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Spreadsheet supplement for W15058.

In late January 2009, the assistant deputy minister of Industry Canada was considering how to design the Knowledge Infrastructure Program, which had unexpectedly been assigned to the department in the recent federal budget. A $2 billion spending program focused on knowledge infrastructure, its projects were required to be completed within two years. The immediate goals were to provide a significant short-term economic stimulus and help create jobs during the economic recession. The long-term objective was to fund the modernization plans of universities and colleges. However, there were severe challenges that had to be met: the program must begin within 120 days; there were significant staff constraints in the department; the regulatory process and Auditor General’s standards must be followed and met; accountability standards had to be addressed; and the political element (both federal and provincial) of project selection must be taken into account. How could the program be designed and administered quickly despite the department`s limited capacity?

Piron Smart Technologies Co. Ltd., a private enterprise located in an underdeveloped region of China, was transitioning from being a founder-centered to a professionally managed firm. In the summer of 2010, the founder and chairman of Piron attempted to hire a senior executive from a Western multinational firm as chief operating officer, with the promise of a later promotion to chief executive officer (CEO). The candidate turned down the offer and demanded to be appointed CEO from the onset, leading to a conflict between the newly arrived CEO and the insiders passed over in Piron’s search for a CEO. See supplement 9B15M016.

Supplement to 9B15M015.

In 2014, IMAX is a Canadian-based company synonymous with large-format, high-quality cinematic experiences. Following four decades of innovation, the bulk of its revenue now comes from providing technology to mainstream movie studios and multiplex exhibitors. IMAX has more than 900 cinema screens in 58 countries, with nearly half of them located in North America. Its chief executive officer believes that the route to becoming a billion-dollar company involves adding 1,100 screens in growth markets outside of North America. If about 400 of the new worldwide screens are designated for Brazil, Russia, China and India—the BRIC economies—how should IMAX allocate these new screens by country and by city?

IMAX is a Canadian-based company synonymous with large-format, high-quality cinematic experiences. Following four decades of innovation, the bulk of its revenue now comes from providing technology to mainstream movie studios and multiplex exhibitors. IMAX has more than 900 cinema screens in 58 countries, with nearly half of them located in North America. Its chief executive officer believes that the route to becoming a billion-dollar company involves adding 1,200 screens in markets outside of North America. If about a third of new worldwide screens are designated for Brazil, Russia, China and India - the BRIC economies - how should IMAX allocate these new screens by country and by city?

A young graduate student finds himself in hot water when he is sued by John Wiley & Sons, Inc., for reselling textbooks overseas for a profit. This case explores the first-sale doctrine-a section of the Copyright Act of 1976-as well as citation of three additional decisions. The B case reveals the Supreme Court verdict. This case is used in a business law course elective at the McIntire School of Commerce.

A young graduate student finds himself in hot water when he is sued by John Wiley & Sons, Inc., for reselling textbooks overseas for a profit. This case explores the first-sale doctrine-a section of the Copyright Act of 1976-as well as citation of three additional decisions. The B case reveals the Supreme Court verdict. This case is used in a business law course elective at the McIntire School of Commerce.

The field of strategic communication encompasses a burgeoning crisis communication literature that seeks to identify effective and ineffective crisis communication efforts. Strategic communication has identified an array of crisis response strategies and the factors that determine when these response options are effective or ineffective. This article extracts key lessons from the crisis communication research to develop a set of guidelines managers can use to inform their crisis communication efforts. The analysis includes an examination of the crisis response strategies and their desired outcomes, the timing of crisis responses, and the situational factors that have proven to affect the effectiveness of crisis response strategies. The research results provide the foundation for evidence-based crisis communication. The guidelines help managers to understand how their communicative choices will impact the corporate reputation and other important crisis outcomes, and will help managers to make informed choices about crisis communication.

This article examines an important issue in crisis management: how to influence public perceptions of the news media's reporting of a crisis. Previous research has found that congruency between the regulatory orientation of a consumer and a product recall message-also known as the regulatory fit effect--increases compliance with a product recall request. Could the creation of a regulatory fit effect prior to reading a news article about a crisis also be beneficial to a company? Two separate experiments conducted in the United States and India involving crises in different industries (airline and tires) examined this issue, and found that contrary to previous research, reactions toward the company were more negative in termsofexpectationsfor a product recall and future purchase intentions. The findings revealed that these negative consumer reactions occurred because regulatory fit enhanced people's vulnerability to harm after reading the article. These results suggest that a company should consider creating regulatory non-fit in order to influence the public's perceptions of a crisis.

Product-harm crises are common in today's marketplace and are expected to occur with escalating frequency as products become increasingly complex, product-safety legislation evolves, and always-demanding customers continue to press for more. A product-harm crisis may cause major revenue losses, lead to costly recalls, and destroy carefully nurtured brand equity. Moreover, the crisis may not only be devastating for the affected brand, but also influence the entire category when other brands are perceived as guilty by association. Despite these enormous stakes, marketing managers are often unprepared to react appropriately to product-harm crises. Managers frequently increase advertising support or decrease price in the wake of a product-harm crisis in an attempt to regain lost consumers. Competitors in the same category may also boost advertising expenditures or lower their prices to benefit from the misfortune of the affected brand(s). This article provides insights regarding the effectiveness of these strategies in the wake of a product-harm crisis. The extant literature has shown that the effectiveness of these strategies depends largely on the role of the brand in the crisis--affected or not--and the characteristics of the crisis.

This article focuses on crisis management and leadership by executives, boards, and institutions and applies research on resilience, power, and sensemaking in the analysis of the ousting and subsequent return of a chief executive by the board of directors. Insights are shared on the transparency of information, the power of social media, the role of leaders in a crisis, and the ability of different voices to be heard and exert influence in our social media age. This case study provides a set of recommendations for leadership and crisis management in the contemporary business environment by showing how a crisis can be fueled by social media. Twitter is analyzed as a source of real-time news and information, which can have a significant impact on organizations and their strategies. Furthermore, implications for new executives are highlighted, with a focus on how their initial sensemaking process shapes the ability to respond to a crisis.

Social media (SM) are transforming the ways in which customers communicate with firms following service failures. While there is a positive side to this phenomenon, there is also a negative side, which can lead to serious social media crises. In light of this duality, the current article addresses the good, the bad, and the ugly uses of SM in the customer complaining process. Herein, we identify six different types of SM complaining situations. The good represent opportunities: (1) when customers complain to the company online immediately after a first-service failure, or (2) when consumers publicize extraordinary recoveries. The bad involve risks: (3) when customers discuss a failure without complaining to the firm, or (4) when consumers reach out to online third-party complaint intercessors. The truly ugly represent the peak of online threats and public crises: (5) when customers spread negative publicity through user-generated content SM following a double deviation, or (6) when competitors respond to this content to steal customers. As a takeaway for managers, we formulate specific recommendations to deal with each type of online complaining.

Many companies today believe that corporate social responsibility (CSR) acts as a reservoir of goodwill, insulating the firm from the negative impacts of a crisis. Yet, the impact of CSR on public reaction to corporate crises is more complex. Drawing on research on stakeholder reactions to CSR and--more specifically--corporate crises, we present a contingent framework for understanding the roles of CSR in corporate crises and how to manage it. This framework posits that CSR plays four important roles: it (1) increases stakeholders' attention to crises, (2) affects blame attributions, (3) raises expectations, and (4) changes stakeholders' evaluations of crisis situations. Several factors underlying these roles are also discussed. Overall, this article underscores that while CSR may insulate companies and mitigate stakeholders' negative responses in some cases, in others it may actually lead to the opposite effect, amplifying the negative impact of a crisis. The article ends with a brief discussion of the implications of our framework for effective crisis management strategies in the age of CSR.

Why has the incidence of corporate crisis risen markedly in China? Why are foreign firms frequently targeted by the Chinese authorities and how should they deal with it? Addressing these pivotal questions is essential for effective management of corporate crisis in the Chinese market. Herein, we describe the background of relevant institutional and market environments in China. Then we introduce three prominent principles deeply rooted in Chinese thinking and business practice--sentiment, reason, and law--and pinpoint how they relate to crisis management. Several cases drawn from well-known corporate crises are utilized to illustrate the dynamic relationships among these three fundamental principles. We proceed to highlight the importance of sentiment and emphasize the delicate balance between sentiment and law. Finally, we elaborate how different forms of institutional capital and social media can be employed to manage sentiment, reason, and law so as to curtail and tackle corporate crisis.

Closing time for a retailer or service provider represents a time when a store is in transition from an open domain to a closed domain. During this time, employees' tasks change from primarily serving customers to managing their closing time activities while concurrently serving customers. As such, shoppers are impacted by employee actions and closing time duties, often in a negative way. We found through our research that customers act with retaliatory, territorial behaviors, and employees report stress and annoyance over closing time practices, yet managers consistently say no problems exist with their closing time practices. In this article, we outline three key problems retailers face in their closing time practices and offer guidance on how to overcome these obstacles.

Situated in Beijing, Tenglong Ltd. is a typical non-state-owned listed firm in China. After its initial public offering, the founder has retained majority ownership and operation control by serving as both chairman and chief executive officer. An independent director of the company is worried about its corporate governance practice. What puzzles him most is the fact that, despite the apparent weaknesses of the board, the company itself is doing very well in the market. As he reflects on his experience, he cannot help wondering whether there is anything wrong with the board and what an effective board should and should not do.

Bonitas, a South African medical scheme (i.e., health insurer), must navigate highly restrictive regulations that make it difficult for Bonitas to innovate, grow, and compete with market leader Discovery as well as providers of alternative insurance products. Bonitas (HBS No. 315-020) must also plan ahead for the rollout of national health insurance-a deeply politicized issue in a country with great disparities in health care quality and access. How can Bonitas compete today while positioning itself to thrive-and not lose relevance-under a universal public health insurance system?

Industry self-regulation has, in general, a lousy track record. Many studies have shown that it is often ineffective unless backed by the power of the state, and that in some cases it serves rather to forestall government intervention or to reduce competition than as genuine self-regulation. Many observers doubt that accelerated private sector regulation could really make a difference against the major public goods issues of our time. Yet we live in a time when many public goods issues are global and global governance mechanisms are at the very earliest stage of development, and in industry after industry leading firms are banding together in an attempt to regulate conduct-designing metrics, relying on independent auditors, and attempting to enforce compliance. Is this a plausible path forward? This note summarizes work in history, political science, and economics-drawing particularly on the work of Eleanor Ostrom-to explore this issue in depth.