Cerner Corporation: Case Study

Group 6
Abhineet Mittal
Siddhi Nigvekar
Nitin Bharihoke
Ashish Majumdar
Suryoday Roy
Cerner Corporation
Healthcare software development company
Started in 1979
Based out of Kansas City
Has 3100 employees, nearly 400 managers
$404.5 million revenue in 2000
Featured in Fortune Magazine in "100 Best Companies to work for in
America" in 1998 and 2000
Valuation of $1.5 billion on March 20, 2001
Neal L. Patterson

Chairman & CEO of Cerner Corporation
Co-founder of Cerner Corporation
51 year old MBA Graduate from Oklahama State University
The Memo
Sent by the CEO to managers on March 13
Raises concern over decline in work culture and less working hours of
employees
Uses strong words , capitalized to emphasize
Expects employees to work from 7.30 AM to 6.30 PM
Asks managers to call employee meetings
Gives a 2 week deadline to managers to act



The Memo (contd)
Lists out potential punishments

Closure of Associate Center
Freeze in hiring
Introduction of punch-in punch-out system to measure work hours
Stop benefits for employees
Laying off staff
Hold on promotions
The Leak
Memo leaked on Yahoo Boards on March 21, 2001

Market upheaval
Trading of shares increases to 1.2 million shares from 650,000 a day on
March 22, shoots up to 4 million on March 23
Share price falls from $44 to $34 in 3 days, goes down to $30.94 on April 4
Valuation plummets 22% in 3 days

Reactions
By Analysts
Communication style & effectiveness of CEO questioned
Concerns raised about functioning of Cerner
- Suspect trouble within Cerner
- Need for employees to work overtime questioned
Leak contributed to share downfall in the already shaky market

By employees
300 employees reply back to CEO

Thank You