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Highlights how one school district leverages human capital management to help create a high-performing system.

Edward Englehardt Giberson, the proprietor, is a skilled glassblower whose business is on the verge of bankruptcy. He works in his studio almost every day, and his products sell reasonably well. On average, he has at least a two-week backlog of orders. He realizes his prices are too low, yet the artistic nature of his products makes it difficult to set prices based on any systematic assessment of demand or comparison with similar products. In desperation, he turns to the consulting club of a nearby graduate business school for help in establishing both a pricing policy and a production policy that he hopes will lead to profitable operations and a positive cash flow. Clearly, continuing "business as usual" is not an option for Giberson.

The Wilmont Chemical Corporation produces a variety of industrial products, including a specialty chemical called SC. The company uses an actual costing system and the LIFO inventory method. At the beginning of each year, the company's controller estimates the total direct cost (omitting any manufacturing overhead allocation) per unit of producing SC. Unfortunately, the market demand and selling price are difficult to predict, as are the raw material and direct labor costs. Monthly budgets are prepared in advance, and are subsequently compared with actual results. The controller is wondering if the company's financial statements would be more "managerially relevant" if the company changed to an estimated costing system, where raw material inventory is kept at estimated costs and finished goods inventory is kept at estimated production costs. The case provides information for comparing the actual operating results for a month with the budgeted amounts. Students are asked to prepare three monthly income statements: one using the company's actual costing system; one using an estimated costing system; and, one using a hybrid costing system that incorporates both actual and estimated costs. They are then asked to take a position as to which of the three income statements presents the most managerially relevant information.

Hydrochem, Inc. produces only one product - condutronic plates. The company uses an actual process costing system but is considering changing to a standard costing system. Manufacturing costs consist of raw material, direct labor and manufacturing overhead, and the company uses full absorption costing. Students are provided with account balance information at the beginning of the month and with information regarding the company's events and transactions during the month. Students are asked to prepare two income statements for the month and balance sheets as of the end of the month. One set of financial statements is to be prepared using the company's actual costing system, and the other set of financial statements is to be prepared using the proposed standard costing system. Students are asked to explain the differences between these two sets of financial statements and to take a position as to which set of financial information they prefer.

Gomez Electronics produces three models of portable compact disc (CD) players. The company uses a full-cost standard-costing system for both internal and external financial reporting. However, the company's president is considering changing to a standard direct costing (i.e., variable costing) system for internal purposes. Students are asked to prepare two sets of income statements: one based on a standard full costing system, and the other based on a standard direct costing system. Each set of income statements provides information that reflects budgeted sales and budgeted production, as well as actual sales and actual production. Gomez Electronics has three production departments, all of which have excess capacity. The company has received and an offer from a large discount company to purchase a large quantity of CD players that, except for the plastic case, are similar to one of Gomez Electronics' CD players. The offer stipulates the price, the total quantity, and the delivery schedule. Students are asked to make a decision regarding whether to accept the discount company's offer. In addition, students are asked to make a recommendation regarding the adoption of a standard direct costing system for internal use.

In this, the third of a three-case series, Alex Pearson, Charley's Family Steak House No. 2 manager, continues to prepare for his upcoming meeting with steak house owner Charley Turner. The purpose of the meeting is to discuss the restaurant's 2009 results, review how they compared with budget, and assess how Pearson performed during his second year as restaurant manager. He is hopeful that this year's meeting will go as well as last year's meeting and that Turner will decide to award him a bonus again this year.

Tony Hamilton, brand manager for Distillers Delight in the United Kingdom, is preparing for his upcoming meeting with his boss, Charlotte Handy, managing director for the United Kingdom for Global Distillers, Inc., one of the leading companies in the alcoholic beverages industry. The purpose of the meeting is to review how well his brand performed during the company's 2003 fiscal year. To say the least, it had been a very difficult year. No one had predicted any increase in the country's excise tax, let alone the 60% increase that took effect shortly after the company's 2003 fiscal year began. From that point on, almost nothing had gone according to plan. Thus, Tony is looking for a way to reconcile actual results with planned results in a way that is accurate, informative and understandable. This case is based on an actual situation, and it was written with the cooperation of one of the leading global companies in the spirits industry. The company name, the product name, individuals' names and the numerical data have all been disguised, yet the issues presented are real.

Set in India in the 1980s and 1990s, this series of cases concerns the attempts by the Unilever division Hindustan Lever Limited (HLL) to create, market, and distribute a detergent for India's rural poor. The upstart, low-priced Nirma detergent, manufactured by a former chemist, has overtaken HLL in the detergent market primarily because Nirma is being distributed and sold to this previously ignored segment of India's population. In this war of laundry powders, HLL must revise its traditional practices in manufacturing, marketing, and distribution pursuant to C. K. Prahalad and Allen Hammond's theory of the worldwide four-tiered market, in which the "bottom of the pyramid" is an untapped and potentially lucrative market. See also UV5263, UV4263, and UV5266.

In 2002, a money manager is considering how to vote her shares in Hewlett-Packard on the proposal to merge with Compaq. The (A) case presents information about the strategic and financial motivations of the merger. Included are completed valuations of both HP and Compaq and detailed summaries of the leading advocate (Carly Fiorina) and critic (Walter Hewlett). The tasks for the student are to value the prospective synergies in the deal and critically assess the strategic arguments (pro and con). The (B) case affords a detailed examination of the terms of the proposed merger. The tasks for the student are to critically assess the specific design of the deal and its impact on shareholders. Of particular interest are the impact on earnings per share (that is, EPS dilution), the governance of the new firm and whether this is, indeed, a merger of equals. The (C) case describes the outcome of the proxy contest. Here the task for the student is to evaluate the strategies of each side in communicating with shareholders and presenting arguments. The objectives of the case module are to expose students to the mechanics of proxy contests, exercise skills in valuation and strategic analysis, and critically evaluate deal terms. The (A) and (B) cases can be taught in sequential classes, or in one class. The (C) case is typically distributed at the end followed by a brief discussion.

In 2002, a money manager is considering how to vote her shares in Hewlett-Packard on the proposal to merge with Compaq. The (A) case presents information about the strategic and financial motivations of the merger. Included are completed valuations of both HP and Compaq and detailed summaries of the leading advocate (Carly Fiorina) and critic (Walter Hewlett). The tasks for the student are to value the prospective synergies in the deal and critically assess the strategic arguments (pro and con). The (B) case affords a detailed examination of the terms of the proposed merger. The tasks for the student are to critically assess the specific design of the deal and its impact on shareholders. Of particular interest are the impact on earnings per share (that is, EPS dilution), the governance of the new firm and whether this is, indeed, a merger of equals. The (C) case describes the outcome of the proxy contest. Here the task for the student is to evaluate the strategies of each side in communicating with shareholders and presenting arguments. The objectives of the case module are to expose students to the mechanics of proxy contests, exercise skills in valuation and strategic analysis, and critically evaluate deal terms. The (A) and (B) cases can be taught in sequential classes, or in one class. The (C) case is typically distributed at the end followed by a brief discussion.

Set in India in the 1980s and 1990s, this series of cases concerns the attempts by the Unilever division Hindustan Lever Limited (HLL) to create, market, and distribute a detergent for India's rural poor. The upstart, low-priced Nirma detergent, manufactured by a former chemist, has overtaken HLL in the detergent market primarily because Nirma is being distributed and sold to this previously ignored segment of India's population. In this war of laundry powders, HLL must revise its traditional practices in manufacturing, marketing, and distribution pursuant to C. K. Prahalad and Allen Hammond's theory of the worldwide four-tiered market, in which the "bottom of the pyramid" is an untapped and potentially lucrative market. See also UV5263, UV1972, and UV5266.

Set in India in the 1980s and 1990s, this series of cases concerns the attempts by the Unilever division Hindustan Lever Limited (HLL) to create, market, and distribute a detergent for India's rural poor. The upstart, low-priced Nirma detergent, manufactured by a former chemist, has overtaken HLL in the detergent market primarily because Nirma is being distributed and sold to this previously ignored market segment. In this war of laundry powders, HLL must revise its traditional practices in manufacturing, marketing, and distribution pursuant to C. K. Prahalad and Allen Hammond's theory of the worldwide four-tiered market, in which the "bottom of the pyramid" is an untapped and potentially lucrative market. See also the B (UV1972), C (UV4263), and D (UV5266) cases.

Set in India in the 1980s and 1990s, this series of cases concerns the attempts by the Unilever division Hindustan Lever Limited (HLL) to create, market, and distribute a detergent for India's rural poor. The upstart, low-priced Nirma detergent, manufactured by a former chemist, has overtaken HLL in the detergent market primarily because Nirma is being distributed and sold to this previously ignored segment of India's population. In this war of laundry powders, HLL must revise its traditional practices in manufacturing, marketing, and distribution pursuant to C. K. Prahalad and Allen Hammond's theory of the worldwide four-tiered market, in which the "bottom of the pyramid" is an untapped and potentially lucrative market. See also UV5263, UV1972, and UV4263.

Explores the concept of strategic alignment within a public school district.

The president of Daikin Industries Residential Air Conditioning Shiga Factory confronted the prospect of an unseasonably cold summer at a time when the Shiga Factory had large quantities of its products in inventory in anticipation of strong summer sales. The president was concerned not only about pending losses in the current year, but also about the factory's long-term survival. Unprofitability was unacceptable and Daikin was caught in a stagnant market in which it was increasingly difficult to build share by product differentiation. The Shiga Factory had been forced to use large inventories to cope with uncertain demand and a long and unwieldy supply chain. The president must decide whether to reduce the number of models, build a lower cost factory outside Japan, or exit the business. He must also determine whether there are any other options.

In 2001, Bank Leu, a Swiss private bank, is considering creating the world's first public fund for catastrophe bonds. Cat bonds are securities whose payments depend on the probability of a catastrophe occurring, such as an earthquake or hurricane. Cat bonds are traditionally issued by large insurance or reinsurance companies. This case outlines the traditional reinsurance market and securitization efforts that have taken place in the past and focuses on Bank Leu's decision as a buy-side participant in the cat bond market.

In 2002, Swiss Re, the world's second--largest insurance company, is considering securitizing parts of its risk portfolio in the capital markets. This would be a first for the company that, until then, had never transferred risk off its balance sheet. Peter Giessmann, head of the Retrocession Group, is considering catastrophe bonds as a way of transferring risk. "Cat bonds" are securities whose payments depend on the probability of a catastrophe occurring, such as an earthquake or hurricane. This case outlines the traditional reinsurance market and securitization efforts that have taken place in the past and then focuses on Swiss Re's decision as a sell-side participant in the cat bond market.

Supplements the (A) case.

Bob Berney, president of Newmarket Films, must decide on a distribution and marketing strategy for Mel Gibson's controversial new movie, The Passion of the Christ. Fueled by Gibson's star power as well as an extensive prescreening campaign among Christian leaders and others representing likely target audiences in the summer of 2003, the religious movie had started to generate publicity in mainstream media. Five months prior to the film's scheduled opening on February 25, 2004, Berney has to choose whether to continue with the prescreening campaign to stimulate further word-of-mouth among core audiences or switch to a mainstream media advertising campaign more commonly used to promote new movies. He also has to determine the appropriate distribution strategy, in particular whether to opt for a wide or limited release and whether to change the timing of the release.

Supplements the (A) case.