Leveraged buyouts are not just for the big guys. Money is available for buyers of smaller companies who know how to structure a deal. Borrowing against assets like equipment, inventory, and accounts receivable gives the entrepreneur the most freedom and thus remains the most popular LBO technique. If a deal is to succeed, the owner must have a compelling reason to sell.
In 1980, the Illinois Department of Children and Family Services faced a crisis. Over 700 black children in Cook County, including 69 infants, waited for adoption while the agency was unable to find black parents. Director Gregory L. Color, with his deputy gordon Johnson, approached Father George Clements, a black activist Chicago priest in the Baptist community. From those meetings came One Church, One Child, a plan to use pastors of the black churches as spokesmen to reach the community. Coler and Johnson faced several hurdles as they asked a private religious institution to help solve a public agency's problem. They had to change negative attitudes both in the black community; which had grown to distrust the state agency, and among a staff suspicious of change who would implement the black adoption program. They had to revamp state laws that inhibited the adoption process. And they had to change bureaucratic procedures that had proven ineffective. The accompanying video exhibit brings to life the successful strategy of the One Church, One Child program, focusing on a presentation in a black church designed to encourage adoptions. In addition, the video includes retrospective comments from the program's administrators and vignettes of families who have adopted children as a result of the program. This case will challenge students to examine the assumptions that limit bureaucracies. Available in Spanish translation. HKS Case Number 856.0
Arbor Capital must choose a method of revenue recognition in the pre-need funeral and cemetery services industry. Since three accounting firms expressed differing opinions on the type of revenue recognition method Arbor should employ, the student must examine the complexity of revenue recognition and the alternatives available to Arbor for recognizing revenue. The case allows the student to determine the effect the alternatives have on the financial statements and the actual economic impact which results from these changes. As an outside director of Arbor's Audit Committee, the student is expected to make a recommendation to Arbor's Board of Directors.
A newly appointed manager of customer services for a department store, must decide whether or not to offer a job to an employee who was recovering from a serious illness, and who might experience a relapse if she took on this high-stress position.
The technical services manager must decide on how to proceed with the development of a new fish head cutting device based on results from a summer study of fish flesh waste. Various alternatives are presented along with projected costs, all with varying degrees of technological and financial risk. (A sequel to this case is available, titled Canadian Fishing Company (B), case 9A88D007.)
The services manager was reviewing the latest progress status of the new fish head cutting device development program. The project was behind schedule and decisions needed to be made on several contingency plans. The technical services manager also wondered how to ensure speedy development of the device without jeopardizing the joint venture relationship. (This case is a sequel to Canadian Fishing Company (A), case 9A88D006.)
A division manager for a chain of medical and research centres must deal with allegations of misappropriated funds. The chain has recently undergone an organizational restructuring, a fact which tends to muddy the issue. Case analysts address ethical and public relations considerations, in light of the fact that one of the key players has threatened legal action against the corporation.
An American project manager (with a team of 12 Americans), who is just about to conclude a week long negotiation with a team of 12 Koreans, is faced with a dilemma. He is being pushed to make a decision he is ill equipped to make; he feels it might not be in his company's best interest, but could be in the best interest of the joint venture that his firm is in the process of establishing with the Koreans.
The mid-1986 Sears new catalogue contained a 20-page section called Elements. This section bore a striking resemblance to the format of an IKEA catalogue, and the furniture being offered was similar to IKEA'S knocked-down self-assembly line. The head of IKEA'S North American operations wondered how serious Sears was about its new initiative and what, if anything, IKEA should do in response.
A three-party negotiation among a company's human resources manager, senior manager, and a supervisor over whether to reverse plans to fire the supervisor's employee. A multi-issue negotiation in which the HR representative is one of the parties. The company is concerned about a decision to retain or fire a newly transferred manager because of an alleged drinking incident.
A three-party negotiation among a company's human resources manager, senior manager, and a supervisor over whether to reverse plans to fire the supervisor's employee. A multi-issue negotiation in which the HR representative is one of the parties. The company is concerned about a decision to retain or fire a newly transferred manager because of an alleged drinking incident.
A three-party negotiation among a company's human resources manager, senior manager, and a supervisor over whether to reverse plans to fire the supervisor's employee. A multi-issue negotiation in which the HR representative is one of the parties. The company is concerned about a decision to retain or fire a newly transferred manager because of an alleged drinking incident.
A three-party negotiation among a company's human resources manager, senior manager, and a supervisor over whether to reverse plans to fire the supervisor's employee. A multi-issue negotiation in which the HR representative is one of the parties. The company is concerned about a decision to retain or fire a newly transferred manager because of an alleged drinking incident.
Sunwind A.B. supplies interior trim (floor-lids) to Volvo Car company from its Säve plant. The newly appointed Managing Director is faced with capacity and quality problems on one hand and plant closure on the other. he is convinced that the successful implementation of the just-in-time, sequenced delivery of floor lids directly onto Volvo's 700 series assembly line at its Torslanda plant, only 8 km distant, would guarantee not only the viability of the Säve plant but also provide Sunwind with a sorely needed competitive advantage within Sweden's car trim industry. Participants are asked to develop an action plan for implementing the just-in-time sequence delivery of floor lids to Volvo. This requires the analysis of current operations and making recommendations for change consistent with the just-in-time approach.
Senior corporate communications executives of a major financial services firm are reviewing the company's sports sponsorship program and are considering expanding it. Hancock already is the corporate sponsor of the Boston Marathon and has the opportunity to sponsor the Sun Bowl (football game). Major questions include the role and evaluation of sports sponsorship as part of Hancock's image enhancement initiatives.
Scarce managerial talent, sales force turnover, and client attrition were potential problems underlying IDS' disappointing performance at mid-year 1987. The marketing vice president had three potential "fixes": 1) increasing or decreasing the $35 million budget for marketing programs, 2) accelerating the expansion of the 6,746-person sales force numerically, and 3) emphasizing the strategic geographical expansion of the sales force. The teaching objective is to show the intricacies of planning, organizing, and budgeting as a three-way interaction which impacts results.
Presents a problem involving rehabilitating a small office building in Boston. Describes an investment decision which is knowingly underfunded. As construction proceeds, the developer realizes that it is not up to building code and faces difficult business and ethical decisions regarding restructuring the deal, finding other sources of capital, replacing the contractors, and dealing with a difficult building inspector. Also points to the necessity of doing accurate financial planning.
In early 1985 the CEO of Waste Management, Inc. is deliberating over several equity-linked debt alternatives to finance the retirement of debt. The teaching objective is to expose students to various forms of equity-linked debt financing alternatives.