As a child, Mikala Eagle loved riding her skateboard and doing tricks. By the time she was a teenager,
she was so good that she began entering and winning professional contests. By her twenties, Eagle was
so successful and popular that she could make skateboarding her career. A skateboard maker sponsored
her in competitions around the world.
The sponsorship and prize money paid enough to support her for several years, but she was barely
getting by. Eagle knew she would have to take her business in new directions so she decided to launch
her own brand of skateboard. She called it Soaring Eagle Skate Company. To finance her venture, she
pooled her personal savings with money from her friend Pete Williams, who wanted to invest in the
company. Together they came up with$75,000. It didn’t take long for young skaters to snap up Soaring
Eagle skateboards. The launch was an instant success.
As the company prospered, Eagle considered ideas for expansion. Another of Eagle’s friends designed a
line of clothing she thought would appeal to Eagle’s skateboarding fans, and Eagle’s name on the
product would lend it credibility. However, Eagle discovered that the business of shorts and shirts is far
different from the business of sports equipment. The price markups were tiny, and the sales channels
were different. Three years into the expansion, Soaring Eagle had invested millions of dollars in the line
but was losing money. Eagle decided to sell off that part of the business to a clothing company and cut
her losses.
Soon after that experiment ,co-founder Williams proposed another idea: They should begin selling other
types of sports equipment—inline roller skates and ice skates. Selling equipment for other kinds of
sports would produce more growth than the company could obtain by focusing on just one sport. Eagle
was doubtful. She was considered one of the most knowledgeable people in the world about
skateboarding, but she knew nothing about inline and ice skating. Eagle argued that the company would
be better off focusing on the sport in which it offered the most expertise. Surely there were ways to
seek growth within that sport—or at least to avoid the losses that came from investing in industries in
which the company lacked experience.
Williams continued to press Eagle to try his idea. He pointed out that unless the company took some
risks and expanded into new areas, there was little hope that they could continue to earn much of a
return on their investment. Eagle was conflicted. Her takeaway from their failed attempt to sell clothing
was that they needed to be careful about expansion. But Williams was adamant that they needed to
generate new revenue streams. She could go along with Williams and take the chance of losing more
money, or she could take her savings and try to buy Williams’s share of the company and run Soaring
Eagle on her own.
DISCUSSION QUESTIONS
1. How do the characteristics of management decisions—uncertainty, risk, conflict, and lack of
structure—affect the decision facing Mikala Eagle?
2. What steps can Eagle take to increase the likelihood of making the best decision in this
situation?
