Case | HBS Case Collection | 2006 (Revised from original 2004 version)

Managing Diversity at Spencer Owens & Co.

by Robin J. Ely and Ingrid Vargas

Abstract

Spencer Owens & Co, a disguised consulting firm, focuses on domestic and international economic development. As an extension of the firm's commitment to social justice, 20 years ago, Spencer Owens management introduced an affirmative action hiring and promotion program. Within 10 years, the firm had achieved the most diverse support and professional staff in the industry. Yet, despite management's good intentions, Spencer Owens--and, increasingly, its work--suffered from acrimonious staff relations and frequent recriminations around racial issues. The protagonist of the case tries to diagnose the problem.

Keywords: Diversity Characteristics; Development Economics; Cross-Cultural and Cross-Border Issues; Employees; Selection and Staffing; Working Conditions; Corporate Social Responsibility and Impact; Consulting Industry;

Format: Print

5 pages

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Citation:

Ely, Robin J., and Ingrid Vargas. "Managing Diversity at Spencer Owens & Co." Harvard Business School Case 405-048, April 2006. (Revised from original December 2004 version.)

On July 17, 2009, Zappos.com, a privately-held online retailer of shoes, clothing, and other soft-line retail categories, learned that Amazon.com, a $19 billion multinational online retailer, had won its Board of Directors' approval to offer to merge the two companies. Amazon had been courting Zappos since 2005, hoping a merger would enable Amazon to expand and strengthen its market share in soft-line retail categories. While Amazon's interest intrigued Zappos' senior executives, they had not felt the time was right—until now. Amazon's offer—10 million shares of stock (valued at $807 million), $40 million in cash, restricted stock units for Zappos' employees, and a promise that Zappos could operate as an independent subsidiary—was on the table. Zappos' financial advisor, Morgan Stanley, estimated the future equity value of an IPO to be between $650 million and $905 million; this estimate skewed the Amazon offer—at least in financial terms—toward the high end of Zappos' estimated market value. Hsieh and Lin, Zappos' CEO and COO, respectively, knew that much of Zappos' growth, and hence its value, had been due to the company's strong culture and obsessive emphasis on customer service. In 2009, they were focusing on the three C's—clothing, customer service, and company culture—the keys to the company's continued growth. Hsieh and Lin had only a few days to consider whether to recommend the merger to Zappos' board at their July 21 meeting.

In a rather flat international business environment characterized by shrinking markets and economic turmoil, Turkey promoted itself as one of the safe havens for investments. Led by the strong domestic demand of a young population, the country had tripled its GDP between 2002 and 2011, and had kept growing by 8.6% in 2011. Thanks to its central location "between the East and the West" and its access to 1.5 billion customers in its region, as well as to its "healthy" state of public finances and reduced government debt, Turkey had by 2012 become the 13th most attractive investment country in the world. As a result, many foreign companies considered setting up shop in Turkey, weighing whether the opportunities would outweigh the difficulties that doing business in emerging markets sometimes brought with it, such as a an unpredictable regulatory and tax environment or the presence of a large informal sector. London-based beverages firm Diageo had been facing that same debate in February 2011 when it had to decide whether or not to buy Turkey's leading spirits producer and distributor Mey Icki. The deal would establish Diageo as a leading industry player, but it also bore risks. The case describes Turkey's economy, history, political context, and its business culture, and discusses some of the key opportunities and challenges for foreign players in the Turkish market.

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