Harvard Case - Control Data Corporation and the Urban Crisis
"Control Data Corporation and the Urban Crisis" Harvard business case study is written by Tom Nicholas. It deals with the challenges in the field of Social Enterprise. The case study is 31 page(s) long and it was first published on : Nov 15, 2007
At Fern Fort University, we recommend that Control Data Corporation (CDC) adopt a social entrepreneurship approach to address the urban crisis, focusing on shared value creation and impact investing through a hybrid organization structure. This strategy will leverage CDC's technological expertise and resources to create sustainable solutions for urban challenges while generating positive financial returns for the company.
2. Background
The case study focuses on Control Data Corporation (CDC), a leading technology company facing declining revenues and a changing market landscape in the 1970s. The company is exploring ways to diversify its business and create new growth opportunities. The urban crisis, characterized by poverty, crime, unemployment, and inadequate infrastructure, presents a significant societal challenge and a potential area for CDC to contribute.
The main protagonists are:
- William C. Norris, CDC's CEO, who is seeking innovative ways to address the urban crisis and create new business opportunities.
- The CDC team, who are tasked with developing a strategy to address the urban crisis and explore potential solutions.
3. Analysis of the Case Study
This case study presents a complex situation where CDC needs to balance its corporate objectives with social responsibility. To analyze the situation, we can utilize the following frameworks:
Strategic Framework:
- Porter's Five Forces: The case highlights the competitive pressures CDC faces in the technology sector, including the emergence of new competitors and declining market share.
- SWOT Analysis: CDC possesses significant strengths in technology and resources, but faces weaknesses in its declining market share and lack of experience in urban development. Opportunities lie in the growing need for urban solutions and the potential for social impact. Threats include competition from established players in the urban development sector and potential regulatory challenges.
- Corporate Social Responsibility (CSR) Framework: This framework emphasizes the importance of integrating social and environmental considerations into business decisions. CDC can leverage its resources to create positive social impact while achieving financial sustainability.
Financial Framework:
- Impact Investing: CDC can explore impact investing opportunities in urban development projects that generate both social and financial returns.
- Triple Bottom Line: CDC can adopt a triple bottom line approach to measure its performance based on social, environmental, and financial metrics.
Social Entrepreneurship Framework:
- Hybrid Organizations: CDC can create a hybrid organization that combines for-profit and non-profit elements to address the urban crisis. This structure allows for leveraging both market-based solutions and philanthropic resources.
- Social Innovation: CDC can foster social innovation by developing new technologies and business models to address urban challenges.
4. Recommendations
CDC should adopt a multi-pronged approach to address the urban crisis:
1. Establish a dedicated Urban Solutions Division: This division will focus on developing and implementing innovative solutions for urban challenges. It will be structured as a hybrid organization, combining for-profit and non-profit elements to leverage both market-based solutions and philanthropic resources.
2. Develop a portfolio of impact investments: CDC should invest in urban development projects that generate both social and financial returns. These investments should focus on areas such as affordable housing, sustainable transportation, renewable energy, and job creation.
3. Partner with NGOs and government agencies: CDC should collaborate with non-governmental organizations (NGOs) and government agencies to leverage their expertise and networks in urban development. These partnerships will enable CDC to access local knowledge and build trust within communities.
4. Foster social innovation: CDC should invest in research and development to create new technologies and business models that address urban challenges. This could include developing smart city solutions, promoting sustainable urban agriculture, or creating new job training programs.
5. Implement a robust social impact measurement framework: CDC should track the social and environmental impact of its urban solutions initiatives. This will enable the company to demonstrate its commitment to creating positive change and to continuously improve its programs.
6. Build a strong corporate social responsibility strategy: CDC should integrate social and environmental considerations into its overall business strategy. This includes ethical sourcing, responsible manufacturing, and promoting diversity and inclusion within its workforce.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: CDC's core competencies in technology and innovation align well with the need for innovative solutions to urban challenges. The proposed approach is consistent with CDC's mission to leverage technology for the betterment of society.
- External Customers and Internal Clients: The recommendations address the needs of both external customers (residents of urban areas) and internal clients (CDC employees). By creating sustainable solutions for urban challenges, CDC can improve the lives of its customers and create new opportunities for its employees.
- Competitors: CDC's competitors are primarily other technology companies and traditional urban development firms. By focusing on social impact and leveraging its technology expertise, CDC can differentiate itself from its competitors and create a competitive advantage.
- Attractiveness ' Quantitative Measures: The proposed approach offers significant potential for both social and financial returns. Impact investments can generate positive financial returns while contributing to urban development. The hybrid organization structure allows CDC to leverage both market-based solutions and philanthropic resources, maximizing its impact.
6. Conclusion
Control Data Corporation has a unique opportunity to address the urban crisis by leveraging its technological expertise and resources. By adopting a social entrepreneurship approach, focusing on shared value creation and impact investing, CDC can create sustainable solutions for urban challenges while generating positive financial returns. This strategy will position CDC as a leader in the emerging field of urban development and contribute to a more equitable and sustainable future.
7. Discussion
Alternative approaches to addressing the urban crisis include:
- Philanthropic Foundation: CDC could establish a philanthropic foundation dedicated to urban development. This approach would focus solely on social impact and would not generate financial returns for the company.
- Traditional Business Model: CDC could continue to operate as a traditional technology company and focus solely on its core business. This approach would not directly address the urban crisis but would allow CDC to focus on its existing strengths.
The proposed approach carries risks, including:
- Financial Risk: Impact investments may not generate the same level of financial returns as traditional investments.
- Operational Risk: Managing a hybrid organization and implementing social impact initiatives requires specialized expertise and resources.
- Reputational Risk: CDC's reputation could be damaged if its urban solutions initiatives are not successful or if the company is perceived as being opportunistic.
8. Next Steps
To implement the recommendations, CDC should take the following steps:
- Phase 1 (Year 1): Establish the Urban Solutions Division, develop a social impact measurement framework, and identify potential impact investment opportunities.
- Phase 2 (Year 2): Launch the first impact investment projects, partner with NGOs and government agencies, and develop new technologies and business models for urban development.
- Phase 3 (Year 3): Expand the portfolio of impact investments, build a strong corporate social responsibility strategy, and evaluate the impact of the Urban Solutions Division.
By taking these steps, CDC can leverage its resources and expertise to address the urban crisis and create a more sustainable and equitable future for all.
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Case Description
Control Data Corporation is considering its response to the assassination of renowned civil rights activist Martin Luther King. Four months prior, William Norris, president of the Minneapolis-based computer firm had already committed to building a plant in a low-income area of Minneapolis, but with pressure rising on businesses to respond to inner-city needs and increase minority hiring, Norris urges the company to consider building yet another inner-city plant, this time in Washington, D.C.
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