The Case Against Cases

In retrospect, of course, letting an Enron or a Tyco make its own case — or even sign off on it — illustrates a major weakness in the case approach: it's all too easy for a company to hide its flaws from the case writers. If a case writer implicitly agrees to let the company control the information, the case may well miss the true story.

Just Trust Us
Perhaps the most obvious flaw in the current case-writing system, points out former Securities and Exchange Commission chief accountant Lynn Turner, now a professor at Colorado State University, is the absence of disclosure. "Academia in the business community has to become much more transparent about its research," he says, noting that in medical journals, for example, "it has now become practice to disclose where you got your data."

Some case writers say that disclosing ties to a company isn't a bad idea. They argue, though, that they aren't investigative reporters, and instead are gathering the most-extensive data possible in order to expose students to real-world scenarios. These days, in fact, many cases grow out of executive-education courses, where high-level employees in attendance and their professors may plan a future study using material that emerges from the back-and-forth of the class.

The professors contend that, since their own reputations are at stake, they can be trusted to write their cases without bias. Trained in the case method at Harvard in the 1970s, John Shank believes that professors generally — but not always — use their corporate relationships primarily to get better information for their cases, and not for personal motives.

But conflicts can intrude in subtle ways when relationships get too friendly. "To the extent that a company is well known to professors through consulting, inevitably they will feel some sympathy that, perhaps unrecognized by the case writers, results in a biased view," says Sloan's Scott Morton. Although he understands the defense that it is important for professors to get close to a company when they write a case, "the question is, do you believe an individual is able to resist the pressures that are there?"

Just ask any of the accounting firms, analysts, and boards that are still reeling from the ramifications of the Enron case.

Learning from Enron

Darden professors Samuel Bodily and Robert Bruner first prepared their flashy CD-based examination of the Houston energy company, "The Transformation of Enron: 1986-2000," by granting Enron's executives the typical agreement to preview the case. The professors weren't receiving any money from the company, but "in fairness, [Enron management] saw what we had before anybody else did," says Bodily. "It was a story that they wanted out," he says of then-CEO Kenneth Lay, president Jeffrey Skilling, and CFO Andrew Fastow, all of whom participated in 15 hours of videotaped interviews in 2000. They did not make any changes in the original material, he adds.

Last year, with Enron bankrupt and in disgrace, and with Fastow and some other executives indicted, Darden made some changes of its own. It pulled the old case and issued a new one, entitled "Enron, 1986-2001: Critical Thinking about the Enron Story."

In Darden's new case, the executive interviews are left intact, but an analysis is added at the end, based largely on subsequent press accounts. "I think it was very important for us to produce a version that allows students to think about it all," says Bodily. "If students can't learn from the failing of a company, then what can they learn from?" Business schools apparently agree. The Enron case is one of the school's biggest sellers ever, with 6,919 cases in distribution, at a list price of $7.50 a pop. —R.H.

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