Don’t forget the history when teaching business cases

Case studies provide a useful and widely accepted learning tool in business education. They offer practical examples of “real-world” situations in which prob­lems are confronted, enabling students to discuss the management decisions or make their own decisions, based on the theories they have learned, to solve the specific problems. These are important teaching aids in giving students insight into business problems and practice, and decision-making experience.

However, one-dimensional case studies alone may not provide sufficient depth or breadth in understanding the reasons for decisions in a workplace. One way, in part, to overcome this problem is to add some historical context to case studies, which provides greater insight into a company’s decision-making and corporate culture.

Limitations of short case studies

There are some major limitations in using case studies for teaching. Case studies are usually subjectively written in isolation, narrow in scope, and limited in analysis. As someone who has written case studies for textbooks, often the subject topic is the main thing in the writer’s mind, rather than telling the full story about the company and situation.

Short case studies only offer a basic story, with incomplete facts about a firm and problem(s) that may confront that firm and its business process. The student must then try to make sense out of the basic “facts” by identifying the relevant principles being taught and unify it into a few manageable, concep­tual variables. The final decision is usually obvious, so the problem is solved.

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An understanding of the context and principles that led to the success or failure in the relevant past is invaluable as a guide to business decision-making in the present. But it is often omitted from case studies. Decision-making is strongly directed toward the future by making better business decisions now. Looking back to them is a luxury.

Therefore, students are treated as if they already know how a company’s management team thinks and makes decisions. Case studies ignore relevant historical dimensions and long-term repercus­sions of previous management decisions. Yet, taking marketing as an example, a knowledgeable marketer who can apply historical context will be able to identify similarities and differences between their present situation and those faced in the past, and can recognise the principles working in today’s market but also what needs to be rethought.

Adding some history

Adding a historical perspective of a company into case studies can help students assess past successes or failures and provide greater insight into a company’s corporate culture and other key influences. This will, in turn, produce a better understanding of decision-making and any restricting factors or vital considerations.

A number of books provide examples of case histories, including several by Robert Hartley (Marketing mistakes and successes) and Richard Tedlow (Management Past and Present: A Casebook on American Business History). Although some of these are quite dated, they provide valuable lessons in looking at major companies such as McDonald’s, Coca Cola, and Ford, showing the relevant company history and allowing the reader to see how it influences the company’s development and decision-making.

There are also journal articles that identify the important role of the founder in a business, including Schein’s “The Role of the Founder in Creating Organizational Culture”, and more recently Iglesias, Ind and Schultz’s paper, “History matters: The role of history in corporate brand strategy”.

To help students understand the workings of decision-making in a company, one task I have used is asking them to include a section of relevant history in their assessment of a company’s marketing decisions. With this simple addition, a number of findings emerged that deepened the understanding of company decision-marking. For example:

• Company A had opportunities to move to prime locations for the business, but the CEO continually refused. It was discovered that the founder of the company, the CEO’s father, had a firm rule – don’t rent; only do business where you can purchase the property as well, because if the business goes bad, you can always sell the property.
• Company B was a retail company that had limited opening hours and was very conservative when it came to advertising messages. While there could have been many possibilities for future strategies, however, the owner was a strict Seventh Day Adventist, and any decision made would have to be in line with his beliefs.

While case studies are an important method for presenting examples of business practice, they can be limited in providing a full picture of why particular decisions are made. In teaching business cases, we should not forget the role of history and individuals in decision-making. The inclusion of a historical context or perspective of the relevant past, the role of the founder, and successes and failures can assist students in understanding a company’s decision-making so that potentially fewer mistakes will be repeated.

David Waller is an associate professor and head of the marketing discipline group within the University of Technology Sydney Business School.

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