When the World Bank signed an agreement with the government of Peru in December, 1997 to provide a $22.5 million loan to help reform the country's antiquated and corrupt judicial system, the Bank knew it faced risks. Peru's President Alberto Fujimori was under fire and observers considered it possible that, rather than exhibiting real commitment to reform, the government may have been seeking the loan chiefly to lend a veneer of legitimacy to measures that in reality reduced judicial independence and concentrated more power in the executive. On balance, however, Bank officials who had to make the decision on whether to proceed with the agreement believed it offered a rare opportunity to address a variety of longstanding ills-including limited access to the justice system, a crumbling infrastructure, and inadequate training of judges and prosecutors. But just three months after the agreement had been signed, Peru's Congress-dominated by members loyal to the President-passed a measure which led Bank officials to question the good faith of the government. The new law limited the powers of one of the pillars of the loan agreement-the National Council of Magistrates, an independent entity mandated to , ratify and remove judges and prosecutors. The Council's members resigned en masse and, in response, the Bank postponed the effective date of the judicial reform loan by six months-halting any disbursement of funds. But in the days following the announcement, Peru's government put increasing pressure on the Bank to change its mind-and finally summoned the Bank's country director for Peru to a personal meeting with President Fujimori. The country director would have to decide whether to stick with the loan postponement-and, more broadly, take stock of what was really going on in Peru. Would the loan help a government sincerely embarked on reform? Or might it simply abet a government bent on subverting the judiciary to further its own political goals? HKS Case Number 1779.0
Discusses the issues facing firms in the seventh generation of home video game platforms. In particular, Sony and Microsoft plan to launch new game consoles in the 2005 to 2006 time frame. Each firm seems to be following a different strategy. Microsoft wants to launch before Sony. Sony for its part is trying to develop a superior processor for its Playstation 3. Forces students to grapple with the issue of digital convergence in content and in hardware functionality.
Discusses the impact of the North American Free Trade Agreement (NAFTA) on the United States, Canada, and Mexico, a decade after it came into force in 1994. Keeping in mind NAFTA's effect on jobs, exports, productivity, and economic growth, policy makers had to decide whether to go ahead with the Free Trade Agreement of the Americas being negotiated by 34 countries in the Western hemisphere.
The French-owned Aguas Argentinas faces a demand from the Argentine government that it renegotiate its concession to operate the Buenos Aires water and sewage services. The company must decide whether to continue with efforts to settle on a new contract or to exercise its rights to go to international arbitration. Either way, it must decide on its strategy going forward.
Coming out of the 2001 high-tech industry recession, this venture capital start-up has to come up with a marketing plan to break even and grow. Its innovative e-commerce software provides unique customer relationship management solutions, but it has to convince customers to adopt its solution. Includes color exhibits.
Presents a framework for leading change in institutions or society, showing leaders how to manage political, economic, or social change by mapping their targets (policy, programs, or people/culture) and choice of action vehicle (single organizations or coalitions of organizations).
A venture capitalist must decide how to respond to an e-mail from his long-time troubleshooter now installed as interim CEO at a struggling contract manufacturing exchange for the custom car business. The investors have been seeking a full-time CEO but have made little progress. Does the investor switch search firms, push for the company to be acquired, or continue as they've been doing? Each strategy imposes its own set of costs, whether in time, reduced return on investment, or increased compensation to the interim CEO and continued floundering at the company, in addition to possible strains in investor relations.
The Asian Newly Industrialised Economies (ANIEs)--Taiwan, South Korea, Singapore, and Hong Kong--have become masters and creators of advanced technologies despite various economic challenges since the 1980s. Fast becoming the next global economic power, it is speculated that China will be the next innovation powerhouse. Analyzes and compares the current innovation strategies of China and the ANIEs and determines the possibility of China repeating the ANIEs' success in technological innovation.
This case focuses on an employee in the asset management division of the Birmingham-based HealthSouth who suspects possible fraud in the company's accounting practices. A highly successful outpatient surgery, rehabilitation, and diagnostic imaging company, HealthSouth had been founded and was run by Richard Scrushy, whose generosity was legendary in Birmingham, Alabama, but whose autocratic and sometimes ruthless management style contrasted sharply with his charismatic, up-by-the-bootsteps entrepreneurial energy.
The senior managing partner of Actis, a leading private equity investor in emerging markets, must decide whether to go into the market to raise money. Actis was spun out of CDC, a 50-year-old division of the U.K.'s Department for International Development, and is guaranteed a substantial flow of capital under the terms of the demerger agreement. Actis management has to decide whether to focus on developing relationships with its chief limited partner and honing its internal processes or to go out into the market to raise funds.
With the collapse of the dot-com market and related shrinkage in the high-tech industry, Cisco took a dip in its sales and profits in 2001. Coming back from the recession, Cisco had to manage and evolve its go-to-market strategy and design in keeping with its new business strategy. Describes those changes and poses new channel management challenges in light of Cisco's entry into new markets and technologies.
In 2002, Esteban Garriga, customer service director at Henkel Iberica, questions whether Collaborative Planning, Forecasting, and Replenishment (CPFR) would help manage retail promotions and limit their impact on the stock-outs and obsolete inventory. Describes the situation facing Henkel Iberica, the Spanish subsidiary of the German consumer products company Henkel KgaA, with respect to the management of retail promotions. The increasing number of promotions and the complexity of the company portfolio seriously taxed Henkel Iberica's sales, production, and distribution systems. Many in the organization believed the company should abandon or cut back promotions and adopt an everyday low pricing strategy. Garriga believes the solution to be in CPFR. Describes Henkel Iberica's operations and provides the necessary background to discuss whether CPFR is the adequate solution for its problems.
A recent MBA graduate is working as vice-president of equity sales for an investment bank in the Ukraine. The firm's managing director has requested a recommendation regarding whether they should start investing in Ukrainian equities on their own account or retain their practice of acting purely as an agent--buying and selling shares for clients without taking any ownership position.
The knowledge management consultant for IBM Canada's Ltd. business consulting service was preparing for a meeting with the Ontario's Deputy Minister of Education. The purpose of the meeting was to secure top-level support for an early-stage Knowledge Management program at the ministry. For the past few weeks she had conducted an initial study of ministry needs and believed that the organization could benefit from one or more knowledge management solutions, including document management, communities of practice and expert directory. The consultant wondered how she should approach the meeting, given the there seemed to be internal ministry concerns about knowledge sharing. As she reviewed her notes, she wanted to know which solution or combination of solutions she should recommend and what implementation challenges she could expect to face.
For General Motors (GM) China, 2004 brought a wide variety of new challenges that added to an already complex business environment. Industry structure was changing quickly, demand and supply projections for motor vehicles had promised substantial increases in sales and profits but suddenly optimism faded. China's membership in the World Trade Organization created expectations of a level playing field for foreign investors, but major barriers remained, including continuing government intervention, competition from government-owned assembly firms, arbitrary rules such as sector-specific credit restrictions and violation of intellectual property with the copying of foreign automobile designs and false-branding of parts. Meanwhile, inflation was increasing and the government was unsure whether and how to use monetary and fiscal policies. This is an abridged version of GM in China, product 905M07.
After sixteen years of building the Web's first viable online student travel business, Mario Ricciardelli finally hit upon a business model that could generate significant income and cash flow. With their its full season approaching, Mario and his partner are taken aback when their trusted strategy adviser suggests that now is the time to think about harvesting their venture. How could they possibly think about selling when it's just beginning to get fun? Mario started his spring break travel business as a sophomore at Babson. After a number of challenges and setbacks, he almost gave up. In the late 90s he aligned with a competitor, and changed the company name to StudentCity.com. When they were acquired by a 'high-concept' venture-backed Web business, it appeared their business concept was finally going to get traction. Instead, Mario and Jacqui watched their paper fortune evaporate as their cash-strapped parent failed. They were able to exit with their business intact. Mario decided to take one more shot. He mortgaged his house to refinance the company, and focused all the company's efforts and creativity on owning the spring break segment. Amazingly, after two seasons with the new business model, they were on track to top $23 million in revenue, with income before tax projected to be $2 million in 2004. If they could stage that sort of turn-around in just 24 months, was it really the best time to sell?
In March 2003, a client approached the Markets Advisory Group at ICICI Bank, India's second largest bank, about a hedging transaction. The hedge involved multiple interest rates and currencies. Shilpa Kumar, head of the Markets Advisory Group, has to put together a recommendation for the client. She can choose from a number of financial instruments, including swaps, options, and futures contracts on interest rates and currencies, in her recommendation.
The Canadian Imperial Bank of Commerce and Barclays Bank PLC were in advanced negotiations regarding the potential merger of their respective retail, corporate and offshore banking operations in the Caribbean. Currently there are four systems in operation in the region. All are carry-overs from the pre-merger operation of the bank. Each of the systems has different pros and cons consisting of degree of fit with the organization strategy, likely impact on organizational culture, and functionality. As part of the effort to standardize practices across the organization, a choice for one standard operating system must be made. This case may be taught on a stand alone basis or in combination with any of four additional cases that deal with various functional issues regarding the actual merger and integration. The four additional cases deal are: CIBC-Barclays: Should Their Caribbean Operations be Merged?, product 9B04M067; Harmonization of Compensation and Benefits for FirstCaribbean Bank, product 9B04C053; CIBC-Barclays: Accounting for Their Merger, product 9B04B022 and Note on Banking in the Caribbean, product 9B05M015.