In late October 2011, after losing 1 billion of dollar reserves in one month, the Argentine government began imposing a series of currency controls, limiting the ability to buy foreign currency. As of October 2011, Argentina's tax collection agency AFIP had been granted the power to approve or reject all requests to buy dollars with pesos in Argentina's banking system. By June 2012, AFIP had removed ""saving"" as a legitimate explanation. While the official exchange rate was approaching six pesos to the dollar, the black market was demanding almost ten pesos to the dollar-a nearly 65% difference. These were not the first currency restrictions that Argentina had imposed on its citizens.
The Barbara Krakow Gallery is a successful contemporary art gallery located in Boston. It utilizes a very rare "no haggle pricing" strategy and extended sales cycle when selling pieces to collectors. Though it remains profitable and very respected, the size and scope of the gallery will be brought into question when Barbara Krakow, its founder, retires and hands it over to her associate, Andrew Witkin.
The German direct insurer Gothaer Insurance Group is among the largest insurance companies in Germany. In recent years, Gothaer was facing the challenge of replacing its existing collection systems. The replacement system was one of SAP's key modules for Insurance Solution, a standard software product called FS-CD (Financial Services-Collections and Disbursements). The first stage of the project significantly exceeded time and budget objectives. The second stage was expected to encounter serious technical problems. Consequently, the entire project was called into question. A meeting of the IT steering committee was scheduled at short notice to decide upon the project's continuance. This case chronicles the series of events leading to that upcoming steering committee meeting.
Dominion Resources is an industry giant, generating and distributing electricity throughout much of the northeastern United States. The company has continuously explored and expanded into new markets. Its portfolio includes fossil-fueled electricity, nuclear power, renewable energies, gas exploration and more. This standalone A case considers a recent question of the proper mix between regulated and unregulated markets and the impact of such a decision on the firm’s future success. The standalone B case, Dominion Resources, Inc. (B) 9B13M009, examines how the disaster at the Fukushima Daiichi Nuclear Power Plant in Japan affects Dominion’s strategic planning given the change in public perception of nuclear power following the incident.
This standalone B case, which can accompany Dominion Resources, Inc. (A) 9B13M008, examines how the disaster at the Fukushima Daiichi Nuclear Power Plant in Japan affects Dominion’s strategic planning given the change in public perception of nuclear power following the incident.
In 2012, the director of a subsidiary campus of a national university was faced with many problems: he was personally overworked as both manager of the new campus and as a lecturer; there were too many part-time lecturers on staff, leading to a loss of commitment and morale; a decision had to be made about buying or leasing the newly renovated campus building; and, most importantly, all of his decisions were subject to approval by the main administration of the university. Without controlling the campus’s bank account, the director was unable to implement the initiatives he believed will allow the school to grow in a sustainable manner. The issues that arose as a direct result of this arrangement provided an interesting perspective on the difficulties involved in managing a small subsidiary of a large public organization.
The widespread cheating scandal that rocked the Atlanta public school system in 2010 and 2011 illustrates how high-stakes performance pressure, without sufficient risk controls, can drive dangerous behavior. After becoming superintendent of the low-income and academically struggling Atlanta, Georgia school system in 1999, Beverly Hall implemented new measurement systems-many of them derived from business best practices-to motivate and evaluate the performance of teachers and principals. Educators whose students performed well on standardized tests received bonuses and public recognition; educators whose students fell short received reprimands, warnings, and eventually termination. With so much riding on "meeting the numbers," teachers and principals began taking drastic steps, including collaborating to change students' test answers while intimidating colleagues who threatened to expose the deception. As Atlanta students' (fabricated) test scores soared, leaders in business and politics praised Beverly Hall's data-driven approach for transforming a lagging school system into a model of success. More than a decade into Hall's tenure, multiple investigations finally exposed the scandal in Atlanta-and its terrible impact on the district's students. (For instructors who want to inject some extra energy, and fun, in the classroom, this case study provides material for students to stage skits in front of the class to illustrate how and why the cheating occurred.)
In the American canon of anti-poverty programs, Moving to Opportunity (MTO)-a housing experiment conducted in the 1990s-stood out for its ambitious yet simple design. Under the experiment, more than 4,600 extremely poor families were randomly assigned to receive housing vouchers in five major American cities. Just like in clinical trials, MTO gave social scientists the opportunity to untangle the effect of place on poverty, and to learn if a better neighborhood could directly improve the lives of the poor. In 2003, a mid-term evaluation of MTO revealed a controversial and surprising outcome. After being placed in neighborhoods with low poverty, teen girls appeared to benefit far more from their new surroundings than teen boys. The rigorous empirical analysis of the MTO experiment had identified important differences by gender, but could not explain the social processes or experiences that led to those differences. A different research methodology would need to examine what the quantitative data could not. This case profiles the qualitative research conducted by Harvard sociologist Kathryn Edin and others on MTO teens. With the help in-depth interviews the researchers offer a deeper understanding of the daily experiences and behavioral patterns that shaped the divergent outcomes between MTO male and female adolescents. Case Number 2007.0
New MBA graduate Larry Steffen has accepted an attractive job offer from Athena Global Technology but must now choose one of two alternative compensation plans. The first compensation plan option includes a base salary plus a $25,000 cash bonus, and the second includes the same base salary plus employee stock options. In order to evaluate and decide on one of these plans, Larry must estimate the value of the offered stock options and consider several complicating factors, including whether he will remain at Athena for the five-year vesting period necessary to receive the options. This case introduces students to option valuation and facilitates a discussion about the effectiveness and potential benefits and problems associated with the use of stock options in compensation packages.
Tetra Pak, the world's largest manufacturer of aseptic packaging materials, is a typical market leader that faces growing challengers around the world and runs the risk of becoming embroiled in antitrust cases. Greatview Aseptic Packaging Company Limited ("Greatview") is an exemplary Chinese national champion that penetrates into developed markets, which are usually saturated with only a few key players. The case describes how Greatview emerged and challenged Tetra Pak, which set industry standards largely by using the tying and bundling strategy and the innovation and patent strategy. Since 2003, Greatview has actively influenced the Chinese government to establish and enforce an antitrust law, which supports the company as it positions itself as the best alternative to Tetra Pak for reducing customers' single-supplier risks and costs. In 2011, Greatview announced the building of its first overseas plant, in Germany, to penetrate into Tetra Pak's home market of Western Europe-the world's largest market for aseptic packaging. In 2013, although Greatview announced ambitious factory expansion plans, its challenges overseas are huge. Meanwhile, Tetra Pak realized that its European patent was not able to protect its historic innovation, aseptic technology, from being imitated. Even more complicated, the State Administration for Industry and Commerce, China's market regulator, launched a national investigation against Tetra Pak, accusing it of misusing its dominant position to limit competition. Both companies need to devise their next competitive moves.
Seven years of research into how teams work shows just how great the benefits are when team members have lots of experience working with one another. Five steps can help managers take advantage of team familiarity, a surprisingly underutilized tool.
Companies that have what the authors call two-dimensional (2-D) diversity--their leaders exhibit both inherent and learned diversity traits--are much more likely to understand their clients and unlock innovation among their workers.
Research shows that mobile banner ads can be effective for some products--those that are both utilitarian and "high involvement" (bought only after much deliberation on the consumer's part). Marketers who understand this can spend their mobile dollars more wisely and tailor and time their ads for maximum impact.
"No" doesn't necessarily mean "never." In fact, new research from Stanford shows that people who've refused your first request are much likelier to agree to your second one than anyone would expect.
Since the global financial crisis, speculation has been rampant about the dollar's looming if not imminent displacement as the world's leading currency. The author makes the case that the crisis has actually strengthened the dollar's position.
The numerous gains in health and wealth over the past few centuries have had the unintended effect of widening inequality gaps: Every breakthrough makes some people better off than others. Although some amount of inequality may be necessary for growth, inequality becomes intolerable when the successful use their advantage to pull even further ahead of the rest.
Data about hours worked per employee, productivity per employee, and per capita GDP in several countries around the world. The bad news: Even "hot" emerging markets like Brazil have seen little growth in productivity in recent years, so even if labor markets recover, those gains might not result in much added GDP.
In the early years of the new millennium, citizens of the growing industrial and commercial city of Pune, India, often faced power cuts as the state-run electricity utility struggled to meet growing demand. Government projections suggested that this situation would continue for several years. Rather than take this situation for granted, a group of concerned industrialists met under the umbrella of the Confederation of Indian Industry and the leadership of Pradeep Bhargava to find solutions to this problem. They soon realized that each of the large companies resident in the city had huge back-up diesel generation sets that were often idle since the power supplied from the grid was cheaper, even after they paid a commitment charge to the utility for ensuring continuous power supply. Could this back-up resource be used to meet the shortfall of power faced by the city? A quick back-of-the-envelope calculation revealed that the city's shortfall and the captive generating capacity of the largest companies matched each other. Feeding this power into the grid was complex technically as well as from a regulatory perspective. Instead, the group realized, why not persuade the companies to use their diesel gensets for their own consumption during peak periods, thus freeing up grid power for use by the citizens and other businesses of the city? This proposal came to be known as the Pune Power Model. Different stakeholders such as the industry regulator, citizen groups, the government, political parties and the industry had different views on the feasibility as well as the desirability of pursuing this model. This case describes the challenges faced, and the change strategies used, by the proponents of the Pune Power Model in getting the model accepted and implemented. It raises questions regarding the appropriateness of such a model as well as the role of industry in solving social problems.