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This case is intended for a broad range of student/executive audiences, and has the ability to be used successfully in a number of courses. It can be used in courses in international economics, international finance, international political economy, financial risk management, and regional courses focusing on the politics or economies of emerging markets/Latin America. Ideally, students/executives would have had macro- and microeconomics; however, I have found that students/executives with neither of these courses have still performed well in the case analysis. It is a challenging case study and is particularly useful in an MBA or executive MBA course, but can be taught successfully in advanced undergraduate courses.

The South Australian Water case study illustrates the management challenges in aligning Information Technology with business objectives in a publicly owned corporation. To achieve the alignment, the new CIO begins by refreshing the IT infrastructure to support the required business applications. When the Government establishes 'Improved water quality' as a major corporate goal, the CIO seeks to add value to the business by developing a quality reporting system that leverages the existing technology. At the same time, he demonstrates to the corporation the IT function's capability to deliver business value through the management of multiple outsourcing vendors.

Amway is a large manufacturer of household products that uses the direct selling approach. The company was established in the late 1940s and over the years, still using direct selling, branched into the United Kingdom, Europe, and Japan. With this global success, it expanded further, into the Chinese market. However, the company must look at its strategy after the Chinese government implements regulations on the direct marketing business model.

Supplements the (A) case.

Traditional financial-ratio analysis is a popular after-the-fact look at financial and managerial performance. This case introduces a means for incorporating rates of improvement, growth, or change into traditional financial-ratio analysis. Indeed, the Delta Factor tables presented in the case easily transform financial-ratio analysis into a forward-looking planning tool.

A hospital specializing in hernia operations is considering whether and how to expand the reach of its services.

Examines the strategic opportunities available to Samsung Electronics in 2004 and beyond as the company attempts to penetrate the digital home. Key issues include the role of horizontal industry models versus vertical industry models in consumer electronics, and how a global conglomerate like Samsung can best participate in the fast-changing, digital-based consumer electronics industry.

In November 2000, Kohlberg, Kravis, and Roberts (KKR) purchased Rockwood Specialties, Inc., a specialty chemicals company, in a $1.2 billion buyout. Spurred by the favorable market conditions in the first half of 2003, KKR was contemplating refinancing its buyout debt in June 2003. Merrill Lynch, its underwriter, proposed to refinance the earlier funding, in part, with a $375 million issue of senior subordinated notes. Although there had been a favorable interest-rate environment and a strong volume of debt issuance in the first half of 2003, the Rockwood offering still posed some significant challenges. First, it was a first-time issue by a privately held company. Second, KKR's motivation for the offering and the complex financial structure surrounding it had resulted in a preliminary credit rating of Caa from Moody's. Students are asked to evaluate and price the high-yield issue. The case discusses how credit ratings, market conditions, and organizational structure affect bond yields. There is a brief history of how the high-yield market evolved from the mid-1980s through 2003.

A Hispanic executive is considering whether to join the board of directors of a company and receives advice from several more experienced directors. Teaching Purpose: To focus on the issues related to joining a board of directors.

Explores the experience of work-related stress and examines various coping tactics. Pays particular attention to stress related to the job-search process. Teaching Purpose: To help students recognize sources of stress and develop more effective coping skills.

Craig Knight, Asia Pacific Digital Business and Customer Services Manager of Eastman Chemical Company, was given a mandate to sell Eastman's philosophy for an integrated electronic supply chain, otherwise known as the Integrated System Solution (ISS), to its business partners in the region, and to encourage adoption. Having invested in a state-of-the-art technical architecture that would support interconnectivity with all parties along the supply chain, Eastman was keen to realise the full benefits to be gained from an integrated e-supply chain on a global scale. Following numerous rounds of discussion with key business partners in the Asia Pacific region, some progress had been made. Nagase & Co., Ltd. of Japan had agreed to adopt ISS connections with Eastman, but had some reservations regarding the extent of integration. Although the benefits of integration were proven, suppliers, customers, distributors and other interested parties were faced with numerous limitations and considerations that would have significant implications on their established business processes and even the shaping of their corporate strategy. Adoption was not a simple choice. Craig understood these shortcomings and was making every effort to ease the adoption process by identifying the longer-term benefits to Nagase and other business partners of applying XML technology to their businesses.

This is an MIT Sloan Management Review article. Many companies have supply chains that are global. They start with the sourcing of components and raw materials from around the world, then move their basic manufacturing to low-cost locations overseas. But few organizations have innovation processes that are equally global. That is, rarely do businesses have innovation activities that integrate distinctive knowledge from around the world as effectively as global supply chains integrate far-flung sources of raw materials, labor, component, and services. But some companies--Nokia, Airbus, SAP, and Starbucks, among them--have managed to assemble an integrated "innovation chain" that is truly global. They have been able to implement a process for innovating that transcends local clusters and national boundaries, becoming what the authors call "metanational innovators." This process requires three steps: prospecting (finding relevant pockets of knowledge from around the world), assessing (deciding on the optimal "footprint" for a particular innovation), and mobilizing (using cost-effective mechanisms to move distant knowledge without degrading it). When done properly, metanational innovation can provide companies with a powerful new source of competitive advantage: more and higher value innovation at a lower cost.

This is an MIT Sloan Management Review article. Traditional models for developing and managing corporate portfolios are based on financial frameworks, business synergies, or leveraging core competencies into related businesses. In this article, the author goes beyond those traditional approaches and offers an alternative--the corporate sphere of influence. Like nations, says the author, companies build spheres of influence that protect their cores, project their power outward to weaken rivals, and prepare the way for future moves. By recognizing the strategic purpose of each part of the portfolio, the sphere of influence model focuses attention on the company's overall strategy, including how it wants to structure the division of product and geographic markets in an industry, which threats it will address or ignore, and how the company's portfolio enhances or detracts from its competitive or alliance strategy. Thinking in terms of building a sphere of influence forces managers to draw together corporate- and business-level strategic analyses that are often treated as separate. The corporate-level concern about where to fight and the business-level concern about with whom and how to fight are brought together into a coherent view. In this article, the author defines the components of a sphere of influence and explains how senior executives can use his framework to assess their company's current sphere and map their desired one. He offers examples of how companies have managed their spheres, drawing from a wide range of industries and companies, including Microsoft, Procter & Gamble, Johnson & Johnson, Anheuser-Busch, Nokia, Harley-Davidson, and Mexican cement company CEMEX.

This is an MIT Sloan Management Review article. For a firm to succeed over the long term, it needs to master both adaptability and alignment--an attribute sometimes referred to as ambidexterity. The concept is alluring, but the evidence suggests that most companies have struggled to apply it. The standard approach has been to create separate structures for different types of activities. But separation can also lead to isolation, and many R&D and business development groups have failed because of their lack of linkages to the core businesses. In an attempt to shed new light on the discussion, the authors develop and explore their concept of contextual ambidexterity, which calls for individual employees to make choices between alignment-oriented and adaptation-oriented activities in the context of their day-to-day work. The authors introduce this as a complementary concept to traditional structural ambidexterity. By means of their survey- and interview-based research--which took place over a three-year period and involved 4,195 respondents across 41 business units in 10 multinational firms--the authors identify the four behaviors displayed by ambidextrous individuals, each of which involves taking independent, adaptive action in the service of overall company goals. They then present a framework for describing and analyzing which organizational contexts encourage or discourage such behaviors. They link organizational context to ambidexterity and, in turn, ambidexterity to high performance. Finally, the authors describe how companies such as Nokia, Ericsson, Oracle, and Renault have been able to create such high-performance contexts, and they offer managers guidance on how to create them in their own companies.

This is an MIT Sloan Management Review article. Many companies organize employees into self-managing teams that are basically left to run themselves with some guidance from an external leader. In fact, comprehensive surveys report that 79% of companies in the Fortune 1,000 currently deploy such "empowered," "self-directed," or "autonomous" teams. Because of their widespread use, much research has been devoted to understanding how best to set up self-managing teams to maximize their effectiveness. Interestingly, though, relatively little attention has been paid to the leaders who must oversee such working groups. At first, it seems contradictory: Why should a self-managing team require any leadership at all? But the authors' research has shown that self-managing teams require a particular kind of leadership. Specifically, the external leaders who contribute most to their team's success tend to excel at one skill: managing the boundary between the team and the larger organization. That process requires specific behaviors that can be grouped into four basic functions: (1) moving back and forth between the team and the broader organization to build relationships, (2) scouting necessary information, (3) persuading the team and outside constituents to support one another, and (4) empowering team members.

This is an MIT Sloan Management Review article. Every industry leader lives in fear of the low-end competitor--a company offering much lower prices for a seemingly similar product. The vast majority of such low-end companies fall into one of four types: strippers, predators, reformers, or transformers. Each of these is defined by the functionality of product and the convenience of purchase. Strippers, for instance, typically enter a market with a bare-bones offering, reduced in function and usually in convenience. Industry leaders have significant advantages for combating low-end competition, but they often hesitate because they're afraid their actions will adversely affect their current profit margins. The answer, then, is to find the response that is most likely to restore market calm in the least disruptive way. An industry leader could choose to ride out the challenge by ignoring, blocking, or acquiring the low-end competitor. Or it could decide to strengthen its own value proposition by adding new price points, increasing its level of benefits, or dropping its prices. Such tactics can be effective in the short term, but the industry leader also needs to consider strategic retreat, particularly when certain conditions make future low-end challenges inevitable.

This is an MIT Sloan Management Review article. Getting more value from knowledge--especially from a firm's own hard-won knowledge--is one of the central challenges facing companies today. Many organizations have approached this problem in recent years by making big investments in IT systems, but the payoff has often been disappointing. Companies would do better to emulate the innovative giants of the Internet--Google, eBay, and Amazon--whose success has in part derived from their ability to make it easy for customers to find what they are looking for, to browse for products and services, and to evaluate potential purchases. These are exactly the things that are hard to do in most companies. That is, employees find that it is not intuitive to search for information in company repositories; they cannot easily browse within categories of knowledge; and they are not given the context they need to evaluate the quality of the knowledge they do find. The authors assert that if organizations apply the basic, proven approaches of the Internet success stories to capture the attention of their employees, they should be able to improve their ROI on sunk IT costs while increasing knowledge-worker productivity.

This is an MIT Sloan Management Review article. As China prepared to enter the World Trade Organization in 2001, many multinationals planned to invest new billions in operations there. But their ambitious growth plans must be viewed with caution. Experienced multinationals have long been aware of the challenges, summed up by the adage that in China "everything is possible, but nothing is easy." But few predicted the most formidable obstacle to success: the emergence of tough competition from local Chinese players. The authors' research over the past five years reveals that although market dominance by local champions is not universal, it's becoming more frequent. Multinationals must face the fact that the competitive edge that is potentially available to them from superior technologies, products, and systems will be blunted unless they build stronger local competencies. Specifically, multinationals must show a new determination to master the complexities of distribution, sales, and service in China's secondary cities and rural heartland and to learn how to adapt products, processes, and marketing messages more sensitively to the peculiarities of the Chinese market.

Hundreds of books on business growth are published each year, but which ones are really worth reading? Harvard Business School professor Pankaj Ghemawat takes a close look at three recent offerings: Chris Zook's Beyond the Core, Ram Charan's Profitable Growth Is Everyone's Business, and Adrian Slywotzky and Richard Wise's How to Grow When Markets Don't. He finds that all three are likely to succeed at prompting readers to take action. Zook defines the various adjacencies along which a business might extend its scope. Charan presents 10 tools that can be put to use immediately. And Slywotzky and Wise advise executives to inventory their companies' "hidden assets" and conduct an analysis of ways to solve customer problems. But Ghemawat wonders if the current crop of books harbors a subtle pro-growth bias. Ghemawat makes a sobering case for the dangers of setting growth targets too high. Ryanair and Coca-Cola, for instance, stumbled badly when they set unreachable growth targets. Even companies that are considered efficient growth machines run into constraints related to their size. Wal-Mart, for example, has had to accept declining growth rates as it has grown ever larger. Yet none of the three books discusses this dynamic. According to Ghemawat, readers interested in growth would be well advised to revisit a classic: Alfred Chandler's The Visible Hand. Chandler's propositions about growth and the managerial enterprise have withstood years of scrutiny, and his central idea--that technological changes, broadly defined, can affect the relative efficiency of different modes of organizing economic activity--still provides a frame for rich debate.

Software maker TopTek has acquired a consulting and systems-integration firm, mainly to profit from the software sales that are a natural by-product of consulting engagements. But in many ways the two companies worked better when they were separate. Before the acquisition, the same people who delivered services to clients made the consulting firm's sales. By contrast, TopTek's professional salespeople, all of them highly skilled at selling product, handled sales. Now the consultants and the salespeople are trying to work together, but they're making a hash of it. For instance, the CIO of a TopTek customer--a retailer--is complaining that consultants from the acquired firm are driving him nuts. They've got his boss's ear, and they're selling additional projects left and right, stimulating demand for a pace of change that the CIO says the retailer can't handle. The consultants in the newly constituted TopTek aren't happy either. They get no commissions on products they sell, because commissions for all sales to an account--forever--go to the salesperson who snagged it in the first place. The sales force has its own gripes. The consultants aren't much help in winning new business, according to Ron Murphy, TopTek's sales VP. What will it take for cross selling to succeed at TopTek? Commenting on this fictional case study in R0407B and R0407Z are Ram Charan, an author and adviser to CEOs; Caroline A. Kovac, the general manager of IBM Healthcare and Life Sciences; Jerome A. Colletti, an author and consultant; and Federico Turegano, the managing director of SG Corporate and Investment Banking, an arm of Societe Generale Group.