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The case examines the liquidity issues that J. C. Penney (JCP) experienced in 2012 and 2013 following a decline in sales and profits over several years. Despite once being a highly profitable and growing company, the increasing pressures of competition led to changes in strategy and in management that were insufficient to return the company to the consistent financial results it had previously enjoyed. While sales and profits waned, the cash balance also suffered, and Wall Street analysts began expressing liquidity concerns as the company wrestled with having enough cash on hand to cover daily operating needs.

Students are asked to calculate a time series of quarterly liquidity and leverage ratios to illustrate the declining financial condition of the company. They are further challenged to weigh the benefits and drawbacks of raising equity versus debt as a solution for the company's lack of liquidity. To assess the amount of external capital required, students are asked to use a sources and uses analysis that provides intuition for the cash flow challenges facing the company. Set against the background of an iconic retailer, the case provides an engaging context in which to discuss the need for a major capital structure decision due to operational challenges.

This comprehensive case has been written for an undergraduate-level course on general management and a post-graduate-level course on organizational behavior and strategic management. After working through the case and conducting an in-depth discussion of the assignment questions, students will be able to do the following: 1. perform a comprehensive assessment of the institute’s internal context to measure its resources and preparedness to deal with COVID-19; 2. apply organizational change frameworks (to understand the trigger of the change, type of change and change process); 3. qualitatively analyze the dynamic capabilities and resources available to reopen the institute; and 4. suggest ways to institutionalize agility in the organization to improve the preparations and future responses to student management on campus based on a thorough analysis.

Founded in 1996, the Indian Managerial Studies Institute, Indore, has emerged as a leader in management education by appropriately weaving the pertinent roles of industry, government and PSUs into a common thread. With the onset of COVID-19 in March 2020, IMSI Indore began to respond to educational and administrative challenges by building on resilient strategies. Two decision-making situations cropped up as the situation improved and again converged to the more lethal second wave in March 2021. Dr Hemant Vishwas, Dean of IMSI Indore, needed to determine whether the institute should continue with the reduced employee and hybrid classroom model or reopen with full-fledged operations for the following academic year.

This comprehensive case has been written considering the teaching pedagogy for an undergraduate-level course on organizational behavior (organizational development and change module) and a post-graduate-level course on organizational behavior and strategic management. This case is suitable for courses on organizational development, change and strategy implementation. Organizational behavior and organizational development and change can be used to understand the core concepts of the change content and process, i.e. the scope and scale of the change. The case also touches on inducing a dynamic change in response to the pandemic in an educational setting, teaching the concepts of dynamic capabilities. It is also expected to be useful for teaching courses related to operations strategies in educational services for executive degree programs and faculty development workshops.

Teaching notes are available for educators only.

CSS 6: Human Resource Management.