"In November 2006, 200 German policemen and prosecutors raided 30 offices and homes of Siemens managers to investigate allegations of embezzlement at Siemens' fixed-line phone unit. In the wake of internal investigations started at the end of 2006, Siemens finally admitted to having identified dubious payments amounting to €1.3 billion from the years 1999 to 2006. As a result, Siemens replaced all but one of its managing board members. At the end of July 2008, a former sales manager at Siemens' telecoms division, was convicted for his role in setting up the slush funds used to win contracts. The same day, the supervisory board approved the recommendations a well-known law firm to sue almost all executive committee members in charge between 2003 and 2006. Learning objectives: To introduce students to the issues surrounding corruption in international business."
For most of 2007, a public dispute was going on between Danone and Wahaha over their joint venture in China. The "antagonism" had even led to the Chinese and French presidents calling on both companies to resume "peace talks" and find an amicable solution. The Danone & Wahaha case looks into how this ten year plus and once "sweet" partnership turned sour. It serves as a basis to further explore what could have been considered as a "win-win" partnership; how it was formed, further developed and how to anticipate and mitigate certain risks when doing business in China or other emerging markets, for example, how to define growth and the share of risks and rewards. It then examines what will happen next and the future outlook or likely scenario for Danone's businesses in China. Learning objectives: The key learnings in this case will apply to how to make all partnerships work, whether with Chinese partners or not, those based on principles of equality and mutual benefits, tolerating minor differences and reach mutual understandings.
The three-part China Aviation Oil (CAO) case series documents the overseas adventure - the rise, fall and subsequent restructuring and rebuilding - of a leading Chinese state-owned enterprise over the last ten or so years. The case is designed to address in an integrative manner issues commonly faced by (1) the increasing number of Chinese executives now playing in the international arena and (2) Western executives who have experience of working with Chinese companies and Chinese executives, or who would like to do so - either in China or their own marketplace. There have been many cases of multinationals going to China, where cultural differences have been blamed for things that did not work, for things that were not understood, or even for frustrations when working with Chinese companies and Chinese executives. However, the real questions are: Are we aware of other differences, e.g. financial and legal? Do we understand them and, perhaps more importantly, how we can work with them? The case series describes the first overseas restructuring of a state-owned Chinese company. As such, it provides participants with a totally different angle for looking at the dilemma of working with China: How to make things work outside China from a Chinese perspective. Learning objectives: The case series has been designed to enable participants to gain a clear understanding of some broad issues, including: 1) The strategic considerations for a Chinese company wishing to expand overseas, and the key success factors. 2) The fact that many of the factors contributing to failure are similar and equally applicable to different business contexts - even though the types of failure might differ. 3) The need to be open-minded - the "rules of the game" are different inside and outside China. 4) The need for increased awareness and a better understanding of the differences - financial, legal, cultural and even moral. 5) The need to work with the differences rather than avoiding them.
The three-part China Aviation Oil (CAO) case series documents the overseas adventure-the rise, fall and subsequent restructuring and rebuilding-of a leading Chinese state-owned enterprise over the last ten or so years. The case is designed to address in an integrative manner issues commonly faced by (1) the increasing number of Chinese executives now playing in the international arena and (2) Western executives who have experience of working with Chinese companies and Chinese executives, or who would like to do so - either in China or their own marketplace. There have been many cases of multinationals going to China, where cultural differences have been blamed for things that did not work, for things that were not understood, or even for frustrations when working with Chinese companies and Chinese executives. However, the real questions are: Are we aware of other differences, e.g. financial and legal? Do we understand them and, perhaps more importantly, how we can work with them? The case series describes the first overseas restructuring of a state-owned Chinese company. As such, it provides participants with a totally different angle for looking at the dilemma of working with China: How to make things work outside China from a Chinese perspective. Learning objectives: The case series has been designed to enable participants to gain a clear understanding of some broad issues, including: 1) The strategic considerations for a Chinese company wishing to expand overseas, and the key success factors. 2) The fact that many of the factors contributing to failure are similar and equally applicable to different business contexts - even though the types of failure might differ. 3) The need to be open-minded - the "rules of the game" are different inside and outside China. 4) The need for increased awareness and a better understanding of the differences - financial, legal, cultural and even moral. 5) The need to work with the differences rather than avoiding them.
The three-part China Aviation Oil (CAO) case series documents the overseas adventure - the rise, fall and subsequent restructuring and rebuilding - of a leading Chinese state-owned enterprise over the last ten or so years. The case is designed to address in an integrative manner issues commonly faced by (1) the increasing number of Chinese executives now playing in the international arena and (2) Western executives who have experience of working with Chinese companies and Chinese executives, or who would like to do so - either in China or their own marketplace. There have been many cases of multinationals going to China, where cultural differences have been blamed for things that did not work, for things that were not understood, or even for frustrations when working with Chinese companies and Chinese executives. However, the real questions are: Are we aware of other differences, e.g. financial and legal? Do we understand them and, perhaps more importantly, how we can work with them? The case series describes the first overseas restructuring of a state-owned Chinese company. As such, it provides participants with a totally different angle for looking at the dilemma of working with China: How to make things work outside China from a Chinese perspective. Learning objectives: The case series has been designed to enable participants to gain a clear understanding of some broad issues, including: 1) The strategic considerations for a Chinese company wishing to expand overseas, and the key success factors. 2) The fact that many of the factors contributing to failure are similar and equally applicable to different business contexts - even though the types of failure might differ. 3) The need to be open-minded - the "rules of the game" are different inside and outside China. 4) The need for increased awareness and a better understanding of the differences - financial, legal, cultural and even moral. 5) The need to work with the differences rather than avoiding them.
The case traces the history of Ahold, the world's third largest food retailer, describing in detail the events in the 10 years leading up to its collapse. After the new CEO, Cees van der Hoeven, took over in 1993, Ahold embarked on a program of rapid expansion with a target of 15 per cent growth in earnings per share per year. The strategy took the form of penetrating new geographic markets and diversification into related industries. While van der Hoeven appeared to be achieving his targets, in reality, he was sowing the seeds of his own destruction. While the apparent reason for Ahold's downfall was the discovery of fraud at one of its US subsidiaries, the actual causes were much more complex. The company itself survived, thanks in part to the existence of a "poison pill", but was radically restructured over the next two years with many of van der Hoeven's ventures being dismantled. The case offers the opportunity to discuss many of the common causes of company failure: 1) poor strategic decisions, 2) over-expansion, especially through ill-judged acquisitions, 3) a dominant CEO driven by greed and hubris, 4) weak internal controls, particularly in regard to remote operations, 5) ineffective boards. The case can also be used to comment on the existence and effect of "poison pills" and other restrictions on ordinary shareholder power; corporate governance and the many reforms now in place or being proposed; and how distant operations can be effectively controlled.
In December 2003, Parmalat SpA collapsed into unexpected bankruptcy. Its off-balance sheet debts were later revealed to total 14.3 billion euros, and it was discovered that it had allegedly been falsifying its accounts and profits for a period of over 10 years. Details the history of the company and Calisto Tanzi, the entrepreneur who founded it. Also describes the development to date of Parmalat's "Extraordinary Administration," the restructuring of the company under the Italian equivalent of Chapter 11 insolvency. Looks at how Parmalat disguised its financial problems for so long. Also explores: (1) when and why Parmalat's financial problems started; (2) how much Parmalat's strategy contributed to its problems; (3) the impact of changing external environments (political and economic) on Parmalat's problems; (4) the effect of Parmalat's history and origins as a family company on the way it managed its problems; (5) how such large accounting mis-statements could be perpetrated; (6) how those mis-statements could go undetected by investors, bankers, and regulators; and (7) what red flags and warning signals could have alerted outsiders to Parmalat's problems.
The case sets out a dilemma faced within International Paper (IP) in deciding how best to manage a particular set of environmental responsibilities and liabilities - remediation to repair past instances of environmental pollution. Remediation issues are resolved over long time-frames because of their technical and regulatory complexity. In addition, the regulatory environment has been continuing to evolve. The underlying case issue is how best to manage corporate social responsibilities where both the number of liabilities and the future costs are uncertain. In this case, the number of remediation issues faced, the costs of remediation and the impact of future regulatory inflation are all unpredictable. Consequently through this case students see the wider external and internal context within which companies must manage their corporate social and environmental responsibilities and the underlying reasons for conflicts of interests between the different stakeholders.
Charts the collapse of Enron and examines the role of various parties, including senior management, the board, and the auditors. Also looks at complex structures and accounting policies used to inflate both revenues and profits artificially and to conceal these from shareholders and others. Brings out key learning points on risk management, corporate governance, ethics, and controls of a complex enterprise.
Hajdu-Bet, the largest private poultry producer and distributor in Hungary, was seeking to expand and had approached the investment committee of a major venture capital company. The company had recently raised a fund to invest in opportunities in the former central and eastern European countries and was keen to find suitable candidates. Though Hajdu-Bet showed promise, the company was not prepared to compromise on the standards required of any new investment and decided to carry out a detailed assessment of Hajdu-Bet. As the members of the investment committee considered the results of the various investigations, they had to decide whether to proceed with the investment and, if so, on what terms and conditions. Alternatively, they could demand additional information, conscious that a further delay might lose them the opportunity.
Gives an overview of the collapse of a prestigious financial institution and the organizational failings that contributed to it. Outlines the history of Barings Bank, the creation of its securities business, particularly in the Far East, and how Nick Leeson, a Barings trader in Singapore, was able to run up massive losses in derivative trading, which caused the collapse of the bank. Identifies the cultural clashes, remuneration system, control failings, and other issues that severely weakened the effectiveness of the matrix management system, an important contributor to the collapse.
Describes how Nick Leeson, a Barings trader in Singapore, concealed his unauthorized trading activities, how Barings blindly financed them, and how the internal and external controls failed to identify the mounting losses. Identifies areas of poor internal control, inadequate computer systems, and a breakdown in information flow. Also discusses the failure of internal and external audit and regulatory systems.