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ESMT Case Study

Nord Stream and the Danish fishermen

ESMT Case Study No. ESMT-311-0120-1
Subject(s)
Strategy and general management
Keyword(s)
Negotiation, distributive negotiation, integrative negotiation, European cross-border infrastructure projects, implications on management of permitting and communication, different approaches to negotiations
The case describes the situation of Dirk von Ameln, permitting director of Nord Stream, in his negotiation efforts to obtain the necessary national permits for the construction of the Nord Stream pipeline. In order to obtain the Danish construction permit, Dirk von Ameln has to reach an agreement with the Danish fishermen, who fear a negative impact on their trade from the construction and operation of the pipeline. The case can be used in its two-party form for introductory negotiation courses. It serves multiple objectives, among them: 1. to understand the steps in preparing negotiations (defining own interests, improving own alternatives, determining the other party's best alternative to a negotiated agreement (BATNA), defining a win set and the objective for the negotiation); 2. to understand the difference between distributive and integrative negotiations, specifically to demonstrate the potential for joint value creation in negotiations with public authorities; 3. to understand the process of negotiation in European cross-border infrastructure projects and its implications on developing company competencies such as management of permitting and communication; and 4. to analyze different approaches to negotiations and their implication on current negotiation strategies and future negotiations and relationships.
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ESMT Case Study

Mr. KLM (A): Jacob Veldhuyzen

ESMT Case Study No. ESMT-411-0117-1
Ulf Schäfer, Jan U. Hagen, Christoph Burger (2011)
Subject(s)
Human resources management/organizational behavior
Keyword(s)
social psychology, behavioral economics, decision making, irrationality, value attribution bias, loss aversion, diagnosis bias/filtering, intuition, employment, filtering, crash, KLM
The three-part case study "Mr. KLM" recounts the story of the world's deadliest plane accident: the crash of two Boeing 747 aircraft at Tenerife in 1977. The case describes both the actual events leading up to the disaster as well as the main character and the case protagonist, KLM Captain Jacob "Jaap" Veldhuyzen van Zanten, to account for the fact that there had actually been two crashes that day: the airplane crash and the crash of "Mr. KLM," Jacob Veldhuyzen van Zanten. The case illustrates the paradigm of a homo rationale who, in an unusual situation, seems to throw aboard principles of rationality while reverting to decisions and behaviors best understood in the light of intuitive, unreflected, biased, or irrational decision making. The case serves as an illustration of findings and principles of social psychology, irrational decision theory, and behavioral economics.
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ESMT Case Study

Mr. KLM (B): Captain van Zanten

ESMT Case Study No. ESMT-411-0118-1
Ulf Schäfer, Jan U. Hagen, Christoph Burger (2011)
Subject(s)
Human resources management/organizational behavior
Keyword(s)
social psychology, behavioral economics, decision making, irrationality, value attribution bias, loss aversion, diagnosis bias/filtering, intuition, employment, filtering, crash, KLM
The three-part case study "Mr. KLM" recounts the story of the world's deadliest plane accident: the crash of two Boeing 747 aircraft at Tenerife in 1977. The case describes both the actual events leading up to the disaster as well as the main character and the case protagonist, KLM Captain Jacob "Jaap" Veldhuyzen van Zanten, to account for the fact that there had actually been two crashes that day: the airplane crash and the crash of "Mr. KLM," Jacob Veldhuyzen van Zanten. The case illustrates the paradigm of a homo rationale who, in an unusual situation, seems to throw aboard principles of rationality while reverting to decisions and behaviors best understood in the light of intuitive, unreflected, biased, or irrational decision making. The case serves as an illustration of findings and principles of social psychology, irrational decision theory, and behavioral economics.
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ESMT Case Study

Mr. KLM (C): Jaap

ESMT Case Study No. ESMT-411-0119-1
Ulf Schäfer, Jan U. Hagen, Christoph Burger (2011)
Subject(s)
Human resources management/organizational behavior
Keyword(s)
social psychology, behavioral economics, decision making, irrationality, value attribution bias, loss aversion, diagnosis bias/filtering, intuition, employment, filtering, crash, KLM
The three-part case study "Mr. KLM" recounts the story of the world's deadliest plane accident: the crash of two Boeing 747 aircraft at Tenerife in 1977. The case describes both the actual events leading up to the disaster as well as the main character and the case protagonist, KLM Captain Jacob "Jaap" Veldhuyzen van Zanten, to account for the fact that there had actually been two crashes that day: the airplane crash and the crash of "Mr. KLM," Jacob Veldhuyzen van Zanten. The case illustrates the paradigm of a homo rationale who, in an unusual situation, seems to throw aboard principles of rationality while reverting to decisions and behaviors best understood in the light of intuitive, unreflected, biased, or irrational decision making. The case serves as an illustration of findings and principles of social psychology, irrational decision theory, and behavioral economics.
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ESMT Case Study

Options for growth: The case of Haier (A)

ESMT Case Study No. ESMT-310-0115-1
Franziska Frank (2010)
Subject(s)
Strategy and general management
Keyword(s)
growth, innovation, driving change, internationalization, leadership, strategy, China, US, Germany, customization, transfer of brand, merger endgame
The Haier case focuses on how Zhang Ruimin, CEO of the Qingdao Refrigerator Factory, manages to develop a nearly bankrupt factory producing bad quality refrigerators into one of the world's largest white goods producers. With a series of rigorous steps, he: a) manages to improve the quality of the refrigerators produced by putting the right incentives and processes into place; b) expands the product range into other areas of the white goods sector, the after-sales services area as well as into the brown goods and financial services sectors; and c) moves aggressively into foreign markets with inroads made very early on into the largest and most competitive markets of America and Europe. All of this took place against the backdrop of a China still smarting from the political and economic upheavals of the years and decades before. The second part of the Haier case (Case B) focuses on the limitations to growth. After Haier achieved outstanding growth, there were a number of cultural and organizational issues to address. Case B should only be used after a discussion of Case A.
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ESMT Case Study

Options for growth: The case of Haier (B)

ESMT Case Study No. ESMT-310-0116-1
Franziska Frank (2010)
Subject(s)
Strategy and general management
Keyword(s)
growth, innovation, driving change, internationalization, leadership, strategy, China, US, Germany, customization, transfer of brand, merger endgame
The Haier case focuses on how Zhang Ruimin, CEO of the Qingdao Refrigerator Factory, manages to develop a nearly bankrupt factory producing bad quality refrigerators into one of the world's largest white goods producers. With a series of rigorous steps, he: a) manages to improve the quality of the refrigerators produced by putting the right incentives and processes into place; b) expands the product range into other areas of the white goods sector, the after-sales services area as well as into the brown goods and financial services sectors; and c) moves aggressively into foreign markets with inroads made very early on into the largest and most competitive markets of America and Europe. All of this took place against the backdrop of a China still smarting from the political and economic upheavals of the years and decades before. The second part of the Haier case (Case B) focuses on the limitations to growth. After Haier achieved outstanding growth, there were a number of cultural and organizational issues to address. Case B should only be used after a discussion of Case A.
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ESMT Case Study

Tijuana hyperborder plant: An investment opportunity?

ESMT Case Study No. ESMT-310-0106-1
Subject(s)
Strategy and general management
Keyword(s)
investment decision, quantitative decision-making, discounted cash flow, net present value, sensitivity analysis, scenario analysis, uncertainty, risk, Monte Carlo simulation, decision trees, spreadsheet modeling, electricity generation, transmission investment, internationalization
The case describes the first quantitative steps in the evaluation of an investment opportunity. It follows the representative of a German utility on his data enquiries about the project of an independent power plant (IPP) in Mexico. The case aims to familiarize students with the most common tools of quantitative decision-making and to make students aware of the advantages and potential pitfalls of these tools. In investments decisions, the use of these techniques can complement a qualitative or strategic choice by providing monetary information related to one or more investment paths. Most importantly, the methods employed in this case allow students to experience different levels of complexity in quantitative analysis, ranging from a standard discounted cash flow analysis to stochastic simulation and decision trees. After having accomplished the case, students will have a basic understanding how to conceptualize strategic investment decisions and implement the appropriate algorithms in spreadsheet modeling.
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ESMT Case Study

A350 XWB: Airbus' answer to Boeing's Dreamliner

ESMT Case Study No. ESMT-310-0114-1
Subject(s)
Strategy and general management
Keyword(s)
timing of innovation, first mover advantage, program management, business strategy
The case study describes the strategic moves of Airbus in the twin-aisle-twin segment since the announcement by Boeing of the launch of its 787 Dreamliner. Airbus' clients initially reacted negatively to the strategic response on two occasions by criticizing the design of its competitive offering. By the end of 2006, however, there were positive signs that the new design, the A350 XWB, would be able to find its market. However, the formal industrial launch was not yet made and the A350 program management office had been asked to prepare a series of proposals to the Board of EADS regarding the next steps.
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ESMT Case Study

Anna Frisch at Aesch AG: Initiating lateral change

ESMT Case Study No. ESMT-410-0112-1
Urs Müller, Ulf Schäfer (2010)
Subject(s)
Human resources management/organizational behavior
Keyword(s)
initiating change, implementing change, change management, communication of change, lateral change / leading change from the middle, influencing / persuading, stakeholder management, power and politics in organizations, change in a global matrix organization
Anna Frisch has tried to initiate change at Aesch AG, a large global provider of medical devices for the healthcare industry. As marketing director, she has identified major shifts in German healthcare that demand that Aesch changes its ways of approaching customers. Instead of targeting the specific needs of doctors in hospitals, Aesch should rather address the new decision makers: the CEOs, CFOs, or CIOs of hospitals, who have a different buying logic. In Aesch's matrix organization (global product responsibility, supported by regional sales) Anna wants to convince the heads of marketing for the different product businesses to change. She seems to be able to quickly convince her colleagues of what she calls "C-level marketing." However, as soon as work is supposed to start, she realizes that commitments were less strong than she assumed. A few weeks later, Anna is clearly told that there will be no support for her.
The short case study is set when Anna realizes the failure of her change initiative. The case discussion allows analyzing and discussing various mistakes in the areas of:
- defining an attractive vision and strategy,
- reading and playing the organizational culture, power and politics,
- communicating a change initiative successfully,
- managing the stakeholders.
The case is supported by a 6-minute video showing Anna reflecting on the events, her analysis of failure, and her personal preferences as of December 2008.
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ESMT Case Study

Barenboim: Adaptive leadership (A)

ESMT Case Study No. ESMT-410-0107-1
Ulf Schäfer, Konstantin Korotov (2010)
Subject(s)
Human resources management/organizational behavior
Keyword(s)
adaptive leadership, leadership, adaptive change;change, resistence to change
The four-part case study (text cases A, B, C, and video case D) illustrates key concepts and lessons about leading adaptive change in the context of some extra-musical initiatives of Berlin-based and world-famous conductor and pianist Daniel Barenboim. The case illustrates the challenges associated with resistance to adaptive change, understanding of stakeholders, management of conflicts, and the psychological challenges of leading unpopular, although important, change efforts under the conditions of pressure from various affected parties, who consciously or unconsciously attempt to divert the change-oriented leader from pushing forward. The case serves as fruitful ground for exploration of the theory of adaptive change (as put forward by Heifetz and Linsky), discussion of the dangers of leading, and psychological challenges of leading.
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