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Product recalls can destroy brands and even companies. But according to the authors, if a company handles recalls strategically, it can decrease the negative impact and maybe even reap some benefits. The authors maintain that a strategic approach to recalls should address the implications of a recall for all relevant business functions and should deal with all stages of a recall, from readiness before the fact to product reintroduction after a recall has ended. The authors offer step-by-step guidelines on handling recalls effectively. With forethought and planning, the authors assert, unavoidable recalls can have long-term favorable outcomes.

Many companies today are searching for growth. But how and where should they look? Breaking compromises can be a powerful organizing principle. Even in the most mature businesses, compromise breakers have emerged from the pack to achieve breakaway growth--far outpacing the rest of their industry. Examples include Chrysler Corp., Contadina, CarMax, and the Charles Schwab Corp. Compromises are concessions customers are forced to make. Unlike trade-offs, which are the legitimate choices customers make between different product or service offerings, compromises are imposed. The authors propose a number of alternative approaches to finding the compromises hidden in any business.

Too often, the board of a nonprofit organization is little more than a collection of high-powered people engaged in low-level activities. But that can change, the authors say, if trustees are willing to discover and take on the new work of the board. When they perform the new work, a board's members can significantly advance the institution's mission and long-term welfare. The authors give many examples of boards that have successfully embraced the new work. The stakes are high: if boards demonstrate that they can change effectively, the professional staff at the institutions they serve just may follow suit.

Diversity efforts in the workplace have been undertaken with great goodwill, but, ironically, they often end up fueling tensions. They rarely spur the leaps in organizational effectiveness that are possible. Two paradigms for diversity are responsible, but a new third paradigm is showing it can address the problem. Leaders in third-paradigm companies are proactive about learning from diversity; they encourage people to make explicit use of cultural experience at work; they fight all forms of dominance and subordination, including those generated by one functional group acting superior to another; and they ensure that the inevitable tensions that come from a genuine effort to make way for diversity are acknowledged and resolved with sensitivity.

Many managers have grasped the power of individual lean techniques--such as just-in-time deliveries and kaizen, or continuous improvement--pioneered by Toyota and other Japanese companies. However, they have stumbled in trying to put them all together into a coherent business system. In an effort to show managers how they can create a powerful whole, the authors studied 50 lean companies in a variety of industries around the world. The companies included Toyota, Porsche, and Pratt & Whitney. On the basis of their study, the authors identified five critical steps that they believe will be useful to all managers interested in applying lean thinking. Lantech, a small manufacturer of stretch-wrapping machines in Louisville, Kentucky, provides an example of how a company can make the leap.

The Royal Dutch/Shell Group of companies owns a petroleum platform, the Brent Spar, in the North Sea. The Brent Spar is an oil storage facility and tanker loading buoy. It came to the end of its useful life and was taken out of commission in September 1991. After a thorough study of the environmental impact of various disposal options, Shell concluded that deep water disposal was the safest strategy. The German arm of Greenpeace mounted an aggressive public campaign against this action, affecting public opinion to the point where Shell changed its disposal plans and opted for on-land dismantling.

Supplement for case UV6481

The purpose of the case is to help students understand the complex nature of a visible and expensive organizational buying process. The goal is to help students appreciate the nature of the selling task, the complex interplay of different decision-making-unit members, and both the political and economic factors that often permeate such purchasing decisions. The A case (see also the B case, UVA-M-0471) documents the procurement-decision process used by Los Angeles to purchase light-rail cars for its subway system. The A case traces the bidding process and ends with the final award.

Set in 1994, this case concerns a subsidiary of Westmoreland Coal that is considering whether to proceed alone as the international partner and developer of a coal-fired electric power plant in Zhangze, China. The domestic partner, the government's electric power agency, has proposed a build-operate-transfer (BOT) project financing in which Westmoreland Energy (WEI) would receive returns over 20 years and then exit. The internal rate of return on the project appears to exceed the CEO's target rate, though the project developer, Dorothy Hampton, is concerned about a variety of risks and the appropriateness of the target hurdle rate. The tasks for the student are to evaluate the risks, estimate a target rate of return, exercise the valuation model (which is given in the case), and recommend any changes in the deal structure that can help WEI achieve its goals. The objectives of the case are to (1) exercise students' capabilities in analyzing a complex investment-financing transaction from the standpoints of various project participants (the key tasks are risk analysis and valuation), (2) illustrate the financial effects of debt leverage and equity leverage (the focus of attention is on the creation of value and its sources, risk shifting, and wealth transfers), and (3) assess the characteristics and challenges of project financings and development projects in emerging economies.

A basic premise of strategy is that superior profits occur when a corporation secures favorable positions in attractive industries, and pursues economies of scope across business units. This note draws on research that documents the importance of industry, positioning, and corporate-parent effects on profitability. The research shows differences in the influence of the effects for high and low performers, and differences for firms that are in the process of achieving and sustaining performance.

A summer intern is asked to perform a financial value analysis of a company's financial report for the period 1987-1994.

In 1995, Hewlett-Packard Home Products Division (HPD) has the assignment to make Hewlett-Packard the third major home PC player worldwide. With the U.S. launch imminent, the HPD team has to decide how to enter the European market.

Spreadsheet Supplement for case 197010

Illustrates: 1) the impact of a manager's leadership style on corporate culture, direction, and performance; 2) the concept of fit between leadership style and the requirements of situations in which managers find themselves; and 3) the need for managers to adapt their styles as situational requirements change. More specifically, it provides an opportunity to look at some of the special issues of: 1) being a black woman manager; 2) the advantages and disadvantages associated with a "family corporate culture"; and 3) managing in a creative business. Does not substantially differ from the (A) case, but it does emphasize more strongly Suzanne de Passe's success. Students have misunderstood the standards of the entertainment industry, and this case makes Motown's accomplishments clearer.

This note, the first in a series on regression analysis, introduces the simple linear model (one X-variable), together with least squares, as a procedure for estimating the coefficients in the model. The standard error of estimate, adjusted R-square, and standard error of the coefficients are all introduced and explained. The presentation of formulas is kept to a minimum, and an illustrative example is used throughout the note. . This note, the first in a series on regression analysis, introduces the simple linear model (one X-variable), together with least squares, as a procedure for estimating the coefficients in the model. The standard error of estimate, adjusted R-square, and standard error of the coefficients are all introduced and explained. The presentation of formulas is kept to a minimum, and an illustrative example is used throughout the note.

Watermill Ventures acquires and turns around an underperforming business. The case describes the criteria the company uses to identify acquisition candidates, its screening and selection process, and the way it introduces strategic thinking at the business it acquires. Steve Karol, Watermill's founder, is concerned because the company has only acquired two companies in its three years of operation. He is considering a number of actions, including establishing a Web site to broaden the base of contact.

Provides questionnaires so students can compare their experiences with different decison-making processes. Students read "Growing Pains," a Harvard Business Review (HBR) case study, and then work in teams to come up with recommendations using a consensus approach to decison making. The next day using Decision-Making Exercise (B) and (C) and "Case of the Unhealthy Hospital," another HBR case study, and working in the same teams, use either a dialectical inquiry or devil's advocacy approach to decision making.

Provides questionnaires so students can compare their experiences with different decison-making processes. Students read "Growing Pains," a Harvard Business Review (HBR) case study, and then work in teams to come up with recommendations using a consensus approach to decison making. The next day they use Decision-Making Exercise (B) and (C) and "Case of the Unhealthy Hospital," another HBR case study and, working in the same teams, use either a dialectical inquiry or devil's advocacy approach to decision making.

Provides questionnaires so students can compare their experiences with different decison-making processes. Students read "Growing Pains," a Harvard Business Review (HBR) case study, and then work in teams to come up with recommendations using a consensus approach to decison making. The next day they use Decision-Making Exercise (B) and (C) and "Case of the Unhealthy Hospital," another HBR case study and, working in the same teams, use either a dialectical inquiry or devil's advocacy approach to decision making.

Note on accounting for retiree benefits.