International Case: Women CEO Manages by the Textbooks
The demand for managers with an international background is great. Consider Marisa Bellisario who was one of the most sought after executive in Europe.She was the first women to head a major industrial firm in Italy, the state controlled ITALTEL SocietaItaliana. This company is the largest telecommunication equipment manufacturer in Italy. Bellisario’s background however was international. After receiving her degree in economic and business administration from Turin University she worked at Olivetti in the electronic division. When Olivetti sold its data processing unit to General Electric, she spent time in Miami working on GE’s worldwide marketing strategy for computers. She left GE to head corporate planning at Olivetti. As the Chief Executive Officer at ITATEL she turned the company around to show a small profit. Her managerial approach had been characterized as “straight out the textbook,” and companies such as GTE Corporation, IBM, AT&T, and other European and Japanese firm were interested in recruiting her.
1. Why was Ms. Ballisario a much sought after CEO? What was her career path?
2. What special problems may she have encountered as a women heading a major company in Italy?
3. If she was successful managing by the textbook, why do some managers still think that Management cannot be taught?
International Case: Could the Challenger Accident Have Been Avoided?
The Challenger space shuttle accident on January 28, 1986, gripped America more than any other event in the dozen year so. It was a tragic accident in which seven people died. There is no evidence that the astronauts may have survived the initial explosion and may have died on impact when the space shuttle hit the water. The purpose of recounting the challenger accident is to briefly explain what happened, possible reason for why it happened, how it may have been prevented and what one can learn from it.
The challenger mission consisted of two complex systems: the technical system and the managerial system. The technical problem was the troublesome O-rings, which under pressure and low temperature became infective and did not provide the required seal. Engineers and manager were aware of the problem. So why was the go-ahead given for launching the spacecraft? Can it be explained by the way the managerial system worked.
Engineer at Morton Thiokol, the contractor for the rocket booster, argued against the launch citing the previous problem at low temperatures. Management, on the other hand, may have felt pressure from NASA to go ahead with launch. Roger Boisjoly, one of the engineers who argued strongly against the launch, started that he received looks from management that seemed to say “Go away and don’t bother us with the facts.” He said that he felt helpless. Another engineer was told to take off his engineering hat and put on his management hat.
Eventually, the Go-ahead was given by manager; Engineers were excluded from the final decision. What, then, was some possible reason for disaster? Some argued that there was a lack of communication between engineers and managers. They had different goals; safety versus on time launching. Others suggested that the people with responsibilities did not want to hear the bad news. Thus, no listening. Still other suggestions were that there was insufficient provision for upward communication outside the chain of command. There was also a suggestion that status difference between engineers and managers and between upper and lower managers may have played a role in inhabiting upward communication. Perhaps there was also false confidence in the mission because of past lack. Manager and engineers knew about the problems, but nobody was killed before. Moreover,no one in the organization wanted to be the “bad guy” to halt the launch. Morton Thiokol may also have been concerned about a pending contact.
The result of the series of event was the death of seven Americans: Jarvis, McAuliffle, McNair, Onizuka, Resnik, Scobee, and Smith. The Question on our mind is: could this accident have been prevented?
1. What can you learn from this disaster that may be relevant to your organization you know?
2. What do you think was the cause, or were the causes, of the Challenger disaster?
COMMITTEE MANAGEMENT AT THE UNIVERSITY OF CAULIFORNIA
Many universities, notably the larger ones, operate extensively through committee management, especially in the appointment and promotion of persons to tenured associate and full professorships. One example of a university where committees are extensively used in this area is the University of Caulifornia.
For appointment or promotion to the position of associate professor or full professor, the University of Caulifornia uses the following steps.
- A candidate is reviewed thoroughly by the staffing committee of his or her department or school.
- If the candidate passes there, the action is sent to the Chair person or Dean for review and then to the office of the executive vice chancellor of the campus, where it is referred to the campus budget and promotion committee.
- The budget and promotion committee immediately refers to the case to a specially appointed ad hoc committee of five faculty members, of whom only one or two may be from the candidate’s department or school.
- The ad hoc committee reviews the case and makes recommendation to the budget and promotion committee.
- The budget and promotion committee reviews the case and makes recommendations to the executive vice chancellor and chancellor of the campus.
- The executive vice chancellor and chancellor review the case, and after review the case is sent to the academic vice president of the university with recommendations.
- The university’s academic vice president and president review the case and, if their decision is favorable, send it with recommendations to the regents of the University for Final Action.
1. How would you like to be reviewed for appointment or promotion by this hierarchy of committees?
2. What strengths and weaknesses do you see in this procedure?
3. Assuming that you see certain weaknesses and perhaps dangers in this kind of committee management, what do you suggest be done?
International Case: Coke’s European Scare
What seemed like an isolated incident of a few bad cans of Coca-Cola at a school in Belgium turned into near disaster for the soft drink giant’s European operations. In June 1999, Coke experienced its worst nightmare—a contamination scare resulting in the recall of 14 million cases of Coke products in five European countries and a huge blow to consumer confidence in the quality and safety of the world’s most recognizable brand.
After the initial scare in Bornem, Belgium, Coke and Coca-Cola Enterprises (CCE), a bottler 40 per cent owned by Coca-Cola, thought they isolated the problem. Scientists at the CCE bottling plant in Antwerp found that lapses in quality control had led to contaminated carbon dioxide that were used in the bottling of a recent batch of Coke. Company officials saw the contamination as minor problem and they issued an apology to the school.
At the same time that the problems were being dealt with an Antwerp, things were breaking down at Coke’s Dunkirk, France, bottling plant. In Belsele, 10 miles from Bornem, children and teachers were complaining of illnesses related to drinking Coke products. The vending machines at the school were stocked with Coke from the company’s Dunkirk plant and were thought to be safe. Now a second bottling plant’s practices were being questioned. What initially seemed like an isolated incident was now a crisis.
Immediately following the second scare, Belgium’s health minister banned the sale of all products produced in the Antwerp and Dunkirk plants. Things got worse when Coke gave an incomplete set of recall codes to a school in Lochristi, Belgium, resulting in 38 children being rushed to the hospital. Immediately following this incident, French officials banned the sale of soft drinks produced in the Dunkirk plant. It was believed that fungicide on wooden shipping pallets were the cause of the illnesses at the Dunkirk plant.
On June 15, 1999, 11 days after the initial scare in Bornem, Coke finally issued an explanation to the public. Most Europeans were not satisfied. Coca-Cola officials used vague language and often contradicted one another when making statements. France’s health minister, Bernard Kouchner, stated, “That a company so very expert in advertising and marketing should be so poor in communicating on this matter is astonishing
After three weeks of testing by both Coke officials and French government scientists, it was concluded that the plants were safe and that there was no immediate threat to the health of consumers. Coke has destroyed all of the pallets in Dunkirk and tightened quality control on co2.
How could this happen to the company that is revered worldwide for its quality control and the superiority of its products? Coke has spent decades building its reputation overseas and the European market now represent 73 per cent of total profits. While the scare has had some effect on Coke’s profits in Europe, the company is more concerned with damages to its reputation and consumer confidence in its products.
Many critics say that Coke’s slow response time, insisting that no real problem existed and belated apology have severely damaged the company’s reputation in Europe. Some would disagree and feel that Coke handled the situation as best it could. “I think that Coke acted in a responsible, diligent way,” says John Sitcher, editor of Beverage Digest. “Their first responsibility was to ascertain the facts in a clear and unequivocal way. And as soon as Coke knew what the facts were, they put out a statement to the Belgium people.”
The character and quality of a company can often be measured by how it responds to adversity. Coca-Cola believes that this crisis has forced the company to re-examine both its marketing and management strategies in Europe. Coke executives in Brussels are predicting that the company will double its European sales in the next decade and that this setback will only make the company stronger. Wall Street analysts seem to agree. Only time will tell
1. What are the management issues in this case.
2. What did Coke do and what could have been done differently?
3. What are the key factors that were or should have been considered by management?
Profiles of Two Visionaries—Bill Gates & Steve Jobs
Two men have their hearts and souls for developing their visions have driven the personal computer revolution. However, the way in which each of these men went about this quest has been different. Steve Jobs and Bill Gates have changed the way the world does business, but the story of their leadership styles is even more compelling than the success spawned Apple and Microsoft.
Gates and Jobs: The Early Years Bill Gates started developing his computer skills with his childhood friend Paul Allen at Lakeside School in Seattle. At the age of 14, the two had formed their first computer company. After high school, Allen and Gates left Seattle for Boston. Gates was off to Harvard and Allen began working for Honeywell. After only two years at Harvard, Gates and Allen left Boston for Albuquerque to develop a computer language for the new Altair 8080 personal computer. This computer language would become BASIC and was the foundation for Microsoft, which was created as a partnership in 1975.
After five years in New Mexico, Microsoft relocated to Bellevue, Washington in 1980 with BASIC and two other computer languages (COBOL and FORTRAN) in its arsenal. Later that year IBM began developing its first PC and was in need of an operating system. Microsoft developed the Microsoft Disk Operating System (MS-DOS) for IBM while two other companies created competing systems. Gates’ determination and persuasion of other software firms to develop programs for MS-DOS made it the default IBM platform.
As Microsoft became more successful, Gates realized that he needed help managing Microsoft. His enthusiasm, vision, and hard work were the driving force behind the company’s growth, but he recognized the need for professional management. Gates brought in another one of his friends from Harvard, Steve Ballmer. Ballmer had worked for Proctor & Gamble after graduating from Harvard and was pursuing his MBA at Stanford University. Gates persuaded Ballmer to leave school and join Microsoft. Over the years, Ballmer has become an indispensable asset to both Gates and Microsoft. In 1983, Gates continued to show his brilliance by hiring Jon Shirley who brought order to Microsoft and streamlined the organizational structure, while Ballmer served as an advisor and sounding board for Gates. Microsoft continued to grow and prosper in the 1990s and Gates became the richest man in the world with Microsoft dominating the operating systems market and the office suite software market with Microsoft Office.
Gates recognized that his role was to be the visionary of the company, but that he needed professional managers to run the operations of Microsoft. He combined his unyielding determination and passion with a well-structured management team to make Microsoft the giant it is today.
The other visionary, Steve Jobs, and his friend Steve Wosniak started Apple Computer in Job’s garage in Los Altos, California in 1976. In contrast to Bill Gates, Jobs and Wosniak were hardware experts and started with the vision for a personal computer that was affordable and easy to use. When Microsoft offered BASIC to Apple, Jobs immediately dismissed the idea on the basis that he and Wosniak could create their own version of BASIC in a weekend. This was typical Jobs: decisive and almost maniacal at times. However, Jobs eventually agreed to license Microsoft’s BASIC while pursuing his vision of developing a more usable and friendly interface for the PC.
Jobs, seen by some as the anti-Gates, is a trailblazer and a creator as opposed to Gates who is more of a consolidator of industry standards. Jobs, whose goal was to change the world with his computers, was very demanding of his employees. Jobs was not a hard-core computer programmer, but he sold the idea of the personal computer to the public. He changed the direction of Apple by developing the Macintosh (Mac) that used a new Graphical User Interface (GUI) that introduced the world to the mouse and on-screen icons. With all this success, there was a major problem developing at Apple: Steve Jobs was overconfident and did not see Gates and Microsoft as a serious threat to Apple.
Soon after the release of the Macintosh computer, Jobs asked Microsoft to develop software for the Mac operating system. Gates obliged and proceeded to launch a project copying and improving Apple’s user interface. The result of this venture was what became Microsoft Windows.
Jobs’ cocky attitude and the lack of management skills contributed to Apple’s problems. He never bothered to develop budgets and neglected his relationship with his employees. Wosniak left Apple due to differences with Jobs. In 1985, John Scully, formerly CEO of PepsiCo, was hired to replace Steve Jobs as president and CEO of Apple Computers. Differences between Scully and Jobs developed which eventually resulted in the dismissal of Jobs.
Microsoft and Apple at the turn of the Century: An Industry Giant and a Revitalized Leader With the success of Windows, the Office application suite, the Internet Explorer, Microsoft has become a household name and Bill Gates has been hailed as a business genius. The fact that Microsoft’s competitors, the press, and the US Justice Department have called Microsoft a monopoly reinforces Gates’s determination to succeed. Some people even questioned whether Microsoft can survive the Justice Department’s decision. But Bill Gates has shown that he is the master of adapting to changing market conditions and technologies.
In the 1990s, Apple went in the opposite direction. The outdated operating system and falling market share eventually led to a decrease in software development for the Mac. Something needed to be done. In 1998 Steve Jobs returned to Apple as the “interim” CEO. His vision, once again, resulted in an innovative product: the iMac. In the 80s he created the simple-to-operate Macintosh to attract people who were using IBM PCs and their clones. Now he developed a simple, stylish, and Internet-friendly computer that added some much-needed excitement to the computer market. Jobs had also changed as a manager and a leader. He had matured and looked to his professional staff for advice and ideas. The Mac is an expression of his creativity and Apple as a whole is an expression of Steve, leading to continuing the success for Apple and a renewed battle between Gates and Jobs.
Q 1. How did Bill Gates and Steve Jobs differ in their Leadership style?
Q.2 Compare and contrast the managerial practice of Gates & Jobs.
Q.3 What do you think about the future of Microsoft and Apple computer.