Wayne Eisener has received two job offers. The first offer is an executive vice-president position at Richmond Hill Mortgages (RHM). The second offer is a junior lawyer position at Weiler and Simons LLP, Barristers and Solicitors. The mortgage company offers a small base salary but potentially large commissions in the long run. The law firm offers a higher base salary and the opportunity to be promoted to partner within five years. However, Eisener would need to update his knowledge of law substantially. As he reflects on the advantages and disadvantages of each job, Eisener must consider his past and how each job will help him accomplish the goals of providing for his family and creating a resurgence in his career.
This technical note focuses on risk management in a project-based organization. Risk management is discussed at the organizational and project levels. Three components of risk management are mentioned: risk assessment, risk management plan, and risk monitoring. Recent thinking in risk management has gone beyond financial risk management and incorporates enterprise risk management (ERM). Finally, the technical note links risk management to strategy, and notes the importance that the implementation of both has on the performance of the firm.
In negotiation, correctly identifying your counterpart's strategy is vital. Only then can you constructively influence their behavior--or adapt appropriately to what they are doing. This case--and its related computer-based exercise (Negotiation Strategy Simulation)--illuminate how through a thoughtful process of probing and testing, a negotiator may determine whether the other party tends to be cooperative or competitive. The material also demonstrates how the benefit of such learning must be weighed against the possible costs of being provocative.
Marcelo Alecrim, the owner of SAT, a gas distribution company in Brazil, envisioned many growth opportunities but lacked financial resources to pursue them. He was approaching an American private equity fund to raise money. Describes Alecrim's challenge in creating SAT and the way he leveraged his vision and a sound business model.
PlaNet Finance was a French NGO providing technical support and training services to microfinance institutions (i.e., institutions providing financial services to the poor) and other microfinance actors, rating of microfinance institutions and management, and advisory services to microfinance investors and investment funds. Furthermore, it was creating a network of microfinance banks through a microfinance holding company. However, in a context of rapid change and explosive growth of the microfinance sector, Jacques Attali, the founder and president, wondered whether PlaNet Finance's scope was sufficiently broad to fulfill its mission or, on the contrary, whether it needed to be narrowed in order to eliminate organizational challenges and external perceptions of conflicts of interest.
In 2002, Professor Nicholas Negroponte, a successful venture capitalist, author, and co-founder and chairman emeritus of the Massachusetts Institute of Technology (MIT) Media Lab, announced his intention to build a PC so cheap as to make it possible to provide Internet- and multimedia-capable machines to millions of children in developing countries. The concept--subsequently often referred to as the "$100 PC"--was launched at the Media Lab in 2003 before being spun into a separate nonprofit association, One Laptop Per Child (OLPC), founded by Negroponte in January 2005. At the time skeptics, including technology industry leaders, argued that it simply could not be done. Through innovative design and technology, Negroponte and his team proved them wrong but struggled to sell the concept and the machines to the world's education ministries, who would be purchasing the laptops for their school age children. Furthermore, by 2007, many other low-cost PC options had emerged and OLPC had not started shipping yet, leading some observers to wonder if the non-profit should reconsider its strategy and options
The 'Dollar General Going Private' case is intended to improve students' understanding and encourage their use of financial statement analysis. The context is Dollar General Corporation's acquisition by private equity sponsor KKR, which took the company private in 2007. Although the proposed merger generated a 30% premium over the stock price at the time, and the enterprise value to EBITDA multiple was significantly higher than comparable transaction multiples in the retail industry, some shareholders claimed that the price was "grossly inadequate," making the decision whether to approve the transaction a difficult one for shareholders generally.
In 2001, accounting regulators, especially those in the U.S., began to reconsider the rules of consolidation with a move toward a requirement based on "control," with much less consideration of the size of the equity stake. The fundamental accounting and reporting issue for the Coca-Cola Company was whether the investment in, and operation of, anchor bottlers such as Coca-Cola Enterprises should be reported as a consolidated subsidiary or as an investment and, if the latter, whether that investment should be accounted for using the equity method of accounting, at fair value, or at cost. Includes a detailed history of the Coca-Cola Company.
Reviews the impact of SFAS 142--Goodwill and Other Intangible Assets--in the context of the AOL Time Warner merger. Under SFAS 142, companies were required to perform periodic testing to determine whether economic goodwill had been impaired. Includes a detailed account of the AOL Time Warner merger from its announcement in 2000 through its completion in 2001. Students are asked to assess what the likely impact is of SFAS 142 on the combined AOL Time Warner balance sheet.
In 2006, AARP was one of the largest, most well known nonprofit organizations in the United States. Its membership base exceeded 38 million individuals, by far the largest nonprofit membership base in the country. In recent years, it had influenced major federal legislation on issues including Medicare, Social Security, and pension reform through a coordinated effort of professional lobbyists and grassroots volunteers numbering close to one million. In addition, AARP Services Inc, the organization's wholly owned, taxable (earned income activities) subsidiary, managed relationships with AARP-endorsed businesses that generated over $500 million in royalties from health insurance, life insurance, mutual funds, and other products--making it one of the largest social enterprises in the country. With activities in the commercial, charitable, and political arenas, AARP had adopted a truly cross-sector approach to achieving its mission to "enhance the quality of life for all as we age." Despite its size, influence, and visibility, AARP felt the public did not fully appreciate or understand the organization. In the face of growing public interest and media fascination with the application of business practices and market principles in the social sector--under the rubric of social entrepreneurship--AARP received relatively little attention from journalists, thought leaders, and academics for its enterprising approach. The organization also faced a public relations challenge over the fundamental principles of its cross-sector model. Left unchecked, AARP knew that such allegations, regardless of their validity, could undermine its ability to achieve its long-term goals. The organization also faced competitive challenges and the problem of increasing internal cooperation and synergy across the entire organization in order to improve its competitiveness and execute its social impact and member value agendas.
This note gives descriptive statistics of inflation, GDP (growth), and unemployment. How the statistics are calculated is discussed and issues specific to the 'Big Three' are mentioned. The note is part of the refresher course in Economics at Darden for incoming MBA students.
The theory of comparative advantage is a surprisingly common-sense idea, but it is often misunderstood. In this technical note the basic theory of comparative advantage is presented with an example that drives home its logic when there are technological differences between countries. In addition, we look at some extensions that specify other sources of comparative advantage, as well as some related theories.
This note discusses the welfare implications of tariffs for consumers, producers, and the government. A brief survey of the state of protectionism in recent years is included.
Describes two social ventures' experience of collaborating with each other through a replication project funded by Lemelson and the Schwab Foundations. Each venture served different purposes: IDEAAS installed and operated alternative solar energy equipment in locations without access to Brazil's electricity grid, and Saude & Alegria educated populations in the Brazilian Amazon jungle on matters of health, environment conservation, and self-sustainable wealth generation. The replication project entailed having Saude & Alegria help IDEAAS expand its service offering from the south of Brazil into the Amazon region. After describing the organizations, the replication project, and its results, highlights the core success factors that possibly led to the project's ultimate outcomes, allowing students to take positions and debate the critical success factors enabling the successful collaboration between social ventures.