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A small start-up company must make additional investments to maximize its firm value. But the company owner will not make this investment unless she can renegotiate outstanding debt claims. Solving this “debt overhang” problem through negotiation is the focus of the case. In this context, students are exposed to a variety of issues: the nature of financial claims, bargaining and negotiation fundamentals, and agency costs of debt.

Entrepreneurship, Corporate sustainability, CSR, Supply chain.

Master's courses: Entrepreneurship, Strategic management.

In 2002, potential risks deriving from emerging normative demands in the CSR debate prompted Axel Springer (AS) to rethink their supply chain strategy for Russian wood. Being one of the first movers in CSR in the publishing business, AS realized that current practices could spark future public discussion that might put pressure on AS, a key player in these supply chains. In early 2002, AS and one of their main suppliers, Stora Enso, started a joint initiative to redesign the supply chain processes in two of the major Russian logging regions to improve their social and ecological performance. Sometime later, other major players in the publishing sector as well as critical reviewers from several non-governmental organizations (NGOs) were invited to participate in the design of the new voluntary sustainability initiative called “Tikhvin Chalna project”, the second phase of which was accomplished by the end of 2006.

Learn that organizations (specifically high-brand owners) are responsible for practices within their entire supply chains (social as well as environmental performance).

Explore proactive corporate sustainability, CSR strategies are market but also institutional driven; Strategizing involves forming and transforming the rules, norms and standard models of customers as well as institutions such as NGOs or governmental bodies. Whether the initiator of such strategy is successful in increasing or manipulating demands is dependent on its resources and capabilities as well as on its network position. The case supports students in understanding resources being used to successfully transform or create institutional arrangements.

Discover that the value of a business' relationships and its network position.

Teaching note, Video files

This case study is based on an MBA team's experience in analyzing a scrap metal recycling business and developing recommendations to improve the performance of the business. The company, Steel City Salvage, has three locations which are managed as separate business entities. The case focuses on the business repercussions of the poor integration across the three locations, and the team's choice of options to improve the integration. These options include changes in organizational structure, processes or culture/leadership style. The case allows students to see how their own experience and education may bias their selection of a preferred option.

Management of Innovation and Technology/Management Information Systems.

Information Systems.

SER (Sugar, Energy & Rum) was a company belonging to the Grupo Pellas Corporation. The company operated in four countries, had six subsidiaries, employed more than 25,000 people, had more than 43,500 manzanas of sugarcane crops in Nicaragua alone and had global annual sales of more than US$400m. In 2008, due to the negative effects of the crisis on the company’s business model (increasing costs due to higher prices for fuel and decreasing income because of low international sugar prices), the company decided to implement a business intelligence (BI) system to optimize its processes to reduce costs and increase productivity. At that time, the company had more than 100 years of data, information systems that fed into their main business processes and a culture that appreciated data as the basis for decision-making. However, there were inconsistencies among data systems, users received highly complex reports in Excel or green screens and process monitoring happened long after the tasks had been completed. As a response, SER used extract–transform–load to collect and clean data that would be used in the BI system (the case leaves the questions regarding the systems selection unsolved for discussion). Based on their business model, they selected the most critical processes and defined key performance indicators to measure the impact of changes in those processes. They considered graphic design as a tool to make the system more accepted by users and worked together with users so that reports only offered the most important information. The result was improved costs and productivity. They decreased manual time spent by 14 per cent, automated time spent by 10 per cent, and eliminated 1,556 hours of dead time for equipment in the field, which allowed them to increase productivity by US$1m just in sugar. They saved 20,000 trips from the fields to the factories, which represented more than US$1m in savings by monitoring the weight of wagons loaded with sugarcane in real time. They improved client perceptions about the company both locally and internationally by implementing a sugar traceability system.

The case “Business Intelligence at the Grupo Pellas SER Company” has as its objective to respond to the question: How does a company make its BI system implementation successful? As such, the case: Discusses what a BI system is and what it provides to a business analyses challenges, benefits and context when implementing a BI system; analyses success factors and recommendations in the BI system implementation process; analyses the process of implementing a BI and highlights the importance of the system priority questions and technological alternatives.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy

During December 2012, Jorge Paulo Lemann, a co-founder and partner at 3G, proposed to Warren Buffett that 3G and Berkshire Hathaway acquire H. J. Heinz Company. Lemann and Buffett, who had known each other for years, jointly decided that the Heinz turnaround had been successful and that there was significant potential for continued global growth. 3G informed Heinz CEO William Johnson that it and Berkshire Hathaway were interested in jointly acquiring his company. Johnson then presented the investors' offer of $70.00 per share of outstanding common stock to the Heinz board.

After much discussion, the Heinz board and its advisors informed 3G that without better financial terms they would not continue to discuss the possibility of an acquisition. Two days later, 3G and Berkshire Hathaway returned with a revised proposal of $72.50 per share, for a total transaction value of $28 billion (including Heinz's outstanding debt).

Following a forty-day “go-shop” period, Heinz, 3G, and Berkshire Hathaway agreed to sign the deal. But was this, in fact, a fair deal? And what might be the future consequences for shareholders, management, employees, and citizens of Pittsburgh, the location of the company's headquarters? Last, what was the role of activist investors in bringing Heinz to this deal stage?

After reading and analyzing the case, students will be able to:

• Understand the influence of investment bankers on M&A transactions

• Consider synergies that drive M&A

• Consider the role of activist investors in corporate strategic decision-making

• Understand the impact of M&A on key corporate stakeholders

• Apply core valuation techniques to support M&A valuation

Understand the influence of investment bankers on M&A transactions

Consider synergies that drive M&A

Consider the role of activist investors in corporate strategic decision-making

Understand the impact of M&A on key corporate stakeholders

Apply core valuation techniques to support M&A valuation

The case describes the competitive advantages that U.S. farmers enjoy in the global cotton industry and the subsidies they receive from the U.S. federal government. Arguments for and against the subsidies are presented in the context of global competition. The case includes the data needed to estimate a supply curve for 2004 cotton production and predict the average 2004 cotton price using total cotton consumption for 2004. Students can also estimate the result of eliminating the U.S. cotton subsidies on the average 2004 cotton price.

Students have the opportunity to learn about the history and structure of U.S. cotton subsidies as well as their impact on global cotton prices. Students also are able to practice building and interpreting an industry supply curve.

A Wall Street Journal article states, “At PepsiCo, Inc., cola was king, but it is quietly being dethroned.” PepsiCo is composed of three lines of business: soft drinks, restaurants, and snack foods. Using data from comparable pure-play companies, the student is asked to compute divisional costs of capital and see if they can be reconciled with the company's reported cost of capital, 11%.

The case could be used in many courses in the field of business and management, for example, environmental management, strategic management, corporate strategy, green or sustainable marketing and international business.

The case has a difficulty level of being appropriate for undergraduate and postgraduate students. However, in utilizing this case as a required component of business courses at various levels, the authors have discovered a different approaching between undergraduate students and postgraduate students in answering those discussion questions. Undergraduate students have tended to focus on the more conceptual and basic approaching based on understanding the main concepts of environmental upgrading. Postgraduate students have a better application and critical thinking based on a better understanding of the fundamental knowledge and concepts. Accordingly, the case has been developed in a manner that will allow students to realize the importance of environmental issues and analyze the company’s main issues as detailed in the case and then suggest opinions and any ideas for the strategy the company should consider and pursue in future. Furthermore, students should identify several points on the company’s chosen strategies and actions for environmental upgrading.

This case is written in the form of an interview with the Chairman and chief executive officer of VIYELLATEX Group, one of the leading firms which embarked upon environmental upgrading in the apparel industry of Bangladesh and in the world. This is an analytical case and not a decision-making one. The main theme of the case revolves around analyzing what drove VIYELLATEX Group to upgrade environmentally, how the group upgraded, the challenges that VIYELLATEX Group has faced and outcomes of environmental upgrading. Environmental upgrading implies an improvement in environmental performance through changes in technological, social and organizational processes and avoiding or reducing the environmental impacts of businesses. In summary, the VIYELLATEX case is an investigation of a leading company in Bangladesh to implement environmental standards and management practices being part of the apparel global apparel industry governed by global retailers and brand marketers.

The learning outcomes are understanding of “corporate sustainability” as a corporate social responsibility of business philosophy, understanding of key features of the apparel industry in Bangladesh, understanding of the main issues and challenges faced by the apparel firms (suppliers) involved in international business regarding environmental upgrading, understanding of the relationship with primary stakeholders, in particular buyers of apparel firm (defining stakeholders and how to cooperate with stakeholders) and understanding of the environmental upgrading in terms of its drivers, processes and outcomes.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 4 Environmental Management.

Social enterprise.

This case study can be used on modules on social enterprise (SE) and international business for undergraduate and postgraduate studies.

Arusha Women Entrepreneur (AWE) is a SE established in 2008 in Tanzania that employs low-income women from peri-urban Arusha and provides technical and management skills training to smallholder farmers. AWE has created a value supply chain from the production and marketing of aflatoxin-free, natural peanut butter, having a strong vision of delivering social and development benefits for smallholder peanut farmers and unemployed women.

This case is the basis for class discussion rather than for illustrating either effective or ineffective handling of a business. From this case, students will learn about the emergence and development of SEs and the challenges they encounter to grow.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS: 3: Entrepreneurship.

A married couple who have a successful industrial B2B business evaluate whether or not to sell the business to two of their offspring, who are both entrepreneurial MBA graduates. Complicating factors include the fact that the sale price and structure need to finance the couple's retirement and give fair inheritance treatment to the remaining siblings. In addition, the father has had some health issues and the business is doing well, so there is a lot of forward momentum to sell to the next generation

Evaluate whether or not, and how, to keep a business founded and run by entrepreneurs as a family business into the sibling generation. Explore “escalation of commitment” and how it influences decisions to keep the business in the family or not.