Engaging local stakeholders and building strong relations has become a strategic imperative for multinational firms in the often politically charged mining, oil, and gas sectors. For BHP Billiton, the world's second largest mining company, its Tintaya copper mine in Peru has long been a source of intense conflict. The mine--which was owned and managed first by the Peruvian state, and later by BHP Billiton--stands on land expropriated from local subsistence farmers. In 2000, to contest this loss of land, mining-related environmental degradation, and allegations of human rights abuses, a coalition of five indigenous communities forged an alliance with a group of domestic and international NGOs (nongovernmental organizations) to build their case against BHP Billiton and pursue it directly with the company's Australian headquarters. The outcome of these efforts was the inception of a unique corporate-community negotiation process known as the Tintaya Dialogue Table. In December 2004, after three years of negotiation, BHP Billiton and the five communities signed an agreement compensating families for lost land and livelihoods, and establishing a local environmental monitoring team and community development fund. However, just as the company resolves one conflict, another group of local stakeholders emerges with new demands--demands that this time the company may not be able to meet. The conflict with this new group culminates in a violent takeover of the mine in May 2005, whereupon BHP Billiton staff are forced to shut down operations, abandon the mine site, and devise a new strategy for winning back local support.
The newly promoted inventory manager wonders if there is an easier, more reliable means of forecasting sales demand. Currently, forecasts are based on the plant manager's, sales/marketing manager's, and inventory manager's knowledge of industry trends, competitive strategies, and sales history. The inventory manager must decide if using statistical forecasting methods would ease the forecasting process and make the forecasts more reliable. Students are exposed to different forecasting techniques, including executive opinion, linear regression, and time series. The data characteristics include seasonality, trend, and random fluctuations.
The general manager of the Wilkins plant in Paso Robles, California has received instructions from the head office to reduce inventory by 30% in the next quarter. Although inventory had been accumulating over the past years, this had been seen as a benefit to the company for a couple of reasons. One is that the cost of raw materials has risen in the past year. The second is that the company has a policy of no layoffs, so having inventory in stock allows the company to minimize the use of overtime and temporary workers. The general manager wondered whether revising the production planning process would be enough to solve Wilkins' inventory problems.
The founder, chairman, and managing director wants to make Biocon, Ltd. one of the top 10 biotech firms by 2015. The company has dealt in low-risk enzymes and generic drugs for many years. In order for the company to grow, the chairman believes that Biocon must enter the riskier business of drug discovery and development. Without making large investments in new capabilities, the company cannot become a top 10 biotech firm.
Chronicles entrepreneur Lisa Conte's two ventures, Shaman Pharmaceuticals and Napo Pharmaceuticals. Shaman was formed to make drug discovery and development more efficient by studying traditional, indigenous healers in the tropics. Shaman had identified a promising compound that came to be known as crofelemer. For a variety of complex reasons, Shaman declared bankruptcy, and Napo, Conte's new company established specifically for this purpose, bought Shaman's library of compounds, including crofelemer. At the time of the case study, Napo was developing the compound for sale in large western markets while arranging an innovative public-private partnership to develop and distribute crofelemer in the developing world. In developing countries, the compound would treat diarrhea, which kills over 2.5 million children every year. However, the public-private partnership proved difficult to arrange. Concludes with Conte deciding whether to proceed with the partnership that would not only save the lives of children, but also provide much-needed capital to keep Napo in business. Highlights the difficulties of establishing partnerships across sectors and pursuing complex negotiations within the complicated market and regulatory environment associated with the pharmaceuticals industry.
Engineer John Harrison must determine why motorcycle racer Marco Presto does not feel that his motorcycle is providing enough power as it comes out of corners. Harrison uses engine simulation software to help him in his work.
Faced with press allegations that executives' stock options might have been backdated, the Board of UnitedHealth Group needs to determine whether its accounting for the options was proper, and if not, what the restatement amount should be and what governance/compensation changes, if any, it should undertake. From an accounting standpoint, allows for the discussion of different methods to account for stock options--intrinsic value method versus fair value--and the differences in the degree of monitoring associated with amounts recognized in the financial statements and amounts only disclosed in footnotes. From a corporate governance standpoint, discusses how the board of directors should respond to this type of crisis in a company with an otherwise exceptional financial performance largely attributed to its long-tenured CEO.
Details power dynamics that unfold in the firm when one of its best and brightest threatens to leave. It focuses on the dynamics of attracting, hiring, compensating, negotiating, and leveraging a star performer in a professional service firm. In particular, traces the detailed events from the resignation of a star to the manager's struggle to decide which of the eligible candidates should be hired. Four candidates and their firms are discussed in great detail. The case allows students to consider both individual (e.g., background, aspirations, attitudes, past short-term and long-term performance) and organizational (e.g., cultures, strategies, structures, performance management systems) factors in choosing a candidate to maximize individual-organization fit.
Charts the development of outsourcing service provider ExlService. Founded by Indian nationals Vikram Talwar and Rohit Kapoor, the firm has moved through several phases of evolution. At the conclusion of the case, the company is offering highly sophisticated outsourcing solutions to manage complex processes for insurance and financial services companies. Throughout ExlService's history, it constantly faces pressures to revise and redefine its service offerings (as outsourced services become commoditized) and retain its well-trained workers (who are highly sought after in India). Chronicles the connections between the firm's investors and the company's strategy and competencies.
Rite-Solutions, a software company headquartered in Rhode Island, was founded by two successful executives that had seen innovation stifled in traditional companies. They observed that people with ideas generally had to present them to management for approval, a process that was intimidating and tended to favor ideas that were well presented, rather than those that were good. In addition, software people were often uncomfortable speaking in public, preferring communication by computer. The Rite-Solutions culture was based on trust and collaboration, with a desire to tap into the creativity of the entire organization. The founders tried a number of methods to involve employees in innovation, which became more difficult as the company grew and added remote offices. They eventually invented a stock market, called "Mutual Fun", where any employee could develop an idea and get other employees to provide their opinions, comments, or time to move the idea forward in their spare time. Communities of common interest formed around these ideas (stocks). When a stock made sufficient progress, and attracted sufficient support, top management could put corporate resources behind it, resulting in a new product, process improvement, or new technology. There were three types of stock: cost-savings ideas, product ideas that utilized technology the company already understood, and new technologies that the company should evaluate. The market began in 2004 and was very successful. By mid-2006, Rite-Solutions had begun to license it to other companies. Discusses the culture of Rite-Solutions, the operation of Mutual Fun, and asks about the application of this tool in other corporate environments.
Although Wal-Mart, the world's largest company by revenue, was into its 9th year of operations in China, its stores were still losing money. It had created a miracle in the U.S. retail industry by revolutionizing the sector's business model and successfully implementing its model through innovative practices that enabled it to sell national brands at "Every Day Low Prices". The challenge Wal-Mart faced was whether it could transport its successful model to win in a market with many differing characteristics which threatened its low-cost structure and which could nullify its competitive advantage. Concerned with the application of established domestic business models in international expansion. Also sheds light on other globalization issues such as market entry strategy, localization vs. standardization, the effect of regulation changes on the competitive landscape, and firm performance.
This case is about the way Pragati Software Private Limited, a small but profitable software training company set up in Mumbai by an alumnus of Indian Institute of Management Ahmedabad sent away half its employees in three rounds of layoff in its tenth year.
EndoNav developed an innovative medical device to make colonoscopy procedures easier and faster to perform and less painful to receive. Despite of excellent technology, IP protection, a reasonably large market, and relatively low regulatory risk, the founder (Jaime Vargas) and his business partner (Kenneth Kelley, GSB MBA, 1987) are unable to secure venture funding. The company eventually decides that it must adapt its product and business plan so that it can be funded on a smaller scale by angel investors.
The protagonist is Bruce Dunlevie, a co-founder of venture firm Benchmark Capital. In early 2007, Dunlevie and his partners are faced with whether to expand their firm into China and/or India, as many other well respected VC firms had been doing at the same time. Despite having two existing and successful satellite offices in the UK and Israel, the partners are not convinced that further expansion makes sense. Therefore, to follow logic, they are also considering whether to spin out the existing satelittes to be independent entities or keep them as part of the Benchmark franchise.
After acquiring F+W Publications from a rival private equity firm, ABRY Partners became increasingly convinced that they had been deceived by the sellers about the profitability of the company. ABRY must determine whether they were deliberately misled, what courses of action are available, and which they should pursue. Considerations include a mix of legal, ethical, and business issues.
The case chronicles the development of Lumni, Inc., an international start-up offering innovative mechanisms for financing higher education. It focuses on: the details of decision making required to transform an idea into a viable business; building partnerships; the challenge associated with raising venture capital; and the challenges of creating a new market where human capital can be traded to finance higher education.
Tracks of the first 6 months of a recent MBA grad, Tim Keller, at Katzenbach Partners, a boutique consulting firm focused on organizational change and strategy. Covers how Keller initially struggles with his assignment and ends with a question of whether or not he should attend a meeting that he was not invited to, where more senior consultants plan to implement the system dynamics tool that he was responsible for creating--on a Sunday when he had a major personal engagement.
Supplements the (A) case. The (B) case presents the final outcome of the events. Reveals how Keller is able to turn around perceptions about him and forge relationships with key decision makers. Includes reflections and lessons learned from all parties and Keller's actual 2005 year-end and self evaluations on the project.
Brainard, Bennis and Farrel is a short case designed to explore the challenge of establishing appropriate compensation from a general management/CEO perspective. Brainard (B) is a one-page handout that is designed to show how an already difficult problem is made more complex by situational context--the detailed personal and interpersonal relationships among key executives over time.