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Development of legitimate teaching cases demands cases be factual, that is that they use “real people, real companies, real situations,” and, usually, present time. Rarely, do cases deal with historical happenings in which lives, as well as fortunes, could be lost to achieve desired ends. History provides rich material on which to build teaching cases with the added advantage of acquainting students with the past and the influence the past has in shaping the future. Answers to the question of “Why use historical teaching cases” are related to the more general question of “Why study history.” Both questions are addressed.

The essence of discounted cash flow valuation is simple; the asset is worth the expected cash flows it will generate, discounted to the reference date for the valuation exercise (normally, the day of the calculation). A survey article was written in Parker (1968), where it was stated that the earliest interest rate tables (use to discount value to the present) dated back to 1340. Works from Boulding (1935) and Keynes (1936) derived the IRR (Internal Rate of Return) for an investment. Samuelson (1937) compared the IRR and NPV (Net Present Value) approaches, arguing that rational investors should maximize NPV and not IRR. The previously mentioned works and the publication of Joel Dean’s reference book (Dean, 1951) on capital budgeting set the basis for the widespread use of the discounted cash flow approach into all business areas, aided by developments in portfolio theory. Nowadays, probably the model with more widespread use is the FCFE/FCFF (Free Cash Flow to Equity and Free Cash Flow to Firm) model. For simplification purposes, we will focus on the FCFE model, which basically is the FCF model’s version for the potential dividends. The focus is to value the business based on its dividends (potential or real), and thus care must be taken in order not to double count cash flows (this matter was treated in this case) and to assess what use is given to that excess cash flow – if it is invested wisely, what returns will come of them, how it is accounted for, etc. (Damodaran, 2006). The bridge to the FCFF model is straightforward; the FCFF includes FCFE and added cash that is owed to debtholders. References: Parker, R.H. (1968). “Discounted Cash Flow in Historical Perspective”, Journal of Accounting Research, v6, pp58-71. Boulding, K.E. (1935). “The Theory of a Single Investment”, Quarterly Journal of Economics, v49, pp479-494. Keynes, J. M. (1936). “The General Theory of Employment”, Macmillan, London. Samuelson, P. (1937). “Some Aspects of the Pure Theory of Capital”, Quarterly Journal of Economics, v51, pp. 469–496. Dean, Joel. (1951). “Capital Budgeting”, Columbia University Press, New York. Damodaran, A. (2006). “Damodaran on Valuation”, Second Edition, John Wiley and Sons, New York.

All information is taken from public sources and with consented company interviews.

Opportunities for value creation may be found in awkward and difficult circumstances. Good strategic thinking and ability to act swiftly are usually crucial to be able to take advantage of such tough environments. Amidst a country-wide economic crisis and general disbelief, José de Mello Group (JMG) saw one of its main assets’ (Brisa Highways) market value tumble down to unforeseen figures and was forced to act on it. Brisa’s main partners were eager in overpowering JMG’s control of the company, and outside pressure from Deutsche Bank was rising, due to the use of Brisa’s shares as collateral. JMG would have to revise its strategy and see if Brisa was worth fighting for; the market implicit assessment about the company’s prospects was very penalizing, but JMG’s predictions on Brisa’s future performance indicated that this could be an investment opportunity. Would it be wise to bet against the market?

This study is excellent for finance and strategy courses, at both undergraduate and graduate levels. Company valuation and corporate strategy are required.

Entrepreneurship.

First year undergraduate students in business and management.

“The Misadventures of Amy and Azi” case presents a brief historical perspective of two partners' venture into the aerobic and fitness industry. The case discusses the partners' foray into the business world armed with great determination and a one year business plan but without proper understanding of the operational requirements of running a business. Though successful in the launching of the first studio, the initial success had blinded the vision of one of the partners, Azi who wanted to open another branch quickly. After a few months of operation, they realized that the second studio was a failure and had sapped the profit from the first centre. To make matter worse, the two partners are stuck with the second studio and have to find another premise for the first studio due to short-sightedness when signing the rental agreement.

The case study enables the students to: understand the current business environment of fitness industry in Malaysia, appreciate the need for proper planning and control in starting a business, to be aware of the importance of understanding legal implications in starting a business, the need to conduct proper market research before starting and to understand multi-cultural and multi-religion issues in Malaysia.

Teaching note.

The subject area is retailing in the Indian business context.

The case is suitable for an MBA course on retail marketing. Positioning is that of an advanced elective, trying to educate, apply and synthesize the facets of learning, thinking and assimilating concepts with practicalities.

The case elucidates the trials and tribulations of Bharat Bazar, one of the top contenders in the Indian retail scene. It explores the journey of brand making and customer patronage. Under consideration is a set of options for the retailer's next stage of growth. While the decisions are not to be mutually exclusive, it is clear that the firm has neither the capacity to scale up without proper locations nor unlimited management resources for economic viability. The retailer naturally has to choose the best direction possible and dedicate all efforts to bring the firm to the next level of growth. The strategy has to be robust in any case.

The case will help students to: appreciate Indian macro retail variables; analyse business decisions of a retailer based on location, merchandise, and profitability; and explore future strategy options from the growth perspective as well as a socially responsible player.

Socially, the case is nourishing and enriching as it connotes not only a wealth creation angle, but also a green and efficient supply chain one. Retailers must cater for the choice pattern of the society, whether essential or non essential items of consumption.

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

Discusses the challenges that internal departments face as organizations grow and expand. The Field Museum in Chicago, Illinois, grew significantly over a short period of time, creating considerable problems in the finance department, as staff and systems failed to keep pace with the evolving demands placed by the museum departments. These problems resulted in outdated policies and procedures, unhappy users, and frustrated employees. The finance department needed big changes but had to make them while maintaining vital functions, improving morale, and instituting new policies and procedures. Discusses several key nonprofit management issues, including change management, the role of leadership in a crisis, the challenge of informal personnel networks and knowledge management, and key financial issues facing nonprofit organizations.

This case, “One Mission, Multiple Roads: Aravind Eyecare System in 2009” is a sequel to the earlier case, “Aravind Eyecare System: Giving Them the Most Precious Gift” (BP 0299). It describes the new challenges facing AECS in 2009. It presents the strategic choices facing a mission driven organization like AECS. For its future growth it had the option of several paths. Following any of these paths would not dilute its mission and yet it could not pursue all of them at the same time. It would have to prioritize them. The case encourages participants to develop criteria for this prioritization.

This case examines the formation of an alliance between Fiat and Chrysler during the height of the financial crisis as a mechanism to save Chrysler from liquidation. The case traces the events leading up to the alliance, discusses the early stage issues with which the partners have to deal, addresses some of the governance issues, and examines the past merger between Chrysler and Daimler that ended in a failure. The case presents a normative approach to alliance management and conjectures about the success of the Fiat-Chrysler alliance. We address whether Chrysler is a suitable partner and whether there is a strong enough rationale for the alliance and whether the two partners are compatible. Finally, the case explores the lessons learned and the cautions that might derail the alliance.

The case describes the policies followed by the Government of India to attract private investments for Oil & Gas exploration. This case is based around observations made by the Comptroller and Auditor General of India on some of the petroleum sharing contracts and the remedial measures suggested by a committee appointed by the Government. The case describes how such contracts are structured elsewhere and raises issue about how such contracts can be structured and managed by the state.

Human Resource Management and Public Sector Management.

The target audiences for the case study are BSc, MSc and MBA students and management trainees and executives who are interested in learning the human resource (HR) practices, policies and strategies adopted by the world’s largest commercial employer to ensure complete satisfaction and contentment of their employees and their employee’s family which, in turn, motivates them to contribute more efficiently and effectively for the organisation. Even senior management teams could be targeted in executive education programmes as this case discusses time-tested HR practices, policies and strategies which have been sparsely discussed so far and hence can be expected to provide insights to senior corporate managers.

India has and is undergoing sweeping economic changes lately. There are several organisations that have supported this positive change. Of these, one such organisation, which shouldered the infrastructural burden of the transportation sector in India’s growth story, was the 160-year-old Indian Railways (IR), the world’s largest commercial employer. IR’s profit over the past few years was a far cry from its loss-making days, which tempted the government of India to consider privatisation in 2001. The transformational turnaround would not have been possible but for IR’s employees. After celebrating IR’s 160th anniversary in 2013, the case organisation wished to revisit its HR practices to understand its recent economic transformations and to strategise how they can improve and sustain maximum efficiency in future. The objective of this case study is to understand the “people side” of IR by explaining its current HR practices and to investigate and identify changes over the years so that changes then can be implemented in the context of HR practices for the future. Hence, the case attempts to explain the role of HR management in IR’s turnaround strategies. Resistance exhibited by IR staff towards its recent initiative of enterprise resource planning (ERP) implementation across India due to fear of job losses and insecurity is also discussed in the case. Teaching note for this case study explains existing people management frameworks published in the research literature to class participants by applying it to the case company. In addition, the teaching note also discusses how chief personnel officers (CPOs) of IR can pursue the change initiatives among the employees with least resistance. Changes/initiatives that can be imbibed by the CPOs in the existing HR practices to overcome the resistance exerted by the employees and to improve the existing system are also discussed.

This case study’s primary objective is to provide a comprehensive understanding of the HR practices being followed in IR, the world’s largest commercial employer. The case also attempts to assess the ERP system initiative by IR and analyse how it can be imbibed into the existing IR’s HR system. In short, the case study attempts to answer the following assignment questions which form the learning objectives of this case study: What are the HR practices that are being followed in the world’s largest commercial employer? How are the HR practices followed helpful in the retention of employees? How can IR pursue the change initiatives, especially ERP implementation, among the employees without any resistance? What are the changes/initiatives that can be imbibed in the HR practices to improve the existing system?

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 6: Human Resource Management.

Health Management and Leadership, Marketing Social Causes, Strategy, International Business.

Post-graduates, Practitioners.

General Electric has been operating in the Middle East, North Africa (MENA) region for over a century. GE is committed to corporate citizenship having launched ecomagination in 2005 and healthymagination in 2009. For sustainability, GE believes that both innovation and localization are critical. This case deals with contextualization of breast cancer campaign for the Kingdom of Saudi Arabia through healthymagination. Rania Rostom, Communications Director, Middle East, North Africa and Turkey region, GE, reviews the campaign implemented and looks at roll-out across the MENA region. The situation is unique, as breast cancer strikes women in the region ten years earlier than the West, and the cultural context does not allow the discussion of the topic in public. One of the peculiarities of this region was the high penetration of social media and its large adoption rate by the young. GE used a unique Facebook campaign to drive awareness on the topic, encourage screening appointments, seek treatment and reduce the discomfort associated with the process.

On completion of utilizing the case study as an exercise, students should be able to gain case-specific skills – critically examine the importance of the consumer behavior, health marketing, marketing strategy and aspects of international business in the Middle East, KSA, in particular, and demonstrate this by analyzing real regional/world examples using complex theoretical frameworks; identify examples of best practice and explain the dynamics toward consumer behavior, health marketing, marketing strategy, international business with reference to a range of theoretical models and apply these in a meaningful way to the MENA region – discipline-specific skills – synthesize and critically evaluate a corpus of academic literature and government reports on consumer behavior, health marketing, marketing strategy, international business – and personal and key skills – reflect on the process of learning and undertake independent/self-directed learning (including time management) to achieve consistent, proficient and sustained attainment; work as a participant or leader of a group and contribute effectively to the achievement of objectives in the field of consumer behavior, health marketing, marketing strategy, international business.

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