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In 1989, the performance measurement systems and compensation policies of Nordstrom Department Stores unexpectedly came under attack by employees, unions, and government regulators. The case describes the "sales-per-hour" monitoring and compensation system that many believed to be instrumental in Nordstrom's phenomenal success. Illustrates how rapid company growth, decentralized management, and unrelenting pressure to perform can distort performance measurement systems and lead to undesirable consequences. This product can be used with the free Job Design Optimization Tool (JDOT), available at: hbsp.harvard.edu/jdot

Spreadsheet supplement for case 191-002.

After providing a brief overview of Turner Construction Co.'s structure and project work, the case gives a detailed description of its project management control system, the IOR system. In addition to explaining the mechanics of the IOR system, the case identifies the uses and benefits of the system from the perspectives of different level managers. Finally, the role of the IOR system as a decision support tool is illustrated through a specific dilemma on a project in progress.

Reveals the system changes that IBM adopted. Designed as an in-class handout after discussion of the (A) case.

Spreadsheet Supplement for case 190137

In 1987, IBM changed its strategy in an attempt to become a market-driven company rather than a product-driven company. The case begins with a description of the new strategy and the reasons for the change and then describes the top-down sales planning and quota system in use under the old strategy. Concludes with a discussion of the reasons why the new strategy cannot be implemented without changing the sales planning and quota systems. The challenge for students is to design new systems to support IBM's market-driven strategy.

Concentrates on the evolution of MCI's strategy-setting process following a period of dramatic growth. Opportunistic strategies during MCI's early years have given top managers a dislike of formal strategic planning and a strongly-held belief in top down strategy setting. Questions whether the nature of planning will have to change as the company passes $6 billion in sales and is faced with increasing global competition.

Describes the incentive system by which Mary Kay Cosmetics motivates the sales force of 200,000 independent agents who comprise the firm's only distribution channel. Illustrates the powerful effect on sales-force behavior that results when creative types of employee recognition are combined with financial incentives. Focuses on the challenges that managers face when they try to reduce program costs by modifying the VIP automobile program that awards the use of pink Cadillacs and other cars to successful sales agents. A detailed description of the parameters and formulas that drive the recognition and reward programs is provided.

Details the changes made to the VIP automobile plan.

Spreadsheet Supplement for case 190103.

Recounts the financial difficulties and management changes experienced by American Red Cross Blood Services: Northeast Region (NER) during the 1980s. After summarizing industry-wide changes in the collection, testing, and distribution of blood and blood products, the case describes the way in which NER management responded to those changes. The types of changes highlighted include: the transition from non-financial to financial planning and monitoring systems; organizational restructuring; increased dissemination of financial information among line management; and conversion to a cost accounting system based on cost center accountability. The primary teaching objective is to illustrate both the need for and the challenges of changing management control systems in response to changes in an organization's marketplace and strategy. The case reveals various factors that must be considered to implement major control changes including management training, differing management styles, information systems capabilities, corporate culture, and a continually changing market.

Illustrates how ADP's top management uses formal planning and control systems to establish strategic boundaries for its business units. Top management has developed a detailed list of strategic criteria that ADP managers use to evaluate products and business units, as well as acquisition and divestiture candidates. Focuses on whether ADP should divest a profitable business that is drifting outside defined strategic boundaries.

Spreadsheet Supplement for case 190053.

Illustrates the management control challenges that are associated with rapid growth and geographic expansion. Situated at an offsite Executive Committee Retreat. The three founding partners of a specialized consulting firm are grappling with several difficult questions and problems: 1) the tension between local office autonomy, entrepreneurship, and the need for a unified firm strategy; 2) the increasing need for standardized ways to monitor rising costs, capacity utilization, and new business development; 3) redefining the role of the Executive Committee and the role of formal systems as the partnership continues to grow.