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Progressive is a leader in providing nonstandard (high-risk) automobile insurance to drivers across America, with a long record of extraordinary profitability. Progressive is facing a challenge in its segment from Allstate, the industry leader, and must decide how to respond.

A company must decide whether to acquire new equipment to offer a new product line. The question is whether equipment will meet return on investment targets considering depreciation and taxation of profits. The equipment is acquired, but one year later better equipment becomes available. A rewritten version of an earlier case.

Discusses the purpose of independent audits of financial reports, the nature of audits and auditing, types of independent auditor opinions, and changing expectations of those who use and rely on audits.

Focuses on the auto supply industry and especially the relations between Johnson Controls (JCI) Automotive Systems Group's Georgetown plant and its main customer, Toyota Motor Manufacturing, Toyota's U.S. assembly plant, for which JCI supplies seats on a just-in-time basis. Can be used to investigate the differing patterns of supplier relations that were traditional in the U.S. and Japanese auto industries, to examine the adaptations that Toyota made to its traditional methods to deal with a U.S. supplier, and to study the very high degree of coordination and cooperation that is achieved between the two companies. JCI's adoption of a version of the Toyota Production System is also discussed.

Advanced Material Technology Corp. (AMT), a Japan-based company and one of the world's largest manufacturers of advanced ceramic products, was considering the prospects of raising 24 billion Yen ($200 million) to finance AMT's planned capital expenditure program. The case introduces a variety of financing sources including straight debt, convertible bonds, and bonds with warrants. Currency denomination and location of a global offering are also considered. Also examines the economic and banking environment in Japan.

Traces Intel's history and strategy from 1968 to 1997. Examines the company's decision to exit DRAMS and its entry into microprocessors. Focuses on how the company managed to achieve and sustain its competitive advantage in microprocessors, and the threats it faces in the future.

Supplements the (A) case.

Discusses the dimensions of the institutional environment surrounding business, including the role of stakeholders and the need for new collaborations in emerging markets; the key assumptions of the institutional perspective on businesses and markets, especially in contrast to assumptions of neoclassical economics; and managerial implications--analytics, skills, and success factors.

The U.S. defense industry has seen more than 50% of its market disappear, and the companies that make up the industry have faced the need for the equivalent of self-administered surgery with no insurance, no anesthetic, and no assurance of long-term health. In 1995, Martin Marietta and Lockheed combined to form Lockheed Martin. That company has emerged in a most coveted role: survivor. In fact, it has seen its stock price nearly double in less than two years. In this article, CEO Norman Augustine relates the company's experience and offers some difficult--and painful--prescriptions. Companies in technology-driven industries must reinvent themselves continually. The bad news is that change requires hard decisions. The good news is that success awaits organizations willing to make those decisions.

Throughout the 1990s, financial investors, corporate strategists, and political leaders in the United States, Western Europe, and Japan have been intensifying their focus on emerging markets. And, indeed, emerging markets are the new frontier. But like all frontiers, warns Jeffrey E. Garten, dean of the Yale School of Management, such markets present a mix of opportunity and risk. The question now is whether businesses and governments in the industrialized world are sober enough about the problems that lie ahead. There is considerable evidence to show that the tides of capitalism that rose so powerfully after the collapse of the former Soviet Union are now poised to recede. What can business and government do to improve the economic environment abroad?

Indianapolis, Indiana, has been a leader in the trend toward efficiency in government. Since 1992, when Stephen Goldsmith became mayor, the city has opened up more than 70 services to competitive bidding. It has reduced its operating budget, lowered taxes twice, and cut its non-public-safety workforce. It has also increased the public-safety budget, invested millions to rebuild the city's infrastructure, and increased budget reserves. According to Goldsmith, the business community has been slow to grasp the significance of government's move toward increased efficiency. There are many opportunities for businesses to help municipal governments lower costs and increase revenues. He offers seven guidelines to help pioneering companies succeed in what could be their next big market.

In many industries, superior technology integration--the approach used to choose and refine the technologies employed in a new product, process, or service--is the key to achieving superior R&D productivity and speed, and superior products. In this article, which is based on an ongoing study of R&D in various segments of the global computer industry, Marco Iansiti and Jonathan West contend that technology integration has become much more important--and challenging--for obvious reasons. A radical change in the approach of U.S. companies to technology integration helps explain the resurgence of the U.S. electronics industry in the 1990s. But one size does not fit all. Indeed, the authors have found that an approach that works well in one country may not be the best for another. To be effective, an approach must suit the local culture and conditions.

Behind every major resource-allocation decision a company makes lies some calculation of what that move is worth. So it is not surprising that valuation is the financial analytical skill general managers want to learn more than any other. What do generalists need in an updated valuation tool kit? In the 1970s, discounted-cash-flow analysis (DCF) emerged as best practice for valuing corporate assets. And one version of DCF--using the weighted-average cost of capital (WACC)--became the standard. Over the years, WACC has been used by most companies as a one-size-fits-all valuation tool. Today the WACC standard is insufficient. Improvements in computers and new theoretical insights have given rise to tools that outperform WACC in the three basic types of valuation problems managers face. Timothy Luehrman presents an overview of the three tools, explaining how they work and when to use them.

For the past 25 years, managers have been taught that the best practice for valuing assets--that is, an existing business, factory, product line, or market position--is to use a discounted-cash-flow (DCF) methodology. That is still true. But the particular version of DCF that has been accepted as the standard--using the weighted-average cost of capital (WACC)--is now obsolete. Today's better alternative, adjusted present value (APV), is especially versatile and reliable. It will likely replace WACC as the DCF methodology of choice among generalists. Like WACC, APV is used to value operations, or assets-in-place. Timothy Luehrman explains APV and walks readers through a case example designed to teach them how to use it.

When does a group have responsibility for the well-being of an individual? And what are the differences between the ethics of the individual and the ethics of the corporation? Those are the questions Bowen McCoy wanted readers to explore in this HBR Classic, first published in September-October 1983. In 1982, McCoy spent several months hiking through Nepal. Midway through the difficult trek, he encountered an Indian holy man, or sadhu. Wearing little clothing and shivering in the bitter cold, he was barely alive. McCoy and the other travelers immediately wrapped him in warm clothing and gave him food and drink. A few members of the group broke off to help move the sadhu down toward a village two days' journey away, but they soon left him in order to continue their way up the slope. What happened to the sadhu? In his retrospective commentary, McCoy notes that he never learned the answer to that question. On the Himalayan slope, a collection of individuals was unprepared for a sudden dilemma. McCoy asks, how do organizations respond appropriately to ethical crises?

Diana Sullivan, CEO of Lenox Insurance, thought she had done her job when, after three years of hard work, she had delivered Lifexpress on time and on budget. A sophisticated computer-aided system, it enabled Lenox's 10,000-plus agents to do everything from establish a prospect's financial profile, to select the most appropriate products from the company's myriad policies, to generate all the paperwork needed to close a sale. But now Sullivan's boss, CFO Clay Fontana, seemed to be holding her accountable not only for the creation and implementation of the system but for realizing its business goals as well. And Lenox's CEO, James Bennett, appeared to concur. In this hypothetical case study, Sullivan and the other top executives at Lenox must decide who should be responsible for realizing the business goals of information technology projects. Should Sullivan have gone about the project in another way? Should Fontana and Bennett be playing more active roles? In 97308 and 97308Z, commentators James K. Sims, Thornton May, Richard Nolan, Robert A. Distefano, and John King offer advice on this fictional case study.

Diana Sullivan, CEO of Lenox Insurance, thought she had done her job when, after three years of hard work, she had delivered Lifexpress on time and on budget. A sophisticated computer-aided system, it enabled Lenox's 10,000-plus agents to do everything from establish a prospect's financial profile, to select the most appropriate products from the company's myriad policies, to generate all the paperwork needed to close a sale. But now Sullivan's boss, CFO Clay Fontana, seemed to be holding her accountable not only for the creation and implementation of the system but for realizing its business goals as well. And Lenox's CEO, James Bennett, appeared to concur. In this hypothetical case study, Sullivan and the other top executives at Lenox must decide who should be responsible for realizing the business goals of information technology projects. Should Sullivan have gone about the project in another way? Should Fontana and Bennett be playing more active roles? In 97308 and 97308Z, commentators James K. Sims, Thornton May, Richard Nolan, Robert A. Distefano, and John King offer advice on this fictional case study.

Diana Sullivan, CEO of Lenox Insurance, thought she had done her job when, after three years of hard work, she had delivered Lifexpress on time and on budget. A sophisticated computer-aided system, it enabled Lenox's 10,000-plus agents to do everything from establish a prospect's financial profile, to select the most appropriate products from the company's myriad policies, to generate all the paperwork needed to close a sale. But now Sullivan's boss, CFO Clay Fontana, seemed to be holding her accountable not only for the creation and implementation of the system but for realizing its business goals as well. And Lenox's CEO, James Bennett, appeared to concur. In this hypothetical case study, Sullivan and the other top executives at Lenox must decide who should be responsible for realizing the business goals of information technology projects. Should Sullivan have gone about the project in another way? Should Fontana and Bennett be playing more active roles? In 97308 and 97308Z, commentators James K. Sims, Thornton May, Richard Nolan, Robert A. Distefano, and John King offer advice on this fictional case study.

With the failure of foreign aid and similar development projects, many analysts are saying that poor countries should just free up their economies and let markets do the work. The Heritage Foundation's 1997 Index of Economic Freedom expands on this line of reasoning in a survey of government intervention and economic development. In his review, Harvard Business School Professor Bruce Scott contends that although some of the Index's claims make sense, the editors have mistaken the chain of causation in many cases. Governments in South Korea and Taiwan, for example, liberalized only after their heavy-handed actions brought their economies a degree of prosperity. Some freedoms, such as an internal market without barriers, promote economic development, but free trade for a developing country can actually get in the way. It is not clear that the magic of the marketplace can take care of everything. Citizens still need government for some things--and a broader framework of analysis than the Index for tackling economic choices.

Almost everyone who leads, works for, or interacts with a manufacturing company can benefit from seeing a factory firsthand, David Upton and Stephen Macadam advise. For example, plant visits allow senior executives to understand a site's performance potential, to assess a competitor, or to rally the frontline workforce. Shop floor operators can assess another plant's operations and apply what they've learned in their own factories. But even people who know that plant tours are valuable can find putting them to effective use difficult. First, unclear objectives often turn touring into tourism. Second, many people lack an organizing framework with which to structure observations and accelerate learning. Upton and Macadam show visitors how to set clear objectives and apply an organizing framework in order to make sense of what they see and hear on a plant tour. In this way, visitors will develop a deep understanding of the plant's manufacturing capabilities--and how best to exploit them.