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Ch. 1

Lipschultz, Levin & Gray LLC

1. Keeping professionals excited about work that can be routine and


standardized
is a major challenge for Siegel. How could he use technical, human,
and
conceptual skills to maintain an environment that encourages
innovation and professionalism in his CPA firm?
Technical skills are skills that include knowledge of and proficiency in a
certain specialized field. Accountants have this skill set and Siegel
would expect competence in his staff. Human skills that he employs
demonstrate his commitment to open communication, innovation and
creativity. The structure of the organization demonstrates the
application of conceptual skills by designing an office that encourages
communication and team skills while focusing on the mission of the
firm to delight the customer. The office is arranged in a nomadic
fashion without proprietary desks or other office equipment. This
arrangement encourages staff to work together and to develop a team
approach to attaining the firm’s goals as expressed in the mission.

2. What management roles would Steven be playing as he (a) made a


presentation to potential clients, (b) assessed the feasibility of adding
a new consulting service, (c) kept employees focused on the
company’s commitments to customers?
The basic managerial roles are broadly classified as interpersonal,
informational, and decisional. Making a presentation to a client would
exemplify the informational managerial role that includes the role of
spokesperson and disseminator of information. In terms of assessing
the feasibility of adding a new consulting service, Steven would be
engaged in decisional roles that revolve around making choices. Here
he would be acting as perhaps entrepreneur and resource allocator.
Keeping employees focused on the company’s commitments to
customers would involve interpersonal roles where Steven would be
acting as figurehead, leader and liaison.

3. What can you tell about LLG’s emphasis on customer service and
innovation? In what ways does the organization support its employees
in servicing customers and in being innovative?
It is clear that LLG is focused primarily on the customer. The mission of
the firm, and the symbols used in the office (e.g. the giant wall-
mounted abacus and the “Welcome Wall”) exemplify the firm’s
commitment. There pledge to “delight” the customer, and to respond
to customer’s within 24 hours demonstrates this commitment. Within
the office, there are no telltale signs of what most people consider
boring, dull CPA work. Everywhere you look in the company’s office
you see versatility, comfort, and eccentricity. The open office design
promotes opportunities for professionals to gather.
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4. Would LLG’s approach work for all CPA firms? Why or why not? What
could other managers learn from Steven Siegel?
Each manager develops his or her own style. Not all CPA firms would
necessarily benefit from LLG’s approach. This may depend on the type
of customers, management, organizational design, and other factors
(as we see in the later chapters). Other managers could learn the value
and benefit of innovation and a strong emphasis on people as a key to
organizational success.
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Ch. 3

United States Air Force Academy


The Culture of Military Institutions

1. Using Exhibit 3.2, describe the culture at military institutions such as


the U.S. Air Force Academy. Why is that type of culture important to
these organizations? On the other hand, what are the drawbacks of
such a culture?
The U.S. Air Force Academy’s culture would appear to be high on
attention to detail, high on outcome orientation, high on people
orientation, high on team orientation, high on aggressiveness, high on
stability, and low on innovation and risk taking. This culture is
important given the potential life-and-death nature associated with
military institutions. The drawbacks of this type of culture may impact
creativity and innovation, which are not typically associated with these
organizations’ culture.

2. Describe how you think new cadets at the Air Force Academy “learn”
the culture.
New cadets’ identities are very closely aligned with their class,
squadron, and group. These norms play a crucial role in controlling
behavior. Also, new cadets will learn about the U.S. Air Force
Academy’s culture as they attend functions and through everyday
observation of those around them. In addition, stories, rituals, material
symbols, and language could play important roles as well if they are
used properly.

3. What challenges face Secretary Roche in changing the climate at the


U.S. Air Force Academy?
The culture of the military is very strong and is focused on loyalty and
commitment to the group. This includes the squadron and the class.
The climate of group loyalty rather than organizational loyalty will be
difficulty for Secretary Roche to overcome. This culture has developed
over along period of time.

4. What role might stakeholders play in this situation? IN answering this


question, be sure to identify what stakeholders there are and what
concerns each might have?
The stakeholders are varied. In addition to the staff and the cadets
(internal stakeholders), there are numerous external stakeholders.
These include the Congress (legislators provide funding), the public,
the military at large, and perhaps, more globally, allies. The concerns
would be different for these stakeholders. Military preparedness is a
highly valued outcome but the issues of discrimination and harassment
are viewed negatively from the public’s perspective. Pressure from
Congress and other “pressure groups” could have an impact on the
internal standards and norms in the military academy.
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5. As this scandal is resolved, what types of cultural changes were


implemented? (You will have to search for this information)
(There is considerable information on this topic. You can research the
popular press including Newsweek, Time, and U.S. World Report. It is
still an open question as to whether this scandal has actually been
resolved. While there has been a change in “CEO” at the Academy,
the complaints of harassment appear to continue. You may want to
consider whether (or how) the culture of the Academy can be
“changed” to eliminate gender bias.)
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Ch.4

National Basketball Association


Shooting for Overseas Success

1. What global attitude do you think the NBA and its member teams
exhibit? Explain why this attitude has or hasn’t contributed to the
NBA’s global success.
The NBA and its member teams appear to exhibit the geocentric
attitude, a world-oriented view that focuses on using the best
approaches and people from around the globe. From this perspective,
major issues and decisions are viewed globally by looking for the best
approaches and people regardless of country origin. This attitude has
contributed to the NBA’s success because the decision makers
recognized that, in order to successfully transplant the NBA, they
would have to use the best approaches and people no matter where
they were from. They also tailored their product to best meet the
needs of the various markets they were looking at.

2. What legal-political, economic, and cultural differences might be


significant to an NBA team recruiting a player from a foreign country?
How would you deal with these differences? As NBA teams start
playing in other countries, would these differences change? Explain.
Legal-political differences could arise in terms of contractual terms and
conditions. Economic differences probably wouldn’t be as significant
because a player from a foreign country would probably want to be
paid in U.S. dollars. However, currency exchange rates might present a
challenge. Cultural differences could arise in terms of how a player
adapted to the realities and expectations of team members, coaches,
and audiences. Most likely as each country has a different set of
norms and cultural values.

3. How has the NBA exhibited effective and efficient managing in the
global environment?
The NBA has capitalized on its inherent popularity around the world. In
addition, David J. Stern, NBA’s commissioner, has been instrumental in
marketing both the game of basketball and Michael Jordan globally. He
understood the similarities and differences between the domestic
(U.S.) and foreign markets. In addition, the league itself reflects a
geocentric attitude in that it has been willing to showcase talent from
around the globe.
(For another assessment of the NBA’s success in global markets,
you can look at, e.g., William Echikson, “Michael, the NBA, and the
Slam-Dunking of Paris,” Business Week, November 3, 1997, p. 82.
available in our library)

4. What could other organizations learn from the NBA’s global


experience?
Physical presence of the corporation is necessary. It is not sufficient to
just “sell” the product (or the play games as in the NBA). It is
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necessary to develop a “relationship” with consumers in different


countries in which you are doing business. Developing a truly
international web presence can also be effective. Understanding and
being sensitive to different cultural values is a key to success as well.
(remember the HSBC TV commercial, “the world’s local bank”?)
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Ch. 5 (you can actually find a lot of articles about the Andersen case in web.)

Arthur Andersen

1. What factors do you think contributed to how employees at Andersen


behaved?
A smaller, weaker, and less profitable Andersen accounting firm was
the result of the split between the accountants and the consultants.
The company was forced to build revenues back up. The pursuit of
revenues became the highest priority. Employees were rewarded on
the basis of their billings. Finally, there was intense pressure to get
clients and keep them happy which compromised accounting
standards.

2. Identify the main stakeholders involved in this situation. What


concerns might
each stakeholder have had? Were any of the stakeholders’ concerns in
conflict with each other? Explain. What impact might this have had on
employees?
Main stakeholders would include: management, employees, clients,
and regulating agencies such as the SEC. All stakeholders should be
concerned with, first and foremost, with GAAP standards. The internal
stakeholders would certainly be concerned also with organizational
economic factors such as profits and returns on investments, job
security, and corporate image and reputation. The stakeholders’
concerns of GAAP standards could be in conflict with the stakeholders’
remaining “happy” and “loyal” to Andersen. The example of Enron
paying $1 million per week in accounting fees illustrates the point.
Ultimately, the impact that this situation had on employees was
extreme in that the firm ceased operations and employees were laid
off.

3. Using Exhibit 5.9 analyze the intensity of the ethical dilemma facing
Andersen’s employees as they were pressured to grow revenues. How
might the other factors that affect ethical and unethical behavior be
involved? (See Exhibit 5.7).
Greatness of Harm—ultimately the reputation and generally
accepted
accounting principles had to yield to pressures for revenues.
Consensus of Wrong—most society members would consider the
“cooking of the books” at Andersen to be wrong, adding to
intensity.
Probability of Harm—The company would probably have argued
that
without the revenues it would fail.
Immediacy of Consequences—the harm will be felt relatively
fast, if not
immediately, adding to intensity
Proximity to Victims(s)—the proximity is direct. Not only the
corporate
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clients but the employees and the investing public are


impacted.
Concentration of Effect—the effect is spread across clients,
employees,
investors, and regulating agencies.

Our answers may differ concerning the intensity and other ethical
factors, based on our own ethical background and opinions about the
events that took place at Andersen.

4. Evaluate Joe Beradino’s ethical leadership. What recommendations


would you have made to him?
His was not ethical in that profits became the only important issue for
the firm. In fact, the four “cornerstones” upon which the firm was built
gave way under his leadership. It is clear that he did not respond to
the “real” clients, that of the investing public.

5. Is there anything that could have prevented the downfall of Andersen?


If not, why not? If so, what?
By the time the issues became widely known, it was far too late to
salvage the firm. Perhaps a different CEO than Bernadino could have
resulted in a different set of practices at the firm. However, it appears
that the severance of the consulting side of the business had left
Andersen very weak. Perhaps if they had pursued a merger strategy,
they could have avoided the disaster.
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Ch. 6

C. F. Martin Guitar Company


Framing a Good Decision

1. How do you think good decision-making has contributed to the success


of this business?
The decisions that have been made are carefully considered, and tied
to the fundamental philosophy of the company. It is a privately held
company so that the immediate stakeholders are more limited than
would be the case in a publicly held firm. It is clear the company
gathers customer information and participates in programs that are
socially responsible.

2. A decision to move into a new market as Chris did is a major decision.


How could he have used the decision-making process to help make
this decision?
It is clear that Chris used the eight-step decision-making process in
reaching the decision to enter this new market. The problem is two-
fold: the reduction in the supply of choice woods and the fact that 65
percent of the guitar market is in the under $800 price range. It is
clear also that Chris applied decision criteria that are consistent with
the company’s philosophy. Once the decision alternative was selected
and implemented, it was followed through and monitored through
customer feedback.

3. What criteria do you think would be most important to Chris as he


makes decisions about the company’s future?
The criteria would be the on-going viability of the firm, socially
responsible corporate behavior, maintaining a high quality product,
and staying true to the company’s philosophy of origin.

4. Would you characterize the conditions surrounding C.F. Martin Guitar


Company as conditions of certainly, risk, or uncertainty? Explain your
choice.
It appears that there are elements of all three. The conditions of
certainty are clear in terms of the diminishing supply of natural wood
products; the element of risk pertains to whether or not a lower-priced
Martin guitar would be accepted by consumers and uncertainty deals
with the ability of the firm to identify other wood products to build
guitars of quality into the future.

5. What could Chris learn from the concept of highly reliable


organizations to help him be a better decision maker?
It appears that CF Martin does already have some of the characteristics
associated with HRO’s. It is clear that Chris is “not tricked by the
company’s historical success—as they enter a new market and
substitute wood products for their traditional products. We do not
know whether he defers to experts on the front lines, but we do know
that the skilled people building these guitars exercise both care and
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patience. The unexpected circumstances (such as the depletion of


rosewood) did generate a solution in terms of using cosmetically
flawed natural woods that customers did not reject. C.F. Martin clearly
embraces complexity given the balance of social responsibility,
depletion of natural materials, price levels of their guitars, and new
markets.
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Ch. 7

Lend Lease Corporation


Building for the Future

1. What role do you think goals play in planning done at Lend Lease?
Explain.
Goals play a substantial role in Lend Lease’s planning. The goal of
doing something that has never been done before is Lend Lease’s
guiding philosophy, and it creates the standard that the business
follows when determining new projects and ventures.

2. How does Lend Lease illustrate effective planning in a dynamic


environment?
Planning involves defining the organization’s goals, establishing an
overall strategy for achieving those goals, and developing a
comprehensive set of plans to integrate and coordinate organizational
work. Lend Lease clearly defined its goal—to do things that have never
been done before—and began working to build the Bluewater shopping
complex in Kent, England. The strategy that was established to
accomplish the goal included team planning, which outlined the
project. A project-control-group (PCG) was set up to accomplish the
task of creating Bluewater. This group set accountability standards
through using agendas, minutes, financial reviews, and other reports.

3. What approach to developing plans does Lend Lease appear to follow?


Explain.
Lend Lease appears to follow formal planning. Specific goals with
deadlines were set, and the end result was the completion of the
Bluewater project early, under budget, and fully leased.

4. Would Lend Lease’s approach work in other organizations? Why or why


not?
This approach would work in many organizations that have the
flexibility and culture to allow for creativity and “thinking outside the
box,” such as Lend Lease. The goals of the organization would have to
reflect the desire to achieve something original or improve on the
existing product and/or service.

5. Lend Lease has a strong commitment to environmentally sustainable


development. (Check out its Web site for information on its core
values.) How might these core values affect planning efforts?
From the web site: Commitment to Environmental Sustainable
Development. Lend Lease is committed to fostering environmental
sustainability in our activities and developments. The company prides
itself on it willingness to shoulder the responsibility of making a
difference. Our objective is to ensure a balance between economics,
environment and social goods to provide greater benefits to all. Our
process is predicated on total stakeholder involvement. This ensures
that we capture innovation, manage costs, and deliver ongoing
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benefits for all. It is clear that Lend Lease’s focus on planning is driven
by their environmental concerns.
(http://www.lendlease.com/llweb/llc/main.nsf/all/all_sust_vision )
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Ch. 8

Joe Boxer Corporation


Turbulent Flight Plan

1. What competitive advantage(s) do you think Joe Boxer has? What


competitive strategy does the company appear to be following?
Explain your choices.
Joe Boxer has the competitive advantage of brand awareness among
87 percent of the target market. The other competitive advantage is
the exclusive sales agreement with Kmart stores. The competitive
strategy that the company appears to be employing is one of
differentiation.

2. What might a SWOT analysis have shown Bill Sweedler of Windsong as


he was evaluating Joe Boxer?
The SWOT analysis would have revealed Joe Boxer’s strengths and
weaknesses as well as the environment’s opportunities and threats.
He could have seen that the cash drain on the company was largely
due to poor management (by Graham).

3. How could Sweedler use strategic management concepts to help him


continue managing Joe Boxer for successful performance?
Sweedler definitely needs to ensure a sustainable competitive
advantage. The core competency of Joe Boxer appears to be the name
recognition that it has with 87 percent of its target market.

4. What might other organizations learn about strategic management


from Graham’s and Sweedler’s experiences?
Other companies could see the value in acquisitions and in turnaround
strategies that take a company that is debt ridden and exploits its core
competency to position the product for longer-term success.