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A State of Flux (A): Reorganizing Public Health in Arkansas, 2005 - 2007
Beginning in the late 1990s and lasting through much of the next decade, the Arkansas Department of Health underwent multiple changes to its organizational structure. Part A of "A State of Flux" recounts how, after a brief period in which the director of health replaced traditional hierarchical leadership with team-based management, several findings of administrative shortcomings helped prompt Governor Mike Huckabee and the state legislature to merge the department with the Arkansas Department of Human Services. Supporters of the merger argued that not only would it force the health division to adopt the highly regarded administrative practices of human services, it would also result in substantial cost savings for the state budget. However, the public health community quickly grew frustrated with the new arrangement, arguing that instead of being the marriage of two equals, the merger had resulted in the subordination of health to human services. Soon a movement to end the merger emerged, and Part B of the case explores how public health officials and their political allies rallied both publicly and behind the scenes to reverse course and reestablish a fully autonomous health department. An epilogue to the case portrays the main tasks and challenges public health leaders encountered as they worked to rebuild a reconstituted Arkansas Department of Health after this tumultuous period of organizational change. Case number 2129.0 -
Philanthropy and Brand Building: Jeff Vinik and the Tampa Bay Lightning
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Bossard Fasteners (A): Fighting B2B Commoditization
As the market leader in fastening technology Bossard maintained a global network of more than 1,800 employees in 50 countries from its headquarters in Zug, Switzerland. The company focused on the supply of fasteners, a process that included sales, technical and engineering support and inventory management. Its business model also spanned three strategic areas: product solutions, application engineering and logistics. Bossard enjoyed a very strong value proposition if its account managers could only access engineers, quality managers, heads of operations, research and development (R&D) departments and business owners who understood the total cost of ownership (TCO) concept. If it had to submit a quote in response to an RFP (request for proposal) and bid for a given list of parts, the customer's procurement department might simply compare prices, and Bossard typically was not the cheapest provider. Competitors also had copied Bossard's logistic system and claimed that they could offer similar solutions for lower prices. Anecdotal evidence suggested that most competitors' solutions were less reliable and accurate than SmartBins and that their data integration workflows did not work as well. In a manufacturing world where global competition, commoditization and strategic procurement puts suppliers under constant margin pressure, how was it possible that a Swiss-based fastening supplier could grow profitably with an EBIT (earnings before interest and taxes) margin of 12.3%, significantly above industry benchmarks? -
Bossard Fasteners (B): Developing a Digital Strategy by Refusing a Digital Transformation
Back in 2014, Bossard's growth had been driven largely by an excellent executive management board, led by CEO David Dean, a long-time Bossard leader, who focused on three strategic pillars: product solutions, engineering and logistics. While enjoying the success of the company, the CEO and the Chairman started a process to focus on new technologies that will impact the industrial fastener market and the production of their main customers, i.e. OEM manufacturers. 3D-Printing, for example, will not replace the manufacturing of industrial fasteners in the near future. However, if more industrial parts are 3-printed and not assembled, there is no need for fasteners. On the logistics and production front, the Internet-of-Things (IoT), Industry 4.0, and Robotics will change the factory of the future. Big Data, Machine Learning and Artificial Intelligence will also open new frontiers in manufacturing, and finally, "smart screws" have the potential to serve as sensors for collecting relevant data. Despite all these new technology, Bossard decided that it does not need a "Digital Transformation", but realized that it had no shared vision for the company's digital future. -
Rise and Stumble: The Innovation Journey of ZTE
This case describes the organisational developmental journey of ZTE from a labour-intensive manufacturing company to a high-tech intensive telecommunication giant. ZTE was regarded as one of the innovative state-owned companies. Over the years, it had developed capabilities across carrier network, enterprise, and consumer fields. This Case provides an understanding of what type of external environment would provide a window of opportunity for a company to catch up fast. It also provides the internal factors of how ZTE handled the challenge of innovation and deployment of technology capabilities. Though the Company was recognised for its innovation, a breaking crisis was facing ZTE due to its "short cut" innovation approach in core technologies. The current development was paralysed because of the denial of access to US technology, which is a symptom of how dependent they are on external sources of technology. -
Empowerment Through Integration: Scaling Up and Financial Sustainability
In early 2017, the chief executive officer of Empowerment through Integration, a not-for-profit organization based in the United States and also operating in Lebanon, wanted to scale up the organization's social impacts and improve its financial sustainability. Empowerment through Integration was committed to breaking social stigmas against people with visual impairments and empowering them to reach their full potential; however, it faced financial, legal, and social struggles in Lebanon, which limited its abilities to reach its goals. What tactics should the chief executive officer pursue to achieve the dual goals of scaling up the organization's social impacts and enhancing its financial sustainability? -
Apex Technology Co. Ltd.: Financing an Acquisition
On April 20, 2016, printer and ink maker Lexmark International, Inc. (Lexmark) announced that it was being acquired and taken private by a consortium comprising China-based computer hardware company Apex Technology Co., Ltd. (Apex), as well as private equity firms PAG Asia Capital (PAG) and Legend Capital (Legend). On the same day, Apex formally announced its acquisition of Lexmark for the Chinese capital market. The announcement caused a huge sensation because Apex was a small company compared to Lexmark; Lexmark completed 2015 with US$3.6 billion in revenue-approximately 10 times the revenue of Apex. To raise enough money to pay for the acquisition, Apex had established the consortium with PAG and Legend, and borrowed a large sum of money from its controlling shareholder and banks. Although Apex had ultimately raised enough money to complete the acquisition, its satisfaction over this success soon gave way to pressing questions about financing. In order to dispel the doubts of regulators and the market, Apex needed to decide whether it should adjust its financing plan for the acquisition, and if so, how. -
Centric Consulting Cleveland: Staying True to Core Values
Centric Cleveland was a business unit of Centric Consulting, a full-service management consulting and technology solutions firm. The firm had been founded with the intention of being different from other consulting firms with regard to building internal and external relationships, developing and supporting employees, adjusting for work-life balance, and being devoted to community service. But in 2015, Centric Cleveland was experiencing rapid growth, which was challenging the company's ability to sustain its unique corporate culture. How could Centric Cleveland sustain its culture and core values as it grew and gained more employees? What changes needed to be made to meet rising expectations for personal well-being and meaningfulness among millennials and generation Z hires? When culture was becoming a popular selling feature to potential new hires in the consulting sector, what could Centric Cleveland do to remain unique and stay competitive? -
Cap and Trade in Ontario
In January 2017, Ontario, Canada launched its cap-and-trade program in an effort to curb greenhouse gas (GHG) emissions. Ontario took a progressive position on combatting climate change that included shutting down coal-burning power plants, investing heavily in renewable power, and setting aggressive emissions-reduction targets across all sectors. Its targets included reducing emissions levels of 1990 by 15 per cent in 2020, 37 per cent in 2030, and 80 per cent in 2050. Its efforts allowed the province to meet its 2014 target of 6 per cent below 1990 levels. These targets complemented Ontario's commitment to the United Nation's 2015 Paris Agreement. Firms that annually emitted more than 10,000 tonnes but fewer than 25,000 had the option of entering the market on a voluntary basis. The expected downstream impact to the average Ontario household would be an increase of about CA$150 per year in home-heating and car-fuel costs. However, cost increases would be felt less directly through the rest of the economy. Four particular companies in Ontario had some decisions to make regarding how the province's cap-and-trade program would affect their operations. -
Institute on Aging: When Non-Profits Operate Like For-Profits
In 2012, the Institute on Aging, a US non-profit organization that served seniors in San Francisco, appointed a new chief executive officer (CEO). His mission was to salvage the organization, which was close to bankruptcy. His strategy was to consolidate services and pursue geographic expansion. Through these efforts, net income rose steadily and gross revenue increased from US$28.7 million in 2012 to US$45.2 million in 2017. However, not every outcome was positive. Morale among the line staff had suffered, and the senior leadership raised questions about the long-term business model that the organization should adopt. What more could the CEO do to help the Institute on Aging, an organization that straddled the public and private sectors? -
Fredrick Martin at UVA
Senior Change Manger Fredrick Martin and the UVA HR leadership team are tasked with the implementation of Ufirst, a project that will merge more than 70 HR programs and 11 distinct HR offices in both the academic division and the health system into a single, seamless HR. Ufirst will also leverage new technology that will provide self-serve HR to approximately 30,000 employees. It is an ambitious and complex project for the university, and the first in a new strategic effort to streamline university operations to make them more efficient, less costly, and best in class. Martin's experience is in the corporate context. Academia presents novel problems because of its complex governance structure. Change in the academic context requires buy-ins from many different stakeholders who could "opt-out, " which could prolong decision-making and derail implementation. Martin and his team must also contend with complex regulations governing hiring and workforce management. Martin needs to figure out how to support the needed change to a new culture where HR professionals are strategic partners with the people they serve rather than transactional experts. They needed to demonstrate to a large university community the power of collaboration and integration to revitalize HR. -
Modernizing France or Dismantling Its Social Contract? Macron's Reforms
This case uses France's labor market and regulation reforms in 2018 to illustrate how deregulation and labor market reforms can affect an economy's potential GDP. The case discusses President Emmanuel Macron's efforts to boost economic growth through economic liberalization, focusing on small- and medium-sized enterprises. The material allows for an examination of the effects of regulation on labor policy. If implemented, would the reforms boost broadly based growth? Would lowering taxes and regulation continue to boost France's economy, or would it unnecessarily put France's social safety net at risk? -
Ten Years After the Global Financial Crisis: A Pension Fund's Retrospective
Ebony Jones manages asset allocation for Colorado's Public Employee Retirement Association (PERA). She is worried that some asset price measures are approaching levels observed prior to the Great Recession, and she is pondering whether she should shift PERA's asset allocation toward cash and fixed-income investments as a precaution. To put the current market situation in perspective, she looks back at the causes and consequences of the Great Recession. Were there clear warning signs of asset bubbles and impending recession prior to 2008? To what extent does today's economy resemble the pre-2008 economy, and what are the implications for Colorado's retirees and the broader economy if stocks and real estate are due for a correction? The case was written for use in Darden's Global Economies and Markets (GEM) core course during a class on the causes of the Great Recession. Each class in the course focuses on a different subset of exogenous variables in the IS/LM AD/AS model that underpins the course. This class focuses on shocks to wealth, consumer confidence, and credit supply, each of which was increasing during the run-up to the crisis and subsequently plummeted. -
The Reputation of the "World's Most Prestigious Award": The Nobel Prize
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Clayton, Dubilier & Rice at 40
In 2018, private equity firm Clayton, Dubilier & Rice celebrated its 40th anniversary and its 20th year under the leadership of CEO Don Gogel. In those decades, CD&R showed solid portfolio performance and generated strong returns for its investors - accomplishments attributed to its unique balance between operations and finance professionals. The firm made sure that, for every deal, it had both the finance and operations expertise to grow revenues, streamline operations, and truly turnaround distressed companies. But as CD&R entered into its fifth decade and its largest fund to date (nearly $10 billion AUM), competition, AUMs, industry "dry powder," and buyout valuations were all on the rise. Within CD&R, rapidly-evolving technologies, talent retention, and the prospect of Gogel's retirement presented additional sources of pressure. Gogel and his team had to consider whether CD&R could maintain its unique identity and continue to add value as it had in the past in the face of such circumstances. -
Fitch Learning: Disrupting the Professional Education Landscape
In 2014, Andreas Karaiskos took over as CEO for a classic classroom based financial services training organisation, Fitch Learning, and started implementing a global expansion strategy via enhanced eLearning capabilities, partnerships with global financial institutions, co-location with other Fitch group companies while also evaluating target markets' sustainable financial indicators and their supportive customer demographics. With its main focus on certificate and basic skills training, its global presence and knowledge, and Fitch Group quality stamp, Fitch Learning is well positioned to capitalise on the large global financial institutions' desire to outsource basic training needs. In addition, with Fitch Group's global footprint, Fitch Learning is well positioned for the developing world's increasing need of financially skilled and certified individuals. Fitch Learning, created by merging Fitch's in-house old styled training department with the acquisition of the eLearning company '7cities' and its advanced eLearning platform and online technology. Andreas Karaiskos, who came from the acquired company's "built for sale" culture, had to merge these two very disparate organisations into a modern, flexible, tech savvy 21st century eLearning company "built for growth" and he needed a new strategy! He had to identify and acquire new resources & capabilities, implement a new organisational culture, keeping an eye on the industry trends while also ensuring the company's profitability. The strategy required a deep understanding of the industry and the forces affecting it, as well as a need for great leadership to keep key staff motivated. In an era where the use of Artificial Intelligence, machine learning, automation, ever increasing government regulations (fuelled by the growing numbers of high tech start-ups in the FinTech, EduTech and RegTech areas) does Fitch Learning have the right strategy to remain relevant as a financial services learning provider? -
Dutch Bros Coffee: Leadership Selection
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From Beirut With Love (A)
This case describes how Robert Fadel, CEO and chairman of ABC, one of Lebanon's leading retail and real estate groups, professionalized the family business. Robert was the second son of the company's founder, Maurice Fadel, who had run it single-handedly. Concerned that the business might be affected by rivalry between his four sons after he died, Maurice set up a trust in 2002 that designated Robert as his successor, and in May of 2009, Maurice revised the trust, granting Robert full control of the board as well. In June 2009, Maurice Fadel passed away, and according to the provisions of the trust, Robert became the chairman and CEO of ABC for a period of five years, with the possibility of extending his term by an additional three years, on condition that he had the support of at least one of his brothers. In his new role, Robert set two main goals for the company. First, he wanted to turn ABC into a professionally managed organization at all levels. Second, he wanted to invest in long-term projects that would expand the business. Actualizing his vision was not an easy task given the family conflicts and Lebanon's economic and political environment. However, Robert achieved both of his goals by the end of his eighth year, in 2017, when he stepped down as ABC's CEO. The dilemmas at that point were whether he should appoint someone from outside the Fadel family as ABC's new CEO, and whether he should step down from the board chairmanship. -
Junkkari Oy: Growing the Wood-Chipper Business
The MSK Group Oy was a third-generation family-owned business located in Ylihärmä, Finland. One of its subsidiaries, Junkkari Oy (Junkkari), manufactured agricultural and forestry equipment, including a range of mid-sized disk wood chippers used in small-scale farming and forestry applications; most of these were exported to markets in Europe and South Africa. Junkkari was not the only Finnish firm manufacturing wood chippers, and there was little to differentiate Junkkari's machines from those of its competitors. Like many small firms that exported to foreign markets, Junkkari used partner distributors to sell its equipment internationally. In early 2017, Junkkari's export manager was reviewing the wood-chipper orders. He knew the firm could double its annual production, but without firm orders, growth was stalled. He wondered how to grow the company's business with a very limited budget. -
Improving Class Contribution: Annie's Low Score
A business student received a low rating on class contribution from her leadership professor. She struggled to understand how this low rating happened, as she thought she had contributed in every class. She then lost the motivation to participate in class discussions, but considered developing a plan of action to address the problem. What strategies would help her to increase her contributions in class and improve her grades?