After an international IPO yielding extraordinary returns to original investors, Banco Compartamos, Mexico's leading microfinance institution, contemplates its future strategic and competing priorities: maintaining growth, defending industry, leadership, preserving social mission and meeting the expectations of a demanding capital market. Additionally, Compartamos' Co-CEOs must decide how to face the highly polarized reactions in the microfinance industry to its IPO. In the process, the case examines the history of Compartamos, from its NGO origins to its license as a full service bank; describes the competitive context of low-income sector of financing in Mexico; and reviews the decisions leading to the IPO in the Mexican Stock Exchange.
In discussing the key cost management principles every executive must know, this technical note organizes the information under six principles. For example, the many meanings of the word "cost" are defined in an abbreviated costs glossary under the first principle while the remaining principles cover relevant costs, allocating indirect costs, good cost data, and second-effect costs.
One year after going into the chip-manufacturing business and hiring a new CEO to reorganize the company, Diversified Electronics Corporation realized that under the new organizational structure, it was clear that last year's results were mixed, and expectations for the year to come would be hard to meet. Discontent focused on the costs that were assessed against each of the company's product lines. Product-line managers also questioned the cost of the chips produced by the chip-manufacturing operation-the largest part of the product-cost structure. The situation called for the implementation of new procedures.
This case explores the larger context of competition among Internet companies for market share globally, especially in the emerging Chinese economy, as well as concerns about advancing the core values of the company including user privacy. Specifically, it concerns the decision facing Yahoo! CEO Jerry Yang when he is confronted with a request by the Chinese government to release the name of one of its users for alleged violations of Chinese law.
Founded in 1870 to help finance surging German exports and imports, the Deutsche Bank soon moved into domestic banking. In fact, its founders aimed to create both a commercial bank and an investment bank under one roof--that is, a "universal bank." By the end of the nineteenth century, the Deutsche Bank was not only the largest bank in Germany, but also a strategic actor in the broader European market and, indeed, in the world economy. Over the first half of the twentieth century, however, the bank faced a series of national crises: defeat in WWI (1914-1918), revolution in 1919, hyperinflation in 1923, economic depression in the early 1930s, the rise of Hitler in 1933, another world war in 1939, and then total defeat in 1945. At the end of WWII, the Soviets closed the Berlin headquarters of the Deutsche Bank as part of their denazification effort. Meanwhile, the United States, Britain, and France, occupying the western portion of Germany, attempted to implement a policy of economic decentralization, and broke what remained of the bank into small pieces. By 1950, facing a proposal from leading German bankers to allow the big banks to begin reconstituting themselves, the Allied powers and the new German legislature had to decide whether to accept this proposal or reject it.
In October 2007, the OLPC reported production delays and missed its shipment date. In early November, the $100 PC finally went into production, with initial shipments planned for Uruguay and Mongolia, and mid-month launched the "Give One, Get One" program. It enabled consumers in the U.S. and Canada, who had the option of purchasing an OLPC for $400, more than double the estimated production cost of $188 for each laptop. Roughly half of the $400 amount went towards purchasing an OLPC for the consumer, while the other half went towards financing a laptop for a child in a different country. The program was popular and extended. But just as things were looking up for the non-profit, Intel resigned from OLPC's board in early January 2008 and announced that it would no longer be partnering with the nonprofit corporation. According to Intel, the move was a result of pressure it received from OLPC to stop marketing its own low-cost Windows-based laptop, the Classmate.
Glass Egg is an outsource games development firm in Vietnam. They are able to offer brand-name publishers -- Microsoft EA,Atari -- significant cost savings in the development of art assets for their video games. However, the firm's management find themselves at a point at which they feel they need to make a strategic decision that will enable Glass Egg to grow more substantially and more quickly. They are evaluating three possible directions including expanding the sales force, expanding the scope of art development services they offer and, more radically, going into the games publishing business themselves. Besides offering a picture of an interesting firm in a growing, dynamic country and business, the case allows for an exploration of two important general themes: 1.) Assessing alternative growth strategies. When should one pursue "more of the same" business vs. offering another product vs. looking for new customers? When is it better to develop an entirely different line of business with different customers and different products? (2) What are the differences between marketing to businesses vs. marketing to consumers? Since one of the options the firm is considering involves a consumer product -- online game development -- the case supports a discussion about the important differences, not only in terms of the nature of the buying process and buying center but also in terms of the vastly different organizational resources and structures that are needed in each.
Through stalled joint venture talks between Pennsylvania-based Wyoff Corp. and Jina-based China-LuQuan, strategic and cross-cultural negotiation challenges are explored both from American and Chinese perspectives. Wyoff, a leading US chemical company has been seeking ways to secure the company's foothold in China's emerging market since the late 90s. When approached by China-LuQuan in 2000, a major Chinese state-owned chemical producer for a joint-venture opportunity to make a popular chemical catalyst in China, Wyoff, Leveraging its superior technology, demanded one-sided terms and played hardball, ruining both the deal and the relationship with China-LuQuan. Seven years later in 2007, Wyoff faced market pressure to again seek a joint venture with China-LuQuan on two other types of products. Both parties had to overcome past distrust to work things out on a series of strategic issues: investment, product slate, marketing, technology, management, organization, staffing, etc. In the negotiations, cross-cultural themes (e.g. trust, relationships, communication, time, autonomy, face, etc.) and different negotiation styles created challenges along with the business and strategic issues. The (A) case sets up the negotiations, highlights issue impasses, explores cross-cultural frictions, and poses tactical challenges. The (B) case describes the strategies, tactics, and results of these negotiations.
To buy a desirable Martha's Vineyard property, Robert and Sally Franklin must craft a bidding strategy informed by their assessment of their competitor. The "A" case sets up the situation and bidding history to date, describes how they assessed their valuations and probabilistic views, and leaves them with a key decision. The B case describes their choice as well as the twists and turns leading to the conclusion.
To buy a desirable Martha's Vineyard property, Robert and Sally Franklin must craft a bidding strategy informed by their assessment of their competitor. The "A" case sets up the situation and bidding history to date, describes how they assessed their valuations and probabilistic views, and leaves them with a key decision. The B case describes their choice as well as the twists and turns leading to the conclusion.
The Chinese currency, the renminbi, has been a subject of controversy between China and its trade partners (especially the US), which accuse China of manipulating its exchange rate to make its exports artificially cheaper. They perceive the renminbi as an unfair weapon in international competition. Chinese officials responded that these attacks were groundless: the renminbi was not undervalued, at least not significantly. The peg contributed to maintaining a stable economic environment, which benefited all economic partners. They also said that, if the US was running a large trade and budget deficit, it was partly attributable to capital inflow from China. The US should focus on the weaknesses of its own economy that generated these deficits, instead of treating China as a scapegoat. Officials also said that China was a sovereign country with the right to choose its exchange rate policy. Throughout 2005 to 2007, the debate was regularly in the news and it was likely that arguments would become tougher if US and European trade deficits with China continued to increase. This case is about economics and business, introducing the basics of monetary economics and demonstrating practical applications of monetary policies and exchange rates that pertain to business decisions..
ProntoWash management considers whether franchising and the Balanced Scorecard could be combined to help customer-facing employees provide consistent service across the world and capture relevant management information. In 2007, ProntoWash, an international car-wash company based in Argentina, was planning for rapid growth throug a combination of owned and franchised operations. CEO Sergio Kompel needed to fina a performance management system that would help the firm maintain a unified focus and operational consistency in new and existing points of sale around the world. One measure that Kompel and his team were considering was the Balanced Scorecard, a tool traditionally used by top management. The challenge for ProntoWash was to design a Balanced Scorecard that would be accessible throughout the organization, from the executives in the central office, to the franchises, to the workers at the front line.
This note summarizes a lot of the research on communication and language in its relationship to exercising power. Specifically. How language is used to negotiate power, what are the characteristics of effective communication, and how you can tell if someone is lying are all briefly considered. The note is used in a class on power in organizations, for a session on the use of language in attracting support and allies.
This note summarizes important ideas in the social networks literature-including brokerage and structural holes and the trade-offs between networking and getting work done and between brokerage relationships and the dense connections required to build trust. The note was prepared for a class on power in organizations for a session on building efficient social networks. It can be used with readings or cases on the importance of social relations in building power.
At the start of WWI, the United States faced a significant housing shortage. Public officials feared the spread of disease--and even communism-- in the nation's cramped urban centers where vacancy rates held near zero and families often "doubled up" in single housing units. Hoping to spark a burst of new construction, New York Senator William Calder called for the creation of eleven regional Federal Building Loan Banks that would serve as a new source of funds for mortgage lenders. The proposal was controversial, however. Opponents disliked the fact that the Federal Building Loan Banks would have the authority to issue tax-free, mortgage backed bonds, and many claimed that the private market would solve the housing shortage on its own. Proponents of the bill, meanwhile, believed that it was necessary to stave off a potentially disastrous and protracted housing shortage, and they cited the long-successful mortgage bond markets in France and Germany as evidence that their plan could succeed. Federal lawmakers had to assess the arguments on both sides and render a decision.
Examines an acquisition in the highly competitive outdoor media advertising industry in China in late 2005. The transaction leads to eventual consolidation of the whole industry and positive stock reactions. Discusses equity consideration in the context of an M&A transaction, and the role of private equity and venture capital in the development and the eventual consolidation of the industry in emerging markets. Provides a context in which to discuss the impact of antitrust regulation, or lack thereof, on the industrial organization in China.
Supplements the A case [308027]. With its dual listings on the Hong Kong stock market and New York stock Exchange, state-owned enterprise, China Netcom was mandated to meet the listing requirements of these exchanges. From this initial step, China Netcom's Chairman, Zhang Chunjiang, began a program that sought to further develop the company's corporate governance practices to meet international corporate governance standards. The company hoped that its commitment in developing a globally-accepted governance structure would help the capital markets and potential investors understand that the company was true, modern corporation, even with the state as a majority owner.
LG Chemical had entered into China's market for ABS, a common plastic, through their subsidiary LG Yong Xing ("LGYX"). From its foundation in 1996, LGYX had targeted Chinese manufacturers who served the domestic market and made just one type of low grade ABS. By the end of 2006, LGYX was the largest company in the Chinese ABS market, boasting a 27% market share and sales of US$709 million annually. However, the market for ABS was changing. With exports by Chinese manufacturers growing, demand was shifting to higher grades of ABS. Moreover, LGYX was facing competitive pressure from both local producers as well as producers in the Middle East. Should LGYX stick to its current product mix? Management decided that it must critically review the subsidiary's strategy over the previous ten years in order not to be entrapped in rigid group thinking
In December 2004, Donald Berwick, MD, president and CEO of the Institute for Healthcare Improvement (IHI), challenged U.S. hospitals to reduce unnecessary deaths by 100,000 within the following 18 months. By the end of this 18 month period, over 3,100 hospitals enrolled in the "100,000 Lives Campaign," representing more than 70 percent of U.S. hospital beds. Calculations estimated that approximately 123,000 preventable deaths were avoided in participating hospitals. The case describes the state of quality in the healthcare industry, the history of the IHI, and the IHI's efforts to bring modern quality practices to health care. After seeing pockets of improvement, the IHI launched the 100,000 Lives Campaign in an effort to stimulate large scale change. The campaign approach incorporated lessons from political campaigns and social activism. The operation of the campaign is described. The impact of the campaign on hospitals is also discussed, with particular emphasis on one hospital that used the campaign as the basis for fundamental transformation.