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REVISED EDITION

THE CASE STUDY HANDBOOK A STUDENT’S GUIDE

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REVISED EDITION

THE CASE STUDY HANDBOOK A STUDENT’S GUIDE

William Ellet

Harvard Business Review Press Boston, Massachusetts

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Harvard Business Review Press titles are available at signifi cant quantity discounts when pur- chased in bulk for client gifts, sales promotions, and premiums. Special editions, including books with corporate logos, customized covers, and letters from the company or CEO printed in the front matter, as well as excerpts of existing books, can also be created in large quantities for special needs.

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Copyright 2018 William Ellet All rights reserved

No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

The web addresses referenced in this book were live and correct at the time of the book’s publication but may be subject to change.

Library of Congress Cataloging-in-Publication Data

Names: Ellet, William, author. Title: The case study handbook : a student’s guide / by William Ellet. Description: Revised edition. | [Boston, Massachusetts] : Harvard Business Review Press, [2018] | Includes index. Identifi ers: LCCN 2018000145 | ISBN 9781633696150 (pbk. : alk. paper) Subjects: LCSH: Management—Case studies—Study and teaching. Classifi cation: LCC HD30.4 .E435 2018 | DDC 658—dc22 LC record available at https://lccn.loc.gov/2018000145

ISBN: 9781633696150 eISBN: 9781633696167

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C O N T E N T S

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. What Is the Case Method? What’s in It for You? . . . . . . . . . . . . 5

PART I

ANALYZING CASES

2. What Is a Case? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

3. The Skills You Need to Read and Analyze a Case . . . . . . . . . . 17

4. How to Analyze Decision Scenario Cases . . . . . . . . . . . . . . . . . 29

5. How to Analyze Evaluation Scenario Cases . . . . . . . . . . . . . . . . 47

6. How to Analyze Problem- Diagnosis Scenario Cases . . . . . . . . 67

PART II

DISCUSSING CASES

7. How to Prepare and Discuss Cases . . . . . . . . . . . . . . . . . . . . . . . 95

PART III

WRITING ABOUT CASES

8. How to Write Case- Based Essays . . . . . . . . . . . . . . . . . . . . . . . . 113

9. How to Write Decision Scenario Essays . . . . . . . . . . . . . . . . . . 131

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vi�C O NTE NT S

10. How to Write Evaluation Scenario Essays . . . . . . . . . . . . . . . . 145

11. Writing about P roblem- D iagnosis Scenarios . . . . . . . . . . . . . 159

PART IV

CASES FOR ANALYSIS AND WRITING

General Motors: Packard Electric Division . . . . . . . . . . . . . . . . . . 173

Malaysia in the 1990s (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

Allentown Materials Corporation: The Electronic Products Division (Abridged) . . . . . . . . . . . . . 213

PART V

STUDY GUIDES FOR CASE ANALYSIS AND WRITING

Study Guide for Decision Scenario Cases . . . . . . . . . . . . . . . . . . . 229

Study Guide for Evaluation Scenario Cases . . . . . . . . . . . . . . . . . . 235

Study Guide for Problem- Diagnosis Scenario Cases . . . . . . . . . . 241

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

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INTRODUCTION

Are you a student who is new to the case method? Are you a student who feels that you aren’t learning as much as you want from the case method? If you belong in either of these categories, this book was written for you.

The fi rst edition of The Case Study Handbook emerged from my sixteen years of work with business school students. This new version follows over a decade more of working with students and refi ning the ideas in the fi rst edition. The initial motivation for the book was frustration. I had been trying to help Harvard Business School MBAs write better case-based examinations. I gave them what I considered to be good advice about writing, such as using a logical essay structure and being concise. There was nothing wrong with the advice—I’m still giving it to this day—but it didn’t have the positive impact I expected on the quality of students’ exam essays.

Eventually, I realized that I didn’t fully understand what the students were having trouble with. First, my advice started in the wrong place. I assumed that students knew how to analyze cases to provide the content needed for their exam essays. Actually, many weren’t sure how to do that. Their uncertainty compromised the depth and quality of their thinking about cases.

Second, case examinations usually ask students to take a position on the central issue of a case. Although many students had no problem taking a position, they weren’t certain what else they needed to do. A common strategy was to fi ll the essay with case facts the students thought were rel- evant to their position and let the reader sort out the relationship between the facts and the position. I assumed that they knew how to write an argument to prove their position.

The two issues had nothing to do with how smart the students were. They weren’t at fault for not knowing what they needed to do because no one had ever told them. Students are usually expected to fi gure out how to analyze cases on their own. Many do and many don’t. But the process of making cases meaningful is too important to leave to chance. The rich

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2�TH E C A S E S T U DY H A N D B O O K

learning that the case method off ers can’t be completely realized unless students—meaning you—understand what a case is and how to analyze it. The same is true of understanding how to make evidence-backed arguments.

One other aspect of the case method causes problems for a signifi – cant number of students: classroom discussion of cases. They’re unsure of the purpose of discussion and their role in it. Much of this uncertainty stems from students’ educational backgrounds. They’re used to the lecture method and have honed the skills needed for that method of instruction: listening and taking notes. They emphatically aren’t used to the professor asking them questions or having a major share of the responsibility for learning in the classroom.

It’s telling that three critical aspects of the student role in the case method—analysis, discussion, and argument—are often ignored. The case method has been defi ned largely from the point of view of professors, not students. Professors concern themselves with analyzing cases in order to teach them and are skilled in argumentation. However, what matters most in the classroom is what students, not professors, know—or don’t.

I’m not blaming professors. They’re focused on their subject-matter expertise, and the academic reward system tends to be biased toward what the professor knows, not how well she or he can teach that knowledge. Showing students how to analyze cases and make arguments about them falls outside the lines of business disciplines and the organization of busi- ness departments or schools. You’ll look in vain for a Department of Case Analysis.

This book fi lls the gap I’ve just described in traditional business cur- ricula. (It also is relevant to programs other than business that use cases, including medicine, nursing, and engineering.) It provides:

• Analytical tools that help you sort, organize, and refl ect on the content of a case and use the concepts and frameworks taught in business courses more eff ectively.

• Advice on how you can participate in and contribute to classroom discussion of cases.

• Guidance on how to develop arguments about cases and express them in writing that is logical, clear, and succinct.

It’s a fair question to ask whether the advice in this book works. Is it worth your time to read? Here’s what I can tell you. For over a decade since the publication of the initial edition, a group of writing coaches, including me, has used the fi rst edition of the book as a foundation for our

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I NTRO D U C TI O N�3

work with hundreds of Harvard MBAs. Almost all of our students sig- nifi cantly improved their ability to analyze cases and to write about them. Our metric was the grades that students received. I’ve had similar results in my teaching at Brandeis University, George Washington University, and the University of Miami.

One of the best examples from my own coaching is a fi rst-generation college graduate from a family that had emigrated to the United States when he was a child. He received poor grades on his fi rst-year exams at HBS and was understandably demoralized. He used the concepts in this book to enhance his understanding of how to analyze a case and write a persuasive argument about it. In his second year, he received high grades in all of his courses—a complete turnaround from his fi rst year. There were several reasons for his academic improvement, the primary one being his hard work. But he said he also benefi ted in class discussion and on exams from the concepts drawn from this book.

This book uses Harvard Business School cases as examples and includes analyses of them. Don’t assume, however, that the analyses give the “right answers” to the cases. The evidence in them can sustain other conclu- sions. The book also includes essays about the cases; they are based on the writing of MBA students. Because the original essays were examinations written under time pressure, they inevitably had errors, unclear sentences, and lapses in logic. I debated whether to present the essays as is or correct and revise them. I chose the latter. No essay is perfect, and I don’t want to set a standard of unobtainable perfection. But I want you to have the best examples of the points made in the book without confusion over what is correct and what isn’t.

This book is intended for you—case method students current and pro- spective. My wish is that it will enhance your learning from cases and provide benefi ts for others associated with your learning—your peers, professors, employers, colleagues, and communities.

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C H A P T E R 1

WHAT IS THE CASE METHOD? WHAT’S

IN IT FOR YOU?

Each year, entering business school students— and students in many other disciplines— encounter an approach to learning that is new to them: the case method. You may be one of them. For novices, the fi rst encounter can be frustrating and unnerving. A case appears to be a straightforward narrative, but when you fi nish reading it, you may ask yourself questions such as:

• What point is the case trying to make?

• Is it trying to make a point at all?

• What am I supposed to do now?

Let’s say you have read a case study of a restaurant chain that ends with the CEO turning over in his mind basic questions about the business. He has some possible answers, but the case doesn’t tell you which one he thinks is best. In another case study, a young MBA has accidentally learned of offi ce behavior that could have serious consequences for the individuals involved, including her. At the conclusion of the case, she has a literal and fi gurative headache, and the choice of what she should do is left up in the air.

In the classroom, case instructors facilitate discussion, asking lots of questions, writing comments on the board, and making occasional remarks. Students respond to questions, build on each other’s comments, disagree with one another, ask questions, and try out diff erent points of view about the case situation. A case classroom is dynamic and unpre- dictable; discussion can lurch into a blind alley, reverse course, and then head in a more productive direction. Sometimes the discussion may seem to end in a frustrating muddle. Students have expressed confl icting views about the main issue in the case, and the professor, the expert in the room,

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6�TH E C A S E S T U DY H A N D B O O K

doesn’t step in and resolve the confl ict by announcing the “right” answer. Why doesn’t she do her job?

Actually, she is doing her job. In a case classroom, you’re entitled to your own opinion; you don’t have to defer to the professor or other students as long as you back your opinion with case facts (including numbers when they’re available) and fact- based inferences and calculations. The professor doesn’t lay out the correct response to the case for one very good reason. As students, you have to learn how to think. The professor can’t do it for you. You have to practice thinking, which means you’ll gain insights and under- standing that are gratifying and fun and make mistakes that are frustrating.

Written examinations that use cases pose another challenge for you. In class, everyone, including the instructor, works collaboratively on a case. On exams, you are on your own. You not only have to analyze the case in response to one or more questions but also write an essay that satisfi es and persuades an expert reader, all in a limited time.

WHAT’S IN IT FOR YOU? Until now, your education has probably consisted primarily of lectures. They are widely used all over the world. There are good reasons for their popularity. They are an effi cient way for an expert to deliver content to many individuals at once. One memorable description of the method is the “sage on the stage.” In combination with textbooks, which are lec- tures in print, this learning model can deliver a large amount of content to many students in a short time. In addition, student learning can usually be tested effi ciently with multiple choice or short- answer questions or problem sets.

The lecture model is good for transferring information. In that sense, it is effi cient (although there are serious questions about how long and how well students retain the information). However, like any learning model, it has limitations when used exclusively. Most important, lectures can teach you what to think but not how to think. Lecture content (live or delivered through media such as the web and in textbooks and other similar read- ings) provides theory, frameworks, concepts, facts, formulas, and expert opinion about a subject. It is the “what” of thinking.

However, for knowledge you will use in the real world— in business, for example, or in engineering or medicine— the “what” isn’t suffi cient. You must know how to apply the knowledge in the real world. For that, you need to practice in situations that are similar to those you will actually encounter.

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W H AT I S TH E C A S E M E TH O D ? W H AT ’ S I N IT F O R YO U ?�7

Here’s a simple example of the diff erence between what and how. You received a degree from Soccer University. You took courses on rules, skills, and strategy and read textbooks, listened to lectures, and watched videos and demonstrations by professional soccer players. However, you never practiced what you learned on a soccer fi eld. Do you know how to play soccer? No, you don’t.

Similarly, let’s say you’re an MBA who took multiple accounting classes taught by the lecture method and read the assigned textbook. None of your classes used cases or any other type of active learning. In your fi rst job, you’re asked to evaluate the organization’s accounting system. In school you had lectures on diff erent types of accounting systems, but you were never asked to analyze, on your own, a real- world accounting system and its fi t with an organization. You aren’t sure what criteria you should use. You could tell your boss that you need her help but are afraid she might question the decision to hire you.

One area of education has always recognized the importance of both the “what” and the “how.” Medical schools teach their students knowl- edge from a wide range of fi elds (the what). But it would be unthinkable to teach students the theory of medicine and turn them loose on patients with no training in how to treat them. Medical schools require clinical training: the application of what students have learned to real patients under the supervision of experienced doctors (the how). This practice continues beyond graduation from medical school in internships and residencies.

Strangely, academic disciplines that teach knowledge meant to be applied in the real world often put limited or no emphasis on the transla- tion of knowledge into action. This knowledge requires practice opportu- nities. The lecture method generally doesn’t give students the chance to practice. In the case method, you use the knowledge you have learned to come up with your own answers (with the guidance of an expert). The method allows for answers that are objectively wrong or dubious because they are part of learning. The case method allows you to make mistakes and learn from them.

This fundamental shift in the learning model causes many students to be confused, uncertain, and anxious. But professors using cases are doing it for your sake. They want to give you the opportunity to practice using what they’ve taught you.

Think of it this way: when you are in a job, your professor isn’t going to be there to tell you the right answer. Your boss likely isn’t going to tell you either. After all, she hired you to come up with answers.

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8�TH E C A S E S T U DY H A N D B O O K

SKILLS FOR THE CASE METHOD MBA students have told me they feel there is a secret to the case method that some people get and some don’t. If you get it, you do well; if you don’t, you scrape by as best you can.

The case method requires a lot from you. At the same time, it isn’t a secret society in which a few fortunate individuals get it and outperform their peers. As a case method student, you need three distinct sets of skills:

1. You need to be able to read a case and give it meaning in relation to the key issues or questions that you have been asked about it.

2. You have to be able to communicate your thinking eff ectively in a class discussion.

3. You must be able to write a persuasive response to a question about a case.

Reading, discussing, and writing about cases all involve the application of knowledge to the situation described in a case. What does “knowledge” mean? It includes your work experience and also the knowledge you learn in courses such as the principles of accounting, the 5Cs of marketing, and the Five Forces of Michael Porter.

This book addresses the three aspects of the case method. The case method begins with reading a case, interrogating it with questions, seek- ing information relevant to the questions, making inferences and calcula- tions, and forming an opinion or conclusion about the main issue. These skills are the focus of part I of this book. In the classroom, the case method is about sharing your thinking with classmates and the instructor and learning from this collaboration. The skills related to case discussion are the subject of part II. You may have to write about cases for class assign- ments or the fi nal examination. Skills for writing about cases are covered in part III. In part IV, you’ll fi nd three cases used as examples for analyzing and writing about a case. Finally, part V includes Study Guides for taking notes to prepare for case discussion and to outline a case- based essay.

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PA R T I

ANALYZING CASES

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C H A P T E R 2

WHAT IS A CASE?

Have you ever read a case? If you haven’t, this chapter will be much more useful to you after you have read a case. There are three at the end of this book to choose from. Read the fi rst section of the case slowly and skim the rest to get a sense of the story it tells.

Much of what you read daily is packaged to make it easy to understand. The writing in newspapers, magazines, television, internet resources such as Facebook, and academic articles tells you what it means. If it doesn’t, it has failed in its purpose to inform. A newspaper article, for example, states its subject clearly, often in the fi rst paragraph, and carefully declares its main points, which are usually explained and amplifi ed through specifi c examples.

Here are the fi rst two paragraphs from a column written by Steven Pearlstein of the Washington Post :

In the recent history of management ideas, few have had a more profound— or pernicious—eff ect than the one that says corporations should be run in a manner that “maximizes shareholder value.”

Indeed, you could argue that much of what Americans perceive to be wrong with the economy these days—the slow growth and rising inequality; the recurring scandals; the wild swings from boom to bust; the inadequate investment in R&D, worker training and public goods—has its roots in this ideology. 1

After you read these two paragraphs, you know what the subject of the article is. You also have an expectation about the content of the rest of the article: it will explore the specifi c ways in which maximizing shareholder value has led to serious economic problems.

You have probably read parts or all of hundreds of textbooks. Along with lectures, they are the backbone of university education. Both are invaluable for learning about ideas that have proven useful to under- standing the real world. For example, in strategy courses all over the world, students learn about Michael Porter’s Five Forces. His framework helps organize thinking about the economic factors that determine how

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12�A N A LY Z I N G C A S E S

competitive industries are. They help you see the elements underlying strategy and how organizations orchestrate them—or don’t. Theories and frameworks help you make sense of specifi c types of situations in the real world. Without them, you would be far less able to explain or anticipate events such as the astonishing success of an organization (e.g., Uber) or a shocking reversal of fortune (Uber). The knowledge codifi ed in concepts and theories taught in academic disciplines is indispensable for under- standing the world.

At the same time, educational texts represent reality as logical and coherent. They can make a complex situation that surprised everyone, including experts, and aff ected millions of people around the world appear to be the logical outcome of well-defi ned causes. The fi nancial crisis of 2007–2008 that started in the United States and spread around the world is an example. Few people saw it coming, and experts, industry participants, government regulators, politicians, journalists, and victims were shocked when it happened. But afterward, experts found a pattern of actions that they believe led inexorably to the disaster.

We can learn much from the study of past events. In real time, how- ever, real-world situations have islands of useful data, observations, and reference points but, to participants, are often fl uid and chaotic, have a large degree of uncertainty, and are diffi cult to understand. Real-world situations don’t come with carefully selected and sorted information that tells participants what is going on and what they should do about it.

To practice using knowledge in actual situations, you need some way of immersing yourself in both the available facts and the fl uidity and uncer- tainty that characterize the real world. That’s what cases are for.

WHAT A CASE IS, WHAT IT DOES, WHAT IT DOESN’T DO

A business case imitates or simulates a real situation. By case, I mean the substantial studies from universities or corporations, not the slender vignettes sometimes included in textbooks. Cases can also be collections of articles, multimedia content, or a variety of other types of content. They are verbal representations of reality—sometimes with visual and auditory complements—that put you in the role of a participant in a situ- ation. The subject of cases varies enormously, from a single individual or organization to an entire nation. Printed cases can range from one page to fi fty or more and can have a small or large amount of content. But all of these diff erent forms of cases have a common purpose: to represent reality, to convey a situation with all its crosscurrents and rough edges.

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