What role does trade finance play in facilitating global supply chain management? Richard S. Elman, founder and CEO of Noble Group Ltd., a global commodities trading company based in Hong Kong, must raise capital to support the firm's working capital and investment needs. In evaluating by which means Elman should raise capital, students must consider issues relating to the payment terms and financing arrangements used in world trade, as well as the risk management and operating decisions of a trade intermediary.
Accounting fraud issues have taken centre stage whenever there is a discussion about the bankruptcy of Worldcom. However Worldcom's performance was in turmoil even before the fraud issues surfaced. The fundamental strategic, management and industry issues that catalyzed the culture allowing fraudulent behavior that lead to the bankruptcy of the company are discussed.
Executives overestimate the relevance of individuals to collective behavior. Agent-level changes won't help you meet system-level goals - and they're likely to yield unintended consequences.
Organizations are tapping people's mental and physical energy on the sly and using it to power lights, digitize books, and do other work. Are they simply putting "wasted" energy to good use or extracting value they should be paying for?
Asked to take a basic financial literacy exam, a representative sample of U.S. managers scored an average of only 38%, which doesn't bode well for either the individuals or their organizations.
The companies that consistently generate revenues through innovation - GE, P&G, Nestle, and others - are highly selective about the projects they pursue.
In July 2008, BP was embroiled in a dispute with the Russian partner of its TNK-BP joint venture. The partners had many areas of disagreement, including the level of capital investment, dividend payouts, international expansion, the number of expatriates, and selection of the CEO. The joint venture also had problems with the Russian government over employee visas and exploration licenses. From BP's perspective, the joint venture was an important part of its global oil and gas business. TNK-BP accounted for nearly one-quarter of BP's oil production, and close to one-fifth of its reserves. How the issues between the partners and with the government were resolved would have a lasting impact on BP and its presence in Russia. The resolution would also impact Russia's overall reputation for attracting and supporting foreign investment.
This B case, which accompanies "Hudson's Seafood Corporation (A)" (UVA-OM-0875), is ideal for use in service- and operations-management business courses. It presents the business decision made by an owner who has considered which option to focus on for each of his two restaurants: a distinctive service package or reshaping one restaurant around the market currently being successfully served by its sister restaurant. A teaching note (UVA-OM-0875TN) that includes video from the era when the A case was written is available to support both cases in this set.
SAS: Leadership in Business Intelligence is set in 2007 and traces the history of a great analytics software firm, considered to be the leader in a domain loosely characterized as Business Intelligence. The firm is one of the world's largest private companies, global leader in Analytics and Business Intelligence and the 33rd largest software company in the world. Ownership of SAS is concentrated in the hands of two programmers, one of whom, Jim Goodnight, holds two thirds of the shares and has acted as CEO for the last 30 years, piloting the strategy of the firm. SAS was originally a statistical analytics software package developed by Jim Goodnight and his original partners before the founding of the firm in 1976. Between its founding and 2007 the firm developed a breathtaking array of software add-ons and capabilities that allows firms to perform data storage, data mining, reporting and generate scorecards that enable managers to forecast opportunities and make data-based decisions for the future.
In 2007, Wyeth Pharmaceuticals' manufacturing organization faced a number of challenges, requiring that it revolutionize the way its 17,000 people operated. The case describes alternative methods of systemic change considered by Wyeth, the approach they implemented, and how they rolled out the changes across more than 25 sites worldwide. The transformation of one plant is described in some detail. The case also describes setting of objectives and expectations, engagement of leaders and staff, and the use of outside advisors.
Research shows that even a few minutes of sleep can improve memory and problem-solving skills. In light of the potential benefits to productivity and performance, you may want to encourage your employees to catch a few winks during the day.
Sunnylake Hospital is being held up by online extortionists who have blocked access to its electronic medical records and are demanding $100,000 to restore it. Paul Layman, Sunnylake's CEO, didn't take their first e-mail seriously, and now the hospital has ground to a halt. Paul's golden-boy IT director can't seem to outwit the hackers. Sunnylake's legal counsel tells Paul, "Literally every second is a liability." The chief of staff is in a mutinous fury. What should Paul do? Three experts comment on this fictional case study in R0910B and R0910Z. He should pay the extortionists, advises Per Gullestrup, the CEO of Clipper Projects, who in late 2008 was closely involved in negotiations with Somali pirates who had seized a Clipper Group ship. But first Paul should hire a negotiator to prevent the extortionists from doing further mischief. He should absolutely not acquiesce, says Richard L. Nolan, a professor at the University of Washington's Michael G. Foster School of Business, because the hackers may have embedded further corruption in the system. And Paul must communicate fully with the staff, his board, patients, and the public. Peter R. Stephenson, chairman of the department of computing at Norwich University, recommends shutting down the servers, running a malware scan on every workstation in the hospital, and watching what happens for 24 hours, in case the extortionists are insiders.
This is an MIT Sloan Management Review article. Sustainability is garnering ever-greater public attention and debate. However, the business implications of sustainability merit greater scrutiny-and scrutiny of a different kind than the "green"-oriented focus that's most common. Will sustainability change the competitive landscape and reshape the opportunities and threats that companies face? If so, how? How worried are executives and other stakeholders about the impact of sustainability efforts on the corporate bottom line? What -if anything -are companies doing now to capitalize on sustainability-driven changes? And what strategies are they pursuing to position themselves competitively for the future? To begin answering those questions, MIT Sloan Management Review and collaborator The Boston Consulting Group conducted in-depth interviews with more than 50 global thought leaders, followed by the Business of Sustainability Survey of more than 1,500 worldwide executives and managers about their perspectives on the intersection of sustainability and business strategy, including their assessments of how their own companies are acting on sustainability threats or opportunities right now. The study identifies three major barriers that impede decisive corporate action: a lack of understanding of what sustainability is and means to an enterprise; difficulty modeling the business case; and flaws in execution, even after a plan has been developed. The study also reveals that while novice practitioners think of sustainability mostly in environmental and regulatory terms, with any benefits stemming chiefly from brand or image enhancement, practitioners with more knowledge tend to consider the economic, social and even personal impacts of sustainability-related changes in the business landscape.
This is an MIT Sloan Management Review article. MIT Sloan Management Review's first annual Business of Sustainability survey revealed much about what executives are thinking and doing about sustainability-driven concerns right now -as well as what's impeding their attempts both to capture opportunities and defend against threats. The most widely credited leading thinkers at the sustainability and management intersection, though, wanted to explore something else: the ways that many fundamental management and strategy practices will be transformed by the pressures that sustainability issues are already bringing to bear. This article identifies eight significant ways that current management expectations and practices will be affected by growing societal and economic understanding about sustainability. Among them: how labor productivity can be dramatically increased by sustainably designed workplaces; how companies "bump into" sustainability-related choices, even when they don't look for them; how a company's sustainability profile will become a proxy for the organization's overall management quality; how innovation results are improved by pursuit of sustainability-related outcomes; how sustainability efforts within an organization lead to more productive collaboration across typical organizational silos; and how transparency and trustworthiness will become increasingly consequential to competitive success.
This is an MIT Sloan Management Review article. MIT Sloan Management Review's Business of Sustainability survey and thought leaders interview project identified numerous management challenges presented by the new competitive landscape that sustainability pressures is creating. Perhaps the biggest challenge, though, is how to build the "business case" for investing in a sustainability-related project -even when you believe that the project addresses a significant opportunity. What do executives need to know about sustainability as a business proposition? Interviewee Amory Lovins, co-founder of Rocky Mountain Institute, co-author of Natural Capitalism -Creating the Next Industrial Revolution and recipient of a MacArthur Foundation "genius grant," argues that executives labor under several pernicious misunderstandings about how sustainability affects business -the worst being that sustainability efforts have to cost a company, when in fact, says Lovins, they nearly always increase profits. How does one begin to build a persuasive business case for undertaking sustainability-related initiatives? Map your flows and costs of materials and energy, says Lovins; you will find fiscal "leaks" that can be fixed, with direct bottom-line benefits. He also points out numerous side benefits of sustainability-related efforts: gains in innovation, labor productivity and appeal as a collaboration partner. Those benefits, he argues, will exceed the direct ones.
This is an MIT Sloan Management Review article. In 1994, when Interface Inc.'s founder and CEO Ray Anderson began to think about his legacy, it made him uneasy. Deep down, Anderson realized that the business model of the commercial carpet manufacturing company he had founded 20 years before was based on "digging up the earth and turning petroleum and other materials into polluting products that ended up in landfills"-not something he wanted his grandchildren and great-grandchildren to remember him by. So at age 60 Anderson broke with the old model and began anew. Standing up to naysayers (whose ranks included associates, suppliers and Wall Street analysts), he set out to transform Interface from a traditional business built on consumption and waste to one whose focus -that is, beyond profitable growth -would be zero waste and restoring the earth. Since the start of the journey, Anderson and his associates have confronted technical barriers that no one could have anticipated. But inch by inch, kilowatt-hour by kilowatt-hour, recycled pound of carpet by recycled pound of carpet, Anderson's vision has moved closer to reality. In addition to becoming increasingly efficient in its energy and materials usage -for example, 89% of Interface's global electricity and 28% of its total energy come from renewable sources -Interface prides itself on its ability to turn an increasingly large percentage of its carpet into new product. It is also proud of the influence its sustainability efforts are having on other companies. This article presents a timeline showing how Anderson's "mental model" changed and how he and his company moved along the road to sustainability.
This is an MIT Sloan Management Review article. Successful innovation -the kind that leads to customer engagement and profits -is rare and hard to achieve, or so one might conclude from observing the results of many companies'innovation efforts. Some have tried investing intensively in research and development. But the author recently studied public companies representing almost 60% of global R&D expenditures and found that above a certain minimal level, there is generally no correlation between R&D spending and financial metrics such as sales or profit growth. For many companies, developing new products is hit-or-miss. But according to the author's research, successful innovation is not magical. It comes from careful attention to a small number of important criteria. The key question isn't how much to spend, but how to spend. The author introduces a "return on innovation investment," or ROI2, methodology that correlates directly with organic growth and links innovation spending with financial performance in ways that can lead decision makers to generate higher, more reliable returns on innovation and R&D. The ROI2 approach is based on a series of innovation studies conducted during the past seven years with companies in the consumer products, health care and chemical industries. To become more effective, a company needs to diagnose its innovation practices and capabilities. The diagnosis can be quite different from one company to the next, and that is why adopting industry benchmarks doesn't work. The individual innovation profile represents the value and quality of a company's innovation portfolio and can be clearly expressed as an "innovation effectiveness curve." This curve lets companies plot annual spending on innovation projects against the financial returns from those projects -and "solve for growth."