Describes the negotiations between the City of Denver officials, airlines, consulting companies, and BAE for the construction of a backup baggage system to enable the Denver International Airport (DIA) to open. When DIA finally opens in February 1995, 16 months behind schedule, it has three separate baggage-handling systems instead of a single state-of-the-art, integrated baggage-handling system.
Addresses the following issues at a conceptual level: 1) Who is a general manager? 2) To whom is the general manager responsible? and 3) How do general managers add value?
The vice president, finance of a firm notes that although performance of the firm as measured by traditional accounting measures has steadily improved, share price has been decreasing. She attempts to employ the concept of economic value added to get to the bottom of the puzzle.
By 2005, franchise systems will account for an estimated one-half of U.S. retail sales. But prospective franchisors need to consider carefully whether to expand a business by franchising or by opening company-owned outlets. The advantages of franchising include allowing the firm to overcome resource constraints of limited capital and thin the ranks of experienced managers. Franchising also provides a means of trading off certain functions; franchisees are more efficient in performing functions whose average cost curve turns up relatively quickly. It obviates the need for monitoring (and its attendant costs) because franchisees have invested their own capital and are motivated to work hard for profitability. It offers substantial efficiencies in promotion and advertising by leveraging the value of a trademark and brand image. And, of course, it helps in managing one's risks, because franchisors can eventually convert profitable franchise locations into company-owned operations (although this strategy raises certain ethical concerns). A beginning firm, however, needs to outline its business goals over an extended period and analyze how it can use franchising to fulfill those goals. Factors that bear upon the relative desirability of the franchise option include labor- vs. capital-intensity, demand variability, the importance of repeat customers, and the role of changing technology. A firm might well find that a "mixed system" (a mix of franchised and company-owned stores) optimizes its cost-benefit balance.
A new administration/government takes power in a state in India and cancels a power project agreed upon/created by the previous state government and an American-based energy company. The project cancellation is based on allegations of irregularities, exorbitant costs, and political pressures.
Mike Wilson and Jim Thompson of Northern Mining Inc., a Canadian-listed junior-mining company, deliberated carefully the prospect of acquiring the largest graphite deposit in Ontario, owned by Graphite Mining Corporation (GMC). GMC's U.S. parent company, the Jameson Corporation, had stopped mining operations in the previous year and then proceeded to sell its interest in GMC to Quebec-based graphite producer Graphcar Inc. Over the past five years, CDN$30 million had been spent in developing the mine and erecting a mill, and now Graphcar Inc. was prepared to sell the mill for CDN$1.5 million. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B014.)
The deregulation of the natural gas industry permitted the creation of new companies, gas marketers or gas banks, such as CoWest. Still in its first year of operations, CoWest had the opportunity to bid on a fixed-price long-term contract to supply gas to a cogeneration plant. The focus of the case is to investigate the possibilities of putting a deal together using financial derivatives.
The assistant treasurer of Videotron Ltee (Videotron) pondered over the Citibank proposals that lay on his desk. Videotron was about to launch a US$150 million, 10-year high yield issue in almost a week's time. Since Videotron's business was transacted almost exclusively in Canadian dollars, it would be exposed to foreign exchange risk on the US-dollar denominated interest and principal debt payments. In light of the recent and dramatic depreciation of the Canadian dollar against the U.S. dollar, the treasurer wondered if he should hedge this exposure. The Citibank Canada exposure management team had proposed hedging techniques using either forwards or cross-currency swaps. (A Microsoft Excel spreadsheet is available for use with this case, product 7A96B021.)
This case demonstrates how forming strategic partnerships with suppliers and clients can lead to win-win-win situations in the supply chain. It can be used to discuss the importance of information sharing and the use of information technology to drive the direction of the individual relationships. It also shows how cultivating partnerships can result in a competitive advantage in a highly competitive service industry. Techniques for developing and maintaining such a relationship are also brought out in the case, and it provides an opportunity to focus on the key concepts of supply chain management as they apply to service industries.
The Timberland Co., a manufacturer and retailer of footwear, outdoor apparel, and accessories, committed itself to instituting and communicating a core set of values to its employees, stockholders, and consumers. The system of beliefs emphasized community service. Central to this commitment was an alliance with the national youth community service organization City Year. Over the years, Timberland and City Year developed a close alliance that both sides contended constituted "a new paradigm" for the interaction between a for-profit business and a nonprofit organization. This case discusses Timberland's commitments to beliefs and service in light of disappointing financial results for the company and subsequent layoffs during the 1995 fiscal year. Introduces the idea of a corporate strategy for community involvement, allowing the instructor to raise questions about the choice of activities and partners, the breadth of projects and the source of motivation for such a strategy. Also allows discussion of the role of beliefs and of community service in the context of a company that has pioneered a distinct approach to these concepts.
Tells the story of the China Internet Corp. (CIC), which was founded to serve both businesses wishing to conduct electronic commerce within China and those intending to trade with companies within China. The company provides access and advertising to companies; it does not offer Internet services to the public. Details CIC's major concerns: expansion, compensation, funding, and human resource issues.
A large, lucrative power plant is negotiated for construction/operation by an American power company in India's evolving privatized power sector. The process of incorporating the project is captured in this case. The American company will own and operate the plant in India, which will sell power to India.
Named president of Disney TV and Telecommunications, Dennis Hightower has to yet again come in as an outsider and take charge. The magnitude of challenge is much larger than in 1987, and the situation facing him is subtly different.
In less than 20 years, the real estate firm Colliers International expanded into a federation of 180 offices with close to 4,500 professionals in over 30 countries. Because Colliers expanded by signing up existing firms strong in their local markets, its leaders had to manage a portfolio of firms with revenues ranging from $500,000 to over $80 million. Some were over 150 years old; others less than one. Firms provided services ranging from commission-based brokerage services to advisory services more akin to consulting services involving retainer fees. Colliers leaders are considering how their organization should respond to the changing needs of real estate clients. Colliers managers need to decide what organizational structure, management practices, and IT strategy their organization requires to enter the next century.
When two or more parties establish a relationship or structure a deal, one of the key issues that arises is the nature of the agency relationship between them. This technical note explains the concept of agency, outlines some of the typical agency relationships that exist in businesses, the agency problems that can arise between people and organizations and the tools that are employed to address these agency problems.
The notion of community has been at the heart of the Internet since its early days, when scientists used it to share data, collaborate on research, and exchange messages. But how can businesses best use its community-building capabilities? Not merely by putting their products or services on-line, the authors contend. Real value will come from providing people with the ability to interact with one another--from satisfying their multiple social needs as well as their commercial needs. Companies that create strong on-line communities will command customer loyalty to a degree hitherto undreamed of and consequently, will generate strong economic returns. The authors present four different types of community: communities of transaction, interest, fantasy, and relationship.
David Martin, chief operating officer of Lexington Labs, was apprehensive about the upcoming meeting with his senior sales executives. Just a few years earlier, when the pharmaceutical company enjoyed extraordinary success, gatherings with the sales force had seemed like celebrations. But in the past 18 months, sales had begun to fall, as had earnings. And most of the top sales personnel had begun to focus on their own businesses as major changes swept through the health care industry. Martin sensed that the solution was a system to facilitate the flow of knowledge across borders. Sales executives needed to share vital information about products, customers, competitors, and selling techniques. But what kind of system would work best? Unfortunately, Martin's apprehensions were justified. The meeting only emphasized how fragmented the company had become. How can Martin get Lexington to function as one global company? In 96302 and 96302Z, Louise Goeser, Thomas H. Davenport, Barry Harrington, George Goldsmith, and G. Kelly O'Dea offer advice on this fictional case study.
David Martin, chief operating officer of Lexington Labs, was apprehensive about the upcoming meeting with his senior sales executives. Just a few years earlier, when the pharmaceutical company enjoyed extraordinary success, gatherings with the sales force had seemed like celebrations. But in the past 18 months, sales had begun to fall, as had earnings. And most of the top sales personnel had begun to focus on their own businesses as major changes swept through the health care industry. Martin sensed that the solution was a system to facilitate the flow of knowledge across borders. Sales executives needed to share vital information about products, customers, competitors, and selling techniques. But what kind of system would work best? Unfortunately, Martin's apprehensions were justified. The meeting only emphasized how fragmented the company had become. How can Martin get Lexington to function as one global company? In 96302 and 96302Z, Louise Goeser, Thomas H. Davenport, Barry Harrington, George Goldsmith, and G. Kelly O'Dea offer advice on this fictional case study.
David Martin, chief operating officer of Lexington Labs, was apprehensive about the upcoming meeting with his senior sales executives. Just a few years earlier, when the pharmaceutical company enjoyed extraordinary success, gatherings with the sales force had seemed like celebrations. But in the past 18 months, sales had begun to fall, as had earnings. And most of the top sales personnel had begun to focus on their own businesses as major changes swept through the health care industry. Martin sensed that the solution was a system to facilitate the flow of knowledge across borders. Sales executives needed to share vital information about products, customers, competitors, and selling techniques. But what kind of system would work best? Unfortunately, Martin's apprehensions were justified. The meeting only emphasized how fragmented the company had become. How can Martin get Lexington to function as one global company? In 96302 and 96302Z, Louise Goeser, Thomas H. Davenport, Barry Harrington, George Goldsmith, and G. Kelly O'Dea offer advice on this fictional case study.