Case #5 in the Jack Wright series provides for the discussion of issues relating to succession planning for the CEO, their selection and appointment, and the subsequent appraisal of their performance. These activities are among the most crucial that boards have to face, and directly impact the long-term performance of the company.
The process by which the board determines the mix of vehicles for compensation of the CEO and the level of compensation is among the most important aspects of board responsibility. Additionally, the board must appraise the performance of the CEO, many aspects of which necessarily relate to the various methods of compensation. This case provides a vehicle for the discussion of many aspects of these topics.
There are many aspects of relationships between the board and management that are determined on a best effort basis. That is, the rules and by-laws of the company cannot pre-specify the detailed workings of the intersecting interests. Our system of capitalism depends on the good faith efforts of all concerned to derive effective working relationships. This case provides for a discussion of these issues in the context of Jack Wright and Mega Corporation.
This case deals with the issues of the corporation's organizational structure and capital structure. Jack Wright and the Mega Corporation board must consider a proposal to eliminate a large number of subsidiary companies to simplify the organization and another proposal to issue corporate bonds, the proceeds of which would be used to repurchase a large block of the company's outstanding shares.
This case finds Jack Wright, now Chairman of the Mega Corporation board, having to deal with an offer from a director to buy the company, in either a friendly or unfriendly fashion.
This case finds Jack Wright and the Mega Corporation board having to deal with a conflict situation involving a director and a "sticky situation" that has emerged from another board on which the director sits. The discussion must deal with both the director's dilemma on the other board and Jack's responsibilities as Chair of the Mega board.
Describes a set of decisions confronting the management team of an early-stage software company. The company has made considerable progress in developing its software but will need additional capital to move forward. Unfortunately, conditions in the capital market are very difficult, and management must decide to address its financial needs. Provides a detailed history of Marv Tseu, the CEO, who had a broad range of interesting experiences in the world of technology.
First Commonwealth Financial Corp., a financial institution in central and southwestern Pennsylvania, implemented the Balanced Scorecard for describing and implementing its new customer-focused strategy. Its founder and chairman decided that the Balanced Scorecard also should become the primary information input for the corporate governance process with the board of directors so that the board could become more knowledgeable about and more actively involved in the company's strategy. Describes how the board became knowledgeable about the company's Balanced Scorecard and how it participated in developing a Balanced Scorecard for itself. In addition to the enterprise and board scorecards, the company also developed scorecards for each senior executive for the governance and compensation committees to assess and reward senior management performance. Extensive exhibits illustrate the three different scorecards and the reports and supporting documents for these scorecards.
In 1998, 38-year-old Gary Loveman was perfectly content with his job as an untenured associate professor at the Harvard Business School. He was a popular teacher with standing room only classes in service management. He lived comfortably with his family in Massachusetts and had successful consulting engagements and executive education assignments with companies such as Harrah's Entertainment. His prospects for tenure review, coming up in the next year or two, looked good. Then his life dramatically changed when the then-CEO of Harrah's, Phil Satre, offered him a job as chief operating officer (COO) of the company. Commuting from his home in Massachusetts, Loveman took the job and never turned back. But hiring Loveman caused some internal and external rumblings. Loveman had never before managed anyone apart from his administrative assistant and some research assistants; he was now going to manage 15 casinos with more than 10,000 hotel rooms and over 35,000 employees. The company was also closing one of its largest acquisitions to date, Showboat. Moreover, the gaming industry was not, in 1998, a common destination for MBA graduates, let alone PhDs--it was an industry dominated by insiders who had spent their careers in gaming, working their way up from the bottom. The tasks facing Loveman as he joined Harrah's were daunting. He had somehow to gain credibility and respect inside Harrah's, as well as in the industry. He had to lead Harrah's through a transition to a more marketing-focused company and help the company break out of a financial performance plateau. And he had to build a set of relationships and a power base to potentially attain the CEO position when Satre stepped down in five years. What could he do to accomplish all this?
Leo Burnett Co. 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, after a brand launching, the global brand center turns 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 team dynamics broke 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 to proceed with the expected decision to modify the global team structure to give one of the teams more autonomy or whether to maintain greater centralized control over the team. She must also recommend how to move forward with the brand and determine what changes in team structure or management are necessary.
Florida Citrus Department has to deal with increasing competition from Brazil. What position should the industry take on its existing tariff? Who benefits? Who loses?
By fiscal year 2000, Samsung had pulled far ahead of other "chaebols," Korean conglomerates. For example, the market value of Samsung affiliates listed on the Korea Stock Exchange exceeded the sum of the market value of listed affiliates of second, third, and fourth largest groups: Hyundai, LG, and SK. Samsung's accomplishments during the late 1990s were particularly noteworthy when compared to its long-time rival Daewoo, whose businesses were forced into financial workout disposition of assets overseen by creditors in 1999. Discusses what made the destinies of the two groups totally different.
Taught in Evolution of Global Business. Globalization and corporate fraud are the central themes of this case on the international growth of Swedish Match in the interwar years. Between 1913 and 1932, Ivar Kreuger, known as the "Swedish Match King," built a small, family-owned match business into a $600 million global match empire. Despite the economic and political disruptions of the interwar period, Swedish Match owned manufacturing operations in 36 countries, had monopolies in 16 countries, and controlled 40% of the world's match production. Kreuger companies lent over $300 million dollars to governments in Europe, Latin America, and Asia in exchange for national match monopolies. Relying on international capital markets to finance acquisitions and monopoly deals, by 1929 the stocks and bonds of Kreuger companies were the most widely held securities in the United States and the world. After Kreuger's 1932 suicide, forensic auditors discovered that Kreuger had operated a giant pyramid scheme. His accounts were ridden with fictitious assets, the truth hidden in a maze of over 400 subsidiary companies. Swedish Match's deficits exceeded Sweden's national debt.
Taught in the MBA Evolution of Global Business course, a business history course on the growth of multinationals. Explores the role of the British entrepreneur Weetman Pearson in developing the Mexican oil industry before 1914. Shows this entrepreneur's evolution from a domestic British builder to an international contractor, building tunnels, railroads, and harbors worldwide, including the United States and Mexico. In Mexico, where Pearson developed close relations with the dictator Porfirio Diaz, the government awarded large oil concessions. In 1910, Pearson discovered one of the world's largest oil wells, and this was used as a basis to build an integrated oil company. But by 1918--when the case ends--Pearson is considering whether to sell his investment in the face of growing political risk.
The battle plan for Operation Iraqi Freedom called for a rapid, responsive force capable of identifying and removing threats immediately. Commercial supply chains may draw some lessons from the government's groundbreaking efforts to accommodate its soldiers in the field.
A homogeneous workforce can be a hindrance when it comes to innovation. In this interview, Chris Anderson--the chairman and host of the annual Technology, Entertainment, and Design brainfest--argues for more diversity in the workplace.
It's easy for corporate strategists to get bogged down by the vast amount of data available to them. The trick is to separate the wheat from the chaff--and that's where a sophisticated early warning system comes into play. Building one takes three steps: Anticipate specific futures, appoint sentries, and expedite decision making.