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Supplement for product 9B19C005.

In 2018, Tesla Inc. was one of the highest-valued automobile companies in the United States—despite never reporting profits. Although Elon Musk, the founder and chief executive officer of Tesla Inc., was appreciated for his vision, learning capabilities, active presence on social media, and dedication, he was also criticized for his leadership style and controversial tweets regarding the privatization of the company. Analysts and short sellers believed Musk’s narrative ability had caused Tesla Inc. to become overvalued and suspected that the company was actually on the verge of bankruptcy. Did Musk’s leadership do more harm than good? Would he be able to save Tesla Inc.?

Kellie Leitch, a long-time member of Canada's Conservative Party but a relative newcomer as an elected politician, ran in the party's 2017 election for a new party leader. Her platform addressed several issues, but the media focused on two: a commitment to institute screening of newcomers to the country for their adherence to Canadian values and a platform of anti-elite initiatives. By the time the election for leader was held in May 2017, Leitch had been singled out, criticized, and lambasted for a platform that was seen by many as running against not only accepted Canadian values but also her own experience and values. How had her reputation shifted from well-regarded physician and community leader to criticized political candidate? What strengths and experience would she need to rebuild her position?

In July 2018, several employees of Yonghui Superstores stood outside the company’s headquarters in Chongqing, China to protest a pay cut that had been imposed on them. In 2012, the national supermarket chain had rolled out a performance monitoring system that periodically identified employees with inferior results. A broad-range profit-sharing plan was linked to the new performance system and calculated results based on team performance. Yonghui Superstores also applied organizational reforms to support the new system. All measures were intended to stimulate overall performance and increase labour efficiency. After the implementation of these measures, Yonghui Superstores saw favourable financial results and improved performance. Its new policies also helped increase personal income for many of its employees. However, the system also sparked anger among some workers who failed to meet predetermined performance expectations. Incidents such as employee protests had to be avoided because they could tarnish the company’s brand image. From an organizational perspective, the company also had to balance the interests of the various business divisions, which faced completely different competitive environments. Yonghui Superstores needed a systematic solution for its performance initiative.

The chief operating officer at Farro Biomed, an independent laboratory in the health care sector, was a talented negotiator, and could be credited with a great deal of the company's success. But inside the company, he was known to be a bully. One of his favourite targets was a middle manager who was responsible for running the executive offices and the board's secretariat. Her work subsequently declined, leading to problems with the board's secretariat. A board member complained, and the chief executive officer eliminated her position. The manager struck back with a demand for a large severance package, claiming a toxic work environment, bullying, and sexual harassment. The chief executive officer had no choice but to take the matter to the board for direction. The board needed to decide how to proceed.

Most board meetings don’t start with a chairperson screaming, “Let’s get ready to rumble.” But it’s not a bad idea. After all, proxy advisory firms and executive development experts say managers and directors need to be ready to defend themselves like never before as the Age of Disruption threatens to stretch shareholder patience to the limits. Thanks to regulatory advantages, Canada has long been considered the land of milk and honey for activist investors. As a result, the annual number of proxy contests has jumped significantly since the turn of the century. However, existing securities laws do not adequately address the fact that control of public companies, along with their cash and assets, can be won by storytellers willing to mislead shareholders and foster discontent. Today’s boards must understand the power of gossip and myth in order to prepare for the kind of populist revolutions they can ignite. The go-to source of information for mom and pop investors is online opinion—not court rulings, corporate documents, balanced media reports, or independent expert advice. Thus, getting the retail crowd onside and prepared to defend you requires a comprehensive retail investor relations program that actively counters misinformation while effectively helping all shareholders understand how the company is working to serve their interests. Communicating the firm’s story needs to be a priority year-round, not just an initiative tied to annual meetings.

Scanteak Corporation was a furniture retailer founded in Singapore in the 1970s. By 2010, it had established more than 100 stores around the world. It had also become the first furniture company to be listed on the Taiwan OTC (Over-the-Counter) Exchange. The two founders had invested a great deal in developing the business and preparing their children to become their successors. In 2003, the two founders’ daughter joined the company to help grow the family business, achieving great success in brand promotion and market expansion. In 2010, the two founders’ son was asked to help with the business in Singapore or Taiwan but rejected their offer, stating that he would only agree if he could independently run the Japan division of the business, which was in deficit. The two founders questioned whether their recently graduated son could handle the business in Japan, and wondered how to respond to his bold request.

This part (B) of the case follows Scanteak: The Making of Successors in a Family Firm (A) to disclose how the founders of Scanteak Corporation responded to the proposal put forward from their second child, as described in part A of the case. While part A focuses on the issue of succession at the company, part B follows the business developments and discusses the transfer of management rights and family wealth to the next generation.

The incidence of sexual harassment and assault is highest in male-dominated workplaces. And, like sexual harassment and assault, gender discrimination is more prevalent among male-dominated companies. Given the preponderance of mostly male or all-male boards, directors should ask what they can do to pre-empt and prevent #MeToo-type situations in the companies they govern. The author recommends six steps: 1) Diversify: Gender-diverse boards look at sexual harassment and discrimination through a different lens because there are assorted types of people in the room. 2) Examine the culture: Culture can normalize attitudes and behaviours that allow problems to perpetuate and allow silence to prevail. 3) Do a vulnerability analysis: Human-capital risk is part of enterprise risk management and human resources and compensation committees should put gender discrimination and harassment risk on the agenda. 4) Review policies and procedures. 5) Establish when and how the board should be notified: Policies should specify what situation is too small to merit board attention and, conversely, what requires the board’s guidance and how urgently. 6) Build a response plan. Ultimately, there is never a good time to face sexual harassment and discrimination problems; however, boards should have tough and sensitive discussions now. They should be informed, attentive, and realistic about the frequency of these problems, and should advocate a zero-tolerance policy.

In recent decades, observers from across disciplines have begun to apply the principles of natural swarm behaviour to artificial intelligence systems, humans, and business systems. Companies such as Spotify and Daimler are adopting swarm theory as a collective organizing framework. This may be because traditional group facilitation is hampered by prescriptiveness, horizontal growth, and groupthink and group polarization. Swarm facilitation is sustained by six core principles or beliefs: a) belief in collective behaviour and the collective intelligence of the group; b) belief that group work is part of a collaborative and complex adaptive system that is self-organizing and emergent rather than a controlled, prescriptive, and ready-made environment; c) belief that ideas collected in the group can contribute directly to organizational improvement or product development, or promote the wider networked learning organization; d) belief that diverse groups of collaborative stakeholders enhance innovation, decision making, and learning; e) belief that modern technology can support the filtering of information and ideas and enhance decision making; and f) belief that open innovation and collaboration promotes vertical growth. Research involving observing the migratory habits of honeybees offers five powerful lessons about what is needed for swarm facilitation to thrive: focus on real issues; split into teams; exercise collective leadership; embrace diversity; and use mechanisms to filter information. In the end, swarm theory is an organizing framework—inspired by the natural world—that promotes group collaboration and helps us navigate through complex adaptive systems.

The customer is the domain of the strategic marketer, yet less than 3 per cent of the largest company boards have marketing representation. Adding a customer expert to the board would bring the customer to the fore of board discussions and augment board competency, with proven expertise in creating and evaluating growth strategies. Filling the strategic marketing vacuum at the board level is increasingly urgent, given the convergence of three factors: the seismic change in customer attitudes and behaviours, the innovation imperative, and the relentless importance of building a company’s brand. To build a better board—one that is more effective and customer-centric—the author proposes three main strategies: a) bring a new emphasis to the creation and maintenance of vibrant revenue streams; b) augment board skills with strategic marketing expertise; and c) cultivate an understanding of new “quantum” customers and their impact on generating revenue. It is time for strategic marketers to take a seat at the board table. As Peter Drucker observed, “The single purpose of business is to create and keep a customer.” In these turbulent times, boards must cultivate a sharp and unwavering focus on the customer as the foundation for strong and sustained business vitality.

In late 2017, the leader of the implementation circle at iQmetrix, a software firm based in Vancouver, Canada, was reviewing her company’s progress with Holacracy. This radical new organizational design was centred on employee self-management and based on a philosophy that focused “on roles (accountabilities for work), not souls (people).” All parts of the organization were now arranged in circles, which were the basic building blocks of the Holacratic organizational design, and all employees had completed their initial training and were now meeting in circles to fulfil the work of the organization. But was it enough? Could iQmetrix truly consider that it was now fully Holacratized? Nearly one year after the launch of Holacracy, the implementation leader looked back over the past year and assessed whether the implementation of Holacracy was now complete, whether the process had been a success, and what to do next.

In 2015, the chief executive officer (CEO) of Hart Schaffner Marx, a 130-year-old U.S. maker of men’s suits and sport coats in Des Plaines, Illinois, set out to create an employment program for people with autism with the help of the company's partner, Autism Workforce. Unlike other similar employment programs, this program aspired to employ people who were seriously affected by autism challenges. The two partnering organizations had worked diligently to activate work skills in people with developmental disorders, and now sought to extend and leverage their initial successes. In 2017, the company’s CEO and owner was now facing decisions about how to extend and leverage the employment program’s initial success.

In late 2016, the board chair of T-Systems South Africa (TSSA), an information technology outsourcing company, faced a new challenge. As the previous chief executive officer (CEO) of the company, the board chair had moved the company from declining revenue toward growth and increased profitability. She accomplished the company’s culture transformation and remarkable turnaround, in part, by capturing the interest of people with a vision about creating a company with soul. She now needed to assist the new CEO in sustaining TSSA’s culture change in a manner that would not intrude on his own ideas, leadership, and style.

Presentation for product 8B18C045.

Several psychological theories can help explain organizational behaviour, but many students are not exposed to the benefits that these types of concepts can provide. This note discusses a brief overview of some of the most relevant theories, which may help employees and leaders to better understand organizational behaviour.

A common assumption is that if we just put good people together, they will automatically develop into a strong team. Conversely, we assume that if we put a lot of low-performing people together, they will perform poorly. However, research tells us that it is not that simple. Teams are different from the sum of their parts, and they develop as they go. Scholars have been able to develop a well-accepted model that can help managers and employees build team effectiveness in the workplace: the input-mediator-outcome (IMO) team effectiveness framework. This note provides an overview of the well-supported IMO model of team effectiveness.

In August 2017, the Canadian country leader of Red Hat Inc., an open source software company, was reviewing the progress made by the Canadian subsidiary of the American multinational in bridging the gender gap. The subsidiary had met its target of increasing the ratio of women in its sales team from 5 per cent in August 2014 to 40 per cent in July 2017. The country leader was examining ways to leverage the takeaways from the four-year experience in reducing the gender gap in an effort to not only sustain the momentum but also go beyond gender parity.

In March 2018, Cricket Australia (formerly the Australian Cricket Board) banned the Australian cricket captain from the sport for a year due to his involvement in a premeditated attempt at ball tampering in a test match against South Africa. He was also banned from any leadership positions in the sport for at least a year thereafter and faced financial losses on account of these bans. Australian fans and political leaders were outraged at the ball-tampering scandal and the captain's involvement. Other cricketers felt that the penalties were severe and disproportionate. What led the captain to engage in “premeditated” foul play? Could he have played the game differently? Will he be able to lead the Australian cricket team again?

In the Newstar Magazine exercise, participants are assigned one of three roles—managing editor, publisher, or board chair—and provided with information about personnel difficulties that have emerged at the independent Canadian magazine. The organization is small, financially strapped, and conflict has appeared within the magazine’s leadership. The objective of the exercise is to understand the source of this conflict and ultimately to resolve it. Use with 9B17C051 and 9B17C052.