During the summer, a popular hotel and restaurant must turn away customers whenever it offers its once a week family pizza buffet. With summer season fast approaching, the managers and owners of Bala Bay Inn must evaluate the process and capacity of the restaurant and identify bottlenecks in the process to determine what can be done to accommodate the demand.
ASIMCO International Casting Company, a joint venture between ASIMCO and Caterpillar, had recently finished several major projects designed to upgrade the manufacturing capabilities in its foundry. The plant was now under significant pressure to increase revenue, and had received an invitation to bid on a new customer order. While this order might provide the ideal opportunity to further upgrade its process technology and capabilities, significant challenges were presented by several critical product characteristics. Alternatively, the plant's limited resources could focus on meeting the internal needs of one of its partners. Caterpillar was expected to authorize test runs of two new products soon; however, the annual production volumes were very uncertain.
Cambridge Laboratories is essentially a fee-for-service provider of laboratory tests. It spends less than 0.5 per cent of revenues on research and development and holds relatively few patents for a biotech company. It now has an opportunity to invest $5 million to establish a joint venture with an Australian proteomics company that operates on a drug discovery (royalty) model. The founder of this company believed that his technology could eventually result in the discovery of new drugs that would generate significant royalties. While the proteomics firm has superb technology, some of the intellectual leaders in the field on its staff, and partnerships with some impressive companies, its technology is yet unproven. Cambridge Labs is also concerned that its existing relationships with big pharmaceutical companies could be jeopardized if it begins to take an intellectual property position in proteomics. In addition, the Australian company consists primarily of PhDs in molecular biology, while Cambridge Labs is dominated by business executives whose primary focus is generating strong financial returns for shareholders. The cultural differences between an Australian science-oriented laboratory and a publicly traded American outsourcing company become apparent during the negotiation phase of the joint venture proposal. Students are asked to evaluate the joint venture and consider whether the cultural and strategic differences can be reconciled.
Vancity Credit Union is one of the largest credit unions in Canada with $9 billion in assets and 300,000 members. The company's success was based on three key elements: member experience, employee experience and community leadership. With the pressure of increased competition from financial institutions and changing market characteristics, the chief executive officer must review the corporate strategy and resources to determine how the company can stay competitive and further increase its members and services.
Biovail Corporation, a large pharmaceutical company, recently had its stock downgraded by a well known pharmaceutical analyst and a number of other analysts were also scrutinizing the company. The outcome was not favorable, as Biovail's acquisition methods were labeled as unethical and their accounting practices were questioned. An investor with the company must decide if she will continue to invest in a company that has been identified with low ethical standards. The supplement Biovail Corporation (B), product 9B04N008 discusses the investor's decision, and some information that caused her to reconsider that decision.
In this supplement to Biovail Corporation (A), product 9B04N007, an investor in Biovail made the decision to sell her stock in the company based on published reports from a well known pharmaceutical analyst. She later finds out that this analyst had an interest in Biovail's competition and wonders if she should reconsider her decision.
Breeden Electronics USA is a start-up division of a German company. It plans to produce two products, both electronic signaling devices. Herman Klein, the division president, has asked his controller, Marlene Baer, to compute several breakeven sales figures as they assess the sales level that is necessary to meet the profit target established by the parent company. Baer must conduct several breakeven analyses and consider the impact on profit if production exceeds sales. This is the first in a series of three cases that can be used to explore the evolution of cost systems. The main issues of the three cases are as follows: in the A case, the company uses a traditional costing system. The main questions relate to breakeven analysis and the effect of inventory buildup on profit. The B case (UV1732) introduces the definition of activities, costing those activities, and computing product cost based on their use of the activities. The revised product costs are not dramatically different, but analyzing what causes the differences is important to discovering where ABC can provide valuable information. The C case (UV1734) takes place after the end of the year, when profits have been reduced by the need to take care of a growing and increasingly complex packing and shipping activity. The controller defines a new activity (order handling), computes the cost per order, and begins to revise the data on product profitability and to develop new data on customer profitability. Having discovered the high cost of handling each order, the controller now has good reason to work on activity-based management: making that process more efficient, and perhaps more customer friendly. The three cases can be used in three classes, or the A and B cases together in one class and the C case in a second class.
A corporate brand, which is based on the characteristics of the firm as well as its products, can play a critical role in a company's brand portfolio. It can help differentiate the firm, support internal brand building, facilitate brand management, build credibility, and provide a vehicle for communicating with and maintaining support among broad external constituencies. However, defining and successfully managing the corporate brand requires the firm to address a number of challenges, including maintaining its relevance to the company's strategy, demonstrating its benefits to consumers, and avoiding negative associations or controversies.
Although all companies would like a better corporate reputation, many are not sure what it takes to create a good reputation and others are not sure that they should use their good reputation to compete in their various markets. Mimicking the behavior of respected companies does not provide a reliable resolution to these dilemmas. Presents a framework to help managers create a better corporate reputation for their organizations and assist them in deciding whether to use this as a primary basis for competition. Also exposes some of the main costs for an organization that decides to compete on its corporate reputation.
Advance selling can be profitable when consumers are uncertain about their future consumption state. At the time of consumption, that uncertainty is resolved, but buyer states still remain unobservable to sellers. Consequently, buyer and seller information is symmetric in advance but asymmetric at consumption (i.e., sellers have an informational disadvantage in the consumption period relative to the advance period). Therefore, sellers can profit from transacting in the advance period when they are at less of a disadvantage. New technologies (e.g., biometrics, electronic tickets, smart cards, online prepayments, and new e-commerce technologies) also enhance the profitability of advance selling by lowering advance-selling costs and restraining arbitrage.
The need to play catch-up in biotechnology has led Germany and Japan to adopt novel technology policies. Whereas policies to assist domestic industries have traditionally been geared toward incumbent firms, current trends revolve around "science entrepreneurship"--reforms in the national R&D system and targeted incentives for biotechnology scientists to file patents and start up their own firms. Japan, in particular, has recognized that catching up with the United States in basic science and in the commercialization of scientific research represents a kind of final frontier.
Although there has been an explosion in the number of technology sourcing relationships between firms--including alliances, acquisitions, and all intermediate levels of equity ownership--managers lack a comprehensive framework to guide them in equity ownership decisions meant to access technology. Higher levels of equity ownership can provide benefits such as exclusive access to and control over critical resources, alignment of interests between partners, and better coordination and control of partner interaction. On the other hand, equity ownership also entails costs associated with implementing changes to organizational structures, in addition to lower employee motivation as well as commitment costs due to market or technological uncertainty.
China is one of the most important foreign investment markets in both volume and growth. However, property rights protection in China is extremely weak and expropriations by both public and private actions are rampant. How can the booming of foreign investment and the looting of property co-exist? Why is protecting property rights so difficult in China? Shows that the different paces of institutional change between formal and informal constraints are the major cause behind the lack of property right protection in China. Discusses policy considerations for China to improve property right protection and raises two fundamental issues for multinational firms doing business in China.
Presents 10 standard guidelines for calculating social return on investment (SROI)--quantitative summaries of companies' social and environmental impacts, actual or projected. SROI is a technique for summarizing the value of companies' environmental and social benefits in terms of a dollar value equivalent. Using data and examples from 88 actual business plans, this article discusses common errors in such assessments and makes recommendations for standardizing them. The aim is to make SROI metrics more comprehensive, credible, and useful for entrepreneurs, managers, and analysts. Such a common framework would also enable investors to compare the social impact of different firms within the same industry.
NASA's fabled Faster, Better, Cheaper initiative sped up the agency's spacecraft development. But when missions began to fail, it was faulty organizational learning--not hardware--that was to blame.
Companies struggling to rejuvenate tired brands may want to look east. SoBe beverages, Nissan, and others are exploiting Westerners' fascination with products that are--or merely seem--Asian.
If they know the unwritten rules about how people in their companies whine, to whom, and about what, managers can determine where not to put their problem-solving energies.
It was supposed to be an amicable "merger of equals," an example of European togetherness, a synergistic deal that would create the world's second-largest consumer foods company out of two former competitors. But the marriage of entrepreneurial powerhouse Royal Biscuit and the conservative, family-owned Edeling GmbH is beginning to look overly ambitious. Integration planning is way behind schedule. Investors seem wary. But for Royal Biscuit HR head Michael Brighton, the most immediate problem is that he can't get his German counterpart, Dieter Wallach, to collaborate on a workable leadership development plan for the merged company's executives. And stockholders have been promised details of the new organizational structure, including a precise timetable, in less than a month. The CEO of the British company--and of the postmerger Royal Edeling--is furious. It's partly a culture clash, but the problems may run deeper than that. Commenting on the fictional case study in R0405A and R0405Z are Robert F. Bruner, the executive director of the Batten Institute at the University of Virginia's Darden Graduate School of Business Administration in Charlottesville; Leda Cosmides and John Tooby, the codirectors of the Center for Evolutionary Psychology at UC Santa Barbara; Michael Pragnell, the CEO and director of the board for the agribusiness firm Syngenta, based in Basel, Switzerland; and David Schweiger, the president of the Columbia, South Carolina-based management consulting firm Schweiger and Associates.