CASE 2 0 FORT GREENWOLD CAPITAL BUDGETING The public image of business in the latter part of the nineteenth century was hardly flattering The adventures of so-called "Robber Barons" constantly made the headlines and their exploits matched those of their contemporaries in the Wild West. For ex- ample, J. P. Morgan hired an army of toughs to literally battle for a section of rail- road near Binghamton, New York. And business leaders often expressed their con- tempt for the public interest, exemplified by such infamous comments as w. H. Vanderbilt's "the public be damned" and J. P.Morgan's "Towe the public nothing Recent research suggests that these individuals were probably not the villains they were portrayed to be, though it is undeniable that they wielded enormous power It was precisely during the era of these powerful business leaders that Harold Cole founded Fort Greenwold (FG), a firm that is currently one of the largest producers of paper and pulp with annual sales of $3.5 billion. Cole located his first plant in a rural town in New England partly to create jobs for the many un- employed workers in the area. "Having a heart does not mean you can't make d was fond of saying. The firm has always been active in the af- fairs of the community and donates generously to local civic and charitable or- ganizations. It also takes special pride in promoting a family atmosphere among its employees. Personnel experts believe that these policies are largely responsi- ble for the enviable productivity record of FG's workers. For its first 80 years FG had an impressive record of growth in earnings and sales. But as the company grew, the willingness of top-level management to de- centralize and delegate authority did not. The company stagnated until the ap pointment of Andy Kurzer as chairman eight years ago in 1988. Kurzer was shocked at the "nickel-and-dime stuff" that reached corporate headquarters, and he moved quickly to decentralize authority. One major change involved the company's capital budgeting procedures. FG actually had no formal mecha- nism for capital projects. Kurzer changed this and set up a six-person expendi- tures committee (EC) that would decide projects costing more than $200,000. Smaller expenditures would be decided at the regional and local levels. CASE 2 0 FORT GREENWOLD CAPITAL BUDGETING The public image of business in the latter part of the nineteenth century was hardly flattering The adventures of so-called "Robber Barons" constantly made the headlines and their exploits matched those of their contemporaries in the Wild West. For ex- ample, J. P. Morgan hired an army of toughs to literally battle for a section of rail- road near Binghamton, New York. And business leaders often expressed their con- tempt for the public interest, exemplified by such infamous comments as w. H. Vanderbilt's "the public be damned" and J. P.Morgan's "Towe the public nothing Recent research suggests that these individuals were probably not the villains they were portrayed to be, though it is undeniable that they wielded enormous power It was precisely during the era of these powerful business leaders that Harold Cole founded Fort Greenwold (FG), a firm that is currently one of the largest producers of paper and pulp with annual sales of $3.5 billion. Cole located his first plant in a rural town in New England partly to create jobs for the many un- employed workers in the area. "Having a heart does not mean you can't make d was fond of saying. The firm has always been active in the af- fairs of the community and donates generously to local civic and charitable or- ganizations. It also takes special pride in promoting a family atmosphere among its employees. Personnel experts believe that these policies are largely responsi- ble for the enviable productivity record of FG's workers. For its first 80 years FG had an impressive record of growth in earnings and sales. But as the company grew, the willingness of top-level management to de- centralize and delegate authority did not. The company stagnated until the ap pointment of Andy Kurzer as chairman eight years ago in 1988. Kurzer was shocked at the "nickel-and-dime stuff" that reached corporate headquarters, and he moved quickly to decentralize authority. One major change involved the company's capital budgeting procedures. FG actually had no formal mecha- nism for capital projects. Kurzer changed this and set up a six-person expendi- tures committee (EC) that would decide projects costing more than $200,000. Smaller expenditures would be decided at the regional and local levels