Fundamentals of Management Case studies

THREE CASES

AND AFTER READING CAREFULLY, ANSWERS

DISCUSSION QUESTIONS. (All cases are 5 Marks each)

CASE # 1 (Managing without Managers)
CASE # 2 (China Company)
CASE # 3 (Crisis Planning at Livestrong Foundation)
CASE # 4 (BUILDING A BETTER BOSS)
CASE # 1 (Managing without Managers)

Just Music, a European commercial music service, is synonymous with dramatically changing the way consumers access and use music on a day-to-day basis. They have succeeded in moving consumers away from buying music and, instead, moving them towards a model of renting the music they enjoy for a monthly fee. The European music giant, launched in 2008, was developed into the business we know today by European entrepreneur Paul Moon, who was inspired to create a service that would be easier and more convenient for customers to use than the now- illegal file sharing websites that were popular at the time.

Like many technology companies, Just Music has a flat organizational structure as opposed to complex hierarchies of management. For Managing Without Managers companies like Just Music it is imperative that they can work in a fast-moving way that allows changes in content to get to the customer as quickly as possible. In order to work as efficiently as possible Just Music have adopted a management and organizational structure based upon squads, chapters, tribes, and guilds. Although you won’t find theory talking about organizational tribes or chapters, it does provide a useful way for Just Music to organize their staff and reporting structures in an industry where many are trying to remove mangers entirely.

‘Squads’ are the building blocks of organizational structure at Just Music. These small teams work in a way that is similar to a small startup business. These squads sit together in one shared space in order to work as effectively as possible on one long term mission; usually improving a specific area or part of the Just Music experience. Squads do not have a manager and instead work together to ensure the overall problem is solved. Each squad does however have a ‘Product Owner’, and it is their job to ensure that work is prioritized across the whole squad. Within each squad you will find employees with different skills that can contribute towards the squad achieving their goal.

‘Tribes’ are groups of squads that work in similar areas. This means that all the squads who are working on web-based services are part of the same tribe; and squads who work on the mobile Just Music application will be part of a different tribe. Each tribe, like the individual squads, is able to work autonomously with very little traditional management taking place. Within the Just Music offices the multiple squads that make up each tribe sit close together to allow collaboration between squads as needed, however the ethos of Just Music aims to discourage squads and tribes being dependent on one another so that change can happen as quickly as possible, something that is incredibly important in the ever changing technology markets.

In order to be able to manage the staff and structure throughout the organization Just Music utilizes what they term ‘Chapters’. These chapters are collections of people who have similar skills but who work in various squads; for example, a chapter may be comprised of all of the programmers in the various squads within one tribe. It is within these chapters that we see more of a link to traditional management theory with clearer lines of management and responsibility for staff members, their development, pay and progression. The only time people tend to work outside their tribe is when taking part in ‘Guild’ activities. The guilds are cross tribe groups of people who have similar interests but again do not have any formal management, and are instead autonomous and self-managed, working on projects or problems that interest them.

As a fast-moving technology company, it is of course essential for Just Music to be able to react, change, and adapt their online content quickly. In approaching management in a nontraditional manner, they have allowed individuals to be more creative whilst still meeting the overall goals of the business. There are however potential difficulties with adopting this more relaxed attitude to management, as there is an overall lack of control and there are opportunities for the freedom

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offered to staff to be misused. The increase in technology companies such as Just Music is changing the landscape of management, with many trying to avoid traditional management practices altogether. Just Music is somewhat unique in its field as they have recognized the need for management within the organization, however they have attempted to find a unique way of balancing the need for freedom and creativity in the workforce whilst still undertaking basic management activities. As Just Music grows, they may need to reflect upon their approach to management.

Case # 1- Discussion Questions

  1. Who undertakes management at Just Music?
  2. How could Just Music manage poor performing individuals or teams? Do you think this

is a problem at Just Music? Why or why not?

  1. Are there any similarities to traditional management at Just Music?
  2. Do you think that this approach to management would be effective within another

company?

CASE # 2 (China Company)

What could be more self-explanatory about corporate values than naming your business “China Company?” Zhong and Wang are Chinese characters for loyalty, dedication, and prosperity. It certainly worked out for the Liaoning Province–based Chinese aluminum developer and manufacturer.

Founded in 1993, it had total assets of US$3.9 billion. In 2014, the company’s revenue was around 16 billion RMB ($2.5 billion). The company is the largest producer of extruded aluminum in Asia and the second largest in the world, with its product being used in many industries—from rail carriages to power plants. From the outset the business sought to be sustainable, prosperous, and contribute to society.

The aluminum industry is highly competitive, and China Company is not only interested in value creation, but also in encouraging its customers to expand their businesses. The company is looking to expand their operations in Europe and the U.S., with Lu Changqing, the executive director and vice president saying, “We’re actively seeking cooperation in Europe and the U.S., including potential acquisitions.”

Employee contribution and a commitment to excellence have been key to the company’s success. Certain elements— like responsible corporate citizenship and operation management with integrity—are built into corporate values. The trick was transforming a corporate slogan into a corporate reality. In 2012 the Chinese government certified China Company as a “State Accredited Enterprise Technology Centre.

China Company was recognized not only for its technology, leadership, and strategy, but also for the fact that its management practices were inspirational to other companies in China. Li Beibei, the director of public affairs of China Company, believed the award showed that the company’s

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achievements went beyond its production and technology. It was recognized for its innovative business culture, management practices, and broad vision.

The company’s single principal shareholder, Liu Zhongtian—a self-made billionaire, who according to Forbes had a net worth of US$3.2 billion as of May 2015—said the company’s rapid growth has been a result of “perseverance and determination.”

As a result of its long-held desire for the business to become a world-class international producer, the company has initiated a shift toward high-end, high-value-added products. The business has expanded not only by increasing its production capabilities, but also through horizontal expansion. This expansion has allowed it greater dominance in the domestic Chinese market, as well as the export market.

China Company’s core values are fivefold. First, it tries to add value and grow alongside its customers; second, it develops its own talent, particularly in relation to innovation, teamwork, and pursuit of excellence. Third, China Company wants to create sustainable earnings growth and reward investors and shareholders. The fourth core value is to be a responsible corporate citizen and to do business with integrity, which includes supporting charities and community events. Finally, it is to establish a business that is trusted by customers and to retain and develop key employees to push the business forward into the future. The company also professes a “customers first” philosophy. Employee training focuses on responding to customer requirements and changing market needs in order to achieve high levels of customer satisfaction.

The aluminum business had to position itself carefully, responding to the demands of the external environment. Rather than react to environmental issues, organizations like China Company have taken immediate steps to cut down on energy use and reduce waste. Globally, the industry can boast that aluminum is the most commonly recycled metal in the world. Clearly, this approach permeates enterprises such as China Company as part of its overall commitment to social responsibility.

China Company is committed to the lifelong learning and career development of the employees, helping each person to effectively combine their talent development goals with corporate development. The company conducted operational and theoretical skill training for specialized operational personnel; they also worked with local government bodies to offer Pre-appointment Bridge-up Training,” a training program for laid-off workers to help develop their professional skills and operation capabilities. Training programs were organized with a total participation of 27,470 individuals, with all staff members having enrolled. To acknowledge the achievements of the employees, China Company awarded titles of “May Day” medal and “Workers’ Vanguard” for excellent performance.

As a member of the Hong Kong Stock Exchange, China Company continues to have great access to potential investment. The company is ranked first among the major Chinese aluminum companies and continues to expand. In retaining its core values of commitment, diligence, responsibility, and innovation, the business has become a major developer and manufacturer of high-quality aluminum products in the world, and at the same time reflects thoughtful response to demands from the external environment.

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Case # 2- Discussion Questions

  1. What are China Company’s corporate values? How do you think these values influence the way employees do their work?
  2. Using the company’s corporate values, describe the organizational culture. In which areas would you say that the company’s culture is very high (or typical)? Explain.
  3. How is China Company’s corporate culture maintained?
  4. “The right culture with the right values will always produce the best organizational

performance.” What do you think of this statement? Do you agree? Why or why not?

CASE # 3 (Crisis Planning at Livestrong Foundation)

In 1996, Lance Armstrong, the now-disgraced pro cyclist, was diagnosed with testicular cancer. Only 25 years old when he found out he had cancer, Armstrong chose to focus on being a survivor, not a victim. During his personal battle with cancer, he soon realized there was a critical lack of resources for individuals facing this disease. He decided to start a foundation devoted to helping others manage their lives on the cancer journey. Since 1998, the Livestrong Foundation has served millions of people affected by cancer. But in October 2012, everything turned upside down for the organization. That’s when the U.S. Anti-Doping Agency released its report that “concluded once and for all that Lance Armstrong, the cancer charity’s founder and chairman, was guilty of doping during his legendary cycling career.”

Doug Ulman, CEO and president of the Livestrong Foundation at the time, said he remembers that day clearly. In fact, he had anticipated for months that this day would come. As good friends, Ulman had believed Armstrong’s statements of innocence over the years. But now, “there was no more hiding.” After the news broke, Ulman called a meeting of every one of the foundation’s 100-person staff, all squeezing into the foundation’s boardroom. There, shoulder to shoulder and crammed together, the suspicions and tingling uncertainties all of a sudden became all too real. When Ulman announced that the organization could no longer “defend” its founder, it was a defining, watershed moment. Livestrong, the once highflying charity which had raised half a billion dollars over the years, was now facing a crisis—maybe even a life-or death crisis— of its own. Now, Livestrong would be operating in “life without Lance” mode.

Although it might be tempting to write off Livestrong as a hopeless case, Ulman and the rest of Livestrong’s staff have worked hard to keep the foundation viable and focused on its purpose. It’s not to ignore the challenges facing the Crisis Planning at Livestrong Foundation organization, because those challenges are significant. But in managing through the crisis, Ulman had to keep staff morale up and make plans to transform and distance itself from Mr. Armstrong. One piece of advice he received from a crisis communications firm was to take the opportunity to get the foundation’s message out. Like many of the cancer sufferers it helps, Livestrong wanted to come out on the other side stronger than ever. It’s not been easy. The foundation has lost some of its biggest sponsors, including Nike and RadioShack. Revenues fell in 2012 and 2013. But in addition to his “crisis management” responsibilities, Ulman has been formulating plans and strategies. He says, “It’s so ironic—we are in the business of survivorship, that’s what we do. Now we find ourselves dealing with the same circumstances in a totally different place.”

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A new phase in Livestrong’s history began in early 2015. The foundation’s Board of Directors announced a new president and CEO, Chandini Portteus. She comes to Livestrong from Susan G. Komen, the most widely known, largest, and best funded breast cancer organization in the United States. With her extensive knowledge and skills in fundraising, global programming, and advocacy, Livestrong has an individual well-versed in the challenges of leading this organization into the future.

Case # 3- Discussion Questions

  1. Could an organization even plan for this type of situation? If yes, how? If not, why not?
  2. How would goals be useful in this type of situation? What types of goals might be

necessary?

  1. What types of plans will be useful to Livestrong? Explain why you think these plans

would be important.

  1. What lessons about planning can managers learn from what Livestrong has endured?

CASE # 4 (BUILDING A BETTER BOSS)

Google doesn’t do anything halfway. So when it decided to “build a better boss,” it did what it does best: look at data.42 Using data from performance reviews, feedback surveys, and supporting papers turned in for individuals being nominated for top-manager awards, Google tried to find what a great boss is and does. The project, dubbed Project Oxygen, examined some 100 variables and ultimately identified eight characteristics or habits of Google’s most effective managers. Here are the “big eight”:

Provide an unambiguous vision of the future;
Help individuals to reach their long-term work goals;
Express interest in employees’ well-being;
Ensure you have the necessary technical abilities to support employee efforts;
Display effective communication skills, especially listening;
Provide coaching support when needed;
Focus on being productive and on end results; and
Avoid over-managing; let your team be responsible.
At first glance, you’re probably thinking that these eight attributes seem pretty simplistic and obvious and you may be wondering why Google spent all this time and effort to uncover these. Even Google’s vice president for people operations, Laszlo Bock, said, “My first reaction was, that’s it?” Another writer described it as “reading like a whiteboard gag from an episode of The Office.” But, as the old saying goes, there was more to this list than meets the eye.

When Bock and his team began looking closer and rank ordering the eight items by importance, Project Oxygen got interesting—a lot more interesting! And to understand this, you must understand something about Google’s approach to management since its founding in 1999. Plain and simple, managers were encouraged to “leave people alone. Let the engineers do their stuff. If they become stuck, they’ll ask their bosses, whose deep technical expertise propelled them to

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management in the first place.” It’s not hard to see what Google wanted its managers to be— outstanding technical specialists. Mr. Bock explains, “In the Google context, we’d always believed that to be a manager, particularly on the engineering side, you need to be as deep or deeper a technical expert than the people who work for you.” However, Project Oxygen revealed that technical expertise was ranked number eight (very last) on the list. So, here’s the complete list from most important to least important, along with what each characteristic entails:

Provide coaching support when needed (provide specific feedback and have regular one-on- one meetings with employees; offer solutions tailored to each employee’s strengths)
Avoid over-managing; let your team be responsible (give employees space to tackle problems themselves, but be available to offer advice)
Express interest in employees’ well-being (make new team members feel welcome and get to know your employees as people)
Focus on being productive and on end results (focus on helping the team achieve its goals by prioritizing work and getting rid of obstacles)
Display good communication skills, especially listening (learn to listen and to share information; encourage open dialogue and pay attention to the team’s concerns)
Help individuals to reach their long-term work goals (notice employees’ efforts so they can see how their hard work is furthering their careers; appreciate employees’ efforts and make that appreciation known)
Provide an unambiguous vision of the future (lead the team but keep everyone involved in developing and working toward the team’s vision)
Ensure you have the necessary technical abilities to support employee efforts (understand the challenges facing the team and be able to help team members solve problems)
Now, managers at Google aren’t just encouraged to be great managers, they know what being a great manager involves. And the company is doing its part, as well. Using the list, Google started training managers, as well as providing individual coaching and performance review sessions. You can say that Project Oxygen breathed new life into Google’s managers. Bock says the company’s efforts paid off quickly. “We were able to have a statistically significant improvement in manager quality for 75 percent of our worst-performing managers.”

Case # 4- Discussion Questions

  1. Describe the findings of Project Oxygen using the functions approach, Mintzberg’s roles approach, and the skills approach.
  2. Are you surprised at what Google found out about “building a better boss?” Explain your answer.
  3. What’s the difference between encouraging managers to be great managers and knowing what being a great manager involves?
  4. What could other companies learn from Google’s experiences?
  5. Would you want to work for a company like Google? Why or why not?

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