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Capital budgeting and investment.

Undergraduate level.

Ms Kamariza, a young Rwandan citizen, established the non-profit organization “Solid Africa” in December 2010. She created the organization together with young professionals, friends and family members with the aim of supporting the most socioeconomically vulnerable individuals’ needs for medical, hygiene, emotional and food services. Ms Kamariza became the Chief Executive Officer and her sister the Chief Financial Officer; together with the help of other additional volunteer staff they carry out this important work. The founders have done an excellent job of maintaining the organization for five years, feeding an average of 1,000 patients every day, and gaining widespread favorable reputation. However, the organization has heavily relied on donations through fundraising events and member contributions (currently 148 members). In 2011, the founders decided that the organization should become self-reliant by planning to build an industrial kitchen, which would cater to different companies (new customers) while also providing free meals to socioeconomically vulnerable patients. This kitchen is foreseen to continuously generate revenue and profits.

The case is aimed at undergraduate students, pursuing their bachelor, management or social science studies. The teaching is mainly suited for students focused in the fields of social entrepreneurship, finance and social innovation. Students should be able to demonstrate the challenges faced by social entrepreneurs in their quest for capital investment; they should understand how management biases can affect business decision-making; they should also demonstrate the importance of capital budgeting techniques in a social enterprise to achieve better investment decision-making.

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.

The aim of the case is to understand the performance management system of academic staff members in higher education institution. Furthermore, students would be able to compare two performance appraisal policies and analyze which one could better serve the purpose considering the context of educational institution. The case would help students understand the performance dynamics of the academic staff and how the performance management system in place affect employees.

The case study presents a troubling situation faced by Asim Khan, a newly appointed director of the Midland University, regarding retention of the faculty. Upon joining Midland, Khan noticed a trend that faculty who was serving the university from many years are leaving the organization one after the other. He decided to revise the faculty policies that he believed was the root cause of faculty turnover in Midland. He formulated a committee to review the existing policies and revamp if required. The committee identified some flaws in the faculty appraisal policy in place at that time and formulated a new one with the consultation of top management. However, when the new appraisal policy was presented to the faculty, few faculty members raised their eyes over a few aspects of the proposed policy. As the new academic year was approaching, Khan had to make an important decision after critically analyzing the pros and cons of both policies that which of the two should be followed for the upcoming year’s appraisals.

The case can potentially be used in the post-graduate courses in MBA programs offering a major in human resource management.

Teaching notes are available for educators only.

CSS 6: Human resource management.

Quintiles Transnational Holdings Inc., the largest global provider of biopharmaceutical development and commercial outsourcing services, grew its revenue at a CAGR of 7.3% and EBITDA at 13.9% between 2008 and 2012.

The case is set in December 2012–April 2013, when the majority of the firm was owned by founder Dennis Gillings and four private equity firms (Bain Capital, TPG Capital, 3i Capital and Temasek Life Sciences) after it was taken private in a management-led buyout in 2003 and a subsequent buyout in 2008. Five years after the second buyout, the private equity firm owners were looking to monetize their positions and considered different strategic alternatives: M&A sale to strategic or financial buyers, IPO, or capital restructuring through special dividends.

Students will step into the role of an associate at the lead investment bank working with Quintiles. They must consider the case information and determine an IPO strategy, process, potential conflicts, and valuation.

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

• Apply valuation techniques (discounted cash flow (DCF) and publicly traded comparables) in pricing an IPO

• Analyze the roles of different parties involved in the transaction

• Discuss the process of a company filing for an IPO

• Evaluate different strategic alternatives available to a private equity—backed company

• Address conflict of interest in management—led buyouts

Apply valuation techniques (discounted cash flow (DCF) and publicly traded comparables) in pricing an IPO

Analyze the roles of different parties involved in the transaction

Discuss the process of a company filing for an IPO

Evaluate different strategic alternatives available to a private equity—backed company

Address conflict of interest in management—led buyouts

The case is presented as descriptive in nature and primarily involves exploratory research.

Ashraf, a young graduate from Bangalore, India, started a chain of lifestyle shops, his family business in Khartoum, Sudan. To modernize the shops, Ashraf approached a small finance bank for financial assistance. However, after submitting the required documents and with a good credit score, he was denied a loan. The bank officials had mentioned that the loan automation software did not approve the application. Hence, the bank personnel said that they could not do anything further. Disappointed, Ashraf sought the help of his professor, John, to understand why the software rejected his application. Professor John explained to Ashraf the advantages and disadvantages of automation. In the process, Ashraf understood the significance and compelling need to address “Algorithm Bias,” a situation in which specific attributes of an algorithm cause unfair outcomes. The case place students in Ashraf’s position to help them understand the advantages and issues of applying automation through artificial intelligence.

The case suits graduate-level courses like business analytics, financial analytics and business intelligence.

Through the case, the students will be able to: Understand the role of algorithms in business and society. Understand the causes, effects and methods of reducing algorithm bias. Demonstrate the ability to detect algorithm bias. Define policies to mitigate algorithm bias.

This case is designed to enable students to understand the role of women in artificial intelligence (AI); understand the importance of ethics and diversity in the AI field; discuss the ethical issues of AI; study the implications of unethical AI; examine the dark side of corporate-backed AI research and the difficult relationship between corporate interests and AI ethics research; understand the role played by Gebru in promoting diversity and ethics in AI; and explore how Gebru can attract more women researchers in AI and lead the movement toward inclusive and equitable technology.

The case discusses how Timnit Gebru (She), a prominent AI researcher and former co-lead of the Ethical AI research team at Google, is leading the way in promoting diversity, inclusion and ethics in AI. Gebru, one of the most high-profile black women researchers, is an influential voice in the emerging field of ethical AI, which identifies issues based on bias, fairness, and responsibility. Gebru was fired from Google in December 2020 after the company asked her to retract a research paper she had co-authored about the pitfalls of large language models and embedded racial and gender bias in AI. While Google maintained that Gebru had resigned, she said she had been fired from her job after she had raised issues of discrimination in the workplace and drawn attention to bias in AI. In early December 2021, a year after being ousted from Google, Gebru launched an independent community-driven AI research organization called Distributed Artificial Intelligence Research (DAIR) to develop ethical AI, counter the influence of Big Tech in research and development of AI and increase the presence and inclusion of black researchers in the field of AI. The case discusses Gebru’s journey in creating DAIR, the goals of the organization and some of the challenges she could face along the way. As Gebru seeks to increase diversity in the field of AI and reduce the negative impacts of bias in the training data used in AI models, the challenges before her would be to develop a sustainable revenue model for DAIR, influence AI policies and practices inside Big Tech companies from the outside, inspire and encourage more women to enter the AI field and build a decentralized base of AI expertise.

This case is meant for MBA students.

Teaching Notes are available for educators only.

CCS 11: Strategy

Decision making, behavioural decision making, heuristics, optimistic bias, confirmatory bias, anchoring bias, ready mix cement (RMC) business in India.

Post graduate management course, executive training program in the subject areas.

Arco is a Projects and Infrastructure-sector company. Some of its key officials, believing that entering the RMC can be beneficial for Arco, plan entry into the manufacturing of RMC but order a feasibility report. The report confirms the hunch and Arco starts the business under the aegis of its associate, EG Ltd (EGL) which is into equipment rental business. At this time a new dimension of reality opens up but the senior officers refuse to accept a revised proposal which is adjusted to the new realities. After a few months and some losses, EGL closes down the RMC plant and rents it out.

This case study is developed with a purpose to provide a basis to discuss how decisions are taken in real life and how various behavioural elements affect the quality of decisions that affect not only the decision makers but many others and their organizations. Focus is especially on prejudice, heuristics and bias that creep into important organizational decisions such as venturing into new business.

Teaching note.

This case was written to help students develop their analytical and decision-making skills with regard to sales force evaluation. It identifies a variety of issues – in the Pakistani context particularly – within the sales force environment, including union representation, sales force team conflicts and power dynamics between superiors and subordinates. The various case lessons will enhance students’ analytical, negotiation and team-management skills. This case can be used to discuss the following issues: the complexity of objective and subjective evaluations of a sales force, sales force perceptions and cultural nuances for succeeding in Pakistan. Distribution structures and management in Pakistan. Characteristic features of the Pakistani pharmaceutical market. Students will be able to explain how salesperson performance information can be used to identify problems, determine their causes and suggest sales management actions to solve them. Students will be able to differentiate between an outcome-based and a behaviour-based perspective for evaluating and controlling salesperson performance. Students will understand how to control one’s behaviour in conflict situations by identifying common interests and achieving a “win-win” situation.

The Al-Ain case describes sales force management and sales force evaluation in a situation that involves a high-performing team operating in a hostile environment. Al-Ain eye centre (Al-Ain), located in the city of Karachi in Sindh state of Southern Pakistan, is a small-scale hospital that has diversified into the pharmaceutical business. Al-Ain’s product portfolio includes analgesics, antibiotics, ophthalmology products and cardiology products. This case focusses on team management and the relationship between a sales manager and subordinate salespeople in the context of Pakistani culture. A sales representative has received a poor performance assessment, which he perceives to be an unfair evaluation of his efforts. As a result of the situation, he subsequently joins a union and creates problems for his superiors. As they explore these management issues within a sales force, students will develop an appreciation for objective methods of sales force evaluation, as well as for the complexity of handling high-performing teams, the importance of employee perceptions and the scope of subjective biases in sales force evaluation that can emerge in practice.

The case is suited to undergraduate or MBA courses on sales management, organizational behaviour, distribution management, marketing/strategy and pharmaceutical industries. It addresses issues of sales force management, sales territory allocations, sales target fixation, team conflict, promotion, team bonus and distribution management in the pharmaceutical industry in Pakistan.

Teaching Notes are available for educators only.

CSS 8: Marketing.

After reading and analyzing the case study, the students would be able to understand the complexities of leadership and decision-making in a diverse workplace, specifically when promoting differently abled employees; explore the importance of fostering an inclusive environment, addressing biases and developing empathy in the context of leadership and diversity; explore the challenges and considerations involved in managing a team with diverse backgrounds and abilities; and evaluate the potential impact of promoting employees with disabilities on the morale and retention of other team members.

This case study is about a hearing-impaired individual, Jessica, who was recently hired by a medium-sized organization, Zerial Education. She was the organization’s first hire with a disability, and some of her colleagues were skeptical about how she would fit in. There was a clear bias against her because of her disability, and she faced many challenges while proving herself and earning the respect of her colleagues. Despite the initial skepticism and bias, she quickly proved herself to be a valuable member of the team. As the appraisal period arrived, Stan Logan, her reporting manager, faced a tough decision. He wanted to be fair and avoid to seem to be biased, yet he was also committed to fostering diversity and inclusion. If he promoted Jessica, it would affirm the company’s commitment to diversity and inclusivity, and it would also validate Jessica’s impressive year of work. However, this might come at the cost of creating tensions among the other top performers who were also deserving of the promotion and potentially complicating client interactions owing to Jessica’s hearing impairment. Logan had to navigate these complexities and make a decision that aligned with both the company’s values and operational needs, while also considering the potential consequences on team morale and client relationships.

The case is suitable for use by students at an MBA level. Human resource management: In this course, students might learn about the legal and ethical issues surrounding disability in the workplace, as well as strategies for recruiting and retaining employees with disabilities. Organizational behavior: In this course, students might learn about the psychological and social factors that influence how individuals with disabilities are perceived and treated in organizations, as well as how to promote diversity and inclusion within a company.

Teaching notes are available for educators only.

CSS 6: Human resource management

The learning objectives to be drawn from the case are to evaluate the various biases that women face in organisational life, understand the challenges facing women at all organisational levels, understand the importance of adopting a proactive approach to change perceptions and discriminatory behaviours and processes and appreciate the role that an inclusive culture within an organisation can play in advancing and championing women’s progression to senior management roles.

The case highlights the challenges facing women in leadership positions in emerging economies and societies in transition like South Africa and explores the role that gender plays in the world of work. It focuses on the dilemmas faced by Alison Bourne, newly promoted to the CEO role at Bergmann Engineering Works (SA).The case shows that, despite the positive contribution resulting from the inclusion of women in organisations, women experience a multitude of obstacles. Some of the limitations highlight that women must work even harder to be perceived as legitimate leaders. These challenges come about despite research showing that the inclusion of women in the workforce improves company performance, enriches the knowledge base and improves the decision-making quality of company boards.

Postgraduate business students at the master’s level.

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

Financial accounting to assess stewardship: the case requires students to evaluate Thompson’s stewardship of McDonald’s, in part based on the company’s financial accounting information. Financial reporting performs an important societal role by helping control agency problems that arise from the separation of ownership and management. Since external stakeholders cannot “observe directly the extent and quality of managerial effort on their behalf […] the manager may be tempted to shirk […] blaming any deterioration of firm performance on factors beyond his/her control” (Scott, 2014, p. 23). However, although financial reporting helps hold managers accountable to shareholders, accounting information is not fully informative about managerial effort. For example, while net income provides useful information regarding the CEO’s stewardship, it is also “noisy,” due to recognition lags and other factors (Scott, 2014, p. 364). Efforts undertaken by Thompson in a particular period, such as marketing expenditures, might reduce current earnings, yet boost future profitability. Additionally, Thompson’s predecessor’s past efforts might have positive or negative effects on current earnings. Evaluating stewardship effectively involves considerable judgment, in addition to knowledge of financial accounting. The implication of poor firm performance is that the CEO is ineffective at formulating and implementing strategies and policies to enhance firm value (Dikolli et al., 2014). Specifically, it appears that missing earnings benchmarks matter more for relatively inexperienced CEOs. Don Thompson’s tenure of 33 months at McDonalds is 42 percent lower than median CEO tenure documented in academic research, where the median tenure of chief executives documented in large sample empirical studies is about 57 months (Dikolli et al., 2014). The evidence suggests that the longer a CEO serves, the less likely he is to be dismissed for performance-related reasons. This appears to be the result of the resolution of uncertainty about CEO’s ability and leads to subsequent declines in the level of monitoring by the Board of Directors. Performance evaluation and bias: a significant body of research explores the extent to which female managers are assessed differently than their male counterparts (Powell and Butterfield, 2002). For example, female CEOs face more threats from activist investors than male CEOs. Therefore, even after women achieve the highest managerial rank, they experience more professional challenges than their male counterparts (Gupta et al., 2018). However, the question of whether black CEOs are assessed differently is more challenging to answer empirically as a result of a smaller sample size (only one percent of S&P 500 companies are run by black CEOs). Our case attempts to develop the inference that if female CEOs are subject to bias, analogous forces are likely at work when black CEOs are assessed. Recent evidence further suggests that business students sometimes demonstrate bias in making assessments (Mengel et al., 2018). The authors discuss these findings – as well as strategies for including them in the case discussion – in the “Teaching Strategy” section herein below.

The case was written from the public record surrounding the appointment of Don Thompson and McDonald’s company filings. The record includes articles from The New York Times and The Wall Street Journal, as well as local and industry publications.

The case examines the role of financial accounting in evaluating CEO performance in the context of the appointment of McDonald’s first African-American chief executive and his subsequent two-and-a-half years on the job. The case deepens students’ understanding of the link between financial reporting and stewardship, while highlighting the subjectivity inherent in assessing managerial performance, particularly over relatively short time periods. As students analyze the case, they must consider the extent to which a firm’s results are attributable to luck vs skill. We use “skill” to refer to CEO effort and other controllable factors, while “luck” refers to exogenous factors, such as macroeconomic conditions. Assessing stewardship is of practical significance. It allows pay to be better aligned with performance and empowers stakeholders to identify when a change of leadership may be warranted. The case may also be used to spur reflection, in an applied context, on the importance of being alert to unconscious bias, even when evaluating seemingly objective financial reporting data. Recent research, discussed herein, suggests that business students sometimes exhibit bias when making assessments.

The case should be included in discussions of corporate governance, executive compensation and the role of accounting information in efficient contracting. It is appropriate in intermediate financial accounting courses for undergraduates, introductory graduate accounting courses, or other courses with an element of financial statement analysis. Standard introductory accounting textbooks offer helpful supplementary reading for students. Horngren et al.’s (2014) book, Introduction to Financial Accounting (12th ed.), Pearson, London, provides an overview of the income statement and its role in assessing performance (see Chapter 2) as well as a useful discussion on evaluating the components and trends of a business (see Chapter 12). More advanced students may benefit from the in-depth discussion of earnings quality, operating income and non-operating income found in Chapter 4 of Intermediate Accounting (9th ed.), McGraw Hill Education, New York by Spiceland et al. (2018).