A group of investors is considering buying the sequel rights for a portfolio of feature films. They need to determine how much to offer to pay and how to structure a contract with one or more major U.S. film studios. The case contains cash flow estimates for all major films released in the United States during 1989. These data are used to generate estimates of the value of sequel rights prior to the first film's release. Designed to introduce students to real options and techniques for valuing them. It clearly illustrates the power of option pricing techniques for certain types of capital budgeting problems. Also illustrates the practical limitations of such techniques.
Multinational professional services firm Coopers & Lybrand has decided to enter the Hungarian market and weighs its strategic options in light of the environment in which it will operate and its resources.
Describes five years of development in a centralized data processing activity serving a highly decentralized corporation. Data processing manager discovers that a major software system conversion is a full year behind schedule, and subsequently makes several managerial and organizational changes. Raises issues of leadership style, human resource management, conflict, and organizational change.
Provides an evaluation of the "Leadership Through Quality" effort at Xerox. The assessment includes both negative and positive factors based on extensive interviews and surveys. Based on this assessment, a plan of action is determined and presented which was endorsed by senior management. Students will be asked to consider whether these mid-course corrections are appropriate. Allows students to see how long major changes take to occur and how much effort is involved to sustain and deepen change.
Reveals the course of action that Xerox took after discovering that its Leadership Through Quality program had not met all expectations. Reinforces the message that change is an ongoing and continuous effort, and that companies never achieve all of their change goals.
Describes Jan Carlzon's actions on assuming the CEO's responsibility at SAS in a time of financial and organizational difficulty. After tracing Carlzon's development as a manager, it focuses on the way in which he developed, then communicated a clear and motivating strategic mission to become "the world's best businessman's airline." After a spectacular turnaround, organizational problems re-emerge, and the case concludes with Carlzon wondering if his "second wave" can provide the same impetus that he gained on his first wave. Highlights the power of a clear and well-communicated strategic mission (strategic intent), but also explores problems and limits that can arise. Specifically, focuses on the common problem of motivating middle managers who often feel disenfranchised by front line empowerment.
In 1987, two European rivals--Asea AB of Sweden and BBC Brown Boveri Ltd. of Switzerland--merged to form Asea Brown Boveri. The new company employed 150,000 employees in 850 legal entities operating in 140 countries. The case describes the challenges facing Percy Barnevik--the organization's leader--and how he resolved those challenges through staffing, communicating priorities, new structural alignments, and information and reporting systems.
Describes the computer-based information system (ABACUS) used to monitor and control business operations in a complex, global company. Describes the technical attributes of the database system, financial reporting requirements, target setting and profit calculations on a full-cost basis (including interest on capital employed and replacement cost depreciation). Exhibits illustrate both inputs and graphical outputs from the system as well as the details of accounting calculations.
Describes the complexity of setting and reconciling performance targets in a global, matrix company. The president of the Finnish industry and rail transport company has received targets from two bosses--his regional superior and his business area superior. Each has set different performance targets (financial and non-financial) which must be reconciled. In addition, a bonus scheme must be developed and approved.
Describes internal allocation conflicts in a complex global company structured as a matrix organization. ABB Switzerland has secured and will build an important power station project; however, internal market allocation policies dictate that this work be handled by ABB Sweden. Transfer pricing issues are described. The president of ABB Switzerland must decide whether or not to escalate the conflict up to superiors for resolution.
Summarizes Carlzon's new focus externally on building alliances and acquiring travel service companies. Describes the financial problems resulting from the recession and the Gulf War crisis. Designed as an in-class handout to highlight the long-term management commitment required to realign and inspire an organization to a new strategic mission. Allows a more balanced appraisal of Carlzon's leadership abilities and limitations.
Concerns the selection and scheduling of orders by a small industrial titanium fabricator that in recent months has been plagued by poor deliveries and a lack of capacity. Four orders are offered, from which the student must select one. Each order represents different order-mix/customer situation issues. The case forces the student to choose among the four orders, given conflicting estimates of capacity available, other business likely to come along, and the requirements of each order. A rewritten version of an earlier case.
Presents an urgent order for repair service from an important customer who had purchased an item from a competitor. The item, which TiFab had bid on, went out at a price that TiFab predicted was below the amount necessary to ensure quality manufacture. Now the customer needs to have the unit, part of a much larger production system, repaired and is willing to pay a very high price. The student must choose a price for this order, and decide whether to take it. Should be handed out in class after discussion of the (A) case. A rewritten version of an earlier supplement.
The governments of Malaysia and the Malaysian State of Sarawak need to assess possible changes in forest policy. Environmentalist pressure threatens traditional market relationships and patterns of business-government interaction. Harvest regulations, subsidies, trade restrictions, environmental controls, and property rights structures are all called into question.