1.Building Your Management Skills Portfolio
Your Management Learning Portfolio is a collection of activities specially designed to demonstrate your management knowledge and skill. Be sure to save your work. Taking your printed portfolio to an employment interview could be helpful in obtaining a job.
The portfolio activity for this chapter is Developing Your Planning Skills. Read the following about Fox Restaurant Concepts, and answer the questions that follow.
Fox Restaurant Concepts (www.foxrc.com) is a collection of boutique restaurants in Arizona, California, Colorado, Texas, and Kansas. Fox is exploring potential opportunities for growth, and you have been hired to develop a new restaurant concept for the company. Sam Fox, CEO, summarizes the company’s philosophy by saying that “Dining isn’t just about the meal—it’s about the overall experience.” Fox has committed the funds necessary to test your new concept restaurant in an area around your school. If the new concept works well in that area, Fox may seek to expand the concept in a larger geographical area.
Your mission involves establishing a plan to introduce this new concept restaurant. After deciding on your new concept restaurant, Fox wants you to work through the first five steps of the planning process: (1) state organizational objectives; (2) list alternative ways of reaching the objectives; (3) develop premises on which to base each alternative; (4) choose the best alternative for reaching the objectives; and (5) develop plans to pursue the chosen alternative. In the space provided here, respond to the following inquiries regarding the first five steps of the planning process.
5-10. Briefly describe the most important characteristics of your new concept for Fox.
5-11. Develop three organizational objectives for your new restaurant.
5-12. Choose one of the three objectives to explore in more detail. List three alternative ways to reach this objective.
5-13. Develop premises to evaluate each of these three alternatives.
5-14. Based on these premises, choose the alternative that is most likely to reach the objective.
5-15. As you think about this alternative, list the significant steps needed to implement this alternative.
- HP’s Tough Decisions
Read the case and answer the questions that follow. Studying this case will help you better understand how concepts relating to decision making can be applied in an organization such as Hewlett-Packard.
The days of a bulky computer hard drive, keyboard, monitor, and mouse are behind us, right? Tablets, smartphones, and other devices are the way of the future, or so it would seem. However, one company, Hewlett-Packard (HP), is betting on the continuation of traditional personal computers (PC).
The story of HP is innovative, sometimes tumultuous, and always fascinating. With several prior high-profile CEOs such as LéoApotheker, Carly Fiorina, and Mark Hurd, the company has ridden the waves of technology with the personal computer and crashed hard with its inability to keep up with Apple’s advent of smart technology. The new CEO, Meg Whitman, is making some key decisions for the company that could affect its future. Formerly CEO of eBay, Whitman brings to the table a strong background that includes experience at Procter & Gamble and Disney. In addition, she made an unsuccessful bid for the governor’s office in California. When she took over the company in September 2011, she faced a recent history of scandals, infighting, and lackadaisical attitudes. Some tough decisions had to be made.
Just a month prior to Whitman’s appointment as CEO, the company had announced that it would sell off its PC business and cease production of its fledgling TouchPad tablet. The PC business was a significant part of HP’s income and history. Though at its founding in 1939 HP offered a wide variety of scientific and technological products, it entered the PC market in the late 1960s and early 1970s. As the company grew during the last decades of the twentieth century, it added printers and scanners to its product line. In 2011, the TouchPad was a very modest attempt to compete with Apple’s iPad. The decisions to end the PC part of its business and stop producing the TouchPad caused HP’s stock price to fall 20 percent (Bandler and Burke, 2012). Upon her arrival, however, Whitman reversed one of those decisions: She announced that the PC division would not be sold or folded; instead, it would be merged with the printer division. The TouchPad, though, was history.
Whitman felt that keeping the PC division was crucial. “HP needs consistency more than anything else,” she said (Heichler, 2012). She argued that losing the PC business would do irreparable harm to the rest of HP’s products and services. In other words, the PC is integral to HP’s survival.
In order to achieve success, though, some changes had to be made. First, more money is being invested in research and development, something that had declined under previous CEOs. “We underinvested in innovation,” she said (Edwards, 2012). Second, sales across the board will have to improve. A steady decline in revenues and a dropping stock price have certainly hurt the company. And finally, HP is considering a reentry into the consumer mobile market. In order to compete with Apple, the company is working on a lightweight PC that has a detachable touchscreen (Edwards, 2012).
In the meantime, though, the company is struggling. Even with severe cost cuttings, margins continue to drop. After profits declined 31 percent in the second quarter of 2012, Whitman announced that 27,000 employees would be laid off, approximately 8 percent of HP’s entire workforce (Worthen, 2012).
Whitman understands that HP is facing a steep uphill challenge. With confidence she states, “I’ve done this a number of times in my career. It’s what great business leaders do” (Bandler and Burke, 2012). The company not only faces a late entry into the tablet market but is also attempting to maintain and innovate in a world where the desktop computer is becoming a nostalgic tool of business from a bygone era. But she is not discouraged. “Strategy is about the art of exclusion,” she says. “If something isn’t working, then you’ve got to do something different. The cost of inaction is far greater than the cost of making a mistake” (Heichler, 2012).51
6-7. What do you think about Meg Whitman’s decision to keep the PC business at HP? Would you have made the same decision?
6-8. Using the rational decision-making process, evaluate Whitman’s decision. In other words, what was the existing problem, what were the possible alternatives, etc.?
6-9. How would you characterize the scope of Whitman’s decision? What levels of management were affected? Finally, should Whitman have used consensus in making her choice? Why or why not?
- Building Your Management Skills Portfolio
Your Management Skills Portfolio is a collection of activities specially designed to demonstrate your management knowledge and skill. Be sure to save your work. Taking your printed portfolio to an employment interview could be helpful in obtaining a job.
The portfolio activity for this chapter is Strategic Planning at the New York Times. Study the information and complete the exercises that follow.
The New York Times Company is one of the most respected news organizations in the world. Although known primarily for the New York Times newspaper, the company also owns television stations, radio stations, and over 40 websites.
Despite the popularity and prestige associated with the New York Times newspaper, the company’s chairman, Arthur Sulzberger, Jr., is facing a difficult operating environment. Specifically, the emergence of the Internet and forms of digital news threaten the existence of the traditional newspaper industry. As a result, the New York Times is generating lower levels of circulation; this decrease in circulation has also caused a dip in advertising. In sum, the profitability of the newspaper industry is decreasing.
Sulzberger has contacted you to help the company develop a new strategic plan. The following questions will help you apply the strategic planning process to a real scenario.
7-9. Perform an environmental analysis for the New York Times Company. Which segment of the environment is causing the company’s problem(s)?
7-10. Based on this analysis, develop a mission statement for the company. Also develop three objectives that will help the company fulfill its mission.
7-11. Review Porter’s generic strategies. Which one of these strategies would you recommend for the New York Times Company? Explain.
7-12. Which of the four strategy implementation skills do you think will be most important for the company as it moves forward? Why?