Kevin Mooney Case Study

Please read and briefly outline how you would answer the questions at the end.

KEVIN MOONEY*

As the elevator descended silently to the lobby, Kevin Mooney mused confidently about the decision he was facing: whether or not to resign from Price Waterhouse, the prestigious accounting firm, and accept a position with a new, still quite small software company. He wondered how many of his colleagues at Price Waterhouse would opt to leave the security of a big business for a challenge like the one at Softcorp, Inc. He would be director of international marketing at a small software firm specializing in financial and accounting software packages for mainframe computers. The companys sales were just over $1 million, and it had no international customers. Nobody in the company even had a passport! Kevin thought this opportunity was filled with chances to exercise his entrepreneurial talents. He liked the founders of the company, its products had growth potential, and he would be an important part of the management team, so they said. Yet, the future at Price Waterhouse was very bright. He wondered what he should do.

His Background

Kevin gave his father much of the credit for forging his entrepreneurial spirit. Nothing Kevin did was ever quite good enough for his father. His constant criticism made Kevin fiercely independent and willing to take on challenging tasks just to prove to himself that he could do them. Consequently, he often recognized opportunities where others didnt.

During high school in Philadelphia, the ham radio club he had organized needed money to buy equipment. Kevin figured the club could raise the money doing what it knew best working with electrical equipment. He founded his first venture, Rapid Radio Repair at Reasonable Rates, a company which repaired small appliances for neighbours, offering reliable service, pickup, and delivery. The neighbours liked the service, and the venture kept the club running.

After high school Kevin Mooney enrolled at Cornell University as an engineering major. In the early 70s, engineering wasnt a very popular profession, or even a lucrative one, but Kevin thought he needed the discipline engineering offered. His four years at Cornell were successful, although his studies didnt excite him. His real interest was his position as chairman of the Student Finance Commission, which had the responsibility of allocating a $130,000 budget among all the student organizations and activities on campus.

Immediately after graduation Kevin married his high school sweetheart and enrolled in Stanford Business School. He recalled his decision to enrol:

Stanford advised students entering directly from undergraduate school to work for several years before beginning the MBA. I figured that most of the younger students probably followed Stanfords advice. So I decided to enrol right away, learn from their work experiences, and save myself the time!

During his two years at Stanford Kevin chose courses he thought would help him run a small business of his own. Then, before job interviews began, Kevin and his wife decided that the Pacific Northwest was the place they wanted to live; he planned his company interviews accordingly. (See Exhibit A.)

Price Waterhouse was interviewing students interested in working in its newly created small business division in Seattle. Although Kevin never planned to be an accountant, the location appealed to him and he thought the job would give him the opportunity to get to know the regions business community. He took the job, and within three months he was generating all his own work, often attending business breakfasts to drum up prospective clients. During the first year he brought five new clients to the firm.

Exhibit A

Kevin Mooneys Resume

KEVIN MOONEY

Blackwelder 5 G

Stanford, California 94305

(555) 321-6877

JOB OBJECTIVE:	To secure a consulting or staff position in corporate or financial planning.
EDUCATION: 1974-1976	STANFORD GRADUATE SCHOOL OF BUSINESS Candidate for MBA degree in June 1976. Concentration in finances. Selected to represent the Stanford Graduate School of Business on the Journey for Perspective Foundation 1975 international study program abroad. Travelled to Eastern and Western Europe for seminars with business and political leaders. Member of Investment Club and Business Development Association.
1970-1974	CORNELL UNIVERSITY, Ithaca, New York BS degree in Industrial Engineering and Operations Research in June 1974. Deans list. Chairman of Cornell Student Finance Commission. Responsibilities included financial planning for more than 100 organizations, allocation of $130,000 of student fees, hiring and directing office staff, and administration of accounts. President of Quill & Dagger Society (senior honorary).
BUSINESS EXPERIENCE: Summer 1975	PEAT, MARWICK, MITCHELL & C0., San Francisco, California Management Consultant. Performed conceptual design and implementation of a centralized purchase order system. Developed complete cost accounting system and contributed in formulating approach and preparing written proposal for a consulting engagement.
Summer 1974	CORNELL UNIVERSITY, Ithaca, New York Summer Conference Coordinator. Administrative responsibility for summer conference programs. Duties included computer information system development and implementation, personnel administration, and coordination of university departments and facilities.
Summers 1972, 1973	DECISION DATA COMPUTER CORPORATION, Horsham, Pennsylvania Manufacturing Engineer. Responsibilities included plant layout, tool design, and writing manufacturing instructions.
Additional Information	Married, Private pilot, currently pursuing additional ratings. Other interests include skiing, photography, swimming, and bicycling.
References	Personal references are on file with the Placement Office and will be forwarded upon request.

Softcorp, Inc.

One of his many clients was Softcorp, Inc. Founded in 1969 by two men who had worked together at Hewlett-Packard, the company was just beginning to build a reasonable customer base. In the beginning the two founders, Joe Hegarty and Bob Wilson, designed the companys accounting applications packages themselves. Accounts Payable and Fixed Asset Accounting were the companys flagship products and contributed about 90 percent of Softcorps revenue. Entirely internally funded except for a small line of credit at the bank, Softcorp dedicated its efforts to product development, marketing, and customer support and training. By 1976, it had 29 employees and sales of $1.2 million. (See Exhibit B.)

Hegarty and Wilson first came to Price Waterhouse for help in enhancing their fixed-asset system to incorporate the latest IRS depreciation rules. After three years and no solution, Softcorps executives were understandably frustrated. Kevin Moody took over their account and resolved the outstanding problems within three months. Mooneys manner and competence impressed the two men, and their relationship thrived. Then, in late 1977, Hegarty and Wilson approached Kevin about the job as director of international marketing.

Exhibit B

Softcorp, Inc., Performance, 1974 1976 ($000)

	1974	1975	1976
Annual Revenue	$357	$734	$1,217
Installations (cumulative)	383	449	530
Total employees	11	23	29

The Job Negotiations

The offer intrigued Mooney. He saw the opportunities inherent in this small company. He knew little about the general markets for software packages and even less about international markets. Softcorp was small and undercapitalized, and Kevin wondered what resources would be available to him to launch an international marketing effort.

Kevin worked well with the two founders. He and his wife had been guests at Hegartys home. In December 1977, Kevin Mooney met with Hegarty and Wilson to discuss the details of the job.

I remember asking them if they knew of any international customers out there who wanted their products. Hegarty just shrugged his shoulders and said, If there are, we know youll find them.

I reminded them that I didnt have any operating experience, but that didnt seem to bother them. They seemed very impressed with my competence and my education. Frankly, I dont think I would have hired me!

They offered me a nice salary (a 20 percent increase over what I was making at PW) plus a bonus which would be tied to performance. I raised the question of equity participation. Both men were reluctant to give me any equity up front. They cited examples of two employees who had been given stock, but after each had demonstrated his commitment and loyalty to the company. They told me that once I had done the same, equity would be a possibility.

The elevator stopped at the lobby. Kevin had just had a last meeting with his boss, Bob Baker. His mentor at Price Warehouse was disappointed that Kevin would throw away his promising future at Price Warehouse.

Baker reminded Kevin that promotions would be announced in a few months, and he thought Kevin had a very good shot at being promoted to manager. Baker asked him several questions he couldnt answer: What resources would Softcorp make available to build the international division? How were they planning to measure his performance? What would constitute success or failure?

When the meeting ended, Baker shook Kevin Mooneys hand and said, Do you realize if you go to Softcorp, you are probably going to fail? Are you prepared for that? Mooney left the building with Bakers questions running through his mind. Softcorps offer letter and nondisclosure agreement were in his briefcase, ready for his signature. He had two weeks to make his decision.

Case Questions

Evaluate Kevin Mooneys entrepreneurial orientation; does Mooney exhibit characteristics/attributes of an entrepreneur? If so why? If not, why not. Be specific.

Considering concepts & our discussion of entrepreneurship, what should Kevin Mooney do, and why? Be specific and explain your reasoning based on the entrepreneurial/intrapreneurial perspective.

Identify & outline Kevin Mooneys apprenticeship (be specific). Is his apprenticeship sufficient to take the position at Softcorp? Why/why not?

What criteria and considerations should be weighed, and how, in making the decision (e.g. family, knowledge/skills, age, etc.). Be specific for each criteria and weight the importance of each in making a decision.