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Babbitt Ranches: Governance and Strategic Planning in a Family Business
The board of Babbitt Ranches had officially adopted a constitution to guide the future of the family business. Babbitt Ranches was a fourth-generation, 122 year old family firm with extensive landholdings in Arizona. The firm's board recognized responsibility and obligation to organizational, ecological, economical, and community values through multiple bottom-line criteria in the new constitution. In addition, the constitution reinforced the family's heritage by outlining a philosophy designed to direct processes, interactions, and critical decisions. Several business opportunities were being considered by the board that could be evaluated using the framework provided by the constitution. The challenge for Billy Cordasco, the firm's president, was to operationalize the constitution to evaluate the current set of opportunities and to ensure the constitution was used as a "touchstone" for firm decisions on an ongoing basis. -
The Backyard Harvest: Outgrowing Hunger One Community at a Time
This case describes a small nonprofit organization called The Backyard Harvest (BYH). The focus of BYH was to collect excess produce from individuals and small farmers and make the produce available to local food banks. Amy Grey had started BYH as a program of a local environmental nonprofit but had recently created a separate and independent BYH organization. Because of recent national press on the organization, Amy had received several requests for help from a handful of people around the country interested in setting up their own version of BYH. Amy's dilemma was how to continue to serve the needs of her local community and help other people around the country set up equivalent organizations. Amy wondered if she should take BYH national, and if so, when and how to do it. -
Employment Vignettes
Six vignettes drawn from decided cases explore legal and business issues in hiring, firing, promoting, and demoting employees, with an emphasis on protected classes, pretext, and anti-discrimination laws in the setting of start-ups and privately held companies. -
Assistant Professor Jo Worthington (A)
A relatively inexperienced professor struggles with managing a case discussion in a class based on numeric analysis. The class is lethargic and time is tight; she considers both a number of possible reasons for their disinterest and different teaching strategies to stimulate discussion and learning. -
Going Global - Working in Jumandia
After two successful years of consulting work, Sonya lands a job at a US-based petroleum company. She thrives in the firm's corporate culture and is soon promoted and transferred abroad to a developing country. However, she discovers that her firm has budgeted $5 million for "legal" consulting - in essence, a payment to the local government. When Sonya pursues the issue with her manager, he suggests that she leave her post and get more experience back home. Through an analysis of Sonya's experience, this case explores about how one might navigate the challenges presented by such an ethical dilemma. -
Parker Petroleum in Crisis
Parker Petroleum's board has given a special task force 24 hours to come up with solutions to trouble on several fronts. Plans for investing $4 billion in a new petroleum refinery in Jumandia are at risk after local residents rioted, alleging environmental damage. Political pressure is also heating up after Jumandia's opposition candidate claimed Parker's CEO was complicit in a $5 million bribe paid to the country's current regime. At the same time, an activist hedge fund has bought 15% of Parker's stock and is pressuring the company to exit its Jumandian investments. In this case students take on the special task force's challenge to make recommendations on how the board should deal with the crises. -
Closing the Gap - the Changing Home Care Environment (A)
The regulations in the home care industry are changing. The industry is moving toward consolidation and favoring large companies. Closing the Gap, a small home care provider in Ontario, reaches a crossroad. The company has three strategic options to choose from: (1) sell the company, (2) buy another company, or (3) grow organically. Given these conditions, students will be asked to conduct an industry analysis and help the chief executive officer (CEO) of Closing the Gap make the appropriate decision. In the (B) case, students will be asked to evaluate an acquisition possibility and advise the CEO whether the acquisition will be a successful one or not. -
Does Detailing Pay
Detailing, or visits from pharmaceutical sales representatives to medical offices to provide details about a drug's purpose and side effects, has become the pharmaceutical industry's most costly direct-to-physician marketing effort, with an estimated $20 billion spent annually. Research studies offer conflicting conclusions on the effectiveness of this approach. One study found every dollar spent on detailing resulted in incremental sales of $1.72 and another concluded it offered only a modest impact. In this case students generate a regression analysis to consider the impact of detailing and sampling on a physician's prescription rate. -
Post-Crisis Compensation at Credit Suisse (A)
On October 20, 2009 Brady Dougan, the CEO of Credit Suisse Group, announced a new compensation plan for the bank. The announcement had followed quickly on the heels of the G-20 meeting the prior month where, in the wake of the financial crisis, the major governments had laid out a set of guidelines for compensation in the financial industry. Credit Suisse Group was the first firm to adopt the G-20 guidelines, and did so a year ahead of the suggested timetable. While responsive to the concerns of regulators and politicians, Credit Suisse's program was more than a knee-jerk reaction, the new compensation plan had been the result of a "10 year journey" to reshape the culture of the firm. After a significant investment of senior leadership time to explain the new program to employees a significant new challenge arose. On December 9, the U.K. government announced they would impose a one-time 50% tax on bankers' bonuses greater than 25,000 pounds. Dougan and the executive team had to decide how best to fund this tax. Was it fair or appropriate to have the shareholders shoulder the burden of the tax? Similarly, was it fair to ask the UK employees to suffer relative to their peers in other countries? -
One Firm One Future at Davis Langdon (A)
Senior Partner Rob Smith just led construction consultancy firm Davis Langdon through a major organizational change in Europe and the Middle East. In the past, compensation arrangements had not incentivized partners to collaborate across the firm to serve clients' increasingly global and complex needs. In 2007, under Smith's leadership, the partnership agreed to implement holistic change. This included a shift from geographical to sector structure and a new profit-sharing system that encouraged partners to work together for the benefit of the firm as a whole. Amidst the global economic crisis, Smith must decide how to extend on a global basis the alignment the firm has begun to achieve in Europe and the Middle East. -
Oliver Sparling and Bible Books, Inc.
What happens when personal values and beliefs conflict with business decisions? This case, suitable for MBA, undergraduate, and executive learners, prompts engaging discussion of this issue. Oliver Sparling was a highly successful senior analyst at AFI International, a top consulting firm in Chicago with an open and tolerant workplace. He was also a gay man who had lived happily with his partner for over 10 years. Sparling encounters trouble, however, when one of the firm's clients, Bible Books, Inc., takes exception to his "inappropriate" openness about his sexuality (including wearing his commitment band). Sparling's boss calls him into the office and asks him to tone it down when he's at Bible Books, Inc. "These are not easy economic times," said the boss. "And this project is a big one for us. Basically, you're doing the company a favor if you lay low, and once the project is finished, it will be like it never happened. Besides, you know that you don't have anything to hide while you're at home here in Chicago. This is just for when you are in Birmingham." Sparling must decide what course of action to take. -
VINESH JUGLAL: SOUTH AFRICAN SERIAL ENTREPRENEUR
Serial entrepreneur Vinesh Juglal wondered what it would be like to run Durban Computer College (DCC), the institution he had just bought. The education market in Africa was growing by leaps and bounds, and the ever-opportunistic Vinesh knew that buying a successful training enterprise could help him make the most of this market. On the other hand, Vinesh was well aware that in order to grow the institution he would need another source of financing, since his current lines were tied up in his real estate and supermarket businesses. Infrastructure was not an issue, since Vinesh had most of the fixed assets he needed to grow DCC Campus. Attracting more students would happen either by lowering fees or by offering financial aid. Vinesh had heard of many sponsoring bodies, including government programs, set up for this purpose. But these sponsors tended to give grants only to non-profit entities. What would be the best way to grow this "business"-if it could be called a business in the first place? Should he target the same return on investment as in his other businesses? More broadly, could he be successful using his previous, purely commercial approach? Learning objectives: To experience, almost first-hand, the rapidly changing business environment in South Africa in the 1985-2010 period, through the entrepreneurial adventures of Vinesh Juglal who builds a series of enterprisees across several industries. To consider the social role of business in the context of a developing country. -
PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY
The situation was clearly untenable. In March 2008, ESB's chief executive Padraig McManus made the startling announcement that the company would become a net-zero carbon emitter by 2035, and would still remain competitive. Under his leadership, ESB was going to lead the way in slowing the growth of Ireland's GHG emissions. He declared that to achieve this goal, ESB would invest €22 billion over 15 years to develop alternative clean technologies, including energy efficiency measures, the use of clean coal, and the connection of an electricity-generating wind farm to the national grid. His target would make ESB the world's first carbon-neutral electric utility. This strategy presented a number of significant risks: 1) Financial risk - the €22 billion capital investment had to succeed. 2) Technological and ecological risks - the strategic framework relied on clean coal technology, still being developed. 3) Credibility risk - what if ESB was not able to achieve its goal? 4) Stakeholder risk - Landowners, concerned over health, environment and property prices, were ready to oppose the wind farms. McManus was conscious of the risks, and he also knew that high performing leaders always take risks even while confronting dilemmas such as: Could an electric utility achieve a zero carbon footprint and remain competitive? Can a responsible leader risk jeopardizing the present and future well-being of his company, the environment, and his country? Could he exert his leadership by influencing Irish, and possibly European, climate policy? The case provides an opportunity for a debate on responsible leadership. It was written for use in senior executive and MBA programs. -
Crown Worldwide: Integrating Corporate Social Responsibility in Business
Founded in 1965 by Jim Thompson, the Crown Worldwide Group ("Crown") began as a small moving company in Japan, shifting its headquarters to Hong Kong in the mid-1970s. Within 30 years, Crown had became the world's largest privately held relocation and logistics enterprise, a success that was attributed primarily to the founder's insistence on high service quality and unwavering commitment to community development. With growing concern among customers about CSR, the company recognized that CSR must be integrated into its corporate strategy and day-to-day business operations to achieve sustainability for both the company and society. In 2008, Crown appointed its first CSR director, whose primary task was to develop and implement a standardized global CSR strategy that would support Crown's environmental and community development initiatives. Various CSR integration steps were taken, such as developing global environmental standards, stimulating employee volunteerism, building CSR communication channels, developing a supplier management system and conducting CSR measurement. In line with the goals of the UN Global Compact-a leadership initiative that guided participants in practicing responsible business-Crown would also publish sustainability reports yearly. Although employees were supportive of the company's CSR efforts, the journey of becoming a well rounded corporate citizen is full of complexities and involves a wide range of stakeholders and multi-dimensional issues. Without a roadmap or framework, CSR integration efforts could be daunting, but inaction is no longer an option in light of increasing CSR expectations. What would be the key success factors for Crown's CSR integration? -
Werner von Siemens and the Electric Telegraph
This case describes the nineteenth century founding by Werner Siemens of the Siemens electrical business in Germany. Werner's dual role as inventor and entrepreneur is explored as he created one of the world's first multinational enterprises, whose growth initially rested on its pioneering role in the new telegraph industry. Werner sent his brothers to open businesses in Great Britain and Russia, and the case explores the advantages and disadvantages of family business as a form of organization, as well as the challenges growing it poses for such family firms. -
Elan Corporation Turnaround
The case begins with newly appointed chairman and interim CEO Garo Armen dwelling on the significant issues that Elan Corporation, an Irish pharmaceutical company, faces. Its share price has plummeted 96% after accusations of accounting fraud and the discontinuation of an important clinical trial due to the drug's severe side effects. As a result, Elan faces insolvency. About $2 billion in debt that could no longer be satisfied in stock will soon mature, and there are questions regarding the company's structure and various operating concerns. Armen is also concerned about the ethical consequences of the company's failing and thus not being able to develop potentially life-saving medicines. Armen must decide what the nature of Elan should be moving forward and what strategy it should adopt. The operational and financial issues discussed in the case are complicated by Elan's status as an Irish company with significant international operations. The case closes with Armen reflecting on the decisions he has made-which students should critique and suggest alternatives to-as well as an open decision on choosing a successor CEO. -
The Upstart's Assault (HBR Case Study and Commentary)
TelZip, a small mobile-network operator, has decided to shake up the European telecommunications market by offering "free forever" broadband service to customers who sign a long-term contract with the company. Meridicom, the dominant industry player, must decide how to respond. Joe Ulan, the incumbent's new chief marketing officer, gets conflicting advice: The product division heads don't like the idea of discounting their products or even of working together; the sales director wants to kill the competition with a price war. How can Joe turn this attack into an opportunity? Marco Bertini and Nirmalya Kumar, of London Business School, present this fictional case to explore the question, "What do you do when one of your small competitors pulls out its big gun?" Two experts comment on the case in R1007R and R1007Z. Georg Tacke, of Simon-Kucher & Partners, argues that simply matching a small competitor's prices is the worst reaction. Anne Gro Gulla, of Telenor Group, suggests creating offshoots of the main firm that might cannibalize the mother brand but avoid the greater evil of allowing it to be eaten alive by outsiders. HBR's online readers also offer their two cents. You can, too. -
The Upstart's Assault (HBR Case Study)
TelZip, a small mobile-network operator, has decided to shake up the European telecommunications market by offering "free forever" broadband service to customers who sign a long-term contract with the company. Meridicom, the dominant industry player, must decide how to respond. Joe Ulan, the incumbent's new chief marketing officer, gets conflicting advice: The product division heads don't like the idea of discounting their products or even of working together; the sales director wants to kill the competition with a price war. How can Joe turn this attack into an opportunity? Marco Bertini and Nirmalya Kumar, of London Business School, present this fictional case to explore the question, "What do you do when one of your small competitors pulls out its big gun?" Two experts comment on the case in R1007R and R1007Z. Georg Tacke, of Simon-Kucher & Partners, argues that simply matching a small competitor's prices is the worst reaction. Anne Gro Gulla, of Telenor Group, suggests creating offshoots of the main firm that might cannibalize the mother brand but avoid the greater evil of allowing it to be eaten alive by outsiders. HBR's online readers also offer their two cents. You can, too. -
The Upstart's Assault (Commentary for HBR Case Study)
TelZip, a small mobile-network operator, has decided to shake up the European telecommunications market by offering "free forever" broadband service to customers who sign a long-term contract with the company. Meridicom, the dominant industry player, must decide how to respond. Joe Ulan, the incumbent's new chief marketing officer, gets conflicting advice: The product division heads don't like the idea of discounting their products or even of working together; the sales director wants to kill the competition with a price war. How can Joe turn this attack into an opportunity? Marco Bertini and Nirmalya Kumar, of London Business School, present this fictional case to explore the question, "What do you do when one of your small competitors pulls out its big gun?" Two experts comment on the case in R1007R and R1007Z. Georg Tacke, of Simon-Kucher & Partners, argues that simply matching a small competitor's prices is the worst reaction. Anne Gro Gulla, of Telenor Group, suggests creating offshoots of the main firm that might cannibalize the mother brand but avoid the greater evil of allowing it to be eaten alive by outsiders. HBR's online readers also offer their two cents. You can, too. -
LUXOTTICA: SUSTAINING GROWTH IN CHALLENGING TIMES
Luxottica, headquartered in Milan, Italy, was the largest eyewear company in the world with sales surpassing €5 billion in 2008. In June 2009, the CEO of Luxottica, met with his management team to review the company's growth strategy for the next five years. The objective was to take Luxottica to the next growth level. Should he stick to the same business model, or adopt a new one? Should he expand retail brand acquisitions? How should the large portfolio of brands be managed? Where should the geographic focus of the company be? Learning objectives: Global strategy, marketing and supply chain management.