Faculty of Business, Economics & Accounting

Department of Business Studies

HELP Bachelor of Business (Hons) Year 1

HELP Bachelor of Management (Hons) Year 1
HELP Bachelor of Business Psychology (Hons) Year 1

CASE Study
Semester 2 2016

Subject:

MGT 101
Principles of Management

Subject Lecturer/Tutor:

Puan Norzan

CASE STUDIES FOR DISCUSSION

CASE STUDY 1: THE MANAGERS DILEMMA
Sharon Jackson is proud to be a middle manager. She has earned her promotions with hard work
and has proved her ability to master the technical problems in her specialty area, data processing.
After receiving her Bachelors degree in data processing at the State University, she went to do
programming work in the field of financial and investment problems. Within two years she
became the recognized genius of her specialty and was promoted to supervisor of her section.
Three years later, when data and word processing functions were merged, she became her
companys director of information and data services. That was three months ago.
Sharon has stayed current in her field through regular reading of journals and trade papers,
through memberships in professional organizations and regular participation in their seminars,
and by being directly involved in data and word processing. Sharon puts it this way: I like
to write programmes as often as I can. Each new problem our department gets is really a test of
our problem-solving abilities. Tackling a problem by myself now and then helps to keep the old
skills from getting rusty. I can still teach the younger programmers a thing or two. Nothing
matches hands-on experience.
Sharon prides herself on her open-door policy and her eagerness to help her employees
perform their tasks. But lately she has become concerned. Her employees do not come around
as much as they used to, and her department is falling behind in its ability to deliver work on
time.
QUESTIONS
1. Which of the three management skills does Sharon possesses?
2. As a middle-level manager, which management skill does Sharon need most?
3. Which managerial roles are performed by Sharon?
CASE STUDY 2: THE NORTON COMPANY VERSUS 3M
While its young, small competitor, 3M (originally Minnesota Mining and Manufacturing
Company), was struggling for survival in the early 1900s. The Norton Company, a manufacturer
of industrial abrasives, was prospering nearly ten times larger. By the late 1940s, however, the
two companies were approximately equal in size. By 1990, 3M dominated several industries and
had revenues more than ten times greater than Norton's. A large French company, Compagnie de
SaintGobain, acquired Norton that year.
Born during the classical school of management thought, Norton had built a tall bureaucratic
structure to house its product divisions and its many staff managers who churned out detailed
reports to aid the company's indepth controlling and planning efforts. Its upperlevel and middle
managers built "increasingly sophisticated systems as the lifelines that linked them to their

distant.....operations...." Decisions were made at the top (requests for spending of $1000 or more
required the board of directors' approval and the company became increasingly self satisfied and
inflexible. It had ceased, for all practical purposes, to actively sense the need for or to initiate
change.
Beginning in the 1940s and into the 1960s, the quantitative and systems school of management
thought were warmly embraced by a number of large and small U.S. firms. Norton among them.
"No company participated in the (quantitative) managerial revolution more enthusiastically than
the Norton Company....." The company adopted a variety of quantitative methods, including
computer modeling to focus on the best ways to expand its existing product lines. It decided to
acquire several existing companies in its industry and to continue profit maximization efforts for
its several original product divisions. It did little, however, to enter new markets or to develop
new product lines.
As the abrasives market began to mature in the 1950s, Norton's response to lagging sales and
profits was to focus on reducing costs and becoming more efficient. "During the late 1950s,
Norton made a few feeble attempts to branch away from the maturing abrasives market, but most
of these were thwarted by lack of resources and institutional encouragement". Unlike 3M, its
attempts to diversify were concentrated on acquiring companies to buy its way into new
directions.
Throughout the 1970s and 1980s, 3M continued to evolve into new...arenas by encouraging
individual initiative. Norton, in contrast, relied primarily on studies and planning models handed
down from its consultants. If Norton was (a definitive example) of a systems driven company,
3M (was a definitive example of) a people centered entrepreneurial model. That model is
essential to competing in today's postindustrial (informationcentered), global markets.
QUESTIONS
1. Which management perspectives are illustrated in this case?
2. What caused Norton to decline in the very market it dominated for so long?
3. Using this case and 3Ms history, what do you think explains 3Ms success over its rival,
Norton?
CASE STUDY 3: CORPORATE CULTURE OF WAL-MART
Wal-Mart is the world's largest retailer and a cultural phenomenon, initiated from a simple
philosophy from Sam Walton whereby lowest prices are offered to the shoppers than anywhere
else. This basic idea is the driver for the growth of Wal-Mart's corporate culture. Sam Walton's
vision was to keep prices as low as possible. The margins offered by him were not as fast
compared to the competitors but he tried to make that up in volume. Sam Walton, thrift and
value for money were a religion. Undercutting the prices for competitor's prices was an
obsession that leads to never ending quest for cost economies. He set an example which can be
matched by only few of the senior colleagues. He walked rather than took taxis and avoided any
corporate traps for success.

As a chairman he was clear about his priorities which were related to his employees, customers
and operational details. A unique spirit of motivation and involvement was created within the
company by giving people responsibility, trusting them, and continually monitoring their
performances. Walton used to drive an old pickup truck and share budget-hotel rooms with his
colleagues on business trips, even after the success of Wal-Mart. He also wanted his employees
to cut down the expenses to bear minimum. This mentality portrayed the loyalty and heart
towards the Wal-Mart's culture even after his death in 1992. The company continued to grow
rapidly after his death. For Example, Wal-Mart's "10-foot attitude" pledge is based on the request
to store a employee that: "I want you to promise that whenever you come 10 feet closer of a
customer, you will look him in eye, greet him and ask him if you can help. The "Sundown Rule"
- that every request no matter ow big or small gets same-day service-has become the basis for
Wal-Mart's fast -response management system. Wal-Mart replaced its mission slogan; "Everyday
low prices" by "Save money, Live Better" was projected to imitate Walton's perseverance that
Wal-Mart played a vital role in the happiness and well-being of common people. By 19990, WalMart exceeded their key rival Kmart in size and in other two years it exceeded Sears.
Wal-Mart culture is based on open door policy which includes open communication which is
critical for understanding and meeting customer needs. Associates can trust on open door and it
is the most important part of their culture. Sundown rule means that Wal-Mart does their best to
answer requests by the close of that business day on which it is received. It is done by combining
the efforts and depending on each other to complete the job. Sam's philosophy plays a vital role
in Wal-Mart's Grass Roots Process i.e. the formal way of capturing associates' feedback. The 3
Basic Beliefs & Values which focuses on respecting the individuals, services to customers,
striving for excellence. These beliefs are practiced each day while interacting with our customers
and each other. 10-Foot Rule is secret for the customer service. While visiting various stores,
Sam Walton encouraged employees to promise for interacting in a good way with the customers
and help them. Servant Leadership states that effective leaders do not lead from the desks. WalMart promotes the idea of developing leaders who are servants and listen to their partners,
employees and helps in accomplishing the goals and duties assigned. Sam Walton believed in the
power of teamwork. As the stores grow and the pace of modernizing increases teamwork plays
and vital role in adapting those changes and working with cooperation.
QUESTIONS
1. Define corporate culture. Identify and
prevalent at Wal-Mart.

describe the type of corporate culture that is

2. Differentiate visible culture and invisible culture. Provide examples of visible culture
and explain their impact on employees performance in Wal-Mart.
3. What values are emphasized in Wal-Marts corporate culture? Explain the impact of
these values on Wal-marts success as the best-known worlds largest retailer.

CASE STUDY 4:

JOHNSON & JOHNSONS TYLENOL CRISIS

Johnson & Johnsons Credo took on prime importance during the crisis of the 1982 Tylenol
recalls. The crisis started on September 29, 1982, in the Chicago area when 12-year-old Mary
Kellerman was pronounced dead at a hospital after her parents found her on the bathroom floor.
Adam Janus was later found collapsed on his living room floor in another part of town and died
in the hospital shortly thereafter. Afterward, Adam's brother Stanley and sister-in-law Theresa
gathered at his house. Suffering from a headache, they found a bottle of Extra-Strength Tylenol
on the kitchen counter and took some capsules. They collapsed soon afterward and died later in
the hospital. Three more deaths were reported the next day. All of these deaths occurred after the
victims had consumed Tylenol. The news of the incident spread quickly, causing a nationwide
panic.
Investigations revealed that the sudden deaths were a result of cyanide poison discovered in the
Tylenol capsules. The capsules had been opened and filled with 65 mg of cyanideup to 10,000
times that which was needed to kill a person. Since the tampered bottles came from different
factories and the seven deaths had all occurred in the Chicago area, the possibility of sabotage
during production was eliminated. Instead, the culprit was believed to have entered various
supermarkets and drug stores over a period of weeks, pilfered packages of Tylenol from the
shelves, poisoned their contents with cyanide at another location, and then replaced the bottles.
In addition to the five bottles which led to the victims' deaths, three other tampered bottles were
discovered. These poisoned bottles were discovered at different stores in the Chicago area.
The crisis was every companys worst nightmare. Some predicted that Tylenol would never sell
again. What followed, however, is one of the most often used examples of effective crisis
management. J&J took its consumer responsibility outlined in its Credo seriously. It immediately
recalled 31 million bottles of Extra-Strength Tylenol worth over $100 million from all retail
stores across the United States. In addition, the company offered to exchange all Tylenol
capsules already purchased by the public with solid tablets. Johnson & Johnson also distributed
warnings to hospitals and distributors that Tylenol production and advertising would be halted
until further notice. According to an analyst, Johnson & Johnson suffered a loss of $1.24 billion
due to the depreciation of the company's brand value. Immediately after the crisis, Tylenol's
share fell from 37% of the U.S. over-the-counter pain reliever market to just 7% by late 1982.
Yet rather than drop the brand as a lost cause, J&J President James Burke poured millions into
reviving the struggling brand. Within six months, its share was back up to 30 percent.
Tylenol managed the crisis in two steps: public relations (reacting to the crisis) and its comeback
stage. Even though the deaths were not a fault of the company, it took responsibility and, unlike
many companies in similar crises, put consumer safety over profit. In addition to its countrywide recall, J&J partnered with the FBI, the Chicago Police, and the FDA to track down the
culprit, even offering a $100,000 reward for anyone who could volunteer information about the
killer. Perhaps most importantly, J&J did not deny the link between the deaths and its products, a
mistake that many companies make immediately following a product crisis.

QUESTIONS
1. Define corporate social responsibility. Identify and describe the important
stakeholders of Johnson & Johnson.
2. Identify and briefly describe the levels of corporate social responsibility. Which
one of it has been practised by Johnson & Johnson? Explain its impact on Johnson &
Johnsons long-term survival.
3. Identify and briefly describe the levels of corporate social responsiveness. Which
one of it has been practised by Johnson & Johnson? Explain its impact on Johnson
& Johnsons image and reputation.