A leading Canadian mining company had recently closed two uranium mines and begun the lengthy and complex regulatory process to obtain approval of their clean-up plans for the mine, surface facilities and waste management areas. The accounting issues in the case focus on the uncertainty associated with the approval of a specific waste management method, upon which the company had based its provisions for clean-up costs, and the potential cost associated with alternative waste management methods that had been investigated by an independent consultant. If forced to adopt one of the alternative methods, a potential cost and liability of $300 million could result. In the audit committee meeting a concern is raised about the potential existence of a contingent liability. The decision faced by the audit committee is whether to investigate the situation, and if so, its role and how to proceed. (Two sequels to this case, titled Northern Mines Limited (B), case 9A98B013 and Northern Mines Limited (C), case 9A98B014 describe the audit committee's investigation and recommendations.)
A leading Canadian mining company had recently closed two uranium mines and begun the lengthy and complex regulatory process to obtain approval of their clean-up plans for the mine, surface facilities and waste management areas. Northern Mines (B) summarizes the investigation that was carried out by the audit committee, and the information that is gathered from the auditors and management about the regulatory process for decommissioning and the company's proposed clean-up methods. Now the audit committee members must decide if a contingent liability exists, and if so, what to recommend to the board about disclosure. (This is a sequel to Northern Mines Limited (A), case 9A98B012.)
The general manager of COM DEV's Chinese facility which assembled satellite components, was trying to decide whether the plant should seek ISO 9000 certification. Not only did ISO 9000 registration have a number of advantages and disadvantages, but as well, the decision in the Chinese plant would have some implications for COM DEV's other facilities in Canada and Europe. In addition, if the general manager decided to seek ISO 9000 certification for his plant, he would have to decide which level of certification to seek. COM DEV Xi'an was a joint venture between COM DEV International of Cambridge, Ontario and Xi'an Institute of Space Radio Technology.
The basics of project management are described and applied to a simple tutorial problem. The steps for project management, as well as the calculation of the critical path, using CPM, are presented.
A stop-action simulation case takes participants through the process whereby four people (three young entrepreneurs and an investor) take a machine vision company from start-up to acquisition by a major publicly-traded company. Over several years, they have to reconcile their differing priorities and objectives in order to negotiate the terms of a number of rounds of additional capital infusion and new partners and deal with the stresses this creates in their relationship.
Describes the financing history of Teleswitch, a maker of small digital telephone switches for the wireless/cellular industry. As the case ends, Teleswitch is revisiting its selection of an investment banker for its hoped-for IPO. A rewritten version of an earlier case.
Lin Zhang has just received approval for the formation of a new quality control group at LongXi, located in Zhangzhou, China. This new group must investigate and reduce the high defect rate of a critical part used in the final manufacture of multi-cylinder diesel engines. Lin must decide who will be directly involved in the team, which data must be collected and analyzed, what is causing the problem, and which actions should be taken. The improvement project is set within the context of LongXi's broader quality and systems, thus encouraging students to evaluate and push forward corporate quality systems. This case is the first in a three-part series that applies the principles and tools of total quality management (TQM) in a Chinese setting.
The executive vice president, Investor and Trust Services Division, The Toronto-Dominion Bank, and chairman, Green Line Investor Services, was trying to decide whether he should request the authorization of the bank's top management to begin negotiations to acquire Waterhouse Investor Services Inc. Waterhouse was the fourth largest discount brokerage firm in the United States, and the acquisition, if consummated, would be the largest acquisition in the history of the bank. The case describes the major strategic moves of Green Line from its establishment in 1984 to the proposed Waterhouse acquisition in 1996. During this period Green Line became the dominant discount broker in Canada. The Waterhouse acquisition would represent its first major move into the global discount brokerage market. One of the issues in the case is trying to understand the reasons for Green Line's success in Canada and the potential transferability of its customer value and profit creation model to the highly competitive U.S. market.
Nancy Featherstone, an account manager with the Royal Bank, was assessing a client request for an expanded operating line of credit. Ashleigh Cosmetics Ltd., a Montreal-based manufacturer and distributor of women's cosmetics, planned to launch a new red lipstick line called Marilyn M. Ashleigh had applied for a $2,000,000 increase in its authorized operating line for a total of $4,500,000. The estimated increase was based partly on anticipated inventory and receivable peak levels for the new product.
The director of sales and marketing for the Delta Grand Pacific Hotel in Bangkok, Thailand, needed to devise a marketing strategy that would ensure the hotel's success in its very competitive market. He wanted to ensure that the hotel maintain and eventually increase its two key benchmarks of performance, namely, occupancy rates and average room rates, by milking the Sukhumvit Micromarket to its fullest potential. Compounding this challenge was the anticipation of a sharp drop in occupancy at the hotel due to the likelihood that an important client contract would not be renewed.
The chief financial officer of Ault Food Limited was compiling the data he would need to run a divisional Economic Value Added (EVA) analysis. He had been asked by the CEO of Ault Foods to present the analysis at the next meeting of the board of directors. The CEO must persuade the board that divesting at least one of the company's divisions will be in the best interest of Ault's shareholders. The case is intended to provide an introduction to the use of EVA in a multi-business setting. Having completed the case, students should have a basic understanding of the EVA concept and its usefulness as a performance indicator, be capable of making EVA adjustments and calculating actual EVA measures, and have a good conceptual grasp of the application of EVA as both an internal control device and an aid to strategic decision making.
Huaneng Power International (HPI), an independent power producer in the People's Republic of China (PRC), is in the process of executing a global equity issue to raise funds for the construction of new power plants. The company is planning to list the new shares through an American Depositary Receipt program on the New York Stock Exchange. The company has recently reduced the price of the issue due to poor market conditions and investor resistance to the price range stated in the preliminary prospectus. HPI's management must decide whether the new offer price and choice of listing exchange is reasonable in light of recent market events and the political, economic, social and technological environment in the PRC.
Wayne Adlam, head of equity capital markets for CIBC Wood Gundy Securities Inc. (Wood Gundy), sat at his desk contemplating placing a value on the equity units of the Legacy Hotels Real Estate Investment Trust. Wood Gundy and RBC Dominion Securities Inc. had been given the mandate to co-lead manage Legacy's Initial Public Offering (IPO). Legacy planned to use the proceeds of its IPO along with funds raised in a concurrent $300 million subordinated debt offering to invest in 11 hotel properties located in major business centres across Canada. The hotel properties would be acquired from CP Hotels.
Details the actions of John Martin, newly named CEO, as he leads Taco Bell through a decade of incremental and radical changes. By the end of the case, total system sales within Taco Bell, a Mexican style fast-food restaurant chain and a division of PepsiCo, have grown from $700 million in 1983 to $3.9 billion in 1994, and the company is managing over 10,000 eat-in restaurants and a wide variety of other retail sites around the world.
In April 1998, Prime Minister Hashimoto faced serious problems, both with his program of six systemic reforms and with his fiscal policy. Japan had been in effective recession for six years, unable to retain the miracle-growth achieved in earlier decades. Hashimoto has proposed to reform social security, fiscal policy, administration, regulation, education, and especially the financial system. But institutional rigidities--the bureaucracy, labor policies, corporate governance, and the aging population among others--has made change exceedingly difficult.
The note begins by suggesting various dimensions along which competitive situations may differ. It then introduces the matrix game structure and means to analyze a matrix games through iterative domination. The terms, Pareto-optimal and equilibrium are introduced. The note ends with a review of several classical matrix game structures: No Conflict Deliemma and Battle of the Sexes.
This article describes the benefits and challenges of alternative workplace programs. Today many organizations, including AT&T and IBM, are pioneering the alternative workplace--the combination of nontraditional work practices, settings, and locations that is beginning to supplement traditional offices. This is not a fad. Although estimates vary widely, it is safe to say that some 30-40 million people in the United States are now either telecommuters or home-based workers. What motivates managers to examine how people spend their time at the office and where else they might do their work? Among the potential benefits for companies are reduced costs, increased productivity, and an edge in vying for and keeping talented employees. They can also capture government incentives and avoid costly sanctions. But at the same time, alternative workplace programs are not for everyone. Indeed, such programs can be difficult to adopt, even for those organizations that seem to be most suited to them. Ingrained behaviors and practical hurdles are hard to overcome. And the challenges of managing both the cultural changes and systems improvements required by an alternative workplace initiative are substantial. How should senior managers think about alternative workplace programs? What are the criteria for determining whether the alternative workplace is right for a given organization? What are the most common pitfalls in implementing alternative workplace programs? The author provides the answers to these questions in his examination of this new frontier of where and how people work.
Everyone talks about empowerment, but it's not working. CEOs subtly undermine empowerment. Employees are often unprepared or unwilling to assume the new responsibilities it entails. Even change professionals stifle it. When empowerment is used as the ultimate criteria of success in organizations, it covers up many of the deeper problems that they must overcome. To understand this apparent contradiction, author Chris Argyris (Harvard Business School Professor Emeritus and Director at Monitor Co.) explores two kinds of commitment: external and internal. External commitment--or contractual compliance--is what employees display when they have little control over their destinies and are accustomed to working under the command-and-control model. Internal commitment occurs when employees are committed to a particular project, person, or program for their own individual reasons or motivations. Internal commitment is very closely allied with empowerment. The problem with change programs designed to encourage empowerment is that they actually end up creating more external than internal commitment. One reason is that these programs are rife with inner contradictions and send out mixed messages like "do your own thing--the way we tell you." The result is that employees feel little responsibility for the change program, and people throughout the organization feel less empowered. What can be done? Companies would do well to recognize potential inconsistencies in their change programs; to understand that empowerment has its limits; to establish working conditions that encourage employees' internal commitment; and to realize that morale and even empowerment are penultimate criteria in organizations. The ultimate goal is performance.