Academic journal article Journal of the International Academy for Case Studies

The Hawthorne Organization

Academic journal article Journal of the International Academy for Case Studies

The Hawthorne Organization

Article excerpt

CASE DESCRIPTION

This case can be seen from many different angles - pure strategy, small business management (including financing and cost accounting), family owned businesses, succession planning, international operations, leadership, entrepreneurs hip, or organizational change. The case traces the growth and progress of two entrepreneurial firms from creation to merger and beyond. This case would be most appropriate for undergraduate courses in entrepreneurs hip, small business management, and strategic management, as a written assignment - and graduate courses as a class discussion. The case is designed to be discussed in one to one and one-half hours and should take students no more than three hours of outside preparation.

CASE SYNOPSIS

John Jones has been CEO of The Hawthorne Organization since 1990. During this time the firm has been on a roller coaster ride with plenty of ups and downs. The marketing research industry is savagely competitive and requires huge investments in technology, human resources, and sales and marketing. Unfortunately, The Hawthorne Organization has made a few bad bets along the way, for which it has paid a huge price. While The Hawthorne Organization is respected and considered one of the leaders in the industry, John has not been able to substantially differentiate its brand or products, or increase margins or profits. The numerous strategy and organizational changes have wrecked havoc on Hawthorne employees and operations. Now John Jones must decide what he should do next with his family-owned business.

INTRODUCTION

James Collins founded Hawthorne Research Company in 1939 in a small town along the soon to be constructed commuter train corridor between Princeton, NJ and New York City. This track has become known as "Research Row" because it is home to many of the nation's oldest and most recognized marketing research firms. Today Research Row is to survey research as Detroit is to automobiles, Hollywood is to movies, and Silicon Valley is to high tech. Jim migrated to Research Row after completing his graduate degree from the University of Wisconsin in 1933. This area was to become the research, public opinion polling, and household survey hothouse for advertising and PR industries concentrated in New York City during the pre-war years. Many young and talented social scientists gravitated to this area to take advantage of this new growth industry, which was on the cusp of a massive expansion, and Jim Collins would help shape and mold the growth and composition of the industry.

During the war years (i.e., 1941-1945) Hawthorne Research and the new industry "treaded water" as the United States and all of her institutions concentrated on winning the war against fascism. Once the war was over the US economy began the longest and greatest economic expansion ever. This expansion was driven by insatiable consumer demand for all types of goods - cars, cosmetics, white-goods, furniture, clothing, electronics, etc. The age of mass-production and mass-advertising was underway and businesses needed information on the giddy and expanding new-middle class, who now possessed tremendous disposable income for the first time in nearly 20 years.

Hawthorne Research became one of the most prestigious research houses in the nation. The company's client list included a who's who of consumer-goods companies, advertising firms, and PR organizations. Its work and reputation was considered unassailable. Jim Collins was known as a great social scientist and researcher and his company grew at a healthy, if not spectacular rate, from 1 946 through 1975. Jim Collins was not a great businessman and never tried to maximize the value of his company. Instead, he was thrilled to make a very good living, while working at something he loved. While the firm was well known and well regarded it never made huge profits even though it had the highest project rates and margins in the industry. …

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