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Carter Racing

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Carter Racing*

David Eccles School of Business
University of Utah

 Jack W. Brittain, Sim Sitkin 1986, revised 2000

John Carter was not sure, but his brother and partner, Fred Carter, was on the phone and needed a decision. Should they run in the race or not? It had been a successful season so far, but the Pocono race was important because of the prize money and TV exposure it promised. This first year was hard because the team was trying to make its name and so had run in a lot of small races. A successful outing could mean more sponsors, a chance to start making some profits for a change, and the luxury of racing only the major events. But if they suffered another engine failure on national television …
“These …show more content…

If we withdraw now, we can get back half the $30,000 entry. We will lose
Goodstone, they’ll want $25,000 of their money back and we’ll end the season $50,000 in the hole. If we run and finish in the top five, we have Goodstone in our pocket and can add another car next season. You know as well as I do, however, that if we run and lose another engine, we are back at square one next season. We will lose the tire sponsorship, and a blown engine is going to lose us the oil contract for sure. No oil company wants a national TV audience to see a smoker being dragged off the track with their name plastered all over it. The oil sponsorship is
$800,000 that we cannot live without. Think about it
-- call Paul and Tom if you want -- but I need a decision in an hour.”
John looked out the window at the crisp autumn sky. The cars were already on the grid, spectators admiring the gaudy paint, excitement mounting in anticipation of the start. This was what made racing at this level special, the cars on display with crowds mingling around and waiting for the engines to roar to life. In an hour, they would retreat to the stands and the cars would circle the track in anticipation of the start. The temperature sign across the street flashed “40 DEGREES 8:23 A.M.”

 Permission to use, a copy of the complete updated case, and teaching materials can be obtained online from Delta Leadership at http://www.deltaleadership.com/case-studies.php

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