Examines the challenges The Home Depot faced in the aftermath of natural disasters such as Hurricanes Katrina, Rita and Andrew. By providing 40,000-50,000 items sold by knowledgeable associates, The Home Depot became a destination place for customers in need of anything from shovels to a new kitchen sink or supplies to use in recovering from a hurricane or flood. Disasters are thus both a source of disruption to the company's operations and a source of additional demand for its products and services. How, then, should The Home Depot organize itself in advance of disaster events?
Absolute Return for Kids [ARK] is a charity with strong financial support--what are the constraints on its growth and impact? ARK seeks to transform the lives of children who are victims of abuse, disability, illness and poverty. As one of the 50 largest fundraising charities in the United Kingdom, the organization's trustees wrestle with how to meet the needs of this vast and most vulnerable population through program expansion and delivery in Eastern Europe, South Africa, and the United Kingdom. How can the organization replicate its existing successful programs faster, both within and existing new countries? How can it best identify new areas into which ARK should expand over the near term and further down the road--and to recognize the ones that would overstretch ARK's organizational capacity and risk failing to maintain the highest quality of delivery?
AARP Foundation--a leading non-profit corporation--must create a new "Dashboard" performance measurement tool to track the effectiveness of its new strategic plan.
After a "first career" in business, HBS graduate Christopher Crane becomes CEO of a worldwide microfinance network. The organization's twin challenges are: 1) developing metrics to give it an accurate picture of its situation and impacts, and 2) generating rapid growth. Students learn how non-financial metrics are integral to Opportunity International's mission but are difficult to define and measure; tailored metrics are necessary for demonstrating success to donors and for strategic planning. Also, the organization is committed to helping as many people out of poverty as quickly as possible, but donations and repayments are not enough to fuel rapid growth; other financial tools are needed. Explores the challenges of measuring non-financial success and considers the trade-offs of continuing as a non-profit versus converting to a for-profit entity. Students will gain skills relevant to growing an organization that is mission-driven but financially constrained, and that has a complex array of international stakeholders.
The MGM Grand Hotel in Las Vegas had detailed information on loyal gaming customers, but could its information systems also be tailored to nongaming customers? As the nongaming business sectors became increasingly profitable both at the MGM Grand and in Las Vegas generally, understanding the nongaming customers appeared to be of critical importance to the continuing growth of the resort.
KaBOOM!, a successful playground-building social enterprise funded through corporate partnerships, wants to develop a performance measurement system that will enable the organization to expand its impact substantially. The board of directors and management are trying to develop a performance-oriented approach that will inform their strategy and allow them to manage operations efficiently and effectively as they grow--and, possibly, shift their emphasis to growth. What operational and impact data should they collect? How should they design a system of measures that will inform them without either drowning them in data or constraining their opportunities for growth? Can they develop a single system that will be useful to the board of directors and management--and support strategy development without inviting micromanagement?
The prestigious Augusta National Golf Club's secret membership is widely believed to exclude women. When feminist advocate Martha Burk receives a mysterious list of "members," she must decide how best to use this information in her efforts to crack the glass ceiling. Burk, of the National Council of Women's Organizations (NCWO), battles Hootie Johnson, of the Augusta National Golf Club (ANGC). Both organizations make strategic use of the media to influence stakeholder groups, and each tries to put its own frame on the debate. The NCWO sees the issue as a statement by affiliated corporations of how (little) they value women, whereas the ANGC sees it as attack on a private club's right to freedom of association. The controversy brings up a host of issues that are important for corporations in dealing with NGOs, partnerships, and corporate values.
Many decry the preponderance of merger failures and conclude that mergers and acquisitions (M&A) are failed strategies. However, analysis of the causes of failure is often shallow and the measures of success weak. Focuses on what makes a merger successful and the appropriate manner of evaluating merger success. Extensive field research of the merger of J.P. Morgan and Chase Manhattan Bank in 2000 illustrates the drivers of merger success and how to improve and value the contributions of mergers.
In early 2000, Verizon Communications implemented a Human Resources Balanced Scorecard to evaluate the effectiveness of and payoffs from human resource management. This case describes the benefits of the scorecard and the challenges of measurement and implementation. Teaching Purpose: To help students understand: 1) how to implement a Balanced Scorecard, 2) how to measure and improve the effectiveness of support functions, and 3) how to link non-financial measures to financial measures of support functions when financial benefits are difficult to quantify.
This is an MIT Sloan Management Review article. Although the concept is not new, profitability modeling, to date, has been limited to individual departments or business functions. Although firms develop models that are more comprehensive and cross-functional, these efforts are sporadic, relatively expensive, and time consuming. More companies might attempt this kind of modeling if they had an explicit framework and procedure for establishing links to guide them. Marc Epstein and Robert Westbrook, professors at Rice University's Jones Graduate School of Management, have studied companies' efforts to develop models that link action to profit and have devised a general model that managers can use to link any departmental action to overall corporate profitability. By customizing their general model, firms can more quickly arrive at specific links between an action and its impact on profitability. The action-profit linkage model helps managers identify and measure key drivers of business success and profit, develop causal links among them, and estimate the impact of actions to bring them about. This process forces managers to narrow their strategies to the areas with the highest payoff. Attention shifts from a preoccupation with individual performance metrics to an awareness of how those metrics work as a system and how they lead to increased profit and more shareholder value. The process of getting to the final model is valuable because managers gain tremendous insight into how their organizations' various metrics interrelate. The model also fosters a common management focus on the variables that matter most in achieving success. More importantly, it helps develop disciplined thinking about profit drivers by tracing them through the customer, the product offering and, ultimately, the company's actions.
Costs relating to companies' impact on the environment are increasing at a dramatic rate. Thus, managing, measuring, and reporting of these costs has become an important issue for managers. Accounting for environmental responsibilities is one of the largest and most challenging issues facing accountants today. This case provides an example of how one company is reacting to the increased pressures for environmental responsibility and how environmental responsibilities affect management accounting, financial reporting, and management control.