9th Case Critique Colloquium

Academy of Management Meetings, August 2000

Toronto, ON, Canada

Organizers: Timothy W. Edlund, Morgan State University

John F. Mahon, Boston University/University of Maine

Panelists: Margaret J. Naumes, University of New Hampshire

Lim Gaik Eng, National University of Singapore

Marilyn L. Taylor, University of Missouri Kansas City

Steven Maranville, University of Houston Downtown

John A. Seeger, Bentley College

CASES:

The Hayti Heritage Center: A Multi-Purpose Organization

Claudia Harris, North Carolina Central University

John Parnell, Texas A & M University

The Sculptor's Tools for Revealing the Potential Within: The Transformation of Fiber Corporation (A); & "The Winds Have Shifted within the Valley," The Story of Co-Management at the APD of Fibre Corporation (B)

Elizabeth A. Haley and Steven C. Currall, Rice University

Compaq & Eckhard Pfeiffer: The Road not Taken

Charles Dhanaraj, Indiana University

Michael Wade, University of Western Ontario

Team Spirit at Sino-American Shanghai Squibb (SASS)

Anne Marie Francesco, Hong Kong Baptist University

Marie Stopes International

Suellen M. Littleton and Paul Williams, London Business School

Albert Dunlap and Corporate Transformation (A) & (B)

Sam Perkins, David Wylie, Ross D. Petty, Virginia Soybel,

Phyllis Schlesinger, and Al Anderson, Babson College

THE HAYTI HERITAGE CENTER: A MULTI-PURPOSE ORGANIZATION

Claudia Harris, NC Central University

John Parnell, Texas A&M Commerce

Case Objectives and Use

This case presents the current situation of a not-for-profit organization, the Hayti Heritage Center, located in Durham, NC. In its short history, the Center has worn many hats and has had two names. The sub-title `A Multi-Purpose Organization' emphasizes a lack of direction in the Center's mission. As a result, a typical analysis of its business environment is made both more difficult and more interesting. Included in the case is information to aid in analyzing both the internal and external environments of the organization and to guide students in determining an appropriate role for the

Hayti Heritage Center. Specifically, the topics of leadership and the on-going problem of finding funding for a not-for-profit organization are relevant to the lack of direction of the Center.

The case can be used effectively for discussing the problems faced by civic organizations in a business policy course. It may also be used to discuss leadership, especially the problems which result from having a weak governance structure and a single-person power structure.

Case Synopsis

The Hayti Heritage Center contains facilities for art displays, archives of African-American documents, a dance studio, several meeting rooms, rentable offices, and a kitchen, in addition to administrative offices for the Center itself and the still-unheated and un-air-conditioned 350-seat sanctuary. Its programs include a four-week day camp for children, a disorganized archives of local historical documents, and a wide variety of art, music, and lecture events. In addition, the facilities are often rented for weddings, receptions, community outreach programs, fashion shows, retreats, and workshops.

Although the St. Joseph's Historical Foundation is officially governed by a board, the positions shown on the organization chart as "Administrative Assistant" and "Program Director" remain unfilled, and clerical and receptionist functions are dependent on volunteers. As a result, the executive director’s position is all-encompassing.

The bulk of the Hayti Heritage Center's revenue is derived from grants. The executive director is responsible both for finding sources of funding and for writing grants. Programming reflects the sources of funding it finds available, rather than based on a clear statement of direction.

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Contact person: Claudia Harris, NC Central University, PO Box 19407, Durham, NC 27707

Voice: 919-560-6148; FAX: 919-560-6163; e-mail: charris@nccu.edu

THE SCULPTOR’S TOOLS FOR REVEALING THE POTENTIAL WITHIN:

THE TRANSFORMATION OF FIBRE CORPORATION (A), and

“THE WINDS HAVE SHIFTED IN THE VALLEY”

THE STORY OF CO-MANAGEMENT AT THE APD OF FIBRE CORPORATION (B)

Elizabeth A. Haley and Steven C. Currall, Rice University

Case Objectives and Use

This case documents the many initiatives that were implemented in a company undergoing substantial change following a dramatic decline in corporate performance. The union and changes in the role of the union leadership are critical elements of the case. Students are encouraged to consider the perspective of both the rank-and-file union members as well as that of the union leaders. The dilemma of downsizing for union members is also considered.

This case is well suited for an Organizational Development and Change course at the MBA or executive level. Used as a combination take-home and in class assignment, it could be used early in the course to demonstrate the complexity of change, but it is a better fit for later in the course when students can apply concepts they have been exposed to in class. Courses in Labor Relations, Organizational Behavior, and Strategic Human Resource Management could also include this case.

Case Synopsis

In late 1997, Fibre Corp. (a pseudonym), brought in a new CEO and president to turn the large, unionized, forest products company around. The company had experienced four consecutive quarterly losses and the “Asian flu” had hit the lucrative white woods operations, resulting in shutdowns. From day one, the CEO put everyone on notice that there would be a thorough examination of all the business units and some units, as well as personnel, would be divested, quickly. The (A) case, The Sculptor’s Tools for Revealing the Potential Within: The Transformation of Fibre Corporation, describes the business conditions and initiatives initiated.

The (B) case, “The Winds Have Shifted in the Valley” The Story of Co-Management at the APD of Fibre Corporation, walks the reader through the steps taken to implement one of the initiatives, Co-Management, presented in the (A) case. The activities of the first division of Fibre Corp. to restart operations after undertaking a joint union/management redesign of the sawmill operation are recounted.

Contact Person: Elizabeth A. Haley, Rice University, Houston, TX, 77005.

Mail: 4454 E Capistrano, Phoenix, AZ 85044 USA.

Voice: (480) 893-1712; e-mail: bethh@rice.edu

Compaq and Eckhard Pfeiffer: The road not taken

Charles Dhanaraj

Kelley School of Business

Indiana University

Mike Wade

Richard Ivey School of Business

The University of Western Ontario

Case Objectives and Use

This is a short case for use in an opening class on business policy, strategic or management. The idea is to use a context that is interesting as well as familiar to most students to address the issue of what strategy is (or is not) and what makes (or does not make) a good strategy. The teaching note provides a detailed analysis of the case along with the teaching suggestions and transparency masters for the classroom.

Case synopsis

The case presents the events leading up to the ouster of Eckhard Pfeiffer as CEO in April 1999. A quick review of the early years of Compaq, as well as the transition of leadership from the founding CEO, Rod Canion to Eckhard Pfeiffer is presented at the outset. Following that, the case describes some of the key initiatives of Pfeiffer in his thrust to make Compaq #1 in the computer industry, and a US$ 50 billion company. The financial difficulties of the late 1998 and early 1999 are discussed to give an insight into the pressure on the board to act. Some quotes from the press, mainly from financial analysts, help the student to get to the tension facing the new CEO – identifying what went wrong as well as what need to be done. The explicit purpose of the case is to introduce strategy, and not carry the discussion to the point where students will be able to formulate a coherent strategic plan for Compaq. Consequently, many of the details of the events, the company and the computer business are intentionally omitted. This also makes it possible that the case can be quickly read by the students in class.

Contact Person:

Charles Dhanaraj, Ph.D.

Assistant Professor of Management

Kelley School of Business

Indiana University

801 West Michigan Street

Indiana 46202

Tel: (317) 274-5694

Fax: (317) 274-3312

Email: dhanaraj@iupui.edu

TEAM SPIRIT AT SINO-AMERICAN SHANGHAI SQUIBB (SASS)

Anne Marie Francesco, Hong Kong Baptist University

Case Objectives and Use

The objective is to evaluate the introduction of teams in a Sino-American joint venture company, and in particular to consider whether the "imported" team concept is appropriate for the Chinese work force. The case allows the instructor to discuss the transfer of people management practices from one culture to another and to consider the specifics of international joint venture management in China.

The case would be appropriate for undergraduate or graduate classes in management, international management, international business, Asian management, organizational behavior, or international organizational behavior. The teaching note focuses on issues such as differentiating groups from teams, the appropriateness of teams in the Chinese context, and the effectiveness of the existing teams within this joint venture.

Case Synopsis

The case describes the development of teams at Sino-American Shanghai Squibb Pharmaceuticals Ltd. (SASS), a foreign joint venture pharmaceutical company in China. The company itself was considered a leader within China, in terms of utilizing modern technology and management practice. In trying to maintain consistency with the company's core values and to improve overall efficiency, SASS's CEO, Zhou De Fu, sought help from the company's foreign partner, Bristol-Myers Squibb (BMS). Consequently, with help from BMS, SASS started to organize a number of teams to handle customer complaints and improve organizational efficiency.

The case gives an account of the first year of operation of the SASS teams, including how they were formed, some of their achievements, and the feelings of those who participated. After reviewing the positive and negative aspects of team functioning, Mr. Zhou is left wondering what he should do about the teams in the future.

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©1999 Anne Marie Francesco

This research was supported by a U.S. Department of Education International Research and Studies grant to Pace University with the author as principal investigator.

Contact person: Anne Marie Francesco, Hong Kong Baptist University, Department of Management, Kowloon Tong, Hong Kong, Tel: 852-2339-5215, Fax: 852-2339-5583, e-mail: manmf@hkbu.edu.hk

MARIE STOPES INTERNATIONAL

Suellen M. Littleton, London Business School

Case objectives and use

The Marie Stopes International case is designed to help students understand key managerial issues in operating an international non-profit partnership* organization. The case is meant to explore how the applications of some practices of mainstream business techniques may be useful to the nonprofit sector. The case demonstrates what the nuances in those applications may be. The case also seeks to explore the dynamics of an international partnership relationship. Students should come away with a good sense of the complex issues which govern global nonprofit social enterprises and some of the management tools available to assist in the governance and running of such organizations.

The case is designed for courses focusing on management of the nonprofit sector. It is also relevant for use in other courses that may discuss aspects of managing operations in the developing world, organizational partnerships or debates regarding the application of pure business techniques to the nonprofit sector.

Case synopsis

The Marie Stopes International (MSI) case explores the issues of managing an international Nonprofit partnership organization. A London based organization; MSI has expanded rapidly over the past decade to provide integrated reproductive health services throughout the developing world. Described by Chief Executive, Dr. Tim Black, as a social enterprise, MSI’s operating philosophy is much like a profit driven business. At MSI emphasis is placed on clear goals and performance criteria designed to achieve efficiency and deliver customer service. Key to MSI’s success, however, is the head office’s ability to manage prosperous relationships with its partner organizations. In most of the countries MSI serves a partnership has been formed with a domestic organization through which services are delivered.

After years of engendering a policy framework in which loosely coupled relationships with partners who managed operations with relative autonomy were maintained, Dr Tim Black is implementing new means of standardizing MSI’s services to help manage the global group. Claiming he would like to build the McDonalds of family planning, Dr. Black is moving toward creating a social franchise. The introduction of a ‘Partners Manual’ is providing a platform in which MSI is seeking to create greater consistency between its partner organizations around the globe.

The case explores both the opportunities and limitations of partnership as well as the governance issues of managing a global group of partners

*For clarity the author notes that ‘partnership’ in this case refers exclusively to partnership between a host nonprofit organization and the domestic nonprofit organization at point of service. ‘Partnership’ in this case does not refer to a public-private relationship.

Suellen M Littleton, London Business School, Sussex Place, Regents Park, London NW1 4SA, England. Telephone: +44 207 262 5050, Fax: +44 207 724 8357, email: slittleton@london.edu

Al Dunlap and Corporate Transformation (A & B)

Sam Perkins, Babson College

Case Objectives And Use

These cases take a multi-disciplinary approach to the situation with Albert Dunlap and his transformation of the Sunbeam Corporation. In particular, they address issues related to organizational behavior/leadership, ethics, accounting and law. Their primary focus is Al Dunlap's style of leadership and corporate restructuring. Given his speedy layoffs of large numbers of employees, based solely on the recommendation of outside consultants, both leadership and ethical issues should be discussed. The A case ends at what appears to be the height of Dunlap's success in order to provide a fairly neutral basis for discussing both the strengths and weaknesses of his approach. The B case is sufficiently brief that it could be distributed towards the end of a single session class to inform the students that much of the purported corporate transformation was actually accomplished through accounting manipulations. Sunbeam acquired other firms, perhaps to better enable the use of accounting tricks, but eventually, the accounting practices were revealed, the share price plummeted, Dunlap was fired, and litigation began.

This case is used in the integrated first year of the MBA program at the Olin Graduate School of Business of Babson College. It is taught by faculty from four disciplines in two days. During the first day, the A case is taught by leadership and ethics faculty, traditionally in separate class sessions. At the end of the last session, the B case is distributed. It is taught the following day in a single joint session between the accounting and law faculty. The A case also could be used in Organizational Behavior courses and the B case could be used in accounting courses.

Case Synopsis

The A case chronicles the career of Al Dunlap as a corporate "turnaround artist." It examines his early career and apparently successful transformation and sale of Scott paper. It focuses on the situation in March 1998 when the Sunbeam Corporation announced the acquisition of three companies - Coleman, Mr. Coffee, and Signature Brands. The move came five weeks after the company had announced record sales and earnings for the fourth quarter and full year 1997. The market reacted to the March 3 news by driving up Sunbeam shares 24% in a week to a record $53, more than quadruple the price when Dunlap was hired and giving him paper profits of $73 million on his new employment contract.

The B case then picks up and describes the situation in mid-March 1998 when the “Bubble Bursts at Sunbeam” as Sunbeam sought to increase its insurance coverage for directors and officers liability by $10 million, in excess of the existing $30 million coverage. On April 3, 1998, Sunbeam released tentative figures for the 1st quarter, showing a loss of $44.6 million on a 5% decrease in sales. The news triggered a 25% sell-off in Sunbeam stock to 34 3/8 and was followed by a June article in Barron's alleging that of the $109.4 million in net income for 1997, $120 million could be attributed to "artificial profit boosters." The B case concludes with the firing of Dunlap and the filing of litigation against Sunbeam and Dunlap.

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Contact Person: David Wylie, Director of Case Publishing, Babson College, Babson Park, MA 02457. Voice (781) 239-6168; FAX (781) 239-4556; e-mail: wylie@babson.edu