This supplement to Competing for Development (A): Fuel Efficient Stoves for Darfur (A), product 9B08M061 provides a summary of the dynamic interaction between the key players from 2007 to 2008 and offers students a new decision point for how CHF Sudan could harness the momentum of change moving forward.
The Crescent Standard Investment Bank Limited (CSIBL) was the largest investment bank quoted on all the stock exchanges in Pakistan, so when it declared a huge loss of Rs2.1 billion (US$35.5 million) for the year December 31, 2005 the market was taken by surprise. There had been some rumors that all was not well and that the investment banking regulator, Securities and Exchange Commission of Pakistan (SECP), had sent a team to investigate the affairs of the bank. Since the main shareholders were individuals or companies of the well-known business group known as the Crescent Group, there was enormous interest in the CSIBL affairs by financial and political circles as well. The case describes the various types of entities that were merged to form the CSIBL, principally to protect the stakeholders by creating an entity with a large capitalization. The bank had reported in its annual reports that all the internal control mechanisms for good governance stipulated by the SECP were in place and the auditors (internal and external) had reported that these were satisfactory. Yet, when subjected to an investigation, it was revealed that the internal management was involved in a variety of acts of misrepresentation and concealment. The case focuses on the weaknesses in the structure of the corporate governance regime in Pakistan. The fact remains that no amount of internal or external checks can stop the internal management from colluding to perpetuate a fraud.
To make its supply chain fit for the future, Hilti, a global player in the construction industry, is revising its current supply chain setup. In particular, the firm has identified three restructuring alternatives: (1) Low pain low gain: Keep the existing supply chain setup and pursue only minor changes. (2) Consolidate around existing structures: Increase the profitability of the existing structures and consolidate production. Closures of individual plants might be necessary. (3) Greenfield: Exploit the potential of a low-cost region and shift the entire production to new facilities in Eastern Europe. The case takes a look at the different options Hilti has and outlines the underlying strategic alternatives. Learning objectives: While discussing the case, students will specifically learn about the chances, difficulties and trade-offs between different objectives involved with supply chain reorganization.
Should this gene detection firm enter the business of providing tests for the detection of genetic diseases? If so, how should it prioritize the tests it could develop?
This case examines the challenges in implementing fair value accounting for mortgage instruments, the role of accounting in the sub-prime crisis, and proposals for revising accounting standards given the crisis.
Dr. Scott Gabu, Chairman of the Emergency Department of the world-renowned, university-based Mercy Hospital, was deeply disturbed when he read the letter from the family of John Samson, a patient who had come to the emergency room one week earlier, that described an incident that occurred at the hospital in which Dr. Jason Diliper, the attending Chief Resident in charge of Mr. Samson, irresponsibly threatened Mr. Samson's health by leaving his bedside while Mr. Samson was having difficulty breathing. Diliper had been a rising star at the hospital, but lately a number of reports about his behavior had concerned Gabu. Was Diliper burning out? What should Gabu do?
Dr. C.V. Chen received news that one of Lee and Li's senior assistants had found a loophole in a power of attorney from one of the firm's clients, SanDisk Corporation (SanDisk), that had allowed him to illegally sell the client's shares in a Taiwanese company and to sneak out of Taiwan with over NT$3 billion. Unfortunately, Lee and Li had no insurance to cover this embezzlement. Chen knew that the three senior partners needed to develop a plan of action to save the law firm, take care of the lawyers and other employees, maintain the reputation of the firm within Taiwan and abroad intact, do what was best for SanDisk and Lee and Li, and keep the more than 12,000 clients from deserting the firm.
For Intel Corporation, the processes and priorities that have made it so successful are difficult to overcome as the company tries to diversify away from its core. The case examines the history and evolution of the New Business Initiatives (NBI) group, as the leader grapples with the questions surrounding why so few of the unit's start-ups actually become significant businesses within Intel's existing divisional structure. While a handful have successfully "graduated" and continue to show high levels of promise, these ventures did not represent truly new and distinct businesses for Intel. Rather they were strongly tied to existing businesses, raising the question of whether NBI had simply become a way for existing divisions to off-load budgetary risk. The case examines what worked, and what didn't, and the challenges posed by transitioning new ventures into the mainstream of the company.
This technical note introduces the basics of forward and futures contracts. It covers the very simplest contract on financial assets with no income and expands the discussion to cover contracts on financial assets with dividends, contracts on foreign currency and commodities. There is a discussion on the difference between forward/futures prices and the expected spot rate.
This technical note covers the pricing of warrants. The note derives the basic formula for the pricing of warrants and offers a simple example to demonstrate the underlying concepts.
This technical note addresses the basics of risk measure for options. It introduces the different risk measures for options: Delta, Gamma, Vega, Rho, and Theta. Although the note focuses primarily on price risk (Delta) and the Delta risk (Gamma), it does address volatility risk (Vega), interest-rate risk (Rho), and time decay (Theta). In addition to providing derivations and basic calculations, the note provides a full description of Delta hedging.
Options on stock indexes, currencies, and futures all have something in common. In each of those cases, the holder of the option does not get the same things that the holder of the underlying asset gets. This affects the value of the option. In this note, we cover the valuation implications of this for options on stock indexes, currencies, and futures.
This technical note accompanies the case titled "Suntrust Acquisition of National Commerce" and describes the various capital ratios that are commonly used in the banking sector as well as gives an example of those ratios using a hypothetical bank. It also discusses briefly Basel I and Basel II which shaped capital regulations and ratios in the Banking sector.
This note provides an overview of interest rate parity and the hedged cost of international borrowings. The note describes the essential steps to hedge international borrowings with forward contracts and describes in detail the link between forward rates and interest rates and what drives that relationship.
Curled Metal Incorporated has declining sales, but has developed a new product (curled metal pile driver pads) that, in field tests, deliver customer benefits that are many times CMI's manufacturing costs. Joseph Fernandez and Rajiv Sanwal of CMI's Engineered Products Division are responsible for formulating a strategy for the new product. A key issue is the price to charge for the pads. The case raises issues of analyzing market potential, aligning price with business strategy, and the implications of a price on development and execution of integrated strategic options.
This case describes Molson's experiment with social media for creating brand awareness. It illustrates issues involved in social media marketing. Molson was faced with the challenge of how quickly the contents of social media could spread to various constituencies. There was a real danger of the situation getting out of hand if Molson did not respond quickly. The case encourages readers to ponder whether Molson's action was the only option available and to consider what its next steps might be.
In March 2006, the divisional vice-president of enterprise information technology for Canadian Tire Corporation (CTC) noted that the Business Intelligence (BI) system had not yet been implemented. Slow but steady steps were taken by his team but the implementation was one year behind. It was becoming evident that BI was not just about technology; the right people and processes had to be in place. The divisional vice-president wondered what his priorities should be in order to implement the BI system as soon as possible.