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On completion of the case study, students will understand the following learning objectives: the characteristics of quantitative easing (QE) and when it may be appropriate to implement QE; how QE differs from a conventional bond purchasing programme; the impact of direct financing of the fiscus by the central bank on its independence; how the macro-economic and political environments affect and influence national economic policy; the difference between traditional and unconventional monetary policies and potential implications for an economy like South Africa. The learnings from this case study can be used in other global economic environments, particularly in emerging markets. This case study provides valuable insights into decision-making, institutional independence, policy coordination, deficit financing, causes and consequences of price inflation, risks relating to monetary instability and the correct application of monetary policy.

After the announcement of the COVID-19-related lockdown in March 2020 and the subsequent slow-down of economic activity in South Africa, the South African Reserve Bank (SARB) had to consider appropriate macro-economic tools to ensure both price and financial stability in South Africa. The macro-economic policy tools had to be considered in light of the South African economic context, which included acknowledgement of South Africa’s debt crisis and slow economic growth. The central bank responded by introducing the following measures: reducing interest rates to a record low of 3.5% to give consumers financial relief and to promote spending in the economy; purchasing government bonds in the secondary markets to stabilise financial markets; facilitating the loan guarantee scheme that was aimed at providing financial relief to small- and medium-sized enterprises; relaxing the capital and liquidity adequacy requirements that commercial banks are required to meet; and ensuring availability of liquidity to banks through facilities such as the weekly repo auctions. However, despite introducing these interventions, the SARB faced calls from politicians, analysts and academics to do more. Various commentators argued that the SARB could introduce QE and directly finance government spending by purchasing government bonds. Some commentators argued that the reluctance of the SARB to pursue these suggestions was a result of the close alignment and relationship between the SARB and National Treasury. The dilemma faced by Governor Lesetja Kganyago of the SARB was threefold, namely, whether it was appropriate for the central bank to pursue the initiatives and, if so, whether the bank could pursue them without compromising its independence, and if the introduction of those initiatives would not adversely affect the ability of the central bank to fulfil its mandate of price stability and financial stability. In this regard, the governor and his executive team were required to consider the long-term implications of introducing the initiatives on consumer price inflation, independence of the SARB and the appropriate use of monetary policy tools to fulfil the central bank’s mandate. But the question was: What policies should the governor favour?

This case study is based on various macro-economic theories. Therefore, it would be useful to teach this case study in macro-economic courses in the following programmes: master’s in business administration, bachelor of commerce, bachelor of economic sciences and business science studies, as well as on executive education programmes, which consider macro-economic policy. In general, students who undertake economics, business and general management, finance, legal, commerce and banking studies could learn from this case study.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

After studying and analysing this case, students would be able to evaluate and understand the importance and need of an infrastructure sector in a country, its inherent risks and scope of infrastructure investment and financing in India – National Infrastructure Pipeline and the important role of Non-Banking Finance Company’s (NBFC) vis-à-vis banks in infrastructure financing in India; critically analyse and recommend alternative decisions in a business problem situation using multi-criteria decision analysis, which is a tool used for business portfolio analysis; understand and evaluate the corporate portfolio management (CPM) tools used for an optimum portfolio mix to turn around companies; identify and suggest an optimum portfolio mix to turn around a finance company using CPM assessment applied to Pidun matrix; and recommend operational and strategic levers for successful turnaround implementation by using the integrated canvas on turnaround.

On 10 May 2020, in New Delhi, India, J. Ray took charge as a full-time director of an Indian Non-Banking Finance Company – Infrastructure Finance Company (NBFC-IFC). The NBFC-IFC of the Indian Government extended long-term financial assistance to infrastructure projects in India. During the financial year (FY) 2017–2018 till FY 2019–2020, the company suffered substantial losses to the tune of US$13.7bn, with profitability experiencing a notable decline – return on assets at a negligible 0.11% and return on equity of only 0.68%.

The NBFC-IFC had a declining yield on advances at 7.05%, net interest margins (NIMs) of 2.08% against a high cost of borrowing at 7.66%, a declining loan book (by 4.35%) of US$336.27bn and a fast-deteriorating asset quality with highest ever non-performing assets (NPAs) at 19.70% of its loan book. Such financial parameters, compared with that of the industry average of banks and finance companies, meant that the NBFC-IFC Ray had taken over was fast bleeding and was on the brink of being declared a sick company. In comparison, private and other government players had profitable and much healthier financials, and Ray felt that there was a need for improvement. To make things worse, Ray got to know that the Indian Government was in the final stages of setting up a new development finance institution focused on long-term infrastructure financing in India. Ray realized the question was not only of the NBFC-IFC remaining relevant but also of its existence in the fast-evolving sector. Ray wondered what could his his integrated canvas be for a turnaround strategy that could include effective management of an optimal portfolio mix.

With a healthy capital-to-risk (weighted) assets ratio of 30.85% and a satisfactorily improved net worth of US$103.1bn, in the given Reserve Bank of India regulatory provisions for the NBFC-IFC including restrictive exposure norms and NBFC-IFC’s operational mandate prescribed by the Indian Government, Ray had to shift the product and sectorial investment of the NBFC-IFC to reduce the NPAs, increase loan book size and improve the yield of advances and its NIM to effectively turn around the company’s profitability. Ray realized that he needed his team to evaluate and select a product and sector strategy for this change.

The present case of financing investment in infrastructure is interesting for implementation in developing economies because a lack of infrastructure is a common problem and there is a necessity of achieving a more developed infrastructure system to support accelerated economic growth in these countries. This case can be used in elective courses on corporate finance strategy and corporate portfolio management for infrastructure finance companies. This case can be taught in elective courses in post-graduate and MBA programs. This case can also be included in management development programs (MDP), executive MBA programs and executive-level courses that have subjects such as corporate finance strategy, corporate portfolio management and strategy management that focus on turnaround strategies including portfolio management for banks and finance companies.

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CSS 11: Strategy.

The case introduces student to basic understanding of banking sector in Tanzania as well as the strategies and struggle to raise capital through shareholders’ funds. Application of Banking theory and Pecking order theory is evidenced from the case. The case outlines why the bank struggled to raise capital and what triggers the capital raising strategies. It also give students an opportunity to think about applicable theories of capital structure and bank capital, and strategies the bank could use to rescue its capital crunch in the future.

The case provides details of how the Capital Community Bank (CCB) raised its capital through strategic financial engineering which enabled it to raise the minimum regulatory capital required to be licensed as a financial institution unit, to a regional financial institution, to a fully fledged commercial bank. The bank started with a paid up capital of TZS 472.3m in 2002, involving four Local Government Authorities and individual investors. Capital raised to TZS 31.3bn in 2014 and down to TZS 20.6bn at the end of 2016. The minimum regulatory capital required is TZS 15bn, while paid up capital was 16.9bn. With the change of the management team in 2017, the bank is looking for avenues to raise further capital to meet the regulatory limits and continue to survive as a commercial bank, given dramatic changes in the banking sector in Tanzania.

The case is suitable for third year students in Bachelor of Commerce/Economics specializing in banking/financial services. It also suits postgraduate/master's students seeking a Postgraduate Diploma or Master of Business Administration in financial institutions/banking course.

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CSS 1: Accounting and Finance.

Corporate finance, financial management.

The case is suitable for Master's level corporate finance or financial management courses. Sufficient prior theoretical knowledge of corporate finance concepts is required.

Väätsa Agro AS is an Estonian dairy farming company. Although the company had operated successfully in the past, its ownership changed significantly in 2006 leading to changes in the company's capital structure. Starting from 2008 milk prices on global markets decreased and this trend had also affected the company's profits. As a result of these developments the company's financial situation had deteriorated since 2008 and towards the end of 2009 the company had problems in meeting its obligations. On 1 September 2009 its owners hired a consultancy firm represented by Karl Kukk to tackle the company's problems.

The case should help students to: understand the risks of LBOs; understand the importance of an appropriate capital structure of a firm; evaluate a company's financial situation and compare it with competitors; understand the alternatives facing firms in financial distress; and choose the best course of action for a distressed firm considering the pros and cons of each alternative for each stakeholder group.

Teaching notes are available; please consult your librarian for access.

The learning outcomes of this study are to gain an understanding of the banking regulations and their impact on banking performance, to understand the intermediation role of banks by channelizing depositors’ savings and providing loans to borrowers, to explain an impact of a recent regulatory change in the Indian banking that directly impacts their financial performance, to critically evaluate the different financial ratios to analyze the performance of a bank and to build a DuPont analysis framework for banks.

The case serves as a primer on banking regulations in India and provides insights into banking performance. Banking regulations play an important role in maintaining financial stability, specifically in emerging economies like India. The protagonist of the case is Salil Kumar who presented his internship project to the review committee of Stock Investment Company on April 16, 2021. However, he had to rework and present his final project within seven days on the basis of the feedback received from the committee. Kumar faced the dilemma of bringing together a comparative study across two banks, namely, Industrial Credit and Investment Corporation of India (ICICI Bank) and State Bank of India (SBI) and building a DuPont framework covering the different aspects of banking performance. The case exemplifies the intricate regulatory landscape in India within which banks operate and highlights the recent alterations introduced by the Reserve Bank of India. For instance, the framework for dealing with domestic systemically important banks (D-SIBs) was introduced in 2014 and subsequently adopted in August 2015. The D-SIB framework provides inherent guarantee to large banks such as ICICI Bank and SBI. This ensures government backup in the event of any failure, thereby securing financial stability. The case study is suitable for banking and financial accounting courses taught in postgraduate management programs. Once the case is studied, the students are expected to understand the basics of banking, regulations, impact of regulations on banking performance and financial measures.

The case provides valuable insights into the intricate dynamics of the banking industry, offering a critical perspective for analysis. A well-structured teaching note would serve as a valuable tool for instructors, allowing them to facilitate engaging classroom discussions and effectively guide students toward achieving the desired teaching objectives.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

Business Management, Global Marketing Strategy, Strategic Management, International Business, International Management.

The case is suitable for undergraduate and post-graduate business and management students. The case is based on secondary data collection and all the facts are real.

The expected learning outcomes include the selection of a foreign market; the determinants of the foreign mode of entry strategy; the process of integrating an internationalization strategy; how to choose the most appropriate partner; and the monitoring of international markets. The case provides a space to think about practice and help learners, therefore, to connect theory and practice.

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In China, supply chain finance (SCF) has gradually emerged as a new service for the retail industry. This case systematically discusses how JD conducts product design and risk control of supply chain finance and related financial services, and analyze the impact of supply chain finance on JD's retail operations. The case also analyzes the relationship between JD supply chain finance and traditional financial institutions, and explore the future development of retail supply chain finance.

Strategic change for business sustainability.

The case is targeted at the BA level and MBA level, and strategic management courses.

The case study focuses on strategic change for business sustainability in the commercial bank sector in Thailand. It describes how Siam Commercial Bank (SCB) developed and implemented strategic change to achieve business sustainability in the economic fluctuations, and the competition in the banking market. SCB is a very long established bank which held the highest market capitalization among Thai Financial Institutions, and it was on the verge of bankruptcy in the Asian financial crisis in 1997.

These include developing students' understanding of the context and practices of strategic change and the nature of theoretical traditions in the field of strategic change.

Teaching notes are available; please consult your librarian for access.

Leadership, human resource management, crisis management, change management and communication.

Executive education; postgraduate; undergraduate.

This case study describes the collapse of Satyam, a leading IT industry service provider from India. Satyam went into a crisis mode after revelation of financial fraud by its Chairman. This resulted in a crisis not just for the company, its clients and employees – but it also had the potential to shake up the entire Indian IT industry the world over, by shattering investor and client confidence in the Indian IT sector. The case provides the students with an inside view of the unfolding of events at Satyam and the people challenges that emerge in a crisis scenario. The case outlines reactions from the industry, government, clients and employees as they tried to make sense of a very chaotic situation, and its multi-level ramifications both within India and outside. The case ends with Thallapalli Hari, the Global Head of Marketing and Communication and ex-head of HR, trying to visualise and prioritise a course of action to propose to other members of the leadership team.

The key aim of this case is to provide a backdrop to the crisis, and also help students put themselves in the role of an HR crisis manager as well as portray the decision making and communication challenges that emerge in chaotic situations. The importance of an immediate and yet strategic response is emphasised and the case is a great starting point to have a discussion on the competencies and skills required in HR to lead under unusual circumstances. This case allows participants to get an in-depth understanding of the collapse of Satyam. The case also illustrates principles of leadership, change management and communication, in particular:

• Leadership: The Satyam story is an HR and leadership crisis nightmare come true. What should an HR leader do when you wake up to find your company with a ruined reputation, minimal financial capital, 53,000 employees on the payroll and more than 500 clients with pending deliverables worldwide. Where do you begin? The case illustrates a situation where immediate action is required to stop the tailspin into which the company was heading.

• Change management: The situation demanded that change be managed from a chaotic system to a stable system. The big issue though remains as to how one can get a system into a state of stability when everything is changing at the same time. Most change management plans have some stable variables, however in the case of Satyam there were multiple changes taking place simultaneously. A combination of change in leadership, client relationships, employee trust and confidence, market reactions together make for a perfect storm. Dealing with even one of these changes is a challenge for a company. In the case of Satyam, its entire existence was at stake.

• Communication: The demands for communicating effectively in a crisis situation are different than communicating under stable systems. The choice of medium, the speed of response, the content all need careful monitoring. Whereas most companies have teams that separately deal with internal and external communication, Satyam provides a unique situation where managing both effectively at the same time was critical to the future of the firm. The stakes for effective communication are much higher under the circumstances. This case can be used in organizational behaviour, human resources and corporate communications modules being taught to under-graduates, post-graduates and for executive education.

Leadership: The Satyam story is an HR and leadership crisis nightmare come true. What should an HR leader do when you wake up to find your company with a ruined reputation, minimal financial capital, 53,000 employees on the payroll and more than 500 clients with pending deliverables worldwide. Where do you begin? The case illustrates a situation where immediate action is required to stop the tailspin into which the company was heading.

Change management: The situation demanded that change be managed from a chaotic system to a stable system. The big issue though remains as to how one can get a system into a state of stability when everything is changing at the same time. Most change management plans have some stable variables, however in the case of Satyam there were multiple changes taking place simultaneously. A combination of change in leadership, client relationships, employee trust and confidence, market reactions together make for a perfect storm. Dealing with even one of these changes is a challenge for a company. In the case of Satyam, its entire existence was at stake.

Communication: The demands for communicating effectively in a crisis situation are different than communicating under stable systems. The choice of medium, the speed of response, the content all need careful monitoring. Whereas most companies have teams that separately deal with internal and external communication, Satyam provides a unique situation where managing both effectively at the same time was critical to the future of the firm. The stakes for effective communication are much higher under the circumstances. This case can be used in organizational behaviour, human resources and corporate communications modules being taught to under-graduates, post-graduates and for executive education.

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Public sector management, policy-making, sustainable development, post-Communism.

The case is designed to be used with undergraduate-level and MBA/MPA students. With undergraduate levels, the case can be used on the subject strategic management. In MBA/MPA programs, this case can be used in subjects such as strategic planning for public administration. Here, it can be stressed as being about the problems faced by a country on the long road toward democracy. Issues to be discussed in class include: environmental scanning, competitiveness, public policies and strategic agenda.

At the most general level, the case allows for the analysis and evaluation of the strategy and performance of the Albania from 1928 to 2014 along economic, political and social dimensions, using the techniques of country analysis (see Country Analysis Framework, HBS No. 389-080). Depending on time limitations and the particular objectives of the individual instructor, the case can be used to explore all phases of the nation's development or, alternatively, to focus on a specific era, such as Albania, in the way toward a free market economy. The case provides a setting in which to explore the diamond model as a tool for analyzing competitiveness and setting the economic policy agenda. In the Albania case, we highlight diamond analysis in an emerging economy. Albania also highlights the transition from a planned economy to a market economy, and the importance of a cross-border regional integration in competitiveness.

The case is written to serve a number of purposes: Understanding the problems and challenges to sustainable development, especially in a post-communist emerging economy like Albania. The transition/changes that all policymakers have to go through in their efforts for sustainable development of the country. To discuss production factors and the importance of a growth model based on the production factors.

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