WHAT IS CASE STUDY ANALYSIS?
A case study presents an account of what happened to a business or industry over a number of years. It chronicles the events that managers had to deal with, such as changes in the competitive environment, and charts the managers’ response, which usually involved changing the business- or corporate-level strategy.
Cases prove valuable in a course for several reasons. First, cases provide you, the student, with experience of organizational problems that you probably have not had the opportunity to experience firsthand. In a relatively short period of time, you will have the chance to appreciate and analyze the problems faced by many different companies and to understand how managers tried to deal with them.
Second, cases illustrate what you have learned. The meaning and implication of this information are made clearer when they are applied to case studies. The theory and concepts help reveal what is going on in the companies studied and allow you to evaluate the solutions that specify companies adopted to deal with their problems. Consequently, when you analyze cases, you will be like a detective who, with a set of conceptual tools, probes what happened and what or who was responsible and then marshals the evidence that provides the solution. Top managers enjoy the thrill of testing their problem-solving abilities in the real world. It is important to remember, after all, that no one knows what the right answer is. All that managers can do is to make the best guess. In fact, managers say repeatedly that they are happy if they are right only half the time in solving strategic problems. Management is an uncertain game, and using cases to see how theory can be put into practice is one way of improving your skills of diagnostic investigation.
Third, case studies provide you with the opportunity to participate in class and to gain experience in presenting your ideas to others. Instructors may sometimes call on students as a group to identify what is going on in a case, and through classroom discussion the issues in and solutions to the case problem will reveal themselves. In such a situation, you will have to organize your views and conclusions so that you can present them to the class. Your classmates may have analyzed the issues differently from you, and they will want you to argue your points before they will accept your conclusions; so be prepared for debate. This is how decisions are made in the actual business world.
Instructors also may assign an individual, but more commonly a group, to analyze the case before the whole class. The individual or group probably will be responsible for a thirty- to forty-minute presentation of the case to the class. That presentation must cover the issues involved, the problems facing the company, and a series of recommendations for resolving the problems. The discussion then will be thrown open to the class, and you will have to defend your ideas. Through such discussions and presentations, you will experience how to convey your ideas effectively to others. Remember that a great deal of managers’ time is spent in these kinds of situations, presenting their ideas and engaging in discussion with other managers, who have their own views about what is going on. Thus, you will experience in the classroom the actual process of what goes on in a business setting, and this will serve you well in your future career.
If you work in groups to analyze case studies, you also will learn about the group process involved in working as a team. When people work in groups, it is often difficult to schedule time and allocate responsibility for the case analysis. There are always group members who shirk their responsibilities and group members who are so sure of their own ideas that they try to dominate the group’s analysis. Most business negotiations take place in groups, however, and it is best if you learn about these problems now.
A Gentle Reminder:
Best practice in writing up a case study report Writing a case study report involves following a few rules. These are
• A case study report is not an essay: it is a call for action, to be read by the company’s managers and executives.
Thus, it is of the utmost importance to state immediately, in the introduction, the report’s conclusion (the action to
be considered). This will avoid lengthy argument and digression. The report should then set out the reasons for this
recommendation, rather than being written in an “investigative” mode which only identifies the solution at its
• A written report is a means of communication: to facilitate this, it should include a table of contents, page
numbering, and all the other basic requirements of a properly formatted document.
• A case study report should follow the structure: “This is the main problem of the case study […] The secondary
problems are these […] To solve these problems, this is what we recommend […] and here are the reasons why […]”
Finally, some pitfalls to avoid:
• A case study report should not simply paraphrase the text provided. Avoid at all costs rewriting the case word-for-
word, or copying figures, tables or graphs already included in the case study.
• Recommendations should be clear and unambiguous, and supported by as much corroborative data as possible.
• The presentation style of a document is as important as its content: both elements affect the reader’s perception
of the analysis proposed. The report should be written in a simple, direct and concise style.
• Finally, subjective phrases such as “it seems”, “I (we) believe”, “in my (our) opinion”, and “it is obvious that”
should be avoided.
1- An Overview of Organizational Behavior Difficult Transitions Tony Stark had just finished his first week at Reece Enterprises and decided to drive upstate to a small lakefront lodge for some fishing and relaxation. Tony had worked for the previous ten years for the O’Grady Company, but O’Grady had been through some hard times of late and had recently shut down several of its operating groups, including Tony’s, to cut costs. Fortunately, Tony’s experience and recommendations had made finding another position fairly easy. As he drove the interstate, he reflected on the past ten years and the apparent situation at Reece. At O’Grady, things had been great. Tony had been part of the team from day one. The job had met his personal goals and expectations perfectly, and Tony believed he had grown greatly as a person. His work was appreciated and recognized; he had received three promotions and many more pay increases. Tony had also liked the company itself. The firm was decentralized, allowing its managers considerable autonomy and freedom. The corporate Culture was easygoing. Communication was open. It seemed that everyone knew what was going on at all times, and if you didn’t know about something, it was easy to find out. The people had been another plus. Tony and three other managers went to lunch often and played golf every Saturday. They got along well both personally and professionally and truly worked together as a team. Their boss had been very supportive, giving them the help they needed but also staying out of the way and letting them work. When word about the shutdown came down, Tony was devastated. He was sure that nothing could replace O’Grady. After the final closing was announced, he spent only a few weeks looking around before he found a comparable position at Reece Enterprises. As Tony drove, he reflected that “comparable” probably was the wrong word. Indeed, Reece and O’Grady were about as different as you could get. Top managers at Reece apparently didn’t worry too much about who did a good job and who didn’t. They seemed to promote and reward people based on how long they had been there and how well they played the never-ending political games. Maybe this stemmed from the organization itself, Tony pondered. Reece was a bigger organization than O’Grady and was structured much more bureaucratically. It seemed that no one was allowed to make any sort of decision without getting three signatures from higher up. Those signatures, though, were hard to get. All the top managers usually were too busy to see anyone, and interoffice memos apparently had very low priority. Tony also had had some problems fitting in. His peers treated him with polite indifference. He sensed that a couple of them resented that he, an outsider, had been brought right in at their level after they had had to work themselves up the ladder. On Tuesday he had asked two colleagues about playing golf. They had politely declined, saying that they did not play often. But later in the week, he had overheard them making arrangements to play that very Saturday. It was at that point that Tony had decided to go fishing. As he steered his car off the interstate to get gas, he wondered if perhaps he had made a mistake in accepting the Reece offer without finding out more about what he was getting into. Case Questions
1- Identify several concepts and characteristics from the field of organizational behavior that this case illustrates.
2- What advice can you give Tony? How would this advice be supported or tempered by behavioral concepts and processes?
3- Is it possible to find an “ideal” place to work? Explain.
2- Managing People and Organizations Humanized Robots? Helen Bowers was stumped. Sitting in her office at the plant, she pondered the same questions she had been facing for months: how to get her company’s employees to work harder and produce more. No matter what she did, it didn’t seem to help much. Helen had inherited the business three years ago when her father, Jake Bowers, passed away unexpectedly. Bowers Machine Parts was founded four decades ago by Jake and had grown into a moderate-size corporation. Bowers makes replacement parts for large-scale manufacturing machines such as lathes and mills. The firm is headquartered in Kansas City and has three plants scattered throughout Missouri. Although Helen grew up in the family business, she never understood her father’s approach. Jake had treated his employees like part of his family. In Helen’s view, however, he paid them more than he had to, asked their advice far more often than he should have, and spent too much time listening to their ideas and complaints. When Helen took over, she vowed to change how things were done. In particular, she resolved to stop handling employees with kid gloves and to treat them like what they were: the hired help. In addition to changing the way employees were treated, Helen had another goal for Bowers. She wanted to meet the challenge of international competition. Japanese firms had moved aggressively into the market for heavy industrial equipment. She saw this as both a threat and an opportunity. On the one hand, if she could get a toehold as a parts supplier to these firms, Bowers could grow rapidly. On the other, the lucrative parts market was also sure to attract more Japanese competitors. Helen had to make sure that Bowers could compete effectively with highly productive and profitable Japanese firms. From the day Helen took over, she practiced an altogether different philosophy to achieve her goals. For one thing, she increased production quotas by 20 percent. She instructed her first-line supervisors to crack down on employees and eliminate all idle time. She also decided to shut down the company softball field her father had built. She thought the employees really didn’t use it much, and she wanted the space for future expansion. Helen also announced that future contributions to the firm’s profit-sharing plan would be phased out. Employees were paid enough, she believed, and all profits were the rightful property of the owner—her. She also had private plans to cut future pay increases to bring average wages down to where she thought they belonged. Finally, Helen changed a number of operational procedures. In particular, she stopped asking other people for their advice. She reasoned that she was the boss and knew what was best. If she asked for advice and then didn’t take it, it would only stir up resentment. All in all, Helen thought, things should be going much better. Output should be up and costs should be way down. Her strategy should be resulting in much higher levels of productivity and profits. But that was not happening. Whenever Helen walked through one of the plants, she sensed that people weren’t doing their best. Performance reports indicated that output was only marginally higher than before but scrap rates had soared. Payroll costs were indeed lower, but other personnel costs were up. It seemed that turnover had increased substantially and training costs had gone up as a result.
In desperation, Helen finally had hired a consultant. After carefully researching the history of the organization and Helen’s recent changes, the consultant made some remarkable suggestions. The bottom line, Helen felt, was that the consultant thought she should go back to that “humanistic nonsense” her father had used. No matter how she turned it, though, she just couldn’t see the wisdom in this. People worked to make a buck and didn’t want all that participation stuff. Suddenly, Helen knew just what to do: She would announce that all employees who failed to increase their productivity by 10 percent would suffer an equal pay cut. She sighed in relief, feeling confident that she had finally figured out the answer. Case Questions
1- How successful do you think Helen Bowers’s new plan will be?
2- What challenges does Helen confront?
3- If you were Helen’s consultant, what would you advise her to do?
3- Managing Global and Workforce Diversity Culture Shock Warren Oats was a highly successful executive for American Auto Suppliers, a Chicago- based company that makes original-equipment specialty parts for Ford, GM, and Chrysler. Rather than retreat before the onslaught of Japanese automakers, AAS decided to counterattack and use its reputation for quality and dependability to win over customers in Japan. Oats had started in the company as an engineer and worked his way up to become one of a handful of senior managers who had a shot at the next open vice-presidential position. He knew he needed to distinguish himself somehow, so when he was given a chance to lead the AAS attack on the Japanese market, he jumped at it. Oats knew he did not have time to learn Japanese, but he had heard that many Japanese executives speak English, and the company would hire a translator anyway. The toughest part about leaving the United States was persuading his wife, Carol, to take an eighteen- month leave from her career as an attorney with a prestigious Chicago law firm. Carol finally persuaded herself that she did not want to miss an opportunity to learn a new culture. So, armed with all the information they could gather about Japan from their local library, the Oats headed for Tokyo. Known as an energetic, aggressive salesperson back home, Warren Oats wasted little time getting started. As soon as his office had a telephone—and well before all his files had arrived from the States—Oats made an appointment to meet with executives of one of Japan’s leading automakers. Oats reasoned that if he was going to overcome the famous Japanese resistance to foreign companies, he should get started as soon as possible. Oats felt very uncomfortable at that first meeting. He got the feeling that the Japanese executives were waiting for something. It seemed that everyone but Oats was in slow motion. The Japanese did not speak English well and appeared grateful for the presence of the interpreter, but even the interpreter seemed to take her time in translating each phrase.
Frustrated by this seeming lethargy and beginning to doubt the much-touted Japanese efficiency, Oats got right to the point. He made an oral presentation of his proposal, waiting patiently for the translation of each sentence. Then he handed the leader of the Japanese delegation a packet containing the specifics of his proposal, got up, and left. The translator trailed behind him as if wanting to drag out the process even further. By the end of their first week, both Oats and his wife were frustrated. Oats’s office phone had not rung once, which did not make him optimistic about his meeting with another top company the following week. Carol could scarcely contain her irritation with what she had perceived of the Japanese way of life. She had been sure that a well-respected U.S. lawyer would have little trouble securing a job with a Japanese multinational corporation, but the executives she had met with seemed insulted that she was asking them for a job. And the way they treated their secretaries! After only a week in Japan, both Carol and Warren Oats were ready to go home. A month later, their perspective had changed radically, and both looked back on those first meetings with embarrassment. Within that month, they had learned a lot about the Japanese sense of protocol and attitudes toward women. Warren Oats believed he was beginning to get the knack of doing business with the Japanese in their manner: establishing a relationship slowly, almost ritualistically, waiting through a number of meetings before bringing up the real business at hand, and then doing so circumspectly. It was difficult for Oats to slow his pace, and it made him nervous to be so indirect, but he was beginning to see some value in the sometimes humbling learning process he was going through. Perhaps, he thought, he and Carol could become consultants for other executives who needed to learn the lessons he was beginning to understand. Case Questions
1- What specific errors did Warren and Carol Oats make during their first week in Japan?
2- If you were talking to a non-U.S. businessperson making a first contact with an American company, what advice would you give?
4- Group Dynamics
A Difficult Task Force José has been appointed chair of a steering task force to design the primary product line for a new joint venture between companies from Japan, the United States, and South America. The new joint venture company will make, sell, and service pet caskets (coffins) for the burial of beloved pets, mostly dogs and cats. One month earlier, each company had assigned personnel to the task force:
From the Japanese company, Furuay Masahiko from Yokohama, assistant to the president of the Japanese company; Hamada Isao from Tokyo, director of marketing from its technology group; and Noto Takeshi from Tokyo, assistant director of its financial management department.
From the United States company, Thomas Boone from Chicago, the top purchasing manager from its lumber and forest lands group; Richard Maret from Buffalo, the codirector of the company’s information systems group; and Billy Bob “Tex” Johnson from Arizona, the former CEO, now retired and a consultant for the company.
From the South American company, Mariana Preus from Argentina, the head of product design for that company’s specialty animal products group; Hector Bonilla from their Mexico City division,
an expert in automated systems design for wood products; and Mauricio Gomes, in charge of design and construction for the plant, which will be located in southern Chile to take advantage of the vast forest there.
These members were chosen for their expertise in various areas and were taking valuable time away from their normal assignments to participate in the joint venture. As chair of the task force, José had scheduled an initial meeting for 10:00 A.M. José started the meeting by reviewing the history of the development of the joint venture and how the three company presidents had decided to create it. Then, José reviewed the market for the new high-end, designer pet coffins, stressing that this task force was to develop the initial design parameters for the new product to meet increasing demand around the world. He then opened the meeting for comments and suggestions. Mariana Preus spoke first: “In my opinion, the current designs that we have in production in our Argentina plant are just fine. They are topnotch designs, using the latest technology for processing. They use the best woods available and they should sell great. I don’t see why we have to design a whole new product line.” Noto Takeshi agreed and urged the committee to recommend that the current designs were good enough and should be immediately incorporated into the plans for the new manufacturing plant. José interrupted the discussion: “Look, the council of presidents put this joint venture together to completely revolutionize the product and its manufacture based on solid evidence and industry data. We are to redesign the product and its manufacturing systems. That is our job, so let’s get started.” José knew that the presidents had considered using existing designs but had rejected the idea because the designs were too old and not easily manufacturable at costs low enough to make a significant impact on the market. He told the group this and reminded them that the purpose of the committee was to design a new product. The members then began discussing possible new design elements, but the discussion always returned to the benefits of using the existing designs. Finally, Tex spoke up: “I think we ought to do what Mariana suggested earlier. It makes no sense to me to design new caskets when the existing designs are good enough to do the job.” The others nodded their heads in agreement. José again reminded them of the task force’s purpose and said such a recommendation would not be well received by the council of presidents. Nevertheless, the group insisted that José write a memo to the council of presidents with the recommendation to use existing designs and to begin immediately to design the plant and the manufacturing system. The meeting adjourned and the members headed to the golf course at 10:45 A.M. José returned to his computer and started to write the memo, but he knew it would anger the presidents. He hoped he would not be held responsible for the actions of the task force, even though he was its chair. He wondered what had gone wrong and what he could have done to prevent it. Case Questions
1- Which characteristics of group behavior discussed in the chapter can you identify in this case?
2- How did the diverse nature of the group affect the committee’s actions?
3- If you were in Jose’s position, what would you have done differently? What would you do now?
4- Using Teams in Organization Teams at Evans RV Wholesale Supply and Distribution Company? Evans RV Wholesale Supply and Distribution Company sells parts, equipment, and supplies for recreational vehicles-motor homes, travel trailers, campers, and similar vehicles. In addition, Evans has a service department for the repair and service of RVs. The owner, Alex Evans, bought the company five years ago from its original owner, changed the name of the company, and has finally made it profitable, although it has been rough going. The organization is set up in three divisions: service, retail parts and supplies, and wholesale parts and supplies. Alex, the owner, CEO, and president, has a vice president for each operating division and a vice president of finance and operations. The organization chart shows these divisions and positions. In the warehouse there are three groups: receiving (checking orders for completeness, returning defective merchandise, stocking the shelves, filling orders), service parts, and order filling for outgoing shipments. The warehouse group is responsible for all activities related to parts and supplies receiving, storage, and shipping. The retail sales division includes all functions related to selling of parts and supplies at the two stores and in the mobile sales trailer. Personnel in the retail division include salespeople and cashiers. The retail salespeople also work in the warehouse because the warehouse also serves as the showroom for walk-in customers. In the service department the service manager supervises the service writers, one scheduler, and lead mechanics and technicians. The service department includes the collision repair group at the main store and the service department at the satellite store. The collision repair group has two service writers who have special expertise in collision repair and insurance regulations. Two drivers who move RVs around the “yard” also work in the service division. The accounting and finance groups do everything related to the money side of the business, including accounts payable and receivable, cash management, and payroll. Also in this group is the one person who handles all of the traditional personnel functions. Alex has run other small businesses and is known as a benevolent owner, always taking care of the loyal employees who work hard and are the backbone of any small business. He is also known as being real tough on anyone who loafs on the job or tries to take unfair advantage of Alex or the company. Most of the employees are either veterans of the RV industry at Evans or elsewhere, or are very young and still learning the business. Alex is working hard to develop a good work ethic among the younger employees and to keep the old-timers fully involved. Since he bought the business, Alex has instituted new, modern, employee-centered human resource policies. However, the company is still a traditional hierarchically structured organization. The company is located in a major metropolitan area that has a lot of potential customers for the RV business. The region has many outdoor recreational activities and an active retirement community that either lives in RVs (motor homes, trailers, or mobile homes) or uses them for recreation. The former owner of the business specifically chose not to be in the RV sales business, figuring that parts and service was the better end of the business. Two stores are strategically located on opposite ends of the metropolitan area, and a mobile sales office is moved around the major camping and recreational areas during the peak months of the year.
When Alex bought the company, the parts and supplies business was only retail, relying on customers to walk in the door to buy something. After buying the business, Alex applied good management, marketing, and cash-management principles to get the company out of the red and into profitability. Although his was not the only such business in town, it was the only one locally owned, and it had a good local following. About two years ago, Alex recognized that the nature of the business was changing. First, he saw the large nationwide retailers moving into town. These retailers were using discount pricing in large warehouse-type stores. These large retail stores could use volume purchasing to get lower prices from manufacturers, and they had the large stores necessary to store and shelve the large inventory. Alex, with only two stores, was unable to get such low prices from manufacturers. He also noted that retired people were notorious for shopping around for the lowest prices, but they also appreciated good, friendly customer service. People interested in recreational items also seemed to be following the national trend to shop via catalogs. So for a variety of reasons Alex began to develop a wholesale business by becoming a wholesale distributor to the many RV parts and supply businesses in the small towns located in the recreational areas around that state and in surrounding states. At the same time, he created the first catalog for RV parts and supplies, featuring all the brand-name parts and supplies by category and supplier. The catalog had a very attractive camping scene on the cover, a combination of attractively displayed items and many pages full of all the possible parts and supplies that the RV owner could think of. Of course, he made placing an order very easy, by phone, mail, or fax, and accepted many easy payment methods. He filled both distributor orders and catalog orders from his warehouse in the main store using standard mail and parcel delivery services, charging the full delivery costs to the customers. He credits the business’s survival so far to his diversification into the warehouse and catalog business through which he could directly compete with the national chains. Although it is now barely profitable, Alex is concerned about the changes in the industry and the competition and about making the monthly payments on the $5 million loan he got from the bank to buy the business in the first place. In addition, he reads about the latest management techniques and attends various professional conferences around the country. He has been hearing and reading about this team-based organization idea and thinks it might be just the thing to energize his company and take it to the next level of performance and profitability. At the annual strategic planning retreat in August, Alex announced to his top management team that starting on October 1 (the beginning of the next fiscal year), the company would be changing to a team-based arrangement. Case Questions
1- What mistakes has Alex already made in developing a team-based organization? 2- If Alex were to call you in as a consultant, what would you tell him to do?
3- Using the organization chart of Evans RV Wholesale Supply and Distribution, describe how
you would put the employees together in teams.
5- Leadership Models and Concepts
Right Boss, Wrong Company Betty Kesmer was continuously on top of things. In school, she had always been at the top of her class. When she went to work for her uncle’s shoe business, Fancy Footwear, she had been singled out as the most productive employee and the one with the best attendance. The company was so impressed with her that it sent her to get an M.B.A. to groom her for a top management position. In school again, and with three years of practical experience to draw on, Kesmer had gobbled up every idea put in front of her, relating many of them to her work at Fancy Footwear. When Kesmer graduated at the top of her class, she returned to Fancy Footwear. To no one’s surprise, when the head of the company’s largest division took advantage of the firm’s early retirement plan, Kesmer was given his position. Kesmer knew the pitfalls of being suddenly catapulted to a leadership position, and she was determined to avoid them. In business school, she had read cases about family businesses that fell apart when a young family member took over with an iron fist, barking out orders, cutting personnel, and destroying morale. Kesmer knew a lot about participative management, and she was not going to be labeled an arrogant know-it-all. Kesmer’s predecessor, Max Worthy, had run the division from an office at the top of the building, far above the factory floor. Two or three times a day, Worthy would summon a messenger or a secretary from the offices on the second floor and send a memo out to one or another group of workers. But as Kesmer saw it, Worthy was mostly an absentee autocrat, making all the decisions from above and spending most of his time at extended lunches with his friends from the Elks Club. Kesmer’s first move was to change all that. She set up her office on the second floor. From her always-open doorway she could see down onto the factory floor, and as she sat behind her desk she could spot anyone walking by in the hall. She never ate lunch herself but spent the time from 11 to 2 down on the floor, walking around, talking, and organizing groups. The workers, many of whom had twenty years of seniority at the plant, seemed surprised by this new policy and reluctant to volunteer for any groups. But in fairly short order, Kesmer established a worker productivity group, a “Suggestion of the Week” committee, an environmental group, a worker award group, and a management relations group. Each group held two meetings a week, one without and one with Kesmer. She encouraged each group to set up goals in its particular focus area and develop plans for reaching those goals. She promised any support that was within her power to give. The group work was agonizingly slow at first. But Kesmer had been well trained as a facilitator, and she soon took on that role in their meetings, writing down ideas on a big board, organizing them, and later communicating them in notices to other employees. She got everyone to call her “Betty” and set herself the task of learning all their names. By the end of the first month, Fancy Footwear was stirred up. But as it turned out, that was the last thing most employees wanted. The truthfinally hit Kesmer when the entire management relations committee resigned at the start of their fourth meeting. “I’m sorry, Ms. Kesmer,” one of them said. “We’re good at making shoes, but not at this management stuff. A lot of us are heading toward retirement. We don’t want to be supervisors.” Astonished, Kesmer went to talk to the workers with whom she believed she had built good relations. Yes, they reluctantly told her, all these changes did make them uneasy. They liked her, and they didn’t want to complain. But given the choice, they would rather
go back to the way Mr. Worthy had run things. They never saw Mr. Worthy much, but he never got in their hair. He did his work, whatever that was, and they did theirs. “After you’ve been in a place doing one thing for so long,” one worker concluded, “the last thing you want to do is learn a new way of doing it.” Case Questions
1- What factors should have alerted Kesmer to the problems that eventually came up at Fancy Footwear?
2- Could Kesmer have instituted her changes without eliciting a negative reaction from the workers? If so, how?