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Company turnaround, General Management.

Executive education, MBA.

This is a four-part case study in which the case of a company turnaround emerges as the students work through a series of decision-making processes. In teaching the case, the students would only be given Part A to begin with, about which they need to make decisions as to what they would do, as preparation for the first part of the lecture. After that has been discussed, they are provided with the second part which tells them what in fact happened in the situation and leads them to the next decision point, and so on. The case deals with an entrepreneur hearing about a business that has gone insolvent; it then tracks the process from investigating the small manufacturing and sales company through the various stages of its subsequent remarkable turnaround to the point where the protagonist was voted Entrepreneur of the Year in South Africa. It covers the period 2007 to 2012 and includes the annual financial statements.

Following are the expected learning outcomes: an understanding of the broad range of management competencies; an understanding of how to turnaround a small organisation; and to experience group-based 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 11: Strategy.

Following discussion and analysis of the case, students should be able to explore how an individual’s background affects his/her perspective on entrepreneurial opportunities; analyse leadership behaviours that support an innovation process; and understand that constraints can enhance innovation.

This real-life case explores the main protagonist, Joni Brenner, an arts university professor at the University of Witwatersrand (Wits) in South Africa, and how over the past 10 years she worked with a group of co-operative beaders in Zimbabwe who developed hand loomed necklaces that were sold locally and internationally, placed in the African section of museum stores.The case provides an opportunity to explore the evolution of the Marigold product, the characteristics of an entrepreneur and how innovation can come from a very focused and constrained approach. Brenner’s involvement with the co-operative involved the supply of materials, design innovation and product sales. Innovation had come through focusing on the evolution of the core product, through different designs and colour combinations, learning through mistakes and through other artistic collaborations. The case concludes with Brenner questioning whether the innovation approach should be adapted to meet the needs of a potential new customer.

This case is appropriate for undergraduate, graduate and post-graduate, MBA and executive education students focusing on entrepreneurship, small business development and/or innovation.

Teaching notes are available for educators only.

CSS 7: Management Science.

In January 1996, an investment manager of a hedge fund is considering purchasing an equity interest in a start-up biotechnology firm, Rocky Mountain Advanced Genome (RMAG). The asking price is $46 million for a 90% equity interest. Although managers of the firm are optimistic about its future performance, the investment manager is more conservative in her expectations. She asks an analyst to fashion a counterproposal for RMAG's management. The tasks for the student are to apply the concept of terminal value, interpret completed analyses and data, and derive implications of different terminal value assumptions in an effort to recommend a counterproposal. Little computation is required of the student. The main objective of the case is to survey many conceptual and practical challenges associated with estimating a firm's terminal value. Issues addressed include the concept of terminal value; the materiality of the terminal-value assumption; the varieties of terminal-value estimators and their strengths and weaknesses; taxation of terminal values; when to assume liquidation versus going-concern terminal values; choosing a forecast horizon at which to estimate a terminal value; the constant growth valuation model, its derivation, limiting assumptions of constant growth to infinity, and WACC > g; use of the Fisher Formula as a foundation for estimating growth rate to infinity; and using a variety of estimates to “triangulate” in on a terminal value.

This case presents the dilemma of a multinational oil and gas company, ExxonMobil, as it factors in the ethical issues related to the environment and cultural differences in deciding whether to proceed with building a pipeline in Chad and Cameroon, two of the poorest and most corrupt developing countries in West Africa. The many players in this project included the World Bank--which cofinanced the project and put restrictions into place that would hopefully prevent pipeline-related government corruption in both Chad and Cameroon--and many environmental and human rights groups that warned of potential disaster. The case also covers the environmental and social analysis of the areas that would be affected by the pipeline.

For 28 years Alaska, like the vast majority of the nation, has struggled with growing prison populations and shrinking budgets. In 1995, the Alaska Department of Corrections, faced with sanctions unless they ameliorated their crowded prison conditions, looked to the popular practice of contracting out its correctional operations by sending 650 prisoners to a private out-of-state prison. But, as the costs of prisoner litigation and transportation mounted, the state began to consider building its own private prison, a decision which many state lawmakers and business entrepreneurs argued would allow the state to stretch scarce dollars by providing cheaper and better quality prisons, return millions of dollars to the state economy, and create permanent jobs. In this decision case, students are required to put themselves in the role of the Alaska Legislature to determine whether they should permit the building and operation of a private prison in one of Alaska's remote communities. The students must analyze and juggle the complex and often competing set of objectives, values, and political tensions intrinsic to all privatization decisions.

This case is one of a pair of cases used in a merger negotiation. It is designed to be used with “British Petroleum, Ltd.” (UVA-F-1263). One-half of the class prepares only the British Petroleum (BP) case, and one-half uses this case. BP and Amoco are considering a merger, and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future oil prices in an uncertain environment, and assumptions about Amoco's ability to reduce exploration and production costs make Amoco's future cash flows difficult to predict.

This case is one of a pair of cases used in a merger negotiation. It is designed to be used with “Amoco Corporation” (UVA-F-1262). One-half of the class prepares only the Amoco case, and one-half uses this case. BP and Amoco are considering a merger, and are in the process of negotiating a merger agreement. Macroeconomic assumptions, particularly forecasting future oil prices in an uncertain environment, and assumptions about Amoco's ability to reduce exploration and production costs make Amoco's future cash flows difficult to predict.

In mid-1992, Christine Olsen, the chief financial officer (CFO) of this large CAD/CAM equipment manufacturer, must decide on the magnitude of the firm's dividend payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook. The case serves as an omnibus review of the many practical aspects of the dividend decision, including (1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout.

The case looks at the Sethusamudram Shipping Canal Project from its inception in the year 1860 to 2012 when the Pachauri Committee was about to submit a report on the latest canal alignment (4A) as suggested by the Supreme Court. It takes the reader through a series of developments starting from the initial proposals and alignments to formation of Sethusamudram Corporation Limited and highlights the impact of National Environmental Engineering Research Institute Report, Tsunami Detailed Project Report, and Subramaniam Swamy Report on various issues including environmental, political, religious, security and legal. The case brings out multi-dimensional aspects involved in an Indian infrastructure project and gives both students and the faculty an opportunity to explore the complexities faced by the Indian decision makers in today's context.

This case explores the turnaround and corporate renewal of the Chicago Blackhawks professional hockey team, which transformed from one of the worst-run organizations in all of professional sports in 2007 to one that won the Stanley Cup (the National Hockey League championship trophy) in 2010. W. Rockwell “Rocky” Wirtz was faced with making critical decisions shortly after inheriting the team from his father, who was the individual most associated with the organization's decline. The team faced financial trouble and had narrowly avoided missing payroll; the previous customer relations strategy (which included refusing to televise home games or to conduct effective marketing) had resulted in significantly diminished brand value; and management and player personnel were devoid of effective leadership. At its nadir, the team was named “The Worst Franchise in Professional Sports” by ESPN in 2004. After assuming control, Rocky embarked on an ambitious corporate renewal strategy that included the following components: leadership: install a new management team with clear goals and creative ideas about how to turn around the organization; culture: reward players for accomplishing their goals and establish a performance-based culture; financial: seek new corporate sponsorships and increase ticket prices once the team established a winning record; and brand and marketing: send a clear message that the team was intent upon winning the championship and design a customer-focused marketing strategy.

After analyzing the case, students should be able to: recommend strategic, financial, and operational changes needed to turn around the organization, and identify key leadership qualities that enable execution of a turnaround plan.