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Mina O'Reilly, an officer at Logan Airport's Transportation Security Administration (TSA) in Boston, must discipline an employee responsible for a security breach that resulted in a 45-minute terminal closure during peak hours, a potential threat to traveler safety, and travel delays across the U.S. O'Reilly considers the impact of her decision on a shifting labor force: the growing divide between those employees deeply committed to the mission and those joining to simply find a job. The senior TSA staff and airlines are calling for accountability, but the person responsible for the breach is a passionate and valued employee who has been with TSA since its formation. As her shift approaches, O'Reilly must decide whether or not she can clock in as usual.

The senior vice president of project finance for a global oil and gas company must determine the weighted average cost of capital for the company as a whole and each of its divisions as part of the annual capital budgeting process. The case uses comparable companies to estimate asset betas for each operating division, and employs the Capital Asset Pricing Model to determine the cost of equity. Students are required to un-lever and re-lever betas and, choose an appropriate risk-free rate, and compute costs of debt and equity.

Student Spreadsheet for 4130

Breeden Electronics USA is a start-up division of a German company. It plans to produce two products, both electronic signaling devices. Herman Klein, the division president, has asked his controller, Marlene Baer, to compute several break-even sales figures as they assess the sales level that is necessary to meet the profit target established by the parent company. Baer must conduct several break-even analyses and consider the impact on profit if production exceeds sales. This is the first in a series of two cases that can be used to explore the evolution of cost systems. The main issues of the two cases are as follows: in the A case, the company uses a traditional costing system. The main questions relate to breakeven analysis and the effect of inventory buildup on profit. The B case (UV1779) introduces the use of an activity-based costing system to allocate costs so that the company can assess both product and customer profitability. The two cases can be used in two classes or together in one class.

FUTUR is a small nonprofit organization founded in Barcelona in 1996. Its aim is to create social and labor opportunities for potentially excluded individuals such as ex-convicts, single mothers with no income, battered women, the homeless, people over 45 years old affected by long-term unemployment, drug and alcohol addicts, and immigrants mostly from Latin America and Northern Africa with problems adapting to life in Barcelona. The type of jobs FUTUR has provided these individuals has changed over time. The organization started operating in the textile sector and later shifted its focus entirely to food services. It has also been committed to fair-trade and environmentally-friendly products. FUTUR opened several restaurants and later expanded into catering services and, more recently, to school cafeterias, the latter becoming a very successful venture. They were also ready to launch a new business to supplement these initiatives. It was based on selling organic, fair-trade products on the streets with salespeople riding specially adapted bicycles. However, the organization needed to find new facilities equipped with an industrial kitchen as it had to move from the building it was currently renting for a nominal price. With so many initiatives underway, Manuel Almirall pondered the pros and cons of diversification for an organization like FUTUR and whether it should concentrate on a single venture. Specifically, he wondered what strategy would be more effective to fulfill the organization's mission while maintaining sustainable growth and moving its central kitchen for its restaurants and catering services.

This case highlights the issues surrounding money market mutual funds in the financial crisis of 2008.

Busse Corporate Center's largest tenant recently declared bankruptcy, leaving the building 38% occupied and significantly overleveraged. In a depressed suburban Chicago office market, Marisa Sanchez, the leasing agent, has to negotiate lease proposals with three prospective tenants to try to fill the vacant space. Meanwhile, the building's owner, Collins Properties, must decide with its equity partner whether to continue funding the building's losses while trying to lease the vacant space, restructure the debt, or default on the loan and turn the building over to its lenders. The decision is made more complicated by Collins' use of a Commercial Mortgage Backed Security (CMBS) Loan, which involves multiple parties, ambiguous relationships, and bifurcated responsibilities.

Australia's Prime Minister Kevin Rudd faced a daunting task that he never imagined he would have to face when he was elected two years ago. Australia at that time was poised to enter its 17th year of uninterrupted growth. Commodity exports were booming, largely driven by China's insatiable appetite for raw materials. Then the global financial crisis erupted in 2008, brewing challenges for the world's biggest exporter of coal and iron ore. Prime Minister Rudd pushed for massive stimulus packages to revive domestic consumption and demand. Yet as an economy heavily dependent on trade, tumbling commodity prices brewed difficult times for Australia's trade deficit and its persistent large current account deficit. What was in hold for Australia's deficit, which had been in the red all but four years since 1950? In addition, how should policymakers address the intense concerns regarding China's growing interest in Australia's prized natural resources sector?

The case describes the situation facing the vice-president of A-CAT Corp. (A-CAT), Vidarbha Region, Maharashtra. A-CAT manufactured a relatively wide range of electrical appliances for household use. Typical products from its product line included TV signal boosters, transformers, FM radio kits, electronic ballasts, battery chargers and voltage regulators. The voltage regulators manufactured by A-CAT were used for many different purposes; however, the focus was on its flag-ship product, VR500 - a voltage regulator of 500 VA. Over the last few months, this model had faced stiff competition and was not able to meet the rising expectations of the market. The management was concerned that a significant number of A-CAT's customers were opting for competitors' products. The case intends to 1) make students aware of the relationship between customer requirements and the technical characteristics of a product 2 ) make students grasp the basics of value analysis 3) teach the students to use value analysis in assessing the scope for cost reduction.

On the evening of 20 October 2008, Citic Pacific, the Hong Kong arm of the CITIC Group, China's largest state-owned investment company, stunned the stock markets by announcing that it would lose as much as HK$15.5 billion (approximately US$2 billion). The company stated that these losses were due to foreign exchange exposures that it had been aware of for six weeks, but had failed to tell the investors about. In an apologetic statement to the public, Larry Yung Chi-kin, the chairman of Citic Pacific, acknowledged the losses and admitted that the contracts had not been properly authorized. Investors and analysts subsequently attacked Citic Pacific for its corporate governance and internal control practices. They expressed shock that the company would make such risky transactions and that it would delay the disclosure of these large potential losses for six weeks. What does this incident say about Citic Pacific's internal risk management and its board of directors, particularly the independent directors? Has the company demonstrated effective corporate governance standards and mechanisms through alignment of its top-level managers' decisions with the interests of the shareholders?

By 2007, China's Ping An Insurance Co. ("Ping An") had grown into the second-largest life insurer in China. Its goal was to become a universal financial services provider by expanding into asset management and banking. These three businesses were the foundation of Ping An's "three-pillar strategy". It had already made two domestic banking acquisitions, but none in asset management. In November 2007, Ping An acquired a 4.2% stake in Fortis, the Belgo-Dutch financial conglomerate, and planned to buy half of Fortis's asset management business, which would be a big step towards reaching its goal. Yet this ambitious overseas expansion plan was crushed by the adverse effects of the US subprime problem and the global financial crisis. The company needs to address important lessons, re-evaluate its overseas investment strategy and learn how to implement risk management in the future.

Structurally speaking, we are on the cusp of a new competitive era. The old era, in which one independent company wrestled with its horizontal market rivals for a bigger slice of the pie, is giving way to a game that is more nuanced, more challenging-but also bigger. In this new game, the smartest, most successful players will be those who build more unified end-to-end systems that deliver tangible value and improved experiences to customers. This technical note focuses on how to manage and orchestrate vital, differentiated-and profitable-customer experiences on a recurrent basis across inter-organizational value chains and routes-to-market systems.

Marlene Baer, the controller of Breeden Security USA, recognizes that grouping all manufacturing overhead costs together and allocating them to Breeden's two products is not very accurate. She groups overhead costs by activity and then allocates them to the two products. The system resembles a simple activity-based costing system. It introduces the definition of activities, costing those activities, and computing product cost based on their use of the activities. The revised product costs are considerably different, and analyzing what causes the differences is important for discovering where ABC can provide valuable information. In addition, at the end of the year, profits have been reduced by the need to take care of a growing and increasingly complex packing and shipping activity. Baer defines a new activity (order handling), computes the cost per order, and begins to revise the data on product profitability and to develop data on customer profitability. Having discovered the high cost of handling each order, she now has good reason to work on activity-based management and the notion of customer profitability making that process more efficient, and perhaps more customer friendly. This is the second in a series of two cases that can be used to explore the evolution of cost systems. The main issues of the two cases are as follows: In the A case (UV1778), the company uses a traditional costing system. The main questions relate to breakeven analysis and the effect of inventory buildup on profit. The B case introduces the use of an activity-based costing system to allocate costs so that the company can assess both product and customer profitability. The two cases can be used in two classes or together in one class.

This public leadership case puts students in the shoes of King County Executive Ron Sims, the top elected official in Washington State's largest and most diverse county. The year is 2005, and Sims wishes to take a high profile leadership role on the climate change issue-locally and on the national stage-by tackling the nearly uncharted realm of "adaptation," preparing at the local level for impacts of climate change considered inevitable. In addition to addressing certain generic leadership challenges-how to navigate the difficult intersection of politics and science, how to think about uncertainty, how to make an argument for long term investments, how to prove effective on both local and national stage-the case has the advantage of introducing readers to a compelling contemporary public issue, sure to grow in urgency worldwide. The case details the array of considerations that went into Sims' decision to take on the adaptation issue, including a brief summary of a concurrent local debate about designing a new wastewater treatment plant to deliver reclaimed water to customers in the future, if needed. HKS Case Number 1906.0

This sequel reveals which actions the County took, and describes the outcome of each in brief. It also includes two exhibits: a summary of the "goals and actions" outlined in the adaptation section of the 2007 King County Climate Plan and a list of executive orders intended to reduce the county's contribution to global warming. In addition to addressing certain generic leadership challenges-how to navigate the difficult intersection of politics and science, how to think about uncertainty, how to plan for the long term, how to prove effective on both local and national stage-the case has the advantage of introducing readers to a compelling contemporary public issue, sure to grow in urgency worldwide. HKS Case Number 1906.1

An Indian wind energy company with global ambitions of being among the top three in its business worldwide, Suzlon Energy Ltd. (Suzlon) manufactures and markets turbines, which harness wind to product electricity. Several of its customers are going global and increasingly expect global service (including pricing) consistent across geographies. Suzlon could consider the rapidly increasing business practice of global account management (GAM) to meet these needs. However, it would be a new trend in the wind energy industry and Suzlon would have to pioneer it. That presents several challenges, including persuading top management to approve a pilot exercise with a key customer, and managing incentives and morale within the organization and across country borders.

NFC was a state-owned company listed on the China stock exchange. It had operations in Zambia, Iran and Kazakhstan before entering into Mongolia. Most of the prior projects were turn-key operations. Mongolia was the first country in which it had an international joint venture (IJV). The joint venture (JV) agreement was signed in 1998. Due to many delays, it was not until 2005 that it finally started operating. In mid-2007, the Mongolian parliament notified the JV that its 5-year 0 per cent and 5-year 50 per cent of income tax term (starting from 2005) had been cancelled. Not only would it need to pay full tax starting from 2007, it had to pay the exempted tax amount from 2005 and 2006. Inside the JV, the union desired another pay raise despite the fact that salaries had been increased 10 per cent just six months ago. Outside the JV, local shipping companies threatened to block the factory gate if the JV did not sign a shipping contract with them on their terms.

In April 2009, Rashonda Williams, responsible for global asset allocation at a large pension fund, had to decide whether the increase the allocation to foreign securities. A primary factor influencing her decision was her view on the likely path of the U.S. dollar over the next 5 to 10 years. Were we on the verge of a massive repatriation of U.S. investors' foreign portfolios? Would foreign central banks begin to diversify away from dollars? Was the dollar (and other major currencies) so undervalued that the Group of Seven (G7) might contemplate coordinated currency intervention? Williams's assessment of these issues would be a large factor in her overall assessment: Should she recommend to the board that it increase the allocation to foreign securities, or should it take this opportunity to repatriate profits and increase the weight on U.S. securities?

This case provides students with an opportunity to become familiar with some major strategic issues that firms face when formulating and implementing a sales promotion, including: cannibalization, brand equity erosion, forward-buying, pass-through, and consumer stockpiling. It also provides them an opportunity to utilize retail scanner purchase data in order to evaluate the historical performance of sales promotions. Based on calculating top-line revenue, marketing margin, and return on marketing investment (ROMI) for prior promotions, students can recommend the most financially and strategically defensible initiative from a choice of several competing sales promotions. The setting is the frozen foods category in the consumer packaged goods industry.

Student spreadsheet for product number 4131.