TEACHING NOTES Prepared and Compiled by Joseph A. Maciariello with assistance from Richard Romo and Matthew Shin HarperCollinsPublishers www.HarperAcademic.com TABLE OF CONTENTS PART ONE MANAGEMENT’S NEW REALITIES . 4 Case Number 1 Yuhan-Kimberly’s New Paradigm: Respect for Human Dignity . 4 PART TWO BUSINESS PERFORMANCE . 5 Case Number 2 What Is OUR Business? . 5 Case Number 3 What Is a Growth Company? . 5 Case Number 4 Success in the Small Multinational . 6 Case Number 5 Health Care as a Business . 7 PART THREE PERFORMANCE IN SERVICE INSTITUTION . 7 Case Number 6 The University Art Museum: Defining Purpose and Mission . 7 Case Number 7 Rural Development Institute: Should It Tackle the Problem of the Landless Poor in India? . 8 Case Number 8 The Future of Mt. Hillyer College . 9 Case Number 9 The Water Museum . 10 Case Number 10 Should the Water Utility Operate A Museum? . 11 Case Number 11 Meeting the Growing Needs of The Social Sector . 12 Case Number 12 The Dilemma of Aliesha State College: Competence versus Need . 13 Case Number 13 What Are Results in the Hospital? . 14 Case Number 14 Cost Control in the Hospital . 14 PART FOUR PRODUCTIVE WORK AND ACHIEVING WORKER . 15 Case Number 15 Work Simplification and the Marketing Executive . 15 Case Number 16 The Army Service Forces . 16 Case Number 17 How Does One Analyze and Organize Knowledge Work? . 17 Case Number 18 Can One Learn to Manage Subordinates? . 18 Case Number 19 How to Staff the Dead-End Job? . 18 Case Number 20 The Training Director in the Hospital . 18 Case Number 21 Are You One of Us or One of Them? . 19 Case Number 22 Midwest Metals and the Labor Union . 19 Case Number 23 Safety at Kajak Airbase . 20 PART FIVE SOCIAL IMPACTS AND SOCIAL RESPONSIBILITIES 20 Case Number 24 Corporate Image to Brand Image: Yuhan-Kimberly . 20 Case Number 25 The Peerless Starch Company of Blair, Indiana . 22 2 PART SIX THE MANAGER’S WORK AND JOBS . 23 Case Number 26 Alfred Sloan’s Management Style . 23 Case Number 27 Performance Development System at Lincoln . 23 Electric for Service and Knowledge Workers Case Number 28 Internal and External Goal Alignment at Texas Instruments . 25 Case Number 29 Can You Manage Your Boss? . 26 Case Number 30 Ross Abernathy and the Frontier National Bank . 27 Case Number 31 The Failed Promotion . 27 PART SEVEN MANAGERIAL SKILLS . 28 Case Number 32 Lyndon Johnson’s Decision . 28 Case Number 33 The New Export Manager . 28 Case Number 34 The Insane Junior High Principal . 28 Case Number 35 The Structure of a Business Decision . 29 Case Number 36 The Corporate Control Panel . 29 PART EIGHT INNOVATION AND ENTREPRENEURSHIP . 30 Case Number 37 Research Strategy and Business Objectives . 30 Case Number 38 Who Is the Brightest Hamster In The Laboratory? . 30 Case Number 39 Andy Grove of Intel: Entrepreneur Turned Executive . 31 Case Number 40 The Chardack-Greatbatch Implantable Pacemaker . 31 PART NINE MANAGERIAL ORGANIZATION . 32 Case Number 41 The Invincible Life Insurance Company . 32 Case Number 42 The Failed Acquisition . 32 Case Number 43 Banco Mercantil: Organization Structure . 32 Case Number 44 The Universal Electronics Company . 33 Case Number 45 Research Coordination in the Pharmaceutical Industry . 33 Case Number 46 The Aftermath of Tyranny . 34 Case Number 47 What Is the Contribution of Bigness? . 34 PART TEN NEW DEMANDS ON THE INDIVIDUAL . 34 Case Number 48 The Function of the Chief Executive . 34 Case Number 49 Drucker’s Ideas for School Reform? . 35 Case Number 50 What Do You Want to Be Remembered For? . 37 3 PART ONE: MANAGEMENT’S NEW REALITIES CASE NUMBER 1 Yuhan-Kimberly’s New Paradigm: Respect for Human Dignity The success of the Y-K’s rotation system requires the spirit of the performance. It is difficult to develop such a culture. So, let’s look further into how Y-K accomplished its spirit of performance. It is based first and foremost on its principle ‘respect for the human.’ The implementation of Y-K’s principle led to hiring managers who have integrity and this integrity in turn results in both human development and the spirit of performance. Human development leads to the spirit of the performance and the spirit of the performance leads to human development in a reinforcing manner. There is a feedback, or mutually reinforcing, relationship between the two variables as shown below. Integrity of Character “Working” with human being always means developing him or her. Developing people requires a basic quality in the manager that cannot be created simply by improving skills or by emphasizing the importance of the task. It requires integrity of character. It requires an understanding of and interest in what people are becoming in their work. Developing people always involves self-development. Self-development is assisted placing high performance standards on people, according to their strengths. The Spirit of Performance “Spirit of performance” in a human organization means that the energy of the organization leads to outputs that are larger than the sum of the individual efforts. This cannot be accomplished by mere mechanical means. To get out more than is being put in is possible only in the moral sphere and this requires respect for human dignity. The spirit of performance requires integrity, high performance standards, focusing on opportunity, and expressing organizational values in people decision. For these requirements to lead to the spirit of the performance, management must demonstrate integrity: the only quality that they must bring with them and cannot be expected to be acquired later on. With a successful implementation of the spirit of the performance, individuals in the organization will develop – both as persons and as knowledge resources. 4 PART TWO: BUSINESS PERFORMANCE CASE NUMBER 2 What is OUR Business? “All right.” said a thoroughly exasperated Callahan, “you have told me what our business is NOT -but how does one go about deciding what it is or should be? You all agree that the market opportunities are good in both areas. So what we need to think through is what it is we are? What is it that we can do? What do we believe in?” How should one go about thinking through these questions? In other words, we have to think through what is our business? What are our core competencies? And what is our mission? But, how should we go about this task? Both those opposed to Outdoor Wear, on grounds the needs for style, promotion, and sex appeal, and those op - posed to Restaurants, on grounds of the need to provide service, atmosphere, and cooks and while catering to guests, have made the mistake of focusing only on weaknesses, what Callahan is not good at, have never done, and the competencies they would have to learn. Neither side has asked: What are we good at? What are our strengths? What can we put to work? In what kind of business are these strengths likely to be productive? Are we primarily buyers for customers? That would have a major bearing for entering the fashion business. Or, are we primarily people who know how to organize and systematize? THE LATTER IS OUR STRENGTH. AND, that is what a chain restaurant requires. CASE NUMBER 3 What is a Growth Company? Each of the men is both right and wrong. Any business needs to earn its cost of capital—or it is destroying economic wealth and is incapable of self-renewal. So, the president of the conglomerate is right to require the bakery to earn a sum sufficient to cover and exceed its cost of capital. The president of the bakery is wrong in asserting that the bakery cannot earn its cost of capital. As is the bakery should at least earn its cost of capital, but by changing its “Theory of Business” and through innovation this bakery could have the potential to meet corporate expectations of financial performance and growth. On the other hand, the president of the bakery is right and the president of the conglomerate wrong as to growth expectations. Given The Theory of Business “as is” the bakery is not going to be a growth business no matter what is done with it—not in a developed country in which bread consumption goes down with rising incomes and standards of living. The bakery is unlikely to grow at 10 percent per year, as the president of the conglomerate expects. However, the bakery could re-define its Theory of Business and look at the new realities of the baking business today. To achieve the president’s expectation and meet growth potential the bakery will need to innovate with new delivery channels, new “whole earth” recipes and expand its product line. Combining these ideas with ad - vanced information technology and Internet sales, this bakery can turn into the juggernaut that the corporate president expects. 5 The staff people of the conglomerate can help the president of the bakery to turn the business around so that it meets profit and growth objectives. Current operations must be operated at minimum costs and maximum cash generation. This will require that the bakery stream line production, reengineer business processes and work on the spirit of performance with incentives and education on a new baking process. To achieve business goals set by the president; objectives should be established in eight key areas: Marketing, Innovation, Human Resources, Financial Resources, Physical Resources, Productivity, Social Responsibility and Profit Requirements. These objectives are paramount for establishing new directions and new measurements for performance. The new Theory of the Business should aim at creating new customers by aligning its business with the needs of noncustomers, taking full advantage of the opportunity created by the two-person working household.