Start by Reading the Discussion Guidelines which are attached. Class Discussions

Start by Reading the Discussion Guidelines which are attached.
Class Discussions: Discussions are planned on a case. There are questions that apply to the case with my responses to the questions that are already provided below. You then must respond to a minimum of two classmates – be inclusive. Your responses should be useful avoiding platitudes and gratuitous remarks. You can be courteous, but it is more important to extend the discussion. Challenge what is said, play devil’s advocate, look for ways to make the discussion more useful. If you do the minimum, you will earn the minimum grade because minimum is average. Please keep this in mind.
The first and most important rule of discussions is to add value. The discussions are intended to be useful and productive.

Read and analyze the case or material in consideration of the discussion prompts provided by the professor and response provided by me. Remember to stay to the prompts.
Collect the material and formulate examples and illustrations that may be useful in helping encourage discussion. This can be hard if some classmates put out a half-hearted effort.
Criticize the case or material articulating and defending your analysis, and remember to analyze, criticize, and connect. Connect the issues that surface to broader themes from the course but try to keep the discussion focused.
Attached I provided the Case Study and The Discussion Guidelines. Below I have provided the Case Discussion Questions, My response, and the response of 2 peers.
Case Discussion Questions:
1. As Peter Vargas, how would you handle the expenditure request for the re-launch of the mini water oxidation system?
2. As Cynthia Jackson, would you approve the expenditure request from Vargas?
3. How effective have Vargas and Jackson been in their roles?
4. How well has Vias managed the global challenges this project involved?
5. How has ART been able to foster innovation and an entrepreneurial environment in the context of a large corporate entity?
My response to the Case Discussion Questions:
1. As Peter Vargas, how would you handle the expenditure request for the re-launch of the mini water oxidation system?
– If I were Peter Vyas, I would approach the affair with a strategic and careful mindset. Informed decisions should guide an expenditure request for the re-launch of the mini water oxidation system by considering the following. First, I would review whether the project is attainable by evaluating market research, the development team’s business plan, and technical specifications. Seeking input from experts within the entity would also go a long way to ensure the product prototype and design are substantial.
– I would also analyze the risks associated with the project because any expenditure should be justified considering the costs involved. Market potential also has to be analyzed by reviewing the product’s unique selling points, competition and market size. Additionally, the project has to align itself with the corporate objectives of ART. If concerns arise, alternatives such as seeking additional partnerships, exploring other markets and scaling down can be explored. Consultation is a major part of any project, and I would seek input from my team and other experts, such as financial experts and marketing professionals.
2. As Cynthia Jackson, would you approve the expenditure request from Vargas?
– As Cynthia Jackson, I would evaluate Peter Vyas’s expenditure request, and my decision would reflect the following considerations. The first assessment would be whether the project is aligned with the strategic goals maintained by the Water Management Division. I would then consider the financial costs and projections to ensure they are supported by data and are realistic. I would also consult experts and senior leaders before making a decision to get their input. Finally, the project’s long-term impact on growth, competitiveness, and reputation has to be regarded. This is done by looking into whether the project fits into the division’s growth strategy and innovation. I would also consider its market potential by looking into whether there is demand and what competition looks like in the same landscape.
3. How effective have Vargas and Jackson been in their roles?
– Peter Vyas shows effectiveness as a manager of the Filtration Unit by fostering innovation, pursuing opportunities for growth, and rebuilding the team. However, he failed at product launches which raises questions about his ability to deliver positive outcomes. On the other hand, Cynthia Jackson’s introduction of thorough product development processes and discipline to the Filtration Unit showcases effective leadership. She focuses on aligning corporate goals to the unit’s activities. After making a decision on the expenditure request, her effectiveness will be evaluated further.
4. How well has Vyas managed the global challenges this project involved?
– Peter Vyas showcases an ability to manage global challenges presented by the mini-oxidation project properly. He knows the value of technology development presented by the India Technical Center and uses it in realizing global applications. He brings in experts from other ART divisions to enhance technical specifications and cost reduction in the project. His ability to navigate difficulties associated with global product development and get support of the project will be tested after the expenditure request decision.
5. How has ART been able to foster innovation and an entrepreneurial environment in the context of a large corporate entity?
– ART has fostered innovation and an entrepreneurial environment within the corporate entity with the following practices. It has encouraged employees to brainstorm and experiment which guarantees innovation and creativity. Sharing technology among divisions and the practice of lending human capital ensures the cross-pollination of expertise and ideas. Additionally, ART prioritizes high-potential projects with management attention and additional resources to accelerate the commercialization process. Accepting failure creates a culture where people can take risks and learn from mistakes without being reprimanded.
Response of 2 peers.
Peer 1 – Ana Vasilescu:
If I were Peter Vyas, I would hold off on approving the expenditure request for the re-launch of the mini water-oxidation system until two things happened: a test of the public’s appetite for such a product and, identifying the critical path of activities needed to bring the water-oxidation system to market.
The Filtration Unit can run preliminary experiments to creatively (and relatively cheaply) test their hypotheses about the demand for the mini water-oxidation system. For example, they can collect pre-orders for the product, run test ads on Facebook and Google, and create surveys that utilize monetary and non-monetary rewards to elicit user feedback. If these experiments fail to generate actionable insights, the company could launch a Kickstarter campaign to eliminate the upfront cost needed to build the oxidation system.
The critical path involves identifying the longest sequence of activities that must be completed on time for the entire project to be on schedule. Peter and his team need to identify this sequence and communicate it to all relevant stakeholders so there is no miscommunication about what needs to happen.
As Cynthia Jackson, I would not approve the expenditure request from Vyas as it is currently structured. Her concern regarding the lack of detail in the pro forma financials was well-founded. The fact that she pushed back on assumptions used to generate the forecasts demonstrates her skill as a senior manager. (Managers like Cynthia are supposed to discuss assumptions rather than predictions to avoid confirmation bias.) If anything, Cynthia should have requested that the development team list their assumptions and corresponding milestones to track progress.
Speaking to the forecasts outlined in Exhibit 5, though, they are woefully lacking in detail. When developing multiple cash flow scenarios, you are supposed to value the cash flows at the unadjusted cost of capital, then apply probabilities for the value of each scenario to estimate the expected value of the project. So, if I were Cynthia, I would request opportunity costs, discount rates, probabilities, and ranges of values (e.g., base case, best case, worst case) for the projections. I would also mandate the inclusion of sunset rules for the water oxidation project. While budget overruns are common in corporate development projects, there needs to be a hard stop point to avoid falling victim to the sunk cost trap.
Speaking to the efficacy of Vyas and Jackson, it appears as though Vyas is anything but effective. He oversees a Filtration Unit that is losing $6 million a year, has only one revenue-generating product line, and has not brought a profitable product to market in five years. These results do not align with the descriiption of Peter Vyas. He was promoted into his current role and successfully addressed the unit’s low morale and growing turnover by creating an entrepreneurial-minded development team. Given the incongruence between his actions and the operational results of the Filtration Unit, the problem lies with the organization itself.
Cynthia Jackson has not been in her current role long enough for me to evaluate her managerial prowess, but I can make some quick judgments about her reasoning. I love the fact that she pushed back on the assumptions and projections given to her by Peter’s team. However, I was concerned by her behavior toward Peter during their first meeting: “Jackson made it clear that the unit’s continued existence was in jeopardy if they did not turn things around.” To facilitate change, you cultivate identity rather than consequence thinking. When employees are focused on consequences, they work toward avoiding bad outcomes instead of pursuing good ones.
While Peter Vyas has done an admirable job managing the global challenges of the project, there are structural impediments interfering with his chances of success. For example, there are multiple R&D groups involved with this third attempt. There’s the filtration unit’s R&D team, the corporate R&D team, and the R&D team from the India Technical Center. It’s no surprise, then, that the Indian R&D team was disappointed when they learned that their prototypes would be repositioned toward the Western markets and away from creating potable water for Third World regions.
Peter Vyas shouldn’t be responsible for developing a global strategy for a specific unit. However, someone at ART should have considered alternative options for entering foreign markets, rather than hastily establishing a corporate R&D group in India. For example, there’s exporting, licensing, franchising, strategic alliances, joint ventures, and wholly owned subsidiaries. Although there are varying degrees of financial risk and ownership with these modes of entry, ART strategists could have experimented with a multitude of different options for gaining access to different countries. Once they gained a toehold in a particular country, they could have explored ways to increase their presence.
Regarding ART’s ability to foster innovation and an entrepreneurial environment in the context of a large corporate entity, there’s some cognitive dissonance at play. When reading this case study, it quickly becomes apparent that innovation and entrepreneurship are cornerstones of Applied Research Technologies’ corporate identity. (Their vision statement is, “We aim to change the world through innovation, and to grow our place in it through entrepreneurship.”) They’ve reinforced this through practices like the Fast Track Pipeline, beta batch productions, and “tinker time.” But, these entrepreneurial practices are clearly not helping the Water Management’s Filtration unit.
Building an innovation culture requires building a sense of community. That means instilling a sense of purpose in your employees, communicating shared values, and defining rules for how everyone interacts with one another. Once you have created the culture, you need to execute. This entails creative abrasion (e.g., creating ideas through debate), creative agility (e.g., quickly testing ideas and iterating), and creative resolution (e.g., making integrative decisions that combine diverse ideas). Applied Research Technologies ticks all these boxes, yet the Filtration Unit in their Water Management division is struggling. Why? It is because ART has failed to update its hierarchical structure to a flat one that incorporates hierarchical elements when needed.
A symptom of ineffective organizational design is the glacial pace of decision-making. One of the best examples of this in the case study dealt with the link between the assumptions of Peter’s team and its access to the HVAC Group’s Residential Market Division: “The team acknowledged that its assumptions relied on the ability to gain access to the HVAC Group’s Residential Market Division. However, the HVAC Residential Market Division’s senior executives had full discretion regarding the products distributed through its channels, and they had not yet made a formal decision about RIMOS.” To me, this indicates a lack of effective communication and collaboration between business units. If ART leaders are unwilling to commit to an organizational redesign, senior executives from the Water Management and Residential Market divisions need to establish and utilize informal networks to compensate for the limits of ART’s formal, corporate structure.
However, if the real problem isn’t poor information flow but rather too much conflict among various divisions and units within the organization, then upper management (and possibly the board of directors) needs to break up entrenched interests to resolve the conflict(s). Some groups doing critical work within a company – like the Filtration Unit – have trouble getting the resources they need, and it’s because resources are often concentrated in a few powerful groups. Upper management can fix this by changing the dimensions along which resources are allocated. In other words, they establish new performance measures and implement them across the board.
Another example of the mismatch between ART’s overall strategy and its structure can be found in Vyas’ attempt to bring the product to market during ART’s second attempt: “From January 2003 to February 2006, the technology team coordinated with separate manufacturing and marketing teams located in the United States to work through two complete cycles of product development, beta batch productions, and test marketing of two different versions of the mini-oxidation system. Both failed due to what were subsequently revealed to be defects in the design and lack of interest in the marketplace.”
As if often the course in large corporations, bureaucracy stifles innovation and the clear communication. To me, ART could significantly increase the Filtration Unit’s chances of success by restructuring its organization into varying sizes of cross-functional teams that operate like mini-startups. Each “startup” would be responsible for a specific product or product line and have the autonomy to decide how to achieve its objectives. For example, the Water Filtration unit would be converted to its own startup dedicated to creating, testing, and launching products like the water oxidation system.
Peer 2: Bridget Cuddihy
1. As Peter Vargas, how would you handle the expenditure request for the re-launch of the mini water oxidation system?
– I would approve the expenditure request on the condition that we were given access to the HVAC residential market division. I would submit my approval of the request and condition to Cynthia Jackson with an explanation of why I am in favor of issuing the funds to move the product forward. In this request, I would summarize the market research results, and highlight key risks that have been identified, along with mitigants.
2. As Cynthia Jackson, would you approve the expenditure request from Vargas?
– I would take the condition noted by Vyas and work with the HVAC executives to discuss their timeline to decide, as well as the probability that they would allow this to occur. I would reiterate the team’s findings and why this could be a profitable sector of the company is access to the residential market was available. I would hold my decision until the HVAC executives have issued theirs. If this product would have access to the HVAC residential market division, then I would approve the expenditure request. If HVAC executives do not approve, I would deny the request due to the high risk associated with market acceptance.
3. How effective have Vargas and Jackson been in their roles?
– Vyas, in his capacity as Business Manager, made key changes to staff the Filtration Unit staff with individuals who could support the effort to keep the unit operational, and reevaluated opportunities that were previously abandoned, re-opening up a potential avenue for a new product. Vyas was an advocate for his team and trusted their opinions and recommendations. Vyas was also successful in managing the relationship between the Filtration Unit team and the ITC technologists. I found that Vyas’s weakness in his role was his ability to implement a process that would successfully vet the product and the market prior to development and market testing, which was evident with the failure of the two initial attempts at bringing the product to market. Despite this, it was evident that Vyas was able to learn from Cynthia Jackson’s oversight and recommendations on market analysis, development, and business planning. Overall, I think Vyas was quite effective in the aspects of his role related to staffing and support of his team, with the potential to grow his skills in product procedure.
– I believe Cynthia Jackson was very effective in her role as VP of the Water Management division of ART. Jackson’s goal for the Filtration Unit was to address its lack of profitability and turn around this sector of ART’s business. Jackson assessed the work that Vyas had done since coming on board as Business Manager and made changes where necessary to strengthen the team’s procedures. Jackson stayed close to the team’s work throughout the three Phases, asking questions and encouraging the team to complete additional diligence. Jackson’s guidance and structure assisted the team and individual growth in their roles by enforcing the three-step process, which produced a potential product for the company.
4. How well has Vias managed the global challenges this project involved?
– I found that Vyas’s management of the global challenges was sound and a critical piece of the development process. Vyas’ relationship with the ITC technicians played a role in keeping the three iterations of the product on track, and he exhibited the ability to manage the relationship despite challenges. Initially, he reenergized the ITC team when he decided to pursue the product, then worked with them through their disappointment when the product application shifted to the second-generation model and also worked with them to manage timelines and expectations when they were frustrated with the timeline to deliver in the third iteration.
5. How has ART been able to foster innovation and an entrepreneurial environment in the context of a large corporate entity?
– ART was able to foster innovation and an entrepreneurial environment due partially to the company’s allocation of funds and its culture. They were intentional with what aspects of the business they were investing in, which included a heavy focus on R&D compared to others in the industry. They also supported this by building a culture that encouraged people to be creative and supportive of good ideas. This entrepreneurial aspect was not only encouraged but was expected that managers use their designated “tinker time” to focus on fostering new ideas. Another way in which they can support their innovation and entrepreneurial environment is by sharing team members across divisions. This knowledge-sharing can help foster new ideas and grant new perspectives.