MAN 374 - General Management and Strategy

FALL 2013
Andrew D. Henderson
CBA 4.226
Office Hours
By Appointment
[email protected]
Course Web Page
via Blackboard
Textbook: Barney, J. B., & Hesterly, W. S. 2011. Strategic management and competitive
advantage: Concepts (4th edition). Boston, MA: Pearson. ISBN-10: 0132546345. This book is
widely available from on-line booksellers, and each student should order their own copy. Note:
The 3rd edition (published in 2010) is essentially identical and can be used instead. Note: You do
not need to buy a version of this book that includes cases.
Reading packet: Available electronically from Harvard Business School Publishing at the following
link: Each student is required to
purchase their own copy.
This course enables students to analyze business situations from the point of view of practicing
general managers, persons who have responsibility for making strategic decisions that affect the longterm health of entire organizations. The key tasks involved in strategic management include detecting and
adapting to environmental changes, creating new opportunities, procuring and allocating critical resources,
integrating activities across subparts of the organization, and shaping corporate purpose and direction.
To be effective, general managers need to have an in-depth understanding of the ongoing
challenges in key functional areas such as marketing, finance, MIS, R&D, and operations. Consequently,
this course builds on and makes use of the knowledge developed in earlier classes. General managers,
however, cannot be superficial dabblers who know a little bit about everything but not much about
anything. Instead, strategic management involves a distinct set of skills, perspectives, and insights about
the business problems and opportunities confronting the total enterprise. Students are expected to
combine knowledge from other courses with the new material presented here to develop sophisticated
analyses and solutions to the large, multi-dimensional problems that pervade today’s fast-paced, global,
and highly competitive business environment.
While not all students will become general managers, for several reasons this course should
benefit virtually all who take it. First, ongoing trends in the corporate world towards flatter, less
hierarchical organizations have resulted in strategic decisions being made at ever lower hierarchical
levels, often by relatively inexperienced people. As a result, leadership responsibilities may be thrust upon
you very early in your career. Second, a number of factors, including technological change and the
continuing shift to global markets, have forced established firms to become increasingly innovative and
entrepreneurial, and such initiatives are often led by people at lower organizational ranks. Third,
functional specialists, including professionals in finance and marketing, are the people on whom general
managers rely to implement a firm’s existing strategy and collect the data needed to update and revise it.
Finally, while specialists are often under intense pressure to fix problems in their own areas, the seemingly
isolated actions taken to fix such problems can have profound implications for the firm as a whole. As a
result, all professionals need to have a solid understanding of strategy.
Verbal communication is both vital to and inseparable from strategic management. This has two
critical implications for this class. First, there will be relatively few lectures. We will instead emphasize
case discussion because strategy is best learned by immersion in actual business situations where one
can fully appreciate the inherent conflicts, pressures, uncertainties, and risks that general management
entails. Second, a case-based approach necessitates learning by doing, so your active contribution to
class discussions is integral to your knowledge development.
Components and Weighting
Your grade will be based on three components, weighted as follows:
Class contribution (individual)
Half (12.5%) assessed 8/29 – 10/10
Half (12.5%) assessed 10/15 – 11/14
Case write ups (3-5 person teams)
Mid-term case analysis (individual)
Final project (5-person teams)
Key Due Dates
Sep 10
Final project: Group member list
Sep 17
Final project: Focal industry and firm choices
Sep 24
Final project: Proposal
Sep 26
Case write up: RBV vs. Porter
Oct 15
Mid-term case analysis
Oct. 29
Final project: Draft report
Oct 31
Case write up: Danaher
Nov 7
Case write up: Vivendi
Nov 5
Final project: Critique
Nov 19 – Dec 3
Final presentations. Bring hard copies to class to distribute.
Dec 12
Final project: Final report
Do 1 of these 2
case write ups
Class Contribution
Why is class contribution a major portion of the grade in every strategy course at top business
schools? It’s simple. One, general managers are extremely busy. Two, getting things done requires both
learning from and convincing others. Three, as a result, general managers spend most of their time
engaged in verbal conversation.
Let me address those of you who find speaking in front of your peers (or me) to be stressful. I’m
a bit of an introvert myself, so I empathize with you. The good news for folks like me (and possibly you) is
that public speaking is a skill like any other – writing, doing NPV calculations, schmoozing people in bars –
because it improves with practice. This course is organized to help you practice speaking with others
about matters of strategic importance.
At the start of a typical session, several students will be asked to open the class by answering a
specific question. Case preparation, which includes careful attention to the assignment questions and
associated readings, should be sufficient to handle such lead-off responsibilities. After a few minutes of
initial analysis, we will then open the discussion to the rest of the class. During our discussions, I always
look for and appreciate volunteers, but please bear in mind that anyone can be cold called at any time. In
your comments, you should have a “high contribution-to-words ratio”. Monopolizing air time is not valued.
Many of the questions we address in class will involve the assigned cases. However, other
questions will involve the assigned readings (e.g., book chapters, HBR articles.) Regarding those
readings, you should always be prepared to answer these questions: What was the author’s purpose?
What were the reading’s strengths, weaknesses, and key assumptions? What were the author’s major
points? And how do we apply those points to today’s case?
Finally, should you expect that high quality case discussion will come naturally and easily? No,
especially at the start of the course. However, the key features of case discussion (incomplete
information, uncertain outcomes, pressurized environments, competing solutions, the need to persuade
others with evidence) are the same ones that you will face constantly in your career beyond McCombs.
In assessing your class contributions, I ask myself the following questions:
a. Is this person an excellent listener?
b. Are the points made relevant to the discussion and linked to the comments of others?
Does this person demonstrate an understanding of the case and associated reading
d. Are comments and recommendations evidence-based ones backed by reliable data
and/or course concepts?
e. Does the participant distinguish among different kinds of data – facts, opinions, personal
beliefs, theoretical concepts, etc.?
Is there a willingness to test new ideas, or are all comments safe? Example of a safe
comment: seconding or repeating earlier comments without elaboration or clarification.
g. Does this person raise interesting questions that appropriately expand the scope of our
conversation or help us cut to the heart of the matter?
h. Can this person draw linkages – comparisons or contrasts – between today’s case and
others that we have covered?
Note: Like most important things in life, assigning class discussion scores involves an element of
subjective judgment. I can promise you, though, that if several experienced professors were to sit in on
one of our classes, their scoring of students’ contributions would be very highly correlated because those
professors would be looking for the same indicators of deep and substantive understanding.
Case Write Ups
You will do two case write ups. Each will be 2-3 double-spaced pages in length, and each will be
done in a 2-5 person team. You are responsible for forming your team. Team membership may be – but
need not be – the same as that for your final project.
In the first case analysis, which is due at the start of class on Sept. 26, 2013, you are to compare
and contrast the Resource-Based View (RBV) and the Porter five forces model, including discussion of
their respective units of analysis, assumptions, conclusions about sustained competitive advantage, and
social welfare implications. In the second case analysis, you’ll address the focus questions in this
syllabus associated with either Danaher (due Oct. 31, 2013) or Vivendi (due Nov. 7, 2013).
Mid-Term Case Analysis
The mid-term involves a written case analysis that you will do individually. A detailed assignment
and the case itself will be distributed about 10 days before it is due. This assignment is open book, open
note, and take home. You’ll be asked to answer 3-4 high-level questions of the type we consider in our
class discussions. Your mid-term is due at the start of class on Tuesday, Oct. 15, 2013.
The mid-term is to be solely your work. Let me state explicitly what this means. In completing the
assignment, you may use the information in the case, the textbook, the readings, your head, and nothing
else. You are not permitted to gather any extra information regarding the case or the firm via the Internet
or other means. If this is at all unclear, please see me. All case reports will be run through SafeAssign, a
plagiarism detection program. This is to ensure that no one receives an unfair advantage, not because I
believe that anyone is going to cheat. If you are unsure about what constitutes plagiarism, you should talk
with me.
Final Project
The final project is a semester-long research endeavor that fulfills the University’s Independent
Inquiry flag. Details are provided in a separate, accompanying document. The final project, which you will
do as a member of a 5-person team, accounts for 40% of your course grade and includes the following
elements: Research proposal, draft report, critique of another group’s draft, oral presentation, and final
written report.
Real-Time Events
You should make a habit of reading business periodicals such as Business Week, the Financial
Times, and The Economist. Keeping abreast of current business developments will facilitate your
participation in class discussions.
In addition, if you are interested in delving further into the topics that we discuss, I strongly
recommend the following.
Ariely, D. 2009
Predictably irrational: The hidden forces that shape our decisions
New York: HarperCollins
Beinhocker, E. D. 2007
The Origin of Wealth: Evolution, complexity and the radical remaking of economics
Boston, Massachusetts: Harvard Business School Press
Christensen, Clayton M. 2012
How will you measure your life?
New York: HarperCollins
Ghemawat, Pankaj
Redefining Global Strategy
Harvard Business School Press
HBR’s 10 Must Reads, 2011
On Leadership
Boston, Massachusetts: Harvard Business Review Press
Hoffman, Bryce G. 2012
American Icon: Allan Mulally and the fight to save Ford Motor Company
New York: Crown Business
Kidder, T. 1981
The soul of a new machine
New York: Avon
Lewis, M. 2003
New York: Norton
Miller, D. and Le Breton-Miller, I. 2005
Managing for the long run
Boston, Massachusetts: Harvard Business School Press
Pfeffer, J. and Sutton, R. 2006
Hard facts, dangerous half truths & total nonsense
Boston, Massachusetts: Harvard Business School Press
Schroeder, A. 2008
The snowball
New York: Bantam-Dell
Other Points
Please note the following:
a. You must always have your name tag in front of you. This is as true on the last day of the
course as the first. If you forget your name tag, make one.
b. By the start of our second session (Thursday, Sept. 3), please find a seat that you like. This
will be your seat for the remainder of the course. My apologies for this small bit of
I expect you to attend every class. Attendance means being on time, in your seat, ready to
start, with your name tag displayed. This is a professional program, and being a
professional means being accountable for performing at a high level every day.
d. If you miss class, you are responsible for (i) informing me beforehand, and (ii) obtaining from
your classmates any notes, handouts, additional reading materials, or assignment changes.
e. In determining final grades, class contribution is given particular emphasis in settling
borderline cases.
You are strongly encouraged to form study groups and brain-storm about cases and reading
g. Learning by doing is a critical feature of this course, and you deprive yourself and others of
that opportunity if you discuss cases with students who have taken MAN 374 in the past or in
another section during the current semester. Therefore, it is an honor code violation to send
or receive any communications about what happened in another section prior to our
discussion of a particular case. No talking (verbal, electronic or otherwise) or sharing notes
across sections until after a focal case is finished in all sections.
h. Per Management Department policy, laptop computers, tablets, and phones are not allowed.
They must be turned off and closed when class begins, as must all other electronic devices.
Accommodations will be made for students with disabilities. (See below.)
The University of Texas at Austin provides upon request appropriate academic
accommodations for qualified students with disabilities. For more information, contact the
Office of the Dean of Students at 471-6259, 471-6441 TTY, .
Each student is responsible for any assignment changes that arise throughout the semester.
All students must have access to Blackboard and have their e-mail properly registered there.
Course Topic Overview
Semester Project
Cola wars
Edward Jones
College sports
No class
Paul Levy
Stone Finch
Grolsch / Bud.
Groups 1 & 2
Groups 3 & 4
Groups 5 & 6
Groups 7 & 8
Concept of strategy
Industry analysis
H-F strategy diamond
Resource-Based View
Semester project feedback
C3E / integration
Competitive dynamics
Strategic purpose
Strategic types / exec levers
Low cost strategy impl.
Differentiation strategy impl.
Logical incrementalism
Implementing renewal
Session 1
Aug 29
Course introduction; the concept of strategy; the roles of the general manager
Mintzberg, H. “The manager’s job: Folklore and fact”. Harvard Business Review,
Barney & Hesterly, Chapter 1, “What is strategy and the strategic management
"Why We Use the Case Method," Appendix, Course Syllabus
Focus question:
(1) Why did Mintzberg write this article, and why has it been so influential?
Session 2
Sep 3
Industry analysis – An introduction to the effects of industry structure on
segmentation, profit potential, and competitive behavior
Cola Wars Continue: Coke and Pepsi in 2010 [9-711-462]
Barney & Hesterly, Chapter 2, “Evaluating a Firm’s External Environment”.
Focus questions:
(1) Why is the soft drink industry so profitable?
(2) How has the competition between Coke and Pepsi affected the industry’s profits?
(3) Why is the profitability so different between the concentrate business and the bottling business?
(4) Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity
of non-carbonated soft drinks?
Session 3
Sep 5
Industry analysis (cont.)
Cola Wars Continue (cont.)
Barney & Hesterly, Chapter 6, “Vertical Integration”
Today, we’ll continue our discussion of industry structure and competition.
Session 4
Sep 10
A consideration of internal and external strategic alignment and the use of the
Hambrick-Fredrickson strategy diamond to assess such alignment
Edward Jones in 2006: Confronting success. [9-707-497]
Hambrick, D. C. and Fredrickson, J. “Are You Sure You Have a Strategy?”
Academy of Management Executive, November, 2001. Available at:
Focus questions:
(1) Using Hambrick and Fredrickson’s Strategy Diamond framework, what is Edward Jones’ strategy as
of 2006? Which elements of the strategy represent recent changes?
(2) Pay particular attention to the “Economic Logic” of the strategy. Why does the company have such a
high return on equity (ROE)? Can you think of other instances in which a relatively low-share player in
an industry is significantly more profitable than some (or all) of the higher-share players?
(3) What recommendations would you make to Mr. Weddle?
Session 5
Sep 12
Innovation and competitive dynamics
Why everyone loves Tesla (and supporting material). This is available on-line from
Bloomberg Business Week at the links below.
cont. . (As part of this, also watch the embedded video: “Inside Tesla: A
massive factory pumping out Model S”.)
Bower, J. L., & Christensen, C. M. Disruptive technologies: Catching the wave. Harvard
Business Review, [95103]
Focus questions:
(1) Why is Tesla’s entry into the automobile industry noteworthy?
(2) Has Tesla’s entry been a success or failure? How do you judge that?
(3) What roles does innovation play in Tesla’s performance to date?
(4) How will Tesla’s entry affect the broader automobile industry?
(5) What threats does Tesla face in the future, and what should it do to mitigate those threats?
Session 6
Sep 17
Innovation and competitive dynamics (cont.)
Tesla (cont.)
Fleming, L. “Breakthroughs and the ‘Long Tail’ of Innovation”, Sloan
Management Review [SMR 265]
Tushman, M. L., & O’Reilly, C. A. O. “The tyranny of success: Managing for
today and tomorrow”. [2427BC]
In this session, we will continue our discussion of Tesla and address some broader effects of innovation
and technological change.
Focus questions:
How do established firms typically respond when confronted with new technologies?
Thinking beyond the Tesla case, what are three firms that have dealt successfully with technological
change? What are three firms that have not dealt successfully with such change? What are the
reasons for their differing outcomes?
(3) What advice would you give Elon Musk?
Session 7
Sep 19
Firm resources and capabilities; consideration of firm-level factors leading to
sustained competitive advantage
eHarmony. [9-709-424]
Prahalad, C. K., and Hamel, G. “The Core Competence of the Corporation”,
Harvard Business Review. [90311]
Focus questions:
(1) How structurally attractive is the on-line personals market?
(2) Does eHarmony have a competitive advantage? If so, where does it come from?
(3) How serious is the competitive threat to eHarmony?
Session 8
Sep 24
Firm resources and capabilities (cont.)
eHarmony (cont.)
Barney & Hesterly, Chapter 3, “Evaluating a Firm’s Internal Capabilities”
Focus questions:
(1) Which of the four options should Waldorf pursue?
(2) What are the major differences between the Resource-Based View and Porter’s five forces model?
What are the strengths and weaknesses of each model?
Session 9
Sep 26
IIF project review and feedback.
Session 10
Oct 1
Application of the C3E framework to integrate ideas covered to date. The Gillette case is
an older one, but its lessons are timeless, and it provides a perfect platform to learn how
to apply the C3E framework to a very broad variety of companies.
Gillette’s Launch of Sensor. [9-792-028]
Reread Barney & Hesterly, Chapter 2, “Evaluating a Firm’s External
Environment”, with particular emphasis on ideas about competitive dynamics.
Focus questions:
(1) Should Sensor be launched as a cartridge or disposable razor? How do industry trends affect this
(2) How much advertising should be used to launch Sensor? $10 million? $20 million?
(3) What should be the schedule for launching Sensor? How should schedules vary around the world
(Europe, U.S., Asia, etc.)?
Session 11
Oct 3
Integration via C3E (cont.)
Gillette’s Launch of Sensor. (cont.)
Today, we will continue our discussion of Gillette’s launch of the Sensor product.
Session 12
Oct 8
Strategy is about dealing with big, complex topics that people feel very strongly about, so
let’s think about … college football! College basketball!! And some other college sports!!!
Here are two contrasting points of view about the role of college sports.
Focus questions:
(1) What role should college athletics play at UT? Should top universities such as UT follow the Ivy
League model and not offer athletic scholarships?
(2) Should we pay college athletes? If so, how?
(3) What alternatives might work better than the existing system?
Session 13
Oct 10
No class … (something to do with a large college sporting event in Dallas).
Session 14
Oct 15
Strategy implementation through executive levers and strategic types.
Southwest Airlines – 2002: An Industry Under Siege [9-803-133] (skim for background)
Southwest Airlines: In a different world [9-910-419]
Focus questions:
(1) During the 1990s, none of the five largest air carriers in the U.S. earned its cost of capital. Yet despite
the industry’s challenges, airlines like Southwest and Jet Blue earn enviable returns. What explains
(2) How vulnerable is Southwest to imitation?
(3) In the next 5-10 years, what kinds of things – those over which Southwest’s leadership has some
control – could go wrong? What should be done to make sure these things don’t happen?
(4) Would you recommend that Southwest acquire the gates and slots available at LaGuardia? Why?
Session 15
Oct 17
Cost advantage strategy – how to implement it.
Pfeffer, J. Producing sustainable competitive advantage through the effective
management of people. Academy of Management Executive, 19(4): 95-106.
Available at:
Barney & Hesterly, Chapter 4, “Cost leadership”
Today, we’ll continue our discussion of Southwest and strategy implementation.
Session 16
Oct 22
Differentiation advantage – how to implement it.
Cambridge Technology Partners [9-496-005]
Locke, E. A. “Linking Goals to Monetary Incentives”, Academy of Management
Executive, 18(4): 130-133. Available at:
Barney & Hesterly, Chapter 5, “Product differentiation”
Focus questions:
(1) How fast should CTP try to grow? What are the key constraints on its growth?
(2) How should CTP compensate its employees?
(3) What strategic type should CTP implement in the future?
Session 17
Oct 24
Strategy implementation – taking charge in a new job; using logical
incrementalism to overcome organizational and individual resistance to change.
Paul Levy: Taking charge of the Beth Israel Deaconess Medical Center (A) [9303-008]
Note: This includes both a regular pdf file and a multimedia case. You are
responsible for reviewing multimedia materials listed on the case’s calendar
through March 5, 2002.
Gabarro, J. J. “When a new manager takes charge”, Harvard Business Review.
[Reprint 95204]
Barthelemy, J. The experimental roots of revolutionary vision. Sloan
Management Review. [SMR229]
Focus questions:
(1) How would you describe the situation Levy inherited at the BIDMC? What challenges did he face?
Why did previous turnaround efforts fail?
(2) How did Levy get started in his new job? What were his objectives, and what did he accomplish?
(3) What was distinctive about the way that Levy went about formulating, announcing and implementing
the recovery plan?
(4) How does Levy overcome resistance?
Session 18
Oct 29
Implementing strategic renewal.
Stone Finch, Inc.: Young Division, Old Division [3214]
O’Reilly, C., and Tushman, M. “The Ambidextrous Organization”, Harvard
Business Review. [6581]
Focus questions:
(1) What is your assessment of Jim Billings’ performance as president of Stone Finch? What do you
think of his leadership style?
(2) What is your assessment of the entrepreneurial subsidiary concept?
(3) What should Jim Billings do?
Session 19
Oct 31
Vehicles of corporate strategy: Mergers and acquisitions
Danaher Corporation. [9-708-445]
Barney & Hesterly, Chapter 10, “Mergers and Acquisitions”
Focus questions:
What role do acquisitions play at Danaher?
What allows Danaher to be successful in its strategy?
What assumptions are built into Danaher’s strategy that are at risk of not holding in the future?
What are the limitations to Danaher’s strategy?
Session 20
Nov 5
Vehicles of corporate strategy: Mergers and acquisitions (cont.)
Danaher Corp. (cont.)
Christensen, C. M., Alton, A., Rising, C., & Waldeck, A. The new M&A playbook.
Harvard Business Review [R1103B]
Kale, P., Singh, H., & Raman, A. P. Don’t integrate your acquisitions, partner with
them. Harvard Business Review. [R0912M]
Today, we will continue our discussion of Danaher and acquisitions as a means of diversifying.
Session 21
Nov 7
Drivers and consequences of corporate diversification.
Vivendi: Revitalizing a French Conglomerate [9-799-019]
Barney & Hesterly, Chapter 7, “Corporate diversification”
Focus questions:
(1) What is Vivendi’s corporate vision? How does the firm intend to create value?
(2) What benefits does Vivendi attain from operating in multiple businesses?
(3) How does the business environment in France affect Messier’s plans and his ability to carry them out?
(4) What are the major risks associated with Vivendi’s strategy?
Session 22
Nov 12
Drivers and consequences of corporate diversification (cont).
Vivendi (cont.)
Goold, M. and Campbell, A. “Desperately Seeking Synergy”, Harvard Business
Review. [98504]
Today, we’ll continue our discussion of the opportunities and challenges associated with diversification.
Session 23
Nov 14
Strategy and globalization. Note: We’ll be drawing contrasts between Grolsch
and Bud, so it’s very important to read both cases.
Grolsch: Growing globally [PG0-001]
Barney & Hesterly, Chapter 11, “International strategy”
Review: Barney & Hesterly, Chapter 6, “Vertical Integration”
Focus questions:
(1) Why did Grolsch globalize, and how well has it performed internationally?
(2) Did Budweiser’s merger with InBev add value? What lessons should Grolsch take from Bud’s
experience as it implements its merger with SABMiller?
(3) How is the global beer industry likely to evolve in the future?
Sessions 24-27:
Project Presentations
Tuesday, Nov 19
Groups 1 and 2
Thursday, Nov 21
Groups 3 and 4
Tuesday, Nov 26
Groups 5 and 6
Tuesday, Dec 3
Groups 7 and 8
Session 28
Dec 5
In this session, you’ll be asked to tell us your views on the questions: What is strategy? What roles do
managers play in setting and implementing strategy? Come prepared to discuss and defend your points
of view.
Why We Use the Case Method1
The case method is one of the most effective means of management education. It is widely
used in schools of business throughout the world, and this use is predicated upon the belief that tackling
real business problems is the best way to develop practitioners. Real problems are messy, complex, and
very interesting.
Unlike other pedagogical techniques, many of which make you the recipient of large amounts of
information but do not require its use, the case method requires you to be an active participant in the
closest thing to the real situation. It is a way of gaining a great deal of experience without spending a lot of
time. It is also a way to learn a great deal about how certain businesses operate, and how managers
manage. There are few programmable, textbook solutions to the kinds of problems faced by real general
managers. When a problem becomes programmable, the general manager gives it to someone else to
solve on a repeated basis using the guidelines he or she has set down. Thus the case situations that we
will face will require the use of analytical tools and the application of your personal judgment.
Sources of Cases
All the cases in this course are about real companies. You will recognize many of the names of
the companies, although some of them may be new to you. These cases were developed in several
different ways. Occasionally, a company will come to a business school professor and request that a case
be written on that company. In other situations, a professor will seek out a company because he or she
knows that the company is in an interesting or difficult situation. Often, the company will agree to allow a
case to be written.
Occasionally, cases will be written solely from public sources. This is perhaps the most difficult
type of case writing because of the lack of primary data sources.
In those situations where a company has agreed to have a case written, the company must
"release" the case. This means that they have final approval of the content of a given case. The
company and the case writer are thus protected from any possibility of releasing data that might be
competitively or personally sensitive. Public source cases, obviously, do not need a release. Given the
requirement for release, however, it is amazing the amount of information that companies will allow to be
placed in a case. Many companies do this because of their belief in the effectiveness of the case method.
Preparing for Class
When you prepare for class, it is recommended that you plan on reading the case at least three
times. The first reading should be a quick run-through of the text in the case. It should give you a feeling
for what the case is about and the types of data that are contained in the case. For example, you will want
to differentiate between facts and opinions that may be expressed. In every industry, there is a certain
amount of "conventional wisdom" that may or may not reflect the truth. On your second reading you
should read in more depth. Many people like to underline or otherwise mark up their cases to pick out
important points that they know will be needed later. Your major effort on a second reading should be to
This note was prepared by Dan R.E. Thomas. It is intended solely as an aid to class preparation.
understand the business and the situation. You should ask yourself questions like: (1) Why has this
company survived? (2) How does this business work? (3) What are the economics of this business?
On your second reading, you should carefully examine the exhibits in the case. It is generally
true that the case writer has put the exhibit there for a purpose. It contains some information that will be
useful to you in analyzing the situation. Ask yourself what the information is when you study each exhibit.
You will often find that you will need to apply some analytical technique (for example, ratio analysis, growth
rate analysis, etc.) to the exhibit in order to benefit from the information in the raw data.
On your third reading, you should have a good idea of the fundamentals of the case. Now you
will be searching to understand the specific situation. You will want to get at the root causes of problems
and gather data from the case that will allow you to make specific action recommendations. Before the
third reading, you may want to review the assignment questions in the course description. It is during and
after the third reading that you should be able to prepare your outlined answers to the assignment
There is only one secret to good case teaching and that is good preparation on the part of the
participants. Since the course has been designed to build as it progresses, attending every class is very
Class Discussions
In each class, we will ask one or several people to lead off the discussion. If you have prepared
the case, and are capable of answering the assignment question, you should have no difficulty with this
lead-off assignment. An effective lead-off can do a great deal to enhance a class discussion. It sets a
tone for the class that allows that class to probe more deeply into the issues of the case.
The instructor's role in the class discussion is to help, through intensive questioning, to develop
your ideas. This use of the Socratic method has proved to be an effective way to develop thinking
capability in individuals. The instructor's primary role is to manage the class process and to insure that the
class achieves an understanding of the case situation. There is no single correct solution to any of these
problems. There are, however, a lot of wrong solutions. Therefore, we will try to come up with a solution
that will enable us to deal effectively with the problems presented in the case.
After the individual lead-off presentation, the discussion will be opened to the remainder of the
group. It is during this time that you will have an opportunity to present and develop your ideas about the
way the situation should be handled. It will be important for you to relate your ideas to the case situation
and to the ideas of others as they are presented in the class. The instructor's role is to help you do this.
The Use of Extra or Post-Case Data
You are encouraged to deal with the case as it is presented. You should put yourself in the
position of the general manager involved in the situation and look at the situation through his or her eyes.
Part of the unique job of being a general manager is that many of your problems are dilemmas. There is
no way to come out a winner on all counts. Although additional data might be interesting or useful, the
"Monday morning quarterback" syndrome is not an effective way to learn about strategic management.
Therefore, you are strongly discouraged from acquiring or using extra- or post-case data.
Some case method purists argue that a class should never be told what actually happened in a
situation. Each person should leave the classroom situation with his or her plan for solving the problem,
and none should be falsely legitimized. The outcome of a situation may not reflect what is, or is not, a
good solution. You must remember that because a company did something different from your
recommendations and was successful or unsuccessful, this is not an indication of the value of your
approach. It is, however, interesting and occasionally useful to know what actually occurred. Therefore,
whenever possible, we will tell you what happened to a company since the time of the case, but you
should draw your own conclusions from that.
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