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Focuses in detail on implementing a corporate restructuring program in ABB's German subsidiary. Special attention is given to Germany's unique form of industrial governance. Two major problem areas--power plants and power transformers--are described in detail, as is a decentralization proposal for the German sales operation. How should the head of ABB Germany proceed? Why did he take this job? What choices did he make? What challenges does he face, particularly as a newcomer? Why are power plants and power transformers in deep trouble and what action can be taken? Does decentralization of the sales force make sense? What are the challenges, opportunities, and risks facing ABB's Germany country head? Will the new international matrix be a help or a hindrance?

Addresses the results and the lessons from the German restructuring effort by focusing in detail on the relationship with the works council and the actions taken for power plants and power transformers, and the sales organization. Closes with a "second wave" of cost cutting and some reflections by the head of ABB Germany, as well as some excerpts from an interview with Percy Barnevik. How did international knowledge transfer help? How much of a constraint were German national and BBC corporate cultures? Can the organization digest a "second wave" of cost cutting? How does the ABB international matrix work, especially for the power transformers business area and for the German power plant operations? How does the domestic matrix work for the sales organization? What leadership and managerial skills are required to succeed in the international matrix? Is ABB the prototype of the global organization of the future?

Senior management of Hydro-Quebec were faced with the problem of how to avoid the possible cancellation of its multibillion dollar hydroelectric development project due to highly publicized opposition from aboriginal rights groups and environmental activists. This opposition was jeopardizing a major export contract by the New York Power Authority. Hydro-Quebec's financial performance, in particular its ability to continue servicing its large U.S.-denominated debt, was an important factor in the economic health and potential sovereignty of the Province of Quebec. The focus on stakeholder analysis is an excellent review of the complexity of decision-making in a highly volatile setting.

The chairman and CEO of Imasco Limited was reviewing an acquisition proposal from one of its operating units, Hardee's Food Systems, to purchase the Roy Rogers Restaurant chain. While he was inclined to support the proposal, he wanted to carefully weigh its broader impact for Imasco as a whole. The probable price of $390 million represented a substantial commitment of funds, at a time of slowing growth in the U.S. fast food business.

As CEO of the Swiss Corp. for Microelectronics and Watchmaking (SMH), Nicolas G. Hayek has engineered one of the world's most spectacular industrial comebacks - the revitalization of the Swiss watch industry. But SMH is more than a turnaround story. It is a case study of Hayek's management philosophy and strategic thinking, both of which are strikingly at odds with prevailing wisdom about how to compete in the new economy. For example, conventional wisdom suggests that "stateless" global companies should seek low-cost production wherever they can find it. Yet SMH is committed to its Swiss home base. Ultimately, Hayek's unconventional philosophy embraces corporate muscle and strategic imagination: "If you combine powerful technology with fantasy, you create something very distinct."

The newly appointed president and CEO of Wellington Insurance, a company without hope according to a recent consultant's report, is faced with the challenge of effecting a complete revitalization at Wellington when prospects for the industry and company look bleak. The case series Wellington Insurance (B) and Wellington Insurance (B1) (Condensed B Case) provides the opportunity to experience the full breadth of strategic analysis, from analyzing the competitive options within an industry to assessing an organization's readiness and capability for revolutionary change.

The Wellington (B) case takes the position of the new chief operating officer of Wellington. He is looking back on the successful turnaround achieved by Murray Wallace (this is described in Wellington Insurance (A)), and wondering how he can build on it. In particular, he is concerned about (a) whether the high-stress environment of change that Wallace generated can be sustained, and (b) whether he is in the position to take decisive action, bearing in mind the temporary appointment of the chairman as CEO.

Discusses FCB and Publicis, partners in a global advertising agency alliance, working together with their clients to provide excellent service. May be used with FCB and Publicis (A): Forming the Alliance and (C): The German-Led Network.

First Fidelity Bancorporation, a holding company for eight independent banks in the New Jersey and Pennsylvania areas, was going through a major restructuring and rationalization in response to serious financial problems, threats of regulatory control and changing market demands. In this reorganization, the head of corporate operations and systems was considering ways to facilitate the restructuring. He was seriously considering outsourcing as an alternative way to manage the internal information systems. The case explores the simple economics behind an outsourcing strategy and the complicated technical, political and cultural rationalization of a hierarchical, independent organization into a centrally-managed operation. Follow-up cases First Fidelity Bancorporation (B): Selecting an Outsourcing Vendor and First Fidelity Bancorporation (C): Managing an Outsourcing Relationship With EDS are available.

Doug Mason wished to create a new product that would cater to the interests of a new age generation, and he chose the development of a beverage that would have a healthy lifestyle image. His entrepreneurial start-up led to very rapid expansion and ultimately to sales in other countries. Clearly Canadian relies upon other companies to provide equipment for transportation and distribution, enabling it to operate with relatively few employees and a small base of physical capital. The case poses an interesting question, Is the company a small service sector enterprise or a large manufacturing business?

Spreadsheet Supplement for case 293093

A qualitative shift is taking place in the ways companies compete, managers manage, and business is conducted. The information-technology revolution makes knowledge the new competitive resource. But knowledge only flows through the technology; it actually resides in people--in knowledge workers and the organizations they inhabit. In the new economy, then, the job of the manager is to create an environment that allows knowledge workers to learn.

As CEO of Primerica, Sandy Weill has built a $6.6 billion company from acquisitions and underperforming firms. The case examines Weill's distinctive approach to building, managing, and leading an organization that seeks the benefits of scale without the problems of bureaucracy. The 1992 acquisition of 27% of Travelers is posed as a final topic for discussion. Illustrates one distinctive general manager's approach to leading a high-performing firm.

Given that organizations are seen more and more as minisocieties, the prospect of applying political principles to management makes a great deal of sense. Federalism is particularly appropriate because it offers a well-recognized system for dealing with paradoxes of power and control: the need to make things big by keeping them small; to encourage autonomy but within bounds; and to combine variety and shared purpose. Federalism responds to these paradoxes by balancing power among those in the center of the organization, those in the centers of expertise, and those in the center of the action--the operating businesses. Federalism avoids the risks of autocracy and the overcontrol of a central bureaucracy. It ensures a measure of democracy and creates a "dispersed center" that is more a network than a place. McKinsey Award Winner.

Describes the federal guidelines used by judges for sentencing organizations convicted of criminal wrong-doing under U.S. law as of November 1, 1991. Describes the guidelines' approach to calculating criminal fines for organizations, determining an organization's culpability, and assessing the organization's legal compliance program. Outlines some of the common criticisms of the guidelines. Intended to permit discussion of the concept of "organizational culpability" and to inform students about the bases for assigning criminal punishment to corporations under current law.

ACCOR, a French-based lodging and restaurant company, is described from its founding in 1967 to its 1990 acquisition of Motel 6. Particular attention is devoted to ACCOR's co-chairmen, Paul Dubrule and Gerard Pelisson, and the management policies they have put in place. ACCOR's venture into North America raises strategic, organizational, and integration challenges.

Supplements the (A) case.

Eighteen months after selling 75% of his company to Aer Lingus, Klaus Woerner, general manager and 25% shareholder, is proposing expansion to California. The Board thinks the move is premature, and in the wrong part of the country. This is the second in a three case series titled, Aer Lingus - ATS (A), Aer Lingus - ATS (B1) and Aer Lingus - ATS (B2) addressing minority shareholders who are also key managers.

Klaus Woerner and Aer Lingus executives have now visited the company Klaus Woerner wants to purchase in California. Opinions are divided. Klaus is adamant the move be made. Denis Hanrahan is less sure. Trust is an issue. This is the third in a three case series titled, Aer Lingus - ATS (A), Aer Lingus - ATS (B1) and Aer Lingus - ATS (B2) addressing minority shareholders who are also key managers.

The semi-annual meeting of the board of Toppan Moore, a joint venture between Toppan Printing of Japan and Moore Corporation of Canada, took place in Tokyo. With sales exceeding US$1 billion, Toppan Moore was a leader in the Japanese business forms industry and widely considered one of the most successful international joint ventures in Japan. While pleased with the venture's recent results, the issue for the board members was how to ensure continued prosperity.