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Instructions

Thread: Choose only one of the two provided business cases from the module textbook Learn items. At the end of each problem-solving case, you will be required to attest that you read the case which will be worth zero points. Once completed, you will respond in the proper discussion to the case using the problem-solving framework. Each thread must be 500–750 words.

The following 4 sources must be included in your thread:

• The textbook, • The chosen case study,• At least 1 peer-reviewed journal article,• 1 passage of Scripture

All sources must be used in current APA format, the aforementioned is a minimum list.

Replies: Provide 2 thoughtful replies to the threads of classmates. Each reply must include an analysis of your classmates’ threads, based on any experience from your own professional career (if applicable) that might be relevant. All replies must be 200–250 words. Also, be sure to integrate the required reading in a logical and relevant manner.

You must cite:

• The textbook,• 1 passage of Scripture, and• 1 peer-reviewed journal article

Problem-SolvingProblem-Solving
Application—HBO + TNTApplication—HBO + TNT
+ TBS + CNN + ETC =+ TBS + CNN + ETC =
New AT&TNew AT&T

The merger of communications titans AT&T and Time Warner appears to be off to a promising
start, following regulatory approval and a series of leadership changes initiated by AT&T
executive John Stankey. However, the difficult work of integrating the processes, employees,
and brands that make up Time Warner lies ahead. This activity is important because it is
critical not to underestimate the size of this task and the planning and work necessary to
execute a merger or acquisition of this magnitude.

The goal of this activity is for you to consider the various challenges faced by AT&T to
successfully integrate Time Warner and create a new company that maximizes its strategic
and organizational potential.

Read about the AT&T/Time Warner merger. Then, using the three-step problem-solving
approach, answer the questions that follow.

There are more than 26 characters in the alphabet soup created in the merger between AT&T
and Time Warner, given the latter included HBO, TNT, TBS, CNN, Warner Bros. movie studio,
and other assets. AT&T finally prevailed in its efforts to acquire Time Warner for over $85
billion, which required it to win a suit filed by the Justice Department seeking to block the
merger. AT&T argued that such a marriage would not be anti-competitive and limit choice for
consumers, but by combining the companies it was necessary to be competitive in a radically
different landscape that blurs the previous lines between content and distribution. This
merger says a lot about AT&T’s strategy for dealing with these challenges and how it plans to
grow in the future.

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History and Additional Motives for the MarriageHistory and Additional Motives for the Marriage
Telecom companies have historically offered cable, telephone, and mobile services, however
now, AT&T not only needs to compete with Verizon and T-Mobile/Sprint, but also the likes of
Netflix, Hulu, Amazon, Google, Facebook, and Apple, many of whom create content and
provide distribution. The future is now, and it requires telecom companies to combat the
millions of people who have cut the cable cord while at the same time attracting the millions
that sign up for streaming services.

Some experts claim these changes are essential to the survival of a company like AT&T, and
as a result the company is expected to be more attractive to investors and consumers.
Moreover, if AT&T’s larger portfolio attracts more eyeballs it will also attract more advertisers
and boost revenues and profits further still.

What Is Required to Realize the Value?What Is Required to Realize the Value?
The merger expands the products and customer bases of all of the brands involved in the
merger, but this complexity also requires masterful change leadership. Many of these assets,
notably HBO, have long and very successful histories. The challenge will be minimizing
conflict and fostering collaboration and cohesiveness among employees (nearly 270,000 in
the combined company), processes (decision making, HR, technology, and communication),
and products (streaming, content, technology, mobile, and cable). This therefore represents
an enormous leadership challenge.

Leading the Change EffortsLeading the Change Efforts
John Stankey, an AT&T executive who was immediately put in charge of Warner Media, put it
simply: “If you don’t make a change, you’re not going to get any change in the product.” In this
spirit he quickly made a number of senior leadership moves. He brought in Robert Greenblatt
who had a long successful career at NBC and Showtime, and effectively offered him his
dream opportunity, as he will now oversee HBO, considered the crown jewel of the
acquisition, along with Warner’s planned streaming service. Also joining the team is Jeff
Zucker (formerly chief at CNN) who will not only oversee larger business than he did at his
previous job, but he also leads a portfolio AT&T sees as especially important to its strategy
and future. However, the shakeup also includes departures, such as Richard Plepler who
worked at HBO for more than two decades and has been its chief executive and face of the
company for the past several years, and David Levy the president of Turner Broadcasting.
Neither was fired but both left presumably because there were clear signals their roles would
be much smaller in the new company, which would mean their previous considerable
autonomy and influence would be diminished.

Potential ObstaclesPotential Obstacles
With regulators seemingly out of the way, the new and existing leadership has many things to
tend to. For instance, Mr. Stankey’s leadership style has been questioned. Critics say he is
quite opaque in communicating his thoughts and plans, which has been quite frustrating to
many employees. And given the enormity of the task, the skills of many leaders will be put to
the test. Among the many challenges will be to reduce conflict, foster collaboration, and
integrate cultures. Competitors certainly won’t relent and are likely to respond with their own
efforts, such as Apple’s planned streaming service, alliances between content providers and
telcos like Netflix and T-Mobile, and Comcast’s acquisition of many 20th Century Fox’s assets.

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1. Award: 0.00 points0.00 points

Reputations of the brands and their associated leaders will undoubtedly both help and hurt in
the merger process, as will employee resistance. Employees that are dissatisfied with their
situation in the new company may resist the changes or even quit, while those who are happy
and satisfied may see new opportunities and commit.

Assume that you are Mr. Stankey. Apply the 3-Step Problem-Solving Approach to identify the
problems, causes, and potential solutions included in the case.

Apply the 3-Step Problem-Solving Approach
Step 1Step 1: Define the problems facing AT&T.
Step 2Step 2: Identify the potential causes.
Step 3Step 3: Make your recommendations.

Footnote
Adapted from E. Lee and J. Koblin, “AT&T Assembles a Media Team, Joining a Battle with Giants,” The
New York Times, March 4, 2019, https://www.nytimes.com/2019/03/04/business/media/att-warner-
greenblatt.html.

I have read and reviewed the above case study.

Yes

No

!

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Problem-SolvingProblem-Solving
Application Case—ToysApplication Case—Toys
R Amazon, Walmart, andR Amazon, Walmart, and
Others, but Not UsOthers, but Not Us

A new company, Tru Kids Brands, is now all that’s left of Toys-R-Us, the well-known toy retailer
which declared bankruptcy and closed all of its stores in 2017. The path forward for this new
company is uncertain at best, as a result of the competitive forces that killed the old brand,
but a new CEO and leadership team seek to return to the playing field. This activity is
important because it illustrates the important role that organizational behavior principles can
play in a surprisingly common situation – reviving a company that has gone through
bankruptcy.

The goal of this activity is to get you to think critically about how what you’ve learned can
apply to one of the most difficult situations faced by any company in this textbook.

Read about the demise of Toys-R-Us and the current situation surrounding what’s left of the
company. Then, using the three-step problem-solving approach, answer the questions that
follow.

Toys-R-Us has long been known as a marquee toy retailer with giant 40,000 square foot
stores and nearly every item desired or imaginable for children (and some adults). A large
percentage of Americans, as well as customers in international markets, can recall visiting a
Toys-R-Us store.

Sadly however, even icons fail, especially when confronted with nearly $5 billion of debt,
fierce online competition from Amazon and Walmart, changing customer preferences (video
games instead of conventional toys), and technology (e-commerce). Not even three billion
dollars in annual sales could surmount these challenges.

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Sealed FateSealed Fate
Some argue the company’s fate was sealed back in 2005 when Bain Capital took the

company private and buried it in debt to do so. Toys R Us never shed this burden.1 The Toys R
Us scenario is a familiar one. The years prior to the great recession (2006-2008) private
equity firms (PE), like Bain and KKR, went shopping for retailers. They took the companies
private by borrowing money for the purchase and planned to achieve high returns by making
them more efficient, selling off parts, or both, and in a period of a few years take them public
again. (Note: PE firms generally collect large fees associated with taking the companies
public.)

However, the recession eroded the value of the retailer’s real estate and at the same time e-
commerce exploded onto the market. Online sales have more than quadrupled since 2007.
For perspective, Neiman Marcus, another PE, debt-plagued retailer reaped 34 percent of total
sales online in 2017. These same factors also spurred the demise of other well-known brands,

like Gymboree, Payless Shoes, and Sports Authority.2

To compete online requires massive investments in technology and support, people, all while
selling products at lower margins. In summary competition is up, debt is up, expenses for

creating an online channel go up, and profits go down—a tough scenario for any retailer.3

Many have responded by only investing in safe bets and cutting products and people, which
in turn has limited merchandise and degraded service.

For its part, Toys R Us tried bankruptcy in September 2017 to salvage the company but doing
this before the holiday shopping season (when it collects a large percentage of annual
revenue) hurt more than helped. Company leadership and other employees were in survival
mode instead of executing and boosting sales when it needed them most. The poor timing
was made even worse as its scared customers away, as they were concerned that toys

couldn’t be returned, and gift cards redeemed.4

Competitors PouncedCompetitors Pounced
Knowing Toys R Us was on the ropes, Walmart, Target, and Amazon cut prices during the
holiday season and took an ever greater share of sales. For instance, competitors sold some
toys at a loss in order to get the business. This practice isn’t sustainable, normally, but each of
these large competitors sells many, many other products besides toys. As such, they could

compensate with sales from other products while Toys R Us couldn’t—It sells only toys.5

Concerns spread and a domino effect ensued. Many toy suppliers delayed shipments fearing
they may not be paid if the company went bankrupt, and creditors also tightened terms
making things even worse.

Where Now?Where Now?
All is not lost. Yes, the company did technically go away—over 700 US stores closed and
nearly 33,000 employees lost their jobs, but a new company—Tru Kids Brands has emerged
in 2019. Investors bought Toys R Us trademarks, private toy and baby brands, its famous
mascot (Geoffrey the Giraffe), Babies R Us, and other assets. The new CEO, Richard Barry,

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formerly the chief marketing officer of Toys R Us, hired many of the former company’s leaders

but none of its stores and associated employees.6

Many industry experts note that although the major competitors are indeed formidable, the
demise of Toys R Us leaves a notable gap in the market. Many people still need or at least
desire to shop in an actual toy store, and this is especially true during the holidays. It’s

nostalgic.7

New Team… New ApproachNew Team… New Approach
Time will tell, but at the time this case was written it is clear it will involve new employees,
new stores, and a new strategy to go along with the new name.

Assume you are the new CEO Richard Barry and Apply the 3-Step Problem-Solving Approach
to chart a path forward for Tru Kids Brands.

Apply the 3-Step Problem-Solving Approach
Step 1Step 1: Define the problem.

A. Look first at the Outcomes box of the Organizing Framework (Figure 16.12) to help
identify the important problem(s) in this case. Remember, a problem is a gap between a
desired and a current state. State your problem as a gap and be sure to consider
problems at all three levels. If more than one desired outcome is not being
accomplished, decide which one is most important and focus on it for Steps 2 and 3.

B. Cases have key players, and problems are generally viewed from a player’s
perspective. You need to determine from whose perspective—employee, manager,
team, or the organization—you’re defining the problem. As in other cases, whether you
choose the individual or organizational level in this case can make a difference. In this
case you’re asked to assume the role of new CEO Richard Barry.

C. Use details in the case to determine the key problem. Don’t assume, infer, or create
problems that are not explicitly included in the case itself. Only use what is provided in
the case.

D. To refine your choice, ask yourself, why is this a problem? Explaining why helps refine
your thinking. Focus on topics in the current chapter, because we generally select
cases that illustrate concepts in the current chapter.

Step 2Step 2: Identify causes. Using material from this chapter and summarized in the Organizing
Framework, identify what are the causes of the problem you identified in Step 1. Remember,
causes tend to appear in either the Inputs or Processes boxes.

A. Start by looking at the Organizing Framework (Figure 16.12) and decide which person
factors, if any, are most likely causes of the defined problem. For each cause, explain
why this is a cause of the problem. Asking why multiple times is more likely to lead you
to root causes of the problem. In this case, for instance, how do competitors factor in to
your decisions? What about the value of the brand? Expertise of leadership?

B. Follow the same process for the situation factors. For each ask yourself, why is this a
cause? By asking why multiple times you are likely to arrive at a complete and more
accurate list of causes. Again, look to the Organizing Framework for this chapter for
guidance. Did particular policies or practices play a role?

C. Now consider the Processes box in the Organizing Framework. Are any processes at

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2. Award: 0.00 points0.00 points

the individual, group/team, or organizational level potential causes of your defined
problem? For any process you consider, ask yourself, why is this a cause? Again, do
this for several iterations to arrive at the root causes.

D. To check the accuracy or appropriateness of the causes, be sure to map them onto the
defined problem and confirm the link or cause and effect connection.

Step 3Step 3: Make your recommendations for solving the problem. Consider whether you want to
resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and
feasible?

A. Given the causes you identified in Step 2, what are your best recommendations? Use
material in the current chapter that best suits the cause. Consider the OB in Action and
Applying OB boxes, because these contain insights into what others have done.

B. Be sure to consider the Organizing Framework—both person and situation factors—as
well as processes at different levels.

C. Create an action plan for implementing your recommendations and be sure your
recommendations map onto the causes and resolve the problem.

Footnotes
​1. N. Bomey, “5 Reasons Toys R Us Failed to Survive Bankruptcy,” USATo ​day.com, March 18, 2018,
https://www.usatoday.com/story/ money/2018/03/18/toys-r-us-bankruptcy-liquidation/436176002/.
2. P. Wahba, “Retail Reckoning,” Fortune, May 1, 2018, 76–81.
3. P. Wahba, “Retail Reckoning,” Fortune, May 1, 2018, 76–81.
4. N. Bomey, “5 Reasons Toys R Us Failed to Survive Bankruptcy,” USATo ​day.com, March 18, 2018,
https://www.usatoday.com/story/ money/2018/03/18/toys-r-us-bankruptcy-liquidation/436176002/.
5. N. Bomey, “5 Reasons Toys R Us Failed to Survive Bankruptcy,” USAToday. com, March 18, 2018,
https://www.usatoday.com/story/money/2018/ 03/18/toys-r-us-bankruptcy-liquidation/436176002/.
6. S. Min, “Toys R Us Plots a 2nd Act with New Look, New Name,” Money​watch, February 12, 2019,
https://www.cbsnews.com/news/toys-r-us-coming-back-under-new-name/.
7. D. Green, “Toys R Us Is Being Revived, but It Probably Won’t Be the Store You Remember,”
Businessinsider.com, February 13, 2019, https:// www.businessinsider.com/toys-r-us-revival-wont-be-
like-old-store-2019-2.

I have read and reviewed the above case study.

Yes

No

!

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