Reference no: EM133059096

Case study 1

BREITT, STARR and DIAMOND LLC

Josh Breitt, Rachel Starr, and Justin Diamond started an advertising agency to serve the needs of small businesses selling in and around their metropolitan area. Breitt contributed clever ideas and a talent for writing scripts and wooing clients. Starr brought a wealth of media contacts, and Diamond handled the artwork. Their quirky ad campaigns soon attracted a stream of projects from car dealers, community banks, and a carpet store. Since the agency's first year, these clients have kept the bills paid while the three win contracts from other companies. Breitt, Starr & Diamond (BS&D) prospered by helping clients keep up with the times, and the agency grew to meet the demand, adding a bookkeeper, a graphic artist, a web designer, two salespeople, a social media expert, and a retired human resource manager, who works 10 hours per week.

As the firm grew, the three partners felt they were constantly being pulled away from their areas of expertise to answer questions and solve problems about how to coordinate work, define jobs, and set priorities. They realized that none of them had any management training-and none of them had ever wanted to be a manager. They decided to hire a manager for a position they would call general manager of operations. That person would be responsible for supervising the employees, making sure expenses didn't go over budget, and planning the resources (including people) needed for further growth.

The partners interviewed several candidates and hired Brad Howser, a longtime administrator for a four-physician medical office. Howser spent the first few weeks quietly studying BS&D's financial data and observing employees at work. Then he became more outspoken and assertive. Although the partners had never cared to monitor what time employees came or left, Howser began requiring all employees to start by 9:00 each morning. The graphic artist and one of the salespeople complained that flexible hours were necessary for their child care arrangements, but Howser was unyielding. He also questioned whether the employees had been shopping carefully for supplies, indicating that from then on, he would be making all purchases, and only after the employees submitted their requests on a form of his design. Finally, to promote what he called team spirit, Howser began scheduling weekly Monday-morning staff meetings. He would offer motivational thoughts based on his experience at his previous job and invite the employees to share any work-related concerns or ideas they might have. Generally, the employees chose not to share. Initially, the partners were impressed with Howser's vigorous approach to his job. They felt more productive than they had been in years because Howser was handling employee concerns himself. Then the top salesperson quit, followed by the social media expert. The bookkeeper asked if she might meet with the partners. "Is it something you should be discussing with Brad?" Rachel asked her. The bookkeeper replied that, no, it was about Brad. All the employees were unhappy with him, and more were likely to leave.

1. What leader behaviors did Brad Howser exhibit? Give examples from the case to support your answer and discuss how well the different leader behaviors exhibited fit the needs of the ad agency.

2. Assume that hiring a general manager of operations was a good idea. What leadership style would be most effective in this position? Why? Justify your answer using theory studied in class.

Case study 2

EATWELL TECHNOLOGIES

Cristina Muñoz and P. R. (Pete) Prakash started EatWell Technologies as a result of conversations they held while they were graduate students in bioengineering. Both scientists were interested in how to develop crops offering superior nutrition in developing countries, and both believe that business innovation can and should drive social change. They focused their research on a genetically modified strain of rice that is drought tolerant and high in vitamin A and iron. Upon completing their studies, they wrote a business plan and formed EatWell Technologies to commercialize their new rice. Their aim was to sell first in Africa, where nutrition is an urgent problem and the potential for economic development presents huge opportunities for business. They selected Nigeria as their first target market.

Working through the government and with nongovernmental development organizations and local farmers, Cristina and Pete established a reputation for integrity and a desirable product. As farmers began purchasing their rice, the two owners hired research assistants, office staff, and sales representatives. They began to enjoy modest profits and started paying themselves a monthly salary-far from what they could earn as scientists in a large corporation but enough to live on. They began discussing what products to offer next. Cristina suggested they develop improved leafy greens to provide variety in local diets; Pete was inclined to add new strains of rice, their area of greatest knowledge.

The two entrepreneurs also realized that as their venture grew, it needed management expertise beyond their skills as scientists. They hired an experienced office manager, and the office staff appreciated her tactful guidance. They also interviewed Bill Jensen, a retired vice president of a community bank. Bill was impressed with the company's mission and thought an interesting retirement project would be to help EatWell become financially stronger. Pete, Cristina, and Bill reached an agreement by which Bill would become a third partner in exchange for investing $450,000. The partners met daily, and Bill helped the scientists track cash flow, choose suppliers, and meet experts who can help the business expand into new markets.

At one of their strategy meetings, Pete and Cristina agreed it is time to settle on the direction for product development: Will EatWell be a rice company, or should it diversify into green vegetables? Bill surprised them with a few PowerPoint slides about his idea. Bill pointed out that rice and leafy greens are commodities, and EatWell will never get much of a return from investing in commodities. Instead, he pointed out the value of the rice as a brand. Imagine where EatWell could go by incorporating the rice into other products, such as energy bars and breakfast cereal. They could go beyond farming into the cities and sell to Africa's rapidly growing middle class, who could pay a premium. They could even start paying themselves salaries in line with their expertise and the risks they took on by forming the company. Pete and Cristina were shocked. From their viewpoint, Bill had lost sight of the company's purpose.

3. In this case, where do you see resistance to change? Give examples from the case to support your answer.

4. Suppose you are coaching Pete and Cristina. What advice would you give them about shaping their future? Explain based on theory.

Case study 3

THE GRIZZLY BEAR LODGE

Diane and Rudy Conrad own a small lodge outside Yellowstone National Park. Their lodge has 15 rooms that can accommodate up to 40 guests, with some rooms set up for families. Diane and Rudy serve a continental breakfast on weekdays and a full breakfast on weekends, included in the room rates they charge. Their busy season runs from May through September, but they remain open until Thanksgiving and reopen in April for a short spring season. They currently employ one cook and two waitpersons for the breakfasts on weekends, handling the other breakfasts themselves. They also have several housekeeping staff members, a groundskeeper, and a front-desk employee. The Conrads take pride in the efficiency of their operation, including the loyalty of their employees, which they attribute to their own form of clan control. If a guest needs something-whether it's a breakfast catered to a special diet or an extra set of towels-Grizzly Bear workers are empowered to supply it.

The Conrads are considering expanding their business. They have been offered the opportunity to buy the property next door, which would give them the space to build an annex containing an additional 20 rooms. Currently their annual sales total $300,000. With expenses running at $230,000-including mortgage, payroll, maintenance, and so forth-the Conrads' annual income is $70,000. They want to expand and make improvements without cutting back on the personal service they offer to their guests. In fact, in addition to hiring more staff to handle the larger facility, they are considering collaborating with more local businesses to offer guided rafting, fishing, hiking, and horseback riding trips. They also want to expand their food service to include dinner during the high season, which means renovating the restaurant area of the lodge and hiring more kitchen and wait staff. Ultimately, the Conrads would like the lodge to be open year-round, offering guests opportunities to cross-country ski, ride snowmobiles, or hike in the winter. They hope to offer holiday packages for Thanksgiving, Christmas, and New Year's celebrations in the great outdoors. The Conrads report that their employees are enthusiastic about their plans and want to stay with them through the expansion process. "This is our dream business," says Rudy. "We're only at the beginning."

5. Explain the differences between feedforward, concurrent and feedback controls. Then discuss how Rudy and Diane can use these types of control both now and in the future at the Grizzly Bear Lodge to ensure their guests' satisfaction.