Knowledge that Transforms

This case provides a rare insider’s perspective on the situation of a high-tech company (Dealer Trade Group: DTG) attempting to upset the existing institutions, prac-tices, and norms of the traditional auto wholesaling industry. Because DTG’s business model is built upon online marketplace technology, many of its operations are foreign to established industry processes. As DTG potentially stands to revolutionize the vehicle wholesaling industry, the case illustrates challenges facing Carter Crockett as he attempted to balance the divergent interests of investors, employees, and dealers. Key Decision and Major Issues for Discussion With a view toward what is best for Crockett and DTG itself, the case engages issues of: (1) who would be the best leader for a company like DTG and (2) when entrepreneurs should “pass the baton. ” This key decision as it stands in the case is complex because of mixed messages from the board and investors, who may not entirely trust Crockett but show no interest in finding a replacement for him. Todd Greenway, the vice president of sales, complicates matters further. Whereas Greenway and Crockett were initially con-vinced of the crucial need to work together to reconcile their backgrounds, later events indicated that Greenway’s relative importance had grown while Crockett’s had dimin-ished. Confronting Greenway for his disrespectful and manipulative behavior is problem-atic because he is largely responsible for DTG’s sales performance. How to deal with DTG’s board, investors, and Greenway are important issues in the case; discussion around them can constitute arguments for or against Crockett’s possible resignation. The case also shows how a venture with a novel business model entering an estab-lished industry can meet with inertia, ineradicable social practices, networks, and insti-tutions, all of which may frustrate strategies for the venture to achieve its objectives. Thus, from a strategic management perspective, fit between a high-tech business model and a low-tech industry is a second issue for discussion.

Early one morning in August 2001, Carter Crockett groaned as he pulled his rickety Honda Accord into the parking lot at 6:53 a.m. Todd Greenway’s new, oversized bright red truck was already there. Crockett was president of Dealer Trade Group (DTG) and Greenway was vice president of sales. Arriving before anyone else gave Crockett time to get ahead of the daily rush of activity; it used to be the best part of his day. But Greenway had started arriving earlier just so he could say he worked the longest hours. This early bird competition used to be fun but was becoming antagonistic. Greenway had an office next to the main entrance and Crockett had begun to resent the gloating of his unavoidable morning greetings. Despite a series of “bumps in the road,” Crockett, other senior managers, and investors believed that DTG was faring better than many online business-to-business (B2B) ventures. They knew the road would not be smooth. Indeed, it had not been: DTG offered a revolutionary, high-tech way of doing business to dealers who were mostly comfortable with traditional, low-tech automobile wholesaling. Yet sales were growing and DTG was beginning to establish credibility despite its online marketplace business model. Although DTG was still burning more cash than it was making, profitability seemed just a few months away. Crockett, who once worked at Microsoft, felt a growing sense of unease. Friction was rising between him and Greenway, who was an auto industry veteran. It had begun to undermine his authority with employees and his relationships with DTG’s investors and board. Privately, Crockett assumed much of the blame. He wondered if it was possible for him to earn Greenway’s respect and the board’s trust. He knew both were necessary to run DTG effectively. Crockett had headed DTG for 2 years. He knew other entrepreneurs who hamstrung their ventures by refusing to “let go of the wheel” when they should have. Was he taking this venture down a similar road? The original plan called for him to run DTG until they hired an industry veteran. When he suggested the idea of resigning to the board, however, they interpreted his concerns as common venture-growing pains and expressed no interest in finding an expensive CEO. Still, Crockett was uneasy. Would an industry veteran lead DTG more effectively? Was it time to get out?

This case examines technological entrepreneurship and human capital in a remote village in southeast India. Sethu Sethunarayanan, director of the nongovernment organization (NGO) Center for Development of Disadvantaged People (CDDP), uses technology to improve the lives of impoverished people, focusing in particular on the indigenous Irula tribe. The Irulas’ rat catching activities constitute a primary source of income and food. However, the Irulas are often unsuccessful in catching rats and suffer many health problems from mouth–blowing a clay pot filled with smoke. Sethu developed a “better rat trap,” improving success rates and income and eliminating health hazards. In parallel, CDDP established a factory and self–help, micro–credit collectives to enable other villagers to improve their socioeconomic condition. The case chronicles the project's development, including opportunity recognition, and new technology development and implementation. An overview of the skills and experience of Sethu and the CDDP team, and the national, local, and community context is also provided.

The Fraud Investigation Detective Agency presents the problems faced by Ken and Barbara Wilson as they established their new business and, after achieving an initial success, the issues that the Wilsons faced as they attempted to expand the business. This case deals with the importance of creating competitive advantages as a strategy in starting a new venture. The case continues as the owners recognize the effects of their competitive advantages on the successful launch of the company. Finally, the case deals with strategies to expand market share by utilizing these competitive advantages. Financial data from the actual company are included.

ElectroChem, Inc. was a global supplier of fuel cell technology for government and commercial applications. When the founder unexpectedly died in 1992, the firm had not yet achieved profitability and was burdened with a high level of debt. Without any formal technical training or business experience, his wife, Radha Jalan, became president. Her primary challenges included increasing ElectroChem's market share and reputation, technology development, generating sufficient revenues and cash flows, and securing external sources of capital. This case illustrates some of the challenges faced by a woman entrepreneur as well as issues associated with growth in an emerging market for energy source alternatives.

This case presents the story of Homeboy Industries, which was founded by Father Greg Boyle, S.J. to offer employment opportunities to former gang members in East Los Angeles. Homeboy Industries has successfully launched several businesses to hire and train “homies” who otherwise may not have found jobs. Michael Baca, the new operations director, is faced with the decision of whether to pursue expansion of the promising merchandising division. Complicating the decision is the need to balance both the social and business objectives of Homeboy Industries while dealing with the organization's extreme shortage of managerial and financial resources. This depiction of an unusual entrepreneurial environment also illustrates several organizational challenges and philosophical dilemmas that are common among social ventures.