When the administration of Peru president Alberto Fujimori embarks on an ambitious privatization program, it turns inevitably to the nation's creaking telephone system. With but 2.5 phone lines per 100 persons, Peru, in the mid-1990s, had the lowest phone "density" in Latin America; installation of a new line took years, except via a thriving black market in existing lines. But the privatization committee which begins to plot the role of both the existing local and long distance phone monopolies, knows that it faces formidable obstacles to change: a suspicious and powerful military which nationalized the phone system in the 1970s; an influential cellular phone operator with his own agenda; existing unions, doubtful legislators who must approve a constitutional amendment to allow privatization to go forward. This case is about the political management of privatization. It describes the "interest group map" developed by the privatization committee and poses the question of what tactical approach should be taken with each. Case users must envision the potential conflicts, the objective desired, and the most useful tactics. The sequel describes the early success of the privatization process, after the phone system's sale to the Spanish phone giant, Telefonica. HKS Case Number 1404.1
"There are occasions when matters go beyond satire and indeed beyond a joke. Things have become so ridiculous that the laughter is incredibly painful. The UK electricity privatization and regulation business has now reached this point." Thus began an article in the March 1995 edition of the Energy Economist. This quote captures the depths to which the credibility of the British program to regulate its electricity distribution companies had fallen. What had happened to a system of regulation touted as a model for the rest of the world-a model most experts felt was a major improvement over rate of return regulation, widely used in the USA? The core of the British system-performance based rates had either been adopted or were being considered in over 30 countries. It was the new wave of regulation. Yet in Britain, it had run smack into one of the largest political and financial furors in recent times. HKS Case Number 1619.0.
Cathay Pacific's Data Centre, located in Hong Kong, had experienced an explosion and fire that disrupted normal business for 13 hours. In the search for a more secure location, the problems with finding suitable offices in Hong Kong were highlighted, while the benefits and advantages offered by other countries presented the company with the option of relocating the data center offshore.
The Bird Flu virus was first detected in Hong Kong in early 1997. This strain of virus had been previously known to infect only birds but had now crossed the species barrier and infected humans. By the end of 1997, the confirmed number of cases had reached 17, resulting in 6 deaths. The implications for Hong Kong were enormous. Bird Flu not only threatened the health and welfare of the people of Hong Kong, but also affected Hong Kong's economy and reputation in terms of international tourism and trade. The Hong Kong government must develop a communication strategy.
In the 1980s, Australian Capital Territory Banking Corp. Ltd. (later known as "ACTDirect") identified the need to develop information systems to enhance the provision and delivery of its products and services. "ACTonline," an electronic banking system, was the bank's solution to meeting the challenges of continual technological change. By the latter part of the 1990s, however, fast and complex advances in technology changed the banking landscape. The new electronic marketplace presented a challenge to management--how best to market ACTonline in the electronic commerce environment?
The SAS Institute is a large, growing software company headquartered in the Research Triangle in North Carolina. Founded more than 25 years ago, it has evolved a unique approach, given its industry, to developing and retaining talent including using no stock options or phantom stock and not paying its salespeople on commission. The CEO and Vice President of Human Resources must decide how well their current management practices will continue to serve them as the company gains greater visibility and faces an increasingly competitive labor market.
Fresh Choice, a restaurant in the throes of recovering from substantial financial difficulties, had borrowed ideas on things ranging from restaurant design to recipes from a competitor. That competitor had itself been started as an imitator of the Fresh Choice salad-buffet concept, indicating that there was transfer of practices and knowledge when the firms were competitors. But once Fresh Choice acquired the other firm, in an effort to acquire its intellectual capital as well as some excellent locations, the transfer of knowledge inside the firm occurred with more difficulty. The questions facing Fresh Choice senior management at this point are as follows: What can they learn from the events that have transpired after the acquisition? What might have they done differently? Why did the problems arise? And, most importantly, what might they do differently in the future to realize more of the benefits of acquisitions and mergers?
Founded in 1984, Cisco Systems made the Fortune 500 list and surpassed the significant $100 billion mark for market capitalization in 1997. Cisco, whose core technology is routers that allow disparate computer networks to "talk to one another," has become the worldwide leader in networking for the Internet. Acquisitions have been an integral part of Cisco's corporate strategy--one industry analyst estimated that 40% of Cisco's 1997 revenues came from acquired businesses. Cisco undertakes acquisitions to enable it to quickly tap into new market opportunities and offer customers end-to-end networking solutions. The case discusses Cisco's background and founders, its philosophy toward acquisitions, its stringent acquisition criteria, and its well-documented and tested approach to integrating manufacturing processes and organizations. Also describes a recent acquisition and poses the question of how to integrate the acquired company's manufacturing organization.
In 1998, the U.S. Department of Justice, together with 19 state attorney generals, filed an antitrust action against Microsoft Corp. for anticompetitive conduct and violation of the Sherman Act. Details the Department of Justice's allegations and the case presented to the court, as well as Microsoft's position on the issues and line of defense. Describes the sequence of events, starting with the trial court, the judge's ruling and remedies, Microsoft's appeal, the court of appeal's decision and, ultimately, the settlement reached by both parties in November 2001.
Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially.
Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially.
Two-party negotiation between a property owner and a neighboring business over the sale of two real estate parcels. The simulation is set in Hong Kong in 1996, just before the British returned Hong Kong to the People's Republic of China. Lee Wing and Terry Jones each operate a business next door to each other on Tai Po Kau Harbour Road. Between their two businesses is a small lot that is unattractive as a separate building site because it sits between two large warehouses. Lee Wing purchased the small lot in 1990 for $70,000 with the intent of expanding his warehouse. These plans were never realized, and the lot is currently vacant.
Two-party negotiation between a property owner and a neighboring business over the sale of two real estate parcels. The simulation is set in Hong Kong in 1996, just before the British returned Hong Kong to the People's Republic of China. Lee Wing and Terry Jones each operate a business next door to each other on Tai Po Kau Harbour Road. Between their two businesses is a small lot that is unattractive as a separate building site because it sits between two large warehouses. Lee Wing purchased the small lot in 1990 for $70,000 with the intent of expanding his warehouse. These plans were never realized, and the lot is currently vacant.
Three-party, multi-issue international trade negotiation among three culturally different countries over which of two countries will export rice to the third; inculdes coalition and ongoing relationship issues. Fuji, the regional power in the "Pacrim" trading block, is a large island nation that imports significant quantities of rice, but that is constitutionally bound to import rice from only one country at a time. The smaller, historically unfriendly island nations of Indocarta and Hawani both wish to export their rice to Fuji. In a series of one-on-one and tripartite meetings, representatives of the three nations must determine not only whether and how Fuji will import rice, but also whether Indocarta and Hawani will cooperate or compete with each other in such an arrangement. The changing economy and the cultural differences among the three nations play a crucial role in the negotiations.
Three-party, multi-issue international trade negotiation among three culturally different countries over which of two countries will export rice to the third; inculdes coalition and ongoing relationship issues. Fuji, the regional power in the "Pacrim" trading block, is a large island nation that imports significant quantities of rice, but that is constitutionally bound to import rice from only one country at a time. The smaller, historically unfriendly island nations of Indocarta and Hawani both wish to export their rice to Fuji. In a series of one-on-one and tripartite meetings, representatives of the three nations must determine not only whether and how Fuji will import rice, but also whether Indocarta and Hawani will cooperate or compete with each other in such an arrangement. The changing economy and the cultural differences among the three nations play a crucial role in the negotiations.
Three-party, multi-issue international trade negotiation among three culturally different countries over which of two countries will export rice to the third; inculdes coalition and ongoing relationship issues. Fuji, the regional power in the "Pacrim" trading block, is a large island nation that imports significant quantities of rice, but that is constitutionally bound to import rice from only one country at a time. The smaller, historically unfriendly island nations of Indocarta and Hawani both wish to export their rice to Fuji. In a series of one-on-one and tripartite meetings, representatives of the three nations must determine not only whether and how Fuji will import rice, but also whether Indocarta and Hawani will cooperate or compete with each other in such an arrangement. The changing economy and the cultural differences among the three nations play a crucial role in the negotiations.
Three-party, multi-issue international trade negotiation among three culturally different countries over which of two countries will export rice to the third; inculdes coalition and ongoing relationship issues. Fuji, the regional power in the "Pacrim" trading block, is a large island nation that imports significant quantities of rice, but that is constitutionally bound to import rice from only one country at a time. The smaller, historically unfriendly island nations of Indocarta and Hawani both wish to export their rice to Fuji. In a series of one-on-one and tripartite meetings, representatives of the three nations must determine not only whether and how Fuji will import rice, but also whether Indocarta and Hawani will cooperate or compete with each other in such an arrangement. The changing economy and the cultural differences among the three nations play a crucial role in the negotiations.
The Federal Republic of Meridia, located in Central America, is negotiating to sell off-shore oil leasing rights along its Eastern coast. the capitol of Meridia, Quintaro, is on the Western coast. Its population is 500,000. Meridia's Western coast already has a number of off-shore drilling facilities, but this would be the first in the East. The Government has high hopes about the effect these newly discovered oil fields will have on that region. The city of Guaca, which dominates that region, was just involved in a six-year civil war. Meridia has many offers by contenders. Petrocentram, from Venezuela, is one of those three. Negotiations between Meridia and Petrocam have been going on for about a month. A "final" negotiation session is about to begin. If a decision is not reached today, Meridia will begin negotiations with other companies.
Supplement to PON619, "Meridia and Petrocentram". Confidential Instructions for J. Lipeno, Meridia's Minister for Economic Development and Reconstruction.