Copyright © 2003 University of Michigan Chapter 13 Spain: The Case for Management The largest furniture company in Spain is located in Barcelona. Delgado Mobiliario, a manufacturer of beautiful, fine furniture, has factories and furniture outlets throughout the country and also in Europe. It has been in business since the middle of the twentieth century, when Carlos Delgado opened a small store selling chairs and tables made of wood products. Under the leadership of Carlos, the company’s annual sales rose to $500 million. Carlos, who was president of Delgado for nearly 50 years, led the expansion of the company from 1 factory to 5, and from 1 store to 18. He was known for his discipline and focus on business goals. After his death in 2000, his son Juan Carlos became president, but he has had trouble following in the footsteps of his legendary father even though he has adopted the same management techniques his father used: strict control. Seen as a cost-conscious, demanding manager, Juan Carlos is not in a good mood these days. For the past year, Delgado Mobiliario has been in a slump. Earnings are down, sales are sluggish, and productivity has decreased in the factories. Juan Carlos has been advised to divest the company of some of its weaker units and to close several of the furniture stores. While the company locations in northern Spain and the European Union are continuing to show some growth in sales and productivity, the stores in southern Spain are not doing well. Juan Carlos is particularly concerned about the drop in productivity. He has met with upper management to discuss the problems that seem to be increasing daily: employees who come to work late, leave early, or don’t show up at all; low morale among the workers; and sloppy work habits that affect the quality of the final product. His concern has increased since he learned that the workers in a large Delgado factory in Seville have been organizing to form a union. After graduating from the University of Barcelona with a major in business, Juan Carlos received an MBA from Harvard, and in the past few years, he has applied various management theories to his company with only limited success. He was somewhat impressed with Ken Blanchard’s The One-Minute Manager and also liked Jim Collins’s Built to Last, but when he experimented with these specific techniques at Delgado Mobiliario, none of them made much of a difference, as far as he could see. So he has continued with his father’s traditional method of management, which involves close oversight of all executives, bureaucratic procedures, and a complicated process for decision-making. However, Juan Carlos has earned a reputation for too much attention to detail and over exacting standards. These management methods have resulted in criticism from employees, who compare him unfavorably to his father. Until this past year, Juan Carlos brushed off the criticism since the company continued to grow and thrive. Now,.

1. Copyright © 2003 University of Michigan
Chapter 13
Spain: The Case for Management
The largest furniture company in Spain is located in Barcelona.
Delgado Mobiliario, a
manufacturer of beautiful, fine furniture, has factories and
furniture outlets throughout
the country and also in Europe. It has been in business since
the middle of the twentieth
century, when Carlos Delgado opened a small store selling
chairs and tables made of
wood products. Under the leadership of Carlos, the company’s
annual sales rose to $500
million. Carlos, who was president of Delgado for nearly 50
years, led the expansion of
the company from 1 factory to 5, and from 1 store to 18. He
was known for his discipline
and focus on business goals. After his death in 2000, his son
Juan Carlos became
president, but he has had trouble following in the footsteps of
his legendary father even
though he has adopted the same management techniques his
father used: strict control.
Seen as a cost-conscious, demanding manager, Juan Carlos is
not in a good mood these
days.
For the past year, Delgado Mobiliario has been in a slump.
Earnings are down, sales are

2. sluggish, and productivity has decreased in the factories. Juan
Carlos has been advised to
divest the company of some of its weaker units and to close
several of the furniture
stores. While the company locations in northern Spain and the
European Union are
continuing to show some growth in sales and productivity, the
stores in southern Spain
are not doing well. Juan Carlos is particularly concerned about
the drop in productivity.
He has met with upper management to discuss the problems that
seem to be increasing
daily: employees who come to work late, leave early, or don’t
show up at all; low morale
among the workers; and sloppy work habits that affect the
quality of the final product.
His concern has increased since he learned that the workers in a
large Delgado factory in
Seville have been organizing to form a union.
After graduating from the University of Barcelona with a major
in business, Juan Carlos
received an MBA from Harvard, and in the past few years, he
has applied various
management theories to his company with only limited success.
He was somewhat
impressed with Ken Blanchard’s The One-Minute Manager and
also liked Jim Collins’s
Built to Last, but when he experimented with these specific
techniques at Delgado
Mobiliario, none of them made much of a difference, as far as
he could see. So he has
continued with his father’s traditional method of management,
which involves close
oversight of all executives, bureaucratic procedures, and a
complicated process for

3. decision-making.
However, Juan Carlos has earned a reputation for too much
attention to detail and over
exacting standards. These management methods have resulted
in criticism from
employees, who compare him unfavorably to his father. Until
this past year, Juan Carlos
brushed off the criticism since the company continued to grow
and thrive. Now, given
the worsening financial situation, Juan Carlos is looking for a
different management
style, something that will bring him closer to his employees and
lead the company back
to its former excellence.
Selected Readings in Business (Shulman) Case
Study: Chapter 13, p.1
Copyright © 2003 University of Michigan
Last week, Juan Carlos finished reading Maverick by Ricardo
Semler, the owner of
Semco, an innovative Brazilian company. Semler is a firm
believer in a flexible
management style, or what has been called “management
without control.” Semler
advises top executives to eliminate hierarchy and bureaucracy
and to relinquish their tight
control because this encourages employees to act in their best
interests and in the best
interests of their organizations. After thinking about the ideas
in Maverick, Juan Carlos
decided that Semler might have the answer to his company’s

4. problems and that he should
implement several of Semler’s techniques. While somewhat
radical, these methods had
resulted in tremendous growth, development, and creativity at
Semco, which Juan Carlos
wanted to replicate at Delgado.
“If Semco employees can be this productive, so can our people.
I intend to use Ricardo
Semler’s organization as a model for us,” Juan Carlos told his
upper management when
he met with them to announce his plans to remake the company.
The next week Juan Carlos sent a memo to all employees of
Delgado Mobiliario,
explaining that the company was being reorganized and new
policies would go into effect
immediately. These changes included fewer levels of
management; employee input into
decision making; flexible work hours; no assigned offices or
desks; and no dress codes.
Not only employees in sales and marketing but also factory
workers would be affected by
these policies.
Reaction from employees was mixed, with some welcoming the
major changes and
others expressing doubt that the company would function well
without its previous
policies and guidelines. But Juan Carlos asked for cooperation
in this attempt to establish
more openness and flexibility at Delgado. He stressed that he
had faith in all the
members of Delgado Mobiliario and that he expected to see
wide-ranging improvements
as a result of his new management approach. “I appreciate your

5. dedication to this
company and your willingness to adapt to these changes in
policy and procedure, which
are for the betterment of the organization,” he told the
employees at a general meeting
held at the Barcelona headquarters.
After six months of his revised management style, Juan Carlos
was in despair, and the
company was in a state of chaos. Delgado Mobiliario had
continued on its downward
trend, to the point that sales in the last two quarters were the
lowest they had been in 10
years, and production at the factories had also markedly
decreased, along with employee
morale. Quarterly earnings were down by 2.7 percent, and
many longtime employees
had quit. Juan Carlos was considering resigning. How naive he
had been to think that
“management without control” would work at Delgado. His lack
of vision and his
inconsistent management had almost destroyed the great
company his father had built,
and if he could undo his mistakes, he would in a minute. But it
might be too late. His
Harvard MBA had not prepared him for this situation.
Selected Readings in Business (Shulman) Case
Study: Chapter 13, p.2
Copyright © 2003 University of Michigan
Discussion

6. 1. What type of manager was Carlos Delgado, the founder of
Delgado Mobiliario?
2. What management techniques does Ricardo Semler
recommend in Maverick?
3. What led Juan Carlos to reorganize Delgado Mobiliario so
radically?
4. How did the new policies and procedures affect Delgado
Mobiliario?
5. What kind of manager is Juan Carlos?
6. What alternatives does Juan Carlos have as the company
president?
7. What would you do if you were Juan Carlos?
Case Study Report
I. Statement of the problem
A. Definition
B. Analysis
II. Suggestions of possible solutions
A.
B.
C.
D.
III. Evaluation of possible solutions

7. A. Advantages
B. Disadvantages
IV. Selection of a solution
A. Choice
B. Justification
Selected Readings in Business (Shulman) Case
Study: Chapter 13, p.3
INTERNATIONAL AIRLINES 1
CASE STUDY ANALYSIS:
International Airlines

8. Prepared by [NAME REMOVED]
Access Temple 2 ESP Business Student
Report Distributed [DATE]
Statement of the Problem
In this case, International Airlines is facing danger of being
acquired by one corporate raider, Roland Crane, who is known
as ruthless and not focused on the long-term goal to manage
company. IA once was a successful company. But now, its price
of stock has reduced from $28 to $14 within a year; in addition,
it hasn’t recovered from stock market crisis in 2001.To avoid
hostile takeover from succeed, the senior executives of IA have
different plans and cannot make an unanimity.
Suggestion of Possible
Solution
s
George Harris, the CEO of IA, plans to push the Employee
Stock Ownership Plan (ESOP). This plan is to borrow from
bank and buy the company’s stocks, and then give it to
employees as incentives. Once the employees hold more than 50
percent of shares of stocks, Crane cannot takeover.
Patrick Fitzgerald (COO) has negotiates with Worldwide
Airlines about a merger with them and combining into one big

9. company which would make it financially unfeasible for Crane
to takeover the company. The problem is that the executives in
both companies cannot reach an agreement on either the
restructuring of the new organization or the company's long-
term objectives.
Paula Bergman (President of IA) wants to do a management
buyout and keep AI as a privately company. In this plan, the
company’s existing managers acquire the majority part of this
company from private shareholders. However, she needs to
solve the financial problem.
Evaluation of Possible