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Safety at Fluor Hanford (B)
Fluor Corporation has always prided itself on its competence in safety. It was a core value of the company, and Fluor had achieved remarkable safety records on complex projects all over the world. But now, in the spring of 1997, Fluor found itself managing the Western Hemisphere's largest environmental cleanup site, the Hanford reservation in Washington State. The Hanford site was established as part of the Manhattan Project in the 1940s that gave birth to the atomic bomb. Hanford produced nearly two-thirds of U.S. plutonium during the Cold War period. The Hanford site was half the size of Rhode Island, occupying 586 square miles in southeastern Washington State. The cleanup that began in 1988 was expected to take 30 years or more. Improving safety at Hanford was proving to be a significant challenge. As the new site manager at Hanford, Fluor Hanford (FH) inherited lower- and mid-level managers and thousands of unionized employees, many of whom were second- or third-generation Hanford employees. These employees had seen many contractors come and go over the previous years. Some of the managers who had worked with the previous contractor saw Fluor's emphasis on safety as getting in the way of operations. Union/management relations were fractious. Hanford's culture was described as "production driven-management told everyone what to do, and, if you didn't do it, there were consequences." Worker involvement in designing and implementing safety programs was negligible. FH also was having trouble satisfying its client, the U.S. Department of Energy (DOE). -
The Oil And Gas Industry
This industry note examines the oil and gas industry. The note first provides background information on industry financial performance, the role of OPEC, and the problems oil-producing nations have had in capitalizing on their resource wealth (i.e., the resource curse). The note then summarizes the major competitors among the integrated oil companies (IOCs), national oil companies (NOCs), and independents. The note describes the major business segments, including exploration and production, refining and marketing, natural gas, and petrochemicals. The note concludes with a discussion of industry evolution. -
Johnson & Johnson Consumer Products Brazil: Corporate Transformation (B)
In January 2000, Jose Antonio Justino, accepted an offer to become the Managing Director of the Consumer Division of Johnson & Johnson Brazil (in Portuguese-Johnson & Johnson Comercio e Distribuicao Ltda.). Johnson & Johnson Brazil (J&J Brazil) had been the early leader in Brazil in a variety of products, including disposable diapers, sanitary napkins, bandages, cotton swabs, sunscreen, and baby care products. Unfortunately, performance had deteriorated in recent years, with both sales and profitability dropping significantly. Market share in many categories was falling because of increased competition from local firms and multinationals. The company group chairman of J&J's global consumer business told Justino in February that he would have to present a business plan at a J&J meeting in Mexico in May 2000. The business plan would have to identify the specific steps that would allow J&J Brazil to restore profitability by the end of 2000 and position the company for future growth -
Johnson & Johnson Consumer Products Brazil: Corporate Transformation (A)
In January 2000, Jose Antonio Justino, accepted an offer to become the Managing Director of the Consumer Division of Johnson & Johnson Brazil (in Portuguese-Johnson & Johnson Comercio e Distribuicao Ltda.). Johnson & Johnson Brazil (J&J Brazil) had been the early leader in Brazil in a variety of products, including disposable diapers, sanitary napkins, bandages, cotton swabs, sunscreen, and baby care products. Unfortunately, performance had deteriorated in recent years, with both sales and profitability dropping significantly. Market share in many categories was falling because of increased competition from local firms and multinationals. The company group chairman of J&J's global consumer business told Justino in February that he would have to present a business plan at a J&J meeting in Mexico in May 2000. The business plan would have to identify the specific steps that would allow J&J Brazil to restore profitability by the end of 2000 and position the company for future growth -
Steve Parker and the GFS-China Technologies Venture (A)
GFS-China Technologies is a joint venture between Standard Industries (Standard) of the United States and Good Fortune Enterprises (Good Fortune) of China. The joint venture was created to manufacture various automotive heating ventilation and air conditioning parts. Two weeks after GFS-China began operating, Good Fortune's president stopped the joint venture and would not allow the joint venture general manager into the plant. Good Fortune's president wrote a letter to Standard and demanded that the venture general manager be replaced. After various meetings and communications between the partners, it was decided that a new general manager would be appointed and would come from Stan-dard. Steve Parker, a Standard manager who was in China working as Asia Pacific purchasing manager for Standard HVAC, was asked if would be interim general manager in GFS-China. It was now up to Parker to decide if he should accept the position and, if so, what he should do to get the joint venture back on track. -
Teleflex Canada: A Culture of Innovation
Teleflex Canada, a division of Teleflex Inc., manufactures a range of products, including marine hydraulic steering systems, trim components for marine propulsion, heating equipment for the truck and bus industries, a range of proprietary fluid controls, and field cookstoves for the U.S. Army. Within Teleflex Canada, there was a consensus that continual innovation in product design, manufacturing, and marketing was critical to the success of the organization. In 2005, Teleflex Canada executives were faced with various questions: Would size inhibit the ability to innovate? Would increased corporate centralization at Teleflex Inc. impact Teleflex Canada's ability to respond to new market opportunities? At the Teleflex Inc. corporate level, different questions were being asked: Could the culture of innovation in Teleflex Canada be transferred to other parts of the company? What was the appropriate level of corporate support and control necessary to foster innovation and high performance at Teleflex Canada and at other Teleflex business units? -
Learning Through Alliances: General Motors and NUMMI
Although alliances often create valuable learning opportunities, the exploitation of the opportunities is a difficult, frustrating, and often misunderstood process. More often than not, firms learn little from their alliance partners. Examines General Motors (GM) and its exploitation of the learning opportunity created by NUMMI, its California-based alliance with Toyota. Over the past few decades, GM has steadily and significantly improved its quality and productivity relative to its main rivals. A key factor in this improvement has been knowledge transferred from Toyota to NUMMI and NUMMI to GM. Describes how GM transferred the "sticky" knowledge of NUMMI to the initially skeptical GM manufacturing community. The learning mechanisms employed included managerial assignments to NUMMI, visits and tours to NUMMI, a technical liaison office for managing learning activities, leadership commitment and involvement in the learning process, and a learning network to articulate and spread the knowledge. -
Time Marches On: The Worldwide Watch Industry
This case traces the development of the worldwide watch industry from its inception through to mid-1990. In particular, it allows the reader to observe some fairly dramatic shifts in industry leadership, as well as several dramatic examples of product redefinition along the way. The case is rich enough in content to allow the reader to identify a number of often-recurring reasons for the changes in industry leadership. -
The Wine Industry
This Wine Industry Note examines the wine industry as the basis for discussing how competitive advantage is created and how advantage can be lost when innovative strategies challenge the incumbent players. The wine industry in 2003 was in a state of transition. Historically, a plethora of products and fragmented international markets made it nearly impossible for a company to establish a dominant international position. In addition, because wine was an agricultural product and subject to the vagaries of the weather, reliability of supply was unpredictable. However, well-capitalized international winemakers were emphasizing global presence and brand recognition. The tremendous success New World producers had experienced in markets traditionally dominated by European winemakers was leading to increased emphasis on creating recognized brands, stable distribution arrangements, and focused advertising campaigns. Only time would tell if the wine industry remained one where terror and the mystery of the wine prevailed, or global brands displaced the local and regional winemakers. -
Enron and The Dabhol Power Company
In September 2001, Houston-based Enron Corporation (Enron) was embroiled in a long-running dispute with various levels of government in India. The dispute involved the Dabhol Power Company (DPC), a 2,184 megawatt (MW) power project in the Indian state of Maharashtra. The dispute began in the mid 1990s. In April 1995, Enron began construction of a $2.8 billion power plant in the state of Maharashtra. In August 1995, the Maharashtrian government announced that the project was canceled based on the recommendations of a committee set up by the government to review the project. After the contract was renegotiated, construction resumed and Phase I was completed in 1999. In 2001, with Phase II of the project 95% complete, Enron announced that it would sell its DPC stake because of payment disputes with its sole buyer, the Maharashtra State Electricity Board (MSEB), and the failure of the Indian central government to honor its counter-guarantee. -
AT&T: Twenty Years of Change
AT&T once dominated virtually all U.S. telecommunications sectors. In 1984, AT&T was broken up into a new AT&T and seven operating companies, known as RBOCs (regional Bell operating companies) or Baby Bells. This case focuses on the period from 1984 to 2000, during which time AT&T went through a series of tumultuous changes. AT&T acquired, and then divested, the computer company NCR. AT&T bought McCaw Cellular Communications Inc. for almost $12 billion. AT&T spun off its equipment division into a new company called Lucent. AT&T invested more than $100 billion to acquire various cable television assets. Finally, in 2000, AT&T announced a sweeping restructuring plan that would break the company up into separates wireless, broadband, business long distance, and consumer long distance companies. -
Why Do Some Strategic Alliances Persist Beyond Their Useful Life?
Strategic alliances continue to be important tools of competitive strategy. However, many alliances do not achieve their partners' collaborative objectives and are terminated prematurely. As a result, alliances are often described as inherently unstable organizational forms that are subject to high rates of failure. In addition to the problems associated with not achieving collaborative objectives, a related issue has received limited attention. Although alliances are prone to failure, there are numerous examples of strategic alliances that continue for years despite failing to accomplish partner objectives. This article examines such strategic alliances. However, it does not focus on why failure occurs, but on the variables that contribute to firms' persistence with failing alliances. It also provides measures that can effectively counter persistence. -
Whirlpool Corporation's Global Strategy
This case deals with Whirlpool Corporation (Whirlpool) and its global expansion, which was driven by Whirlpool's objective of becoming the world market leader in home appliances. Beginning with the purchase of a majority stake in an appliance company owned by Philips, the Dutch electronics firm, Whirlpool purchased a majority stake in an Indian firm, established four joint ventures in China, and made new investments in Latin America. By the mid-1990s, serious problems had emerged in Whirlpool's international operations. In 1995, Whirlpool's European profit fell by 50% and in 1996, the company reported a $13 million loss in Europe. In Asia, the situation was even worse. Although the region accounted for only 6% of corporate sales, Whirlpool lost $70 million in Asia in 1996 and $62 million in 1997. In Brazil, Whirlpool found itself a victim in 1997, and again in 1998, of spiraling interest rates. -
The Rise and Fall of Iridium
This case describes the development and subsequent failure of Iridium. Iridium was a satellite-based communications system initially developed by Motorola and then spun off as a separate company. Using its constellation of 66 low earth-orbit satellites, the Iridium system was intended to provide reliable communications from virtually any point on the globe. On November 1, 1998, Iridium began commercial telephone service and satellite-paging service began two weeks later. However, a variety of problems plagued the company, and by May 1999, Iridium had only 10,000 subscribers. In August 1999, Iridium defaulted on its debt and filed for Chapter 11 bankruptcy protection. In March 2000, with only 50,000 subscribers, Iridium terminated its services. Motorola's estimated financial exposure to the bankruptcy of Iridium was $2.2 billion. -
Wil-Mor Technologies: Is There a Crisis?
The CEO of Wilson Industries, a U.S. firm, is concerned about the performance of a joint venture between Wilson Industries and a Japanese firm, Morota Manufacturing. He wants the joint venture president to make some changes to improve financial performance. However, the president is unsure of what action to take because the Japanese partner, Morota, is satisfied with the performance and is considering expansion plans. -
Wil-Mor Technologies: Is There a Crisis?
The CEO of Wilson Industries, a U.S. firm, is concerned about the performance of a joint venture between Wilson Industries and a Japanese firm, Morota Manufacturing. He wants the joint venture president to make some changes to improve financial performance. However, the president is unsure of what action to take because the Japanese partner, Morota, is satisfied with the performance and is considering expansion plans. -
Honeywell Inc. and Global Research Development
The Honeywell Technology Center (HTC) is the central R&D organization for Honeywell, Inc. almost 40% of Honeywell sales comes from outside the U.S. and this figure is expected to reach 45% or more by 2000. However, HTC, based in Minneapolis, is a long distance from international markets. Within HTC there is a growing consensus that HTC has to become more international to support Honeywell's growth opportunities. But, HTC management is far from consensus on how to internationalize R&D. Can the HTC culture be replicated outside the United States? How quickly should HTC move? Who will manage new R&D organizations? How will these organizations be funded? Should international R&D sites be centers of excellence for specific technologies, or should they be application centers using technology developed in Minneapolis, or both? -
Warner-Lambert Company
In 1991, Warner-Lambert Company, a firm involved in three core businesses-ethical pharmaceuticals, nonprescription health care products, and confectionery-has just completed its most successful year ever. However, Mel Goodes, the new CEO, is worried that the current organizational structure is inconsistent with an increasingly global business environment. The key issue in the case is how to shift a classic multidomestic, country-oriented firm to a more responsive, tighter-linked global structure. This should lead to a discussion of the pros and cons of running a business on a global versus local basis. The issue becomes quite complex with Warner-Lambert because of the differences between its three core businesses. -
Seagram and MCA
This case deals with the possible acquisition of MCA, the entertainment company, by the Seagram Company Ltd. (Seagram). MCA was owned by Matsushita Electric Industrial Company Ltd. (Matsushita). In early March 1995, Edgar Bronfman Jr., the 39-year-old president and chief executive of Seagram Company Ltd. (Seagram), has just concluded a round of meetings with the senior management team of Matsushita. Matsushita, the largest consumer electric products manufacturer in the world, acquired MCA in 1990 for $6.59 billion. Matsushita was clearly interested in selling a portion or possibly all of MCA. -
Creating Knowledge Through Collaboration
Although many firms enter strategic alliances with specific learning objectives, these objectives are often not realized. Drawing on a study of North American-Japanese joint ventures, this article analyzes the question of why some firms are more effective than others at exploiting alliance learning opportunities and develops a framework for alliance learning. The framework incorporates knowledge management processes--a set of organizational actions that establish the basis for accessing and exploiting alliance knowledge--and facilitating factors--the conditions that promote a favorable climate for effective alliance knowledge management. The primary obstacle to successfully learning from alliances is a failure to execute the specific organizational processes necessary to access, assimilate, and disseminate alliance knowledge.