The Legal Environment of Business

THE CASE OF BLUE MOOD CLOTHING INC.



Blue Mood Clothing Incorporation is an apparel producing company

It is a wholly owned subsidiary of Colosal Corporation

Its number one product is the breezer

Lately, about a month ago, there has been an incident of theft involving 5000 breezers

The company’s investigator Bill has Alex as his main suspect; he was seen packing a number of breezers at the back of his van

Introduction



There is a need for ultimate discretion in this case given that all the culprits have not been confirmed. Alex Ridgefield is so far implicated because he was caught on film. Another reason that implicates Alex is that despite being a night security guard at Blue Mood Clothing Incorporation, he masquerades himself as a sales agent of the company. Bill, the company’s investigator, is looking for more proof because Alex may be working with other personnel in the company. This presentation will give invaluable insights with respect to the case of pilferage at Blue Mood Incorporation.

2

Colossal Corporation can terminate Alex without any hearing or notice

This is because Alex is an at-will employee of Blue Mood Incorporation

Besides, there is a morally reprehensible reason (theft) as to why Alex should be terminated.

Termination of Alex



Employment at will is a code of common law that permits either a member of staff or a boss to end a working relationship at any time, for any particular reason, with or minus prior notice, and even for a reason that can be regarded as morally reprehensible, provided that the termination of the working relationship never falls into an exception to the employment-at-will principle.

3

Alex Ridgefield is responsible for several crimes committed against Blue Mood Clothing Inc. They include:

Stealing 5000 breezers from the company

Identity theft; Alex Ridgefield posed as a sales person of Blue Mood while he was not

Breach of contract; Alex was supposed to guard the property of the company from theft but instead he did the opposite; he stole it.

Did Alex Commit Any Crime?



The past two decades have witnessed an increase in the criminalization of business law. In the Blue Mood case, Alex stole from the company and he was caught on camera. As such, Alex Ridgefield is more likely to go to prison for defying the terms of a contract (choosing to be a thief while he was supposed to be a guard). In addition to that, his actions come across as a corporate offense (Twomey, Jennings & Greene, 2016).

4

Nick’s crime is receiving stolen property

Given that the investigation by Bill is still ongoing and Nick is completely not off the hook, there is a possibility that he had intent.

If Nick is found guilty it is worth mentioning that his crime will attract a prison term and fines for the damage caused to Blue Mood

If Nick had no intent to receive stolen property, he will still be charged for negligently buying stolen property

Did Nick Commit Any Crime?



Nick was quick to purchase breezers from Juanita Winfrey without any form of contracting. Perhaps if he had used an attorney he would not be in risk of being labeled a receiver of stolen property; he would have every right to pin the blame on Juanita. At the moment there is no knowledge as to whether Nick is guilty or not i.e. whether he intentionally bought stolen property or not. If he had no intent, perhaps the courts will be merciful and charge him a fine for his negligence.

5

Bill has a confidentiality agreement and swore an oath of secrecy to Vice President Dodger

His crime, if any, is that of defamation

He defamed both Nick and Blue Mood

Defamation is a civil wrong and a crime in all of America’s states

Did Bill Commit Any Crime?



Bill’s crime is that of defamation. In as much as he did not send the email intentionally, he still wronged the company and Nick. Nick Johnson has a right to sue Bill for defamation given that there is no concrete evidence or legal proceeding that can indict him yet. Bill defamed the company because when news of theft and disorganization in company protocol reach some existing and potential buyers, they may not want to be associated with Blue Mood anymore; that will result into a lot of losses.

6

Juanita’s crimes, if any, revolve around:

Receiving stolen property

Retaining stolen property

Disposing of stolen property

Did Juanita Commit Any Crime?



All states in the US are against the receipt of stolen property to stop theft and to dismantle organized crime businesses that gain from theft. The Model Penal Code, a model law embraced by many jurisdictions, factors in the receipt of stolen goods within its consolidated theft offense (Model Penal Code §§ 223.1, 223.6).

7

Alex could defend himself or use an attorney for his defense

He could allege that he was coerced to steal a part of the company’s consignment from the warehouse

Alex could also allege that someone from the inside threatened to fire him if he did not get the shirts to Juanita for him or her i.e. he could claim that instructions came from up top (from one of his bosses who was working with Juanita)

In fact , Alex could say that he was officially instructed by the company VP Kenneth Dodger to load his personal van with the shirts and take them to Juanita

Alex’s Defenses



Alex needs a good well paid attorney to defend him because the evidence against him is solid, particularly the tape. His only way out is to tell the jury that his action was part of protocol; that he occasionally handled assignments that constituted ferrying consignments from the warehouse to other storage places and bulk buyers.

8

Nick could say that he does not know anything about the shirts. He was simply a buyer looking for a seller in the internet and in the process he found Juanita

He could answer or deflect any incriminating question by asking the prosecution to ask Juanita why she lied to him

Nick could say the legal preceding is a conspiracy to sabotage his business because he did not know the truth regarding where the shirts came from.

Nick’s Defenses



Nick’s case is a bit lighter because he was not directly involved in taking the shirts from the warehouse. There is no solid evidence against him and he could play the victim of a fraud.

9

Bill could say that he truly sent the email by mistake and he did not want to blow his cover intentionally

He could come up with an excuse that lately he has been staying up on many nights in an attempt to figure out the case and that must have made him a bit clumsy

Finally bill could say that given his clean record in taking up and successfully handling the company’s investigations in the past, he should be given some credit.

Bill’s Defenses



Bill’s case is lighter too because he was not directly involved in taking the shirts from the warehouse. His role was that of investigation and his only mistake was leaking information and defaming the company. He has a good history of never exposing company information and such may ward off any suspicion of malice on his part from his superiors.

10

Juanita could peg all the blame on Alex

She could say that Alex came to her lying that he was Blue Mood Incorporation’s sales representative

If asked about receipts, itineraries, and invoices among other purchase documents, she could say that she was in a hurry to make quick money and did not doubt Alex since he was affiliated to a reputable company such as Blue Mood Inc.

Juanita’s Defenses



So far there is no evidence against Juanita proving that she stole or aided the stealing of shirts from the company. This makes it very easy for her to blame the individual that was actually seen on camera taking the breezers i.e. Alex.

11

A tort is a type of wrongful activity that brings about harm to another party

A tort can be said to be intentional or not depending on the state of the individual that does the wrongdoing

When an individual that makes a mistake willingly intended to commit it, then it is an intentional tort

Negligent torts are the ones committed when someone is not aware of the law

Intentional Torts



Given the facts available for the case of Blue Mood Inc., only the prosecution can decide who is guilty of committing an intentional tort or a negligence tort. So far only Alex is answerable to the courts on grounds of committing an intentional tort. Juanita and Nick can plead negligence to the jury.

12

As a tort, conversion consists of:

Taking the property of another person

Illegally converting that property’s ownership

Presenting said property as your own either through sales or marketing

Intentional Torts of Conversion



In the world of criminal law, conversion can be regarded as theft. Alex, Nick, and Juanita all handled stolen property; for that matter, it is the responsibility of the jury to judge whether negligence or intent was the case.

13

Defamation, as a tort, constitutes:

Saying something that is not true about another person

Such untruthful statements usually bring about harm

It revolves around written and spoken words

Intentional Tort of Defamation



For the Blue Mood Case, it is worth mentioning that Bill committed libel against Nick, who may be innocent. In the event that the court finds Nick innocent, he could go ahead and sue Bill for damages.

14

According to the investigation conducted so far by Bill, there is a thin line between the innocence and guilt of Nick

Nick innocently bought apparel from Juanita without prior knowledge that the whole consignment was stolen

If found guilty, Nick’s intentional tort would revolve around being an accomplice to Alex in stealing Blue Mood’s clothing.

Did Nick Commit an Intentional Tort?



Given that Nick did not do anything intentional to harm Blue Mood Inc., he may be charged for negligence when it comes to tort law. Nick was negligent because in he just bought 5000 breezers without asking for any form of documentation from the seller. He had no receipt, purchase order, itinerary, or invoice among other possible documentation that characterizes a normal transaction.

15

The intentional torts committed by Alex are rather obvious and revolve around:

Being an identity thief

Breach of an employment contract

Stealing and selling property that did not belong to him

Did Alex Commit an Intentional Tort?



It is more likely that the torts committed by Alex are intentional. First in line is trespass to chattels and conversion; these are both intentional torts that center on wrongful and intentional interference with the possession of another individual or company’s property. Alex is the one who facilitated the movement of the clothes from the company’s warehouse. He was aware too that what he was doing was wrong.

16

Given that every permanent or contracted employee of Blue Mood Incorporation signs a confidentiality agreement, Bill committed a tort but it is most likely that it was not intentional.

He is at the mercy of the company’s vice president because he could charge him for negligence or fire him

Bill’s negligence partly or fully compromised an important investigation that the company was conducting regarding theft

Did Bill Commit an Intentional Tort?



In the event that the company makes a decision to sue for damages, Bill could be fined. His offence was not a criminal one but it could also cost him a great deal of time and money.

17

Bill is yet to figure out if the torts committed by Juanita were intentional or whether they were due to negligence.

It is even unclear whether Juanita was deceived by Alex or whether she is party to the crime

In case Blue Mood Inc decides to sue Juanita, it may sue her for damages and negligence (Ferrera et al., 2018).

Did Juanita Commit an Intentional Tort?



Juanita could have to go to court because of negligence. She bought not one, not two, not three; but 5000 shirts without any form of legal documentation. Wasn’t she curious that it was a bit odd Alex brought her franchise in a private minivan as opposed to a company truck. Why wasn’t she given receipts.

18

There are several things Alex could say to defend himself. They include:

Juanita was a con and she threatened him with his family if he did not steal the shirts for her

The company’s vice president had a competing apparel business and he coerced him to steal the shirts from the warehouse.

Alex and Nick were the vice president’s aides and the VP was only reacting because they had been caught.

Alex’s Defense on Torts Committed



Alex will have to be indicted and can only be successful if he puts up a really good defense. He was caught on tape; something that is not easy to erase.

19

Bill’s torts, if anything, are out of negligence

He should stick to his statement and emphasize on the fact that he sent the email to his entire inbox by mistake

Bill could use his longstanding history with the company to claim that he could not possibly betray Blue Mood

Bill’s Defense on Torts Committed



Bill should defend himself on the grounds that his is a tort of negligence and not a tort of intention. Given that there is no proof he sent the emails on purpose, his sentence will be lighter. He should also argue that he has worked for the company many years as an investigator without leaking any information.

20

Juanita’s crime centers on negligence and her defense should center on a few possibilities. They include:

She should deny dealing with Alex previously and that he is someone she met online (Singer, 2018)

She should insist on the fact that Alex posed as Blue Mood’s sales executive

In her defense she should challenge the prosecution to produce solid evidence against her.

Juanita’s Defense on Torts Committed



Given that trespass to chattels and conversion are general intent torts that could land Juanita into trouble simply because she was found in possession of stolen shirts, she should pin all the blame to Alex. Juanita should say that she has never met Alex in her life and had only dealt with him for the first time.

21

Nick’s defense will pretty much be the same as that of Juanita.

Nick should argue that if he was involved he would not share information so freely with Bill regarding Juanita

Nick’s defense should also posit that if he was guilty and aware of the nature of the merchandise, he would not be so quick to buy it and post an advert online (Beatty, Samuelson, & Abril, 2018).

Finally Nick should argue that online sales do not involve a lot of paper work and for that reason he did not ask documentation from Juanita

Nick’s Defense on Torts Committed



Nick’s defense should be much like Juanita’s. He should thus put the blame on Jenny for linking him with stolen property. Failure to do so could lead to a serious case that is based solely on possession of stolen property.

22

Depending on the crime, either the government or Blue Mood clothing, or both will collect damages.

The intentional torts caused financial loss to the company and in the event that anyone is found culpable damages will be paid

To discourage rogue behavior in the corporate world, the state where Blue Mood Inc. is located will most likely punish the offenders through fines and jail time.

It is worth mentioning that any defendants found not guilty can sue Blue Mood for defamation and get compensatory damages

Who Will Collect Damages?



The main aim of tort law is to offer remedies, normally in terms of damages (money awards), to parties negatively affected by the civil wrongs of other people. The damages offered for tort violations revolve around punitive and compensatory damages.

Two parties that can collect damages in this case include Blue Mood Inc. and the state government. Collection of Damages by Blue Mood Inc. will be facilitated by the courts where the legal proceedings concerning the theft will occur. What’s more, in the event that the defendants in the case are able to prove their innocence; they will collect damages on grounds of defamation.

23

The primary aim of compensatory damages is to put the injured party in the same position that party would have been had the tort never been committed

In this case Blue Mood Inc. is the main injured party

There is a need to restore the financial position the company was in prior to losing its consignment of 5000 breezers

Upon indictment of those found culpable, the courts will fine the guilty an amount that is equivalent to the selling price of the 5000 breezers; these are known as special damages because they are quantifiable

Compensatory Damages and Who Will Collect Them



Compensatory damages awarded to Blue Mood Inc. may even be more than the selling price of the shirts because the company would have sold the stolen shirts for a profit and produced another batch of shirts. In summary, the tortfeasors wasted the time and money of the company.

It is also worth mentioning that the damages awarded to Blue Mood Inc. may be more in case the courts decide to award the company with general damages. The general damages is something that the company can collect because they lost reputation and consortium respectively (there is a likelihood that some companies may dissociate themselves with Blue Mood because of the case; there may be a perception that the company’s system is not safe).

24

Punitive damages are meant to punish a tortfeasor

The person or persons who the courts may punish because they want to award Blue Mood is Alex

His was an egregious case and intent was clearly involved

Other defendants such as Juanita and Nick may be punished as well

Punitive Damages and Who Will Collect them.



Traditionally, punitive damages are damages that exceed basic compensation and they are awarded to punish defendants. For the defendants involved, punitive damages will be applied if the courts feel they engaged in particularly reckless or wanton conduct that shows ignorance to the interests of other people.

25

The defendants may collect damages if and only if:

they are found innocent of the crimes and torts they were accused of

If they sue Blue Mood Inc. immediately on grounds of defamation the moment their case

Damages that Could Be Collected by the Defendants



Any of the defendants (Alex, Juanita, Bill, and Nick) can sue the company and collected damages provided that they are innocent.

26

The legal environment of a business is subject to many challenges

As such the managers of a business should be well versed with matters pertaining keeping the law and breaking the law

With the support of attorneys and the criminal justice system at large, it becomes easy to

Conclusion



For both the plaintiffs and the defendants, it is best that they are well versed with matters of business law. This way they will be able to make sensible complaints and pleas respectively in front of the jury. All the same it is worth mentioning that the outcome of the case is something that will be very hard to predict.

27

Beatty, J. F., Samuelson, S. S., & Abril, P. S. (2018). Business law and the legal environment. Cengage Learning.

Ferrera, G. R., Alexander, M. M., Wiggins, W. P., Kirschner, C., & Darrow, J. J. (2018). The Legal and Ethical Environment of Business. Wolters Kluwer Law & Business.

Singer, L. (2018). Settling disputes: Conflict resolution in business, families, and the legal system. Routledge.

Twomey, D. P., Jennings, M. M., & Greene, S. M. (2016). Anderson’s Business Law and the Legal Environment, Comprehensive Volume. Nelson Education.

References



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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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HBR Press Quantity Sales Discounts

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.

For details and discount information for both print and ebook formats, contact [email protected],

tel. 800-988-0886, or www.hbr.org/bulksales.

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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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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This document is authorized for use only by yanxing wu in Intl Business Strategy – Spring 2021 taught by ERIC HUTCHINS, California State Polytechnic University – Pomona from Jan 2021 to May 2021.

For the exclusive use of y. wu, 2021.

This document is authorized for use only by yanxing wu in Intl Business Strategy – Spring 2021 taught by ERIC HUTCHINS, California State Polytechnic University – Pomona from Jan 2021 to May 2021.

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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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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