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Assignment 2–Case Study Report
Paul Smith
210991817
Jordan Garth
210673845
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Executive Summary
This assignment is based on comparing and contrasting two influential business leader’s
management styles and functions. The first leader we choose was Reggie Fils-Aime and he is currently
the COO of Nintendo of America. He is a very charismatic and transformational leader. He gave
Nintendo new direction and motivation to remain viable in the gaming industry. The second leader we
choose was Richard Pratt. He was the CEO and owner of Visy. He was a very relation-orientated and
transactional leader. He managed to turn a 5 million dollar organisation into an over 2 billion dollar
organisation. He was unique in respect to the way he related to, and inspired loyalty to his employees.
In this report, we will examine the advantages and disadvantages of these two very different
management styles. Overall, we found that both leaders knew how to get the most out of their
employees although they both used many different methods of leadership and management.
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Table of Contents
Cover Sheet........................................................................................1
Executive Summary.............................................................................2
Table of Contents................................................................................3
Introduction........................................................................................4
Leader 1..............................................................................................5
Leader 2..............................................................................................8
Critical Analysis.................................................................................11
Point 1......................................................................................11
Point 2......................................................................................12
Point 3......................................................................................12
Summary..........................................................................................14
References........................................................................................15
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Introduction
In this assignment we are comparing and contrasting two influential business leader’s
management styles that determine how they manage and motivate their employees. In addition to this
we are going in depth to describe each leader’s history in their company, their specific management
style, and what makes their style affective in their industry. The first leader we choose was Reggie FilsAime and he is the current COO of Nintendo of America, and the second leader we choose was Richard
Pratt and he was the owner and CEO of Visy from 1969-2009. The overall aim is to gain a better
understanding on how different management styles influence employees, change, and success within
the company as well as the advantages and disadvantages of each leader’s management styles.
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Leader 1
Reggie Fils-Aime has worked for a vast amount of companies from Pizza Hut to VH1. He began
his successful journey with Nintendo in December 2003 as the Executive Vice President of Sales and
Marketing. He was responsible for all sales and marketing activities for Nintendo in the United States,
Canada, and Latin America. He became popular among the gaming crowd in May of 2004 with the
opening line of Nintendo’s E3 (Electronic Entertainment Expo), “My name is Reggie. I’m about kickin’
ass, I’m about takin’ names, and we’re about makin’ games,” as mention by Mark MacDonald (2006,
p25). From here he gained popularity through his management and leadership skills of being a
transformational and charismatic leader. With his great success, on May 25, 2006 Reggie became the
President and Chief Operating Officer of Nintendo of America (COO). From here, he revolutionized
Nintendo’s approach in the gaming industry with his assertiveness and overall charismatic character.
Reggie came into Nintendo at a tough time when they definitely needed help in their leadership
roles. Something that Reggie brought to the table was that he admitted that some of Nintendo’s
previous products were not up to par. One of Nintendo’s unsuccessful products was the Nintendo
GameCube. He was the first to admit that this was not an attractive looking system and that it had its
flaws in an interview with EGM Staff (Electronic Gaming Monthly), “I will grant you that GameCube is
not a sexy device (laughs), but we're smart people and we learn from our mistakes” (2005, p47). With
this he gained a lot of popularity with the Nintendo employees and management teams. This is because
he had referent power. Inside of Contemporary Management, Jones defines referent power as power
that comes from subordinates’ and coworkers’ respect, admiration and loyalty (2008, p198). Reggie had
shown his employees that he would take the blame for something that theoretically was not his fault.
With this, he had the employees behind him and he began to revolutionize their overall business
strategy.
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Reggie was thinking outside the box and decided to have a new business approach for Nintendo.
In an interview with Schiesel in the New York Times Reggie states that,
''Both of our competitors have focused on an old paradigm,'' he said. ''They focused on more technological
horsepower as the path to success. They fell into a trap of just listening to their core user base rather than focusing on
attracting new customers” (2007, p7)
Reggie was going to launch a new gaming system on November of 2006. It was to be called the Nintendo
Wii. Previously, Nintendo had attempted to compete for the best graphics in the gaming industry, but he
decided to take a new approach in his corporate-level strategy with his transformational leadership
skills. Inside of an article written by PontiskoskiIn, he states that,
“In Nintendo’s case the goal was to provide a new kind of gaming experience. The company decided to position itself
completely different from the competition. When Microsoft’s Xbox and Sony’s Playstation were competing on whom had the
most advanced graphics engines, Nintendo decided to go against the traditional industry wisdom, and questioned how people
actually want to play” (2009, p374).
This is exactly what a charismatic leader is all about. Reggie had a vision of improving their overall
organisational performance as a result of change in the organisation’s structure, culture, strategy, and
decision-making. This vision paved the way for gaining a competitive advantage. He was able to be this
transformational leader, because he had everyone on his side. He was charismatic, loyal, honest, and
most importantly he had his employees behind him. He motivated people and lead them to believe that
he has the answers. So Reggie took a new approach and decided to create a completely new gaming
experience. With this, the company was able to attract females and families in addition to the traditional
hardcore gamer segments of teenage and young adult males, PontiskoskiIn (2009, p375). This allowed
Reggie to diversify his consumer base and transformed Nintendo forever.
Overall with Reggie’s transformational management he allowed Nintendo to take a step back
from the technology arms race and chose to focus on the fun of playing, rather than cold tech specs
Borden states (2008). Also since Reggie came to be the COO Nintendo was ranked #10 on The World’s
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Most Innovative Companies of 2008 by Mark Borden (2008). Also inside of the article written by Mark
Borden he mentions that,
“In 2007, Wii outsold both the PlayStation 3 and Xbox 360. But get this: Unlike its competitors—which lose money on
each console and earn it back on software -- Nintendo turns a profit on its consoles, makes more selling games, then takes in
still more in licensing fees. "Not to sound too obvious," Fils-Aime says, "but it makes good business sense to make a profit on
the products you sell” (2008).
One can see that Reggie is quite happy with his success as COO so far, and that with this transformation,
Nintendo went from the bottom to the top thanks to great leadership, more specifically charismatic and
transformation leadership along with an inventive strategy. What is interesting is how his business
strategy allowed Nintendo to be successful once again. Normally a strategy reflects who the COO is, and
in this situation we can see the quality of character Reggie has for his employees, his company, and his
overall success.
In 2009 Reggie was quite pleased with the sales he helped to generate for Nintendo. Reggie
knew every since the Wii came out that “we have products that consumers want to hold onto,” as
stated by Newman (2008, p3) and inside of an article in the New York Times Taub mentions that,
“Nintendo remained the leading console maker in October of 2009, with 506,900 Wii units sold in the United States,
the NPD Group, a market research firm, said Thursday. Sony's PlayStation 3 was the second-biggest seller, with 320,600 units,
while Xbox 360 sales were 249,700” (2009, p2).
This is the advantage of a transformational leader. You change something about the overall company’s
strategy through Reggie’s leadership skills and attributes to make it more profitable. Although Reggie
did take a big risk in transforming Nintendo, and with this there is a disadvantage of this type of
management style. With risk yields reward, but this transformational leadership style can also lead to
failure and shut-down as a company. Overall this leadership style can be beneficial to evolving a
company and leading it to success, but it can also destroy a company and send them on the path of
failure in today’s business environment.
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Leader 2
Richard Pratt (1934 – 2009) was born to Jewish parents in Danzig Poland. He migrated to London
with his mother and father in 1938. Richard Pratt is quoted saying he ‘escaped the holocaust by five
minutes’ Kirby (2009, p3). He later migrated to Australia where his father Leon started Visy, a family
business making boxes in a small twenty by thirty feet factory in Fitzroy. Richard started working in the
business at age eighteen in 1952. Richard’s dad, Leon, taught him everything he knew about business.
He was an excellent salesman and was great at engaging with clients, Kirby (2009, p5). Pratt inherited
the 5 million dollar business in 1969 and made it grow into an over 2 billion dollar a year entity using his
transactional leadership style. Visy is now a multinational corporation with multi functions such as
recycling as well as its box production.
Richard Pratt used reward power; which inside of Contemporary Management, Jones defines as
the ability of a manager to give or withhold tangible and intangible rewards (2008, p196). Pratt used this
power to manage his employees, contracts, and potential customers while using a relationship
orientated leadership style and a transactional leadership. Richard believed in the power of
‘Networking,’ Thomson (2009). From his earliest days living in Kew in Melbourne he had an ‘open
house,’ Kirby (2009, p82) policy on Sunday nights where friends and associates could turn up for diner,
creating a networking venue for all. Richard would also invite his guest’s partners, and make it a point to
give the wives of his guests a gift and remember their names. He wanted his guests to like him and feel
valued. This is an example of how Pratt used a strong relationship orientated approach to running Visy.
Throwing great social functions was so integral to the way Pratt did business that he employed an
entertainment officer for many years to ensure the parties would run smoothly. Pratt would usually mix
business with pleasure such as taking a client or associate to a football match. Pratt is quoted having
said ‘if your selling something, spend most of your time with customers who are bigger than you are and
work to get their respect,’ Kirby (2009, p82). The relationship orientated approaches to not only manage
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his employees, but the entire way he did business was seen when his long time family friend
Muhammad Ali accompanied Pratt onto the ground at the 1998 AFL grand final, Kirby (2009, p83). It was
a very smart public relations stunt in front of 98,000 patrons and fans, along with the viewers watching
on television. As Visy is not a consumer business, people remember connections like this, and in turn
build a quality brand name for Visy.
Pratt tried to gain as much political and economic influence as possible by donating money to
both sides of politics, and inviting many politicians to functions at his Raheen mansion in Kew. He has
had ex-prime ministers on his payroll such as Bob Hawke who was paid $8,000 a month for a period of
time for consultation on international affairs, Kirby (2009, p89).
Pratt’s leadership style is well known for trying to be involved in every detail of his business as
possible. He once said that ‘the best managers look for ways to make things happen,’ Thomson (2009).
He would often tour the factory floor and once said that ‘the best managers manage by walking around,’
Thomson (2009). Pratt managed to receive great loyalty for his employees, because he showed it
towards them. Many of them remained at Visy for decades. This was because they were well paid along
with recognized for their hard work by being rewarded with gifts and bonuses. Every year, the employee
who brought Thorney Holdings, Pratt’s investment company, the best investment deal would be
rewarded a luxury car or a trip around the world, Thomson (2009). The amount of reward power Pratt
used to exercise was second to none as not many others have the resources to reward their employees
such as Pratt did.
One of Pratt’s biggest beliefs with human resources was that the best person for the job was
already in another job, Kirby (2009, p90). He figured that an employee with a great and effective skill set
would not be looking for a job as they would already be in a job for another organisation. So with this in
mind Pratt would often poach managers or executives from other organisations. He would use extrinsic
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motivation by make them an offer too good to refuse such as pay and remuneration packages. This is
another example of how Pratt used reward power to get the right person in the job and get them to
achieve what he wanted from them.
It is clear through all of these examples that Richard Pratt was a relationship orientated leader
and a transactional leader. He used his reward power frequently to inspire performance from his staff
and constantly gained loyalty from his staff, clients and other contracts through the various networking
and relationship building he engaged in over the years.
There are many advantages to Richard Pratt’s take on leadership in today’s business
environment. The political, social and motivational influence he achieved through networking shows
how important it can be to make connections and make people feel valued and respected. Although this
benefited his organisation immensely, trying to gain political influence for one’s own benefit can be
received controversially by the general public. The great thing about the way Pratt managed his people
was that it ensured they would remain with Visy and that they felt respected and valued as an employee
and performance was encouraged and rewarded.
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Critical Analysis
Point 1
One point that differs greatly between Reggie Fils-Aime and Richard Pratt is that Reggie was
more of a transformational leader; while Richard displayed characteristics of a transactional leader. This
is because Richard used rewards as incentives to motivate his employees and Reggie on the hand just
used a positive vision and the concept of beneficial change. In addition to this, Pratt used transactional
leadership through his powerful position in the company to reward/punish employees based on their
work performance. Pratt believed that “employees that did not share his attitude did not stay at Visy for
very long,” Kirby (2009, p60). This demonstrated his focus on what he wanted his employees to achieve.
On the other side of the coin, Reggie was making sure that his employees were aware how important
their jobs are for the organisation and how necessary it is for the success of the company. Also Reggie
did not have the amount of power that Pratt had at hand, because Pratt was the sole owner of Visy;
while Reggie in only the COO of Nintendo of America. Nintendo is global company and he is still under
others; while Pratt is the head honcho of his firm.
It is also interesting to see the comparison of the countries in relationship to which leadership
role they took on. Another key factor in which leadership role they emerged themselves into was that
companies in the United States tend to be more profit-oriented in relation to companies in Australia, so
Reggie took the role of a transformational leader to maximize profit and not necessarily focus on the
importance of individual employees’ needs and desire. In Australia companies have a more humanistic
perspective than the United States, which may result in some Australian managers being more peopleoriented than American counterparts, and this is why Pratt took on the leadership role of being a
transactional leader in the way that he rewarded people and was employee-orientated, Jones (2008,
p194). Overall we believe that the aspects of a transformational leadership role is more beneficial than a
transactional leadership role because research has found that when leaders engage in transformational
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leadership, their subordinates tend to have higher levels of job satisfaction and performance, Jones
(2008, p211).
Point 2
Another topic of difference between these two leaders is how Pratt showed characteristics of
relationship-oriented leadership; while Reggie demonstrated charismatic leadership. These are both
similar qualities in relation to employees gaining trust and respect for these leaders, yet they differ in
how this trust and respect was acquired. Reggie inspired his employees with his new and fresh ideas and
through this gained popularity with his employees by being charismatic. On the other hand, Pratt made
his employees respect him through making them feel valued and looking after their needs and concerns
by connecting with his employees. In conclusion we believe that they are both valid uses of leadership, it
just depends on what industry your company is involved in and what type of motivation your employees
respond to.
Point 3
The last point where the leaders differ is in the way they operate their companies. Pratt used to
believe that during the day 100% of the bosses time should be spent communicating with employees,
customers, and supplies and that planning should be done after hours. He also did not have a head
office and spent most of his day walking around on site and at the factories, Kirby (2009, p62). One
example is when he stood on a box in a plant in Chicago and asked if anyone wanted to tell him
anything, had any complaints or suggestions, Kirby (2009, p63). His view was that it was the people in
the factories, people who made things, who were the ones who would know if there were any
problems. Reggie however focused more on his customers than on the needs of his employees. He had
more of an idea of what his consumers wanted, and spent most of his energy on that. Again, both
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strategies are applicable it just matters which situation you are trying to tackle. In respect to employees,
Pratt’s way is more efficient because he focused more on the employees and gets more out of them;
while with Reggie’s way is it more effective because he focused more on the consumer’s demand.
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Conclusion
In the area of management there no perfect style of leadership. Every style of leadership is
applicable and effect in certain industries at certain times. Overall Pratt and Reggie are/were very
effective and efficient leaders. They knew how to get the most out of their employees although they
both used many different methods of leadership and management.
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References
Builttothrive.com/Mark Borden. 2008. The World's Most Innovative Companies. Available at:
http://www.fastcompany.com/magazine/123/the-worlds-most-innovativecompanies.. [Accessed 07
September 10].
EGM Staff, 2005. Nintendo: Past Present Future. Electronic Gaming Monthly, Issue 192, p46-47
James Kirby. (2009). From Poland to Shepparton and beyond. In: Rod Myer Richard Pratt: One Out of the
Box. Milton, Queensland: John Wiley and Sons Australia. 1-10.
James Kirby. (2009). The Unreasonable Man. In: Rod Myer Richard Pratt: One Out of the Box. Milton,
Queensland: John Wiley and Sons Australia. 60-63
James Kirby. (2009). Working Five to Nine. In: Rod Myer Richard Pratt: One Out of the Box. Milton,
Queensland: John Wiley and Sons Australia. 82-90
James Thomson. (2009). Richard Pratt's Secret to Success. Available:
http://www.smartcompany.com.au/wealth/20090427-richard-pratts-secrets-to-success.html. Last
accessed 12th September 2010
Jones, Gareth R., and Jennifer M. George. (2008), Contemporary Management. Boston: McGrawHill/Irwin.
Mark MacDonald , 2006. In Control. Electronic Gaming Monthly, Issue 201, p24-28.
Newman, J.N., 2008. Make Videogames History: Game preservation and The National Videogame
Archive. National Videogame Archive, 1, p3.
Pontiskoski, E.P., 2009. Overcoming Barriers to Open Innovation at Apple, Nintendo and Nokia.
Proceedings of World Academy of Science: Engineering & Technology, Vol. 53, p372-377.
Schiesel, S.S., 2007. VIDEO GAMES; Nintendo, Once Down, Devises Its Comeback. . New York Times, 1,
p7.
Taub, E.T., 2009. Despite Sales Slip, Nintendo Predicts Strong Season. . New York Times, 1, p2.