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Video Guide

Chapter One: Organizations and Organization TheoryVideo Case Title: Innovative Management for a Changing WorldOrganizations Discussed: Camp Bow Wow

Video Case Synopsis

With more than 150 locations, Camp Bow Wow is one of the fastest growing franchise businesses in the United States. Founded little more than a decade ago by dog-lover Heidi Ganahl, the Colorado-based kennel has earned a reputation as a fun, safe place where pets can stay when owners are away. A few years ago, when franchisee Sue Ryan joined the Camp Bow Wow system, the Boulder, Colorado, businesswoman was able to manage most aspects of the camp on her own. But after the thriving doggie day care facility proved to be more work than she could handle, Ryan hired experienced staff members to help manage the camp and provide better customer service.

Video Case Discussion Questions and Suggested Answers

1. How does Camp Bow Wow, as an organization, benefit society?

Camp Bow Wow is a for-profit organization that brings together people and resources to deliver pet care services for on-the-go pet owners. By delivering services that people need, and by doing so at a profit, the organization creates value for consumers, employees, owners, and investors. Employees of Camp Bow Wow, by working collectively, accomplish goals far beyond the capacity of any individual. As unique social entities that are goal directed, structured, and linked to the external environment, for-profit and nonprofit organizations have an important place in the modern world.

2. Is Camp Bow Wow an example of an open or closed system?

Camp Bow Wow is an example of an open system. Unlike closed systems, which do not interact with outside entities, open systems maintain constant interaction with stakeholders, customers, suppliers, competitors, and government regulators in the environment to transform inputs into outputs.

3. Which of the five parts of an organization are featured in the video?

Organizations consist of top management, middle management, technical support staff, administrative support staff, and a technical core. The technical core at Camp Bow Wow is comprised of the camp counselors who care for pets and interact with customers daily. This core activity is directed and coordinated by management—namely, owner Sue Ryan (top management) and general manager Candace Stathis (middle management). The video case does not directly address or profile administrative or technical support staff.

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4. Which activities at Camp Bow Wow require high efficiency? Which activities require high effectiveness?

Efficiency refers to the amount of resources used to achieve the organization’s goals. Effectiveness is a broader term, meaning the degree to which an organization achieves its goals. A high performance organization is one that achieves goals to the maximum extent possible (effectiveness) while making the best use of limited resources (efficiency). According to Candace Stathis, dog care tasks at Camp Bow Wow require high efficiency so that everything gets done on time and according to schedule. In contrast, customer service needs to be effective but not necessarily efficient, since overemphasis on efficiency could interfere with quality customer interactions. “Customer service has to be effective as opposed to efficient because it’s important for the owners to know that you care about their dogs,” Stathis said. “If you’re just trying to be efficient, then it’s not going to make them want to come back, and it’s not going to make them feel that you know them or their dog.” She points out that the hardest part of her job is trying to juggle the customer service side of Camp Bow Wow with the pet care side.

5. Based on what you saw in the video, describe various structural dimensions of the Camp Bow Wow organization.

Answers will vary. Regarding hierarchy of authority, owner Sue Ryan states that her kennel had a “flat structure” where nearly all employees reported directly to her. Ryan discusses the issue of specialization when she says that entry-level camp counselors had trouble performing a broad range of tasks (phones, customer service, pet care, and clerical work). Concerning centralization, owner Sue Ryan makes most decisions at Camp Bow Wow, yet she also delegates some authority to general manager Candace Stathis. As a doggie day care center, Camp Bow Wow is low in the dimension of professionalism. Formalization is not discussed, but the written rules for operating a local Camp Bow Wow kennel are largely created and maintained by corporate headquarters.

Chapter Two: Strategy, Organization Design, and EffectivenessVideo Case Title: Strategy Formulation and ExecutionOrganizations Discussed: Theo Chocolate

Video Case Synopsis

Seattle’s Theo Chocolate is one of the newest and most innovative companies to master the art of cacao cultivation. When Theo launched in 2006, the company offered a wildly exotic line of dark and milk chocolate bars and truffles. The treats had unusual names such as Coconut Curry, the 3400 Phinney Bar, and Bread & Chocolate. Bars were wrapped in artistic watercolor packaging with whimsical cover designs. Theo’s product quickly garnered accolades from critics and organic foods consumers alike. But when selling such creative confections to foodies and green consumers didn’t add up to high

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volume sales, founder Joe Whinney and his management team went back to the drawing board to find a more effective strategy.


1. Which of the three competitive strategies—differentiation, cost leadership, or focus—do you think is right for Theo Chocolate? Explain.

Answers will vary, but students should recognize that Theo uses its organic and fair trade expertise to differentiate itself from other chocolate makers and brands (differentiation strategy). In keeping with this strategy, Theo’s bars are more expensive than the traditional milk chocolate bars made by leading brands. As a small company that produces chocolate in small batches, Theo cannot offer better prices than those offered by large chocolate companies—so, a cost leadership strategy is not possible. And while the company seems well suited for a focus strategy—the company is a hit with green consumers in the Pacific Northwest—founder Joe Whinney says he is not satisfied with a narrow regional target market. The founder hopes to share his chocolate with mainstream chocolate consumers, both nationally and globally.

2. What flaw did Theo Chocolate CEO Joe Whinney discover in his company’s early strategy?

According to Joe Whinney and Debra Music, Theo’s early marketing strategy failed because it failed to align with the wants and demands of mainstream consumers. The company’s emphasis on organic and fair trade production methods had limited appeal with a small consumer niche.

3. Evaluate Theo’s new strategy in light of the company’s strengths, weaknesses, opportunities, and threats.

A SWOT analysis for Theo Chocolate begins by recognizing that Theo has a mission to be the most loved and most ethical chocolate company in the world. Internal strengths that help the company achieve its mission and strategic goals include the company’s expertise in chocolate making, knowledge of sustainable business practices, and control over its supply chain. As Joe Whinney and Debra Music discovered, the company’s initial exotic product line was too unusual for mainstream markets—a major weakness in the quest to become the world’s most loved chocolate company. As Whinney and Music scanned the external environment for opportunities, they noted that the mainstream chocolate market was lacking a traditional chocolate bar that could claim to have green benefits. This general analysis led Theo to try a new strategy: launch a product line that would appeal to mainstream chocolate bar customers yet offer unique environmental benefits. Threats in the external environment include the public’s fickle interest in green marketing, the dominance of mass-produced chocolate brands like Hershey and Mars, and the necessity of large sales in maintaining shelf space in grocery stores.


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4. How would you expect Theo Chocolate’s strategy to affect the company’s organizational design?

Large chocolate manufacturers like Hershey’s, which produce chocolate bars in mass quantities to achieve low-cost (low-cost leadership), possess an efficiency orientation complete with strong central authority, tight cost controls, and highly efficient procurement. This design works well within stable market conditions. Theo Chocolate, however, produces its award winning chocolate in small batches using a “bean-to-bar” production method. Since Theo’s strategy is based on differentiation, the company’s design tends to be flexible and oriented towards learning and innovation.

Chapter Three: Fundamentals of Organization StructureVideo Case Title: Designing Adaptive OrganizationsOrganizations Discussed: Modern Shed

Video Case Synopsis

If anyone knows about structural designs that are sturdy, contemporary, and adaptive, it’s Seattle builder Ryan Smith, the founder of Modern Shed. Smith’s company builds space-saving modern dwellings for use as studio spaces, guesthouses, and more. Like his stylish sheds, Smith’s business is built to be adaptive, scalable, and suited to the needs of today’s challenging economic environment. Modern Shed has fewer than 20 full time employees, yet at times the company’s output rivals that of a large builder, due to collaboration with dozens of independent contractors. This small-yet-flexible organizational structure has helped Modern Shed thrive, even as larger companies struggle to survive the present economy.


1. Describe Modern Shed’s organization structure.

Modern Shed is best characterized as a modular structure. The Seattle shed builder has a core hub of just 12 to 14 employees (mostly designers and managers). These top managers outsource most aspects of business operations to outside specialists. The company’s manufacturing process involves close collaboration with dozens of outside vendors who specialize in the creation and delivery of components used in the sheds—everything from paneling and electric to hardware and transport. The members of this outside dealer network act as a virtual team; they coordinate through monthly conference calls, and they come together to build projects and product lines planned by Modern Shed’s Seattle office.

2. What are the advantages of Modern Shed’s organizational structure?



Two advantages of Modern Shed’s organizational structure include responsiveness to market needs and access to highly skilled personnel—without the high payroll costs. As an example of Modern Shed’s responsiveness, Ryan Smith’s team designed and manufactured an entirely new product line of Modern Shed in response to a request from a national home-and-garden company. The new shed product was designed and ready for shipping within eight weeks.

3. What are disadvantages of Modern Shed’s organizational structure?

Disadvantages of Modern Shed’s organizational structure include a lack of control over outside supply chain partners, high task demands for managers, and uncertain loyalty from independent contractors

4. Which departmental group option does Ryan Smith describe when he says that typical business organizations have a group for answering phones, another group for accounting, and yet another group for manufacturing?

In the video, Ryan Smith describes a functional grouping structure when he says typical business organizations have a group for accounting people, a group for manufacturing people, and a group for people who answer phones. The functional grouping places employees together who perform similar functions or work processes or who bring similar knowledge and skills to bear.

Chapter Four: The External EnvironmentVideo Case Title: Managing Human ResourcesOrganizations Discussed: Barcelona Restaurant Group

Video Case Synopsis

The restaurant business is in constant flux, with workers coming and going in a revolving-door fashion. This is true even of high-end concepts like Barcelona Restaurant Group, a collection of seven wine and tapas bars located in Connecticut and Georgia. To deliver Barcelona’s sophisticated dining experience, managers must keep abreast of employment trends and recruit skilled individuals who can run the establishment. To find individuals with the right attitudes and work ethic, Barcelona Chief Operating Officer Scott Lawton places weekly employment ads and guides job candidates through a multi-stage staffing process. According to the human resources executive, Barcelona’s staffing method has proven to be effective at attracting the best and weeding out the rest.


1. Identify the environment and sector that directly impact Scott Lawton’s job recruitment and selection activities.


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Chief Operating Officer Scott Lawton is responsible for hiring decisions at Barcelona Restaurant Group, and his human resources efforts take place within the task environment—the component of an organization’s environment that interacts directly with the organization and affects its ability to accomplish goals on a daily basis. While the task environment includes many sectors, hiring and firing decisions are related to the human resources sector of the task environment.

2. How does environmental uncertainty affect Barcelona’s staffing needs?

Throughout the video, Barcelona’s Scott Lawton mentions the high level of uncertainty that human resources managers face in the restaurant industry. In particular, he notes that the restaurant labor market is transient, with employees coming and going in a revolving door fashion—mostly due to burnout and turnover. As a result, Barcelona must properly manage its staffing needs to maintain good performance. Lawton says that effective management of uncertainty is critical to Barcelona's success.

3. What does Barcelona do to manage uncertainty in its labor market?

Barcelona manages uncertainty in its labor market by creating a Chief Operating Officer (COO) position to handle human resources issues full time. Although Barcelona is too small in size to have a human resources department, COO Scott Lawton acts as an H.R. director, managing the company’s labor and recruitment issues on a daily basis. Planning and forecasting, placing job ads, and conducting daily interviews are key activities Lawton uses to manage the high uncertainty of the restaurant industry labor market.

Chapter Five: Interorganizational RelationshipsVideo Case Title: Managing Social ResponsibilityOrganizations Discussed: Theo Chocolate

Video Case Synopsis

Motivated by a dual love of chocolate and the environment, Joe Whinney dreamed of building the first organic fair trade chocolate factory in the United States. In 1994, the Pennsylvania native pioneered the import of organic cocoa beans to the United States. In 2006, Whinney’s Theo Chocolate Company became the first and only sustainable chocolate maker in the nation. Unlike leading candy manufacturers that deliver sweets in high volume, Theo produces award-winning organic chocolate in small batches. In addition, the company boasts a bean-to-bar production method that uses cocoa beans grown without harm to farmers or the environment. To achieve its production and sustainability goals, Theo develops strong interorganizational relationships with growers and partners throughout its supply chain. The result is the efficient production of creamy, delectable milk chocolate bars that are good for both the ecosystem and the palate.




1. Who are some of the key members of Theo Chocolate’s organizational ecosystem?

Theo Chocolate coordinates with a range of supply chain partners to deliver its organic fair trade chocolate. These key partners include organic cocoa bean farmers, transport companies, food-ingredient suppliers, distributors, and retailers.

2. Why, according to Joe Whinney, is it desirable for Theo to control its manufacturing process all throughout its supply chain?

While discussing Theo’s organic manufacturing process, owner Joe Whinney states, “It was important to control the manufacturing from the bean to the finished product, and throughout the supply chain. If I could build a vertically integrated business, I had the best opportunity to affect every part of the business and really create lasting change.” Whinney’s business strategy includes social responsibility goals that cannot be met without cooperation from supply chain partners. In particular, Whinney aims to develop financial relationships that are as profitable for growers as for Theo. Instead of viewing outside firms as adversaries, Theo sees such firms as partners for collaborative networking.

3. Do you think relationships with supply chain partners are as important as relationships with customers? Why or why not?

The relationships are equally important. Building positive relationships with suppliers and distributors is essential to delivering high-quality products. If one of Theo Chocolate’s organic growers fails to produce quality beans or misses shipping dates, production will halt and service to retailers and consumers will suffer. As a result, Theo must maintain close relationships with its supply chain partners.

4. How does Theo use fair trade to create stable relationships with farmers?

According to Theo owner Joe Whinney, fair trade is a transparent negotiating system that allows farmers in cocoa growing regions to get a higher price for their crop. By entering these agreements, Theo pays higher prices for organic cocoa beans in exchange for supplier loyalty.

Chapter Six: Designing Organizations for the International EnvironmentVideo Case Title: Managing in a Global EnvironmentOrganizations Discussed: Holden Outerwear

Video Case Synopsis


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Where can snowboarding enthusiasts find apparel that is fashionable whether the destination is Vancouver’s Cypress Mountain or Switzerland’s Saas-Fee? Style-minded boarders around the globe get their snow duds from Mikey LeBlanc, a snowboard professional who founded Holden Outerwear in 2002. Holden boasts customers in Asia, Europe, and North America, but LeBlanc’s team manages operations from the sports-apparel Mecca of Portland, Oregon. To serve retailers in the United States and Canada, Holden employs an in-house sales team. Overseas marketing, however, is managed through partnerships with outside distributors. Although Holden would prefer to manufacture product lines in the United States, LeBlanc says government regulations and labor costs present large barriers for small businesses. Despite challenges, LeBlanc’s determination to create an internationally recognized brand is opening many doors for the sportswear firm.


1. Which stage of globalization characterizes Holden Outerwear’s international involvement?

The four stages of globalization include the domestic stage, the international stage, the multinational stage, and the global (stateless) stage. Oregon-based Holden lies mostly within the international level of development. Factors that mark the company as presently in the international stage include the firm’s outsourced China manufacturing and significant sales to Japan, Germany, Norway, and Canada. Despite these international activities, Holden is a small sports apparel company that does not own factories or fabric mills. To qualify as a multinational business, Holden would need a very high percentage of sales to occur outside of the United States. In addition, multinational businesses typically own and operate facilities and offices at multiple locations around the world. Holden cannot be characterized as a domestic business or a global business—the domestic stage is characteristic of companies that make and sell goods solely within their home countries, and the global (stateless) stage is characteristic of firms that have ownership, management, and manufacturing dispersed among many nations.

2. How has global expansion influenced Holden’s business and created opportunity?

Although Holden is a U.S. company, rapid change in global markets has shaped the organization’s manufacturing and marketing strategy, leading to global expansion. Low-cost production factors are a primary motivation for Holden’s decision to go global. To keep manufacturing costs low, Holden uses an outsourcing strategy that produces Holden’s outerwear garments in Asia. According to Owner Mikey LeBlanc, outsourcing Holden’s garment production to Chinese manufacturing facilities slashes the cost of products by half, relative to the cost of manufacturing in the United States. Moreover, outsourcing provides Holden with an abundant supply of skilled labor and textile materials. Finally, competition in global markets, combined with new technology, has enabled Holden to sell products across Europe and Asia.



3. What are some challenges of globalization for Holden?

While most management functions are the same whether a company operates domestically or internationally, managers experience greater challenges and risks when working in an international setting. For instance, Mikey LeBlanc explains that to obtain the benefits of China’s low cost manufacturing, Holden’s managers had to coordinate with 12 different shipping companies. The situation required extensive paperwork and resources, and garments pieces often failed to arrive together at the same time, producing long delays. Over time, managers found ways to consolidate overseas shipping into a more manageable and efficient operation. In addition, Holden’s managers face significant challenges in the economic, legal, political, and sociocultural environment of business. When conducting operations internationally, managers can expect to encounter difficulties related to language and cultural barriers, diversity, poor infrastructure, government takeovers, tariffs, and even globalization protests.

Chapter Seven: Manufacturing and Service TechnologiesVideo Case Title: Leading TeamsOrganizations Discussed: Holden Outerwear

Video Case Synopsis

Professional snowboarder Mikey LeBlanc launched Holden Outerwear in 2002 to support his snowboarding passion. Today, LeBlanc’s company produces some of the most interesting performance garments ever to appear on slopes. With their stylish zippers, fit cuts, and leather shoulders, Holden garments have more in common with urban skate wear than with traditional ski suits. For much of Holden’s history, managers worked independently on design projects—an approach that offered ultimate control of the process. However, as the demand for Holden outerwear has grown, LeBlanc has increasingly made use of teams to design and manufacture the company’s high-fashion outerwear. From the procurement of raw materials used in fabrics to the final assembly of complete performance garments, Holden’s design teams oversee the production process to deliver high-fashion snowboard apparel.


1. Is Holden’s organization structure based on service technology or on manufacturing technology? How do these differ?

Holden Outerwear is a designer and maker of high performance outerwear garments for snowboard enthusiasts. As such, Holden’s work process is based on manufacturing technology (large batch and mass production), not service technology. With manufacturing technology, a company transforms inputs into tangible outputs (products) that can be inventoried for later purchase and consumption. The process makes heavy use


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of capital assets and involves materials handling and assembly. Examples of manufacturing companies include steel companies, automakers, and garment makers. In contrast, service technology produces an intangible output that is used immediately and can’t be stored for later consumption. Examples of service companies include consultants, airlines, movie theaters, and hotels.

2. Is Holden’s design department team part of the firm’s core or noncore work processes?

Holden’s design teams are part of the organization’s noncore departments. In manufacturing, core technology deals with the transformation of raw materials into final products. Groups such as R&D and marketing that aid and manage core technology are noncore departments. Even so, noncore groups possess departmental technologies, which can be classified according to their variety and analyzability. The members of Holden’s design department are engaged in activities best characterized as craft technology. Designers and pattern makers at apparel firms are among the few workers today whose activities are characterized as craft technologies.

3. Would the use of mass customization make sense for performance outerwear manufacturers?

In the past, customization of individual products was cost prohibitive for manufacturers. But lean manufacturing and flexible manufacturing have enabled some apparel businesses to begin offering custom patterns. However, mass customization generally requires expensive technology and results in higher prices for consumers. Holden Outerwear does not yet offer customization of its products, but new manufacturing technologies, combined with interactive Internet applications, may enable companies like Holden to offer greater customization for consumers.

Chapter Eight: Using Information Technology for Control and CoordinationVideo Case Title: Managing Quality and PerformanceOrganizations Discussed: Barcelona Restaurant Group

Video Case Synopsis

Barcelona is the restaurant of choice for diners who crave flavorful European tapas, eclectic ambience, and the largest collection of Spanish wines of any restaurant group in the country. To keep customers satisfied night after night, leaders at Barcelona manage quality across a range of operations, from customer service to food presentation. In particular, Barcelona’s owners and general managers track performance using budgets, secret shopper reviews, video monitoring, and other techniques. Controlling is not just a job for leaders, however: chefs and wait staff ensure the delivery of great dishes while paying attention to important intangibles such as music, lighting, atmospherics, and



conversation. These efforts have made all the difference in Barcelona’s success. In an industry littered with mediocrity, Barcelona stands out for aesthetic and culinary excellence.


1. According to Barcelona owner Andy Pforzheimer, why do so many good restaurants go out of business?

Barcelona owner Andy Pforzheimer says that restaurants go out of business because they fail to effectively and accurately measure their own performance. In particular, restaurants fail to define success, and they fail to appraise their own progress in a methodical manner. Pforzheimer also says that restaurant owners demonstrate a lack of self-knowledge that can be remedied only by probing and “wanting to know.” Quantifying service is especially important in the restaurant industry, where customer satisfaction depends on intangibles such as consistent food preparation, wait times, and atmospherics.

2. What is the “balanced scorecard” approach to measuring performance, and in what ways does Barcelona utilize this approach?

In the past, businesses measured and controlled their performance by analyzing sales, revenue, and profit. The balanced scorecard approach expands the bases around which a company’s progress is measured, adding components such as customer service, business process, and learning and growth. These aspects of a business are now quantified and analyzed to measure growth and achievement. Barcelona Restaurant Group measures financial performance using traditional accounting methods. In addition, the company measures customer service performance with the aid of multiple “feedback loops” that gather and assess customer feedback data. Quantifying customer service is especially important in the restaurant industry, where customer satisfaction depends on intangible qualities such as pleasant servers, food preparation, and short wait times.

3. List the four steps of the feedback control model and describe an instance where Barcelona followed this process to improve its performance.

The feedback control model consists of four sequential elements: setting strategic goals, establishing standards of performance, measuring actual performance and comparing it to the standards, and making corrections as needed. Student answers will vary regarding situations where Barcelona followed this process to measure and control business performance. In one scene, owner Andy Pforzheimer takes corrective action to rising food costs by requiring managers to fill out food cost worksheets.

4. How do managers at Barcelona control the company’s financial performance?

In the video, Barcelona uses multiple methods of controlling financial performance. First, leaders hold weekly meetings during which chefs and general managers review


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financials. The meetings get heated at times, such as when owner Andy Pforzheimer interrogates managers for letting food costs rise above 25 percent. Second, Barcelona’s seven restaurants generate monthly financial statements, and managers of these restaurants track financial progress against the financial numbers of the other restaurants. This friendly competition between Barcelona restaurants motivates managers to improve quality while maintaining low overhead costs. Third, to incentivize managers towards growth, Barcelona offers a 12 percent bonus on annual restaurant sales earned above the company’s base operating profit. The bonus money is significant and can be adjusted upward or downward slightly to reflect the scores from restaurant reviewers.

Chapter Nine: Organization Size, Life Cycle, and DeclineVideo Case Title: LeadershipOrganizations Discussed: Camp Bow Wow

Video Case Synopsis

Founded little more than a decade ago by dog-lover Heidi Ganahl, Camp Bow Wow is a safe happy place where people can take their pets when no one is home to care for them. For dog owners who work in the daytime, the Boulder, Colorado-based franchise offers premier doggie day-care services. For pets that need to stay a little longer, Camp Bow Wow has overnight boarding with spacious cabins and comfortable cots. Although a young company, Camp Bow Wow is one of the hottest franchise businesses in the nation, with more than 150 locations across the country—the pet-care service ranked No. 87 on Entrepreneur magazine’s list of fastest-growing franchises in 2010. The transition from a small family business to a national chain, however, has brought big changes to the company’s culture and structure.


1. What major change to Camp Bow Wow’s structure has taken place since the company began as a small family business in 2000?

Camp Bow Wow was founded as a small family business in 2000, but in 2003 owner Heidi Ganahl transformed the company into a national franchise. According to Ganahl, Camp Bow Wow’s small, family-business culture was highly beneficial during the startup phase. The business required a different culture once it became a franchise chain, however. In particular, Ganahl says Camp Bow Wow had to adopt a performance-oriented culture where individuals were required to meet established quality and performance targets. In addition, Ganahl had to standardize and replicate the original business model for easy adoption by franchisees. As she states in the video, one of the biggest challenges for any franchise is to get hundreds of franchisees on the same page and committed to one vision and one way of achieving goals.



2. At which stage of the organizational life cycle is Camp Bow Wow? Explain your reasoning.

Answers will vary. Camp Bow Wow was founded in 2000 and became a franchise business in 2003. Today, the company boasts more than 150 franchise locations across the nation. Having established its core doggie day care business, Camp Bow Wow is now adding new business units including in-home pet care, dog training, and even a pet refuge charity—all under the Camp Bow Wow brand. This level of development is beyond the entrepreneurial stage but somewhere between the collectivity stage and the formalization stage. Ganahl is currently developing coordination and control systems to manage the training of new franchisees and open dozens of new franchise locations. In addition, Ganahl’s strong visionary leadership is starting to give way to delegated leadership among franchisees and department leaders. The company is experiencing increasing formalization and bureaucratic control.

3. How will size affect Camp Bow Wow’s structure as it continues to expand?

As a small startup, Camp Bow Wow was flat, flexible, entrepreneurial, responsive to market changes, and organic. As the company continues to grow, its franchise model will become more mechanistic and complex, taking on a vertical hierarchy and greater departmentalization. Over time, the company will become tied to past products and technologies and experience difficulties innovating for the future. The bureaucratic characteristics that will enable the company to exist efficiently as a large organization will also challenge the capacity for innovation. The video demonstrates the tricky balance Heidi must achieve between her own vision and leadership and that of her franchisees. At times, the vision set by corporate headquarters will need to make concessions to the vision of individual franchisees, to allow for responsiveness to local markets.

Chapter Ten: Organizational Culture and Ethical ValuesVideo Case Title: The Environment and Corporate CultureOrganizations Discussed: Camp Bow Wow

Video Case Synopsis

Founder stories play an important role in business. Andrew Carnegie’s rise from a penniless immigrant to a captain of industry is perhaps the most famous rags-to-riches story in American history. More recently, Heidi Ganahl’s launch of Camp Bow Wow has emerged as an inspirational tale of triumph over tragedy. While in her mid-twenties, Ganahl and her husband were planning to launch a dog-friendly kennel business when her husband died suddenly in a tragic plane crash. Heidi went into a long personal tailspin, but her brother eventually convinced her to launch the business she originally envisioned with her husband. Inspired by family and pets, Ganahl moved ahead with the


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plan, and today Camp Bow Wow is one of the fastest-growing franchise businesses in the nation.


1. What aspects of Camp Bow Wow’s corporate culture are visible and conscious?

Visible aspects of Camp Bow Wow’s culture include the company logo, the presence of dogs in workspaces, the dress code, the camp imagery, and Heidi Ganahl’s life story, which is told and retold during franchisee meetings. Founder Heidi Ganahl says that one of the unique things about working at Camp Bow Wow’s corporate headquarters is that “you get to bring your dog to work with you every day.” Employees keep baby gates at offices to hold dogs, and the company encourages regular dog-walking breaks. According to Heidi Ganahl, having pets at work keeps everyone focused on the company mission and what’s best for the brand.

2. What aspects of Camp Bow Wow’s corporate culture are invisible and unconscious?

Invisible aspects of Camp Bow Wow’s culture include values such as overcoming adversity to achieve success—a core value communicated through Heidi Ganahl’s life story. Another invisible value embraced at Camp Bow Wow is the idea of providing a humanitarian service to dogs and dog lovers. This value has led to the creation of the Bow Wow Buddies Foundation, a non-profit division of Heidi Ganahl’s company that finds homes for unwanted pets, invests in animal disease-prevention research, and promotes humane treatment of animals.

3. Why did Camp Bow Wow have to change its culture when it became a national franchise?

Camp Bow Wow’s family-business approach was useful in the startup phase of Camp Bow Wow’s growth. However, Heidi Ganahl says her company required a different culture once it became a national franchise. For example, Ganahl says the focus had to shift to greater performance, where individuals had to meet and exceed performance goals. In addition, franchising forced Camp Bow Wow to adopt elements of a bureaucratic culture. In particular, Ganahl had to standardize all core elements of the Camp Bow Wow business model and brand. In the video, she states that a big challenge for any franchise chain is to get hundreds of franchisees on the same page and committed to one vision and one way of achieving goals. Ganahl says this requires a strong culture that “doesn't allow for people to color outside of the lines, yet taps into their creativity and innovation.”

4. What impact does Heidi Ganahl’s story have on employees at Camp Bow Wow?

The story of Heidi Ganahl is told and retold at all levels of the Camp Bow Wow organization. Consumers and franchisees who come in contact with Camp Bow Wow learn about the company by hearing the details of her story. Boulder franchisee Sue Ryan



says that Ganahl’s story is inspiring because it deals with perseverance through tough times. Ryan adds that while business owners don’t experience Ganahl’s specific tragedy, they do understand adversity. Finally, the story offers a personal connection between employees and the founder. According to Ganahl, the takeaway from her story is that people inevitably face challenges in life and business, but that our responses to adversity determine whether we will be successful or unsuccessful.

Chapter Eleven: Innovation and ChangeVideo Case Title: Managing Change and InnovationOrganizations Discussed: Holden Outerwear

Video Case Synopsis

While many apparel manufacturers dream of being trendsetters in the fashion industry, Holden Outerwear is the ultimate style innovator. Founded in 2002 by professional snowboarder Mikey LeBlanc, the Oregon-based sports-apparel maker has given traditional baggy outerwear a complete style makeover. Unlike ski-apparel brands that focus on utility at the expense of looking good, Holden believes that technical snowboarding garments can be fashionable. Holden’s snow pants and jackets possess unique features such as leather covered snaps, leather shoulders, real cotton denim twill, and urban-style stitching—materials that look like high fashion statements but are actually high performance outerwear. While the company is famous for using only authentic materials, Holden’s greatest innovation has been the creation of an award-winning eco-friendly fabric, which LeBlanc invented and introduced in 2005.


1. Identify the type of change that Holden’s leaders are managing on a daily basis.

Holden is engaged in managing product change, not culture change, technology change, or strategy and structure change. Product change and innovation is a primary way in which organizations adapt to competition in the market.

2. What resistance is Holden encountering, especially as the company seeks to design and manufacture highly innovative outerwear garments?

According to owner Mikey LeBlanc and designer Nikki Brush, Holden faces resistance from the outside vendors that help Holden deliver innovative products. Since Holden is a small company and does not own its own factories or fabric mills, producing outerwear requires cooperation from outside vendors. In the video, designer Nikki Brush says that being highly innovative means doing things differently, and this requires Holden managers to push on outside vendors in ways that sometimes cause conflict. Owner Mikey LeBlanc states that outside partners often give an “it’s not possible” response to


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Holden’s innovative concepts. Nikki Brush adds that rising costs throughout the industry make vendor cooperation even more uncertain, as outside manufacturers don’t want to risk money or resources on untested products. When partnering with Holden on new innovations, outside vendors may fail to perceive benefits of innovation, or they may focus on costs, or they may have a fear of loss.

3. Do traditional garment manufacturing technologies help or hinder Holden’s quest for product innovation? Explain.

As discussed in the video, Holden’s manufacturing partners tend to resist product innovation. This is because traditional factory processes and standardized textile machines are designed for the mass production of familiar goods. Holden’s designers are constantly suggesting radical changes to garments that could require new technologies to produce. However, without the guarantee of large profits, manufacturers are likely to resist unusual product concepts.

4. How might Holden’s managers overcome resistance to the company’s innovative ideas and deliver permanent change?

Acting as change agents, Holden’s leaders could reduce resistance by offering vendors long-range partnerships, including windfall profits for hot-selling garments produced in a joint venture. A single trendy item that sold mass quantities could incentivize a vendor to adjust its manufacturing process and partner willingly with Holden on an ongoing basis. As a side note, the recent trend towards mass customization in apparel manufacturing may work in Holden’s favor, for it allows manufacturers to earn profits from items produced in smaller quantities. Holden’s managers need to demonstrate to partners that consumer demand is strong for Holden innovations.

Chapter Twelve: Decision-Making ProcessVideo Case Title: Managerial Decision MakingOrganizations Discussed: Plant Fantasies

Video Case Synopsis

Founded in 1987 by Teresa Carleo, Plant Fantasies is the gardener for such well-known New York City properties as the Trump Organization and John Jay College. Carleo’s attention to detail is evident in all of her projects—most notably her company’s rooftop gardens. Each landscape and floral design requires close collaboration between architects, floral designers, and gardeners, and success often boils down to big decisions over little details. While some decisions involve plant colors and types, others involve complex negotiation with people, as when Plant Fantasies uses designs created by outside landscape architects. As founder, Carleo stays highly involved in most day-to-day



business decisions. Even so, she says that allowing workers to participate in the decision-making process boosts quality and employee motivation.


1. Did Plant Fantasies owner Teresa Carleo use the rational approach to decision making to launch Plant Fantasies? Explain.

According to Carleo, the decision to quit her old job and start Plant Fantasies was characterized by whim and emotion. Her process was not consistent with the rational decision making model. She was emotionally upset at her former employer, and she had little experience with horticulture or operating a business. Nevertheless, she made a choice: “I just made the decision, I just went for it,” Carleo states. In the rational model of decision making, the decision maker strives for conditions of certainty, gathers complete information, and evaluates all alternatives to ensure good results.

In real management settings, decision making can never be purely rational due to time constraints, limited knowledge of possible alternatives, bias, and human error. In addition, people and groups encounter decision-related problem areas like groupthink, escalating commitment, and uncertainty. In most decision making situations, people follow the bounded rationality model and end up satisficing—making a satisfactory rather than optimal decision. Satisficing causes managers to select the first acceptable alternative that meets minimal decision criteria, even though better alternatives may exist.

2. List an example of a programmed decision at Plant Fantasies. Identify a nonprogrammed decision at Plant Fantasies.

A programmed decision is a decision that is relatively structured or recurs with some frequency. One programmed decision at Plant Fantasies is the daily process of maintaining healthy plants for clients. For instance, a maintenance manager examines plants at client location, determines if the landscape has a healthy or unhealthy garden condition, and sends a purchase order to Teresa Carleo for new replacement plants. This routine activity is a core function of the Plant Fantasies service. Another example of a programmed decision is discussed when Carleo says she selects tulips for a client that has a long history of ordering and reordering the same plants and colors.

A nonprogrammed decision is a decision that is relatively unstructured and occurs much less often than a programmed decision. This type of decision occurs in situations that are unique, unstructured, unpredictable, or highly consequential. A nonprogrammed decision at Plant Fantasies takes place whenever Teresa Carleo has to collaborate with an outside landscape architect to install a garden. Many complicated and unknown factors arise for Carleo and her staff when working with an outside firm or designer.

3. How might managers at Plant Fantasies evaluate the results of their decision-making process when installing a new garden for a client?


264 ● Video Guide

Answers will vary, but there are many ways managers can gather feedback and monitor the outcomes of gardening decisions. Maintenance teams can observe and track landscaping progress during and after installations. In addition, Teresa Carleo can conduct customer satisfaction surveys over a period of months to ensure that clients remain satisfied with landscaping solutions. Feedback is an important part of the decision making process because feedback provides managers with useful information that can improve the next decision cycle. If an evaluation reveals that a decision failed to meet its objectives, this information will stimulate a new problem analysis and evaluation of alternatives.

4. Why is Teresa Carleo’s reliance on intuitive decision making effective for so many of her business decisions?

Teresa Carleo relies heavily on intuition for decisions at Plant Fantasies. In intuitive decision making, experience and judgment rather than explicit reasoning are used to make decisions. Intuition is not arbitrary or irrational, however, as it is based on years of practice. Clients of Plant Fantasies should expect Teresa Carleo to have excellent intuition for landscaping decisions because she has more than two decades of hands-on experience making decisions for her company and clients.

Chapter Thirteen: Conflict, Power, and PoliticsVideo Case Title: Evolution of Management ThinkingOrganizations Discussed: Barcelona Restaurant Group

Video Case Synopsis

Barcelona Restaurant Group is a collection of seven wine and tapas bars in Connecticut and Georgia. At Barcelona, life is all about authentic Spanish cuisine and exceptional service. According to Bareclona’s owner, cuisine makes up just one-half of the total Barcelona experience—the other half is comprised of intangibles such as atmospherics and good service. To ensure customer satisfaction, leaders at Barcelona conduct weekly meetings to evaluate employee performance across a range of operations, from food costs to customer service. Meetings get heated at times, and conflicts arise when employees fail to meet established goals. Owner Andy Pforzheimer routinely mixes it up with managers and chefs, and the dialogue gets feisty at times. “I can be difficult to work for,” the owner says candidly. “I like managers who talk back. I like people who self start.” Video Case Discussion Questions and Suggested Answers

1. Describe the type of conflict that occurs at Barcelona. What structural factors are the likely causes of this conflict?



Students will note the intergroup conflict on display during the weekly managers meetings. These performance-oriented meetings bring together chefs and managers from multiple Barcelona restaurants. Structural factors at the root of conflicts may include goal incompatibility, differentiation, task interdependence, and limited resources. The most obvious conflict occurs between the owner, Andy Pforzheimer, and his lower-level chefs and managers. Students may cite interdependence among employees as a source of conflict, as the video features a brief dialogue on how the poor performance of one Barcelona employee is reflecting negatively on the entire restaurant crew.

2. Who has authority at Barcelona and why?

In the video, the individuals who possess authority at Barcelona include owner Andy Pforzheimer and COO Scott Lawton. These top executives have the right to influence others by virtue of their positions in the company. General managers at individual restaurants also possess authority, by virtue of their formal positions. Authority is a force for achieving desired outcomes as prescribed by the formal hierarchy and reporting relationships.

3. What forms of personal power do Barcelona’s top leaders possess?

Owner Andy Pforzheimer and COO Scott Lawton wield legitimate power by virtue of their formal organizational positions. They also possess reward power, as they can hire employees and determine compensation. The two leaders have coercive power, since they can discipline and dismiss employees. Finally, as respected veterans of the restaurant industry who inspire subordinates, they possess referent power. 4. How do managers handle conflict and foster collaboration at Barcelona?

At Barcelona, managers’ use of shared goals and direct engagement results in a collaborating win-win approach that is high on assertiveness and cooperation. The organization’s unwavering dedication to customer satisfaction serves as a superordinate goal that unites all employees and helps manage conflict. In addition, the interdepartmental meetings act as an integration device that enhances collaboration between employees at various levels of the company.


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