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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.

Teaching notes are available for educators only.

CSS 11: Strategy.

The case study highlights two strategic angles – that of the business unit (business strategy, profitability, market leadership. organizational culture, operational turnaround, industry structure and competitive dynamics) and the owner (returns, repositioning strategy and funding plan). By the end of this case study, students would be able to understand the changing competitive forces of a dynamic industry; analyse the circumstances leading to a change in the control of a firm from the state to the private sector; understand the logic of acquiring a perennially loss-making firm operating in a volatile environment without a unique strategy; identify a firm’s strategic and operational choices for financial turnaround, return to profitability and regaining market leadership; and learn about the actual strategic realities and choices confronting a troubled business organization in a difficult industry.

When the Tata Group took over Air India on 27 January 2022 from the state that had ownership for 68 years, Air India was under a long spell of poor performance, bleeding losses and unmanageable levels of debt. Unsatisfactory customer service, management issues and competition were the key reasons. Therefore, a crucial question facing the group’s Chairman N. Chandrasekaran was what workable strategy he could use to reposition Air India and make it profitable again so as to recover the $7.5bn of estimated investment involved in the acquisition and turnaround.

This case study is intended for undergraduate and graduate executive education levels in business administration and management and allied subjects, particularly for courses in strategic management, marketing, financial management, turnaround and transformation, mergers and acquisitions and organizational change.

Teaching notes are available for educators only.

CSS 11: Strategy.

The case is written based on publicly available data from primary sources such as the company’s annual reports, company website and the company’s presentations, as well as from secondary sources comprising newspaper articles, research papers, research magazines, magazine articles, industry reports, research reports, etc. as indicated in the references. The company’s financials and peer data are sourced from the Thomson Reuters Eikon database.

The case examines the financial position of Macy’s, Inc., America’s largest and one of the oldest premier departmental stores, with a consolidated annual turnover of US$18,097m in the fiscal year 2020/2021 (FY, 2021). Over the previous few years, the company had been struggling with decreasing market share and profitability mainly due to increasing competition from online retailers and deep discounters, which was affecting the company’s share price. With the appointment of a new chief executive officer (CEO) in fiscal year (FY) 2017, Macy’s, Inc. undertook several changes to revive its financial health and improve its market share. However, it still registered heavy losses of US$3,944m in the FY 2020/2021, the company’s first time in the past decade. With many retailers filing for bankruptcy, was there more that Macy’s could do to improve the company’s position and regain lost investor confidence? Will its entry into emerging markets play a crucial role in its turnaround?

The case can be used in undergraduate and postgraduate courses such as accounting for managers, financial statement analysis, management accounting, introduction to accounting and advanced financial statement analysis. The case can also be effectively used to understand the primary fundamental analysis of the company that involves understanding the company’s positioning and strengths, weaknesses, opportunities and threats analysis. The case would also help business management and entrepreneurship students to get a preliminary idea about the change management process. Finally, the case can be used to familiarize students with using Microsoft Excel to build financial analysis worksheets.

Teaching notes are available for educators only.

Business rescue, as a mechanism to aid financially distressed companies in South Africa, has received considerable academic and practical recognition. However, the business rescue plan is an overlooked and, perhaps, underdeveloped aspect of the regime. For stakeholders, this is the ultimate decision-making document. Creditors are the most influential stakeholders in business rescue proceedings owing to their voting rights. For creditors to make informed decisions and exercise their votes meaningfully, the business rescue plan should be transparent and adequately disclose relevant and reliable information. This study aims to identify creditors’ primary information needs to enhance the sufficiency and decision-usefulness of business rescue plans, not only to entice the vote of creditors but to enforce accountability from practitioners.

Using a qualitative research design, semi-structured interviews were conducted with 14 executives from 10 South African financial institutions.

The findings reveal that comprehensive disclosure of financial, commercial and legal information in business rescue plans was a critical antecedent for stakeholder decision-making. Additionally, leadership and social impact information were influential determinants. This study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan.

This study advances academic knowledge and, for practitioners, adds value to the development of business rescue plans. This can enhance creditors' confidence in supporting the rescue effort and approving the plan.

The originality of this article lies in its investigation of how creditors assess the information in BR plans as a precursor to supporting the company’s reorganisation in a creditor-friendly business rescue system such as South Africa. This study provides novel insights into the decision-making process, particularly how creditors assess BR plans, address information asymmetry and vote on the plan.

COVID-19, like many previous crises, proved once more that some hospitality and tourism organizations are more crises resilient than others. Despite increasing frequency and magnitude of crises, little is known about the features of crises resilient organizations and mitigation strategies they adopt. If the characteristics of such resiliency are identified, those strengths might be targeted. Hence, the purpose of this study is to identify characteristics of crises resilient organizations by analyzing the interface between different organizational characteristics, recovery strategies they adopted and impacts of COVID-19 on individual hospitality and tourism organizations.

A global sample of 202 respondents from 20 countries and four continents, representing different sectors of the hospitality and tourism industry, participated in the survey. Descriptive analysis and cluster analysis were used to rank the items and group hospitality and tourism organizations based on their crises resiliency.

Service quality, loyal customers, branding, high paid in capital, domestic market base, hygiene and safety image, information and communication technology adoption, product and market diversification and restructuring debts emerged as major characteristics and strategies of crises resilient organizations. Using cluster analysis, four different groups of organizations were identified. Based on the impacts of COVID-19 on these organizations, Cluster-1 emerged as significantly more crises resilient, whereas Cluster-4 organizations were significantly more vulnerable to crises. Their characteristics and mitigation strategies they adopted were discussed.

The paper not only identified features of crises resilient organizations and successful mitigation strategies but also measured their impact on various performance indicators. Future studies might use characteristics, mitigation strategies and performance indicators identified in this study.

Based on the findings, tourism organizations would focus on strengthening characteristics and implementing strategies that make crises resilient organizations. Public bodies and destination management would also set their decision criteria based on these findings to create a more resilient tourism industry.

This research not only identifies how hospitality and tourism organizations are affected by COVID-19 but also how these impacts change based on different organizational characteristics and strategies. Understanding which organizational characteristics affect the crises vulnerability of hospitality and tourism organizations might inform risk and crises management literature and structural design elements in tourism businesses, hence offer both theoretical and practical implications.

This study aims to present and test a model of small business owners’ adaptation during the COVID-19 pandemic, through the lenses of the resource-based view of the firm, upper echelon theory (UET) and positive psychology. Specifically, it examined the relationships between personal characteristics and strategic pivot behavior in a sample of small business owners during a peak period of the crisis in Israel.

A sample (N = 202) of small business owners provided information on their business and demographics, and responded to questionnaires assessing their personality (Big Five personality traits), emotional intelligence (EI) and reported the extent to which they implemented strategic changes during the pandemic. These changes were categorized as “positive” (e.g. shifting to new markets, adding partners or investors) or “negative’ (e.g. letting employees go).

The results partially support an association between personality traits and “positive” strategic change behavior, mediated by EI.

The results suggest that business owners' personality traits, and chief among them – EI may play a key role in enabling flexibility when dealing with a long-term crisis or threat. However, market and legislative differences between markets may limit the generalizability to other sectors or countries.

To the best of the authors’ knowledge, this study is among the first to address small businesses’ COVID-19-related challenges from a personal-resource perspective by applying a theoretical lens integrating the RBV of the firm, UET and positive psychology. The findings provide a better understanding of the ways in which business owners’ personal resources account for business pivot behavior in times of crisis.

Madan Mohanka set up Tega Industries Ltd. in 1976 to manufacture abrasion-resistant rubber mill lining products used in the mining and mineral processing industries. In 2011, as part of its inorganic expansion strategy, Tega bought a company in Chile. However, post-acquisition, several managerial, legal and commercial problems crept up in its manufacturing facilities in Chile, leading to financial downturn in Tega's fortunes in 2016 and compelling it to planning a revival between 2016-19. However, political unrest and Covid 19 uncertainty has caused a dilemma related to further investments worth INR 1.25 billion. Management is contemplating the next steps.

Madan Mohanka set up Tega Industries Ltd in 1976 to manufacture abrasion-resistant rubber mill lining products used in the mining and mineral processing industries. In 2006, as part of its inorganic expansion strategy, Tega bought a mill-liner company in South Africa. Buoyed by this growth, two acquisitions were made in Australia and Chile in the year 2011. However, post-acquisition, several managerial, legal and commercial problems crept up in its manufacturing facilities in Chile, leading to financial downturn in Tega's fortunes in 2016 and compelling it to either plan a revival or divest its interest in its Chilean Plant.

Economy-wide crises create major challenges for small and medium enterprises (SMEs). Existing studies emphasize the crucial role of contrasting behavioral strategies, effectuation and causation in SMEs' adaptation to crisis conditions. Yet, prior literature concentrated predominantly on exploring the impact of effectuation and causation on firm performance rather than survival. The authors present and empirically test a theoretical model explaining how behavioral strategies affect SME survival during an economy-wide crisis under different levels of environmental dynamism.

The authors propose a theoretical framework based on the combination of the effectuation literature and the emerging variance-based perspective on entrepreneurial actions. The theoretical model is then tested using a sample of Russian SMEs during a period of economic adversity and recovery (2015–2019).

The empirical results reveal that causation reduces the probability of firm survival in dynamic environments, while effectuation increases the chance of survival irrespective of the state of the environment. In a nutshell, the study provides evidence that the effectuation logic serves a viable way for SMEs to increase the chances of survival through the economic shock and subsequent recovery period.

For the first time in the literature, the authors demonstrate the role of behavioral strategy (effectual and causal) as a crucial antecedent of SME survival in the short and medium term, particularly during an economy-wide downturn. Furthermore, the study demonstrates the power of variability-based theorizing for explaining and predicting the survival/failure implications of entrepreneurial actions.

The data for the case study were collected as part of a consulting project. In an interview (orientation meeting), the management of the company outlined the key data on the company and the problem, which were used to describe the case study. The account balances of the revolving credit facility were provided as an Excel file and analyzed and processed in the follow-up. The names of the company and individuals in the case were changed to protect the identities and privacy of the involved parties.

This case represents a real practical problem, in which James was asked to take over a mandate as interim manager for a family business in a severe crisis. The crisis situation also manifested itself in the company’s severely strained liquidity situation. One of the first important measures was to enable smooth solvency or to expand the liquidity scope. An analysis of the bank balances over a longer period of time showed that the liquidity situation had already been tight for several months, but the previous management had done nothing to remedy this situation. James asked himself how he should proceed to solve this problem.

This case study is suitable for lectures that focus on corporate finance or financial restructuring. It should build on basic knowledge related to financing instruments and working capital. The case study can, therefore, be used for undergraduate students (Bachelor level) in a higher semester or as an introduction for Master’s students.

An instructor can use this case in courses related to finance or financial restructuring. Target groups are undergraduate students (Bachelor level) in a higher semester or as an introduction for Master’s students. Students should have prior knowledge of financing instruments and working capital management. The case shows a frequently occurring and therefore important standard case, which can be solved on the basis of the outlined procedure. After completion of the case studies, students should have a deeper understanding of basic financial principles and be able to propose how financial restructuring could be conducted in case of lack of liquidity and limits in headroom.