MBA Guides: Business school first year, first term: The fine art of case analysis
I wrote these six pieces in my first few months at Columbia Business School as a fresh of the boat first year student in New York. While they are all a little dated (it has been 10 years) they provide a nostalgic look back at days when post the sanctioning of your student loan you could sit at peace for a few hours each evening and write a page for your business school student magazine. Away from the din of the traffic, the rush of the finance case due the next morning and the maddening competitiveness of some of your classmates. I wrote under the pen-name Roach.
By the time I wrote this piece I had had it with the dramatic and contrived introductions to Harvard Business School cases. I understood the need for a standard in case analysis and I appreciated the opportunity to analyze a real world situation with real world numbers and real world answers but I hated Senior Gomez looking outside at the snow falling in December. Onwards then, my dear MBA student, to Senior Gomez and the case.
This article was written when white house interns and their ability to get sitting US presidents in trouble were still hot enough topics of discussion in NYC.
This case was prepared as the basis of a class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Senor Gomez looked at the snow falling outside from his desk.
Doesn’t Senor Gomez have anything else to do with his time. What kind of a senior executive these days has the time to look at the snow falling outside his window? (One who is just about to jump out of it?) That is what happens when you give people room with large windows and post card views.
He was deeply troubled by the state of his firm in early 1990. Over the last two years profitability and sales had gone down by 50%. Cash reserves were at an all time low. He had to act fast before his business also became a HBS Case Study. Infact he first found out that he was in trouble when he received a tip from a nameless HBS source that his business was on the list of candidates for this year’s new cases.
1. Obviously if you spend all of your time looking at the snow falling outside, your business is not going to do too well.
2. The early 90’s were snow blizzard season in US and Canada. Which explains why that period is such a favorite of case writers? Apparently a lot of senior executives were looking outside their windows during office hours. This also explains the recession that followed on account of a dramatic reduction in corporate profitability.
What were his options, he asked himself?
1. Forget the business and run away with the remaining cash and intern to Fiji.
2. Commit suicide.
3. Apply to business school as a slightly aged MBA student.
1. The first thing to go in these situations is sanity. You can always tell when they start talking to themselves.
2. Besides claiming insanity, what else can Senor Gomez do? Depends – on the attractiveness of his intern, his health insurance plan and the complex process behind current business school rankings.
3. Option one will probably give him the most bangs for his bucks. With Option two he has to take the contingency of surviving his suicide attempt and its impact on his insurance premiums and his insurability status. Option three is the same as Option two since he will probably be forced to commit suicide after sitting through the case analysis of his firm by his classmates.
Exhibit One – List of meaning-less numbers
- Air fare to Fiji for two.
- Trading price for Fiji Citizenship for two.
- Business School expenses in 1990.
- Terminal value of Senor Gomez business versus current cash reserves.
Ah! But there is pattern in chaos. The cost of business school education has risen faster than air fares to Fiji. This means that the inflation rate has lagged behind B School cost increases. Which means that in 1990 Senor Gomez was in the wrong business. He should have been running a business school, increasing his endowment and earning superior returns on his investments.
(For some dubious reason this is never a viable option in any case)
Exhibit Two – A number of meaning-less pictures
- Picture of intern
- Picture of wife
- Post card showing snow falling outside Senor Gomez’s window
- Picture of sun shining over islands in Fiji
Recommendation of the Group:
After carefully evaluating all the evidence presented in this case that group feels that the most viable option is to exchange Senor Gomez’s business empire for intern and an island in Fiji. The picture of the intern on the beach at Fiji removed any remaining doubts the group had about this strategy.