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Jefferson County was in a financial crisis as the commissioners faced a decision concerning whether the County should file for bankruptcy. The County was under an EPA mandate to update an outdated and overrunning sewer system. Estimates to do the work ranged from $250 million to $1.2 billion. The situation led to graft, corruption, bribery and illegal activities. More than 20 people were prosecuted in association with the illegal activities involved in financing and construction of the sewer system and four of the five commissioners were sentenced for their involvement in the corruption. Five new commissioners were elected and had to determine what to do after the down-grade of the County's bonds and warrants; the reduced revenues; and the corruption had put the County in a situation where funds were not available to continue to operate the County and provide services to its citizens. Should they declare bankruptcy or choose other paths open to them?

Data sources – this case is based on field research and interviews with a commissioner, court documents and from many other public sources. Extent of disguise – the case is not disguised.

The case can be used in graduate or upper division undergraduate courses in accounting, strategy, public administration or finance. There are several topics in the case that could be addressed: governance; economics, government and political issues, ethics, accounting, financial instruments, and strategy.

Corporate finance, strategic financial management, financial innovation and financial engineering.

The case is suitable for graduate level management students.

In early April 2011, Mr Ramakrishnan, the CFO of Tata Power Ltd and members of his team were busy re-evaluating fundraising options for financing Tata Power's capital expenditure requirements, for refinancing of debt, for working capital related to current projects and for liquidity to support potential acquisition bids. The team had the task of evaluating different innovative funding options as the challenge was to strike a fine balance between maintaining the owners' equity without dilution of control and avoiding any adverse impact on credit rating that could increase the cost of capital; these constraints reduced flexibility for fund raising. Keeping in mind the global market scenario and estimating the investor appetite were factors critical to the structuring of a funding instrument.

The case will help students to be comfortable in thinking about evaluating markets, financial instruments and weigh rating considerations and regulatory constraints for taking capital structure decisions.

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

The learning outcomes are as follows: to teach the concept of mutual fund as whole, how mutual fund works and who are the investors; discuss how any asset management company can work and what is their investment process; discuss how mutual funds are affected by changes in economic outlook/macro-economic variables; discuss the alternative risk-adjusted measures of performance evaluation, such as the Sharpe ratio, Treynor, Jensen’s alpha and measure of risk-adjusted performance; and discuss which index to use as a benchmark and how to improve funds’ performance.

In April 2019, Khaldoon Bin latif, Chief Executive Officer (CEO) of Faysal Asset Management, reflected on the changes that had occurred during his two and a half years at Faysal. He was quite pleased with the recent performance of Faysal Funds and the company’s relationship-oriented approach to money management for individuals with high net worth. Yet, he wanted to ensure that both the investment-process and performance-evaluation measures that he had implemented at Faysal would continue to provide superior returns. Latif also wanted Faysal to outperform the relevant indices, not only on an absolute basis, but also on a risk-adjusted basis. He pondered which indices and models Faysal should use in the future based on their performance.

Undergraduate/graduate

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.

In mid-February 2009, amid the global financial crisis, the news was grim. The U.S. economy had been in recession since December 2007. If the downturn lasted into early spring, it would become America's longest postwar recession. The economy had shed 3.5 million jobs over the previous 12 months, the worst 12-month period on record. Bank lending was plummeting; the few banks with funds available were holding onto them. With this massive shift into liquid assets (cash and cash equivalents) and away from lending of any sort (even for productive uses or, in many cases, the working capital firms needed to survive), the economy would likely grind to a halt. On this brisk mid-February day in Washington, Timothy Geithner and Ben Bernanke rolled up their sleeves and reevaluated their plans to address the nearly impossible task of righting the ship. In terms of monetary and fiscal policy, were they doing all they could to halt this epic slide? Were they doing too much?

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.

In 2015, Toyota proposed to issue a separate class of shares to attract long term individual Japanese shareholders aligned with the company's long-term R&D programmes. The distinguishing feature of these shares was the exit option with no loss of capital. The proposal was not received well by US based institutional shareholders of the company and proxy. A major proxy adviser recommended voting against the proposal. The case provides an opportunity to discuss security design issues and their implications for corporate governance.

At what point in the tepid recovery from the global financial crisis should the Fed take a major step in normalizing U.S. monetary policy by greatly reducing its holdings of U.S. Treasury bonds? Federal Reserve Board Chairman Ben Bernanke faced this question in Spring 2012, even as he was concerned that the U.S. economy was on weaker footing than many believed. Suitable for both core and elective MBA courses in global financial markets and international finance, this case examines the risks associated with a policy some would consider monetizing the budget deficit. Students consider the factors behind the current and prospective levels of U.S. long-term interest rates from Bernanke's perspective.

Paytm has become a popular method to make cashless payments in India. Be it for transferring funds through mobile numbers, online payment of utility bills, cabs, etc. or payment to offline merchants. This case elaborates on the position Paytm has attained in the market thus far and its ambitious future growth plans. It describes the strategies being adopted by Paytm’s competitors and the new developments in the payments business in India. The case finally narrates the challenges the Fintech firm faces at present and poses a pertinent question: is Paytm on a growth trajectory or committing suicide by leaping so fast?

The case collates secondary data pertaining to Paytm’s current position and recent developments in the Indian mobile wallet industry. It presents the facts and data published on websites, newspapers, and magazines in the form of a case study.

This case can be applied to strategic management at under graduate and introductory level in post-graduate marketing of digital products.

In January 2011, during the World Economic Forum's annual meeting in Davos, Switzerland, Jason Sterling, a hedge fund manager, was conducting online research to see if he could trade on any newsworthy information emerging from the summit. Sterling's fund traded primarily in sovereign debt, and he needed to figure out if European leaders would be able to come up with a viable solution to the crisis or whether the debt crisis would lead to the default of several European nations. He knew that if a solution was not found in the coming weeks, the sovereign debt markets could be thrown into turmoil.

Industrial Marketing.

MBA students and participants of MDPs.

It involves marketing of air compressors in particular and industrial equipment in general. It tries to analyse strategies on the framework of market leader strategies to facilitate growth in a challenging business environment in view of the strengths and weaknesses of the firm. It aims to identify the organizational and business model changes that may be required to be implemented in transforming a firm from a marketer of capital goods to a marketer of projects.

To help students/participants evaluate and select marketing strategies for a market leader under challenging business environments as well as identify important organizational and business model changes involved in transition of any firm from selling products to selling projects.

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.