Examines California Public Employees Retirement System (CalPERS), the world's fourth largest pension fund. Dale Hanson, CEO of CalPERS, has a problem; how does he use CalPERS' influence as the holder of a small percentage of 1,300 American companies to put pressure on corporate America to achieve better returns for shareholders? The case discusses the constraints which confront CalPERS as a quasi-state agency and describes their efforts to improve corporate governance to date.
The manager of a Fairfield Inn located near a family entertainment center is requesting special consideration for a falling quality rating caused, in his opinion, by unusually high occupancy rates at his unit. The case raises questions about quality measurement, control, and the consistency of an operating strategy.
Why has Britain declined? The case provides three interpretations: from a neoclassical economist, two institutional economic historians, and a sociologist. Their explanations partly overlap and partly conflict over such areas as technology, national culture, and social class.
The rapid depreciation of the peso in 1982 precipitated a crisis at Grupo Alfa, Mexico's largest private company. The company's peso cash flow was insufficient to service its large dollar-denominated debt. Students are asked to formulate a plan for restructuring Alfa's debt in the context of Mexican laws governing property and creditors' rights. To do this, students must decide on a business strategy, make financial projections and understand participants' negotiating strengths and weaknesses. Teaching objective: In addition to the basic elements of a large corporate restructuring, the case highlights the roles played by governments and legal systems. Provides a useful contrast to U.S.-style restructurings.
Addresses the controversy that surrounds highly promotional retail pricing referred to as "high-low pricing" by the trade. High-low pricing involves setting prices at an initially high level for a brief period of time, then discounting off the so-called "regular" or "original" prices for the bulk of the selling season. Discusses recent accusations by state and local authorities that such pricing policies are deceptive and covers, in detail, a recent court case involving May D&F, a subsidiary of the May Companies in Colorado. Introduces the complexity of the retail promotional environment, and the problems associated with highly promotional pricing. Understanding consumer response to promotions is critical to the case analysis.
In France, management is not a task. It is a "state of mind." Alumni of the grandes ecoles, the elite colleges, dominate the upper echelons of business and have the same social prestige as doctors or lawyers. Movement from public to private sector managerial positions is common, reflecting and reinforcing a rich relationship between French industry and government, not unlike Japan's.
Although they account for 20% of the world's population and a major share of its natural resources, Latin America and Africa have been left out of the move to globalize trade and markets. Now, because of declining protectionism, these countries are ready to take an active role in world trade. By using the emerging Pacific Rim economies as a model, many of the less-developed countries ar e liberalizing their trade policies and privatizing their industries to create wealth.
Many large manufacturing companies are finding themselves at a cost disadvantage in markets they have dominated for years. This is because of excessive overhead structures and the emergence of the "robust" competitor, comparable in size and product scope but able to produce at a lower unit overhead cost. High-overhead companies should not cut overhead by outsourcing or downsizing. If they expect to retain their size and also become more cost competitive, they must rethink their manufacturing systems.
Laura Wollen, group marketing director for ARPCO, was about to recommend her best product manager, Charles Lewis, for a position in the London office. Yet David Abbott, Wollen's counterpart in the United Kingdom, admitted that Lewis looked good on paper, but doubted he would fit in with the team and adjust to the British market. Wollen finally understood that Abbott's reservations were because Lewis was black. Wollen was wary of promoting Lewis into the London job only to have him fail there because of racism. Four experts analyze her alternatives.
In the 1990s, competitive success will come from building and dominating fundamentally new markets. Core competencies are one prerequisite for creating these new markets. Corporate imagination and expeditionary marketing are the keys that unlock the markets. Corporate imagination is unleashed when companies escape the tyranny of their served markets, think about needs and functionalities instead of marketing's more conventional customer-product grid, overturn tradition price-performance assumptions, and lead customers rather than follow them.
By the end of the century, the most successful computer companies will be buying computers rather than building them. Defining how computers are used, not how they are built, will create real value. Three new rules will guide the computer industry's strategic transformation: 1) compete on utility, not power; 2) monopolize the true sources of added value; and 3) maximize the sophistication of the value delivered, while minimizing the sophistication of the technology consumed. McKinsey Award Winner.
When GE's retiring Reginald Jones turned the job of CEO over to Jack Welch on April 1, 1981, the Wall Street Journal reported that GE had "decided to replace a legend with a live wire." Some wondered if the young dynamo could fill the elder statesman's very large shoes. But Welch had a very powerful and well-articulated vision of where he wanted his company to go. By 1984, he had regrouped GE's sectors, redefined its core businesses, made massive investment and disinvestment decisions, changed the company's approach to planning, and drastically cut personnel. Despite a major recession in the world economy and flat sales, profits rose from $1.5 billion in 1980 to $2.3 billion in 1984. This case chronicles the evolution of GE through the 1970s and early 1980s, focusing particularly on the changes wrought by Reg Jones and the way in which Jack Welch took that heritage and reshaped it to fit the demands of a new decade.
By the mid 1980's Jack Welch had completely transformed General Electric with more than 300 divestitures and acquisitions since the beginning of the decade. Welch insisted that his business units be number one or number two in their markets, and have the strength of large companies and the leanness and agility of small ones. Yet, although Welch had succeeded restructuring GE the way he wanted, employee morale was low. The case focuses on Welch raising employee productivity by continuing to remove layers of management and by allowing employees to have a greater voice in their own affairs.
Astor, the wealthiest American of his time, engages in fur trading, shipping, real estate investment, and general merchandise trading. Astor's career illustrates the immediate pre-modern management era: types of decisions, time horizons, and number of transactions.
After a decade of mediocre performance, the Norton Co. enters 1990 with the prospect of increased sales in the next few years. Yet Norton is pursuing slow growth industries, and a lower than expected earnings announcement at the beginning of 1990 has depressed earnings forecasts by brokerage firms. BTR, a large highly successful British conglomerate, is considering making a takeover offer of Norton but is troubled by a number of issues. This case takes a behind-the-scenes look at how a company like BTR would value a potential takeover target and analyze how the acquisition would impact BTR's operations and performance, and how it might stave off competing bids if it were to make an offer.
Japonica Partners, an investment firm, is trying to determine whether there is any unseen value in Sunbeam Oster Co., Inc., a Chapter 11 debtor. If there is, Japonica must consider the means by which they can acquire control of a company in Chapter 11.