The International Monetary Fund was dismissed as almost irrelevant to the global economy, but during the 2008 financial crisis, it returned to center stage, providing financial rescues for developing countries.

This case was written as the financial accounting portion of the final exam for a first-year MBA course at Harvard Business School. The goal was to test students' ability to apply major concepts taught during the course to an industry which they had not covered, but which shared similarities in terms of economics with issues addressed in the curriculum. The company, Tokyo Auto Fire & Marine (hereafter Tokyo AFM), is a fictitious insurance company based in Japan. The new CEO is revisiting the accounting choices of his predecessors in light of changes in the economic environment of the firm. The case can also be taught as a review session.

In 2006, amidst shareholder upset over CEO Robert Nardelli's compensation and Home Depot's declining stock price, Relational Investors decided to further investigate the situation. As experts in turning around underperforming and undervalued companies, Relational's principals saw opportunities for Home Depot to improve its stock price through changes in strategy, corporate governance and capital allocation. In particular, Relational felt Nardelli's growth plan for the company had caused the decline in the stock price. Relational decided to invest in Home Depot and intended to initiate a proxy fight if the board did not reassess the company's strategy. Shortly thereafter, Nardelli left Home Depot and the board offered Relational a board seat. This case describes Relational's analysis of the problems at Home Depot, why they decided to invest, and how they went about getting their recommendations implemented.

The chairman of Taiwan-based Polaris Securities Co. Ltd. (Polaris Securities), announced approval of Polaris' investment plans in Singapore, Vietnam and Abu Dhabi. The chairman's name was known in Taiwan as synonymous with innovation and entrepreneurship. He had experienced great success in launching an information technology strategy and related complementary assets for online stock trading and online transactions. With a prominent performance, the chairman had made Polaris Securities stand out conspicuously in Taiwan's securities market. He also copied Polaris Securities experiences, such as computational finance, trading platform and customer service, to Polaris Securities (Hong Kong) Ltd. (Polaris Securities HK) to expand his business scope. The chairman contemplated whether Polaris Securities and Polaris Securities HK experiences could be duplicated in Singapore, Vietnam and Abu Dhabi.

Lantian Stock was China's first state-owned agricultural enterprise to have gone through the corporatization reform in mid 90's. Since its listing in 1996, Lantian Stock had recorded a dazzling performance in its financial statements. However, in October 2001, its resplendent image was smashed by an academic researcher, Liu Shuwei with her powerful 600-word article that pointed out the liquidity crisis of Lantian Stock. Consequently, all banks in China refused to extend loans to the company. Meanwhile, Liu faced defamation prosecution brought up by the company who initially denied the allegation. The defamation charge was dropped eventually as the Chinese regulators began to unveil the hidden truth that Lantian Stock had indeed involved in misreporting and perpetrating accounting fraud. Chinese media also dug up the controversial background, mythical tales and the previous fraud record of Lantian Stock. Since Liu could uncover the misstatement based on some basic financial ratio analysis, she remained skeptical about why such wrongdoings had not been discovered by related parties earlier. Alternately, the auditing or CPA firm of Lantian Stock commented that the fraud was undetectable as it had gone far beyond what CPAs could discover from its required procedure, and blamed it on the Chinese environment that was conducive to accounting fraud. Was the circumstance of Lantian Stock scandal as what the CPA had claimed?

The Stitch It Group (Stitch It) is a mall-based clothing alteration service. Having previously sold Stitch It to its current owners in 1990 (retaining the chief executive officer (CEO) position), the founder and CEO was presented with an opportunity in 2003 to repurchase the company. Having originally sold the business because he was too cash-strapped to grow it himself, Stitch It had since grown from three store locations to 84 stores under three brand names spread throughout Canada and the United States. In determining whether to buy back the firm he founded, the founder and CEO also needed to consider his daughter Jennifer's expressed interest in becoming an executive in the firm. How would he provide Jennifer with the proper technical training to become familiar with all aspects of the firm's business, and improve her business acumen and leadership skills? The founder and CEO had one week to inform the owners of his intent to purchase and he felt it was a good deal, considering the opportunity for growth. Even if the founder and CEO resolved to buy back his company, he wondered how to train Jennifer to take over the business one day.

The chairman of Taiwan-based Polaris Securities Co. Ltd. (Polaris Securities), announced approval of Polaris' investment plans in Singapore, Vietnam and Abu Dhabi. The chairman's name was known in Taiwan as synonymous with innovation and entrepreneurship. He had experienced great success in launching an information technology strategy and related complementary assets for online stock trading and online transactions. With a prominent performance, the chairman had made Polaris Securities stand out conspicuously in Taiwan's securities market. He also copied Polaris Securities experiences, such as computational finance, trading platform and customer service, to Polaris Securities (Hong Kong) Ltd. (Polaris Securities HK) to expand his business scope. The chairman contemplated whether Polaris Securities and Polaris Securities HK experiences could be duplicated in Singapore, Vietnam and Abu Dhabi.

This technical note provides a brief overview of tax planning, the U.S. tax system, and basic U.S. tax law attributable to fundamental business decisions in a corporation's life.

This note takes the reader through the development of a positioning statement for a target market. The exercise includes determining the relevant point of reference (market definition, product category, competitive set) and associated points of parity, the point of difference, and why customers should believe the product or service can deliver on the desired positioning. The appendix contains a description of perceptual mapping, a tool that is often used when making positioning decisions.

Kimberly-Clark in the Andean region had hit a performance plateau. Five years prior, Sergio Nacach had taken over as general manager for the region and had embarked on a cultural transformation to build a winning culture centered on the people who worked for the organization. This case explores what he did and the context within which he did it. Similar to other cases on high commitment work arrangements, but set in a non-U.S. context, the case discusses organizational cultural change, the extent to which high performance work practices generalize across settings, and what made the Andean region a particularly receptive place for this management approach. The case also raises the issues of how to keep the enthusiasm going and the extent to which this transformation depended on a particular individual and his personal style.

The chairman of Taiwan-based Polaris Securities Co. Ltd. (Polaris Securities), announced approval of Polaris' investment plans in Singapore, Vietnam and Abu Dhabi. The chairman's name was known in Taiwan as synonymous with innovation and entrepreneurship. He had experienced great success in launching an information technology strategy and related complementary assets for online stock trading and online transactions. With a prominent performance, the chairman had made Polaris Securities stand out conspicuously in Taiwan's securities market. He also copied Polaris Securities experiences, such as computational finance, trading platform and customer service, to Polaris Securities (Hong Kong) Ltd. (Polaris Securities HK) to expand his business scope. The chairman contemplated whether Polaris Securities and Polaris Securities HK experiences could be duplicated in Singapore, Vietnam and Abu Dhabi.

TeaBox was a small, food-selling retail shop located in secondary schools in Hong Kong. It was considered a bold enterprise as it was run by a non-governmental organization using social workers to test social enterprise as a way of servicing the community. After one year in business, an evaluation of the enterprise identified poor management as the cause of financial losses and complaints in employee surveys. The superintendent of TeaBox was determined to save the venture and began by investigating the financial statements and employee surveys in depth to find a way to make TeaBox a viable enterprise and differentiate it from other, similar providers. Based on this analysis, he wanted to develop a concrete plan to become successful.

This is a supplemental case to TeaBox - Running Tuck Shops in Hong Kong Schools (A), product 9B08M032. TeaBox management had identified employee dissatisfaction as a major reason for its poor first-year evaluation. Manpower reallocation was seen as a key success factor, and properly executed it could prove to the stakeholders that it was capable of running a successful social venture. The superintendent of TeaBox formed a committee to decide upon a new manager and to provide ideas for future expansion.

We believe that the practice of threat as a negotiation tactic is essentially without merit. While its risks are outsized, its benefits are few, if any. This renders threat utterly bankrupt as a strategy. Herein, we explore the drawbacks of threat as a negotiation tactic, and offer a series of practice pointers relevant to threat and its potential defenses.

When a firm chooses to enter or continue business in a foreign market, it becomes exposed to associated political risks which should be assessed and managed. Help is available for becoming aware of the level of macro political risk; that is, the political risk across industries or all businesses in entire countries or geographic regions. Yet, surprisingly little guidance exists by which to identify and assess firm-specific political risks, termed micro political risk. Herein, we offer some new perspectives on the nature of micro political risk within a host country, illustrating how it stems from economic, societal, and governmental forces. We have compiled a number of firm-specific variables which can affect the firm's micro political risk profile, and advance an innovative methodology by which executives can address these variables and develop an assessment of their firm's micro political risk. Examples of micro political risk situations are provided, along with discussion of implementing the proposed methodology.      

A series of visits to a Fortune 500 wholesale distribution company of technology products revealed a changing perspective regarding building and implementing reverse logistics programs. Five major initiatives define the reverse logistics program design process at this company: (1) Gain senior management support and turn reverse logistics into a company-wide initiative; (2) Involve your customers in the reverse logistics design process; (3) Give distinct recognition to the employees involved in handling returns within the firm; (4) Implement carefully developed written rules and procedures that reflect both internal and external concerns; and (5) Assign strict responsibility for the execution of the reverse logistics program. The study follows these five major considerations in more detail. The interviews and observations at this particular firm provide guidelines for managerial decisions relating to reverse logistics.     

A situational theory of leadership attempts to match a particular leadership style or type to specific external circumstances. The general idea is that one type of leadership will be effective in one situation, but a different type of leadership will be effective in another situation. Historically, situational theories of leadership have been too abstract to apply to specific situations. Nevertheless, the concept of situational leadership retains considerable intuitive appeal. In this article we draw on our previous research about situational leadership during resuscitation in a trauma center, in order to derive a general strategy of how a leader can best develop his or her own personal theory of leadership which best works for their unique circumstances. The core of the strategic approach involves: (1) defining goals for a specific situation, (2) defining potential leadership types, (3) identifying situational conditions, (4) matching a leadership style to the particular situation, and (5) determining how the match between leadership style and situation will be made. The medical trauma center we profile provided an interesting example of how leaders considered elements of the situation to guide their own leadership.

Is branding an effective tool for generating shareholder wealth for companies that are active in a business-to-business environment? Or, do other factors such as innovation and manufacturing efficiency-or the lack thereof-create or destroy shareholder wealth? Based on an examination of almost 1,700 companies listed either on the United States or European stock exchanges, this study reveals this crucial relationship could be described as a W-shaped curve with five distinctive phases, depending on the strategic branding position of the company. Used strategically, business-to-business (B2B) companies with a balanced corporate brand strategy, generally yield a return to their shareholders that is 5%-7% higher. It is therefore vital that key executives, including the board of directors, systematically assess and monitor the strategic branding position of their company and how their branding investments are performing against key competitors. This study reveals that shareholders should insist on systematic performance feedback from the corporation regarding all key items in the balance sheet-it - including branding. As disclosed herein, very few of the companies analyzed possessed an optimal balance between branding and financial performance.     

Brand extensions are always tempting to marketers, and in the case of luxury brands the allure is particularly strong. While the path to luxury brand success may be partly paved with extensions, there are even more examples of brand extension disasters that litter the way. Brand extensions continue to be among the most researched and studied phenomena in marketing. When it comes to luxury brands, however, the factors that lead to successful extension have received far less attention. In this article, we consider the notion of perceived premium degree of the brand as a function of its category, and what we term the degree of adjacency between its product categories. Building on our research, which found that a luxury brand's perceived premium degree has a different impact on profitability depending on whether or not the brand is spread across adjacent product categories, we demonstrate when luxury brand extensions work-and when they fail. Perhaps most importantly, we herein introduce the premium adjacency matrix as a tool for luxury brand managers to consider in formulating extension strategies.