knowledge, experience, and relationships walk out the door every time somebody retires. This problem is going to become much more acute in the next decade or so, when baby boomers--more than one-quarter of all Americans, amounting to 76 million people--start hitting their mid-60s. Based on the results of their year-long research project, the authors of this article offer recommendations for gaining the loyalty of older workers and creating a more flexible approach to retirement that allows people to continue contributing well into their 60s and 70s.

It's tough to get consumers to adopt innovations--and it's getting tougher all the time. That's because more and more markets are taking on the characteristics of networks. The interconnections among today's companies are so plentiful that often a new product's adoption by one player depends on its systematic adoption by other players. The traditional levers executives use to launch products--such as targeting unique customer segments or developing compelling value propositions--don't work as well in this new environment. Instead, innovators must orchestrate a change of behaviors across the market so that a large number of players adopts their offerings and believes they are better off for having done so. In this article, Monitor Group's Bhaskar Chakravorti outlines a four-part framework for doing just that: Reason back from a target endgame, implementing only those strategies that maximize the chances of getting to goal; complement power players, positioning the innovation as an enhancement to products or services; offer coordinated switching incentives to three core groups: the players that add to the innovation's benefits, the players that act as channels to adopters, and the adopters themselves; and preserve flexibility in case the initial strategy fails.

Microsoft's and Wal-Mart's preeminence in modern business has been attributed to any number of factors--from the vision and drive of their founders to the companies' aggressive competitive practices. But the authors maintain that a bigger factor of their success is the success of the networks of companies with which Microsoft and Wal-Mart do business. Most companies today inhabit ecosystems--loose networks of suppliers, distributors, and outsourcers; makers of related products or services; providers of relevant technology; and other organizations. The analogy between business networks and biological ecosystems vividly highlights certain pivotal concepts. The moves that a company makes will, to varying degrees, affect the health of its business network, which in turn will ultimately affect the organization's performance. Because a company, like an individual species in a biological ecosystem, ultimately shares its fate with the network as a whole, smart firms pursue strategies that will benefit everyone. So how can you promote the health and stability of your own ecosystem, determine your place in it, and develop a strategy to match your role? Knowing what to do requires understanding the ecosystem and your organization's role in it. Is your company a niche player, a keystone, or a dominator?

Leaders who rely forever on the same internal advisers run the risk of being sold short and possibly betrayed. Alternatively, lone-wolf leaders may make enormous, yet preventable, mistakes when trying to sort through difficult decisions. A sophisticated understanding of trust can protect leaders from both fates. During the past decade, author and consultant Saj-nicole Joni studied leadership in more than 150 European and North American companies. Her research reveals three fundamental types of trust: personal trust, expertise trust, and structural trust. Executives may persevere in relationships that are based on personal trust, but such relationships are unlikely to remain static--and probably won't provide the kinds of deep, often specialized knowledge leaders need. In organizations, leaders develop expertise trust by working closely with people who consistently demonstrate their mastery of particular subjects or processes. Structural trust refers to how roles and ambitions influence advisers' perspectives and candor. Advisers in positions of the highest structural trust generally reside outside organizations, providing leaders with insights that their organizations cannot. High-performing leaders' most enduring valuable relationships are characterized by enormous levels of all three kinds of trust.

Each corporate growth project is an option in the sense that managers face choices--push ahead or pull back--along the way. Yet, many companies hesitate to apply options theory to initiatives such as R&D and geographic expansion, partly because these "real" options are highly complex. In this article, the authors make the case that the complexity of real options can be eased through the use of a binomial valuation model. Many of the problems with real-options analysis stem from the use of the Black-Scholes-Merton model, which isn't suited to real options. Binomial models, by contrast, are simpler mathematically, and you can tinker with a binomial model until it closely reflects the project you wish to value. Suppose your company is considering investing in a new plant. To use the binomial model, you must create an "event tree" to figure out the full range of possible values for the plant during the project's lifetime. Then you work backward from the value at completion, factoring in the various investments, to determine the value of the project today. These calculations provide you with numbers for all possible future values of the option at the various points where a decision needs to be made on whether to continue with the project. The authors also address another criticism of real options: that gaps often arise between theoretical and realized values of options of all types. Such gaps may be largely the result of managers exercising options at the wrong time. Looking for trigger points that correspond to the nodes on a binomial decision tree should not only tell managers when they need to decide on exercise, but also specify rules governing the exercise decisions.

Three years ago, 70-year-old Hill-Rom Inc. was in a position familiar to many mature businesses: The company was strong but needed to be stronger. It was a top producer of hospital beds and specialty mattresses--its core product lines. It also had competitive, complementary lines of stretchers, furniture, and architectural equipment. Its customer base was extensive and had a respected sales force and solid profit margins. But by the time Ernest Waaser took over as chief executive in early 2001, revenue growth had been slowing, and competition was on the rise. To secure Hill-Rom's place in the market, Waaser focused first on the sales organization. The CEO took several steps to restructure the sales force. The company changed its customer segments to reflect customers' demands and financial status better, ultimately targeting two main groups: key and prime customers. It then changed the overall structure of the sales organization so it could tailor its approach to these two segments; key customers received more specialized service than prime customers. Finally, Hill-Rom adjusted the sales force after the company took an in-depth look at historical data on products and services and sales completed. Reasons for staffing changes were carefully communicated to the sales force. Because of Hill-Rom's initiatives, the cost of sales is down, short-term revenue growth is up, the outlook for long-term revenue growth looks bright, sales and profit margins are up, and customer satisfaction has increased.

Most nonprofits make program decisions based on a mission rather than a strategy. They rally under the banner of a particular cause. And because their causes are so worthwhile, they support any programs that are related to their core missions. It's hard to fault people for trying to improve the state of the world, but that approach to making decisions is misguided. Acting without a clear, long-term strategy can stretch an agency's core capabilities and push it in unintended directions. The fundamental problem is that many nonprofits don't have a strategy; instead, they have a mission and a portfolio of programs. But they hardly make deliberate decisions about which programs to run, which to drop, and which to turn down for funding. What most nonprofits call "strategy" is really just an intensive exercise in resource allocation and program management. This article outlines for nonprofits a four-step process for developing strategy. The first step is to create a broad, inspiring mission statement. The second step is to translate that core mission into a smaller, quantifiable operational mission. The third step is to create a strategy platform; that is, the nonprofit decides how it will achieve its operational mission. Decisions about funding and client, program, and organizational development are all made here. And step four is making reasoned, strategic decisions about which programs to run and how to run them.

The land of fried chicken and hush puppies likes its snacks steeped in fat, and Southland Baking Co. has always been happy to oblige. Its Chizzlewits are crumbly, full of saturated fat, and delicious. As a result, Southland has a solid foothold in its market. But to Peter Schmidt, Southland's vice-president and general counsel, every day seems to bring more evidence that products like Chizzlewits are becoming the new tobacco. A New York lawyer has just sued a company like Southland for supposedly making his client fat. A House subcommittee is holding hearings on the fat content of baked goods. And Mothers Opposed to Obesity in Kids is lobbying for warning labels on all foods containing sugars and saturated fats. Southland is trying to come up with a leaner version of Chizzlewits, but the results haven't been encouraging. As Arthur, a little boy in a test group, says with a scowl after taking a bite and spitting it out: "It looks like a Chizzlewit, but it doesn't taste like one!" Should Schmidt tell his CEO that Southland needs to recast its product lines? In R0403Z, commenting on this fictional case study are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C. Commenting on this fictional case study in R0403A and R0403Z, are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C.

The land of fried chicken and hush puppies likes its snacks steeped in fat, and Southland Baking Co. has always been happy to oblige. Its Chizzlewits are crumbly, full of saturated fat, and delicious. As a result, Southland has a solid foothold in its market. But to Peter Schmidt, Southland's vice-president and general counsel, every day seems to bring more evidence that products like Chizzlewits are becoming the new tobacco. A New York lawyer has just sued a company like Southland for supposedly making his client fat. A House subcommittee is holding hearings on the fat content of baked goods. And Mothers Opposed to Obesity in Kids is lobbying for warning labels on all foods containing sugars and saturated fats. Southland is trying to come up with a leaner version of Chizzlewits, but the results haven't been encouraging. As Arthur, a little boy in a test group, says with a scowl after taking a bite and spitting it out: "It looks like a Chizzlewit, but it doesn't taste like one!" Should Schmidt tell his CEO that Southland needs to recast its product lines? Commenting on this fictional case study in R0403A and R0403Z, are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C.

In mid-2003, Morgan Stanley and JPMorgan launched a number of structured credit products that had exposure to correlations in the credit risks of the firms underlying the TRAC-X index: tranched TRAC-X NA, tranched TRAC-X Europe, and options on both TRAC-X NA and TRAC-X Europe. The values of these TRAC-X derivatives were determined by some key parameters: the probabilities of default of each of the firms covered in the index, the recovery rates of the underlying corporate debt instruments in the event of default, and credit risk correlations among the underlying firms (plus, the value of TRAC-X options was also influenced by the volatility of CDS premiums). Tranched TRAC-X and other tranched products were often quoted in the market at prices that were expressed through an implied correlation parameter. Among the issues facing Morgan Stanley's Lewis O'Donald was the implication of the "implied correlation" quotations on the tranched products. Taken at face value, the quotations available in the market seemed to indicate that different tranches on the same underlying index of firms were trading at different implied default correlations. The market prices of the different tranches implied different default correlations for the same set of underlying firms--meaning that credit protection for the same set of underlying firms could be bought or sold at prices that assumed that the defaults of the underlying firms were correlated differently from the viewpoint of different tranches. This correlation skew across the different TRAC-X tranches represented a form of pricing discrepancy.

Supplements the (A) case.

A manager recounts his experience firing the person he was asked to replace and reflects on the challenges of the experience. Teaching Purpose: To role-play and reflect on tasks that entail harming other people to fulfill one's responsibility.