29 Jun Case Study-Crushing the CrackBerry
Question
Complete a 2-3 page (500-750 Word) essay — the case studies of Crushing the CrackBerry, Chapter 5 pg. 101 and Doing the Right Thing by Making a “Hurd” Decision on itself found in Chapter 6 pg. 122. Case Study Completions are to be posted and submitted no later than Sunday by 11:59 p.m
Instructions: Use the following framework for your case analysis. Your case analysis assignment is designated above and can be found in your textbook.
Step 1: Read the cases thoroughly with a view to understanding the Public Relations issues illustrated by each case. Make sure you discriminate between information which is relevant and that which is superfluous and/or ambiguous.
Step 2: Define clearly and concisely the basic problems (or issues) in the cases. Then identify the main issues. Do not be confused with “symptoms.” Identify the key decisions to be made.
Step 3: Use the information and facts provided in the case to analyze the situation. This would include understanding the situation, an analysis of the environment (if applicable)– for example, are there particular strengths and weaknesses, external opportunities and threats (SWOT analysis), etc. that should be mentioned?
Step 4: Based on your analysis from step 3 above, identify possible alternative strategy solutions to cope with the problem(s)/Issue(s) you have identified in step 2 above. State any assumptions you make, and feel free to make assumptions in order for the strategies to work. Evaluate the pros and cons of each alternative considered. This should form the main focus of your attention in the case analysis.
Step 5: Recommend a course of action (if appropriate), selecting the alternative proposed in step 3 above. Which would you consider most appropriate to solve the problems you have identified in step 2 above taking into consideration the analysis made in step 3? Include some specifics regarding how the recommendations may be implemented by the marketing team. Note: You should edit your recommendations based on the latest web-information that you can access by going to the company’s website.
Your response should be approximately 500-750 words, and should follow the organizational structure listed above (Steps 1-5). Write well. Write clearly. Clearly structure your final report.
Case Study Crushing the CrackBerry It hardly seemed possible. By the summer of 2012, the company that created the legendary BlackBerry—the “crackberry,” the use
of which caused loyal users to become addicted—seemed on a collision course with oblivion. All signs
pointed to Research in Motion—RIM, the company that at the start of the new century invented the
handheld device that spread like wildfire—either being eviscerated for its parts or sold at fire sale prices. As RIM announced yet another quarter of disappointing earnings in July 2012, its reputational fall from
grace was stunning in its slope and severity. RIM’s decline was also testimony to the importance of effective public relations in the growth and
development of a company and its products.
From Dominance to Devastation RIM was founded in Waterloo, Ontario, Canada by Greek Canadian Mike Lazaridis, a computer genius
who at the age of 12 won a prize for reading every science book in his local library. Together with his RIM
co-chief executive Jim Balsille, Lazaridis introduced the revolutionary BlackBerry wireless mobile device
in 1999, and the results were electric. Celebrities from Lady Gaga and Brad Pitt to Nicki Minaj and Kim Kardashian were pictured with their
BlackBerry devices by their side. The rise of “CrackBerry Nation” seemed unstoppable. Until, that is, the
Apple iPhone entered the fray.
Competition from the iPhone and later Verizon’s Droid Razr and many other upstarts caused RIM to lose
its business focus 101102and its public relations edge. By 2011, bad news for RIM turned very bad—and
kept on coming. ? Collapse of the U.S. market. In 2011, BlackBerry’s share of the U.S. smartphone market dropped to
10% from 49% in 2009. ? Unfinished PlayBook Tablet. In April, RIM released the BlackBerry PlayBook to compete against
Apple’s iPad. The half-finished PlayBook was greeted with under-whelming reviews. Why, people
wondered, would the company introduce something that wasn’t complete? RIM was forced to cut the
tablet’s price to $200 from $500, costing the company a $485 million write-down.
? BlackBerry blackout. In October, RIM’s network suffered a well-publicized failure, causing service
interruptions for customers around the world. RIM’s restoration from the “BlackBerry blackout” took a
full week, making it the longest service delay for the device in its 12-year history.
? Sovereign conflicts. As RIM worked to expand globally, it tangled with security regulations around
the world. India threatened to ban BlackBerry service if RIM didn’t comply with government rules. The
country demanded access to communications sent over RIM’s corporate services, and the two sides
continued to debate.
? Disappointing earnings. In September, RIM announced that its quarterly income fell by nearly 60%
from the year earlier. Its gross profit margins dropped, cash evaporated, and inventories more than
doubled because of unwanted PlayBook tablets. In a conference call with analysts, the company’s cochief executives seemed oblivious to the bad news. Balsillie told analysts that one new model was “a
thing of beauty to behold,” sentiments founder Lazaridis echoed. Analysts weren’t convinced. Said one
conference call participant, “We question the company’s long-term viability.”
? Phone delays. In December, RIM announced it would have to delay the introduction of smartphones
running the vaunted, new BlackBerry 10 operating system. The BlackBerry 10, viewed by many as the
company’s “last hope,” wouldn’t be ready until late in 2012. By year-end 2011, BlackBerry had vacated its place as the smartphone of choice for serious
professionals.
Seitel, Fraser P.. The Practice of Public Relations, 12th Edition. Pearson Learning Solutions, 2013.
VitalBook file.
http://online.vitalsource.com/books/9781269986991/id/ch5fig6 Case Study Doing the Right Thing by Making a “Hurd” Decision For decades, the Hewlett-Packard Company—or HP, as it was known—was one of Silicon Valley’s most
respected technology companies. Its founders, Stanford classmates David Packard and William Hewlett,
created their partnership in 1939 and built a worldwide computer colossus. Both Hewlett and Packard, after they retired, became well known as philanthropists, each of them the
epitome of high ethics and propriety. The hugely successful company they developed was built on a platform of innovative competence
complemented by an understated public profile and high moral fiber. All that began to change when in
1999, HP stunned the macho, high-tech world by recruiting an actual woman to be its CEO. Carly Fiorina,
high-profile executive vice president of AT&T, was the surprise selection to take the Hewlett-Packard
reins, becoming one of the most powerful women in business. Fiorina’s tenure was marked by a
contentious merger with rival computer maker Compaq, dissension in the ranks, and a most un-HP-like
parade of personal CEO publicity. Carly mania reigned in the media. Publicity about HP’s woman chief
seemed to be all over the place. In 2005, having had enough fireworks, the Hewlett-Packard board
ushered CEO Fiorina out the door.
Fair-Haired Boy As Fiorina’s replacement, Hewlett-Packard chose Mark Hurd, a no-nonsense, 25-year computer industry
veteran. Unlike his predecessor, Hurd proved himself a solid, low-key leader, well respected by Wall
Street and the media, if not always by the people who worked for him. (He laid off 10% of the HP
workforce shortly after being named CEO.) Hurd generally managed the company skillfully, regaining
much of the credibility it had sacrificed in the Fiorina era.
122 123 Hurd’s one slip was in 2006 when HP was embroiled in an embarrassing crisis that resulted from its
board chair hiring spies to snoop on fellow HP board members, staff members, and journalists who
covered the company. Upshot of the scandal was national publicity exposing the HP practices and the
California Attorney General charging the HP board chair, Patricia Dunn, with four felonies for her role in
the HP investigation into the unauthorized disclosure of company information. Throughout the crisis, CEO Hurd adopted a low profile. Ultimately, when the smoke cleared, he
announced that the board chair had resigned, and he apologized profusely for HP’s violation of the
privacy of directors and company employees. Not only did Hurd escape the board crisis relatively
unscathed, he was named to add to his CEO title as the new HP chair.
“A Close Personal Relationship” For five years, Hurd navigated Hewlett-Packard through steadily better years; the company appeared to
be back on its profitable/ethical track. That’s why it was such a bolt from the blue on Friday, August 6,
2010, when it was announced that CEO Hurd had decided to resign. According to HP’s board, which made the announcement after the market closed, CEO Hurd resigned,
technically, for “fudging on his expenses.” Less technically, but more importantly, Hurd was found to be
having a two-year “close personal relationship” with a female contractor. Part of Hurd’s “relationship”
with the contractor included dinners, often on business trips, for which the CEO charged the company
but failed to report that he dined with his friend, the contractor. And so, because of these “expense irregularities,” the HP board fired the CEO. Not incidentally, the
“contractor” in question happened to be a blonde bombshell, former aspiring B movie actress-turned
seminar leader, featured in such cinematic properties as Intimate Obsession, Blood Dolls, and the
immortal Body of Influence 2.
Biting the Bullet In making its announcement about its well-regarded CEO, HP went to great lengths to acknowledge that
after an extensive investigation, it found that he committed no violations of law but rather violated the
Hewlett-Packard Code of Conduct. So the board had “no recourse” but to ask for and receive Hurd’s
resignation. Hurd, himself, was candid in admitting that he had not always represented the corporation in the
manner in which he should have (Figure 6-9). He said, “I realized there were instances in which I did not
live up to the standards and principles of trust, respect and integrity that I have espoused at HP and
which have guided me throughout my career…. I believe it would be difficult for me to continue as an
effective leader at HP and I believe this is the only decision the board and I could make at this time.” The HP board, also to its credit, acknowledged that getting rid of such a well-respected leader was a
difficult decision. Said its lead independent director, “The board deliberated extensively on this matter. It
recognizes the considerable value that Mark has contributed to HP over the past five years in
establishing us as a leader in the industry…. This departure was not related in any way to the company’s
operational performance or financial condition, both of which remain strong. The board recognizes that
this change in leadership is unexpected news for everyone associated with HP.” HP’s critics were livid at the decision. Which is, of course, what happened immediately after Hurd’s departure from HP: its shares tumbled. But
in short time, investors realized—even if industry analysts didn’t—that a successful company that
actually stands for something is a good investment in the long run. Accordingly, HP shares soon regained
the value they had lost.
Taking the Ethical Road Hewlett-Packard’s critics had a point. The company’s board did have at least two other options, both
employed time and again by organizations facing similar crises. ? One, it could have looked the other way, quietly slapped the CEO on the wrists, and hoped nothing
would be made public.
123 124
? Two, HP could have announced Hurd’s resignation to “pursue personal business opportunities” and
offered no further explanation.
Hewlett-Packard chose neither of these two easier courses. The action it took reinforced that the
company’s Code of Conduct wasn’t just a piece of paper that meant nothing; by contrast, it represented
a mandatory pact to which every employee, regardless of rank, was a subject. In taking strong action
against the highest ranking individual in the company, HP’s board remained true to the ethical
framework established by its founders and demonstrated the three-step template to which all
companies should subscribe in similar management crisis.
While reasonable observers might disagree with aspects of the HP decision and response, they can’t
quibble that the Hewlett-Packard board displayed admirable courage in taking a clearly unpopular action
in order to safeguard the principles upon which the company was built. The board took the high road
and distinguished itself. As to Mark Hurd, he landed on his feet, hired by none other than Larry Ellison as
co-president and board member of Oracle Corporation. Oracle, as it turned out, also had a Corporate
Code of Conduct which, among other things, stated the following:
Our reputation and our success depend upon the personal commitment that each of us makes to
uphold our values and practice ethical behavior in all of our business dealings. All of us, regardless of employment level, position, or geographic location, are expected to make this commitment daily, both
individually and collectively, to uphold the standards of business conduct outlined in this Code.
Which, as it turned out, was exactly what Hewlett-Packard’s Board did in firing Mark Hurd.* Seitel, Fraser P.. The Practice of Public Relations, 12th Edition. Pearson Learning Solutions, 2013.
VitalBook file.
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