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In June 2015, a new analyst at an investment fund company had to review the financial performance of a potential investment target, the North West Company Inc. (NWC), and make a recommendation. NWC was a food retailer operating in underserved markets. The company operated retail locations in Western and Northern Canada, Alaska, the South Pacific, and the Caribbean, reporting total sales of CA$1.6 billion in 2014. Twelve years after NWC’s initial push outside of Canada, international sales accounted for 35.8 per cent of the company’s business. Whereas rivalry among competitors and consumer choice defined the mainstream Canadian market, food retail in Northern Canadian markets was characterized by limited offerings, high prices, and few competitors.<br><br>The analyst’s report needed to include an assessment of NWC’s profitability, liquidity, and financial structure. The analyst was particularly interested in NWC’s international operations; although international expansion carried with it the potential for significant revenue growth, she wondered whether the profit potential was as great as that of NWC’s operations in Northern and Western Canada. She also knew that if NWC did choose to expand its international operations, it would require significant capital investment. Was NWC a good investment opportunity?

Founded in 2005, Greek yogourt maker Chobani used value innovation to become the number one yogourt brand in the United States by 2011. However, due to some internal problems such as a lack of seasoned professionals and financial resources, and external factors such as competition and decline in demand, Chobani lost its market share to competitors starting in early 2013. With help from a private venture firm, Chobani took several steps to turn things around by 2016. Will Chobani be able to regain its leadership position going forward? If so, how will it fuel its growth?

In a world awash in digital connectivity, disruptive innovations, political instability, cultural fragility, and continuous interactive feedback loops, linear thinking isn’t effective for building even moderately effective mid-range strategies. This article explains why linear logic has never been more dangerous in terms of related opportunity costs, and then offers tips on how to break the habit. Based on linear projection, we tend to conflate the immediate, inferable extensions of current conditions with the future. This is dangerous due to five fatal flaws in the linear model that can negatively impact the way most businesses think about their past, present, and — most importantly — their future: 1) Linear thinking leads to wrong assumptions. 2) Linear thinking assumes past is prologue. 3) Linear thinking marginalizes the concept of discontinuities. 4) Linear thinking imposes old patterns rather than discovering new ones. 5) Linear thinking minimizes the role of feedback in an increasingly interconnected world.

In late December 2014, one of the founders of the Indian start-up Deltecs InfoTech (Deltecs) was considering the progress of his organization. Deltecs had received several awards for its product, an innovative middleware that companies could use to create their own applications on mobile platforms. Its customers had also received awards for the innovative ways they had deployed the Deltecs product. The company had grown at a rate of almost 100 per cent per year. To sustain that growth, it would need to explore new products or new markets, which would require additional funding. The co-founder also wanted to achieve 10,000 business-to-business customers by 2020. To do so, Deltecs would need to focus on acquiring and retaining employees who could achieve this growth strategy. The co-founder was considering various funding sources, including equity- and debt-baced options. He also wondered whether to outsource some or all of his company’s human resources management functions.

In August 2015, imiAID, an Indian start-up that provided portable first aid kits for emergencies, was struggling to reduce its production costs and increase awareness about its product. The company began operations in Guwahati, Assam, and subsequently expanded the business to other states in Northeast India. Key target segments for imiAID included educational institutions and health-care service providers. Customers were somewhat aware of the product; however, imiAID wanted to develop a strategy that addressed its two goals of reducing production costs and increasing awareness about the imiAID Pocket First Aid Kit. Management had to decide how to best guide the company’s growth. Would imiAID be able to successfully operate in the emerging market of Northeast India in the long term?

In March 2013, the chief executive development officer of the Heiltsuk Economic Development Corporation (HEDC) was preparing a report on the findings and recommendations of the organization’s seven-year history. The HEDC, the economic development arm of the Heiltsuk Nation, was not meeting its goals. The HEDC structure was based on the theory that economic development success in Aboriginal communities required a separation of business from political influence. Unfortunately, the HEDC had yielded little economic success to date. Further, it was not clear whether it had effectively brought about the desired separation of economics from politics. Similar concerns were expressed by the chief councilor of the Heiltsuk Tribal Council, the political governance structure responsible for administering, governing, and setting policy for the Heiltsuk Nation. There was hope that the report would bring clarity to what had gone wrong in the development process under the HEDC. Was the governance structure appropriate for the task the HEDC was supposed to fulfill, or were the roles and responsibilities not clearly defined? What was causing the myriad of communication issues? What should be done?

In the fall of 2010, the founders of Campus FundSource, an organization developed to help campus groups raise money for their respective causes, were asked to present to a potential investor. The three founders were struggling with how to scale their start-up that connected campus groups that needed funding (such as language groups, intramural sports teams, and singing groups) with major brands that were trying to reach a younger demographic with their marketing messages. The company was still at the start-up stage, and the founders had just graduated from a business accelerator program, where they finished developing their website and tested both the site and the business concept--connecting brands with students. In order to show potential investors that they were readily scalable, they needed to show that they could quickly attain a critical mass of both student groups and national brands. This presented a chicken-and-egg dilemma, as it was proving difficult to penetrate two markets at once. How could Campus FundSource attract both the student groups who needed funding and the national brands that wanted to attract and keep post-secondary students as their customers?

In 2014, India’s HCL Technologies emerged as one of just eight 21st-century listed technology companies in the world to surpass US$1 billion in net profits, $5 billion in revenue, and $15 billion in market capitalization. When most companies were using their websites as online information pages, HCL Technologies converted its legacy website into an effective lead-generation vehicle. Within one year of implementation, the website began generating a lead funnel worth $1 billion. HCL Technologies used its updated website to implement various strategies to ensure effective lead generation, revenue generation, and site-traffic generation. Over time, the website evolved into a driver for thought leadership for the business and its customers.

An entrepreneur faced a dilemma regarding the flexible work policy in his start-up consulting firm. The leader of the firm struggled with the complications that arose after the implementation of flexible working arrangements, and the various situations caused him to rethink the concept of trying to help his employees to manage their own work–life balance. Since flexible working hours were granted on a role-by-role basis, a perception of unfairness emerged when a valuable subject-matter expert was denied flextime privileges while many of his colleagues were allowed to take advantage of them. The manager was apprehensive regarding the rising sense of detachment between the users of flextime and the non-users. Should the manager scrap the policy altogether, or should he attempt to find a better way to implement his firm’s flexible work arrangements?

In 2005, three international information technology professionals formed an international joint venture to design and construct information technology systems for shopping centres and office buildings. Despite being relative newcomers to working in the Chinese marketplace, in 2012, the company won a contract for a large job in China. However, when the company’s three directors travelled to China to meet with their Chinese business partners, they encountered several unexpected, questionable situations. Their Chinese business partners were not there to meet them; rather, they had travelled to another country. The three directors met instead with representatives from the Chinese government consortium overseeing the construction project, and these officials pressed the three company directors regarding what they had brought for them. Their limited preparation and lack of contingency plans challenged their ability to maintain respect and move forward. How could they recover the situation and still achieve their goals of a signed contract?

De Beers, a sophisticated, international mining company, operated the Victor Mine, an open pit diamond mine in Canada, located within traditional territory claimed by the Attawapiskat First Nation. To develop the mine, De Beers had to follow provincial and federal legislation, meet environmental standards, and most importantly, negotiate use of the land with the First Nation. Although the mine was successful, the First Nation community was suffering with health, education, and housing issues; rampant unemployment; and a remarkably high rate of suicide among its youth. Benefits negotiated in the mining agreement were not resolving the problems, despite the provision of employment opportunities and payment of millions of dollars to the First Nation. In frustration, the First Nation set up road blockades to stop work at the mine. De Beers now wanted to extend their mining operation by using a mine extension, but to do that, they had to seek further agreement from the Attawapiskat. Did the history of First Nations in Canada affect their relationship with De Beers? Were the stakeholders meeting their responsibilities? What lessons could be applied to negotiations for future developments?

In January 2015, the chief executive officer and managing director of Tata Consultancy Services, India’s largest information technology company, expected to face questions from the media related to recent rumours of his company’s plans to lay off nearly 30,000 employees. Over the previous four weeks the reports had spread on both social media and conventional media platforms, leading to widespread protests against the company and attempts to unionize information technology employees (a first in India). The company’s carefully constructed corporate reputation of being employee friendly was threatened. The chief executive officer needed to design and execute a communication strategy that addressed the concerns of the various stakeholders involved.

In 2015, Hanuman Singh, a portfolio investor, was looking for investment opportunities in India. His friend Ram Naik suggested Singh invest in Tata Consultancy Services Limited, an information technology company based in Mumbai. Singh’s normal practice was to look at the company balance sheets, understand the company’s strategy, and then decide whether to invest. But he recently had a bitter investing experience when the company he invested in went bankrupt. Singh now understood that a deeper analysis was required before investing. He was looking for an accounting analysis that would give him insight into any possible manipulations so that his investment decision would yield his expected results.

On June 9, 2011, Empresas La Polar S.A., a Chilean retailer, informed the Chile’s securities commission that it had detected irregularities in its accounting for credit card receivables. A fraudulent credit card scheme masterminded by key executives and missed by directors and auditors was going to result in an estimated write-off in excess of US$300 million. On June 17th, the company advised the commission that the write-off would, in fact, be double the original estimate, amounting to US$640 million, resulting in negative equity. The filing contributed to a decrease in the value of the company’s stock market value, dropping from US$1.2 billion to US$281 million and putting the company at risk of bankruptcy. Should the directors be held responsible and punished for what had happened? What role did the regulators and auditors play? See supplement 9B16C033.

Supplement for product 9B16C032.

Instructor spreadsheet for product no. 8B16B013.

<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Corporate Social Responsibility Award, European Foundation for Management Development (EFMD) Case Writing Competition</strong></p><br>Bank Audi, a leading financial institution, was founded in Lebanon in 1830 and, over the years, had been engaged in various forms of philanthropic, charitable giving embodying its responsibility towards its various stakeholders. The head of the corporate social responsibility (CSR) unit faced a prominent decision. How could the bank consolidate its CSR efforts—which had taken a largely philanthropic approach, especially between 2010 and 2012—in the context of a coherent strategy that built on the assessment of aspects that were material and critical to both the bank and its key stakeholders? Setting the bank’s CSR priorities would serve as the basis of a coherent CSR strategy for Bank Audi.

In June 2014, Hisense of China and Hitachi of Japan were considering whether their 11-year-old joint venture (JV) should once again assume responsibility for its international sales. After developing a solid central air-conditioner market share in China, in 2009, the JV began to sell in various overseas regions but struggled. In April 2012, the partners agreed to have a Hisense subsidiary (the HIMC) assume full responsibility for selling the JV’s products overseas. However, over the next two years, HIMC’s performance in selling the JV’s products overseas was unsatisfactory. In response, the partners began to discuss whether they should have the JV sell its own products again overseas. Of immediate interest was the Southeast Asian market. This case can be used with Hisense-Hitachi Joint Venture (B): Expanding in Southeast Asia, 9B16M220

Conventional international business strategy preaches the need for subsidiaries of multinationals to align themselves with the agenda set by headquarters. But believing corporate parents always know best is a mistake. Although subsidiaries tend to seek approval of initiatives via dialogue with headquarters, there are also “maverick” subsidiaries that pursue independent initiatives covertly. And the author’s qualitative research on factors influencing independent subsidiary initiatives has found that maverick behaviour can deliver superior business results. <br><br>Whenever HQ has a different interpretation of local conditions, subsidiary managers tend to see their own assessment as superior (often rightly so). This situational awareness illustrates one of the pitfalls of the command-and-control approach adopted by most headquarters. Subsidiaries that fail to meet performance metrics established by headquarters tend to be subjected to more oversight than subsidiaries that beat expectations. As a result, rebel managers at these subsidiaries can be driven to covertly pursue independent subsidiary initiatives in a quest to show that they can deliver superior business results through more autonomy. Although sanctioned and unapproved subsidiary initiatives can deliver success, the independent initiatives the author has studied demonstrate that subsidiary managers tend to go rogue because they see it as a path to superior results. Subsidiaries should not, of course, be granted absolute freedom. After all, the trust handed to subsidiaries that beat expectations can transform into complacency. Nonetheless, there is a need for a better mixture of central control and local autonomy so that subsidiaries can be agile as multinationals continue to expand into new markets and monitoring becomes more difficult.

In February 2014, the chairman and chief executive officer of the third-largest law firm in Canada, Gowlings LLP, was examining his options for taking the firm global. On the verge of retirement, he hoped to establish an enduring platform for international expansion based on three aspects: a new global location, a new global partner, and a new organizational structure. Each point was interlinked, and each presented its own managerial dilemmas. Gowlings had already established offices in three locations outside Canada: Moscow, London, and Beijing. The company had been ranked as the top legal advisor based on deal volume for Canadian mergers and acquisitions in both 2012 and 2013. Gowlings was primed to build on these attributes and move to the next level in positioning itself as an international law firm.