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1 – 3 of 3Michael J. Schill and Elizabeth Shumadine
This case examines the April 2007 decision of British music company EMI to suspend its annual dividend as the company struggled to respond to the effect of digital audio…
Abstract
This case examines the April 2007 decision of British music company EMI to suspend its annual dividend as the company struggled to respond to the effect of digital audio distribution on its core business. The EMI case is intended to serve as an engaging introduction to corporate financial policy and themes in managing the right side of the balance sheet. The case contrasts EMI's storied success with artists such as the Beatles, the Beach Boys, Pink Floyd, and Norah Jones with its recent inability to succeed in financial markets. In light of takeover threats and restructuring costs, EMI's CFO Martin Stewart must recommend EMI's dividend policy.
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Abdul Rehman Shaikh and Asad Ali Qazi
To understand the strategic importance of location selection within the organization. To analyze the constraints in decision-making for selection of location. To analyze the…
Abstract
Learning outcomes
To understand the strategic importance of location selection within the organization. To analyze the constraints in decision-making for selection of location. To analyze the alternate options for a location selection. To understand the usage of the factor rating method.
Case overview/synopsis
Due to a countrywide anti-encroachment drive, Mr Mughal loses his shop. He had just received a notice that his shop including those of others near him was established on one of the amenity plots. The structure was declared as illegal and was to be demolished in 24 h. He had to vacate the shop and his display center to avoid the loss of his items. He along with other shop owners approached to Supreme Court of Pakistan (SCP) to stop this demolishing act and to prove that these shops belonged to them for decades and that they had already paid the price of shops at that time. However, the SCP rejected their appeal straightforward and the anti-encroachment drive was carried out. Now, Mr Mughal had to find out an alternate location to establish his display center and to resume his business operations.
Complexity academic level
Undergraduate.
Supplementary materials
Teaching Notes are available for educators only.
Subject code
CSS 9: Operations and logistics.
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This case covers the scandal that occurred in 2008 at Société Générale when one trader, Jérôme Kerviel, lost the prominent French bank nearly €5 billion through his unauthorized…
Abstract
This case covers the scandal that occurred in 2008 at Société Générale when one trader, Jérôme Kerviel, lost the prominent French bank nearly €5 billion through his unauthorized trading. The case describes Kerviel’s schemes as well as SocGen’s internal monitoring and reporting processes, organizational structures, and culture so that students reading the case can identify and discuss the shortcomings of the firm’s risk management practices. The case and epilogue also describe the French government’s and Finance Minister Christine Lagarde’s reactions to the scandal (e.g., imposition of a €4 million fine and increased regulations), prompting students to consider the role of government in overseeing that healthy risk management practices are followed in key industries (such as banking) that are highly entwined with entire economies. Finally, the case encourages students—during class discussion—to critically consider whether it is truly possible for one rogue trader to act alone, which elements in a work environment enable or even encourage risky behavior, and who should be held accountable when such scandals occur. Interestingly, this case highlights a story that is not unique. Prior to Kerviel’s transgressions were the similar scandals of Nick Leeson at Barings Bank and Toshihide Iguchi at Daiwa Bank, yet history has repeated itself. This case gives students a vivid example of the dangers of internal, self-inflicted risk on organizations, and it opens a discussion on how to avoid it.
After completing this case, students will be able to:
Identify shortcomings in a firm’s risk management practices (i.e., processes, systems, structures)
Evaluate the role and interests of governments as well as peer firms in overseeing healthy risk management practices in an industry
Understand the dangers of self-inflicted risk and consider the elements in an organization (e.g., leadership, compensation structure, incentives, recruiting) that impact its risk environment
Identify shortcomings in a firm’s risk management practices (i.e., processes, systems, structures)
Evaluate the role and interests of governments as well as peer firms in overseeing healthy risk management practices in an industry
Understand the dangers of self-inflicted risk and consider the elements in an organization (e.g., leadership, compensation structure, incentives, recruiting) that impact its risk environment
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