Case

Studies

Subject : Request for Leave of Absence

Don, a project engineer, has requested a two month leave of
absence beginning in two weeks. He has just won custody of his
two sons in an unpleasant divorce settlement. He needs time to
make arrangements for child care, and he wants to be absolutely
sure that the boys are cared for properly.
Don is the lead person on the SASTEX project, which will involve
35 other engineers and technicians. He is the technical expert
who helped the firm land the contract. Without Don, SASTEX may
not get off the ground. The Family Medical Leave Act of 1993
doesnt mandate Dons request be granted. However, Don has
been a top performer and has pushed hard to get the leave.

Subject : Unpaid Debt/Bill of Top Customer

Wilson Beeson has worked closely, with Marco Quintana, a
Spanish businessman, to create what was up until now a
profitable exporting relationship. Beeson is the president of
profitable exporting relationship. Beeson is the president of
Americana, a machine tool firm that has been providing
Quintanas manufacturing plant in Seville, Spain, with machine
tools for 15 years.
Until recently, Quintana has been a model customer very
demanding in the quality expected, but prompt with payment.
The Spanish economy has dramatically faltered. Inflation has
skyrocketed, and unemployment rates are increasing. Quintana
has informed Beeson that the $4 million, eight months-overdue
bill simply cant be paid. Although Beeson and Quintana are close
friends, the debt has strained their relationship. Beesons board
has instructed him to solve the problem now.

Subject : Teamwork
Over the past three years, Mary Higgins has hired an outstanding
group of accountants, engineers, scientists, sales people and
financial analysts. The talent and experience of each individual
are impeccable. Despite the individual strengths of those who
were hired, Higgins cant get the people to work effectively
together. There is gossip, withholding of information, animosity
and hostility displayed within and between groups. The lack of
teamwork and cooperation has taken its toll on many people;
some employees have quit and gone elsewhere; and Higgins
herself has been hospitalized three times this past year for an
ulcer. She is at a loss about how to get her key employees to work
together as a team. She is thinking about firing the biggest
instigators to send a message to the remaining employees.

Subject : Company Policy

Trish cravens is the most productive and dedicated lead
technician in Anderson Optical Systems Co. She has worked her
way up in the past 10 years and has expressed aspirations to
become the division coordinator, a highly rewarded and
recognized position. Denise Calkins, the division general
manager, just found out that Cravens may be leaving Anderson
because her husband, a research scientist who lost his job when
his company closed six months ago, has found a job in Colorado.
Anderson has had seven job opening in the past 10 years chat fit
Cravens husbands record and experience, but the company has
a policy to not employ spouses in the same facility. Calkins has
expressed her opinion over the years that this policy has cost
Anderson some top talent. She has requested a meeting with the
president, who has recently been talking about updating some of
Andersons policies.

Subject : Personal Time management

Typically, Pete Maxville is a bundle of energy, optimistic, and
committed to excellence. This has all changed in the last year.
Maxville has not been able to return his telephone calls, meet
with customers on time, or develop his strategic plan (no six
months overdue). He is totally overloaded with requests for his
time or presence at meetings. He has been working from 7.00 AM
until 9.00PM for at least nine months, is totally fatigued, and
believes that his performance has suffered. He has flown off the
handle three times this past week and has had some major
arguments at home about trivial matters.
Maxville has attended time management workshops and read
everything he can about time management, but nothing seems to
improve his attitude, emotions, or behavior. He feels
overwhelmed by the job, Budget cutbacks, increased competition,
new government regulations and policies, and the retirement of
six key managers have all placed new responsibilities and
burdens on Maxville. He is searching for a way to get himself back
on track.

Subject : An Ethical Dilemma

Bob Ogan is the audit manager of Pearl, Lendnini, and Nordstrum,
a fast-growing firm in Phoenix. While working on a recent major
project, he-realized that he was spending 60 to 70 hours more
than the company had estimated for the work. He asked another
audit manager, Rick Spurgeon, how he would handle the excess
hours. This is a term used to indicate that excesses above
estimates are simply not reported. In a short response, Spurgeon
said Bury the Hours Coming in with excessive hours was just not
acceptable in the firm. True, the firm didnt receive a true picture
about the time, but burying the hours was the honorable.
Company-spirited thing to do.
Ogan thinks that although he participated in estimating the time
to do the project, it was the senior partner who was the final
authority. Ogan feels that he was expected to work longer hours
and that burying is unethical. He is wondering how he is going
to solve this dilemma.

Managers are Paid to Make Decisions

Bob Wilson is president of Security National Bank (SNB). During
the seven years he has been president, the bank has become one
of the three largest banks serving metropolitan Rockford. It has
been extremely successful, mostly at the expense of competing
banks.
On his desk, Wilson has a report from Barbara Stark, the Banks
director of marketing. The report focuses on the banks entry into
the first phase of electronic banking the purchase and installation
of automatic tellers (ATs). Wilson is very impressed by the report
and has asked Stark to come to his office to discuss the proposal.
It is a very positive meeting, with both parties agreeing on the
necessity for getting the program started, Stark says:
Mr. Wilson, most experts believe that before very long every bank
in the country will be faced with a decision concerning these
machines. The decision will be either offensive (to install them in
order to be the first in the marker) or defensive (to respond to a
competitor that has already installed them). I believe that to
maintain the growth rate, we have achieved during your seven
years as president, our move should be an offensive one.
I dont think anyone would argue with you on that point, Mr
Stark, Wilson agrees.
Wilson is extremely impressed with the position taken by his
director of marketing and is in general agreement with it. He
decides to take up Barbara Starks proposal at the next meeting
of the board of directors and to strongly support it. In addition he
sends a copy of the report to Dick Bryan, vice president of branch
operation, along with a memo supporting the proposal and asking
Bryan for additional ideas that he might have.
Five days later, Bryan asks to see Wilson concerning the report.
What he has to say comes as a surprise.

Mr. Wilson, I have read carefully the report concerning ATs. Let me
say that I am in total agreement with the philosophy of
aggressive, consumer oriented banking that you have instilled
into each of us at SNB, Certainly, we have been successful. I also
agree that the concept of electronic banking is the wave of the
future and support each of the benefits outlined in Ms. Starks
report.
I see one potential problem, however in implementing any
decision in this direction. It involves the dismissal of several
tellers, First, from the standpoint of social responsibility, I do not
think that this would be very responsible, and it might subject us
to much criticism in the community, I can relate to how each of
the tellers might feel, because I remember the late 1950s and
what my family went through when my fathers plant was being
automated. Maybe that experience has biased my thinking in this
matter, but I feel it necessary to at least express it.
Second, this decision could create morale problems for the
remaining tellers. As you know, I must work through all of these
people, the branch managers, and the people in the branches.
They are our contact with customers and as you have said many
times.I believe there is a potential problem here that was not
addressed in Ms. Starks report. That is, what will the impact be
on our branch manager and our branch personnel when they see
their subordinates and peers being replaced by a machine?
Since branch operations is my area, I feel compelled to let my
views be known, I know that the decision is not mine to make and
that many other factors must be considered. In fact, I cant say I
disagree with the concept, but I do know that if we go with ATs, it
will have to be implemented through my area.
That evening, Wilson thinks about what Bryan said. It is certainly
something he has never considered, and it is good that Bryan
brought it to his attention. He tosses around all the benefits, costs

and problems associated with the decision. What position should

he now take on the matter at the meeting of the board of
directors? Oh well, he thinks, I guess this is what Im paid for,
to make decisions like this.
Questions
1. Analyze this decision situation in terms of what you know
about the decision-making process and the influences on it.
2. If you were a consultant to the president, what would your
advice be? Why?

Group Decision making at Longley University

Tom Madden slipped into his seat at the meeting of the faculty of
the college of Business Administration of Longley University. He
was 10 minutes late because he had come completely across
campus from another meeting that had lasted 1 hours, Boy!
he thought, If all of these meeting and committee assignments
keep up. I wont have time to do anything else.
The next item of importance, said the dean, is consideration of
the feasibility report prepared by the assistant dean, Dr. Jackson,
for the establishment of our Latin American MBA program.
Whats that? Tom whispered to his friend Jim Lyon, who was
sitting next to him.
Ah, Professor Madden, winked Lyon as he passed the 86 page
report to Tom, evidently youve not bothered to read this
impressive document. Otherwise, youd know.
Heck, Jim, Ive been out of town for two weeks on a research
project, and Ive just come from another meeting.
Well, Tom, chuckled Jim, the report was circulated only three
days ago to, as the dean put it, ensure that we have faculty input
into where the college is going. Actually, Tom, I was hoping you
had read it because then you could have told me what was in it,
Dr. Jackson, said the dean, Why dont you present a summary
of your excellent report on what I believe is an outstanding
opportunity for our college, the establishment of an MBA program
in Latin America.
Hey, Jim, said Tom, theyve got to be kidding. Were not doing
what we should be doing with the MBA program weve got here on

campus. Why on earth are we thinking about staring another one

3,000 miles away?
Jim Shrugged. Some friends of the deans or Jacksons from down
there must have asked them, I guess.
While the summary was being given, Tom thumbed through the
report. He noted that the college was planning to offer the same
program that it offered in the United States. Certainly, he
thought, their students needs are different from ours, He also
noted that faculty were going to be sent from the United States
on one-to three year appointments. You would think that
whenever possible they would seek local instructors who were
familiar with the needs of local industry, Tom thought. He
concluded in his own mind, Actually, why are we even getting
involved in this thing in the first place? We dont have the
resources.
When Jackson finished the summary, the dean asked, Are there
any questions?
I wonder how many people have had the time to read this report
in three days and think about it, Tom thought to himself.
Has anybody thought through this entire concept? Tom Spoke
Up. I mean .
Absolutely, Professor Madden, surely you dont question the
efforts of Dr. Jackson and myself. Had you been here when this
meeting started, you would know all bout our efforts. Besides, its
getting late and weve got another agenda item to consider
today, the safety and security of final examinations prior to their
being given.
No further question, Tom said.
Wonderful, said the dean. then I will report to the president
that the faculty of the College of Business Administration

unanimously approves the Latin American MBA program. I might

add, by the way, that the president is extremely pleased with our
method of shared decision making. We have made it work in this
college, while other colleges are having trouble arriving at
mutually agreed upon decisions.
This is a great day for our college. Today we have become a
multinational university. We can all be proud.
After the meeting, as Tom headed for the parking lot, he thought,
What a way to make an important decision. I guess I shouldnt
complain though, I didnt even read the report. Id better check
my calendar to see what committee meetings Ive got the rest of
the week. If Ive got any more, Ill

Question :

Discuss merits and demerits of Group decision.

Kate Spade : Risk Turns Niches into Opportunities

After graduating from college in 1986, Katherine (Kate) Noel
Brosnahan was employed by Mademoiselle magazine, working her
way up to senior fashion editor / head of accessories before her
departure in 1991. During this time, Kate concluded that the
womens fashion accessories market lacked stylish, practical
handbags. Kate, along with her then boyfriend and now husband,
Andy Spade saw an opportunity and capitalized on it. How did
Kate and Andy capitalize on this opportunity?
The Startup
Kate and Andy set out to develop a well-edited line of
fashionable, but not trendy handbags. Kate developed design
sketches for six handbags with simple shapes that emphasized
utility, color, and fabric. Kate also investigated production costs.
Andy contributed the marketing expertise, drawing on his
experience at several advertising agencies. In January 1993, Kate
and Andy launched Kate Spade Handbags.
Kate worked full time to get the new company firmly established
while Andy initially worked only part time. From January 1993 until
September 1996, Andy worked nights and weekends on behalf of
the new company and continued to work full time for an
advertising agency. Andy began working full time with Kate Spade
Handbags in September 1996, becoming its president and
creative director.
Early on, Kate and Andy recognized the crucial need for recruiting
talented people to help them grow the business. In late 1993,
Pamela Simotas joined the company to assist Kate with the
sourcing of materials and the manufacturing of the handbags. In
1994, Elyce Arons joined the company to focus on sales and
public relations. The addition of Simontas and Aronsled to the
creation of a partnership that now numbers seven persons, each
of whom brings special expertise and talents to the company.

Growing into the Future

Kate Spades vision focused on developing product lines and
appropriately positioning the company in both the domestic and
global marketplace. Kate Spades original design philosophy relied
on simplicity, elegance, and enduring quality to create products
that combined great personal style with long-lasting utility. This
design philosophy has been consistently applied to growing the
companys product lines. In addition to the original six nylon tote
bags, Kate Spades product lines now include leather handbags
and accessories. Evening bag, baby bags a luggage collection,
shoes, glasses, paper products (e.g personal organizers address
books, and journals) and beauty products. In 1999, Jack Spade, an
accessories line for men, was launched under Andys tutelage.
Jack Spade products include messenger bags, briefcases, and
utility bags, among other items.
In mid-1996, Kate Spade opened its first retail shop in New York
Citys Soho neighborhood. Expansion of the retail operation soon
followed, with stores being opened in Boston. Los Angeles,
Greenwich, Manhasset, San Francisco, Georgetown and Chicago.
Numerous Kate Spade outlets now exist in several Japanese cities,
including Tokyo, Kyoto and Osaka. International distribution of
Kate Spade products has also expanded to Australia, the
Bahamas, Bermuda, Canada, England, Guam, Hong Kong, Ireland,
Korea, the Philippines, Puerto Rico, Saipan. Singapore and Taiwan.
An e-commerce operation is currently under development.
In just over a decade, Kate Spade has grown from the germ of an
idea about how to fill a void in the womens fashion accessories
market into a multi-product line business with distribution in
several U.S and international locations. A future challenge for
Kate Spade is how to build on its phenomenal success of the past
decade. Continued expansion will be a key element in
accomplishing this. Growth of the fledgling Jack Spade business
may be another important element of the companys continued

growth. Perhaps the Jack Spade line will be the companys growth
engine of the next decade? Kate and Andy Spade recognize that
their biggest challenge in the future will be to continue
differentiating themselves from their competition while creating a
passionate following among customers who have numerous
choices.
Review Questions
1. Describe the key decisions that Kate and Andy faced in the
startup of their company.
2. What were the key elements of Kate Spades growth in the
first decade of its operations? What specific business
decisions were made in implementing these key elements of
growth?
3. What key decisions will Kate Spade need to second decade
of its operations?

Frito-Lay Managers
Design Decisions

Blunder

in

Software

Some big blunders bring great opportunities; others just waste

time and energy. At Plano, Texas-based Frito-Lay Inc., one error
led to the creation of an impressive knowledge management
system, a second mistake undermined users' acceptance of it.
The story begins in the late 1990s, when one of Frito-Lay's biggest
customers adopted a more centralized decision-making structure.
Frito-Lay's regional sales teams, designed to deal with regional
customer offices, found themselves struggling to work effectively
with this huge account.
Moreover, the customer a Sophisticated, multibillion-dollar
supermarket chain began demanding more form the Frito-Lay
sales teams. When a Frito-Lay salesperson suggested a new way
to merchandise a product, the supermarket wanted the facts and
figures to back it up. They were pushing us to support [our plans]
with quantitative and qualitative research, recalls Mike Marino,
Frito-Lays
vice
president
for
category
and
customer
development.
Sensing a trend, Frito-Lay created a handful of national sales
teams to focus on top customers, such as the supermarket chain.
Theoretically, this would bring more of Frito-Lays resources to
bear on its customers needs, particularly for information. But the
company seemed to have forgotten the needs of its sales teams.
The teams, used to working regionally, found nationwide
collaboration difficult. Although Frito-Lay had rich stores of market
research and other pertinent customer information housed in
databases at its head-quarters, there was no easy way for a team
member in, say, Peoria, Illinois, to find what he needed.
Frustration rose, performance suffered and sales team turnover
reached 25 percent.

Then, in early 1999, Marino engaged a software developer to

help. Frito-Lay and the developer envisioned a Web-based portal
that would combine tools for knowledge
management
and
collaboration, enabling the team to better serve the customer
while helping reduce frustration and turnover. The software
development project team would pilot the portal with the
supermarket team because it had the most centralized and
demanding customer." We knew if we could deliver there, we
could satisfy any customer," Marino said.
The pilot sales team told the project team what kind of knowledge
they needed. The request ranged from simple information, such
as why Frito-Lay merchandises Lays and Ruffles products in one
part of a store and Doritos in another, to more complex research
on what motivates shoppers as they move through a store. Then
the project team had to find the knowledge. The team went
prospecting in Frito-Lays databases in departments such as
marketing, sales and operation. They scoured the Web for
external sources such as trade publications and industry
organizations. They identified in-house subject matter experts and
noted their areas of expertise in an on-line database.
In October 1999 the project team presented a working prototype
to the pilot sales team only to find that in the quest for speed, a
classic and crippling error had been made. The project team had
neglected to involve the sales team in the design of the tool. The
prototype the project team had built could be marginally useful to
any sales team, but it wasnt specific enough to be
transformational for the pilot team.
Conceptually it was a great idea, said Frito-Lay sales team leader
Joe Ackerman. But when folks are not on the front line, their view
of what is valuable is different from those running 100 miles an
hour in the field.

The project team needed to backtrack and plug in the missing

features, but it also had to win back the sales force, who
suspected that even a revised tool would be a waste of time. ''We
roll out lots of new things at the company," says Ackerman, but
for teams in the field, "those thing can create additional work."
The project team spent the next four months working with
salespeople to evolve the prototype into a system they would
embrace. Some of the changes were "baked in," like a .callreporting feature that everyone is required to use."So many
people want to know what happened on a sales call, the account
manager can be on the phone for days," Ackerman explains.
"Now, we're able to post that to a Web site. It frees up the
account manager to document the call once and move on.
Other changes included enabling users to analyze and manipulate
data rather than just viewing it and developing reports tailored to
customers' needs. "The [original] reports were very general,"
Ackerman says, so users would have had to spend lots of time
reformatting them for customer presentations. "Now they can use
them in more of a turnkey fashion."
With the changes in place, the project team wisely enlisted
Ackerman for the official rollout. "If it comes from the field, it's
really better-received than if it's from headquarters," he says. So
we made sure it was embraced by the team leader-me."
Questions for Discussion
1. Frito-Lay's decision to develop a new knowledge
management portal was made at what level of the
organization?
What
information
was
required
to
make this decision?
2. In carrying out the decision, the project team failed to
include the sales force in the design decisions for the hew
software. Why is this a "blunder"?

3. The hew "knowledge management" software system

provides information through an employee portal. Do you
think
this
will
improve
decision
making
at Frito-Lay? What types of decisions will the new systemaffect?
Programmed?
Nonprogrammed?
Intuitive?
Systematic?