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In the summer of 2002, the International Rivers Network (IRN), an environmental NGO located in Berkeley, California, was engaged in what appeared to be the last hours of a three year campaign to stop a $582 million dam and hydropower project at Bujagali Falls in Uganda. The final piece of the financing puzzle was about to be put in place as the World Bank was set to approve a $250 million loan guarantee for the project. Although the project would have some adverse environmental and social impacts, IRN contended that the power deal between the government of Uganda and AES was the real problem. As IRN saw it, the cost of the project was too high and Ugandans would bear most of the risk, which would add to the country's debt burden. However, without the power purchase agreement, which remained undisclosed despite requests for it to be made public, IRN had little economic data on the project to bolster its argument. Still, there were compelling reasons, such as economic development and poverty alleviation, for the Ugandan government to go ahead with the deal it had with AES, the project sponsor. AES, with its social mission and reputation for delivering low-cost energy to the world, seemed like the ideal sponsor.

Tom Bird and Ken Saxon are two young MBAs who buy a company after graduation. Chronicles their efforts as they grow the company from $600,000 in sales to $5 million. The two confront the issue of hiring succession management.

What do international stocks contribute to the portfolio of a U.S. investor? How do currencies interact with stock price movements in determining the benefits of international diversification? This case helps students compare the risks and returns of foreign stock markets with each other and with the U.S. market and to examine the risks and returns of international diversification. Students must calculate returns, adjust for currencies, derive correlations, and map efficient frontiers based on raw data. To obtain executable spreadsheets (courseware), please contact our customer service department at [email protected].

Presents an easy introduction to time-driven activity-based costing (ABC) that allows students to build a simple ABC model of order profitability. Midwest's time-driven ABC approach is based on two categories of parameter estimates. The first is the cost per hour of employees performing diverse tasks, such as order-entry operators and delivery personnel performing desktop deliveries. The second is the estimated time required for employees to perform each type of task (manual vs. electronic orders, nearby vs. distant deliveries). Students apply the time-driven ABC model to five representative orders to estimate order profitability based on a far more accurate portrayal of the cost of processing and delivering orders. Stimulates a discussion about the actions, such as pricing and process improvements, to enhance the profitability of orders and also how to report and manage the cost of unused capacity. A rewritten version of an earlier case.

Richard Breeden proposed corporate governance reforms for MCI. Breeden is a former chairman of the SEC who was a court-appointed "corporate monitor" for the troubled company (formerly WorldCom). The company must adhere to the proposals unless excused by a court order.

Samsung's global marketing director is assessing how to build the global brand reputation of the company further and upgrade the company's worldwide brand image. To show how to build a global brand.

Shurgard, a U.S.-based firm that rents storage facilities to consumers and small businesses, is considering financing options for rapid expansion of its European operations. Five years after entering Europe, Shurgard Europe has opened 17 facilities in Belgium, France, and Sweden. Along the way, Shurgard has encountered skepticism from both European consumers and investors about the unfamiliar self-storage concept and internal debates on how much to adapt the U.S. business model to European lifestyles. Wall Street analysts also do not value the impact that the European expansion could have on Shurgard's U.S. performance as a publicly traded Real Estate Investment Trust (REIT). As an alternative, to finance this expansion, Shurgard received a proposed deal from a consortium of banks and other investors where they would provide private equity financing spaced over the next few years plus a line of credit. In return, the investors would receive a large share of Shurgard's equity and control of its board, which could force a public offering in less than two years. The decision focuses on whether Shurgard Europe should accept the conditions and valuation of the proposed deal or seek another deal at a later point in time. Students must assess whether the self-storage business model can deliver the growth rate in Europe that the company has promised his potential investors. Involves calculating some basic estimates of the company's value from financial exhibits (enterprise value using a pEBITDA multiple). Main focus is to assess this as an entrepreneurial venture. Students do not need to be familiar with REITs.

Spreadsheet supplement for case 504-051.

How should a multinational firm manage foreign exchange exposures? Examines transactional, translational, and competitive exposures. Describes General Motors' corporate hedging policies, its risk management structure, and how accounting rules impact hedging decisions. Although the overall corporate hedging policy provides a consistent approach to the foreign exchange risks that General Motors must manage, there are situations where the company must consider deviations from prescribed policies. Describes three such situations: large exposure to the Canadian dollar with adverse accounting consequences, GM's exposure to the Argentinean currency when devaluation is widely anticipated, and the impact of the depreciation of the Japanese yen to the dollar. To obtain executable spreadsheets (courseware), please contact our Customer Service Department at [email protected]

Traces the economic development of the United States from 1790 to 1857, focusing especially on the struggle between free traders and protectionists over federal tariff policy. Devotes considerable attention to the nation's political system, its evolving common law, basic factors of production (land, labor, and capital), and key sectors (agriculture, manufacturing, transportation, etc.).

Over three decades, Oscar de la Renta (ODLR) had established itself as one of the premier luxury brands in America. Its mainstay business had always been producing and marketing high-priced, couture/ready-to-wear luxury goods. Now, in September 2003, it faced a series of critical strategic decisions. First, how should it grow the business while preserving its luxury brand? Should it diversify into the moderately priced segment of apparel and unserved customer segments like the Hispanic market, where it had a strong brand appeal but negligible presence? Second, as a family-owned company, how could it effectively compete against increasingly larger, publicly financed, luxury goods conglomerates? And, how might de la Renta, the company's founder and chief designer since inception and now 71 years old, effectively prepare the company for the future? Describes the company's business and highlights these key tensions: expanding the scope of a luxury brand, pursuing licensing or organic growth strategies, and competing against publicly owned conglomerates. Includes color exhibits.

Sony's first household robot, AIBO, couldn't do much of anything useful. By reframing AIBO as a pet, the company found a way to capitalize on the product's imperfections and attract an unusually diverse group of new customers.

Managers pay lip service to employees as "valuable assets." But when numbers are down, staffers are often seen merely as costs to be cut. Treating employees like the assets they are can do more for your company than build morale.

E. Lawrence Kersten thinks corporate America could use a good dose of demotivation. Carrying products that promise to "unleash the power of mediocrity," Kersten's company, Despair Inc., has just the ticket.

For years, managers assumed that the best way to take advantage of opportunities abroad was to ally with local companies. But a fundamental shift in the cost/benefit equation has led businesses to forgo partnerships in favor of owning foreign affiliates outright.

Wise allocation of assets across both stocks and bonds can help companies reap higher returns from an asset mix that includes equities without assuming unacceptable risk.

Global Transfer of Best Practices Carlos Camarero led Rank Xerox's Wave C initiative. Wave I (to improve revenues) was successful and Wave II (to redefine sales processes) was disappointing. Carlos prepared to discuss with Rank Xerox's Managing Directior (Bernard Fournier) Wave I's success, Wave II's failure, and lessons learned about best-practice transfer.

Fournier rejected Carlos' request to re-implement Wave II. Carlos visited Colombia and Dubai to determine whether to apply their telephone selling approach ("Telemarketing") elsewhere. Carlos had to decide whether to tell Fournier of Dubai's revolutionary tool that could transform Rank Xerox's sales operations or put the idea aside.

Carlos obtained Fournier's approval to implement "Telesales" (i.e., Carlos's renamed version of Dubai's Telemarketing). Telesales was successful within a year of launch. Success factors were: project's IT aspect; salespeople's acceptance of using computers; salespeople not resisting potential added control of Telesales; and offering of a complete package.

Condensed version of INS597.