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This case looks at a recent shift in the way organizations look to leverage the benefits from India as a cost-effective destination to provide services. What started, around 15 years back, as an activity to outsource all non-core activities to Indian companies to take the advantage of cost-effective resources, has now given way to a new model where the focus is on two key aspects, namely, “insourcing of work” and “transfer of core activities to India”. This is because of the realization that outsourcing may be a short-term solution for non-core activities; however, to build a sustainable capability that is both cost-effective and value-oriented, insourcing is key. Also, it is not just non-core activities that can be supported remotely; many core activities that have been managed by on-shore teams are increasingly being shifted to India to leverage the depth of skills available in the country. First Telecom has undertaken pioneering work in this domain by moving some of the critical functions to India and has created Centers of Excellence (CoEs) providing niche services to rest of the world.

Target audience includes corporate executives, students of MBA/postgraduate program in management in strategic management and/or workshops for understanding the concept of insourcing, cost transformation, business environment analysis and growth strategies for future.

First Telecom has adopted what could be termed as “India 2.0” as the strategy to transform their operations worldwide to utilize the full potential of “India” as a service sector-outsourcing destination. The focus is not only on cost-avoidance but also on standardization of processes and mobilization of resources in a CoE setting to maximize the benefits. This case attempts to understand the way to go about it and the expected returns in a quantifiable manner.

To develop an understanding of business environment in the context of large multinational organizations that are constantly evolving to improve their operational excellence. Also, to develop an understanding of the outsourcing market and how companies are looking to move their core services to cost-effective locations to achieve the next phase of cost transformation after the outsourcing (non-core services) wave.

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CSS 1: Accounting and Finance

The paper attempts to revisit the nexus between economic growth, carbon emissions, trade openness, financial effectiveness and FDI for a sample of seven developed and developing countries using curvilinear relationship as per environmental Kuznets curve (EKC) hypothesis over long term.

The authors determine the unit root properties of variables (using Clemente–Montañés–Reyes unit root test with double mean shifts and AO model and augmented Dickey–Fuller test) for structural breaks at different levels. Autoregressive distributed lag (ARDL) and error correction model (ECM) methodology was used to estimate long- and short-run parameters among the selected variables in sample countries from 1965 to 2016. Vector error correction (VEC) and Granger causality approach was used to determine the direction of causality.

The authors confirmed long-run relationship among the variables and highlighted high economic growth and energy consumption as the main causes of environmental degradation. While in India financial development and FDI inflows depict a negative association with environmental sustainability, however, such relationship was positive in the United Kingdom (UK), which is often considered as a benchmark for policymakers. The authors’ findings were in agreement with existing research insights in reporting FDI and financial development as the major contributors towards (unsustainable) sustainable environment through emissions in case of (developing country like India) developed country like UK. For other sample countries (China, Brazil, Japan, South Africa, United States of America (USA)), the authors’ model failed to capture financial development and FDI as significant contributors of carbon emissions. However, unidirectional causality running from energy to carbon emission was observed leading to the policy adoption of incentivizing alternative energy-based resources to increase energy efficiency across the energy value chain.

Manufacturing with renewable energy, in collaboration with private and foreign players, under an institutional framework is desirable. Policy instruments including mandatory administrative controls, economic incentives and voluntary schemes that promote energy efficiency building blocks need to be established. A sound legal system for implementing technological innovation, financial subsidy incentives, interest-free loan programmes and development of financial sector supports creation and thriving of energy efficient units, often a perquisite for accelerated development.

By undertaking a comparative analysis, the authors address the research gap through revisiting EKC hypothesis with different set of trade policy and financial development framework. To the best of the authors’ knowledge, earlier studies were limited to one-country data analysis and did not consider the comparative data set of developed and developing countries with reference to financial development and FDI components.

The application of activity based costing (ABC); calculating the cost of a CNC Process using ABC; designing a pricing strategy.

The case can be used in the following courses: MBA program with specialisation in finance (to teach students the application of costing in services sector); MBA program in general management (to highlight the concept of activity based costing and its application); and under an elective course on management control systems in MBA programs (to highlight the strategy to determine price effectively).

The case highlights the application of activity based costing in arriving at cost and finally leading to development of price to be charged by KK Metals. The company wishes to compute the activity based cost of CNC process and develop the selling price for 194 precision turning services scientifically as opposed to the present strategy of being a price taker, largely on the basis of what essentially is prevalent in the local market within which KK Metals operates. The case gives an insight to numerous control variables that the management can consider while pricing its services.

The case can be used to understand management concepts such as ABC, pricing and the role of efficiency in business processes. It can be used to: teach complexities involved in identifying activity driver(s) in case of ABC as far as application to service sector is concerned; help understand the use of costing as an effective tool in pricing strategy of the company; and help students realize the significance of inputs used for calculating per hour cost.

Teaching notes are available. Consult your librarian for access.

The focus is on a performance management system and its strategic alignment using a Balanced scorecard in a Public Private Partnership framework. This case study analyses the situation for Tata Power Delhi Distribution (TPDD) which needs to realign its strategy to meet the emerging sustainability challenges of inclusive growth and combating the climate change. The case covers the field of strategic management, strategy formulation and performance management system deployment using the balanced scorecard. It touches upon the emerging need for corporates to look beyond economic signals and take social and environmental impacts into strategy planning process.

The case can be used in the following courses; post graduate program in public administration; MBA/Post graduate program in management in strategic management; executive training program for Government executives in public sector organizations to highlight the concept of performance management system in PPP companies.

After the initial tumultuous years, TPDD emerged as one of the efficient power distribution companies in Delhi region. One of the major management tools that was helpful to achieve this was the balanced scorecard. TPDD's general manager for corporate strategy & planning reviewed the process and the due diligence that went into designing and implementing the balanced scorecard. Now, after the balanced scorecard success story, he along with Dr Ganesh Das, Head of Group – Strategy wants to take it to a next level and integrate their strategies related to inclusive growth of community and combating the ill effects of climate change. They believe that the balanced scorecard method that had helped them to achieve their strategic goals will help them to achieve future objectives too. But whether the existing four perspectives: financial, customer, internal process and learning and growth would adequately address the emerging challenges or whether there was a need to introduce a new perspective – “The Social Perspective” – is what they contemplate in the case.

The case can be used to teach the following: the importance of strategy in an organization and how it helps the firms to realize their stated vision; to highlight the process of strategy formulation and its deployment; to help students realize the difficulties in realizing a strategic goal through performance management system; use the balanced scorecard as an effective tool for strategy deployment and organizational alignment; to introduce students the concept of sustainability in the organization and emerging global challenges; and to illustrate the complexities involved in a strategic planning process

Teaching notes.

Bicycle industry, emerging markets, competitor analysis, financial forecasting.

This case can be used as a teaching tool in the following courses: MBA/post-graduate programs in management in management accounting, management control systems and strategic cost management; executive training programs for middle and senior level employees; and under-graduate/post-graduate programs in entrepreneurship. It can be used to explain and test the concepts of SWOT analysis, Porter's five forces model and PEST analysis. It introduces the technique of breakeven analysis and its relationship with operating leverage. Moreover, it demonstrates the application and analyses of the Du Pont equation.

Hero Cycles Ltd was established by the four Munjal brothers in pre-independence India. It started off as a business of bicycle spare parts, but quickly expanded in post-independence India, with Ludhiana as its base. The company later joined with foreign firms like Honda Motors, Japan to become the largest manufacturers of bicycles in the world. It dominates domestic markets with a market share of around 40 percent. Ananth Munjal, a learned, ambitious and cautious individual, is the next generation, ready to take over the reins of the company. Being someone who believes in learning from past mistakes, he forms a team to critically examine the decisions made by his predecessors. This team is also directed to utilize forecasting techniques for determining the expected profitability given the existing state of affairs that prevail. Additionally, Du Pont analysis is to be performed for studying the efficiency of the company on the facets of operating performance, asset turnover and associated financial leverage. Also, Ananth's risk-averse nature compels him to study the past with regard to the relationship between operating leverage, breakeven sales and corresponding margin of safety. Furthermore, he wishes to inspect the historical cost structure of the firm, and its influence on company performance.

These include the use of: SWOT analysis to identify the strengths, weaknesses, opportunities and threats to a company; PEST analysis to identify the political, economic, social and technological factors that affect the operations of a company; Porter's five forces model to analyse an industry. The case also helps students: by identifying fixed costs and variable costs that are a part of operating expenditure of a business; in the use of forecasting the financials of a company for the sake of predicting the future outcomes of certain business strategies; by application of Du Pont analysis to examine the efficiency of the various processes and strategies; in determining quantitative terms like contribution margin, breakeven sales, operating leverage, margin of safety, their significance, and the relationship between these terms.

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 paper aims to resolve the ongoing issue of asset pricing in indexed based investments, primarily in Sukuks. It is to be done by modeling the returns of S&P MENA (Middle East and North Africa) Sukuk index (SPS), S&P MENA bonds indices (SPM) and Dow Jones MENA (DJM) equity index using system equations and to find out cointegration among them.

In this study, daily data of stated regional market indices, from the month July 2013 to June 2017, are analyzed using the cointegration model and Generalized Method of Moments (GMM) estimation.

Findings revealed through cointegration test that indices are found to be not integrated in the long run; however, in short run, DJM is having one way relation with other two indices, and SPM and SPS are having unidirectional relation. The results of the GMM model show that SPS is significant in influencing SPM and vice-versa, and rest other variables are insignificant in influencing each other systems equations.

There is ample work available on various Islamic indices, but there is no study found on the MENA (Middle East and North Africa) Equity, MENA Bond and MENA Sukuk indices together.

The purpose of this paper is to analyze the existence of volatility spillover effect in frontier markets. This study also examines whether any linkages exist among these markets or not.

Monthly data of regional frontier markets, from 2009 to 2016, are analyzed using Multivariate GARCH (BEKK and Dynamic Conditional Correlation (DCC)) models.

The result of cointegration test shows that the sample frontier markets are not linked in long run, and Granger causality test reveals that the markets under consideration do not cause each other even in the short run. BEKK test says that the effect of the arrival of shock from the own market does not last for longer, whereas shock from other markets lasts with the stronger persistence, and according to DCC test, the volatility spillover exists for all the markets.

The results of present study suggest that the frontier markets are not cointegrated in the long run as well as in the short run, which opens the doors for long-term investments in these markets in future, which may lead to decent returns. Long-term investors may draw the benefits from including the financial assets in their portfolios from these non-integrated frontier markets; nevertheless, they have to consider and implement diversification and hedging strategies during the period of financial turmoil, so as to protect themselves against economic and financial distress.

Significant work has been done on developed, developing and emerging markets but frontier markets are not explored much so far. This paper is an attempt to see the status of frontier stock markets as potential financial markets for diversification benefits.

The case provides valuable insights on challenges faced by otherwise-protected organisations which are made to face the global onslaught. What happens to an organisation when its own collaborators become competitors overnight? What happens when market leaders refuse to share their technology or dictate their own terms? In addition, this case study looks at the strategy of diversification desired in the business portfolio and the cost of non-diversifications. The case evaluates the environment in which a capital-intensive industry has to operate. It evaluates the combination of all the variables required for undertaking a comprehensive analysis and aims at identifying the best possible level to which the business can be expanded to maximise profits under the known constraints in which the business has to operate.

Target audience is corporate executives, students of MBA/postgraduate programme in management in strategic management and/or workshops for understanding the concept of SWOT (strengths, weaknesses, opportunities and threats) analysis, competitor analysis, Porter's Five Forces Model, Boston Consulting Group (BCG) Matrix, business environment analysis and growth strategies for future.

A combination of global competition and open access in the domestic market is putting pressure on the margins, as new players are likely to move towards gaining market share by bidding aggressively. This is threatening the competitive intensity for Bharat Heavy Electricals Limited (BHEL) in the long-term. Raw materials, such as steel products, that are critical to production process are subject to substantial pricing cyclicality and periodic shortages of supply in India. The margins are thus continuously being impacted by movement in raw material prices, especially steel and copper. How BHEL hopes to sustain its growth story? Whether Chinese competition will kill BHEL? These are some of the pertinent questions the authors will try to answer in this case study.

Use of SWOT analysis to identify the strengths, weaknesses, opportunities and threats to a company and use it as a tool to strategic decision-making. Highlighting the importance of strategic tools such as Porter Model and BCG Matrix within an emerging economy backdrop; to illustrate the alternatives and difficulties/complexities involved in a strategic planning process of growth and cost cutting; and to analyse the financial statements of BHEL.

Analysing public sector undertakings (PSUs)/government companies involved in infrastructure build up/projects of strategic nature in the country, their performance, challenges and efficiency in pre-liberalisation era and post-liberalisation era, and identifying how many are visible today, including the reasons for their growth/decline in generating revenues and profits, has multiple social implications especially for an emerging economy like India. A look at the performance trends of such companies over the past years too would help them in their quest by assisting them to get an idea of business and the industry profile in which BHEL is operating.

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The purpose of this paper is to understand the situation of Accurate and then to consider possible options for Accurate to face competition in future. Several opportunities are also linked with certain drawbacks and hence by studying the entire mechanism, the decision makers of Accurate may decide on its future direction and how to go about it.

Accurate Weld Arc was established in New Delhi in 1993, his son. The company focused on manufacturing wire drawings and selling to niche customer segment. Due to this, they were operating at a modest turnover. At this juncture, the organization took two critical decisions, first, to enter the welding electrodes market which had a bigger target segment, and second, to hire a Marketing Head who conducted an extensive marketing research to recognize the need of customers and to identify differentiating factors for the organization. Later, the company made further investment in middle-gauge welding electrodes and its turnover climbed in the first year. After that, the company had set up a manufacturing unit in Raipur, Chattisgarh which generated huge profit and is now looking forward to spread its wings in other parts of the country.

This case may be used for postgraduate students, who are doing their specialization in finance and accounting.

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 1: Accounting and Finance

This case attempts to study one of the key problems faced by a multinational organisation in the globalised environment that exists today: whether to outsource or insource. Outsourcing deals with getting into a contract with an outside vendor/supplier (local to the region in question) to deliver services to the parent company as per the agreed deliverables. On the other hand, insourcing deals with setting up operations in the destination country and hiring local staff on behalf of the company to do the same tasks.

Historically, outsourcing has been considered a better choice because of several benefits such as the ease of setting up operations, a predictable costing model and reduced capital investment. However, it comes with its own set of disadvantages as well, including a high attrition rate and a sub-standard level of quality in the deliverables. Apart from the quantifiable parameters, there are several qualitative parameters as well, which encompasses the employees' passion/commitment towards the company, sense of achievement and performance management process.

This case considers an existing situation in First Telecom (henceforth, referred as FT), where they have outsourced one part of their operations to multiple providers in India and are now facing huge issues with the quality of the deliverables; as a result, FT are now looking to explore if an insourced solution would be more cost-effective and productive. It evaluates the two models against various parameters and makes a recommendation on the preferred model.

This case can be used as a teaching tool in the following courses: MBA/postgraduate programme in strategic decision-making; MBA/postgraduate programme in management in management accounting and management control systems; and executive training programme for middle- and senior-level employees to look at the various factors involved (in addition to cost) that should be taken into account while comparing outsourcing versus insourcing.

FT is a communication service provider and has presence in more than 170 countries around the world. The company is considered among the top three telecom companies around the globe and offers solutions to multinational customers in the areas of networks, IP telephony, security services and other managed services.

The company has more than 100,000 employees around the globe. In addition to the regular (on rolls) employees, the company also outsources a lot of its operations in various countries to local service providers. The services that this company outsources include software/tools development, solution pricing and in-life service management. Historically, the company has believed that outsourcing is a better alternative because of the ease of setting up operations and lower cost.

However, because of the recent changes in the global market, there is a huge pressure within the company to reconsider all the functions and find ways to contain costs to help the company's bottom line.

There have been numerous complaints about the quality of output from one of the outsourced functions, namely, the “Pricing Team”, which is being presently outsourced to two service providers in India. The lack of accuracy has cost the company a key opportunity valued at more than USD5 million and the COO is furious at this loss. He has tasked the head of business improvement to do a full review of the function and look at the possible alternatives the company can explore to avoid these issues in future.

FT now wants to do a cost-comparison analysis of the existing set-up with a new insourced set-up considering all costs that would come into play. This would help FT to decide the future course of action to ensure reduced costs and enhanced operational efficiency from the process.

Understanding of cost-comparison parameters involved as an effective tool for strategy development and achieving organisational objectives; understanding of SWOT analysis (organisation level and decision level) and its applicability in the organisation context; understanding the Porter's five competitive forces model to illustrate the effect of environment on an organisation; and understanding of outsourcing and insourcing models and the pros and cons of each model, which is a key management decision in most multinational organisations.

Historical reports of the concerned unit in terms of the costs incurred, rate of attrition and operational efficiency achieved. Cost Accounting: A Managerial Emphasis, 14th ed., Charles T. Horngren, Srikant M. Datar and Madhav Rajan, Publisher: Prentice-Hall, 2012.Practical implications Based on the option (outsourcing versus insourcing) found to be better, appropriate actions would need to be taken in terms of either renewing the contracts with the outsourcing partners or preparing to terminate the existing contracts and hiring of talent from the market to replace the outsourced staff.

For nearly two decades, India as a country has grown considerably and one of the key contributors in that growth has been “Business Process Outsourcing” from all across the world to India. While the outsourcing wave has provided the initial push to the economy of India, it would not be able to help sustain the momentum primarily because of two reasons: the first is the growth of other countries, such as Hungary, the Philippines and China, as alternatives for outsourcing (and equally may be more cost-effective at times); and the second reason is the shift in various companies towards an insourcing model for critical functions.

Therefore, as a country, India needs to move ahead and, instead of only focusing on providing resources to do the tasks outsourced by global companies, focus should now shift to promoting innovation and creativity among the workforce. A lot of companies nowadays are realising the importance of product innovation and are investing huge amounts in R&D to come up with breakthrough technologies that can help them create a sustainable development model. However, this should in no way be considered an end of the outsourcing era. Although there needs to be an effort towards improving the interlock process, outsourcing is here to stay because of the benefits it brings.