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On October 20, 2009 Brady Dougan, the CEO of Credit Suisse Group, announced a new compensation plan for the bank. The announcement had followed quickly on the heels of the G-20 meeting the prior month where, in the wake of the financial crisis, the major governments had laid out a set of guidelines for compensation in the financial industry. Credit Suisse Group was the first firm to adopt the G-20 guidelines, and did so a year ahead of the suggested timetable. While responsive to the concerns of regulators and politicians, Credit Suisse's program was more than a knee-jerk reaction, the new compensation plan had been the result of a "10 year journey" to reshape the culture of the firm. After a significant investment of senior leadership time to explain the new program to employees a significant new challenge arose. On December 9, the U.K. government announced they would impose a one-time 50% tax on bankers' bonuses greater than 25,000 pounds. Dougan and the executive team had to decide how best to fund this tax. Was it fair or appropriate to have the shareholders shoulder the burden of the tax? Similarly, was it fair to ask the UK employees to suffer relative to their peers in other countries?

The (B) case describes how Credit Suisse management allocated the cost of the 25% U.K. banker's tax among shareholders, U.K. Managing Directors and the other employees globally.

The (C) case describes the results of Credit Suisse's PIP I program, the value of PAF, shareholders' vote on the new compensation plan supported by management, and the impact of the company's approach to the U.K. banker tax.

Serial entrepreneur Vinesh Juglal wondered what it would be like to run Durban Computer College (DCC), the institution he had just bought. The education market in Africa was growing by leaps and bounds, and the ever-opportunistic Vinesh knew that buying a successful training enterprise could help him make the most of this market. On the other hand, Vinesh was well aware that in order to grow the institution he would need another source of financing, since his current lines were tied up in his real estate and supermarket businesses. Infrastructure was not an issue, since Vinesh had most of the fixed assets he needed to grow DCC Campus. Attracting more students would happen either by lowering fees or by offering financial aid. Vinesh had heard of many sponsoring bodies, including government programs, set up for this purpose. But these sponsors tended to give grants only to non-profit entities. What would be the best way to grow this "business"-if it could be called a business in the first place? Should he target the same return on investment as in his other businesses? More broadly, could he be successful using his previous, purely commercial approach? Learning objectives: To experience, almost first-hand, the rapidly changing business environment in South Africa in the 1985-2010 period, through the entrepreneurial adventures of Vinesh Juglal who builds a series of enterprisees across several industries. To consider the social role of business in the context of a developing country.

The situation was clearly untenable. In March 2008, ESB's chief executive Padraig McManus made the startling announcement that the company would become a net-zero carbon emitter by 2035, and would still remain competitive. Under his leadership, ESB was going to lead the way in slowing the growth of Ireland's GHG emissions. He declared that to achieve this goal, ESB would invest €22 billion over 15 years to develop alternative clean technologies, including energy efficiency measures, the use of clean coal, and the connection of an electricity-generating wind farm to the national grid. His target would make ESB the world's first carbon-neutral electric utility. This strategy presented a number of significant risks: 1) Financial risk - the €22 billion capital investment had to succeed. 2) Technological and ecological risks - the strategic framework relied on clean coal technology, still being developed. 3) Credibility risk - what if ESB was not able to achieve its goal? 4) Stakeholder risk - Landowners, concerned over health, environment and property prices, were ready to oppose the wind farms. McManus was conscious of the risks, and he also knew that high performing leaders always take risks even while confronting dilemmas such as: Could an electric utility achieve a zero carbon footprint and remain competitive? Can a responsible leader risk jeopardizing the present and future well-being of his company, the environment, and his country? Could he exert his leadership by influencing Irish, and possibly European, climate policy? The case provides an opportunity for a debate on responsible leadership. It was written for use in senior executive and MBA programs.

Because managers hold a status in society similar to that of doctors and lawyers, it is natural to think of business as a profession-and of business schools as professional schools. But, argues Barker, a professor at Cambridge University's Judge Business School, that can lead to inappropriate analysis and misguided perceptions. We turn to professionals for advice, he writes, because they have knowledge that we don't. We trust their advice because they've been guaranteed by professional associations that establish the boundaries of the field and reach consensus on what body of learning is required for formal training and certification. These associations make a market for professional services feasible. Although business schools might be able to reach consensus on what they should teach, the proper question is whether what they teach qualifies students to manage. After all, successful businesses are commonly run by people without MBAs. Managers' roles are inherently general, variable, and indefinable; their core skill is to integrate across functional areas, groups of people, and circumstances. Integration is learned in the minds of MBA students, whose experiences and careers are widely diverse, rather than taught in the content of program modules. Thus business education must be highly collaborative, with grading downplayed, and learning must differ according to the stage of a student's career. Business schools are not professional schools. They are incubators for business leadership.

Special teams dedicated to innovation initiatives inevitably run into conflict with the rest of the organization. The people responsible for ongoing operations view the innovators as undisciplined upstarts. The innovators dismiss the operations people as bureaucratic dinosaurs. It's natural to separate the two warring groups. But it's also dead wrong, say Tuck Business School's Govindarajan and Trimble. Nearly all innovation initiatives build on a firm's existing resources and know-how. When a group is asked to innovate in isolation, the corporation forfeits its main advantage over smaller, nimbler rivals-its mammoth asset base. The best approach is to set up a partnership between the dedicated team and the people who maintain excellence in ongoing operations, the company's performance engine. Such partnerships were key to the successful launch of new offerings by legal publisher Westlaw, Lucent Technologies, and WD-40. There are three steps to making the partnership work: First, decide which tasks the performance engine can handle, assigning it only those that flow along the same path as ongoing operations. Next, assemble a dedicated team to carry out the rest, being careful to bring in outside perspectives and create new norms. Last, proactively manage conflicts. The key here is having an innovation leader who can collaborate well with the performance engine and a senior executive who supports the dedicated team, prioritizes the company's long-term interests, and adjudicates contests for resources.

Virtually all managers in consumer businesses recognize major social, economic, and technological trends. But many do not consider the profound ways in which trends-especially those that seem unrelated to their core markets-influence consumers' aspirations, attitudes, and behaviors. As a result, companies may be ceding to rivals an opportunity to transform the industry. For instance, the impact of the digital revolution on consumers' daily lives is hardly a revelation. But it may be less obvious that heavy digital users tend to focus on short-term goals, demand immediate gratification, and expect to multitask. That insight, the authors argue, is as important for a company that sells lipstick as it is for one that sells smartphones. The authors present a process for identifying the trends that could reshape a business and three strategies for leveraging trends to create new value propositions: Infuse aspects of the trend into the product category to augment traditional offerings, as Coach did with its lower-priced Poppy handbags. Combine aspects of the trend with attributes of the category to produce offerings that transcend it, as Nike did with its Nike+ sports kit and web service. Or counteract negative effects of the trend with new products and services that reaffirm the category's values, as iToys did with its ME2 video game, which encourages children to be physically active.

A company's stock price will tend to decline after women are appointed to the board.

How Wall Street stifles innovation.

When a crisis strikes, brands can avert backlash from consumers -- and even strengthen the brand -- with well-considered and thoughtfully deployed communication. Based on scientific research on persuasion, the authors present a comprehensive crisis communication framework to help restore consumer trust, illustrating these recommendations using cases of both successful and unsuccessful recovery from brand crises. The authors draw heavily on Toyota's recent experience in responding to the unintended acceleration of some of its vehicles. Toyota's responses provide examples both of what to do, and what not to do, when a company is accused of wrongdoing. The authors contend that there is no one best communications path to follow when a company is in crisis. Rather, they say, the best approach will depend on the answers to three central questions: Is the accusation prompting the crisis true? Is the crisis severe? Has the company established its brand as something that customers closely identify with? Taking these factors into account, a company might best be served by some combination of seven communications strategies. These strategies range from admitting error and apologizing on the one extreme to defiantly denying and wrongdoing and even attacking the accuser on the other. In addition to describing these seven communications strategies, the authors also lay out four lessons on corporate crisis communications that emerge from the Toyota debacle. One, in the Internet age, speed of response is imperative. Second (and a corollary to the need for speed), companies need to be ready for a crisis at all times, and have at hand a step-by-step protocol to follow when bad things happen. Third, it is essential that in a time of crisis, the CEO him or herself -- not lower level management--needs to step forward and publicly articulate the company's responses. And fourth, companies must not delude themselves that they can skate by while ignoring a crisis. Response is essential.

Luxottica, headquartered in Milan, Italy, was the largest eyewear company in the world with sales surpassing €5 billion in 2008. In June 2009, the CEO of Luxottica, met with his management team to review the company's growth strategy for the next five years. The objective was to take Luxottica to the next growth level. Should he stick to the same business model, or adopt a new one? Should he expand retail brand acquisitions? How should the large portfolio of brands be managed? Where should the geographic focus of the company be? Learning objectives: Global strategy, marketing and supply chain management.

This case focuses on the review by the private equity firm ABRY Partners of an opportunity to invest in a film financing vehicle, Legendary Pictures. Before 2004, private equity firms had avoided co-investing with film studios in film productions because of their perception of the industry as highly risky and biased against financial investors. The ABRY team undertook extensive due diligence to determine the risk-reward profile of investments in film slates. The case highlights issues around due diligence, risk assessment, market bias and deal structuring in private equity.

The German country managing partner of a global law firm must decide how to respond to a corporate mandate to restructure its client portfolio. The case enables a discussion of different types of clients in a global professional service firm in terms of relative revenues, profitability, and strategic significance. It also highlights the tensions between local subsidiaries and corporate headquarters with respect to managing client portfolios.

In April 1998, Pfizer Inc ("Pfizer") launched Viagra, a prescription drug for treating erectile dysfunction, in the US and Europe with huge success. However, its market entry into China was met with an 11-year battle with local drug companies over Viagra's patent, Chinese trademark and three-dimensional trademark ("3D trademark"). Pfizer's patent was invalidated in July 2004 by the authorities after being jointly challenged by 12 local companies. A local company had launched its own erectile dysfunction drug using Viagra's Chinese nickname as its trademark, and copying Viagra's 3D trademark. Pfizer defended its intellectual property rights ("IPR") in court. It won the patent and 3D trademark litigations, but lost in the Chinese trademark case. Irrespective of the litigation outcomes, Viagra's sales in China have been stifled by prevalent counterfeits and herbal substitutes containing its active ingredient or equivalents. Pfizer's management is trying to figure out what went wrong in its market entry strategy, how to generate more sales before its patent expires in 2014, and what should be done to better protect the IPR of the drugs it intends to launch in the country.

Zensar is a rapidly growing, mid-sized Indian IT services company with a collaborative management philosophy and innovative HR policies. One of its practices, Vision Communities, is an inclusive forum for innovation and strategy formulation. As the company grows, managers must decide how to scale the Vision Community process so that it retains its spirit of employee involvement and engagement while encompassing a larger, more geographically dispersed group of participants.

In May 2006, Foxconn International Holdings first discovered a trade secret leakage to BYD Company Limited through current and former employees. Despite successful conviction of four individuals involved, prosecutors dropped all criminal charges against BYD in December 2008. Around 400 senior managers and engineers have left Foxconn for BYD since 2003, posing continuous threats of further infringement of intellectual property ("IP") rights. In response to a deep global recession since late 2008, one of Foxconn's strategies has been to increase investments in research on and production of smartphones, which maintain strong demand relative to traditional mobile phones. Because Foxconn's factories are located mainly in emerging markets with high IP risks, the success of this strategy is being threatened by ineffective IP protection. It is imperative for the company to revisit its IP management strategies, not only to protect its research and development investment but also to generate extra revenue for survival. It also has to devise an appropriate litigation strategy against BYD.

Foxconn International Holdings is the world's largest contract manufacturer of mobile phones. BYD Company Limited entered the market in 2003 and has pursued a learning-by-hiring strategy by actively recruiting workers from Foxconn. In May 2006, Foxconn first discovered a leakage of its trade secrets to BYD through current and former employees. Materials seized from BYD's premises were found to contain substantial non-public information belonging to Foxconn. A number of individuals involved were arrested and prosecuted. However, BYD declared that the information it possessed about Foxconn came from publicly available sources. Foxconn has concluded from internal investigation that BYD has been stealing its trade secrets systematically over a long period. Its management is contemplating pursuing criminal charges against BYD in order to protect its intellectual property ("IP"). (Please refer to case B for China's legal system for resolving IP disputes and factors that influence IP litigation outcomes in the country.)

In June 2009, Sichuan Tengzhong Heavy Industrial Machinery Company Limited ("Tengzhong"), a little-known manufacturer of construction machinery and special-use vehicles in south-western China, took the global auto industry by surprise when it announced its plan to acquire the money-losing Hummer division of General Motors Corp. Hummer's premium sport-utility vehicles and sport-utility trucks had relatively low fuel efficiency of 9−16 miles per gallon. Since 2006, Hummer's sales volume had declined sharply due to escalating oil prices, its negative image as a "gas-guzzler" and a shift in customer preferences towards smaller sedans. Tengzhong had no prior experience in the light vehicle industry or in managing a major auto brand. Because this was Tengzhong's first attempt at foreign direct investment, it was imperative for its management to figure out the major obstacles in managing its new Hummer subsidiary in the US. They also had to formulate a sound business plan to get the Chinese government's approval for this acquisition, and to make the investment a big success. (Note: This acquisition was called off in February 2010 because Tengzhong was not able to get the Chinese government's approval. The details are included in Appendix 1 of the teaching note for reference.)

On 28 July 2009, the board of directors of Geox approved the footwear and apparel company's half-year results, which showed consolidated sales of US$653 million. This was a remarkable achievement and recognition for a company that had only been in the business since 1995. In the early 1990s, inventor, entrepreneur and erstwhile winemaker Mario Moretti Polegato, suffering from hot and sweaty feet, used a pocketknife to cut holes in the soles of his sneakers, thereby creating the first pair of "shoes that breathe". Convinced that his creative solution could be transformed into a commercially successful product, Polegato spent several years developing a breathable membrane for shoes that allow the feet to breathe while remaining watertight. When he succeeded in producing the prototype of such a technology in the laboratory, he immediately patented it and began marketing it to existing shoe manufacturers. However, none showed any interest in his product. He thus decided to embark on his own, and commenced manufacturing these "breathing" shoes under the Geox brand name. Since then, Geox's innovative products have continued to carve out a niche for themselves in the global footwear market. By 2002, the company had extended its "breathability" technology to fabric and entered the apparel market. By 2009, after a mere 14 years, Geox had become a global name and was ranked the world's second-largest casual lifestyle footwear sector operator. The company conducted its business in 68 countries around the world through over 10,000 multi-brand points of sale and 997 single-brand Geox shops. By introducing yet another product to the established and intensely competitive shoe industry, Geox had successfully demonstrated the power of innovation. But like any other innovative company, Geox has to fret about sustainability of its competitive advantage.