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Thermaware, Inc., a manufacturer of top-of-the-line industrial thermostat controllers, is considering moving toward a single-piece-flow system. From the demand and production information given, students must determine a schedule that reduces inventory and approaches single-piece flow. The case can be used as a vehicle to reinforce the scheduling concepts found in the book The Gold Mine.

Eugene Isenberg, CEO of Nabors Industries, was listed in a 2006 Wall Street Journal article as one of the highest paid executives in the U.S. over the previous 14 years. He received this compensation as a result of a unique bonus arrangement and large stock option grants with several favorable features. At the same time, the strategy that he implemented for Nabors led to a remarkable financial turnaround as the company emerged from bankruptcy and expanded to become a global leader in the oilfield services industry. Readers are asked to evaluate the structure of Isenberg's compensation agreement in light of the company's industry, strategy, and financial position. Particular consideration is paid to the total compensation, mix of compensation, performance measures, and other compensation terms.

Describes the approach to creative collaboration and leadership adopted by Paul Robertson as leader of one of the most highly regarded string quartets in recent history. Intended to prompt a discussion of a variety of issues surrounding management of creative ensembles. The topics discussed include: the nature and attainment of mastery (as opposed to technical competence); master and apprentice relationships; the details of collaborative work and workspace; and how to make preparations for world class performances.

Biography of publisher and philanthropist Joseph Pulitzer.

Marco Suter, Executive Vice-Chairman, UBS Board of Directors, carefully studied the chart on his desk. It showed the public commitment of major financial institutions to help mitigate global warming. Evidently, UBS lagged behind its competitors. The graph was part of a report that environmental specialists and senior executives at UBS had compiled. It suggested the company adopt a more progressive policy on climate change. Suter thought about the options that the working group had generated. These ranged from stabilizing the company's current carbon emissions to complete carbon neutrality. The UBS Corporate Responsibility Committee would meet early next week. Suter wondered which option he should support.

Spreadsheet for case 906E17

Senior management of a large company learns that its largest and most important information systems project will be eight months late. The developers used the latest technology ( Web-based, distributed, client-server, networked) and architecture (SOA). Some new parts were up and running but many old, legacy pieces were carrying a heavy part of the daily demands and risks of outages were increasing. There were staffing problems and challenges with conversions, and it appeared that some organizational units were resisting adoption of the new systems.

Describes the role accident has historically played in invention and discovery, and raises questions about the importance of variation in business innovation processes.

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Describes the reorganization of the drug discovery organization at Wyeth Pharmaceuticals and focuses on the decisions to: (1) centralize decision-making within drug discovery and (2) institute numerical metrics--jointly affecting all R&D scientists--for the progression of compounds through the Wyeth pipeline. Highlights issues concerning the degree to which scientific activity can be evaluated via numerical metrics, the extent to which R&D can be structured as a process, and the degree to which decision-making should be centralized in commercial R&D activities.

Describes the economic development of Latvia, a small eastern European country on the shores of the Baltic Sea, from regaining independence in 1991 to European Union (EU) accession in 2004 and is set on May 1st, 2004, the day Latvia became an EU member. Latvia had achieved strong growth since regaining independence from the Soviet Union in 1990. Describes Latvia's economic development over this period, discussing the economic policy efforts that have taken place and includes general information on the country, its history and politics, and the business environment that companies faced in 2004. A special focus is the influence that the EU accession process has on the Latvian economy and on economic policy choices in the country. Challenges students to discuss how the environment changes as EU membership is achieved, and which new priorities the country might need to define for its economic policy.

Focuses on the experience of China's largest shirt manufacturer in managing various aspects of government relations in China. Identifies a wide variety of social initiatives it has undertaken.

In October 2004, SpaceShipOne rocketed into space, winning the $10 million Ansari X PRIZE. This competition for the first privately funded, manned spaceflight was organized by the X PRIZE Foundation, and attracted 26 competitors, who had spent more than $100 million in pursuit of the prize. The success of SpaceShipOne generated intense media and public interest. Many of the competitors for the Ansari X PRIZE also planned to continue their efforts to develop commercial spaceflight businesses. After this success, Peter Diamandis, founder and CEO of the X PRIZE Foundation considered the future of the foundation. He saw three options: shutting down, continuing with a focus on space, or creating a "world-class prize institute that uses the prize-incentive model to solve today's grand challenges." He chose the third alternative, with the vision of developing 10-15 prize competitions. The foundation chose to work on fields including space, medicine and genomics, energy and transportation, education, and other social challenges. Describes lessons learned about prize competitions through the Ansari X PRIZE program. Discusses issues in creating and operating a successful competition, as well as the advantages of using incentive prizes, including bringing new thinking to bear on difficult problems and paying out only when an important goal is accomplished (paying for results, not effort). Poses several problems facing the Foundation as it begins to focus on fields outside of space: could prize competitions work in fields that were not technology-centric (such as poverty); could the organization scale up to support as many as 10-15 competitions; and what areas should the foundation focus on. Finally, could the prize model revolutionize philanthropy by using financial incentives to stimulate investment in important fields and leverage philanthropic dollars by paying only for results?

Using examples from financial markets, this note examines links among market prices, stated interest rates, and compounding assumptions. The note emphasizes how interest rates are expressions of market prices, and pays particular attention to the role of compounding assumptions. Market prices are converted into stated interest rates for different compounding assumptions. Guidance is offered on how to make intelligent comparisons across markets that use different compounding conventions. The note is useful as background for the study of a wide array of pricing issues in fixed-income and options markets.

This note introduces options (both calls and puts) and their valuation. After covering the history of options and the basic nature of their payoffs, the note provides an intuitive discussion of the determinants of an option's value. The note then introduces and applies the Black-Scholes option-pricing model to real data, using an Excel-based version of the model. Throughout, the emphasis is on the basics of options and their valuation.

This note shows how dividend payments affect option values owing to the effects of dividend payments on share price and resulting investor behavior. In addition to discussing the underlying logic, the note shows how to value options for dividend-paying stocks by adapting the Black-Scholes option-pricing model. The note addresses issues of early exercise and the underlying incentives of investors who own call or put options.

This note examines how spot and forward interest rates relate to bond prices and to each other. After defining spot and forward rates, the note shows how to estimate spot rates from data on either zero-coupon bonds or coupon bonds. It also shows how to express these stated rates for different compounding assumptions. The note pays particular attention to understanding how arbitrage forces in markets establish the links between forward and spot rates and how to infer one set of rates from the other. The note deepens understanding of bond pricing, assuming that the reader is already familiar with the basics of present-value techniques. It is a useful springboard for topics (e.g., swaps) that require familiarity with spot and forward rates.

This note is a brief introduction to the logic and practice of using stock options to compensate executives. The Black-Scholes option-pricing model is used to estimate the value of option grants for a company. The note affords the opportunity to apply options valuation in the context of executive compensation, and serves as a companion to introductions to options that expose the reader to the Black-Scholes option-pricing model.