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Describes the efforts of Indian Prime Minister P.V. Narasimha Rao to deregulate and open up the Indian economy in the early 1990s. Focuses on the difficulties he encountered, reflected in the poor showing of the ruling Congress Party in state elections in December 1994, and raises the questions: Why is economic change so difficult in India? What are the obstacles to Rao's reforms? What is the likelihood that he will succeed? Contains a brief history of India's economic, political, and social development since it achieved independence in 1947.

Updates Russia--1994.

In the midst of a sales slump brought on by a recession in Spain, Antmobel's managers are presented with an opportunity to sell a substantial quantity of furniture in Uzbekistan. Management must decide whether the order fits with the company's strategy, capabilities, and internationalization plans.

Antmobel is presented with a plan to enter the French market. The company must weigh the costs and potential benefits of such a move in the context of its international strategy and the firm's capabilities.

Antoni Subira, the Minister of Industry in Catalonia, Spain, must decide whether to impose strict European Union environmental guidelines on the local leather industry. Failure to impose new regulations would result in substantial fines. Imposition, on the other hand, could lead to a further decline in an industry already buffeted by foreign competition.

Describes Russia's transition from a centrally planned economy under Communist rule to an increasingly market-oriented economy under a more democratic political regime. Can be used to discuss the complementarity of elements of an economic strategy, and the optimal sequencing of political and economic reforms. The first section provides a brief synopsis of Gorbachev's reform strategy and the political and economic chaos following from partial implementation of relatively weak economic and political reforms. The second section describes Yeltsin's radical reform strategy of 1992 to simultaneously achieve macroeconomic stabilization, price reform and privatization. Attention is drawn to the partial implementation of this program and the political and economic obstacles hindering progress. Concludes by asking whether Yeltsin's attempts to consolidate power through new elections and constitutional reform will be successful.

Explores some of the economic and political tradeoffs that need to be negotiated by a firm seeking to influence industry structure. The setting is the nascent personal computer software industry in the People's Republic of China (PRC) in 1993. Microsoft has to localize its software products for use in the PRC. This localization can either be done in-house by Microsoft, or can be contracted to the local software vendors. Explores the costs and benefits of full integration and arm's-length market transaction. Also discusses the "holdup" problem that arises when assets specific to a particular partnership are created.

Supplements the (A) case. Designed as a class handout.

Designed to follow Germany in the 1990s: Managing Reunification.

Between 1985 and 1990, the global economy witnessed an unprecedented surge in flows of foreign direct investment (FDI). This sudden increase called back into prominence the range of questions that have long surrounded FDI. What causes firms to expand or contract their purchase of foreign assets? How do patterns of investment affect trade and development? What is the impact of FDI on host countries? This note explores these questions in some detail and includes data summarizing recent trends in FDI flows.

The nation-state has begun to crumble. What is emerging in its place is the region-state, which is defined by economic activity, not political borders. The factors behind the shift are threefold: First, people, capital, and information can move across borders so quickly that economic decisions are often based on the fear that needed resources will go elsewhere. Second, as consumers see how other people live, they pressure their governments to give them access to the best and cheapest products. And third, as governments defer to special interests and try to provide constituents with a civil minimum of services, they invest inefficiently and as a result destroy wealth. Although political leaders will resist acknowledging the demise of the nation-state, only those who can accept it and promote region-states within and across their borders will be able to provide the best quality of life for their constituents.

A business strategy must be congruent with the capabilities of a firm as well as both its market and nonmarket environments. The market environment includes those interactions between the firm and other parties that are intermediated by markets or private agreements. The nonmarket environment includes those interactions that are intermediated by public institutions. A business strategy must integrate both market and nonmarket components.

During his successful 1991 bid for the indianapolis mayoralty, Stephen Goldsmith is clear about his preference for privatizing city services. Once in office, however, Goldsmith decides on a different, more complex approach. The inefficiency of publicly-provided services, he reflects, may not be the result of their being public but rather a reflection of the lack of competition over who will provide them. In that light, Goldsmith undertakes a bold experiment: to force city departments to bid against private providers. This case focuses on the first stages of the Goldsmith experiment, a time in which city public works crews must, for the first time, compete against private firms for a pothole repair contract. The case raises core questions as to how to structure public-private competitions to ensure that valid comparison will be possible, as well as how to determine the exact nature of public costs. In addition, it allows for discussion of more theoretical questions as to whether some functions must always be public, while others should be private and still others privately-provided but publicly-financed. HKS Case Number 1270.0

During his successful 1991 bid for the indianapolis mayoralty, Stephen Goldsmith is clear about his preference for privatizing city services. Once in office, however, Goldsmith decides on a different, more complex approach. The inefficiency of publicly-provided services, he reflects, may not be the result of their being public but rather a reflection of the lack of competition over who will provide them. In that light, Goldsmith undertakes a bold experiment: to force city departments to bid against private providers. This case focuses on the first stages of the Goldsmith experiment, a time in which city public works crews must, for the first time, compete against private firms for a pothole repair contract. The case raises core questions as to how to structure public-private competitions to ensure that valid comparison will be possible, as well as how to determine the exact nature of public costs. In addition, it allows for discussion of more theoretical questions as to whether some functions must always be public, while others should be private and still others privately-provided but publicly-financed. HKS Case Number 1270.1

For decades after the revolution of 1917, Communist Party leaders claimed that the socialist economic system was superior to the capitalist system on both moral and economic grounds. By 1985, when Mikhail Gorbachev became general secretary of the Communist Party of the Soviet Union, the economic claim had been increasingly contradicted by the facts. Soviet per-capita income remained significantly below western levels, and Soviet growth rates had declined steadily since the 1960s. Gorbachev searched for a way out of this economic deterioration announcing a policy of perestroika and glasnost. Had Gorbachev misdiagnosed the problem? Should other options have been pursued? This case outlines the starting conditions for any attempts at economic reform of a socialist system. Describes the economic strategy of allocating resources by command channels rather than allowing resources to be allocated by markets and firms. This clear example of planning leads to deeper understanding of the forms of planning seen in other countries. Successes and failures of this system are noted, with particular attention to the information aggregation and processing demands made on central planners.

Examines the founding of the United States of America during the second half of the eighteenth century. Focuses on: 1) the reasons why the American colonists rebelled against Britain (1763-1774); 2) the problems the new nation confronted during the War of Independence and under the Articles of Confederation (1775-1788); 3) the main issues taken up at the Constitutional Convention in Philadelphia (1787); and 4) the enormous challenges facing Alexander Hamilton as Secretary of the Treasury in the first Washington Administration (1789-1792). A complete version of the Constitution (including the first 10 amendments) is attached as an appendix.

Since its introduction in 1983, Acutrim has been a major player in the U.S. appetite suppressant market and in the broader diet industry. This case focuses on the strategic, regulatory, marketing, and financial challenges this product and the rapidly changing diet industry pose for Ciba Consumer Pharmaceuticals as part of a large public corporation. Within this context, the case is intended to introduce students to the $33 billion diet industry and to elucidate some of the economic, cultural, and psychological factors that help shape the market for diet products, low-fat and health entrees, and a wide variety of foods in prosperous economies.

In early 1994, Dow Corning Corp. debates whether to participate in a proposed $4.2 billion product liability settlement. Specifically, the firm must decide whether to contribute $2 billion to end a class action suit filed by women suffering from connective tissue diseases, autoimmune disorders, and other medical conditions, allegedly as a result of defective silicone breast implants. Although denying any impropriety, Dow Corning stands accused of intentionally withholding information on health risks associated with its implants over several decades.

The industralized world has been undergoing a crisis during the last three years--its worst since 1945. Even now, as the long-awaited recovery finally begins to gather momentum, it is failing to make itself felt in the most critical domain: employment. In Europe, unemployment is expected to continue increasing, probably until the end of 1995. The authors argue that the failure of the current recovery to translate into a significant improvement in employment is evidence that what the world has been going through is not merely a crisis but also an economic revolution. Perhaps the most spectacular component of this revolution is the shift in the world economy's center of gravity to Asia. These changes are creating new rules and necessitating a new modus operandi for the key players in the world economy. If they play by those rules, the authors argue, there is no reason to think they cannot bring about a period of widespread prosperity similar to the one following World War II.