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The Mercini Lady Case is a modern statement of the law on the rights of the buyer in a sale contract. The seller has to supply goods in conformity with description, of merchantable quality and fit for the stated use. These rights, the ‘implied conditions’, however, can be ousted by express terms in the contract. The Court of Appeal judgement of the UK keenly considered that the exclusion clause should be interpreted in its business sense. However, it sided with precedence established over hundred years that the exclusion clauses take away valuable rights of the buyer and must be strictly and technically constructed.

To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to review the conceptual framework that is typically covered in Intermediate 1 to respond to question 5.

This case is based on the three financial statement restatements that Weatherford International Ltd. made over an approximately 18-month period. The restatements were due to a fraud committed by manipulating the income tax accrual in the financial statements. The manipulation used was to overstate the amount of income used to calculate the dividend exclusion and then use a relatively high tax rate to calculate the resulting tax benefit. The tax rate used for the fraud was substantially more than Weatherford’s effective tax rate (ETR), which was a prominent part of the company’s strategic growth plan. The tax senior with the external auditors who reviewed the entry made for the dividend exclusion captured the inconsistency with the comment that “This [the entry] deserves a huh?” The case is intended for students in Intermediate 2, where financial statement restatements and their effect on the company’s financial statements are typically covered. During the years covered in this case, Weatherford was also under investigation for violations of the Foreign Corrupt Practices Act (FCPA). Weatherford’s FCPA violations included multiple instances of bribery, the inappropriate use of volume discounts, improper payments and kickbacks in the United Nation’s Oil for Food program. Weatherford received the eighth-largest fine in the history of FCPA violations (at that time) of $152m. Weatherford’s FCPA investigation expanded, and the company paid another $100m in fines for violations of sanctions law and export control law. This case focuses only on the fraudulent manipulation of the financial statements through the tax accrual and does not delve into the other investigations. However, the linkage between those investigations and the fraud in this case is Weatherford’s nonexistent internal controls.

This case was designed to be used in Intermediate 2 financial accounting classes to highlight financial statement restatements and review the conceptual framework and materiality. The students who used the case did not have difficulty with the tax aspect of the case. However, most of the students had taken one tax class previously or concurrently. If students have not had any exposure to tax, the instructor might want to walk students through the tax aspects of the case.

This case study aims to expect the following learning outcomes. A better understanding of the nature of a psychological contract being developed by employees in non-profit organizations, especially working in the areas of social development and the impact of this contract on employee commitment. Enhanced understanding of conflict of interest (personal versus public) in social development organizations and its implications. Identification of issues of task conflict versus interpersonal conflict and its impact on organizational functions. Identification of dynamics of exclusion of internal stakeholders from organizational strategic decision-making process along with its impact on organizational performance and sustainability. Devising a mechanism to avoid such conflicts in social development organizations, in particular, and organizations in general.

This case highlights five issues as follows: it identifies and discusses conflict of interest between privileged class possessing decision-making positions in the board of directors and implementers working at the grassroots level at ANMOL (a non-governmental organization working for poor girls education in Baluchistan-hub of China–Pakistan Economic Corridor); it discusses the basis for formulation of psychological contracts and impact of its violation on stakeholder’s commitment and motivation; it discusses the implications of difference of opinion of both stakeholders regarding organizational vision and possible drawbacks of converting task conflict into interpersonal conflict on individuals, organization and end-users; it explores implications of exclusion of key stakeholders from organizational decision-making and its impact on organizational smooth working and sustainability; and it suggests a mechanism to avoid conversion of task conflict into interpersonal conflict and smooth functioning of an organization. Hence, this case discusses theories of conflict of interest between top-leadership and workforce, psychological contract and implications of its breach on employee motivation and organizational sustainability in the context of social development organizations.

This case provides sufficient material to be discussed at master level courses (management sciences – master of business administration (MBA) level) such as human resource management (dynamics of psychological contract and conflict resolution), leadership and change management in social development organizations (social enterprises).

Teaching Notes are available for educators only.

CSS 7: Management Science.

A buyer company has an advance payment stuck with the seller company and acts cautiously in not paying further till they get control over the goods. Claiming this to be a breach, the seller terminates the contract and makes claim for the damages. The seller picks all legal points it could in the routine business practices to escape the unfortunate situation. The judgment in the Toba Trade Case gives a comprehensive view of several legal themes including, payment and delivery, variation of contract, termination, anticipatory breach, award of damages and unjust enrichment.

After completion of the case study, the students will be able to gain knowledge on public–private partnerships (PPPs) in emerging markets; understand how to apply the sensing element of the dynamic capabilities framework in analysing context, especially in emerging market context; and understand how to apply the dynamic capabilities framework to the process of developing brand equity.

On 20 March 2020, in Johannesburg South Africa, Dr Barbara Jensen Vorster, the head of corporate communications and marketing at the Gautrain Management Agency, was considering her dilemma of how to manage stakeholders at a time when the patronage guarantee was under question. The nature of the Gautrain PPP transport contract entailed a revenue guarantee that was called a patronage guarantee. How did they build their Gautrain brand equity during the Gautrain PPP patronage guarantee controversy? This case study highlights the perspectives of multiple stakeholders which places the Gautrain brand equity under strain. The Gautrain brand identity was created to project an integrated, overarching brand position for the construction project and later the operating company. The logo illustrated Africanisation, and the slogan “For People on the Move” represented a modern collaborative approach. Upholding the status of the brand is an important quest for the corporate communications and marketing team, and therefore the issue around the patronage guarantee must be addressed. This case study illustrates contrasting views about the Gautrain being elitist versus the rapid rail train enabling economic prosperity. The pro-prosperity versus pro-economic development values were at the heart of the different opinions around the patronage guarantee. Students are therefore confronted with their own values while the case study aims to drive an awareness or consciousness around these issues in an emerging market.

This case study is appropriate for advanced undergraduate and Master of Business Administration courses focused on marketing, communications and/or stakeholder management, such as in business and society courses. At both levels, the case study will be valuable in generating discussion on communications models and how to manage stakeholders ranging from government to community representatives. In courses where dynamic capabilities theory is taught, this case study will offer a specific application of this model in the context of brand communications and building brand equity in times of controversy.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

Financial Services Marketing, Financial Inclusion, Emerging Market Studies.

The case is suitable for graduate management students in courses such as general management and marketing courses. It is also suitable for a specialised rural marketing course and marketing of financial services. In business schools outside India, the case can be used in a course on marketing strategies for emerging economies. The case is suitable for executive development programmes for the areas pertaining to rural banking, marketing of banking services and financial inclusion programmes.

The case analyses the financial inclusion initiative by Odisha Gramya Bank, a regional rural bank set up after amalgamation of three banks in the state of Orissa, India. The topic of financial inclusion has been the attraction from bankers, policymakers and academia in light of linkage between formal financial system and inclusive growth. To harness the fortunes at the bottom of pyramid, the case looks into the development of financial inclusion, business strategies and strategies for various customer segments.

To introduce students to analyse and compare various financial inclusion options. The case is useful to comprehend the various methods of financial inclusion. To analyse the evolution of regional rural banks and Odisha Gramya Bank after its amalgamation. To appreciate the issues faced by Odisha Gramya Bank. To understand various market segment and to evaluate its potential. To suggest appropriate strategies for each market segment. To appreciate how technology can be harnessed for business correspondents. To recommend the roadmap for financial inclusion to Mr Sidharthan, Chairman, Odisha Gramya Bank.

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 8: Marketing.

After working through and discussing this case, learners should be able to:1. evaluate the financial condition of Ellerine Holdings Limited (EHL) at the time of the merger proposal and use it to make inferences about the company’s ability, at that time, to function effectively as a going concern;2. identify the conditions within EHL and in the operating environment that may have made it necessary for EHL to seek to change its business strategy;3. determine whether the acquisition price offered to EHL by African Bank Investments Limited (ABIL) was fair; and4. compute the value accretion/loss expected to be realised by the existing shareholders of ABIL and EHL under the merger proposal.

This case situates the directors of Ellerine Holdings, a furniture retail company that merged with African Bank Limited in 2007, reflecting on the events that led up to both entities being placed into business rescue in 2014 and asking whether the merger was the cause of the demise. If they had chosen an alternative partner, would the results have been different?

Masters Level students – MBA or Masters in Finance.

For instructors.The following material has been provided with the teaching note for instructors:- Teaching Note.- Johannesburg Stock Exchange News System (SENS) extract of related original filing.For students.The following supplementary material has been provided to accompany the case:- Financial information on the two companies (Excel spreadsheet).- Johannesburg SENS extract of related original filing.

CSS 1: Accounting and Finance.

Infrastructure finance.

II MBA/Executive MBA (Project Finance, Infrastructure Finance).

It is generally believed that the economy of India is on the threshold of achieving significant growth in the coming years. The availability of adequate infrastructure facility will play a key role in realizing this growth potential. To accelerate the process of creating infrastructure capacity, the Government of India has opened up many infrastructure sectors for private sector investment. Creation of international standard airport facilities is an important component of such new infrastructure creation. This case study presents the initial development and financing closure of Bengaluru International Airport Limited (BIAL), the first major private sector airport in India. In retrospect, it is generally felt that BIAL was an important milestone in the privatization of airports in India. The blueprint for the greenfield PPP airport in Hyderabad was closely modelled on the BIAL project. The experience gained in the development of BIAL also played a major role in subsequent brownfield PPP airport expansion projects in Mumbai and Delhi.

The goal of this case study is to illustrate the complexities that exist in the process of infrastructure development and financing. This following are the expected learning outcomes:

• The importance of using an appropriate project structure.

• The prevalence of early returns to project sponsors as compared to lenders.

• The process of achieving financial closure.

• Analyzing project risks and returns.

The importance of using an appropriate project structure.

The prevalence of early returns to project sponsors as compared to lenders.

The process of achieving financial closure.

Analyzing project risks and returns.

Teaching notes.

Exchanges are designed to be default tolerant. The exchange functions as a counter-party in all transactions. A system of margining ensures that a transaction is always consummated even if either the buyer or the seller fails to honour his/her commitment. Investigations on the payment crisis at the National Spot Exchange Limited (NSEL) in 2013 involving Rs. 5,600 crore revealed that the reasons for the crisis lay in the hubris of the promoters, connivance and collusion of the independent and institutional directors on the board of NSEL, benevolence of the government and ambivalence of the regulator. The failure raises serious concerns about governance at all levels in the country. Fundamental principles of governance were given a short shrift.

After completion of this case study, students will be able to describe the funding path for start-ups, including the amounts and profiles of the usual investors or sources of funds, according to the moment in their life cycle and the characteristics of the initiative; highlight the challenges faced by start-up founders in weak entrepreneurial ecosystems and risky institutional environments; and argue in favor of or against different modes and typical instruments of venture capital (VC) investments in the early stages of new businesses, each of them different regarding dilutions, valuation potential, depth of negotiations and term sheets.

Asistensi, a technology and telemedicine start-up founded in 2020 in Venezuela by three entrepreneurs (Andrés Simón González-Silén, Luis Enrique Velásquez and Armando Baquero), raised US$3m in less than a year in a seed round in which it attracted the attention of professional VC funds such as Mountain Nazca, Alma Mundi Ventures and 468 Capital. Everything was set for launching operations in Mexico and the Dominican Republic in April 2021. However, a series of difficulties led to higher expenditure than planned, prompting the entrepreneurs to seek additional capital. The decision on the financial instrument to be associated with the potential valuation and shareholder dilution figures has been posed as a dilemma.

The case study focuses on understanding the start-up financing process. It can be used effectively in management- and finance-related subjects for graduate students taking introductory topics in entrepreneurship and entrepreneurial finance, as well as introductory executive education courses in entrepreneurship, entrepreneurial finance and VC.

Teaching notes are available for educators only.

CSS3: Entrepreneurship