Intel has decided to locate its next assembly and testing plant in Latin America. Four countries have made the short list: Brazil, Chile, Mexico, and Costa Rica. The Telford, International Site Selection Analyst for Intel, needs to recommend a final site. There are two key issues that must be resolved first: 1) what kind of business environment is most suitable to Intel's needs; and 2) how can Intel leverage its bargaining advantages most effectively. The case illustrates the advantages for a high-technology company such as Intel, with its strong need to operate in a country with stable, predictable rules of business, and to invest in a fully consolidated democracy.
After the Brent Spar episode and the 1995 events in Nigeria, Shell undertakes an intensive review of its values and business principles. At the same time, it conducts the largest multi-stakeholder consultation in its history in an effort to better understand society's evolving expectations for companies like Shell. Based on its findings, the company launches an effort to change its culture and embed in the organization a revised set of business principles. The company is considering whether as part of the transformation effort to begin public reporting on its environmental and social as well as its financial performance. The issue is sharpened when Shell receives a challenge from a small group of shareholders in the form of an unusual (for a British company) shareholder resolution.
From 1992 to 1997, CIBC CEO Al Flood and head of investment banking John Hunkin integrate the struggling investment bank, Wood Gundy, with CIBC's corporate bank. The impact and interaction of organization design, compensation schemes, and communication initiatives are explored.
The board of directors of Medtronic, Inc., a company known for its commitment to effective corporate governance, must prepare for the departure of Chairman and CEO Bill George and the retirement of four long-time directors. The company had experienced rapid growth in the early 1990's as well as significant change in the composition of its board. Now the Medtronic directors must evaluate how the board has changed, how it will continue to change, and how it should prepare for the future.
A middle manager is about to meet with his boss to discuss her request that he head up a task force to determine how overhead can be reduced by 20%. He must decide what to address in that meeting and how the task force should be launched and led. The focus is on team leadership at four stages in a team's life cycle: 1) preparation, 2) initial meeting, 3) mid-course consultation, and 4) post-performance debriefing. A rewritten version of an earlier case.
By 1997 the turnaround of CIBC's troubled investment bank, Wood Gundy, and its integration with corporate banking activities was complete. Marketplace results were encouraging, but scuttled mergers and tumultuous succession issues made the future uncertain.
Explores the implementation of a cutting-edge knowledge management system in a midsize, specialty chemical company. The initiative, begun in the early 1990s, has received several awards for its efforts. In early 1999, the company is experiencing severe price pressures in all of its key markets and has had to transfer its entire system to a new platform.
This article reviews a central tension in management--the relationship between customers and innovation. It explores the contrast between serving and creating customers and examines the sometimes uneasy relationship between an innovation orientation and a customer orientation. From this discussion, the article develops a model that provides an inclusive paradigm of the different strategies that firms have used to resolve the tension and explores the dynamics of the change process for several well-known companies. It concludes by developing the managerial implications of the model, with particular emphasis on how new technology is changing the desirability of alternative strategies.
Organizations have been quick to realize that involving suppliers in new product/process/service development efforts has the potential for significant results. Numerous studies have shown that supplier participation in product development projects can help reduce cost, reduce concept-to-customer development time, improve quality, and provide innovative technologies that can help capture market share. However, not all efforts are successful. Supplier integration is most successful when driven by a formalized process that considers supplier capabilities, level of complexity of the technology, and degree of risk. Leading companies conduct a formal in-depth supplier evaluation and risk assessment prior to supplier involvement on the project team.
This article identifies the major enablers and inhibitors in the achievement of business-Information Technology (IT) alignment. Alignment involves the activities that management performs to achieve cohesive goals across the IT and functional (e.g., finance, marketing, manufacturing) organizations. Therefore, alignment addresses both how IT is in harmony with the business, and how the business should or could be in harmony with IT. IT requires strong support from senior management, good working relationships, strong leadership, appropriate prioritization, trust, and effective communication, as well as a thorough understanding of the business environment. This article develops a methodology that leverages the most important enablers and inhibitors to business-IT alignment.
This case examines the organizational changes and human resource strategies implemented to create an entrepreneurial culture within the formerly state-owned oil company. After a local entrepreneur radically downsized and reorganized the company, YPF was successfully taken public in 1993. But in a country where the economy had been closed for many decades and state-owned institutions had become bloated and highly bureaucratic, changing the mindset and behavior of the workforce to turn it into a competitive player in the world economy was not automatic. It required major redesign of organizational systems, like recruiting, training, and performance management. The case describes the changes introduced by a new vice president of human resources and offers early reaction to those changes.
This case was developed to serve as a foundation for student discussion of the use of contingent forms of payment in M&A. The protagonist in the case represents the buyer, and must design terms of contingent payment ("earnout") that will protect the buyer if the rosy future does not occur, yet reward the seller if it does. Students are given completed discounted cash flow (DCF) valuations of the target (Digitech) under both the seller's and buyer's forecasts, which reveal a wide gulf in valuation. The protagonist seeks to bridge this gulf through a combination of fixed and contingent payments to the seller. Two different earnout designs are suggested in the case. Students must simulate the value of the earnout to estimate the expected value of this provision from the standpoints of both the buyer and seller.
This note provides a detailed explanation of how to apply the equity residual valuation method when the debt/equity mix is changing. An example is provided that works through levering betas. The note can be used to accompany cases on leveraged buyouts.
In 1998, ICI's research division had discovered a new use for anthraquinone and had to decide whether to accelerate research on a process to synthesize anthraquinone and develop the commercial application, or to terminate the modest R&D effort. (A Microsoft Excel model is available for use with this case, product 7A98E029.)
Hutchison Whampoa was considering strategies for its long-term capital structure. The HK$35 billion Hong Kong-based conglomerate had ambitious growth plans in multiple business sectors in different geographies. Traditionally, like many of its domestic peers, Hutchison had relied entirely on short to medium-term bank loans. Its demand for long-term financing, attractive rates in other capital markets (especially the U.S.) and concern about a more diversified investor base had led Hutchison to explore other financing options. In particular, the company was debating the benefits of a Yankee Bond Offering. At the time, Hutchison had already approached Moody's and Standard & Poor's for a bond rating.
From 1992 to 1997, CIBC CEO Al Flood and head of investment banking John Hunkin integrate the struggling investment bank Wood Gundy with CIBC's corporate bank. The impact and interaction of organization design, compensation schemes, and communication initiatives are explored. A rewritten version of an earlier case.