McDonald's executives announce plans to launch a dollar menu in the fall of 2002. Students must evaluate the potential impact of this menu on restaurant revenues, and the sales of McDonald's Value Meals.
Human beings are driven by reasons and emotions. On the one hand, as rational choice theorists assert, human beings are resourceful and evaluative as they strive to maximize their own interests. An individual's interests can converge or diverge from the interests of the organization. Thus, to bring the resourcefulness of individuals to benefit the organization, control systems must be designed to align the interests of the organization and the individual. On the other hand, it has long been recognized (and reinforced by contemporary research on the human brain) that human beings are also driven by emotions. Emotions can be in accord with rational behavior (e.g., when fear evokes caution in the face of danger, or pride motivates greater effort). But emotions can also be at odds with rational behavior (e.g., when pain avoidance leads to an unwillingness to confront difficult decisions, or shame leads to cover-ups, or hubris leads to excessive optimism). Understanding the importance of both reason and emotion is, thus, critical to designing organizations, control systems, and governance structures that promote desired behaviors. Teaching Purpose: Some model of human nature, implicitly if not explicitly, guides any manager's actions. It is useful for students to be aware of these underlying assumptions and attentive to ways reason and emotion shape their own behavior and those of others around them.
Describes the issues facing a founder-CEO regarding building a board of directors, assembling an executive team, managing tension between co-founders, and outsourcing system development work.
The development of a new venture partnership and the challenges associated with raising its first fund are chronicled. The decision to focus on early-stage investments, the determination of the appropriate size of the fund, the fund-raising process, and the steps in closing are all examined. Also presents information on the relationships among the five partners, the division of responsibilities, and the compensation package. Provides personal background on each of the partners and explores their motivation for choosing this career change at this particular moment in their lives.
This case examines how insiders can expropriate value from shareholders in emerging markets when property rights are ill-defined. As such, it provides a platform for considering how institutions and legal rules impact financing patterns and economic outcomes. CME, controlled by the former U.S. Ambassador to Austria, Ronald Lauder, and its Czech partners win the bidding for the first private broadcast frequency with national coverage in the Czech Republic in 1993. After the entity succeeds dramatically, the primary Czech partner wants to sell his share in the operating company. CME must decide whether to buy the stake and at what price.
Alfonso's Department Store (Ivey, 9A99E002) presents 26 weeks of data on Alfonso's dollar sales and dollar advertising, together with the sales and advertising of competing stores. In the supplement, a consultant presents the results of his analysis of these data. Students are asked to critique this analysis and explore its implications.
This case presents a simple model of the drivers of profitability in a professional service partnership and conducts an empirical exploration of the determinants of profitability among AmLaw 100 firms over the period 1994 to 1999.
After the company's IPO is withdrawn, the company enters a period of severe financial distress. The consultants recommend that the company be liquidated. The CEO must convince the board, the lenders, and the landlords that the company can and should be saved.
Pixar, Inc. is the subject of an article that suggests its share price is currently overvalued. The article is picked up in summary by several wire services. Pixar's management must determine the appropriate public response. Its choices range from ignoring the article, to a brief response, to a point-by-point refutation.