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Studying The Case Study

HOW TO STUDY A CASE

T GOES WITHOUT SAYING THAT THE case method requires students to do most of their studying before class in sharp contrast to the lecture method. If you want to fully understand the arguments and presentations of your fellow-studentsnot to mention making a good presentation of your ownit is a must that you should be prepared. In effect, you must place yourself in the role of the responsible manager, and decide your action plan as called for by the facts of the case. There are several conventions of casewriting that are important to understand. You may accept simple declarationssuch as: ABC Ltd was founded in 1922. Or: The firm had been continually profitable between 1991 and 1995as true in the sense that had you been gathering the information yourself, this is what you would have discovered. A statement like: The salesroom appeared nearly empty at the time of the case-writers visit is another kind of true statement although it allows you to question, by analysing other evidence, whether the period of the case-writers visit was typical of affairs in general. Another substantial class of evidence is that which represents the opinions of the case characterspeople involved in the case situation. The case-writer wants you to know about these opinions since such ideas are often very powerful in explaining what happens later. But you must be careful not to accept such opinions as factsuntil and unless your study of other evidence leads you to accept the opinions as facts. A third kind of evidence often found in cases is financial information such as balance-sheets and operating financial statements. Although you should not be unduly suspicious of these facts, you would do well to remember that these too are facts

RITESH SHARMA

N RECENT TIMES, THERE HAS BEEN A MASsive growth in the demand for management education. This is particularly true of the developing countries, and especially India. Unfortunately, the teaching methodology employed by our management schools is not at par with the quality of education that is desirable. Even today, most lectures that teach management to professionals or students do so without discussing concepts in relation to a particular problem. Problemrelated themes in management educationa.k.a. case studiesare virtually unknown in this country.

ARINDAM BANIK ........................ Professor, International Mgmt Institute

that the case-writer has had to accept on someone elses word. For example, it is known that the profits after tax of a company are influenced by the assumptions underlying the operating statement, particularly the assumptions regarding the rate of depreciation. As you examine these facts, you will have to bear the responsibility for judging for yourself what they mean.

THE CASE STUDY DIAGNOSIS

EAD THE CASE THROUGH ONCE, quickly. The purpose of this is to make yourself familiar with the topic, the cast of characters, the leading actor whose role you will play while analysing the case, and the general nature and quality of evidence with which you must work. You will also have to gather some ideas about the problem that must be solved. This quick reading is like the first visit to a new city during which you quickly identify the major roads, the shopping areas, and the business districts, but leave until the second visitthe details of your own involvement with the city. Read the case thoroughly the second time. This time, at a much slower pace. Take note of the important facts in the prose passages, and study each quantitative exhibit to decide what facts can be identified from it. By the end of the second reading, you should be able to abstract from it a statement of the problem(s) involved, the nature of the decision(s) that the manager needs to make, and most of the major elements, such as the constraints, the opportunities, and the resources, that influence the actions the manager can take.

The case

method requires students to do most of their studying before class in contrast to the lecture method

THE PROBLEM-SOLVING FORMAT

LL MODERN CONCEPTS OF MANAGERIAL PROBLEMsolving have common elements: identifying the problem(s) or the areas for improvement; setting the objective(s) or the goal(s) for achievement; identifying the possible alternative courses of action; predicting the likely outcomes, or the consequences of each course of action using the cause-andeffect and probability methods; and following the course of action, the expected outcome of which most closely matches, or exceeds, the desired outcome. Some specific case-solving conceptssuch as linear programming for the optimal allocation of scarce resources achieve mathematical precision by ignoring many quali-

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BUSINESS TODAY s SEPTEMBER 721, 1997

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tative facts in the situation being analysed. Such a simplistic approach allows these mathematical formulae to come up with the best solution, but only in a context completely isolated from the real world. In contrast to this, many real-world situations are too complex to assert that there is only a single correct solution. The best solutions are those that can be supported by logical arguments.

All the

THE PROBLEM-SOLVING PROCEDURE

s ANALYSE THE PRESENT SITUATION. A good way to start analysing the status of the problem in a case is by asking questions. Some of the typical questions that are usually good starting-points for a number of cases are: What are the primary causes of costs for the company? How intense is the competition that the company is facing? Are the companys customers more interested in the quality of the product or in the price of the product? All the questions that you might ask yourself as you study the case are about cause and effect. As you put the facts togetherand juxtapose them in different waysyou find out what causes are having what effects on the company, and your attention may be directed to a particular relationship referring to some theory that you have been taught. When this happens, you are gaining experience in applying known concepts to new situations. s FORECAST THE FUTURE SITUATION. The future situation contains circumstances over which the individual manager cannot hope to exert much control. Most environmental parameters, for example, are beyond the managers direct control. In this step, you, as the manager, need to forecast what will happen in order to identify the future constraints and opportunities affecting the outcomes of your planned actions. And any environmental parameter you have found to be important in the present situation should feature in your forecast. However, it is also prudent to point out here that this step is less importantand far easierwhen the case deals with short-termless than one yearproblem-solving. In many such instances, it is safe to assume that there will be no change in the environment over the interval between the decision-making and the final implementation of the decision. s SET OBJECTIVES. At this stage of the problemsolving process, it is possible to demonstrate specifically what is meant by setting objectives. An objective is a desired future state of the company, described in terms of the effects that the manager can influence. It is often said that objectives should be stated in such terms that you can measure results to see if the objectives have been accomplished. They should also contain the date for completion. Both these requirements can be fulfilled as per a given format. Setting objectives for short-term problems may be reasonably simple. For example, if the

questions you ask yourself as you study the case are about what causes have what effects on the company

The problem

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can be expressed in terms of the differences between the present situation and the desired situation

problem is one of temporarily increasing the standard rate of production of 5,000 units per day to 6,000 units per day, your objective may be to return to the standard rate of production within five days. In more complex problems involving long-term planning, however, objectives often contain more elements. They may involve changes in the scale of operations, changes in the selling prices and the product lines, increased manpower, and other variables under the control of the manager. s DEFINE PROBLEMS. It may appear strange to defer the defining of the problems in the case to this late stage. However, this deliberate delay is important because the problems can now be defined in ways that ensure that you will come up with effective actions to solve them. The statement of the problem can now be expressed in terms of the differences between the present situation and the desired future situationthe objectivesof the company. s LIST THE POSSIBLE ALTERNATIVE COURSES OF ACTION AND PREDICT THEIR OUTCOMES. It is convenient to discuss the next two steps as if they were one because you will, after considering their probable consequences, discard a great many actions you might have taken immediately. Some cases contain a good deal of information about alternatives as is often true in the real world. For example, a managers objective might be to achieve the maximum return on invested capital. Therefore, your prediction of outcomes in the case would be in the form of comparable ratios of profits to money invested under the two alternatives of, say, using a new machine or continuing with the existing production process. In other instances, the case may not yield adequate information about the possible alternatives and their outcomes. This is particularly true of cases dealing with human relationships. In these instances, it will be up to you, the student, to devise alternatives and predict their outcomes. This is, after all, what the manager in the real world must do when faced with such situations. However, at the point of predicting outcomes, there arises an important issue: uncertainty. And what is important for you to keep in mind is that you must think explicitly about the effects of each alternative course of action. s COMPARE, CHOOSE, AND IMPLEMENT. This final step may almost appear to be trivial once you have stated and ranked the predicted outcomes in the order of their attractiveness in light of the objective. This is especially true of the instances where you have defined a single simple objective such as an increase in the output of the factory by 7 per cent, or an improvement in the return on investment from 9 per cent to 11 per cent. If you are careful to make your predictions about the outcome in exactly these terms, the best course of action to meet your objectives will become obvious. And that, in essence, will have served the purpose of studying the case study. q

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