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Supplements the (A) case.

Beijing Jeep Corporation Ltd. was one of the first joint ventures between an American company, DaimlerChrysler Corporation and a Chinese enterprise, Beijing Automotive Works. Early in its operations, Beijing Jeep was given preferential treatment on tariffs and foreign exchange, and had spent many years developing relationships with senior government officials that protected them from import competition. After several years of negotiations, there was an agreement of terms for China to enter into the World Trade Organization. Terms of this agreement called for a steep reduction in tariffs for imported automobiles, which would lower entry barriers to the Chinese automotive industry, thus creating more competition for the company. Tariffs on components imported from the United States would also be reduced but this would not be enough to offset the flood of imported vehicles into the market. Entry into the World Trade Organization would mean a lot of changes, and Beijing Jeep must determine whether they should continue focusing on the relationships they have built with the government, or approach their joint venture partner for additional support.

Glegg Water Company is an international company that specializes in customizing premanufactured components into full industrial water treatment systems. In the early 1990s, the water treatment industry had introduced a process that removes charged particles from water used in industrial applications. This technology was superior to resin technology because it was more environmentally sound and more reliable. However, its applications were limited to low water flows. Glegg, through its development of the E-Cell, refined the technology that made it available to high water flow operations, was expandable and more versatile than previous systems. In spite of the clear technological superiority, Glegg was finding it difficult penetrating the market. The chief executive officer must develop a strategy and marketing plan that will make E-Cell the industry standard.

The managing director of this specialty foundry must decide whether to approve a major investment to automate part of her plant's production process. The case presents information sufficient to build cash flow forecasts of production costs incremental to this investment. Discounted cash flow (DCF) analysis reveals that this investment project is attractive but that the benefits hinge on important assumptions about the plant's business volume, the manager's ability to lay off workers over the objections of a labor union, and the hurdle rate. The objectives of the case are to (1) introduce students to the mechanics of DCF analysis of go/no-go capital investment decisions, (2) consider the principle of incremental analysis as the foundation for identifying relevant cash flows for a project, (3) explore the classic trade-offs in capital-for-labor investments, and (4) review analytical adjustments required in comparing projects of unequal lives.

This is an MIT Sloan Management Review article. Partnering with outsiders to speed innovation is increasingly the norm among high-tech companies. Then why are so many organizations still struggling to make such efforts work? The answer, say MIT Sloan School professor of management Edward B. Roberts and management consultant Wenyun Kathy Liu, is that all too often companies choose collaborative strategies without first considering what stage in the technology life cycle a given technology has entered--and which type of partnership is suited best to that stage. There are four phases in the life cycle of a technology (the fluid, the transitional, the mature, and the discontinuities), and, depending on where a particular technology is at the moment, only certain external partnerships facilitate speedy development. That reality presents a challenge for managers: Each product a company is juggling may be in a different phase, and because the partnerships developed for one phase of one technology could eventually serve a different purpose in another phase of another technology, all partnerships must be handled with care. Companies are more inclined to form alliances as the technology becomes better defined and as competitive pressure increases. In broadening past research (on the technology life cycle's effect on internal product development) to encompass the externally focused technology life cycle, the authors also have underscored the growing complexity of achieving business success. The implication for management in high-tech industries is that leaders need to excel at multitasking, thinking laterally, thinking creatively, and networking with individuals in various related industries. But all that starts with understanding the technology life cycle and what it means for outsourcing innovation.

During his first three years as CEO, Lloyd Byrne transformed Bretplex from an uninspired family-controlled company in the machine tool business into a midsize industrial conglomerate. Sales doubled, market value tripled, the company's management team grew stronger, and the board's makeup was enhanced by the appointment of several glamorous nonexecutive directors. After that strong beginning, however, Bretplex's previously unstoppable growth ground to a halt. The turning point was the company's acquisition of Hazlemere Measures, a British equipment manufacturer. The price of the acquisition had been bid up by an aggressive competitor, and the market believed Bretplex paid too much. Soon, other acquisitions were being examined. Worse, the company began missing its revenue estimates and revised them downward only as reporting dates drew near. More uncertainty emerged when Laura Barrington, the manager of an activist shareholder fund, began asking whether Lloyd had what it would take to lead the company to recovery. Board members Harriet Poole, a CEO herself, and Jefferson Souza, a strategy guru, debate solutions for Bretplex. If the company fires Lloyd, Jefferson says, the market will think the company is serious about getting its house in order, and Barrington and the fund will probably back off. Harriet, distracted by events at her own company, fears that it will be highly disruptive for Bretplex to lose its much-admired leader and, possibly, some of its senior managers. She is inclined to stick with a restructuring plan just approved by the board.

To move forward, society needs geniuses--those rare individuals whose flashes of insight and imagination change the way we live and see the world. Traditionally, we look for them in the arts and sciences, but geniuses appear in many guises. They can be engineers, designers, analysts, and even managers. Yet for all their creative energy, geniuses don't always make the best employees, colleagues, or bosses. They are notoriously prickly people, and they can be fiercely individualistic. Moreover, they can be surprisingly fragile. They frequently act with flamboyance, but inside they are deeply vulnerable. To understand how a manager might approach the challenges of genius, HBR senior editor Diane L. Coutu recently talked with choreographer and dancer Mark Morris. A MacArthur Fellowship winner, Morris has created some of modern dance's most enduring works, and his dance group is widely considered to be the most exciting company in the business. Morris' work with live music requires that he manage the genius of sopranos and virtuoso conductors who collaborate with his dance troupe. That makes him uniquely suited to discuss the realities of living with genius--from the inside as well as the outside. In this article, Morris discusses the roots of creativity, the truth about prima donnas, the dangers of living with mediocrity, and his drive toward authenticity. He also offers his candid opinion on geniuses: "These people are up against their own egos; that's why they're so delicate or flamboyant or insecure. Those qualities all amount to the same thing: vulnerability." To work with people effectively, he says, you must be completely honest: "Real artists or geniuses...especially need the truth. They're not fooled by false praise and empty encouragement."

Few companies can boast a collection of star brands like LVMH Moet Hennessy Louis Vuitton, the French powerhouse that owns the likes of Dior, Dom Perignon, and TAG Heuer. What accounts for the company's spectacular success? In a rare interview, the chairman of LVMH, Bernard Arnault, opens the window on that question with HBR editor Suzy Wetlaufer. Arnault identifies how companies build star brands and describes the process LVMH uses to create its wildly innovative products. First, the luxury goods giant begins with radical innovation--an unpredictable, messy, highly emotional activity that the company wholly endorses. Unlike many companies, LVMH does not believe in managerial limit setting. Artists must be completely unfettered by financial and commercial concerns, Arnault insists, to do their best work. When it comes to getting that creativity onto the shelves, however, LVMH banishes such chaos. The company imposes strict discipline on its manufacturing processes, meticulously planning, for instance, all 1,000 tasks in the construction of one purse. Through near-draconian manufacturing disciplines, the company is able to achieve exceptionally high productivity, rivaling even some of today's most technologically advanced factories. The bottom line is that LVMH has one goal: star brands. According to Arnault, star brands are born only when a company manages to make products that "speak to the ages" but feel intensely modern. Such products sell fast and furiously, all the while raking in profits. As Arnault notes dryly, "Mastering the paradox of star brands is very difficult and rare--fortunately."

During his first three years as CEO, Lloyd Byrne transformed Bretplex from an uninspired family-controlled company in the machine tool business into a midsize industrial conglomerate. Sales doubled, market value tripled, the company's management team grew stronger, and the board's makeup was enhanced by the appointment of several glamorous nonexecutive directors. After that strong beginning, however, Bretplex's previously unstoppable growth ground to a halt. The turning point was the company's acquisition of Hazlemere Measures, a British equipment manufacturer. The price of the acquisition had been bid up by an aggressive competitor, and the market believed Bretplex paid too much. Soon, other acquisitions were being examined. Worse, the company began missing its revenue estimates and revised them downward only as reporting dates drew near. More uncertainty emerged when Laura Barrington, the manager of an activist shareholder fund, began asking whether Lloyd had what it would take to lead the company to recovery. Board members Harriet Poole, a CEO herself, and Jefferson Souza, a strategy guru, debate solutions for Bretplex. If the company fires Lloyd, Jefferson says, the market will think the company is serious about getting its house in order, and Barrington and the fund will probably back off. Harriet, distracted by events at her own company, fears that it will be highly disruptive for Bretplex to lose its much-admired leader and, possibly, some of its senior managers. She is inclined to stick with a restructuring plan just approved by the board. In R0109A and R0109Z, commentators Norm Augustine, Charles Elson, Richard H. Koppes, and Nell Minow offer advice on this fictional case study.

During his first three years as CEO, Lloyd Byrne transformed Bretplex from an uninspired family-controlled company in the machine tool business into a midsize industrial conglomerate. Sales doubled, market value tripled, the company's management team grew stronger, and the board's makeup was enhanced by the appointment of several glamorous nonexecutive directors. After that strong beginning, however, Bretplex's previously unstoppable growth ground to a halt. The turning point was the company's acquisition of Hazlemere Measures, a British equipment manufacturer. The price of the acquisition had been bid up by an aggressive competitor, and the market believed Bretplex paid too much. Soon, other acquisitions were being examined. Worse, the company began missing its revenue estimates and revised them downward only as reporting dates drew near. More uncertainty emerged when Laura Barrington, the manager of an activist shareholder fund, began asking whether Lloyd had what it would take to lead the company to recovery. Board members Harriet Poole, a CEO herself, and Jefferson Souza, a strategy guru, debate solutions for Bretplex. If the company fires Lloyd, Jefferson says, the market will think the company is serious about getting its house in order, and Barrington and the fund will probably back off. Harriet, distracted by events at her own company, fears that it will be highly disruptive for Bretplex to lose its much-admired leader and, possibly, some of its senior managers. She is inclined to stick with a restructuring plan just approved by the board. In R0109A and R0109Z, commentators Norm Augustine, Charles Elson, Richard H. Koppes, and Nell Minow offer advice on this fictional case study.

When Hugh Price became president and chief executive of the National Urban League in May 1994, he knew he was taking the helm of an organization groping for new moorings in the post-civil rights, post-Great Society, post-welfare state era. During the Reagan administration of the 1980s, the large annual federal grants and contracts that had steadily grown during the 1960s and 1970s, sustaining the National Urban League and its network of 113 affiliates, were abruptly slashed. People wondered if the Urban League would dissolve. This case chronicles what happened with the NUL during this era of transition. Pair with the sequel (HKS 864). HKS Case Number 1634.0.

When Hugh Price became president and chief executive of the National Urban League in May 1994, he knew he was taking the helm of an organization groping for new moorings in the post-civil rights, post-Great Society, post-welfare state era. During the Reagan administration of the 1980s, the large annual federal grants and contracts that had steadily grown during the 1960s and 1970s, sustaining the National Urban League and its network of 113 affiliates, were abruptly slashed. People wondered if the Urban League would dissolve. This case chronicles what happened with the NUL during this era of transition. Pair with the first part of the case (HKS 863). HKS Case Number 1634.1.

iMotors was an online used car retailer. Its business model reconfigured the industry value chain and allowed it to create significant new value for consumers. The case highlights the tension between value creation and value appropriation, limits to growth and the importance of establishing legitimacy in creating new categories. It also raises the question of the sustainability of competitive advantage.

If you could move your company's headquarters anywhere in the world, where would you go? How would you narrow the possibilities? Here's what's involved in relocating a $51 billion company.

The answer is probably "yes." Managers often unintentionally sap their businesses' profits by ignoring the complexities of pricing. Find out what they're doing wrong.

In Russia, 3M is doing more than capitalizing on positive cultural traits. It has also learned how to turn negative cultural traits to its advantage.

In studying strategic information systems (IS) alignment, it is important to examine the associated processes over time rather than view alignment as an isolated event. This article focuses on how organizations undergo a series of interdependent changes in business strategy and IS strategy to increase the alignment between them. Based primarily on detailed case studies of changes over long time periods in three organizations, the research suggests that this process of adaptation and change, which allows alignment to occur, is more complex than previously believed. Although efforts to achieve alignment between IS and the business do sometimes succeed, they often go astray. There are three such potentially problematic trajectories--excessive transformation, paradoxical decisions, and uncertain turnarounds. This article identifies some factors explaining why organizations might pursue these problematic trajectories and offers some suggestions for avoiding them.

Chauvco quickly became one of the top 30 oil companies in Canada. Rising costs and diminishing oil and gas reserves led Chauvco to consider investing in other countries. In 1992, Chauvco purchased an interest in an Argentine oil and gas block that was being privatized. Chauvco's success in Argentina depended on the country's future political stability and the continuance of government policies. Prior to the 1989 election of Carlos Menem, Argentina experienced decades of political and economic instability, the government nationalized many businesses and imposed detailed regulations throughout the economy - a set of policies that led to low growth, budget and trade deficits, hyperinflation, and currency devaluation. Whether Menem's reforms could achieve long-term success remained to be seen. Chauvco encountered a number of difficulties, as well as some positive aspects of the environment of business. The company initially entered a joint venture partnership and then developed an independent set of operations. By 1995, Chauvco had to decide in what proportions it should divide its future investments between Canada, Argentina and other countries, and what criteria it should use in evaluating investment opportunities. This is an abridged version of 9A95H003.

A Thai import of automobiles benefits from appreciation of the baht against the deutsche mark, and will want to maintain the currency peg for two reasons - to maintain import competitiveness and to benefit from the interest differential. This role play is a supplement to Thailand, 1997, product 9B01M024.

A Thai shoe manufacturer notices that the prices of his exported products have become uncompetitive because of the baht's appreciation against the yen. This is a role play supplement to Thailand, 1997, product 9B01M024.