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Acme Investment Trust is considering investing in a private equity partnership that is seeking only 15% of the profits, instead of the standard 20%. The management fee requested, however, is higher than in its earlier fund. The pension managers must consider the financial and organizational consequences of this shift.

Bob O'Connell, CFO of General Motors, is considering a variety of equity alternatives to fund a large shortfall over the next couple of years. His tasks are to map out a financing strategy for the long term and to choose the equity instrument to be issued immediately. Of particular interest to O'Connell is a new security called PERCS (preferred equity redemption cumulative stock).

Discusses the negotiation of a possible trademark infringement involving a German conglomerate and a Taiwanese trading firm.

The purpose of this case is to permit a discussion about value creation, performance assessment, the case method and corporate finance. It is intended to be used in the first class in a corporate finance course.

The senior financial analyst for Kingston-Murray Enterprises, must decide what funding technique to recommend to the company's chief financial officer. The firm's recent discoveries of gold and sulfur reserves have created a need for $500 million in operating cash. Because of the company's low credit rating and high cost of borrowing, senior management has restricted the financing choices to either common stock or convertible bonds. The zero-coupon convertible under consideration is a LYON (liquid-yield option note). Before recommending whether to issue LYONs, the analyst wants to understand fully the details of these subordinate, zero-coupon, callable, putable, convertible notes.

Charlie LeMantia, the president and CEO of Arthur D. Little (ADL), a leading consulting firm, is trying to decide whether the firm has a complete and effective corporate strategy. The case traces ADL's history, its rise to prominence and subsequent decline, and LeMantia's efforts to turn the organization around. Special attention is devoted to his introduction of process thinking and process management, and their impact on the way the company is managed.

The case visits the catastrophe insurance business at an interesting time in the history of the insurance markets. A major reinsurer, National Insurance, is taking a look at the new insurance derivatives being traded on the Chicago Board of Trade with a view to using them for risk management and as a portfolio option.

Growing fiscal deficits, persistent economic recession, and underinvestment in the nation's telecommunications infrastructure lead the Argentine government to privatize its state-owned monopoly provider of telecommunications services, ENTel, in late 1990. The privatization process and the resulting ownership structure is complex, and the new regulatory framework appears to offer both significant opportunities and risks for investors.

Mike Ennis, general manager of Northern Telecom's Business Products Division, recommends a new solution for replacing Vantage, an unsuccessful product for Northern Telecom. The case documents in detail the voice of the customer. Students are required to discuss the merits of Ennis's proposal.

Offers the opportunity to examine two important challenges in starting a company: selecting partners and finding capital. Presents a candid view into the struggle of a young entrepreneur, Dan Stilton, and his two newly acquired partners, Scott Bettor and Henry Tellsworth, as they look for capital to launch their venture, Florida Air, a regional airline.

Matt Dorman, owner of this custom bunk-bed manufacturer, is considering a move to a new location. Students must perform a process-and-bottleneck analysis to evaluate the viability of the move. Economic justification involves calculation of the increased capacity available at the new location. See also the video UVA-OM-0818V.

ABN-AMRO, the largest bank in the Netherlands, must decide whether to take any action in regard to the poor performance of Smit Transformatoren, a Dutch transformer manufacturer. ABN-AMRO acted as lead underwriter for the IPO of Smit, and also released a favorable equity research report around the time of the IPO. Smit's stock price initially performed favorably, but then fell significantly in conjunction with poor earnings announcements and other bad news.

Students assess the performance of the Magellan fund, consider the sources of that success, and to decide on its sustainability. Designed for beginning finance courses, the case requires no numerical calculations to perform the analysis; but the absorption of capital market background and the implications of finance concepts in the case will fully occupy the novice. Set in fall 1995, the case describes the investment styles of three of the fund's managers-Peter Lynch, Morris Smith, and the current manager, Jeffrey Vinik.

The partners of Apex Investment Partners are seeking to provide financing for Accessine Technologies, a small firm specializing in providing "One Person, One Number" telecommunication services. The negotiation of the terms-and-conditions of the deal, as well as its pricing, prove challenging.

Indian apparel exports are enjoying considerable success in the international markets. However, the future is uncertain owing to impending technological, regulatory, and market changes. This case explores the long lead times for sourcing apparel from India and provides situational context for students to explain this phenomenon.

Li & Fung, one of the largest export trading companies in Asia, works primarily as an agent to connect U.S. and European manufacturers and retailers of nondurable, mass-market consumer goods with suppliers located all over East Asia who manufacture products according customer designs. Li & Fung's network of 2,000 suppliers in over a dozen countries is one of its most important competitive assets. This network consists of relationships with suppliers and knowledge of their capabilities and strengths. The network provides a number of benefits to customers, the most important being a wide variety of manufacturing options that differ by price, quality, and delivery time. Li & Fung's trading operations are organized into largely-independent, customer-focused divisions aided by regional branch offices. Its internal structure and incentives (especially compensation) are designed to motivate staff to customize service to each customer and to use the entire network to place each customer order with the supplier that most closely fits customer requirements. This design is especially important because of trading's low margins.

The Executive Shirt Co. is contemplating a move into custom-made shirts. The company's general manager has charged two of his managers to come up with plans for incorporating production of custom shirts into the existing manufacturing process.

In 1993, Booz.Allen & Hamilton forsook its previous, highly local organizational structure. It was motivated by a desire to serve multinational clients more effectively and to provide greater value to clients with more localized business by collecting best practices from around the world. Following a plan entitled Vision 2000, the firm created unified staffing pools based on industry and functional (strategy, operations, or information technology) expertise, within each of the three large regions, Atlantic (containing Europe and N. America), Asia-Pacific-Japan, and Latin America. In staffing each client engagement, partners considered all available staff within their regions attempting to provide the best consultants for the project, regardless of where they were located. The firm also redesigned compensation and evaluation methods, segmentation strategy, and staff development programs to fit its more integrated service delivery system. New systems and programs for sharing intellectual capital between consultants increased the firm's ability to provide value.

Should South Bank offer a lower rate or more lenient loan terms to compete for a $120 million working-capital facility agreement with a telecommunications corporation? In this case, students are placed in the position of Yousuf Omar, a relationship manager at SouthBank (SB) whose longtime prospect, DSC Communications Corporation, has asked SB to bid as the agent bank on a $120 million working-capital facility. This could be an ideal client given the opportunity for significant credit and other business in the years ahead. To win the bid, however, Omar must be willing to recommend to his superiors that the bank aggressively pursue the deal by offering a lower interest rate or more lenient security and covenants for the loan than its rival bank has offered.

Describes the situation facing the head of a rapidly growing industry-focused group within a consulting company. Highlights the dilemmas of being a "producing manager" (i.e., a professional who has both individual production as well as management responsibilities). Issues raised include: delegation, developing subordinates, developing an agenda, and building an organization.