This case is a study of the initial discovery of penicillin and how it came to be a mass-market product. The discovery of penicillin is fascinating first and foremost because of its direct, life-saving benefits and because of the context of World War II that surrounded its rise. Throughout the case, an argument is made for the importance of this invention not only for the society of the 1940s, but for our society today. Students are introduced to a handful of the individuals and institutions involved in the discovery and development of the technology, providing them with the information necessary to consider the people, institutions, and other factors that led to the drug's success. Students consider especially the role of intellectual property during penicillin's rise to success, as well as the cultural and legal differences between Britain and the United States related to the patenting of medical discoveries.
This case set describes the gale of creative destruction that came with the rise of refrigeration and the creation of a globalized food supply chain, examined through the life of Charles Tellier, a French entrepreneur and inventor of the refrigerated ship that completed the first successful transoceanic shipment of fresh meat. It takes place largely during the mid- to late 19th century, a time of increasing globalization and disruptive social change. Tellier was a visionary inventor who saw refrigeration's potential to transform the world's food supply and improve nutrition and quality of life for the growing middle classes through improved year-round access to high-quality, perishable animal protein. While he was a dedicated and ultimately successful inventor, he struggled to fund his pursuits and manage stakeholders in his endeavors. The A case rests on a pivotal moment when Tellier's refrigerated transport technology showed early promise, but Tellier and the owners of the company disagreed on the appropriate next steps to verify and capitalize on this early success. This B case offers an epilogue.
This case set describes the gale of creative destruction that came with the rise of refrigeration and the creation of a globalized food supply chain, examined through the life of Charles Tellier, a French entrepreneur and inventor of the refrigerated ship that completed the first successful transoceanic shipment of fresh meat. It takes place largely during the mid- to late 19th century, a time of increasing globalization and disruptive social change. Tellier was a visionary inventor who saw refrigeration's potential to transform the world's food supply and improve nutrition and quality of life for the growing middle classes through improved year-round access to high-quality, perishable animal protein. While he was a dedicated and ultimately successful inventor, he struggled to fund his pursuits and manage stakeholders in his endeavors. The A case rests on a pivotal moment when Tellier's refrigerated transport technology showed early promise, but Tellier and the owners of the company disagreed on the appropriate next steps to verify and capitalize on this early success.
Facing strong pressure from investors to improve financial performance and preserve capital, senior management at Euroland Foods must select which projects to fund across a slate of major investment proposals for 2021. While the board of directors has imposed a limit of EUR120 million for the company budget, various managers have proposed projects totaling EUR316 million. The task for students is to evaluate each proposal's financial attributes and qualitative factors (mainly strategic considerations and internal company politics), then choose the projects to be approved. This case presents two alternative modes of delivery: (1) a standard case discussion; or (2) a role-play exercise with a debriefing. The teaching note includes role-playing character descriptions for distribution to students and describes both modes of delivery. The different viewpoints of the company managers featured in these character descriptions is a unique aspect of this case, which affords students the opportunity to grapple with some aspects of capital budgeting that they don't normally encounter. The multifunctional aspect of this case affords an opportunity for a finance instructor to coteach it with an organizational behavior instructor. Points of linkage are in the areas of group leadership and the assessment and management of group decision-making processes. The case is suitable for intermediate corporate finance courses.
This note describes a collection of 26 teaching case studies and 5 expository notes on the history of financial crises from 1720 to 2008. The note also summarizes a semester-length course design based on these materials. The purpose of this collection is to advance pedagogy and research in the field of financial crises.
Britannia Chemicals was under pressure from investors to improve its financial performance because of the accumulation of the firm's common shares by a well-known corporate raider. Earnings had fallen to 180 pence per share at the end of 2017 from around 250 pence per share at the end of 2016. The manager of Merseyside Works, a production plant owned by Britannia Chemicals, thus believed the time was ripe to obtain funding from corporate headquarters for a modernization program for her plant-at least she had believed this until her controller presented her with several questions that had only recently surfaced. This A case presents a go/no-go project evaluation regarding improvements to a polypropylene production plant. It explores aspects related to identifying incremental cash flow implications of investment decisions and evaluating related financial criteria, including impact on earnings per share, payback, and net present value, and internal rate of return.
In the 1920s, Germany experienced one of the most severe episodes of hyperinflation in history. The episode originated in military defeat and revolution, produced instability that figured prominently in the onset of the Great Depression, and created policy dilemmas that present cautionary lessons for leaders in business and government. This note examines the causes, dynamics, and consequences of Germany's hyperinflation in 1923. Hyperinflation is an episode of very large price increases across a broad range of goods and services that often arises from excessive expansion of the supply of paper money to finance government expenditures. It causes wasteful distortions in the functioning of markets, including hoarding of goods and commodities, currency depreciation, capital flight, price controls, and black markets. In a self-reinforcing cycle, price increases beget greater issuance of currency, which begets more price increases and so on, until a political regime shift reforms the unit of currency and government spending.
In August 1990, Mikhail Gorbachev, president of the Union of Soviet Socialist Republics (USSR) and general secretary of the Central Committee of the Communist Party, confronted one of the most difficult dilemmas of his career: how to improve the country's economic performance. This case set highlights Gorbachev's reform efforts from 1985 to 1990. Numerous measures of economic performance had declined, and the USSR faced serious crises of economics (declining productivity and financial insufficiency), federalism (challenges to the primacy of the Soviet Union), and separatism (ethnic and nationalist agitation). Three groups of advisers offered competing plans. One plan focused on economic revolution toward a market economy; one on reform of the existing centrally planned economy; and a third on economic retrenchment and reinforcement of socialist discipline that had prevailed over the previous 73 years. Students must evaluate the benefits and risks of each alternative and recommend a course of action.
In August 1990, Mikhail Gorbachev, president of the Union of Soviet Socialist Republics (USSR) and general secretary of the Central Committee of the Communist Party, confronted one of the most difficult dilemmas of his career: how to improve the country's economic performance. This case set highlights Gorbachev's reform efforts from 1985 to 1990. Numerous measures of economic performance had declined, and the USSR faced serious crises of economics (declining productivity and financial insufficiency), federalism (challenges to the primacy of the Soviet Union), and separatism (ethnic and nationalist agitation). Three groups of advisers offered competing plans. One plan focused on economic revolution toward a market economy; one on reform of the existing centrally planned economy; and a third on economic retrenchment and reinforcement of socialist discipline that had prevailed over the previous 73 years. Students must evaluate the benefits and risks of each alternative and recommend a course of action.
In December 1938, US president Franklin D. Roosevelt (FDR) contemplated recent setbacks that challenged the viability of his program of economic recovery, popularly called the "New Deal." Various achievements and defeats in the first three years of his administration energized his supporters and galvanized a diverse opposition of conservatives, populists, and extremists-who believed FDR had gone too far or not far enough. Critics accused him of overreach of powers beyond his constitutional authority, of inconsistency, of inciting class warfare, and of creating conditions that actually retarded recovery. Would the record of the New Deal sustain the level of popular support that he won in the election of 1936? Had his policies and programs promoted economic recovery? What lessons should he learn from his defeats? What changes should he make in his programs and politics as he entered the election year? Should he double down on his progressive agenda or change course?
Supplement to case UV7966 On March 15, 1848, the governor of the Bank of France, Antoine d'Argout, faced the potential collapse of his institution. A cascade of agricultural and industrial shocks, rising food prices, spikes in unemployment, and currency outflows struck at the heart of the French economy. At the same time, France, and Europe more broadly, had dissolved into armed revolution. The French king's abdication in February, alongside the already teetering financial system, resulted in massive bank runs that toppled a substantial part of the Paris banking system. Dramatic monetary contraction and the collapse of credit markets choked off sources of economic growth. Across Europe, proposals for action polarized three broad coalitions-liberals, radicals, and conservatives-each of which differed about the pace and extent of democratization. With the provisional French government lacking legitimacy and even facing bankruptcy, a state bailout seemed unlikely. Faced with the threat of financial collapse and anarchy in the streets, d'Argout contemplated the situation. What had caused the crisis at the Bank of France and in the French economy? What was the connection between financial and societal distress, and could they be treated separately? How would conservative, liberal, and radical advisers interpret the crisis and suggest remedies? Given this analysis, how should d'Argout try to save his bank? Would tactical reforms save the Bank, or should d'Argout make wholesale changes? The tasks for students are to plot the causes and course of the crisis and to consider the difficult policy tradeoffs.
On March 15, 1848, the governor of the Bank of France, Antoine d'Argout, faced the potential collapse of his institution. A cascade of agricultural and industrial shocks, rising food prices, spikes in unemployment, and currency outflows struck at the heart of the French economy. At the same time, France, and Europe more broadly, had dissolved into armed revolution. The French king's abdication in February, alongside the already teetering financial system, resulted in massive bank runs that toppled a substantial part of the Paris banking system. Dramatic monetary contraction and the collapse of credit markets choked off sources of economic growth. Across Europe, proposals for action polarized three broad coalitions-liberals, radicals, and conservatives-each of which differed about the pace and extent of democratization. With the provisional French government lacking legitimacy and even facing bankruptcy, a state bailout seemed unlikely. Faced with the threat of financial collapse and anarchy in the streets, d'Argout contemplated the situation. What had caused the crisis at the Bank of France and in the French economy? What was the connection between financial and societal distress, and could they be treated separately? How would conservative, liberal, and radical advisers interpret the crisis and suggest remedies? Given this analysis, how should d'Argout try to save his bank? Would tactical reforms save the Bank, or should d'Argout make wholesale changes? The tasks for students are to plot the causes and course of the crisis and to consider the difficult policy tradeoffs.
On October 25, 1847, British prime minister John Russell met with his cabinet to review a deepening financial crisis and to weigh proposals for government response. Chief among these were two proposals. The first was to suspend the Bank Charter Act of 1844 in order to permit the Bank of England to discount more freely and to issue banknotes in greater volume than the Act allowed. In recent days, delegations of merchants, industrialists, and country bankers had approached Russell to plead for more currency. The second was to do nothing and allow the crisis to run its course. Some members of Parliament argued that the whole point of the Act was to impose discipline at times like this, so to suspend it would make a mockery of that discipline and create moral hazard. As leaders of the Whig Party, Russell and his cabinet would need to navigate carefully through the crisis, owing to the slim majority his government held in Parliament. The A case (UV7950) describes five shocks that promoted the financial crisis of 1847-agriculture, railways, demand, monetary, and fiscal-as well as the complicated political situation at this time of the Irish potato famine. This B case offers an epilogue.
On October 25, 1847, British prime minister John Russell met with his cabinet to review a deepening financial crisis and to weigh proposals for government response. Chief among these were two proposals. The first was to suspend the Bank Charter Act of 1844 in order to permit the Bank of England to discount more freely and to issue banknotes in greater volume than the Act allowed. In recent days, delegations of merchants, industrialists, and country bankers had approached Russell to plead for more currency. The second was to do nothing and allow the crisis to run its course. Some members of Parliament argued that the whole point of the Act was to impose discipline at times like this, so to suspend it would make a mockery of that discipline and create moral hazard. As leaders of the Whig Party, Russell and his cabinet would need to navigate carefully through the crisis, owing to the slim majority his government held in Parliament. The A case describes five shocks that promoted the financial crisis of 1847-agriculture, railways, demand, monetary, and fiscal-as well as the complicated political situation at this time of the Irish potato famine. The B case offers an epilogue.
The first (or "Great") Industrial Revolution occurred in Europe from roughly 1760 to 1860, and marked the end of the centuries-long feudal era and the rise of modern capitalism. To understand the modern industrial economy, it is necessary to consider the profound structural changes that produced it in the 18th and 19th centuries. New industries replaced old systems or businesses with new technologies, products, markets, and business practices, resulting in dramatic changes in economic growth (a measure of material well-being), politics (new institutions, interests, and ideologies), and society (such as urbanization, changes in social mobility, and immigration). Anchored to the rationalist principles of the Enlightenment, the Industrial Revolution emphasized increased productivity across sectors, from agricultural labor to factory production. The Industrial Revolution encompassed and relied on dramatic changes to organizational management, capital structures, resource procurement, and political institutions, marking a culmination of societal transformation that manifested in an explosion of economic development. The word "revolution" suggests a period of radical change, a shift from an old order to a completely new one: the Industrial Revolution was such a shift. This note offers a historical overview of this hugely consequential period in economic history.