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Associate Professor Essay Teaching Note: Case 1 – Robin Hood Case Objectives 1. To provide an introduction to the conceptual framework of strategic management using a non-business situation. 2. To introduce students to the process of problem identification and potential solution analysis that will be used in case discussions throughout the semester. See the table below to determine where to use this case: |Chapter Use |Key Concepts | |1: Strategy Concept |Leadership for strategic management; sustainable competitive advantage; vision, mission, strategic objectives;| | |external environment; internal environment; efficiency vs. effectiveness; stakeholder management | Case Synopsis Robin Hood and his merry men are now in trouble because wealthy travelers (their source of revenue) are avoiding the forest. As is often common in an entrepreneurial organization, the Merry Men were highly motivated by Robin Hood’s leadership. Therefore, Robin had previously relied on informal communication to organize and implement operations. Robin is pleased with the growing size and influence of his organization. However, growth has meant that specialized duties have begun taking up most of the men’s time, leaving a command vacuum between Robin and the first line recruits. In addition, they are now all located in a large encampment that can be seen for miles. This creates the probability of a surprise attack on their position. Growth has also put great pressures on resources, so now they must harvest the forest more thoroughly. Where will additional revenue come from? Rich travelers are avoiding the forest, so in desperation Robin is considering robbing the poorer travelers, which means his lieutenants must now tell their men to rob their brothers and fathers. What started as a  rebellion is in danger of being routinized into banditry. Robin must therefore begin to evaluate the Merry Men’s mission in view of the changing environment. Should it still be an extension of his private grudges and aspirations? Has the organization acquired a new mission, if so what is it? Who are the key stakeholders here? On whose behalf should the organization formulate its mission! Teaching Plan Most students are familiar with the Robin Hood story, so it’s possible to ask them to read this short case in class during the 1st or 2nd class meeting. Either use the PowerPoint slides or ask the discussion questions directly. As students respond, either write answers on the board or refer to the PowerPoint slide answers. It’s up to the instructor whether or not to assign Chapter 1 prior to discussing the case. If the case is read before the chapter is read, then the instructor has the option to ask students, when they do read the chapter, to identify the concepts in the chapter that they recognize from the case discussion, and come to the next class prepared to share what they recognized. If the case is discussed after students have read Chapter 1, the instructor can ask students to identify what concepts apply from the chapter. Summary of Discussion Questions Here is a list of the suggested discussion questions. You can decide which questions to assign, and also which additional readings or exercises to include to augment each discussion. Refer back to the Case Objectives Table to identify any additional readings and/or exercises so they can be assigned in advance. 1. What is strategy? 2. What strategic problems does Robin Hood have? 3. What is the role of the organizational leader as strategist and articulator of global goals? 4. What are some issues in this organization’s external environment? 5. What is the relationship of the organization’s internal structure to its environment? 6. How do group values or culture influence strategy making? 7. What strategy can Robin Hood implement? Discussion Questions and Responses Chapter 1: Introduction and Analyzing Goals and Objectives 1. What is the purpose of strategy? See Chapter 1, Exhibit 01: Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages: †¢ strategy directs the organization toward overall goals and objectives; †¢ includes multiple stakeholders in decision making; †¢ incorporates both short-term and long-term perspectives; †¢ recognizes trade-offs between efficiency and effectiveness. An interesting question that the instructor can ask at this point is: what business is Robin Hood’s organization in? Some students might say philanthropy, some might say robbery. The answers to this question will help students understand the importance of vision and mission: the leader must have a clear idea of the purpose of the business, and who it competes with, in order to craft strategy. If the business is robbery, there are different competitors, like highwaymen. 2. What strategic problems does Robin Hood have? Robin Hood’s organization is in a profit squeeze: revenue is down and costs are rising. In addition, there are cracks in the culture of the organization. Issues that need to be addressed include: †¢ How to avoid detection of the growing organization? †¢ Has Sherwood Forest become too small to sustain operations? †¢ What to do about the growing strength of the Sheriff’s forces? †¢ How to address organizational communications and leadership confusion? Decisions that need to be made include: †¢ Should Robin Hood kill the Sheriff? †¢ Should Robin Hood accept the Baron’s offer to join in freeing King Richard? †¢ Should Robin Hood impose a fixed transit tax in order to increase revenue? Consequences to be considered include: †¢ Does the change in the external environment mean that the original mission is no longer valid? †¢ If Robin Hood decides to kill the Sheriff, accept the Baron’s offer or impose a tax on travelers, how do each of those actions link to the mission? †¢ If the mission changes, to what degree does Robin Hood have to worry about the loyalty of stakeholders? One other issue concerns the rapid growth of the organization. In the space of two years the organization grew from fragmentation and obscurity to a strong regional presence. Competitive strategy is about sustaining a position in the industry. Growth implies that strategy has to be flexible enough to adapt. Does Robin have a sustainable strategy? 3. What is the role of the organizational leader as strategist and articulator of global goals? See Chapter 1, Exhibit 06: The primary role of the organizational leader is to articulate vision, mission and strategic objectives. Leaders must also be  proactive, anticipate change and continually refine changes to their strategies. This requires a certain level of â€Å"ambidextrous behavior†, where leaders are alert to opportunities beyond the confines of their own jobs, and are also cooperative and seek out opportunities to combine their efforts with others. Robin Hood needs to evaluate his initial vision of the organization’s purpose: what was the original goal that was â€Å"massively inspiring, overarching, and long-term†, that represented a destination that is driven by and evokes passion? Is the original vision irreconcilable with the present circumstances? Robin Hood’s organizational mission may have to change: a mission encompasses both the purpose of the company as well as the basis for competition and competitive advantages. Organizations must respond to multiple constituencies if they are to survive and prosper, and the mission provides a means of communicating to diverse organizational stakeholders. If the vision and mission have to change, Robin Hood must establish strategic objectives to operationalize the mission statement. That is, objectives help to provide guidance on how the organization can fulfill or move toward the â€Å"higher goals† in the goal hierarchy—the mission and vision. Therefore, Robin Hood needs to redefine the organizational vision and mission since it may have changed rebellion may have become routinized into banditry. He must also identify the key stakeholders, broadening his focus beyond his own private grudge to include the needs of the district, the region, or the nation. And he must establish new goals. Depending on the stakeholders, these new goals may include replacing the Sheriff or changing the political order. 4. What are some issues in this organization’s external environment? There are obvious resource constraints. Sherwood Forest has finite resources: the inputs into the organization (travelers to rob) have dwindled, especially since the rich travelers have started avoiding it. Robin Hood’s band are spending past gains on present problems in the assumption that  future revenues will continue to grow at the same pace as in the past. This assumption, one that is often pervasive in successful organizations, may be unwarranted. The Merry Men are reduced to robbing poorer travelers. The poor travelers are their main stay of political support. Here is a common pitfall of success, the tendency of organizations to take their best and most important customers for granted, to extract from them the highest return for least effort in the belief that they have no practical alternative. In addition, trained manpower is scarce. Regarding the physical environment, the current growth of the organization has created a large encampment that can be seen for miles, and is therefore now a target for attack. The nature of the Merry Mens environment and operations requires stealth and flexibility. The current physical facility does not provide for this. 5. What is the relationship of the organization’s internal structure to its environment? See the Chapter discussion of the trade-offs between effectiveness and efficiency. Given the growth of the operation, Robin Hood’s previous structure may no longer be effective. He may no longer be able to achieve the goals of the organization. He might need to make trade-offs. His current structure is functional, with each lieutenant a specialist. Communication has been informal, and Robin currently has no direct link to his first line recruits. This structure performed well in the early days of the band. However, with the growth of the organization, this has become problematic, resulting in lack of coordination. His lieutenants could do double time as staff and line personnel: fulfilling their staff duties in off-peak periods, but available for line duty during field operations. Robin might want to consider creating a decentralized regional operation, with sub-bands who can operate out of smaller regional headquarters and better coordinate movements. This will increase flexibility of the total organization by moving the organizing of operations closer to those who undertake them. This will also reduce the chance of attack because then only  part of the band might be detected and surprised. Decentralization also pushes food-gathering down the line, thereby eliminating food distribution problems. Small scale operations can be carried out with greater economy. 6. How do group values or culture influence strategy making? During strategic analysis, the leader does â€Å"advance work† to anticipate unforeseen environmental developments, identify unanticipated resource constraints, assess changes in his or her preferences for how to manage. During strategy formation, depending on the type of organization structure, the leader might include key individuals in a discussion around selecting which strategies might be best to implement at which level within the organization. In strategy implementation, the leader must ensure proper strategic controls and organizational design, and establish effective means to coordinate and integrate activities within the firm as well as with suppliers, customers and alliance partners. Therefore, leaders must pay attention to all stakeholder needs, including the group’s values and the organizational culture. See Chapter 1, Exhibit 05 for the diverse stakeholder groups and the claims they make on the organization. Regarding the organizational culture, it was based on founding values that embraced a missionary outreach to the community. The original purpose created unity and a spirit of daring among the Merry Men. Robin is considering abandoning the higher (more affluent) segment of his market for a deeper exploitation of a very large segment with limited resources. Here he runs up against organizational traditions and values. If Robin pursues profit maximization now (robbing all travelers, including the poor), the group will become thieves. Group members will resist stealing from their brothers and fathers. Robin needs to restore the group members’ need for order and purpose. The Merry Men need to feel that their participation is quasi-voluntary. 7. What strategy can Robin Hood implement? The basic question strategic management tries to answer is: How can we create competitive advantages in the marketplace that are not only unique and valuable but also difficult for competitors to copy or substitute? Robin Hood must assess how functional areas and activities â€Å"fit together† to achieve goals and objectives. If the organization is still Robins extension of a personal grudge, then displacing the Sheriff should be the primary mission of the Merry Men. If the organization is acting on behalf of the district then replacing the Sheriff with a more benign administration should be the priority. If however the Merry Mens existence is an expression of widespread dissatisfaction with the present political order, then Robin should consider his potential contributions on a national scale. An analysis of the options confronting Robin ought to lead the students to question the criteria by which strategy is judged. Who is the actor in strategy? The chief executive officer? Top management? A coalition of stakeholders? There is clearly no theoretical answer to these questions. A discussion ought to set the ground for an appreciation of the political and structural forces under which strategy emerges. Robin should have a meeting with the Merry Men to explain the strategic dilemma and long-term issues. He needs to increase organizational discipline, which could be done by creating a clearer organizational structure with strategic controls that enforce the mission. To do this, he needs to recruit qualified leaders for the new decentralized structure, and involve lieutenants in the solution. It is always an issue – which functions should be decentralized and which retained at the corporate level. In this case intelligence gathering and finance should probably be kept centralized. It is crucial for the students to appreciate the contradictory pressures that implementation generates. The new decentralized structure will call for more intricate communication and command systems. It increases flexibility, but also increases the probability of breakdown and mismanagement. In this case runners must keep the various sub-bands in communication. This is a primitive technology that may be insufficient to ensure coordination. An  opportunity exists here for the students to appreciate to what extent sophisticated organizational forms are made possible by modern technologies which are ordinarily taken for granted. While restructuring is going on Robin must begin to consider other aspects of his strategy. He should examine the possibility of diversifying beyond the confines of his traditional forest territory. This is viable if he is decentralized. Operations can be carried on in the countryside by the autonomous sub-bands. He must also resolve the issue of the proposed transit tax. What should be his relationship to the local population? Should he increase their burden of taxation, or not? Robin must also prepare for the possibility of ceasing operations by providing outplacement training. He should pursue alliances beyond the current band of Merry Men, negotiating a possible change in the political order, negotiating amnesty, returning the band to legality. He should probably avoid contact with the Sheriff! Finally, Robin should recognize that mistakes will occur. Therefore he should anticipate the costs of implementation, especially the problems of extended communication. Robin must familiarize his lieutenants with his intentions and the projected problems. They must actively become involved in the evolving implementation. Ultimately, however, Robin Hood must consider the long-term course of action. If the Merry Men were a profit-maximizing organization in the classic sense they would be satisfied with keeping the Sheriff off balance; or perhaps work towards his replacement with a more inexperienced man. They are however a missionary organization. To pursue profit maximizing would sooner or later lead them to thievery, pure and simple. It would also undermine their unity and spirit of daring. Robin Hood has little choice but to increase his involvement in issues that lie beyond his immediate task environment.