Understanding Case Study Method


Prof R.K. Gupta
Professor & Director
Centre for Advanced Training in Management

The case study method is a hyped up tool used in B-schools from Harvard to Hyderabad and by companies in selling their business solution software or tools and by companies to train their executives. But unfortunately a large number of faculty members, the students and academics have confusion regarding the methodology, the relevance and outcomes of a case as tool for training. It is surprising that some teachers even from so-called Premium schools give cases in examination papers. That for sure is an abuse of case study method. Even illustrations and examples are considered as case. Many trainers also assume that a long and detail case is a good and effective case. Unfortunately it is not always correct. The length of case has no significance as to its relevance and learning potential. A summary of case study method, its objectives and outcomes are reproduced below. These are based on personal experience and opinion of the author and hence no references are given.

Objectives and nature of case study

A case is written description of a business related problem or situation and often contains organizational and financial data specific to the situation or problem. This may also have external data and facts about social, economic or other micro economic circumstances impinging upon that business situation. Case offers student highest possible realism in management study (as compared to experimentation or hands-on projects in engineering or science) as it brings before student real situation and facts surrounding it. How things actually happen in business.

Case offers student opportunity to analyze facts, data and situation and see these with different perspectives. A case therefore is a classroom tool for group discussions, the best way to handle a case. Student has to propose solution to problem in the case. However, for better learning one or two problems should be specified in a case which student can focus on and try to arrive at solution. Since different business situations and goals can have multiple solutions, the students in a group can arrive at different solutions. That is the main advantage of learning through because study. To see problem from other people's perspective too and see how many approaches are possible and which may be adopted for optimum solution in the given circumstances and depending on personal factors of manager or entrepreneur or team of managers and their background and precedents. By presenting real business situations and data the student is given opportunity to feel how real life business world feels like and works.

The case study also helps student to improve reading, writing and speaking ability and to systematically analyze and derive solutions to varied situations and problems and evaluate these in a group from various angles. While analyzing case data and trying to arrive at decisions the student has to also recall or search for decision making tools and domain knowledge acquired in that area from text books, journals and class room instructions and discussions.

One argument is that cases are too short or may not contain complete information required. That is true of real life business situations too. Managers often don't have enough time or enough information but have to take a decision using their knowledge, past experience, logic and certain amount of risk. As information unfolds in future, it may occur that decision taken was not correct or the best. But that is how things happen. That is how managers function. The ability to make good judgments in limited information, limited time and limited resources with a vision is what differentiates good businessmen and managers from others. The next best way to learn is hands-on experience in real life business place working under guidance and supervision of an experienced manager.

Management uses both analytical tools and subjective evaluation procedures to arrive at solution. There are no formulae for success in business. However, there are differences in businesses in terms of values, business models, entrepreneurial styles, ethics, risk propensity and aggressiveness. If students act roles as finance manager, HR manager or marketing managers, their perspective to same business problems will differ. As they would see in more focused functional way and try to push their agenda. That is how it happens. Use of logic, management concepts and principles and tools of analysis where applicable, assists the student in formulating plan of action and one's arguments and justification for the selection of the best alterative solution.

Case study Methods:

As suggested above, it would be observed that there are different structural approaches to accomplishing the case analysis:

1. Individual
2. Group or collaborative
3. Brainstorming
4. Role playing.

Actual analysis can be presented orally or in written form. Students can do the case analysis individually or in group- either small or large. Each student must participate and come ready by thoroughly reading the case and jotting down point about the problems and analysis. As happens, some participants will be more productive than others and a few may have work experience from which they can draw on more inputs and hare experiences with others as they speak or present their views and analysis.

A group leader, a recorder and a spokesperson can be assigned which automatically gives at least three members an active role and some leadership experience. The role of instructor is to keep discussions on track, judge the quality of analysis and act sometimes like devil's advocate to provide a new viewpoint.

In brainstorming method instructor can act as facilitator in an informal unstructured discussion mode. It should be clear that case study is a student centric and not instruction centric method. In the end of the case specific question may be asked for classroom learning or no questions and no specific problems may be identified at all. Case study methods are also used and found to be effective tools in company training programs also. Here both outside cases or cases based on past situations in the company may be used for analysis and learning experience. It is quite useful in situations like service delivery and conflict resolutions with employees and customers.

It is possible to discuss one case in all the groups in the class, all solutions can be heard and then the consensus can be reached for most appropriate solution or more than one solutions can be prioritized.

In other method different groups in class can analyze different cases so that more topics and problems can be covered from the syllabus.

The case should not be confused with demonstrations, illustrations or examples. The case does not present solution in its text or a clear-cut point like in illustration or example.

Approach for case analysis is summarized hereunder:

1. Read the case completely including questions if any given at the end.

2. Reread the case with any accompanying data, illustrations or tables and do the following: 

    2.1.Clearly define the immediate problem to be solved, if it is not already done.   

    2.2.Identify the major concepts and /or principles raised by the problem; for example-share valuation method in a merger proposal.

    2.3. Develop several alternative solutions to the problem and that could be applied to the situation. Some times such solution may not be consistent with company business policy and ethics.

    2.4.Evaluate each alternative by listing advantage, disadvantage and possible consequences.

    2.5 Identify the recommended solution along with any further justification in detail. 3.Develop a recommended course of action if needed.

It may be noted that in some cases major issue may not be included in major question deliberately for the student to try and identify the same. The complexity of a case is not judged by length of the case. A short case may be found to be much more complex to handle than a long case.

Example to illustrate above points:

Let us consider example of a currently popular topic of real estate business in India that is undergoing complex situation of demand recession, high costs and public criticism. A company XYZ Developer is faced with the situation of 3 projects under various stages of completion. In the nearing-completion project out of the three with a cost of Rs 20 lacs per flat, only 25% flats could be booked so far while other two projects have attracted only 10% bookings, each. The two remaining projects are scheduled for completion in 2012 and 2013 respectively, subject to cash flow availability as projected in previous year i.e. 2008 for next 5 years. There are 40 similar projects competing in market, which are at various stages of execution with average booking status of 40%. Obviously the XYZ Company is lagging behind the industry average. The company has raised debt from financial institutes @ 14% floating rate PA and the repayment plan is enclosed with this write up. All the three projects have considerably slowed down and may affect the possession schedule of even the booked customers. Company is finding it difficult to carry on construction work and make repayments as per schedule. There are several options for Company to follow.

The HODs of various functions like marketing, finance and land acquisition have obviously different objectives and conflicting goals. The Board of Directors have called for an elaborate meeting of all concerned to evolve a plan of action which may include several possibilities including drastic rebates in the prices. Should it be done or not and in what mode and over what time frame could be one major decision problem. The real estate industry outlook over short term of next 1-3 years is not clear with Union general elections due after 4 months. The financial year is closing after two months.

The complexity of above situation is very clear and the limited information available in the case as well as in real business situation especially on macro-economic front as far as real estate industry is concerned. Any decision to slash prices may severely affect the profitability of the company and may not yield expected outcomes. These outcomes desired are yet to be defined in the proposed meeting. Hence we can seer that a number of factors have to be evaluated, various options have to be listed and defined and their financial consequences and the effect on company reputation and goodwill also have to be factored in. The company's future projects may also get affected. The main point is when company can expect a turn around of demand situation and how company can control costs. Forecasting of both price and demand factors is a difficult proposition in current macro-environmental situation. What solutions can the Financial and Marketing heads offer and what the Project managers have to say?

Prof R.K. Gupta
Professor & Director
Centre for Advanced Training in Management

Source: E-mail February 18, 2009


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