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In 2009 the management of Vale, a Brazilian diversified mining company and the largest iron ore producer in the world, was under pressure from at least two fronts. First, the emergence of China as the most important consumer of iron ore in the last few years had changed the pricing system for iron ore from long-term contracts based on negotiated "benchmark prices" to contracts based on spot prices, usually forcing mining companies to pay for shipping. Second, for Brazil's charismatic president, Lula, a former union leader, Vale's layoffs during the global financial crisis and its perceived move away from Brazil (as Vale increased its exports to China and purchased Chinese vessels to ship iron ore to Asia) were reasons to start an open campaign to pressure Vale and Agnelli to invest in integrated steel mills in Brazil. In October of 2009, the CEO of Vale, Roger Agnelli was going to meet with Lula and had to decide what to do to attenuate these political pressures. What could Agnelli do to deal with political pressures at home? Was the purchase of large vessels to ship iron ore to Asia a good decision at a time when the shipping industry had spare capacity?
Describes a potential trans-Atlantic merger between two young companies in the Internet space. VacationSpot.com, based in Seattle, and Rent-A-Holiday, based in Brussels, both offer online listings and reservations for independent leisure lodging (i.e., villas, apartments, and bed and breakfast places) around the world. Both companies were started in 1997. At the time of the case (April 1999), the two companies are world-market co-leaders and discussing a merger. While the lodging inventory of both companies is very similar, their most recent post-money valuations have a ratio of approximately 9:1. Merger negotiations have come to a standstill over the valuation issue. Both sides need to decide whether to restart negotiations and what terms to propose.
Anne Ewers, general director of Utah Opera, is awaiting the decision of the members of the board of the Utah Symphony and Utah Opera about whether to merge Utah's top two arts organizations. If the vote favors the merger, Ewers will be asked to assume the helm of the newly created organization and take responsibility for integrating the two organizations. Challenges students to consider the merits of the merger and to develop an action plan for how Ewers would integrate the two organizations, including how to design the new firm, how to manage various constituents--many of whom are upset by the announcement--and how to create a new corporate culture. Students also need to specify what Ewers would do in the first few days if the vote were to favor merging the two organizations. Teaching Purpose: To explore the human capital issues related to mergers and acquisitions.
A large diversified steel and energy firm is pressured by a corporate raider to spin off its steel business in order to increase its stock price. As an alternative to the spinoff, management proposes replacing the company's common stock with two new classes of "targeted" stock that would represent separate claims against each business segment's cash flows, allowing the stock market to value each business separately (and more accurately).
Supplements the (A) case.
Describes the evolution of USA TODAY Online, the electronic version of the newspaper, within the organizational structure of the newspaper. Describes the tensions and issues that develop and the pressure from the Online division to be spun off. At the same time, CEO Tom Curley sees a greater strategic need for integration. Poses the question of what degree or type of strategic integration is required, what degree of organizational integration this implies, and how it can be achieved.
This two-part case series describes how the option of launching USA Today was defined and evaluated by the Gannett Corp. This case supports a broad discussion of whether the concept of a national, general interest daily fits with the changing external environment and Gannett's internal resources and capabilities; it also allows specific analysis of the economics of the proposed venture.
Using Transparency to Execute Your Strategy: Open Up Your Business for Scrutiny--Laying the Groundwork for Building Sustainability into Strategyby Adam Werbach
Transparency is more than just a way to comply with legal responsibilities; it's how you attract societal resources to solve them. Sharing information openly with your constituents will open your business for ideas and innovations from every crack and crevice of your organization. By systematically measuring and reporting on your own sustainability, you will engage everyone--from your employees to your customers to your suppliers to your critics--in the process of building a truly sustainable enterprise. This chapter outlines the phases your organization must travel through to achieve greater transparency--a necessary step on the journey to building sustainability into core business strategy. This chapter was originally published as chapter 4 of "Strategy for Sustainability: A Business Manifesto."
This chapter identifies the web of relationships inherent in any business, and explains how managers can structure contracts to define and strengthen relationships by increasing predictability, allocating risk and reward, creating and retaining options, and aligning incentives.
Links two very useful pieces of management research--resource allocation processes as studied by Bowen and Burgelman and the aggregate project plan expounded by Wheelwright and Clark.
Describes how activity-based costing (ABC) should be applied with: 1) budgeted, not historical, expenses and 2) assigning the costs of capacity resources.
Describes applying activity-based costing to manage customer relationships. Links cost-to-serve to net margins earned with individual customers.
Deals with CEO Bill Foote's decision of how to deal with USG's exposure to asbestos liability. USG was the largest building materials company in the United States, with 14,000 employees and gross revenues of $3.8 billion. Although USG used asbestos in a small subset of its products (and never in its SHEETROCK), as more companies that were heavy users of asbestos went bankrupt, USG was faced with shouldering the burden of the entire building materials industry. USG was otherwise a solvent, growing company. Bankruptcy was an option, but a successful reorganization was by no means assured. How would USG keep its highly motivated (and nonunionized) workforce and continue to attract top managerial talent? Would there be any value left for the shareholders? In the Johns Manville bankruptcy, shareholder equity was wiped out entirely.
In 1988, USG was the world's largest gypsum producer and one of the world's largest building-products companies. On May 2, 1988, USG's board of directors announced a proposed leveraged recapitalization plan to thwart a hostile cash tender offer by Desert Partners. With only one week remaining before the tender offer was scheduled to expire, shareholders must decide whether to tender their shares or wait and vote in favor of the recapitalization plan.
A major challenge of creating business strategy is to develop organizational structures that will help overcome the parochialism and power of silo groups. Organizational structures and processes need to be developed that will create silo linking, whereby people can enhance cross-silo information flow and develop and implement programs across silos. This chapter discusses a variety of devices available for firms to forward silo linking, including teams, informal and formal networks, matrix organizations, and centralized marketing groups.
Briefly describes the process of case writing, the general nature of cases, and the advantages to students of learning by the case method. An approach to studying a case, individually or as a group member, for classroom discussion is outlined. Also summarizes the basic characteristics of a case discussion.
Customer intelligence-about their preferences, about their buying behavior-can help you make a number of decisions based on fact, not conventional wisdom. This chapter will show you how to analyze and interpret data you already have within your company. While internal data clearly has its limitations, it can tell you a lot about what your customers want, what they do, and how they respond to competitive threats.
Prioritizing things according to their importance or urgency is an important first step to learning the art of effective time management. This chapter helps you set, sort, and decompose goals to make better use of your time by helping to differentiate between what is urgent and what is important. Most important, the chapter demonstrates how goals can be broken down into achievable tasks and, subsequently, how to develop goals for subordinates and direct reports.
IT and IT-enabled business processes are candidates for outsourcing, which can be a valuable approach to helping mature an enterprise architecture. But a company can lose ground if outsourcing is inappropriately applied. This chapter discusses how enterprise architecture can be a guide to outsourcing decisions.
Examines how managers use, and sometimes misuse, analogical reasoning as they formulate their strategies. Suggests a process that managers can employ to use analogies productivity.
Describes the first major risk financing using catastrophe bonds. Provides a basis for discussing the securitization of insurance risks.
Supplements the (A) case.
Select your format based upon: 1) how you want to read your book, and 2) compatibility with your reading tool. To learn more about using Bookshare with your device, visit the Help Center.
Here is an overview of the specialized formats that Bookshare offers its members with links that go to the Help Center for more information.
- Bookshare Web Reader - a customized reading tool for Bookshare members offering all the features of DAISY with a single click of the "Read Now" link.
- DAISY (Digital Accessible Information System) - a digital book file format. DAISY books from Bookshare are DAISY 3.0 text files that work with just about every type of access technology that reads text. Books that contain images will have the download option of ‘DAISY Text with Images’.
- BRF (Braille Refreshable Format) - digital Braille for use with refreshable Braille devices and Braille embossers.
- MP3 (Mpeg audio layer 3) - Provides audio only with no text. These books are created with a text-to-speech engine and spoken by Kendra, a high quality synthetic voice from Ivona. Any device that supports MP3 playback is compatible.
- DAISY Audio - Similar to the Daisy 3.0 option above; however, this option uses MP3 files created with our text-to-speech engine that utilizes Ivonas Kendra voice. This format will work with Daisy Audio compatible players such as Victor Reader Stream and Read2Go.