Hasbro Inc. (Hasbro) was founded as Hassenfeld Brothers in 1932 in Pawtucket, Rhode Island. The founder was Henry Hassenfeld, an immigrant from Poland. The operation of Hasbro began with manufacturing inexpensive product, which eventually turning to toys in the 1940s. In 1951, the company hit pay dirt for the Mr. Potato Head that indicated bright future of Hasbro in toys. Next big hit was G.I. Joe around a decade after the first hit. In 1968, the company went public. The beginning of investment in interactive games was acquisition of Milton Bradley. In early 1990s, the company acquired Tonka Toys which includes Parker Brothers.
In 995, realizing that interactive games becoming ...view middle of the document...
Some division missed targets and way over budget. In 1999, Hasbro Interactive shoots for stars when the company targeted reaching $1billion in revenues within three years. The unrealistic target changed behavior and affected decision-making. Hasbro Interactive did what it has to in order to reach the targets including new acquisitions. However, without multi-year plan for investment required, the goal was far to be achieved. Several Hasbro’s senior executives began to lose confidence in Hasbro Interactive, despite Mr. Hassenfeld and Mr. Baum’s continued support. The reasons were high volume of product returns from 1998 holiday season, overlapped Monopoly promotion with McDonald and Burger King, and revisions in financial projections.
The events called for tightened controls at Hasbro Interactive. A studied showed that Hasbro Interactive’s CFO was so busy valuing acquisition targets that he had little time for financial monitoring system. New CFO of Hasbro began implementing exacting financial systems but perceived as dampening employees’ innovation. She also started preparing for 2000 planning cycle. Hasbro Interactive incurred loss in 1999 but Mr. Dusenberry claimed it as good investment. Some senior executives were not supportive of Hasbro Interactive’s product development spending as no clear roadmap in place. Hasbro Interactive continued to face difficulties and eventually resulted to the sale of it to Infogrames for $100million. The deal provided that Infogrames license Hasbro properties, creating on going revenue streams.
MAIN PROBLEM AND DECISION MAKER
The major problem of the case is the poor top management control and strategic planning which lead to management failure and cost Hasbro Interactive to be sold. It can be seen from the case that Hasbro’s approach in dealing with business’s risk was more toward reactive rather than proactive. In other words, Hasbro was not having adequate preventive measures towards problems and risks. It operate the business following what it perceived as good decision without proper planning and eventually response to the problems which arose after that. The case and problems were analyzed from the perspective of Hasbro Inc. as the division of Hasbro Interactive has already been sold. However, the causes of the problem also come from Hasbro Interactive as well as from Hasbro Inc. therefore, the decision is to be taken by Hasbro as a whole form the experience of downfall of Hasbro Interactive.
In this case, the appropriate decision maker is Alan Hassenfeld, as the chairperson of Hasbro Inc. The reason is that he was the person who was “watching over the whole thing” of the crisis as he claimed. He was the chair of Hasbro Inc. who has the authority for making changes and the one who decided for the formation of Hasbro Interactive to expend the business into interactive games. Furthermore, he was the one who hired the top management at Hasbro level and Hasbro Interactive as the major problem is related to...