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Case A: To extract cheap volatility in Duke Energy convertible bonds, Mark Punt, a convertible arbitrageur at KBC AIM, purchases the bonds and delta hedges them with a short position in the company's shares. To manage the credit risk of his long convertible bond position, Mark faces a choice of hedging with CDS, shares of the company or out-of-the-money puts on the company's stock. Key to his hedging strategy is an understanding of the observed negative correlation between credit spreads and share prices for Duke Energy.

The board of the European Middle and High School is engaged in a negotiation with an investment bank to lease a building that it needs in order to expand the size of the school. The negotiator for the investment bank has made a tough offer to the School which is under pressure to accept it. At the moment of the decision, the board discovers it will have to make additional investments in the property. Should it go ahead and accept the deal? What are the financial and business considerations? Is the negotiator for the investment bank right to try to extract the best deal for his company?

In the mid-1980s, Arrow, the world's largest electronics distributor, implemented a college recruiting program to hire salespeople. The program was part of an effort to increase the professionalism and skill set of the sales force in an industry where few salespeople had college degrees. After an expensive and thorough training program, many of the new college grads hired were poached by Arrow's competitors for higher salaries. Arrow was ultimately unsuccessful in persuading the college grads to stay, and the recruiting program ended after five years. In 1997, CEO Steve Kaufman decided to start a new college recruiting program, determined not to repeat the mistakes of the past. A rewritten version of an earlier case.

At the end of 2001, the Canadian Imperial Bank of Commerce (CIBC) and Barclays Bank PLC were in advanced negotiations regarding the potential merger of their respective retail, corporate, and offshore banking operations in the Caribbean. Some members of each board wondered whether this was the best direction to take. Would the combined company be able to deliver superior returns? Would it be possible to integrate, within budget, companies that had competed with each other in the region for decades? Would either firm be better off divesting regional operations instead? Should the two firms just continue to go it alone with emphasis on continual improvement? A decision needed to be made in the coming week.

Presents a detailed account of power dynamics that unfold in the firm when one of its best and brightest threatens to leave. Focuses on the dynamics of attracting, retaining, compensating, negotiating, and leveraging a star performer in a professional services firm. A manager and a star performer fight to improve their relative bargaining power. Specifically traces the detailed events from the resignation threat to the research director's struggle over deciding whether to counteroffer, to promote a junior, or to hire from outside the firm. Teaching Purpose: To discuss issues ranging from managing talent to resignation dynamics, power and influence, compensation, negotiation strategies, and managing a professional services firm.

Describes the start-up, growth, organizational design, and operations over the first 10 years of a professional services firm. Focuses on the creative use of organizational purpose and values as an integral part of strategy and alignment of organizational activities.

QUALCOMM, Inc. had transitioned from a fledgling startup into a Fortune 500 wireless technology leader. Its CDMA technology was considered the preeminent technology and was the world's fastest growing wireless communications technology. CEO Irwin Jacobs had a number of concerns as he determined how to sustain the company's success. How should the company allocate its resources among products? How could QUALCOMM encourage other countries--China and India in particular--to move to CDMA-based systems? How should QUALCOMM defend its position against other new technologies?

This case introduces students to the design of artificial agents and evolutionary tournaments through W. Brian Arthur's minority game. Following Arthur, the game is motivated by the story of El Farol, a popular music bar in Santa Fe, California. The bar tended to attract large crowds with its programming of Irish music on Thursday nights. The venue offered only a limited amount of space which detracted from the enjoyment of music programs when the audience outgrew the bar capacity. Moderately attended events were highly successful with most patrons. A crowed bar, however, would diminish this enjoyment to the point where most patrons would have preferred not to attend the event. Since El Farol did not pre-sell tickets, patrons had no information about the evening's attendance until they arrived at the restaurant. Although there was no information about attendance at upcoming events, patrons could learn attendance levels in previous weeks by word of mouth and, over time, formed expectations about future attendance based on their knowledge of past attendance figures.

In January 2003, West Marine (the nation's largest boating supply retailer) was on the verge of acquiring its biggest competitor, BoatU.S. Several years earlier, the company had acquired E&B Marine, another boating supply company of a similar size. However, that transaction proved to be too much for the organization to bear. Having nearly doubled its number of stores overnight, West Marine's systems and processes, as well as the experience level of its management team, could not withstand the rapid growth. West Marine's supply chain was especially hard-hit: The company was unable to keep all 72 West Marine and 63 E&B Marine stores amply stocked during the critical peak season. Following the E&B Marine transaction, the company charted a new course, bringing in a deeply experienced management team, initiating a significant cultural change, and repairing systems and processes across the company. On the eve of another major acquisition, West Marine was proud of all that the company had accomplished through its collaborative planning, forecasting, and replenishment program, particularly in the supply chain arena. As the company prepared to ramp up its growth engine again on its way to becoming a $1 billion business, West Marine's executive team wondered what "soft spots" might be discovered within its new and improved infrastructure.

This case presents the challenges the Coca-Cola Company faced in Brazil. Not only was Coke up against its nemesis, Pepsi, it also had to compete with hundreds of local brands, many of which did not pay taxes. These local brands were generically called tubaίnas. The case provides background information on the history of Cake in Brazil, trends in the Brazilian soft drink market, and on competition by Pepsi and the many local soft drink firms. In addition, Coke's strategies for competing are outlined. The student is asked to analyze the information presented in the case and to make recommendations to Coke on how to better compete in Brazil.

As Bruce Taub, founder of Fernwood, strolled past some of New York City's finest galleries, he pondered the unique challenges that Fernwood faced. Where others had seen the inefficiency of imperfect markets, Taub saw an opportunity to revolutionize the very nature of how Americans related to the fine art market. As its chairman and founder, Taub had built Fernwood to serve as a vehicle for his vision: to democratize investment in art such that "even my secretary could someday own (shares of art) in her 401(k)." As Taub walked through the doors at Christies, he knew that in the near future, he was going to decide the path that would initially guide Fernwood toward investors. He also knew that at least in the short-term, he needed the support of the art community, and he wondered what else he could or should do to win that support.

Focuses on a major transformation of Otis Elevator's infrastructure. Led by the CEO, this transformation represents a remarkable long-term reengineering of all the processes of the firm to drive its operating costs down and service image up. The transformation is the continuation of a process that has been going on for more than 20 years.

After inheriting the leadership of their family's land and lumber companies, Matt and Kevin Hancock struggled with how to revise their internally focused governance system.

Brazil has just won a cotton case action against the U.S. cotton agriculture program at the World Trade Organization. What does this mean for future agricultural programs in the United States? For future trade policies of the United States, Brazil, and others in the global agribusiness system? The future role of the WTO? Negotiation through litigation? Developed versus developing country trade policies?

Mondavi Winery is facing a shortage of its Chardonnay wine. This shortage will disrupt its positioning in wine outlets and impact earnings. Allows students to discuss how to communicate such temporary--but financially important--shocks to the capital markets and Mondavi's other stakeholders. Mondavi's subsequent problems in meeting prior earnings forecasts also allow for a discussion of earnings guidance policies.

Paybox.net AG was the world's first mass-marketable mobile payment system. Launched in 1999 at the height of the dot-com boom, it has been steadily losing ground. The company's founder, and architect of the technology underlying Paybox, must decide if his product has a future and, if so, what the market strategy should be.

Provides background on search funds and follows two partners as they try to raise financing for a search fund.

The Valhalla Partners venture capitial firm introduced a new approach to the due-diligence process. An internal due-diligence report analyzes Telco Exchange, a startup company in the IT software space. An extended excerpt examines the trade-offs involved in the new due-diligence process and whether Valhalla should invest in Telco Exchange.

Tells the story of the Czech transition from a centrally planned to a free market economy, describing the first economic reforms, the fixed-exchange rate regime, and the voucher privatization. Also explains why, in the middle of the 1990s, the Czech Republic liberalized its capital account and how this affected the Czech banking system, leading to a massive credit boom. Explores why Ceskoslovenska Obchodni Banka (CSOB), the country's fourth largest bank, decided not to participate in the credit boom and how CSOB determined and pursued its expansion strategy. Students assume the position of Pavel Kavanek, CSOB's CEO who, in June 2000, must decide whether CSOB should acquire IPB, another large Czech bank on the brink of bankruptcy.

The purchasing manager was wondering how many bottles he should purchase in the coming year. Last year, the market had levelled off and sales predictions were difficult. On the one hand he wanted to be sure sufficient bottles were available to supply this year's sales levels, yet he also wanted to minimize year-end inventories as covered storage space for empty bottles was tight and a bottle change-over seemed possible in the next two years.