Among all the companies that were touched by scandal in 2002, Tyco was uniquely positioned to serve as a laboratory for governance reform. It had solid manufacturing businesses and, unlike Enron or WorldCom, it was not the victim of massive, systemic accounting fraud. Yes, there was serious malfeasance at the top, but undergirding the company was a foundation of profitable basic businesses. In this article, Tyco's first-ever senior vice-president for corporate governance describes the steps the company is taking to wipe the slate clean and restore shareholders' and employees' trust in its operations. The company began by bringing in a new CEO, Ed Breen; hiring some 60 new senior executives; swapping out the entire board of directors with individuals who boast strong backgrounds in operations as well as in finance; and meticulously, systematically scrubbing all the books. Tyco's new board is clear about who has authority over which transactions and, with three executives within the company reporting directly to it, has a window into day-to-day affairs. Most important, Tyco is creating the conditions for good governance below the senior executive level, including a stronger boundary between finance and operations management.

Now that companies such as General Electric and Citigroup have accepted the premise that employee stock options are an expense, the debate is shifting from whether to report options on income statements to how to report them. The authors present a new accounting mechanism that maintains the rationale underlying stock option expensing while addressing critics' concerns about measurement error and the lack of reconciliation to actual experience. A procedure they call fair-value expensing adjusts and eventually reconciles cost estimates made at grant date with subsequent changes in the value of the options, and it does so in a way that eliminates forecasting and measurement errors over time. The method captures the chief characteristic of stock option compensation--that employees receive part of their compensation in the form of a contingent claim on the value they are helping to produce. The mechanism involves creating entries on both the asset and equity sides of the balance sheet. On the asset side, companies create a prepaid-compensation account equal to the estimated cost of the options granted; on the owners'-equity side, they create a paid-in capital stock-option account for the same amount. The prepaid-compensation account is then expensed through the income statement, and the stock option account is adjusted on the balance sheet to reflect changes in the estimated fair value of the granted options. The amortization of prepaid compensation is added to the change in the option grant's value to provide the total reported expense of the options grant for the year. At the end of the vesting period, the company uses the fair value of the vested option to make a final adjustment on the income statement to reconcile any difference between that fair value and the total of the amounts already reported.

Chief Technology Officer Barry Golding is meeting with Mathews & Co.'s department heads to ask for another round of investment so he can begin implementing customer relationship management software at the menswear chain. For months, he has been the CRM project's cheerleader, and it is Barry whose reputation is at stake. He quickly loses control of the meeting. One department head is disappointed that so few of her wish list items are in Barry's latest plan. Another is sour on the project now that he's discovered he won't get any payback for two years. The CEO, who has given the project his blessing, isn't present to back up Barry. Barry can't see what he could have done to keep the department heads on his side. But a friend later tells him about what she calls the "blue sky paradox:" You have to get people to dream big to sell a project, but by doing that you set them up to be disappointed. What can Barry do to save the project? Commenting on this fictional case study in R0312A and R0312Z, are Nathaniel Leonard, the supply chain director of Goodyear's Engineered Products business; Andrew McAfee, an assistant professor at Harvard Business School; Barry J. Gilway, the executive vice-president of Zurich North America Services; and John Freeland, the managing partner of Accenture's CRM practice.

Chief Technology Officer Barry Golding is meeting with Mathews & Co.'s department heads to ask for another round of investment so he can begin implementing customer relationship management software at the menswear chain. For months, he has been the CRM project's cheerleader, and it is Barry whose reputation is at stake. He quickly loses control of the meeting. One department head is disappointed that so few of her wish list items are in Barry's latest plan. Another is sour on the project now that he's discovered he won't get any payback for two years. The CEO, who has given the project his blessing, isn't present to back up Barry. Barry can't see what he could have done to keep the department heads on his side. But a friend later tells him about what she calls the "blue sky paradox:" You have to get people to dream big to sell a project, but by doing that you set them up to be disappointed. What can Barry do to save the project? Commenting on this fictional case study in R0312A and R0312Z, are Nathaniel Leonard, the supply chain director of Goodyear's Engineered Products business; Andrew McAfee, an assistant professor at Harvard Business School; Barry J. Gilway, the executive vice-president of Zurich North America Services; and John Freeland, the managing partner of Accenture's CRM practice.

The vice-president of rehabilitation and support at a hospital must decide if the request from a department to automate and track the dispatch of porters within the hospital is the best solution. He is aware that this area has been experiencing problems, however, he is not sure he has enough information to make the decision and instructs the manager of the department to provide a cost-benefit analysis and alternatives.

The Pizza Public Company Limited is a division of the Minor Group of Companies and focuses on the management and operation of food-service outlets. This case series takes place between November 1999 and February 2000 and covers the negotiation process between Pizza Public Company Limited and Tricon Restaurants USA regarding the renewal of the company's franchise agreement for Pizza Hut in Thailand. After 20 years of managing the brand, an agreement cannot be reached and Pizza Public Company Limited must plan for the development of a new pizza brand. In the (A) case, the chief operating officer of Pizza Public Company recognizes that the negotiations are breaking down and faces the challenge of how to engage the team and develop a contingency plan should the company lose the Pizza Hut brand. Supplement cases (B) through (E), products 9B03A025, 9B03A026, 9B03A027 and 9B03A028, follow the negotiation process.

An historic hotel faces the twin challenges of seasonal demand and a decline in its most important market. The hotel's general manager is considering several expansion/renovation proposals to address these problems, each of which implies a different strategic focus. The decision is complicated by the fact that the hotel is located in world-renowned Banff National Park, an environmentally sensitive area administered by the Canadian government. Growing public concern over development in national parks implies that an overly ambitious expansion plan is likely to be rejected, yet this may be the hotel's last chance to add significant capacity for the long-term. The case demonstrates the role of social and political forces in business decisions, while underscoring the interdependency of target market, positioning and marketing mix decisions.

Rachel Turner works as a cook in the largest restaurant of the Lincoln Diner chain. There are a variety of human resources problems in this company and the staff association representing the employees is weak. In this context, Rachel stands up for her co-workers, almost as an unofficial steward. The situation culminates with Rachel's abrupt, unsubstantiated suspension by her difficult boss, leaving her wondering whether or not she should file a grievance. Her decision is complicated by the fact that she is romantically involved with the computer operations manager at Lincoln Diner head office, who also faces a decision as to how to react to this development. The supplement (B), (C) and (D) cases, product numbers 9B03C033, 9B03C034 and 9B03C035 follow the matter through two more decision points to its resolution.

This supplement to Lincoln Diner (A), product 9B03C032, covers Rachel Turner's decision to grieve her suspension and eventual dismissal by the Lincoln Diner restaurant chain, and the complete failure of both the company and the employees' staff association to address her formal grievances about her treatment. As this process is unfolding, Rachel's boyfriend continues to work as computer operations manager in the Lincoln Diner head office, but finds he is treated differently by his fellow managers. The case culminates with Rachel's deliberations about whether or not to file a complaint with the labor board. The supplement (C) and (D) cases, product numbers 9B03C034 and 9B03C035 follow the matter through another decision point to its resolution.

This supplement to Lincoln Diner (A) and (B), product number 9B03C032 and 9B03C033, covers Rachel Turner's decision to file a labor board complaint against the employee association of which she is a member for its failure to represent her properly in grievances related to her suspension and eventual dismissal by the Lincoln Diner restaurant chain. The labour board rules in her favor which sends her grievances to arbitration. However, prior to the arbitrarion hearing, the company makes her a series of financial offers to settle and Rachel must decide whether or not to do so. The supplement (D) case, product number 9B03C035, presents her decision and rationale.

This supplement to Lincoln Diner (A), (B) and (C), products 9B03C032, 9B03C033 and 9B03C034, presents Rachel Turner's rationale for settling a grievance just prior to going to arbitration. It also provides some insights she gained after the fact about the incident precipitating her suspension and eventual dismissal by the Lincoln Diner restaurant chain, and her reflections on how the experience affected her.

The director of occupational health & safety services at St. Joseph's Health Care London reviewed a report which stated that roughly half of the staff working at the veterans care facility at the Parkwood Hospital were vaccinated against the influenza virus. With the flu season quickly approaching, the director knew that she had to motivate a larger number of staff in the veterans care facility (as well as other staff at St. Joseph's) to be vaccinated against the influenza virus in order to reduce the risk of life-threatening flu outbreaks among the patients. She wondered what specific actions she could take improve the vaccination rate at Parkwood Hospital and other St. Joseph's facilities.

In March 2002, the general manager of Mathura Refinery had to respond to new national legislation that mandated the production of new cleaner-burning fuels. While these fuels would reduce vehicular emissions in the country, there was the possibility of increased local emissions from the refinery from the new processes used to produce these fuels. Effluent and oily sludge emissions also demanded management attention. The general manager recognized that Mathura Refinery had unique constraints because of it close proximity to the Taj Mahal. Any future expansion of the refinery's capacity would be contingent on its ability to reduce sulfur dioxide emissions and address public expectations.

The Education Store reviewed and provided sales of educational software for children in kindergarten to grade 12. The store took its direction from the local board of education and functioned with the administrative system of the school board but operated independently and was relatively free to make day-to-day decisions. The manager of the Education Store felt the existing database no longer kept up with the store's needs. A database designer had two weeks to analyze the store's requirements and develop a prototype. From the information he had, he wondered whether this task was an upgrade or a complete redesign. He must also look at a number of design issues, and who would ultimately maintain the database.

Leo Burnett Company Ltd. is a global advertising agency. The company is working with one of its largest clients to launch a new line of hair care products into the Canadian and Taiwanese test markets in preparation for a global rollout. Normally, once a brand has been launched, it is customary for the global brand centre to turn over the responsibility for the brand and future campaigns to the local market offices. In this case, however, the brand launch was not successful. Team communications and the team dynamics have broken down in recent months and the relationships are strained. Further complicating matters are a number of client and agency staffing changes that could jeopardize the stability of the team and the agency/client relationship. The global account director must decide whether she should proceed with the expected decision to modify the global team structure to give one of the teams more autonomy, or whether she should maintain greater centralized control over the team. She must recommend how to move forward with the brand and determine what changes in team structure or management are necessary.

Based in Saskatoon, Canada, Cameco was the world's largest uranium mining company. It had developed its policy for corporate social responsibility in northern Saskatchewan where it had its major mining operations and where there was a large Cree and Dene Indigenous population. The issue centres on whether the same corporate social responsibility policy can be applied to the company's joint venture with the Kyrgyzstan government to operate a gold mine in eastern Kyrgyzstan. Complicating the decision was a chemical spill that had occurred several months before, and relations with citizens in nearby communities were at an all-time low. The joint venture's vice-president of human resources and corporate relations must decide which of the programs might be successfully implemented in Kyrgyzstan, what new programs might need to be developed, and how best to communicate company policy to the local community.

Dominion Telecom Inc. is wireless, Internet and broadband provider. The director of strategic initiatives for the company must decide between two investment proposals; the first one would save resources in their call centre, the second would allow the company to use its Web site as a key marketing tool in a cost-effective manner.

In mid-2003, China was the fastest-growing telecom market. Telecom subscribers are estimated at 472 million. With the size and growth of telecom, China is a hot spot for new telecom and IT technologies. Furthermore, China's sheer market power provides a strong position for establishing telecom policies and standards that have important global and economic implications. This case provides the underlying background to discuss the key issues and decisions facing China's policymakers.

Describes Flextronics' evolution from providing outsourced manufacturing services for original equipment manufacturers (OEMs) in the electronics industry to developing entire unbranded products for purchase by OEMs. In 2001, Flextronics began a development program that yielded several unbranded cell phones that--even by the admission of several OEMs--delivered performance comparable to that of branded products at a significantly lower cost. Nonetheless, as of early 2003, no major OEM had yet agreed to purchase any of these phones from Flextronics. As chairman and CEO of Flextronics, Michael Marks must decide how aggressively to pursue full product development.

Looks at the consumer psychology of new product adoption. Identifies a key reason why consumers do not adopt innovations as quickly as developers think they should--an irrational resistance to behavioral change. Identifies strategies for firms to manage and overcome this resistance.