Articles and Publications

Ivey Business Case Publication, 2004
DIGITAL ECONOMY - THE NEED FOR CHANGE
Authors: Crossan MM ; Charania S

Case and Teaching Note available for purchase through Harvard Business Online and Ivey Case Publishing



Case Summary:

Digital Economy was founded in 1994 as a private think tank focused on researching the effects of emerging technologies on competitive strategies and high performance organizations. By the late 1990s, clients demanded consulting services to complement previously purchased research services. The company's business model and offerings flourished in the technology boom. In the first quarter of 2001, the technology boom began to deflate. Digital Economy's decision makers were confident that the changes in the environment would be short lived and that the company's business model and offerings were infallible. Unfortunately, this assessment and subsequent decisions lead to substantial losses in the next two years. The parent firm pressured Digital Economy to realize a profit by the following fiscal year or be completely shut down or consolidated. Digital Economy was in a state of crisis yet the management team did not see the need for change. This case illustrates how biased environmental analysis and personal beliefs can affect decision making and lead to and sustain organizational crisis.

Industry: Business Services
Issues: Crisis and Change, Environmental Change, Management Decisions
Setting: Canada, small organization, 2002
Level of Difficulty: MBA and Undergraduate
Length: 18 page(s)