Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 5 explores the field of human relations today. Examples discussed include Lorsch's work on boards of directors, Thomas and Gabarro's work on the obstacles African-American executives face and what helped them reach upper levels of management, and Neeley's work on English as a lingua franca in relation to the Japanese company Rakuten. How business scholarship and education have changed since the height of the medical model's popularity is also discussed. Influences from other fields, such as economics, have surpassed that of the human relations paradigm in business education, but problems have arisen because of this shift.

Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 4 focuses on human relations work done in the twentieth and twenty-first centuries by younger colleagues, including Kotter, Gabarro, and Hill, as well as Lorsch's research on white-collar workplace management problems. The evolution of the medical model is tracked across generations along with the usefulness of it. The medical model was used to better comprehend behavior of successful managers, the relationship between leadership and management, and the various skills and emotional resources needed for successful management transitions. The refinement of the medical model over the years allows for testing the findings of research that has grown out of the idea of "walking sticks" (i.e., real-world data gathering).

Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 3 looks beyond the Hawthorne study to other successes of the human relations paradigm. The Dashman study focused on a real company facing issues that defied management theory; observation allowed executives to see what was actually going on and led to actionable knowledge. Other examples discussed include Turner and Lawrence's work on job satisfaction and Lorsch's work with companies in the plastic industry. Contingency theory explains why companies use different mechanisms for functional integration based on necessary company tasks. Compared to classical business theories, contingency theory is flexible and malleable to the point of being able to work for any organization.

Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 2 explores the Hawthorne study in detail, an extensive project in the 1920s and 1930s led by Mayo and Roethlisberger concerning the Hawthorne Plant, which manufactured telephone equipment outside Chicago. This study was the key test for the medical model, showing that the medical model was a better diagnostic tool and debunking various theories about organizations and people working within them. For years after the Hawthorne study, researchers and practitioners continued to ponder it, and human relations eventually became a vital paradigm in business research. The lasting impact of the Hawthorne study is discussed at the end of the chapter.

Over the past few decades, business schools have embraced game theorists, economists, and others who deal in abstraction, all but stopping the solving of real-world, real-time problems. This text argues for a return to the medical model in business: listen, observe, and test. These three steps are the roots of human relations and organizational behavior; managers must fully assess a business and diagnose its problems before solving them. This model helped managers, consultants, and management scholars diagnose and solve problems faced by small and large organizations for decades, and it can continue to help companies today with myriad issues-including competition, leadership, diversity, and organizational structures-by offering a framework for addressing these problems rather than abstract theories. Chapter 1 discusses the beginnings of the medical model in business and the connections across various disciplines (e.g., medicine, psychology, and sociology) its founders developed. Wallace Donham, the second dean of Harvard Business School, paved the way for thinkers of different backgrounds to come together and create the medical model, also known as the human relations model, in the early twentieth century. Many influential academics and thinkers helped to shape the medical model, which is dependent on dynamic equilibrium. Businesses are living entities, needing to respond to changes in technology, investment conditions, market demand, and the workforce. If managers and consultants are to treat organizations as the living beings they are, they need to study the business holistically and work backward from the current problem to the underlying causes.

Uber Technologies Inc., the popular ride-hailing company, entered 2017 having doubled its bookings in 2016 and achieving a valuation of nearly $70 billion, making it the largest venture capital-backed company in the world. Co-founder and CEO Travis Kalanick embodied the company, with a hard-charging attitude embedded in the company's workplace culture that allowed it to successfully take on the entrenched taxi industry. Uber looked to enjoy another year of global growth in 2017, until lawsuits and a cascading series of scandals surrounding that same workplace culture led a group of powerful investors to seek Kalanick's resignation to protect their investment. This case presents an overview of the growth of Uber, the impact of Kalanick, and the role that Uber's board of directors had in shaping the company's growth. It centers on the factors leading to Uber board members and investors to call for Kalanick's resignation, focusing on how board oversight can help shape company culture and how entrepreneurial boards deal with founder CEOs. It then deals with the events that happened in the aftermath of Kalanick's resignation, including the appointment of Dara Khosrowshahi as CEO and the changes, the lawsuit brought against Kalanick by venture capital firm Benchmark Capital, and the governance changes proposed at the end of September 2017.

When organizations get into big trouble, fixing the culture is usually the prescription. That's what most everyone said GM needed to do after its 2014 recall crisis. Cultural reform has likewise been proposed as the solution to the corrosive bureaucracy at the Veterans' Administration, unethical behavior in banks, and the excessive use of force by police. But interviews with successful change makers, conducted by Harvard Business School's Jay W. Lorsch and Emily McTague, suggest that culture isn't something you "fix." Rather, cultural change is what you get when you put new processes or structures in place to tackle tough business challenges. Organizations are complex systems with many ripple effects--and reworking fundamental practices will inevitably lead to new values and behaviors. In this article, the authors explain how this played out during four major transformations: the remake of Ecolab into a diversified corporation three times its original size; the postbankruptcy merger of Delta and Northwest; the turnaround of Ford; and Novartis's shift to a diversified health care portfolio. Each firm's CEO took a different approach for a different end. Ecolab's Doug Baker pushed decisions down to the front lines to strengthen customer relationships. Delta's Richard Anderson got airline workers on board by focusing on meeting their needs. Ford's Alan Mulally broke down barriers between units to improve collaboration and efficiency. Novartis's Daniel Vasella decentralized to unleash creative energy. But in every case, when the executives used tools such as decision rights, performance measurement, and reward systems to address their particular business challenges, organizational culture evolved as a result, reinforcing the new direction.

On January 9, 2015, Nelson Peltz of Trian Fund Management launched a proxy fight for four out of the twelve seats on the DuPont board. The fund had previously published a public letter addressed to shareholders outlining its proposal to break the company into three areas: agriculture and nutrition, industrial materials, and performance chemicals and criticizing the company for its poor performance. CEO and Chairman Ellen Kullman and her board were left with the difficult decision. Should they allow four of Trian's nominees onto their board, knowing that it would mean replacing four highly experienced and valuable directors or should they go face to face with Peltz in a very public proxy fight?

Proxy access grants shareholders meeting certain ownership requirements the right to nominate directors for election to the board without going through a typical proxy contest. In August 2010 the SEC approved a rule granting proxy access for shareholders meeting specific ownership requirements. The rule was challenged by US Chamber of Commerce and overturned in July 2011. Shortly after the rule was overturned, rules governing shareholder proposal process were amended so that shareholders could put forward proposals on proxy access at individual companies. Proxy access did not garner significant attentional during the first two proxy seasons after the rule was amended. However in the 2015 proxy season, over 100 companies received proxy access proposals. This case chronicles the debate on proxy access from the perspective of institutional investors, shareholders, and US company's board of directors and management.

The firing of Market Basket CEO Arthur T. Demoulas by his cousin, Arthur S. Demoulas, and directors affiliated with Arthur set off employee protests throughout the grocery store chain. Industry specialists estimated that Market Basket was losing close to $10 million each day in lost business and inventory, due to the protests. A long history of legal battles had destroyed the relationship between the families of the 2 cousins. This case describes the complexities of corporate governance for a family-owned organization.

In October 2004 Fernández Pujals, founder of Telepizza, an international home delivery pizza business, bought 24.9% of Jazztel (€90 million), a telecom company. At the time, Jazztel that was near bankruptcy and needed a capital injection to finish the year. Over the next ten years, Fernández Pujals led the restructuring of Jazztel's debt, reached an agreement with the former monopoly Telefónica, set up internal call centers, and transformed Jazztel into the fastest growing broadband operator in Spain. The case describes how Fernández Pujals designed and managed the board and led Jazztel towards profitable growth.

On Tuesday March 15, 2011, all 1,200 global Partners of McKinsey & Co. gathered at the Gaylord National Hotel & Convention Center near Washington, DC for their annual Partners' conference. The atmosphere was tense as Partners, in addition to their normal agenda, discussed the Galleon Group insider-trading trial and the recent allegations against the Firm's former Managing Director, Rajat Gupta. Three months earlier Senior Partner, Anil Kumar, pled guilty to providing confidential information about McKinsey clients he served to Galleon Group founder Raj Rajaratnam. The McKinsey Partners were shocked and dismayed by the actions of Kumar, as well as the recent allegations against Gupta and were closely monitoring the situation. Could a former Managing Director of their Firm have conspired to enable insider trading? And if so, what did that mean for the future of the Firm?

On Tuesday March 15, 2011, all 1,200 global Partners of McKinsey & Co. gathered at the Gaylord National Hotel & Convention Center near Washington, DC for their annual Partners' conference. The atmosphere was tense as Partners, in addition to their normal agenda, discussed the Galleon Group insider-trading trial and the recent allegations against the Firm's former Managing Director, Rajat Gupta. Three months earlier Senior Partner, Anil Kumar, plead guilty to providing confidential information about McKinsey clients he served to Galleon Group founder Raj Rajaratnam. The McKinsey Partners were shocked and dismayed by the actions of Kumar, as well as the recent allegations against Gupta and were closely monitoring the situation. Could a former Managing Director of their Firm have conspired to enable insider trading? And if so, what did that mean for the future of the Firm?

Since the start of the 21st century, a new breed of shareholder--the activist hedge fund--has frequently played a decisive role in interactions between corporations and markets. The game of these activists is simple: They buy stocks they view as undervalued and pressure management to do things they believe will raise the value, such as giving more cash back to shareholders or shedding divisions that the activists think are driving down the stock price. With increasing frequency they get deeply involved in governance--demanding board seats, replacing CEOs, and advocating specific business strategies. The authors have identified six ways in which to fend off activist challenges or use them to improve your organization: (1) Have a clear strategic focus and stick to it. (2) Analyze your business as an activist would. (3) Have your external advisers lined up in advance and familiar with your company. (4) Build board chemistry. (5) Perform in the short run against declared goals. (6) Don't dismiss activist ideas out of hand.

In the spring of 2008, the recession had decimated the company's core business, construction equipment rental. The economic downturn resulted in a significant decrease in North American construction and industrial activities and had adversely affected the company's revenues and operating result. The stock of the company quickly fell from the mid-$30 range in late 2007 to $3 in March 2009. In addition, two of the company's former chief financial officers had been charged with securities fraud and other violations, by both the U.S. Attorney's office and the SEC. The Board was faced with the resignation of the founder and chairman, management succession issues, the failed merger with Cerberus, and the lawsuit in Delaware. The Board was responsible for overseeing the change in a number of senior management and board positions which became increasingly difficult due to the turmoil and poor performance of the company. Recruiting and retaining talent in senior management and the board was central to the success of the company, which relied on their people for strong performance. In addition the company's total indebtedness was approximately $3.3 billion, including $146 million of subordinated convertible debenture. The company's substantial indebtedness had the potential to have adverse consequences in a number of ways, including: increase their vulnerability to adverse economic, industry or competitive developments; require the company to devote a substantial portion of their cash flow to debt service, reduce the funds available for other purposes; limit their ability to obtain additional financing; and decrease their profitability or cash flow. And the company was still dealing with multiple purported class action and derivative lawsuits that had been filed against it. It was during this time the board started looking for candidates both for the CEO and Chairman positions.

In April 2012, Jenne Britell, the Chairman of the board of directors of United Rentals, Inc. (NYSE: URI) was preparing her notes for an upcoming stockholders' meeting. It was a meeting unlike most other meetings she had chaired. Stockholders were about to vote on a transaction that was perhaps the ultimate fulfillment of the founders' original vision. She was reminded of the company's founding just 15 years earlier and its meteoric growth. With a considerable sense of achievement and satisfaction, she reflected on her tenure as board chair commencing five years ago. Elected to the board in 2006 and then unanimously selected by her peers as Chairman in June 2008, Britell led the board through the aftermath of a tumultuous period that included senior management and board changes, a SEC investigation, financial restatements, the jilting of the company by Cerberus Capital Management in a transaction to acquire URI, and the deepest recession to hit the global economy since the Great Depression. At the meeting, stockholders would be asked to consider approval of a merger agreement between URI, the largest equipment rental company in the world, with RSC, the second largest equipment rental company in the world and URI's largest competitor. The meeting would mark the triumph of a new governance model and company strategy whose development and implementation Britell and CEO Michael Kneeland had led. As Britell reflected on the hard won gains, she also looked forward to the challenges and opportunities that lay ahead as the company managed the integration of RSC's operations with URI and the integration of three new board members from the acquired company. She also reflected on how governance and strategy could continue to evolve as the company planned for the next five years.

On January 29, 2013, Elliott Management, a hedge fund run by Paul E. Singer that owned 4.5% of Hess Corporation stock, put forward a slate of five independent directors it wanted elected to improve the company's performance. Elliott argued that Hess lacked focus and was distracted by ventures outside its core exploration and production business. Further it argued that John Hess, CEO and son of the founder, of being more interested in "maintaining a family dynasty than instilling accountability and addressing chronic underperformance."

On July 12, 2012, Bill Ackman's Pershing Square Capital Management announced publicly that it had purchased about $2 billion of Procter and Gamble (P&G) stock. Shares in the company closed up 3.75% the day the disclosure was made public. Ackman told the New York Times that Pershing would be a major P&G shareholder. ""We think it's an underrated stock,"" he said. ""We think there is a lot of great opportunity there."" During the next several months there was little or no public discussion of the matter although people familiar with the situation reported that Ackman held conversations with P&G directors individually. Then, on April 24, 2013, P&G announced that its 3rd quarter earnings had risen 6%. However its 4th quarter forecast fell short of Wall Street's expectations. Shares fell 5% based on this outlook. P&G results were lagging its peers by 4% in 2012 and 2% in the first quarter of 2013. Then, abruptly in late May, CEO Robert A. McDonald, who was 59, resigned. The board selected A.J. Lafley, (65) who had been McDonald's predecessor to return to lead the company. There was speculation about how long Lafley would stay and in what direction he would take the company. On June 6th, P&G announced that Lafley had appointed four senior executives to lead the company's major businesses, reporting directly to him.

In early 2013 the leaders of McKinsey & Co., were reflecting, as they did periodically, on the path forward for their firm. Founded in Chicago in 1926 by "James O. "Mac" McKinsey," with only a small staff in one office, the firm had grown to be a global company with more than 17,000 firm members, including more than 9,000 consultants. It was arguably the world's preeminent management consulting firm. This case describes the history of events and decisions which have led to this enviable record of success, and poses the questions before the firm's senior leaders in 2013. What should be their path forward? Could the firm continue to grow successfully with its current strategy, organization, and culture?