Chapter 5, Cengage Case.

Title: What Would You Do? DuPont Headquarters, Wilmington, Delaware

The DuPont company got its start when Eleuthre Irne du Pont de Nemours fled Frances revolution to come to America, where, in 1802, he built a mill on the Brandywine River in Wilmington, Delaware, to produce blasting powder used in guns and artillery. In 1902, E.I. du Ponts great-grandson, Pierre S. du Pont, along with two cousins, bought out other family members and began transforming DuPont into the worlds leading chemical company. In its second century, DuPont Corporation would go on to develop Freon for refrigerators and air conditioners; nylon, which is used in everything from womens hose to car tires; Lucite, a ubiquitous clear plastic used in baths, furniture, car lights, and phone screens; Teflon, famous for its nonstick properties in cookware and coatings; Dacron, a wash-and-wear, wrinkle-free polyester; Lycra, the stretchy, clingy fabric used in active wear and swimwear; Nome, a fire-resistant fiber used by firefighters, race car drivers, and to reduce heat in motors and electrical equipment; Corona, a high-end countertop used in homes and offices; and Kevlar, the bulletproof material used in body armor worn by police and soldiers, in helmets, and for vehicle protection.

You became DuPonts CEO right as the world fell apart at the height of the world financial crisis. Fortunately, you had early warning from sharply declining sales in DuPonts titanium dioxide division, which makes white pigment used in paints, sunscreen, and food coloring. Sales trends there can be counted on to indicate what will happen next in the general economy, so you and your leadership team began working with the heads of all of DuPonts divisions to make contingency plans in case sales dropped by 5 percent, 10 percent, 20 percent, or more. Many DuPont managers thought you were crazy, until the downturn hit. It was difficult, but with plans to cut 6,500 employees at the ready, you were prepared when sales dropped by 20 percent at the end of the year. But when that wasnt enough, salaried and professional employees were asked to voluntarily take unpaid time off and an additional 2,000 jobs were eliminated. In all, these moves reduced expenses by a billion dollars a year. But one place you refused to cut was DuPonts research budget, which remained at $1.4 billion per year.

One of the ways in which the Board of Directors measures company performance is by comparing DuPonts total stock returns to 19 peer companies. Over the last quarter century, DuPont has regularly ended up in the bottom third of the list. This makes clear that you have one overriding goal: to restore DuPonts prestige, performance, and competitiveness. The question, of course, is how? Before deciding, there are some big questions to consider. First, given sustained weak performance over the last quarter century, do you need to step back and consider DuPonts purpose and reason for being in business? After transitioning from blasting powder to chemicals, DuPonts slogan became, Better things for better living through chemistry. Is it time, again, to reconsider what DuPont is all about? Or, instead of an intense focus on DuPonts purpose, would it make more sense to make lots of plans and lots of bets so that a thousand flowers can bloom? In other words, would it be better to keep options open by making small, simultaneous investments in many alternative plans? Then, when one or a few of these plans emerge as likely winners, you invest even more in these plans while discontinuing or reducing investment in the others. Finally, planning is a double-edged sword. If done right, it brings about tremendous increases in individual and organizational performance. But if done wrong, it can have just the opposite effect and harm individual and organizational performance. With that in mind, what kind of goals should you set for the company? Should you focus on finances, product development, or people? And should you have an overriding goal or separate goals for different parts of the company?

Please be sure to answer all questions. Your responses should be in complete sentences with the correct punctuation and grammar.

If you were the CEO at DuPont, what would you do?

Sources: C. Loomis & D. Burke, Can Ellen Kullman make DuPont Great Again? Fortune, 3 May 2010, 156-163; M. Reisch, Leading DuPont: After a Difficult First Year as CEO, Ellen Kullman Sets the Stage for Growth, Chemical & Engineering News, 12 April 2010, 10-13.

Case Assignment Rubric

Criteria and Points

Addressed all questions with supportive information and documentation. 1. 60 Points for Full and thorough responses and no grammatical errors. 2. 40 Points for partial and essential responses with no more than three grammatical errors. 3. 20 Points for partial and basic responses with more than three grammatical errors. 4. 0 Points for No Response/Did not answer the questions.

Total=60