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The objective of the statement of cash flow is to facilitate an understanding of the financial consequences of business activities by providing detail pertaining to the sources and uses of a company's cash. While the income statement and balance sheet are based on accrual accounting, the statement of cash flow is intended to represent the cash-flow consequences of business activities. Most of the challenge with preparing, and ultimately understanding, the statement of cash flow is due to a failure to appreciate the relation between the statement of cash flow and other financial statements. The purpose of this note is to discuss the conceptual framework underlying the preparation of the statement of cash flow that is based on that relation.

Emily Holland-Power was eager to start looking for permanent employment. Holland-Power was entering the final year of the two-year honors bachelor of arts program in business administration at the Richard Ivey School of Business at The University of Western Ontario in London, Ontario. From her summer work at Lalani, O'Hagan & John, an accounting firm in London, she had concluded that accounting was not for her. However, she had also decided that she wanted to work in a professional firm. Thus, Holland-Power wanted to learn more about opportunities in management consulting and investment banking. She decided to meet with two of her classmates who had worked in each of these occupations. After asking them about various aspects of their jobs and the firms for which they worked, Holland-Power needed to decide which career path to pursue.

The exercise involves having students write letters to an organization of their choice describing their operating experience at a detailed level. The companies' responses are paired with the students' letters and the entire collection is made available to the class. The collection can be compelling. Students are quick to sense which organizations value customer communications as meaningful operational input. They find highly instructive the frequency with which situations laboriously recounted by their "valued customers" elicit generic responses from companies, and replies to detailed letters of praise get the tone dramatically wrong. At HBS, it is incorporated in a second year elective, taught in a module devoted to utilizing customer-operators to improve operations (HBS 608-135).

While it is relatively easy to identify why strategies fail, it is much harder to explain how to fix a failing strategy or build an organization that can continuously renew its strategy. This note identifies some patterns that distinguish companies whose renewal efforts made headway from firms whose efforts fell flat.

This note describes the hedge fund industry as of the end of the year 2007.

Scoping the situation at the Mega Oil Corporation, a major management-consulting firm, had been the easy part. The firm is seriously behind its best competitors and risks falling further behind unless changes are made to reorganize its worldwide staff functions. Now the more difficult task is identifying and prioritizing the actions to take.

Spreadsheet Supplement for case 208126

This is a follow-up to the Starbucks case, product 98M006, describing the aftermath of strategic decisions taken in 1999. The case describes the crisis of confidence of investors in the strategic choices made by Starbucks. It poses the issues facing Starbucks in attempting to regain focus.

Global financial markets had changed dramatically in the decade following the ING (A) case, product # 9A99M022. This (B) case points to the nature of these changes, creating an opportunity for students to discuss them. Meanwhile, ING had also altered its global strategy, eliminating its attempts to create a global investment bank, and focusing its activities on specific financial sectors, each of which reported directly to head office. This new structure enabled ING head office to maintain closer control over its numerous local institutions. Students can analyze alternative potential strategies for ING in the context of the major financial changes. The (B) case presents summaries of: the 2007-08 global financial crisis; the attempts, like Basel II, to establish global reserve requirements; the economic prospects of the European Union and emerging markets; and ING Direct's success in e-banking.

Shortly after the acquisition of Corus in 2007, Tata Steel Limited entered the international markets with a convertible bond offering (CARS) that had distinct features. The offering of US$875 million was the first of its kind from India. The successful issuance reflected investor confidence in the country and the company. This case covers a full analysis of the CARS with a scope that spans valuation, structuring of the financing instrument to suit the issuer's strategic imperatives and investment analysis.

The product planning manager for BMW Group Canada (BMW) wondered how to revive the once-promising BMW Individual program. Despite a strong start when the BMW Individual Collection (IC) was launched in 2002, and significant growth in total BMW sales over the past three years, IC sales had declined substantially. At the corporate level, no specific measures had been taken to ensure a constant focus on the Individual program. At the customer level, BMW retailers were putting forth little effort, likely because they had no additional incentive to push a program that appealed only to a very small portion of their customer base. The product planning manager wondered how he could revive the BMW Individual program in Canada and give it the attention it deserved.

In 2007, the marketing director for Cineplex Entertainment is trying to decide whether or not to proceed with a loyalty program that would provide incentives for customers to see more movies and events, and spend more on concessions. An important by-product would be the collection of detailed customer buying data. She has crafted four possible combinations of rewards and received proposals from three suppliers with experience in managing customer data banks. She must decide the structure and richness of the program, the supplier, the likely response rate to determine financial feasibility, and whether to launch regionally or nationally.

PCH International started out as a sourcing agent of low-priced electronic components from Taiwan and China to the Western world in the mid 1990s, it had evolved to become a provider of comprehensive supply chain solutions to global technology companies by 2007. PCH was designed to address the needs of a complex global technology supply chain landscape. The first section of the case provides an overview of the global technology supply chain in the 2000s; the second section describes the physical, information and capital "flows" in the technology supply chain and the third section discusses how PCH had designed solutions to address the challenges in the three "flows." Customers examples included in the case to illustrate the various supply chain principles.

The number of international tourist visits will more than double in the next dozen years. As demand for access to hot spots outpaces capacity, some companies will profit by creating destinations. And all businesses will need to adopt strategies for claiming - or avoiding - prime turf.

Managers are less receptive to bad news and contrary viewpoints than they think they are, and they often send subtle signals that discourage frank input. The solution: 360-degree surveys of peers and subordinates that generate feedback specific to individual managers.

Change initiatives thrive in companies where the agents of reform are promoted and thereby retained, according to research from a change-leadership consultancy. Investors also notice and reward these businesses.

Coca-Cola developed a distribution model for emerging markets by learning how its Peruvian bottler succeeded in the mom-and-pop channel. The tenets: Turn wholesalers into distributors, use IT to link and control distributors, and employ simple technology. PepsiCo has taken a page from the same playbook; other multinationals can, too.

The managing director and CEO of PIMCO fondly remembers a boss who helped him find solace in failure. Bolstering your high performers when they fall short, he says, is the key to maximizing their potential.

When high-tech businesses lose a valued inventor, they often gain access to her new employer's intellectual capital. To take full advantage of the networking possibilities, technology companies should consider adopting alumni programs like those at consulting and law firms.