Laura Wollen, a group marketing director for ARPCO, Inc., must decide whether to recommend a high performance product manager for a choice position overseas. The supervisor overseas resists the hire because of the candidate's race and Wollen fears that insisting will set her candidate up for failure. On the other hand, she believes she is the best candidate and should not be denied the position.
Describes a new investment which is linked to an index of commmodity futures prices. Explores how the index is constructed, how commodity futures (as opposed to other futures and spot prices) behave, and what the portfolio impacts of such an investment might be.
Describes how commodity futures work, what products and exchanges are available, and who the players in the commodity markets are. Also presents a careful discussion of the pricing of futures in commodity markets, focusing on cost of carry and risk premium approaches, and explaining backwardation and contango markets.
The corporate raiders of the 1980s have turned into corporate boardmembers of the 1990s. In this new role, the takeover experts are not plunderers, nor are they creating quick profit at the expense of companies' long-term health; rather, they are defying expectations and, in a number of important respects, successfully implementing the agenda of the gurus of good management. Setting the pace in this new arena is the leveraged buyout firm of Kohlberg Kravis Roberts & Co. KKR's partners hold board seats at nine different companies with $1 billion a year or more in sales. KKR is practicing a surprising amount of what might be regarded as a textbook version of sound management methods--including rigorously evaluating CEO performance, devising proper management incentives, and making budgets count.
Japan is organized in a fundamentally different way from the economies of the rest of the industrialized world. It is a nation girded by cartels and bound by keiretsu, or families of interrelated businesses, which would seem alien and even illegal in the United States. Pure cartels have great power over Japan's markets. Even political parties operate like cartels. U.S. businesses cannot merely wait for the Japanese to accept fair trade policies as determined by governments of the West. They must be alert for opportunities to join keiretsu, use U.S. political muscle, and exploit any openings in Japan's closely knit business network.
Europe's capitalist system may be better suited to meet the demands of a global economy than its American or Japanese counterparts. In the years ahead, every country must face the challenge of incorporating diverse groups under one roof and improving the quality of life for all. Here Europe's history gives its managers a decided advantage. Because their national markets are small, European companies have long been internationally oriented. And unlike their peers in the United States or Japan, European managers are accustomed to working within the bounds of an implicit social compact. A new generation of "Europreneurs," such as Edzard Reuter of Daimler-Benz and Percy Barnevik of ABB, has appeared to meet the challenges of emerging global markets.
While it is easy to recognize leadership in action, defining the essence of leadership is hard because it cannot be reduced to a set of personal attributes or particular activities. Intent on capturing the essence of leadership, Chan Kim and Renee Mauborgne turned to lessons that Kim had learned as a youth in the temples of Korea's Kyung Nam province. These lessons dealt with the qualities that define true leaders. Their points were made through stories, not through statistics or research. Thus they provided the inspiration for five parables of leadership.
Behind Nike's catchy slogans and flashy TV commercials is the vision of founder, chairman, and CEO Phil Knight. Knight has taken Nike from a small-time distributor of Japanese track shoes to the top of the athletic shoe and apparel market. He has transformed his technology company into a marketing company whose product is its most important marketing tool. Knight learned how to build brands and understand consumers, and then how to split those brands into sub-brands to help keep the company growing. That approach brought Nike to a broader range of consumers while preserving the customer base. To create an emotional tie with the consumer, Nike started advertising on TV. "Sports is at the heart of American culture," Knight says. "You can't explain much in 60 seconds, but when you show Michael Jordan, you don't have to. It's that simple."
Keeping up with technology is getting more difficult for companies as the pace of innovation quickens. Today innovations are increasingly coming from outside industries--a textile company that develops a new fiber, for example, can revolutionize the building materials industry. By fusing technologies, companies can create new products, markets, and industries, and remain ahead of their competitors. Technology fusion blends several previously separate fields of existing technology. Three fundamental principles can help companies implement a fusion strategy. First, let the market drive R&D, not the other way around, through a process called "demand articulation." Second, develop a strong intelligence gathering capability both as a defense mechanism against competitors and as a source of new ideas. Third, and most important, take part in cross-industry R&D projects.
The boardmembers of Minute Publishing must decide the fate of the company's three-year-old national newspaper, America Today. They can either follow the advice of CEO Neil Harcum, who implores them to continue the paper's publication, or CFO Peter Rawson, who wants to shut down the presses. Both sides have convincing arguments. Harcum has a proven track record of making newspapers profitable. He argues that Minute "cannot allow the beancounters to set policy." Rawson, on the other hand, explains that America Today is losing $100 million a year and has broken Minute's 20-year string of earning gains. In making its decision, Minute's board will also be choosing a new CEO. Harcum is retiring at the end of the year and doesn't want Rawson to take his place.
America, a nation once celebrated for its irrepressible optimism, now appears to be obsessed by "declinism"--the idea that something is fundamentally wrong with the U.S. economy, and until it is fixed, America will neither compete effectively in global markets nor provide an adequate standard of living for its citizens. The real challenge facing American society is not reversing economic decline; it is addressing the social implications of the new economy--in particular, how to reinvent America's double commitment to economic opportunity and social equality. Ironically, too great a preoccupation with decline may keep American society from getting on with the job.
In the annual report, Welch indicates a new priority for the company--developing a cadre of managers who can lead GE in implementing its strategy in a new organizational context. The question facing Welch is whether his bold new human resource vision is realistic and achievable.
Two partners, Anne Salpryn and Tom Hilliard, successfully develop a creative software company. While Anne becomes more managerially oriented, Tom wants to remain a software project creator. The partnership becomes jeopardized as Tom's personal life begins to fall apart and he is faced with sexual harassment charges at work. Anne seeks to buy him out. Examines the perils of partnership, man/woman business relationships, and the tensions posed by creativity and organization.
Two sisters begin a bakery/cafe and have difficulties organizing the work and defining their roles. The case is written from the mother's perspective as she tries to figure out how to keep the business from falling apart.
An introductory case in cash flow analysis and the preparation of statements of cash flows. Based on the 1991 income statement and balance sheet at a ski resort company, the case provides additional information which allows a student to prepare both a direct and an indirect statement of cash flows. A rewritten version of an earlier case.
The CFO of Fleetwood Enterprises is considering whether to recommend a large share repurchase to the board of directors. Fleetwood's core businesses, manufactured housing and recreational vehicles, are very sensitive to business cycles and oil prices. Following Iraq's invasion of Kuwait, Fleetwood's stock price dropped more than 20%, but Fleetwood appears strong enough to both survive a severe downturn and repurchase a large block of shares. Designed to permit a thorough review of basic capital structure, dividend payout, and share repurchase theories, in the context of a large firm facing both a potential crisis and a valuable opportunity.
An investment manager notices a large apparent discrepancy in the prices of two nearly-identical bonds issued in conjunction with a major leveraged buyout. The manager must figure out whether the instruments are mispriced relative to one another, and if so, how to capture arbitrage profits from the temporary anomaly. The case introduces students to a wide variety of instruments ranging from very simple treasury strips to P-I-K debentures. Encourages students to devise "arbitrage" positions and understand the degree to which these positions are riskless.
Parker Co., a U.S. based agricultural chemical company with $4 billion in sales, has agreed to a joint venture with Spencer, Inc., a smaller U.S. based company, to develop and market a new herbicide for corn. The two companies must consider marketing, tax, and liability issues to decide whether the new entity will be a corporation or a partnership. Demonstrates how various tax and non-tax factors affect the legal form of joint venture.