March 2001 (Revised April 2001)
Case
HBS Case Collection

MiCRUS: Activity-Based Management for Business Turnaround

By: Robert S. Kaplan, Jonathan B. Schiff and Stanley Abraham

Format:Print
| Pages:19

Abstract

MiCRUS is a new company, spun off from IBM as a joint venture between IBM and Cirrus Logic to produce semiconductor wafers at world-class costs for its two parent companies. The senior management team needs to overcome the bureaucratic, internally focused culture that existed when the plant was a captive IBM supplier. They turn to activity-based costing/activity-based management to engender a more entrepreneurial culture where decentralized work teams take responsibility for initiating and accomplishing significant cost reduction projects. This case describes how project teams use activity-based information to identify opportunities and set priorities for cost reduction projects, and then report on progress at open management meetings. The senior managers also introduce an Open Book Management philosophy where financial data is shared with all employees.

Keywords

Activity Based Costing and Management; Cost Management; Semiconductor Industry

Citation

Kaplan, Robert S., Jonathan B. Schiff, and Stanley Abraham. "MiCRUS: Activity-Based Management for Business Turnaround." Harvard Business School Case 101-070, March 2001. (Revised April 2001.)