978-1259278211 Case 2 Solution Manual Part 2

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Referencing Chapter 9: Strategic Control & Corporate Governance

See the concept of strategic control, especially the roles of informational and behavioral

control in the formulation and implementation of strategies. The contemporary approach

to strategic controls allows managers to adapt to and anticipate changes in both the

internal and external environment. The relationships between strategy formulation,

Informational control is concerned with whether or not the organization is “doing the

right things”, while behavioral control is concerned with whether or not the organization

Boehm needs to make sure enough information of the right kind is available to monitor

activities – this is where things such as financial, quality control, and customer feedback

Referencing Chapter 10: Creating Effective Organizational Designs

See the concept of organizational structure, referring to the formalized patterns of

interactions that link a firm’s tasks, technologies, and people. Structures help to ensure

that resources are used effectively in accomplishing an organization’s mission. Structure

As a small firm, Boehm appears to be best suited for a functional structure, an

organizational form in which the major functions of the firm, such as production,

●Enhanced coordination and control

●Centralized decision making

The disadvantages include:

●Impeded communication and coordination due to differences in values and

●May lead to short-term thinking (functions vs. organization as a whole)

When an organization is small (15 employees or less), it is not necessary to have a variety

of formal arrangements and groupings of activities. However, as firms grow, excessive

demands may be placed on the owner-manager in order to obtain and process all of the

Referencing Chapter 11: Strategic Leadership: Excellence, Ethics & Change

See the concept of leadership, the process of transforming organizations from what they

are to what the leader would have them become. Leadership is proactive, goal oriented,

This involves:

●Setting a direction

Through Edward Boehm’s vision and the example he set for his firm, it seems likely he

Boehm might have also gone further to create a learning organization, one able to

continue his ideas and ideals by encouraging all employees to use their intelligence and

apply their imagination. Learning organizations are organizations that create a proactive,

Boehm himself certainly characterized the learning leader by his willingness to challenge

Referencing Chapter 12: Fostering Corporate Entrepreneurship

See the concept of innovation, the ability to use new knowledge to transform

organizational processes or create commercially viable products and services using the

latest technology, experimentation, creative insights, and information from competitors.

Before proceeding, firms must first define the scope of the innovation efforts and must

A strategic envelope defines the range of acceptable projects. Strategic envelope means a

firm-specific view of innovation that defines how a firm can create new knowledge and

learn from an innovation initiative even if the project fails. The strategic envelope also

In defining the innovation scope, a firm should answer several questions:

●How much will the innovation initiative cost?

●How likely is it to actually become commercially viable?

●How much value will it add; that is, what will it be worth if it works?

●What will be learned if it does not pan out?

Edward Boehm seemed to have been an innovator all his life. Now that the firm’s

Completing the Strategic Management Process – suggested sequence of actions

Remember, the basic question strategic management tries to answer is: How can we

create competitive advantages in the marketplace that are not only unique and valuable

but also difficult for competitors to copy or substitute? As explained above, during

strategic analysis, the leader does “advance work” to anticipate unforeseen environmental

It’s important for the organization’s leadership to consider all the factors that go into

strategic management and to decide the sequence of strategic actions in order to conserve

resources and gain focus. Here are some suggestions for how the Boehms should

proceed:

●First, gather market information;

●Second, continue to build the reputation of this unique company;

The choices discussed above have implications for strategic decision making. Regarding

personal goals and values: the Boehms valued high-quality art, supporting wildlife

causes, being recognized and honored for their art, and becoming very wealthy. Profit

Regarding functional policies, distribution of product should be limited to high quality

locations. Media outlets should be selected carefully, and strict pricing rules should be set

WHAT HAPPENED:

The Boehms were faced with some decisions about how to proceed. Here’s what

happened (this is not part of the case in the textbook, so should be shared with the class –

see the final PowerPoint slides):

Mr. Boehm died shortly after the date of the case, in 1969. Fortunately, an extremely

talented younger artist had been working with him for some time. This man had begun to

share some of Mr. Boehm’s own personal values concerning wildlife art and had

developed substantial skills in the design of porcelain art objects. Mrs. Boehm, however,

To establish the name of the company on a permanent basis, Mrs. Boehm called it “The

Studio of Edward Marshall Boehm,” just as there was a Studio of Rubens, etc. in the past.

She then got Richard Nixon, who was then President of the United States, to let the

Mrs. Boehm in earlier years had promoted sales of Boehm products to major museums.

She had arranged a gift of Boehm porcelain from President Eisenhower to Prince Phillip

and from President Eisenhower to Prime Minister Diefenbaker of Canada. She was also

very talented in placing articles in major art and “living” magazines about the Boehm

When the name Boehm was sufficiently established, she cut the distribution of Boehm

products to approximately 50 retail outlets. These were very carefully selected to be the

premier department stores in their areas. In addition, the company very carefully

controlled the way in which the product was displayed, and sales clerks were trained,

The Boehm’s did not want to lose control over their product or concept. Consequently,

with some minor exceptions, they financed the operation internally. As the company’s

In its technological strategy, Boehm tried to avoid disclosing its process or formulas for

porcelain through patent publications. It tended to practice its porcelain art quietly to

avoid competitive incursions. As the Boehm birds became more successful, the company

diversified its product line into other art objects, such as flowers, special art displays

CASE UPDATE:

Although Helen Boehm died in 2010 at the age of 89, the company’s products still appear

to be highly collectible. See http://www.nytimes.com/2010/11/20/business/20boehm.html

According to a news report, Helen sold the business in 2003 to Texas-based Home

Interiors & Gifts. In 2008, the business was acquired by Applejack Art Partners an art

Sharon Lee Parker’s husband George is now the hands-on manager. When it was

acquired, Boehm had almost shut down, with all assets possibly being sold to a China

porcelain factory (almost all fine porcelain is now made in China). According to George

Unfortunately, in 2014 the business closed “temporarily” due to business being “slow,”

and because of Parker’s poor health. The current landlord says he is trying to sell the