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Case Studies by N. Craig Smith

29 case studies

by Publication Date
published: 29 Nov 2019

  • Topic: Responsibility
  • Region: North America

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Abstract:
After years building a solid customer base by cross-selling its financial service offerings, Wells Fargo was engulfed by a scandal over unauthorized accounts opened in customers’ names. Regulators discovered that hundreds of thousands of fake accounts had been opened by bank employees scrambling to meet sales quotas. Was it the work of rogue employees, or the result of an unethical corporate culture coupled with an unrelenting drive to “sell, sell, sell”?

Pedagogical Objectives:
1. To analyse factors that explain unethical behaviour in businesses. 2. To determine whether “bad apples or bad barrels” are the origin of organizational misdeeds. 3. To consider how the causes of organizational misconduct may be mitigated by responsible business leadership, organizational design and corporate governance. 4. To examine corporate hypocrisy in a context where an organization with an excellent banking reputation is nonetheless cheating its customers. 5. To use the ‘fraud triangle’ framework to explore the risks of organizational misconduct.

Keywords:
Organization Misconduct, Business Ethics, Leadership, Fraud Triangle, Stretch Goals, Rogue Employees, Sales Quotas, Corporate Culture, Corporate Hypocrisy, Consumer Banking, Mis-Selling, Rationalisations, Risk Management, Sales Incentives

published: 26 Jul 2019

  • Topic: Responsibility
  • Region: Africa

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Abstract:
This case puts participants in the shoes of the directors of Barry Callebaut (BC), a cocoa-sourcing and chocolate manufacturing company. Chairman Andreas Jacobs is passionate about cocoa sustainability in West Africa – ensuring the cocoa crop (endangered by poor farming and climate change) and the farmers who grow it will survive and thrive. However, in response to a falling share price, the BC board has shifted strategy to achieve cost leadership. Moreover, customers have been unwilling to pay a premium for sustainable cocoa beans. Given the scale of the problem, the company cannot ‘go it alone’. Nonetheless, when the CEO steps down in 2008, Jacobs sees an opportunity for BC to embrace sustainability and urges the board to go beyond goodwill gestures – like its earlier building of schools in Ivory Coast – and take “real action”. Should the board follow his lead? What would “real action” mean?

Pedagogical Objectives:
1. How business should be involved in sustainability and the challenges involved in taking real, impactful action (not simply paying lip-service). 2. Consider sustainability challenges in the context of business challenges – seen through the eyes of the board – and the role of the board in driving sustainability initiatives. 3. Evaluate the extent to which board members should follow the lead of a strong chairman pursuing a personal passion. 4. Identify solutions to the sustainability challenges faced by Barry Callebaut.

Keywords:
Sustainability, Corporate Governance, Boards, Cocoa, Chocolate, Supply Chains, Côte D’ivoire, Africa, Child Labour, Poverty

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published: 26 Jul 2019

  • Topic: Responsibility
  • Region: Africa

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Abstract:
This case puts participants in the shoes of the directors of Barry Callebaut (BC), a cocoa-sourcing and chocolate manufacturing company. Chairman Andreas Jacobs is passionate about cocoa sustainability in West Africa – ensuring the cocoa crop (endangered by poor farming and climate change) and the farmers who grow it will survive and thrive. However, in response to a falling share price, the BC board has shifted strategy to achieve cost leadership. Moreover, customers have been unwilling to pay a premium for sustainable cocoa beans. Given the scale of the problem, the company cannot ‘go it alone’. Nonetheless, when the CEO steps down in 2008, Jacobs sees an opportunity for BC to embrace sustainability and urges the board to go beyond goodwill gestures – like its earlier building of schools in Ivory Coast – and take “real action”. Should the board follow his lead? What would “real action” mean?

Pedagogical Objectives:
1. How business should be involved in sustainability and the challenges involved in taking real, impactful action (not simply paying lip-service). 2. Consider sustainability challenges in the context of business challenges – seen through the eyes of the board – and the role of the board in driving sustainability initiatives. 3. Evaluate the extent to which board members should follow the lead of a strong chairman pursuing a personal passion. 4. Identify solutions to the sustainability challenges faced by Barry Callebaut.

Keywords:
Sustainability, Corporate Governance, Boards, Cocoa, Chocolate, Supply Chains, Côte D’ivoire, Africa, Child Labour, Poverty

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published: 25 Apr 2019

  • Topic: Responsibility
  • Region: Asia

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Abstract:
In 2013, India passed a law to make corporate social responsibility mandatory for large companies. The case examines the context in which the CSR legislation was introduced and how Tata Motors Ltd (TML) responded to it. Case (A) explores the meaning of corporate social responsibility and the question of whether a company should put community projects before profits. Case (B) examines Tata Motors’ CSR programmes in depth and provides an opportunity to consider their impact. Students are challenged to come up with their own ideas for how the philosophy of “more from less for more” can be used to address issues related to poverty and lack of education in India.

Pedagogical Objectives:
1. Explore the meaning and practice of corporate social responsibility and the normative (moral) and instrumental (business case) motivations for companies to engage in it as a voluntary activity. 2. Understand why the Indian government mandated CSR (by the Companies Act 2013) and its implications for companies and their stakeholders, in response to pressing social needs. 3. Consider the impact of CSR programmes, how it can be increased, and ways it can be measured using a Social Return on Investment methodology. 4. Explore the benefits of board involvement in CSR policy-making and reporting. 5. Encourage students to come up with their own ideas about how to do “more from less for more” in India and elsewhere.

Keywords:
Corporate Social Responsibility, India, Government Regulation, Csr Mandate, Social Return on Investment, Corporate Governance, Poverty, Skills Training, Motor Industry, Board of Directors, Kpmg

Prizes won:
- Winner 2018 EFMD Case Writing Competition

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published: 25 Apr 2019

  • Topic: Responsibility
  • Region: Asia

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Abstract:
In 2013, India passed a law to make corporate social responsibility mandatory for large companies. The case examines the context in which the CSR legislation was introduced and how Tata Motors Ltd (TML) responded to it. Case (A) explores the meaning of corporate social responsibility and the question of whether a company should put community projects before profits. Case (B) examines Tata Motors’ CSR programmes in depth and provides an opportunity to consider their impact. Students are challenged to come up with their own ideas for how the philosophy of “more from less for more” can be used to address issues related to poverty and lack of education in India.

Pedagogical Objectives:
1. Explore the meaning and practice of corporate social responsibility and the normative (moral) and instrumental (business case) motivations for companies to engage in it as a voluntary activity. 2. Understand why the Indian government mandated CSR (by the Companies Act 2013) and its implications for companies and their stakeholders, in response to pressing social needs. 3. Consider the impact of CSR programmes, how it can be increased, and ways it can be measured using a Social Return on Investment methodology. 4. Explore the benefits of board involvement in CSR policy-making and reporting. 5. Encourage students to come up with their own ideas about how to do “more from less for more” in India and elsewhere.

Keywords:
Corporate Social Responsibility, India, Government Regulation, Csr Mandate, Social Return on Investment, Corporate Governance, Poverty, Skills Training, Motor Industry, Board of Directors, Kpmg

Prizes won:
- Winner 2018 EFMD Case Writing Competition

Related:

published: 28 May 2018

  • Topic: Responsibility
  • Industry: Automotive
  • Region: Global

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Abstract:
The case is a detailed ‘inside’ account of the ‘dieselgate’ scandal at Volkswagen which revealed how engineers had programmed software that enabled its cars to cheat emissions tests. It explores the origins of internal and external forces that propelled the company to market environmentally sustainable “clean diesel” cars while using engine management software to conceal on-the-road emissions of over 40 times the permitted levels. The scandal - one of the biggest of the decade – illustrates contributing factors that are common to many instances of organizational misconduct: obedience to authority, organizational culture, goal-setting, and corporate governance.

Pedagogical Objectives:
1. To understand how ethical and social responsibility issues arise in business at the level of the individual, the organization, and society. 2. To identify and analyse the individual and organizational factors that give rise to organizational misconduct. 3. To consider how such factors can be mitigated, and the implications for responsible business leadership, organizational design, and corporate governance. 4. To discuss corporate hypocrisy – how an organization with a reputation for engineering excellence could market “clean diesel” cars and programme them to cheat emissions tests. 5. To explore the industry and societal consequences of organizational misconduct by a major player in the automotive industry. 6. To consider the role of rationalisations in justifying misconduct by individuals. 7. To apply the fraud triangle framework to explore risks of organizational misconduct. 8. To discuss effective crisis-management responses.

Keywords:
Environmental Responsibility, Organizational Misconduct, Vehicle Emissions, Sustainability, Corporate Social Responsibility, Business Ethics, Organizational Culture, Leadership, Green Marketing, Volkswagen, Automotive Industry, Pollution, Fraud Triangle, Crisis Management

Prizes won:
- Second Prize in the Corporate Sustainability track of oikos Case Writing Competition 2018

published: 28 May 2018

  • Topic: Responsibility
  • Industry: IT, Healthcare
  • Region: Middle-East

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Abstract:
Recent MBA graduate Majed finds his dream job: high-tech, entrepreneurial, senior, social – contributing to the economy of Palestine, a cause close to his heart. But the new CEO of WebTeb, an online medical information service in Arabic, finds it more challenging than expected. Recruiting IT talent in Palestine is particularly tough. Eventually, his team finds an android developer to help them launch, but then comes a fateful phone call. Majed has infringed an unwritten policy of Palestinian tech companies – never to poach each other’s employees. The rationale behind this is to keep wages low and thus boost an industry with potential to transform the local economy. The injured party, an IT outsourcing company, asks Majed to rescind the offer. If he refuses, they threaten to put WebTeb out of business by offering better salaries to his entire web-development team. Case B shows how Majed resolves the dilemma.

Pedagogical Objectives:
1. To show how MBA graduates may be exposed to real-life ethical dilemmas right after business school, even in a social entrepreneurship context. 2. To demonstrate that an apparently simple ethical challenge is not as black and white as it might at first seem. 3. To explore whether “stability and order” or “economic growth” can ever justify controlling a market (especially a job market) and wage cartels, and by extension, whether “the end justifies the means”? 4. To explore the interplay between ethical principles and cultural/social/political context. 5. To discuss doing business in Palestine and developing economies in general – particularly the idea that wealth generation through business could hold the long-term solution to apparently intractable social and political problems. 6. To demonstrate the convergence between good ethical behaviour and good management.

Keywords:
Business Ethics, Palestine, Ethical Dilemma, Labour Market Controls, Wage Cartels, Web Development, Technology Skills, Free Market, Health Website, Means and Ends, Developing Economy, Mba, Social Entrepreneurship, Human Resources Management

Related:

published: 28 May 2018

  • Topic: Responsibility
  • Industry: IT, Healthcare
  • Region: Middle-East

Show details ...

Abstract:
Recent MBA graduate Majed finds his dream job: high-tech, entrepreneurial, senior, social – contributing to the economy of Palestine, a cause close to his heart. But the new CEO of WebTeb, an online medical information service in Arabic, finds it more challenging than expected. Recruiting IT talent in Palestine is particularly tough. Eventually, his team finds an android developer to help them launch, but then comes a fateful phone call. Majed has infringed an unwritten policy of Palestinian tech companies – never to poach each other’s employees. The rationale behind this is to keep wages low and thus boost an industry with potential to transform the local economy. The injured party, an IT outsourcing company, asks Majed to rescind the offer. If he refuses, they threaten to put WebTeb out of business by offering better salaries to his entire web-development team. Case B shows how Majed resolves the dilemma.

Pedagogical Objectives:
1. To show how MBA graduates may be exposed to real-life ethical dilemmas right after business school, even in a social entrepreneurship context. 2. To demonstrate that an apparently simple ethical challenge is not as black and white as it might at first seem. 3. To explore whether “stability and order” or “economic growth” can ever justify controlling a market (especially a job market) and wage cartels, and by extension, whether “the end justifies the means”? 4. To explore the interplay between ethical principles and cultural/social/political context. 5. To discuss doing business in Palestine and developing economies in general – particularly the idea that wealth generation through business could hold the long-term solution to apparently intractable social and political problems. 6. To demonstrate the convergence between good ethical behaviour and good management.

Keywords:
Business Ethics, Palestine, Ethical Dilemma, Labour Market Controls, Wage Cartels, Web Development, Technology Skills, Free Market, Health Website, Means and Ends, Developing Economy, Mba, Social Entrepreneurship, Human Resources Management

Related:

published: 29 May 2017

  • Topic: Responsibility
  • Industry: Pharmaceutical
  • Region: North America

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Abstract:
This case examines how a drug price increase by one small company, Turing Pharmaceuticals, became the focal point of a controversy that engulfed the entire drug industry. Turing’s decision to raise the price of its anti-infection drug Daraprim, from $13.50 to $750 per dose, is emblematic of the debate about the responsibilities of pharmaceutical companies and business more generally. The case asks: Do pharmaceutical executives have a responsibility to patients when setting drug prices, or are they beholden only to their shareholders? More broadly, what are the responsibilities of companies to shareholders relative to other stakeholders? And what role should be taken by public policy makers in this domain? While set primarily in the United States, the case raises questions of corporate social responsibility and public policy for the global healthcare industry and business more generally. It provides an opportunity to explore the potentially conflicting demands of shareholders and stakeholders, the limits of industry self-regulation and the need for government-imposed price controls, notably in the context of patent monopolies.

Pedagogical Objectives:
1. To explore the nature of corporate social responsibility and its role in business decision-making, especially when the interests of different stakeholders are potentially in conflict. 2. To debate the responsibilities of pharmaceutical companies and other firms providing lifesaving products and services in relation to decisions about price and profitability. 3. How managers can strike a balance between obligations to different stakeholders, applying considerations of profitability, social responsibility, moral obligation, protecting corporate reputation and enlightened self-interest in the context of a life-threatening human need. 4. To identify the limits to corporate social responsibility in answer to the question: How much is enough? 5. To discuss how industries can police themselves, and the role of public policy interventions and industry regulation when they cannot. 6. To highlight the new challenges posed by public dissatisfaction with questionable company practices as expressed via social media, and the implications for business.

Keywords:
Corporate Social Responsibility (csr), Stakeholders, Shareholder Primacy Norm, Drug Prices, Fairness in Pricing, Price Gouging, Government Regulation, Industry Self-Regulation, Patent Monopolies, Industry Reputation, Social Media, Pharmaceutical Industry, Valeant Pharmaceuticals

published: 29 May 2017

  • Topic: Responsibility
  • Industry: Public transportation/Taxi
  • Region: Global

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Abstract:
This case explores the changes wrought by the “sharing economy”, examining the innovations and controversies surrounding the online ride-hailing service Uber. It provides a unique overview of the challenges posed by new business models like Uber’s, which use the internet to link individual providers of goods and services to customers. Raising significant economic, social and environmental sustainability issues, it asks: what are the responsibilities of “sharing economy” companies? More specifically, are they merely “technological platforms” facilitating transactions for private individuals or do they have the same responsibilities as real-world companies such as transportation businesses, hotels and employment agencies?

Pedagogical Objectives:
1. To explore the societal changes brought about by the “sharing economy” model and examine the role of corporate social responsibility and sustainability in developing that new economy. 2. To examine the difficulty of defining the “sharing economy” and explore how various possible definitions influence such companies’ responsibilities and how they are regulated. 3. To facilitate discussion of issues such as labour relations and regulatory oversight of companies created by emerging technologies. 4. To explore the potential for greater sustainability through the adoption of “sharing economy” business models. 5. To encourage discussion of positive and negative strategies that technology companies can use to engage with regulators when introducing new platforms and business models.

Keywords:
Sharing Economy, Sustainability, Corporate Social Responsibility, Digital Economy, Digital Disruption, New Business Models, Labour Rights, Consumer Safety, Business Regulation, Taxi Companies, Corporate Governance, Investors, Stakeholders and Accountability

Prizes won:
- Winner of the 2019 Case Centre Awards, Ethics and Social Responsibility Category
- 2018 Case Centre Best-selling Case in Ethics and Social Responsibility
- Second Prize in the Corporate Sustainability track of oikos Case Writing Competition 2017

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