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Toro Co. S'no Risk Program
by David E. BellToro introduced a promotion in which purchasers of their snowthrower would receive a refund if the next winter brought only modest snowfall. The principal focus of the class is to understand what the risk implications are for the customer and for the company. May be used to discuss insurance and inventory issues.
Citibank Indonesia
by Kenneth A. MerchantDescribes a dilemma faced by Citibank's country manager for Indonesia. His superiors have asked him to raise his profit goal for 1984. But to produce increased profits he would either have to reduce the amount lent at below-market rates, particularly to prime customers and government entities, or to increase the bank's sovereign risk at the time of a downturn in the Indonesian economy. The goal is to illustrate the role of country managers and some of the difficult tradeoffs they face.
Introduction to Portfolio Theory
by Andre F. PeroldIntroductory note describing the basic building blocks of Markowitz's mean-variance portfolio theory.
Health Stop Retail Medical Centers (A): Strategy
by Regina E. Herzlinger Joyce Lallman Nancy M. KaneReviews the different business models of for-profit chains that provide ambulatory health care services and asks the students to evaluate which is most likely to do good and do well. It is an effective case for introducing the framework for how to evaluate health care innovations.
Basic Ratio Analysis and Equity Valuation
by David F. HawkinsDescribes the use of common financial ratios to analyze a firm's performance and financial condition. Discusses fundamentals of equity valuation. Based on an earlier note by the same author.
Camelback Communications, Inc.
by Robin CooperCamelback Communications, Inc. has a poorly designed cost accounting system and is in the process of redesigning it. This case demonstrates how the old cost accounting system operated.
Scovill, Inc.: NuTone Housing Group
by Lourdes Ferreira Kenneth A. MerchantDescribes a conflict between the corporate controller and a division president about labor standards, which the division purposefully overstates to protect its margins. Illustrates the multiple roles of standards, and the roles of controllers and line management in resolving such conflicts.
Leckenby Co.
by Thomas T. Weeks David A. LaxThis game is a highly structured exercise in labor-management bargaining. If union and management cannot reach agreement within two days, then the union will strike. The costs of a strike are not the same for the two sides. Similarly, the cost of a settlement to management differs from its benefits to the union. Union and management players frequently feel that they are more powerful, hold out, endure a strike, and do poorly relative to other players.
Harnischfeger Corp.
by Krishna G. PalepuPresents an analysis of Harnischfeger's quality of earnings, and the investment potential of the company's stock in light of the company's turnaround strategy.
OTISLINE (A)
by F. Warren Mcfarlan Donna B. StoddardDescribes the company's use of information technology to strengthen its position in the elevator sales and service market. Also demonstrates how information technology can be used to better manage and control a large geographically dispersed service organization.
Hanson Ski Products
by Julie H. Hertenstein William J. Bruns Jr.At the end of the budget cycle, the manager must test whether plans are feasible given financing arrangements and constraints. Cash needs are great due to seasonality. Needed loans must be calculated at five separate dates, and financial position projected. This is a rewritten version of Hanson Industries (B) and (C).
Graves Industries, Inc. (A)
by Kenneth A. Merchant Joseph P. MulloyThe first in a series of cases that explores the causes and methods of fraudulent financial reporting and the lines between acceptable, unethical, and fraudulent behaviors.
Graves Industries, Inc. (B): Lohnes Marine Hardware Division
by Kenneth A. Merchant Joseph P. MulloyDescribes events occurring over a four-year period in one division of Graves Industries. The division goes through a business cycle and uses several methods of managing earnings to meet its budget targets. The purpose of the case is to allow the exploration of the causes of the unethical (or fraudulent) behaviors and ways in which they could have been prevented, or at least detected more effectively.
Graves Industries, Inc. (C): Consumer Hardware Division
by Kenneth A. Merchant Joseph P. MulloyDescribes events occurring over a three-year period in a division of Graves Industries. The division is being squeezed for profit, and managers in the division get involved in some fraudulent financial reporting schemes involving revenues and capitalization of expenses. A number of issues are raised concerning causes of the frauds and methods of preventing and/or detecting them.
Mueller-Lehmkuhl GmbH
by Dagmar Bottenbruch Robin CooperMueller-Lehmkuhl sells apparel fasteners and rents attaching machines. It views these two products as effectively a single item and prices them accordingly, the fasteners at high profit and its attaching machines at a loss. The cost system allocates the cost of the attaching machines to the fasteners. The Japanese have entered the market and found a way to unbundle the two products. As a result they are challenging the European way of doing business. The case asks the student to analyze the true cost and profitability of the products.
Codman & Shurtleff, Inc.: Planning and Control System
by Robert L. SimonsDetailed description of the planning and control systems in use at Johnson & Johnson. Focuses on the actions of managers in one subsidiary in revising budget targets. Illustrates intensive strategic planning and financial planning process in a large, decentralized company. Includes interviews with the president and senior executives concerning benefits of the system. Raises issue of the role of formal control systems in decentralized organizations.
Kansas City Zephyrs Baseball Club, Inc.
by Krishna G. Palepu Kenneth A. Merchant Joseph P. MulloyDescribes a dispute between the owners of the major league baseball teams and the players' union about the profitability of the baseball teams. The issue is important because of the ongoing collective bargaining negotiations. A consultant is brought in to decide whether a representative team, the Kansas City Zephyrs, is making or losing money. He has to settle a number of accounting disputes about roster depreciation, signing bonuses, deferred compensation, and stadium costs.
Polysar Ltd.
by Robert L. SimonsCanada's largest chemical company produces and markets butyl rubber in two divisions, each treated as a profit center. The new plant in the North American Division operates below capacity resulting in a significant volume variance and an operating loss. The European Division is at capacity and is profitable. The actions of the European Division affect the capacity utilization of the North American Division. Includes divisional financial statements and interviews with the vice-presidents of each division.
John Deere Component Works (A)
by Robert S. Kaplan Artemis MarchThe division has recognized the inadequacies of its existing, traditional cost system for estimating product costs. Describes the innovative activity-based system that was developed to more accurately trace overhead costs to individual products. Provides students with the opportunity to critique a standard cost system and to assess the characteristics of the proposed system that traces costs to production activities.
John Deere Component Works (B)
by Robert S. Kaplan Artemis MarchHaving installed an activity-based system, the division is now exploring the insight provided by that system. In particular, it is studying the economics of lot-size process planning and product mix management.
Games of Strategy: An Introduction
by Vijay KrishnaAn introduction to the formal analysis of strategic situations. Ideas of game trees, backwards induction, and dominated strategies are introduced. The methods of backwards induction to find optimal strategies is related to the method of successive eliminations of dominated strategies for games of perfect information.
Patten Corp.
by Krishna G. PalepuForbes Magazine criticized the revenue recognition policy of Patten Corp. As a result, the company's stock price dropped by a significant amount. The students are asked to discuss if the criticism by Forbes is justified, and if not, what the company should do.
United Services Automobile Association (USAA)
by John E.P. Morrison Michael R. Vitale Joyce J. ElamUnder the leadership of Robert F. McDermott, USAA has been transformed from a property and casualty insurance company with $200 million in assets in the late 1960s to a $11 billion financial services empire in 1988. The case illustrates the value of having a CEO drive a vision of how computer and communications technologies can be used within an organization. As a result of McDermott's vision and his strong support for information services planning, USAA has one of the most technologically sophisticated operations in the insurance business. Describes a number of new system initiatives that are being put in place and can be used to discuss the challenges faced by USAA to use these initiatives to increase the competitive advantage that its technological base had given them in the past. Also includes a mission statement for the Information Services Division.
Home Depot, Inc.
by Krishna G. PalepuHome Depot, founded in 1978, pioneered the warehouse retailing concept in the home center industry. The company's niche strategy resulted in rapid growth in sales. By 1986, however, the company began experiencing deteriorating profitability. Students are asked to analyze the company's performance using ratio analysis and sustainable growth framework, and to recommend a plan of action.
Texas Instruments: Cost of Quality (A)
by Robert S. Kaplan Christopher D. IttnerTexas Instruments implements a Cost of Quality (COQ) system as part of a company-wide "Total Quality Thrust." After several years of operation, group management questions whether or not the COQ system should be updated to make it more useful in identifying areas for quality improvement. The case documents the current system and asks students to analyze the role it played in the quality control process and areas in which it could be improved.