An Interview with Online Exercises in Cases, Articles, Chapters, Add Outside Material

Michael E. Porter Operations Management and eLearning to an HBP Coursepack

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Teaching Materials
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An Interview with New! Online Exercises in

Michael E. Porter
New Curriculum: Redefining Health Care
Harvard Business School Professor Michael E.
Porter, a leading authority on competitive
strategy, has now developed a comprehensive
curriculum on health care strategy. Porter
was recently interviewed by Heide Abelli of
Harvard Business Publishing.
ABELLI: What are the main themes and topics in your health care cases?
Operations Management
Five new online exercises, each illustrating
a fundamental concept in Operations
Management, can be used to reinforce
key learning objectives in related cases,
articles, and simulations. Each exercise
is available entirely online and takes less
than 30 minutes for students to complete.
The discounted academic price for each
exercise is $6 when delivered via an HBP
digital coursepack. Exercises include:

PORTER: This curriculum is about how to deliver health care based on the value
framework. It starts with the idea that the ultimate purpose of any health care
system is to deliver excellent value and great outcomes for the patient, and to do
so as efficiently as possible. To do that, though, we need to transform the way that NEW!
health care is actually delivered, how it’s measured, and how it’s paid for.

Most of the cases are about providers, but there are also some cases about health
plans, others about employers, and some that stress the role of government or
examine influencers of the system. But ultimately, for us, the center of the universe
in health care is the people who actually deliver care.
ABELLI: What are the most difficult challenges for health care leaders of tomorrow?
PORTER: This value framework represents a radical departure from past thinking.
Health care leaders have not thought in this way about what defines success for
their organizations. Given the flawed payment system in many parts of the world,
there’s not a good correlation between the financial success of the provider and the
success of the patient. The value framework starts to get us realigned around the
fundamental purpose, which is, again, to deliver good outcomes efficiently.
The challenge is that the current structure is far from ideal to deliver value. Care
delivery is siloed into fragmented specialties. Care is fragmented across too many
Balancing Process Capacity
Students must maximize utilization and improve
profitability by applying concepts of process
analysis at a car wash. The first challenge assumes
demand is constant and validates Little’s Law—the
impact of WIP (work in process) on throughput
time. The second adds demand and process variability
to reveal the complex and realistic challenges of
running an efficient operation. #4301
Inventory Basics
Students can play 3 scenarios as they manage stock at
a hardware store and experience a different demand
pattern for wrenches, paint, and rock salt. They must
balance holding costs against ordering costs and avoid
running out of stock. Allows for discussion of the
Economic Order Quantity (EOQ) model in different
situations with demand variability. #4388

Continues on p. 2 Continues on p. 3
Michael Porter
... continued from p. 1
different providers. Too many people are
providing too many services. Meanwhile,
nobody is measuring outcomes. Nobody
understands the actual cost of delivering
care to the patient. They may understand
the cost of the pathology department, but
they don’t understand the cost of caring
for a breast-cancer patient over that
patient’s care cycle, and so on.
This curriculum really takes on those
issues in a very practical, nitty-gritty way
in the Harvard Business School tradi-
tion. This approach captures the real
problems in actual organizations and
provides a platform for discussion of
how they could do it better.
ABELLI: There are numerous interna-
tional health care cases in your collection.
What are the key conclusions from your
research on health care in other nations?
PORTER: One thing we’ve found is that
the insurance systems are very different
in different parts of the world. That said,
the problems of delivery are pretty
much universal. And so we look for
organizations in all parts of the world
that really represent the best practice
and the most innovative work in the
area of delivering value.
We believe a real opportunity is missed by
not exchanging ideas and understanding
care-delivery models and outcome mea-
surement approaches on a global basis.
So we have many international leaders
come here to Harvard Business School to
take these courses. And we have formed
see new article:
The Strategy That Will Fix Health Care by Michael E. Porter and Tom Lee #R1310B
Harvard Business Review, October 2013
 not a premium educator? apply online: educatoraccess.hbsp.harvard.edu
2 | fall 2013 Teaching Materials Newsletter
some deep relationships with providers
around the world.
ABELLI: Have your cases been devel-
oped mainly for use with sophisticated
health care practitioners in executive
education settings? Or could a profes-
sor feel comfortable assigning cases to
first-year MBA students, for example, in
a strategy course?
PORTER: I would say that health care is
enough of its own world that, if I were
choosing strategy cases for a first-year
course, I probably wouldn’t do a strategy
case on the Cleveland Clinic. Because you
just need to know so much about health
care delivery to understand the strategic
choices and how to think about them.
The very broad principles of strategy cut
across any industry, whether nonprofit
or for-profit. But health care is a very
different kind of environment. There’s a
lot of technology. There’s a lot of medical
science. There’s a lot of specificity in
terms of payment systems and regulatory
systems.
Our cases are designed to serve students at
all levels of seniority in or near the health
care system. And so we regularly teach
this material to medical school students.
We have a course now for residents and
fellows who have their MD and are doing
post-doctorate training. The courses are
also valuable for people who are going
into clinical practice or who are running
departments, and, of course, for top
management. We have nurses and other
specialists participate in this, and they all
get a lot out of it.
The Value-Based
Health Care Delivery
curriculum is based
on the framework
introduced by
Professors Michael E.
Porter and Elizabeth
Olmstead Teisberg in the book
Redefining Health Care (2006).
#7782
ISBN 978-1591397786
432 pages
Harvard Business Review Press
See the full curriculum, including
suggested cases and articles, sample
topic modules, and course descriptions:
hbsp.harvard.edu/list/porter
Because basically, the central idea in
this body of work is this: if you want to
deliver excellent care, high-value care,
you have to deliver it as an integrated
team that takes responsibility for the
whole cycle of care for the patient’s
condition. That’s going to involve lots of
different specialties and lots of different
skill sets. It’s also going to require the
ability to have a deep understanding of
what it actually costs to deliver care, so
that you can learn how to do it more
efficiently in ways that don’t detract
from outcomes. This is why we have
CFOs from health care institutions, as
well as suppliers of medical technology
and pharmaceuticals, participate in our
courses. We also have participants from
health plans because it’s their job to be
purchasers of high-value health care.
We have a lot of cases that explore this
question: how can a health plan actually
encourage the value transformation as
opposed to work against it?
 ABELLI: What teaching advice would
you give to an instructor who wants to
use your materials to teach health care
management?
PORTER: Well, this material is power-
ful. It’s so different from the health-
management curriculum that you see
in most schools.
Photo: Evgenia Eliseeva
impact. These are some of the most fun
case discussions we’ve ever had, when
we get a bunch of doctors in the room 
talking about how to deliver health care i n t h i s iss u e
better. It’s powerful material.
01 an interview with
We also provide to an instructor some michael E. porter
topic lectures, articles, and other support-
ing conceptual material, and of course NEW! online exercises in
01 
Teaching Notes. And we have aspirations operations management
to provide even more supporting content
for the cases. 04 New Cases, Articles,
Chapters, & elearning
I think it’s a little intimidating for faculty 04 Accounting

who haven’t taught in a business school

All of our curriculum is fundamentally
about clinical care for patients—not about
the management part, the back office,
the billing. It’s about the delivery of care
and the delivery of value in that care.
We’ve had a tremendous resonance with
05 Business & Government Relations
to teach cases. But we now have a bunch
of MDs who are teaching this material 06 Business Ethics
successfully and having a great time 07 Economics
doing it. So I would encourage faculty
08 Entrepreneurship
members in the medical field or public
health field to try this out. 09 Finance
10 General Management
Our material, I think, is a great bridge
between the business school and medical 11 Human Resource Management
school. There’s an opportunity here for
12 Information Technology
virtually every school—including medical
schools, public health schools, and busi- 14 International Business

this appeal. I would just encourage any
faculty member to give these cases a
shot. Even if you don’t know that much
about health care, if you’re teaching
health students, they will get this. And
if you can help tee this up, to help the
students understand the frameworks,
these discussions will have a large
ness schools—to embrace this material 15 Marketing
and add it to their curriculum.
16 Negotiation
17 Operations Management
See an extended version of this
18 Organizational Behavior
interview with Michael Porter:
academic.hbsp.harvard.edu/ 20 Sales
tmnfall13
21 Service Management

21 Social Enterprise

22 Strategy
Online Exercises ... continued from p. 1

Multiple-Server Queues 23 contact information

Demonstrates how variability in arrival times, service times, and resource utilization can
impact patient waiting times for a 4-bed hospital unit. A second scenario compares the New! eBooks
BC 
average performance of 4 specialized 4-bed units to the performance of a pooled 16-bed
unit. Illustrates the trade-offs among cost, patient experience, and clinical quality that arise
from queuing systems. #4386

Push vs. Pull Production

Set at a computer manufacturing supply chain, this exercise has students consider how
production triggers are directly related to meeting demand, managing inventory, and
maximizing capacity utilization. #4402

System Utilization in Service Management (available for course use in Spring 2014)
Students analyze a service process—writing and renewing insurance policies—to understand
the impact of capacity utilization on throughput time and WIP under demand variability. This
exercise reinforces students’ understanding of Little’s Law. #4391

TN Teaching Note Available hbsp.harvard.edu 1-800-545-7685 | 3

newly
released
ACCOUNTING
Accounting for the iPhone at
Apple Inc.
Francois Brochet, Krishna G. Palepu,
Lauren Barley
Harvard Business School Case
#111003 (19 pages) TN
Apple initially recognized revenue associated
with its iPhone product using subscription
accounting. However, in 2008, the company
started providing non-GAAP supplemental
numbers where all of the revenue was recog-
nized up front. Market participants’ reactions
to the disclosure were mixed. Was Apple
“right” in arguing that subscription accounting
was inadequate for the iPhone?
Boston Children’s Hospital:
Measuring Patient Costs
Robert S. Kaplan, Mary L. Witkowski,
Jessica A. Hohman
Harvard Business School Case
#112086 (28 pages)
Spreadsheet Available
The case describes two pilot projects on
applying activity-based costing to measuring
the cost of treating patients. It presents process
maps and financial data relating to the
processes used during 1) an office visit to a
plastic surgeon for three different diagnoses,
and 2) application and removal of three
different casts in the orthopedic cast room.
Students calculate and compare the costs and
margins of the three procedures at the two
different sites using the hospital’s existing
cost system and a proposed new system based
on time-driven activity-based costing.
Diamond Foods, Inc.
Suraj Srinivasan, Tim Gray
Harvard Business School Case
#113055 (20 pages)
The Diamonds Foods, Inc., case describes the
4 | fall 2013 Teaching Materials Newsletter
major accounting blowup at the company in
late 2011 that was triggered by a report by Off
Wall Street (OWS), a prominent short-selling
research firm. Diamond Foods, a high-flying
growth company in 2011, grew from a walnut
farmers’ cooperative in 2005 into a branded
snack foods manufacturer on the strength
of a series of acquisitions. The accounting
scandal that involved improper accounting for
walnut purchases led to Diamond’s dropping
its high-profile acquisition of Pringles, an SEC
and DOJ investigation, the departure of the
CEO and CFO, and the grounding of a high-
flying growth company. The case describes the
history and growth of the company and the
investigative and analytical work conducted
by OWS, and allows students to understand
implications of the growth strategy for finan-
cial performance and valuation. Additionally,
the case highlights the role of corporate boards
and audit committees in managing strategic
and financial reporting risks.
Encana Corporation: Accounting
for Foreign Currency
Darren Henderson, Chris Sturby,
Gillian Heisz
Ivey Publishing Case
#W12374 (25 pages)
Encana is reassessing its choice for functional
currency and presentation currency. Histori-
cally, Encana has used Canadian dollars for
its functional currency and U.S. dollars for its
presentation currency, but changes in Encana’s
operations over the past several years have
caused the company to revisit its choices. For
functional currency, Encana must determine
whether Canada continues to represent its pri-
mary economic environment. Further, Encana
must consider whether its reasons for using
U.S. dollars as presentation currency remain
valid. To make its decisions, Encana must
apply the guidance in IAS 21, “The Effects of
Changes in Foreign Exchange Rates.” Finally,
Encana must determine the impact of its
choices on the financial statements.
C a s e s
A r t i c l e s
 ch a p t e r s
e l e a r n i n g
Granville Symphony Orchestra
David W. Young, Robert N. Anthony
The Crimson Group Case
#TCG249 (5 pages) TN
This case provides a vehicle for discussing
the presentation of a nonprofit’s financial
statements. The presentation in the orchestra’s
annual report is unusual. It focuses on contri-
bution to fixed costs from operating activities,
highlighting the operating deficit and how this
deficit was, or was not, made up from endow-
ment revenue and annual fund-raising. The
case also includes an eight-year projection in
the published financial statements, which is
highly unusual.
Incentive Contracts for Financial
Consultants at Private Client
Services Division
Suneel C. Udpa
North American Case Research Association
#NA0172 (21 pages) TN
Paul Lui, executive president at Private Client
Services Division (PCSD), had the difficult task
of designing a new incentive compensation
system for financial consultants at the wealth
management division of a mid-tier financial
services firm that had limited resources
compared to its larger rivals. Lui had many
objectives in mind in designing the new
incentive compensation system: to motivate
financial consultants to stay, perform, and
excel; to attract new consultants to fill in
the vacated positions; and to generate new
business in the face of labor shortages and sig-
nificant competition from larger firms. How
did the current compensation plan at PCSD
compare to those of rival firms? How could
Lui change the compensation plan for PCSD,
given the resource constraints his company
faced as a mid-tier financial services firm?
Beyond changing compensation plans, what
could Lui do to recruit new experienced con-
sultants, stop top producers from leaving, and
more generally improve the morale at PCSD?

Investindustrial Exits Ducati
Francois Brochet, Karol Misztal
Harvard Business School Case
#113058 (30 pages)
In early 2012, Investindustrial, a European
private equity group, publicly announced its
intention to sell its 76.7% stake in Ducati
Motor Holding S.p.A., an iconic Italian
producer of sport performance motorcycles.
The decision followed a six-year turnaround
during which Ducati returned to profitability
and significantly expanded its product line.
Investindustrial’s team had the following exit
alternatives: 1) a trade sale to an automotive
buyer; 2) a secondary buyout, partial or com-
plete, by a financial investor; and 3) a relisting
in Hong Kong. Each option had its pros and
cons, but all required a careful valuation of
Ducati to maximize the investors’ return on
their flagship investment.
Justin Anson Distillery, Inc.
Richard F. Vancil
Harvard Business School Case
#113122 (6 pages)
A distiller increases whiskey production and
income declines because of accounting meth-
ods in use. Questions are raised regarding the
treatment of expenditures, which can be clas-
sified as production, inventory, or period costs.
The necessary aging process raises added
questions about prior period restatements and
needed financing. This is a rewritten version of
an earlier case by R.F. Vancil and R.H. Deming.
NovaStar Financial: A Short
Seller’s Battle
Suraj Srinivasan, Amy Kaser
Harvard Business School Case
#113120 (27 pages)
The NovaStar case describes the challenges
faced by short seller Marc Cohodes of hedge
fund Rocker Partners as he tried to expose
what he thought was widespread fraud in
mortgage lender NovaStar Financial. The case
is set in the time period from 2001 to 2007
and tracks the growth of the subprime industry
and its collapse leading to the financial crisis.
The case describes the business model of
NovaStar, a leading subprime mortgage
lending company, and its accounting practices,
with a focus on the key risks and opportunities
facing the company. The case requires
students to put themselves in the shoes of
Marc Cohodes in order to understand the
TN Teaching Note Available
accounting — business & Government rel ations
business model and accounting numbers and
to identify whether the financial performance
is a good representation of the true economic
performance. In particular, students learn
accounting concepts related to securitization,
gain on sale accounting, valuation of avail-
able for-sale securities, and analysis of the
statement of cash flows. The case also allows
students to understand the roles and incentives
of various capital market participants such as
sell-side analysts, the media, auditors, and the
Securities and Exchange Commission (SEC).
Why “Fair Value” Is the Rule
Karthik Ramanna
Harvard Business Review Article
#R1303H (4 pages)
For the past two decades, fair value account-
ing—the practice of measuring assets and
liabilities at estimates of their current value—
has been on the ascent, marking a major
departure from the centuries-old tradition of
keeping books at historical cost. Why has this
happened? The author, an associate professor
of business administration at Harvard Busi-
ness School, offers one answer: the member-
ship of the Financial Accounting Standards
Board, which sets the standards for GAAP in
the United States, has shifted over the decades
to include more people from the financial ser-
vices industry. Ramanna offers strong evidence
that these executives prefer fair value and gives
several possible motives for their preference.
One, investment banks and asset managers
are accustomed to using fair value in their day-
to-day business. Two, GAAP profits defined
on the basis of fair value rather than historical
cost accelerate the recognition of gains, partic-
ularly in periods of rising asset prices. Three,
the use of fair value to determine impairment
of goodwill from M&A activity may impose
less drag on earnings, potentially boosting
M&A activity—a major revenue source for
investment banks.
BUSINESS &
GOVERNMENT
RELATIONS
AIG and the American Taxpayers (A)
Karthik Ramanna, Matthew Shaffer
Harvard Business School Case
#113124 (23 pages)
Explores the decision faced by AIG’s board
on whether to join shareholder and ex-CEO
Maurice Greenberg’s lawsuit against the U.S.
government. The suit, argued by super-lawyer
David Boies (of Bush v. Gore and California
gay marriage fame), claims that in September
2008 the U.S. arbitrarily set aside the rights
of AIG’s shareholders—thus violating the
Fifth Amendment by taking private property
without just compensation—while preserving
shareholder rights in other troubled financial
institutions, including Goldman Sachs, whose
ex-CEO was then treasury secretary. The
U.S. government moves to dismiss the case,
arguing that it has wide discretion in times
of crisis, but a federal judge allows the suit to
proceed. The case raises two issues central to
understanding capitalism: 1) the importance
of and limits to property rights; and 2) the role
of the state in choosing between varieties of
capitalism, here between oligarchic and entre-
preneurial capitalism.
Kunshan, Incorporated: The Making
of China’s Richest Town
William C. Kirby, Nora Bynum,
Tracy Yuen Manty, Erica M. Zendell
Harvard Business School Case
#313103 (32 pages)
In 1980, the city of Kunshan was mere coun-
tryside, registering on neither the Chinese
government’s nor the international business
community’s radar. By 2010, Kunshan had
become the richest city per capita in China and
a global technology powerhouse, home to com-
panies such as Foxconn, Compal Electronics,
and Wistron. Kunshan’s entrepreneurial, self-
starting development combined with strategic
location and high levels of local government
support had been responsible for Kunshan’s
tremendous growth and success. How could it
continue to grow at a rate to maintain its lead-
ership among Chinese entrepreneurial cities?
And would the founding of an international,
joint-venture campus with Duke and Wuhan
University keep the city of Kunshan innovative
and ahead of the curve?
Michelle Rhee’s IMPACT on the
Washington, D.C., Public Schools
Laura Winig
Harvard Kennedy School Case
#HKS694 (16 pages) TN
The case opens in 2007, when the Washington,
D.C., public school system was failing. Parents,
politicians, labor unions, and activists all
hbsp.harvard.edu 1-800-545-7685 | 5
Business & G overnment re lations — business ethics
agreed that reform was necessary due to
abysmal student test scores and attendance
records as well as safety concerns. But stake-
holders disagreed sharply on how to achieve
their shared goal of providing a good education
to the city’s children. Reformers wanted to
close failing schools, parents wanted to choose
where their children attended school, and the
teachers union wanted more compensation for
teachers. Michelle Rhee, a former teacher and
“outsider,” was hired by Mayor Adrian Fenty
to institute sweeping and speedy reforms. As
chancellor, Rhee came under fire by teachers
and their union, parents, and the public for her
swift move to close underperforming schools
and, controversially, to fire teachers rated as
“ineffective” by IMPACT, a value-added evalu-
ation system designed to isolate each teacher’s
unique contribution to his or her students’
educational achievement based on student
test scores. The case discusses the steps Rhee
took to reform the D.C. public schools and
the support and opposition she encountered
along the way, culminating with her November
2010 resignation.
Rough Justice: Stuart Eizenstat and
Holocaust-era Asset Restitution (A)
James K. Sebenius, Laurence A. Green
Harvard Business School Case
#913037 (26 pages)
Beginning in 1994, a series of articles and
public disclosures indicated that Swiss banks
may have retained assets belonging to victims
of the Holocaust and also may have engaged in
long-term attempts to block survivors’ ability to
recover those assets after World War II. Stuart
Eizenstat, a longtime government official and
U.S. Special Envoy for Property Restitution,
undertook a complex multiyear negotiation
among victims’ representatives, advocacy
groups, government officials, and the banks in
an unprecedented attempt to obtain restitu-
tion for the victims. Unifying fractious parties
within an uncertain legal, social, and business
landscape, Eizenstat used a unique approach
of quantifying “rough justice” in order to
enforce the accountability of corporate entities
and governments for past injustices in Swit-
zerland, which forms the basis of this study.
6 | fall 2013 Teaching Materials Newsletter
Turkey—A Work in Progress?
Richard H.K. Vietor
Harvard Business School Case
#713018 (31 pages) TN
For the past 10 years, Turkey has grown its real
GDP at about 6% annually. This came after a
huge debt crisis in 2001-02, wherein Turkey
had to borrow $16 billion from the IMF and
comport with its difficult conditionality. Today,
Turkey is a middle-income country in search
of an effective development strategy. It tends
to run high inflation with a devalued currency,
despite massive capital inflows and a huge cur-
rent account deficit. At home, the government
has carefully managed among Islam, democ-
racy, and secularism. And abroad, it deals with
a difficult neighborhood—Syria, Iran, Iraq,
and Israel (not to mention Russia, Europe, and
the USA). Prime Minister Erdogan is trying to
rewrite the constitution before 2014, when the
next election occurs.
BUSINESS ETHICS
Barclays and the LIBOR Scandal
Clayton Rose, Aldo Sesia
Harvard Business School Case
#313075 (22 pages)
In June of 2012, Barclays plc admitted that
it had manipulated LIBOR—a benchmark
interest rate that was fundamental to the
operation of international financial markets
and that was the basis for trillions of dollars
of financial transactions. Between 2005 and
2009, Barclays, one of the world’s largest and
most important banks, manipulated LIBOR to
gain profits and/or limit losses from derivative
trades. In addition, between 2007 and 2009,
the firm had made dishonestly low LIBOR sub-
mission rates to dampen market speculation
and negative media comments about the firm’s
viability during the financial crisis. In settling
with U.K. and U.S. regulators, the firm agreed
to pay $450 million in fines. Within a few
days of the settlement, Barclays’ CEO, Robert
Diamond, had resigned under pressure from
British regulators. Diamond blamed a small
number of employees for the derivative trading-
related LIBOR rate violations and termed their
actions “reprehensible.” As for rigging LIBOR
rates to limit market and media speculation of
Barclays’ financial viability, Diamond denied
any personal wrongdoing and argued that,
if anything, Barclays was more honest in its
LIBOR submissions than other banks—ques-
tioning how banks that were so troubled as
to later be partly nationalized could appear to
borrow at a lower rate than Barclays. This case
explains why LIBOR was an essential part of
the global financial market, the mechanism
used to establish the rate, and what Barclays
did wrong. The case allows for an examination
of 1) the consequences of violating the trust of
market participants; 2) cultural and leadership
flaws at Barclays; 3) the challenge of effectively
competing in a market where systemic, and
widely understood, corruption is taking place;
4) the complicity of regulators in perpetuating
a corrupt system; and 5) what might, or might
not, be effective remedies for the systemic
flaws in LIBOR.
Clarence Hall University and
the Donation
Bidhan Parmar, Jenny Mead,
Mallory Combemale
University of Virginia Darden School
Foundation Case
#UV6545 (9 pages)
Annalisa McGann, chair of London’s presti-
gious Clarence Hall University, together with
the university’s board must make a decision
about whether to return a large monetary
donation from the Natour Charitable
Foundation, which was founded and run by
a recent graduate who was also the son of the
leader of a corrupt, authoritarian regime in an
oil-rich region. Almost two-thirds of the money
had already been invested in an innovative
leukemia drug that could significantly increase
patients’ chances of survival; the remainder
had been earmarked for an endowment fund
for low-income students. Each course of
action—keeping the money, giving back the
entire sum, or returning the unspent money—
had complex consequences, particularly in the
current environment, in which all British uni-
versities were suffering financially and there
was nationwide student unrest over rising uni-
versity costs. The British press, by uncovering
the connection between Natour and Clarence
Hall, had forced the administration’s hand,
and McGann and the board needed to make a
quick decision after considering a number of
complicating factors.

Confronting a Pandemic in a
Home Rule State: The Indiana
State Department of Health
Responds to H1N1
David Giles, Arnold Howitt
Harvard Kennedy School Case
#HKS728 (21 pages)
When Indiana State Health Commissioner
Dr. Judy Monroe learned of the emergence of
H1N1 (commonly referred to as “swine flu”) in
late April 2009, she had to quickly figure out
how to coordinate an effective response within
her state’s highly balkanized public health
system, in which more than 90 local health
departments wielded considerable autonomy.
Over the next several months, she would
come to rely heavily on relationships she had
worked hard to establish with local health
officials upon becoming commissioner—but
she and her senior advisors would also have
to scramble to find new ways to communicate
and coordinate with their local partners, who
represented jurisdictions that varied consider-
ably in terms of size, population demograph-
ics, resources, and public health capacity.
Defining the Purpose for Borussia
Dortmund GmbH & Co. KGaA
Urs Mueller, Ulrich Linnhoff,
Bernhard Pellens
ESMT—European School of Management
and Technology
#ES1341 (14 pages)
In its 100th year of existence in 2009, Borussia
Dortmund (BVB) was the only German soccer
club listed on the stock exchange. With three
days to go before the annual shareholders
meeting on November 24 of that year, the
club’s managing directors, Thomas Tress
and Hans-Joachim Watzke, went through the
year-end figures one more time. Although the
situation had improved since 2005, when the
club was on the brink of insolvency, the closing
accounts once again showed a negative net
income. After nine years as a publicly traded
company, the BVB had to report its fifth loss,
this time for 5.9 million euros, which added up
to a cumulative loss of more than 145 million
euros. After the passing of a century, many
stakeholders were concerned about the way
forward. What was the organization’s purpose?
What was more important, finally making a
profit and meeting shareholders’ expectations
or playing for the fans and the club’s honor?
What could the managing directors offer to
TN Teaching Note Available
business ethics — economics
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their shareholders, who had seen the value of The Next Emerging Giants
their shares drop from 11 euros at the IPO to Take Flight
less than 1 euro in November 2009?
Alicia Garcia Herrero
IESE-Insight Magazine Article
#IIR058 (8 pages)
ECONOMICS
Move over BRICS, Next 11, and CIVETS: the
EAGLEs have landed. A new formulation by
Flexicurity: Riding into the Future
BBVA Research, which conducts economic
Ton Wilthagen
analyses for the international banking group,
IESE-Insight Magazine Article
reveals a special group of markets that it feels
#IIR063 (7 pages)
deserves closer investor attention. The author
One of the most urgent problems confronting refers to these countries as EAGLEs, which
European governments today is high unem- stands for Emerging and Growth-Leading
ployment. At the same time, global companies Economies. These 10 emerging countries will
are finding it harder to find experienced and contribute more to global growth than the G7
qualified professionals who can help them average in the next 10 years. On top of this,
compete in a global business environment. this article identifies a dozen other countries to
watch in the so-called EAGLEs’ Nest. Though
The creative and collaborative approach to
the opportunities for investors depend on
employment known as “flexicurity,” seemingly
many factors, there are two key areas that are
offers a solution to both these problems by
common across all EAGLEs: the rise of the
emphasizing flexible work arrangements and
middle class, presenting opportunities for the
comprehensive lifelong learning schemes,
retail and household service sector; and vast
thereby helping firms and employees thrive
infrastructure needs, of special interest to con-
in volatile business contexts. In this article,
struction companies in the developed world
the author highlights two areas of flexicurity
looking for new opportunities to boost their
that stand out for reaping immediate benefits
production capacity.
and unleashing powerful societal effects:
more diverse contractual arrangements and
lifelong learning for all categories of workers. Preparing for the Pitfalls of
But flexicurity involves more than formulat- Interconnectivity
ing policies; it’s an entirely new conception of
Ian Goldin
work. It needs to be understood as a dynamic
IESE-Insight Magazine Article
phenomenon and monitored through a careful
#IIR068 (8 pages)
examination of the different conditions of each
unique labor market and culture. Recent decades of globalization have created
a more interconnected, interdependent, and
complex world than ever witnessed before.
While policy makers have focused on facilitat-
ing integration, the implications of growing
hbsp.harvard.edu 1-800-545-7685 | 7
economics — entrepreneurship
interdependence have been largely ignored.
Global integration has brought many benefits,
but it has also created fragility by produc-
ing new kinds of systemic risks. This article
provides an understanding of these new
21st-century systemic risks and the challenges
they pose. The 2008-09 financial crisis is used
to illustrate the failure of even sophisticated
global institutions to manage the underly-
ing forces of systemic risk, which have been
amplified by our growing interdependence.
At the same time, technological change has
greatly increased the power of individuals to
destabilize powerful systems. Urgent reform
of global governance structures and institu-
tions is essential to improve the mitigation and
management of such global risks. Likewise,
significant changes in risk management
and risk culture are required to ensure that
businesses are better prepared. This article
suggests the first steps to take.
ENTREPRENEURSHIP
Amici’s East Coast Pizzeria
Naeem Zafar, Jack Fuchs,
Victoria Chang
California Management Review Case
#CMR533 (14 pages)
The Amici’s East Coast Pizzeria case study
presents the history of Amici’s East Coast
Pizzeria, started by Peter Cooperstein and
Mike Forter in 1987. It allows students to
evaluate the company’s launch in terms of
opportunity identification and also evaluate
the company’s scaling and growth strategy
and options, all in the context of an entrepre-
neurial start-up environment.
Entrepreneurial Finance in Finland?
William R. Kerr, Ramana Nanda,
Alexis Brownell
Harvard Business School Case
#813068 (24 pages) TN
This case describes a new venture attempting
to bring early-stage entrepreneurial financing
to Finland and other Nordic countries. Entre-
preneurship is taking off in Finland, an area
that historically has had little venture capital or
high-growth start-up activity, but a gap remains
for seed-stage financing. The founders are
evaluating the best way to structure their pri-
vate equity fund to reflect their own assets and
abilities and the needs and resources of the
entrepreneurial scene in the Nordics. The case
8 | fall 2013 Teaching Materials Newsletter
evaluates whether to organize as an accelera-
tor, a micro-VC fund, an incubator, a normal
VC fund, or a hybrid.
EverTrue: Mobile Technology
Development (A)
William R. Kerr, Alexis Brownell
Harvard Business School Case
#813122 (25 pages) TN
Brent Grinna is evaluating different options
for the technology development of his
start-up’s iPhone app, including hiring local
programmers, finding a CTO, and outsourc-
ing. He has just over two months before he
presents his alumni networking app to Brown
University, in the hope that they will adopt
it and fund his company, EverTrue. He lacks
the technical knowledge necessary to make
the prototype himself and so has to quickly
decide on the best option. He is considering
multiple ways to find a developer, including
hiring a local programmer or making use of
a local app-development company; using an
outsourcing platform like oDesk; contracting
with Dashfire, a friend’s company that charges
low fees for product development in exchange
for equity; or finding and hiring a CTO or
technical co-founder. Grinna must weigh
issues like cost, speed of development, equity
retention, proximity and ease of collaboration,
and control of intellectual property. The case
further provides an opportunity for discussing
the business models of global firms like oDesk
and Dashfire.
ExerciseApp
Barbara L. Marcolin, Ning Su,
Corey Rochkin
Ivey Publishing Case
#W13025 (10 pages) TN
The CEO and founder of ExerciseApp decided
to take the plunge and spec out the features of
his new iPhone mobile application and sup-
porting website. He planned for ExerciseApp
to stream exercise workouts from pro athletes
to followers who wanted to “Train. Play.
Be. Like the Pros” and get an edge to their
workouts. As he envisioned the application, he
realized he would need a lot of help with the
technology and the setup of this entrepreneur-
ial venture in order to successfully bring it to
market. With limited funding, he must decide
on the next steps for the business, including
the application’s features, business model, and
market strategy.
MakerBot: Challenges in Building
a New Industry
Ruth Gilleran, Erik Noyes
Babson College Case
#BAB706 (17 pages) TN
Like Apple, MakerBot Industries offered its
first product in the form of a kit. Enthusiasts
who wanted to build their own 3-D printer
and enter the brave new world of personal
manufacturing could create any object in their
imagination—as long as it was no bigger than
a coffee cup. The founders of MakerBot—Bre
Pettis, Adam Mayer, and Zach Smith—were
each passionate about bringing affordable 3-D
printing to the masses. Moreover, they would
not betray their commitment to open technol-
ogy and open innovation. Above all else, they
wanted to make their 3-D printers understand-
able to and modifiable by users. They did this
by keeping every aspect of their 3-D printers’
hardware and software open and adaptable.
Through the creation of Thingaverse.com (a
universe of things), an expanding army of
MakerBot enthusiasts could upload, share,
and modify a growing array of 3-D objects,
including toys, small inventions, medical
devices, and even architectural models. What
advantages did MakerBot’s strategy of open-
ness bestow? How was MakerBot positioned
for future battles in the emerging personal
manufacturing industry with Hewlett-Packard
and others? Lastly, how did MakerBot turn a
unique research endeavor into a powerful idea
attracting venture funds from Jeff Bezos, The
New York Times, and venture capitalists?
SaferTaxi: Connecting Taxis and
Passengers in South America
Peter A. Coles, Benjamin Edelman
Harvard Business School Case
#913041 (10 pages) TN
SaferTaxi, a taxi booking service in South
America, must develop its mobilization strat-
egy; that is, it must attract enough passengers
and drivers to make its service worthwhile
for all. Drivers hesitate to pay for SaferTaxi’s
smartphones and service unless these will
deliver passenger bookings—and passengers
have no reason to sign up unless drivers are
available. Meanwhile, regulators question the
permissibility of online taxi booking in light
of regulatory requirements, and some existing
taxi booking vendors feel threatened by Safer-
Taxi’s efforts to enter the market. As SaferTaxi
attempts to satisfy these diverse constituents,
*Reviews available to Premium Educators

Entrepreneurship
Working Capital Simulation: Managing Growth
In this single-player simulation, students consider investments for growth
and cash-flow improvements at a small company. They must understand how
financial statements are interconnected and consider the possible effects of each
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the interaction of factors and the impact of any one strategic decision. This
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international competition looms. What should
SaferTaxi’s founders do next?
FINANCE
Brazos Partners and the
Tri-Northern Exit
Matthew Rhodes-Kropf,
Nathaniel Burbank
Harvard Business School Case
#813157 (26 pages)
Randall Fojtasek, a partner at the Dallas-based
Brazos Private Equity Partners, must decide
whether now is the time to sell his firm’s
investment in Tri-Northern Distribution.
Brazos, a middle-market leveraged buyout
group, created the company two years earlier
through the acquisition of two electronic secu-
rity distribution companies: Tri-Ed Distribu-
tion and Northern Video Systems. Twenty-four
months after successfully integrating the two
companies, Brazos has received two attractive
offers for the combined distributor. With the
company’s management projecting double-
digit growth for 2012, however, it is far from
clear that now is the optimal time to exit from
the firm’s third fund.
Conscious Capitalism Firms: Do They
Behave as Their Proponents Say?
Chong Wang
California Management Review Case
#CMR528 (27 pages)
Proponents of the Conscious Capitalism
(CC) movement claim that CC firms should
demonstrate a lower gross margin, a higher
profit margin, a lower SG&A (Sales, General,
TN Teaching Note Available
and Administration), and a lower marketing
expense than do non-CC comparable firms.
Using a sample of industry-year-size-matched
control firms as the CC firms’ benchmark, this
article shows that empirical evidence largely
disagrees with these conjectures. It further
shows that in contrast to the implications of
the CC movement, CC firms neither demon-
strated superior stock performance relative to
the S&P 500 in recent years nor responded
less to the pressures from the equity market.
Gold as a Portfolio Diversifier:
The World Gold Council and
Investing in Gold
Pedro Matos, Evans Richard
University of Virginia Darden School
Foundation Case
#UV6524 (14 pages) TN
Spreadsheet Available
The global head of investment research at the
World Gold Council (WGC) had finished his
presentation “The Strategic Case for Gold as an
Asset Class” at the 2012 Bloomberg Precious
Metals Conference in New York. As a result of
the market collapse in 2008 and the ongoing
euro-area crisis, investors worldwide had safety
and security on their minds, and many in the
room were wondering whether gold would
provide capital preservation and improve the
overall risk-return trade-off of their portfolios.
At the same time, the sustained run-up in the
price of gold since 2001 that was mentioned in
the presentation was a cause for concern. Was
gold the safe haven that it had proved to be in
2008 and 2009, or was it an asset class at the
peak of a bubble? The investment case for gold
deserved closer examination.
finance
#4302
Seat time: 30 minutes
Teaching Note available
India Faces a Power Failure:
U.S. Financial Service Company
Expansion Plans
F. John Mathis, Frank Tuzzolino
Thunderbird School of Global
Management Case
#TB0311 (13 pages) TN
The case deals with U.S. Financial Service
Company (USFSC) and its CEO, John P.
Lewis, and their consideration of whether the
company should open operations in India.
USFSC would either partner with a local
financial service company or invest in a new
start-up bank branch or representative office
in India. Although Lewis is conducting this
analysis in 2012, the case covers the time
period from 2005 to 2012 to provide back-
ground and to review the economic develop-
ments and political policies undertaken by
the Indian government to recover from the
global financial crisis of 2007-2009. The case
requires a performance analysis of the finan-
cial ability of USFSC to undertake expansion
into India and/or requires an assessment of
the economic and political risks of investing in
India and how to mitigate those risks.
Lin TV Corp
David S. Scharfstein, Erik Stafford,
Joel L. Heilprin
Harvard Business School Case
#213065 (6 pages)
This case considers the valuation of Lin TV, a
publicly traded company with 30 TV stations.
The case highlights how a change in operating
strategy can enhance the firm’s value, and it
considers the effect of consolidation within the
industry on firm value.
hbsp.harvard.edu 1-800-545-7685 | 9
finance — genera l management
Lockheed Martin’s Acquisition
of NationScape, Inc.
Susan A. White
North American Case Research
Association Case
#NA0178 (21 pages) TN
Defense is big business, especially for
companies like Lockheed Martin. Lockheed
Martin, formed in 1995 through the merger of
Lockheed Corp. and Martin Marietta, was one
of the largest defense contractors in the world,
employing about 140,000 worldwide. Lock-
heed Martin was considering the acquisition
of NationScape, Inc., a firm that supports U.S.
military readiness; diplomatic and develop-
ment efforts; and peacekeeping, stabilization,
and nation-building activities in more than 65
countries around the world. The acquisition
could increase Lockheed Martin’s overseas
defense support operations and expand its
capabilities to provide diplomatic and develop-
ment services to complement its existing
defense business. The corporation needed to
determine an appropriate price for the acquisi-
tion and also evaluate whether the acquisition
would be a good strategic and cultural fit for
the corporation.
Melco Crown Entertainment:
Rolling the Dice and Other Ways
to Raise Capital
Stephen Sapp, Matthew Gray
Ivey Publishing Foundation Case
#W12210 (15 pages) TN
The case deals with how the investment
banker advising the chief financial officer of
Melco Crown Entertainment Limited (MCEL),
a casino and entertainment company based in
Macau, suggests that the company finance two
new gaming resorts currently under construc-
tion. The development of these properties has
stopped because of insufficient funding, and
project timelines have started to be questioned.
A decision regarding the best means to raise
the necessary capital needs to be made quickly
or MCEL may not be able to capitalize on the
lucrative, growing gaming market in Macau.
The advice must consider the immediate need
to raise capital to get the projects back on track
and the need for long-term financial flexibility
to take advantage of future opportunities. The
case considers a variety of domestic and inter-
national options to determine what best meets
MCEL’s needs.
10 | fall 2013 Teaching Materials Newsletter
The Naini-Itarsi Railway
Electrification Project
Ravi Anshuman, Narang Tapsi,
Anand Sharma
Indian Institute of Management
Bangalore Case
#IMB395 (14 pages) TN
Spreadsheet Available
This case exposes students to financial decision
making in government enterprises and the
concepts of financial and economic rates of
return. It is based on actual electrification
projects being undertaken by Indian Railways,
one of the largest government organizations
in the world. Electrification projects require
large capital outlays with significant financial
and welfare implications. The case analysis
involves 1) estimating incremental cash flows
under alternative scenarios, 2) calculating
the financial rate of return, and 3) conduct-
ing a sensitivity analysis to identify the key
value drivers. It also provides opportunities to
discuss nominal vs. real cash flows, differences
between internal rate of return and net present
value, and the choice of different discount
rates. The case is suitable for a course on Cor-
porate Finance and Valuation.
The Real Value of Say-on-Pay
Mireia Gine
IESE-Insight Magazine Article
#IIR092 (7 pages)
In light of the financial crisis, shareholder
activism is growing around the globe, leading
to Say-on-Pay policies, which give sharehold-
ers the opportunity to voice their opinions on
executive pay and put pressure on boards to
justify and explain pay packages more clearly
to shareholders, if not redesign them com-
pletely. In several high-profile cases, large com-
panies have failed to obtain approval of pay
packages for their CEOs due to such activism.
Given the trend toward implementing Say-on-
Pay in the United States and several European
countries, the author collaborated on research
to determine the real effect of such policies
on companies and their performance. The
research shows that while Say-on-Pay may not
curb excessive remuneration, it does provide a
host of other measurable, positive benefits for
companies and their shareholders, both in the
immediate and longer terms. Apart from these
benefits, the author argues that Say-on-Pay can
be an effective way to strengthen corporate
governance and accountability within the firm,
outweighing the time and costs they require.
GENERAL MANAGEMENT
Clayton Industries, Inc.:
Peter Arnell, Country Manager
for Italy (Brief Case)
Christopher A. Bartlett,
Benjamin H. Barlow
Harvard Business School Brief Case
#4199 (12 pages) TN
Clayton Industries, a 60-year-old U.S.-based
firm in the HVAC (heating, ventilation, and air
conditioning) industry, with nearly $1 billion
in revenues, has gradually built a presence in
a number of countries, including several in
Europe. Peter Arnell, previously Clayton’s suc-
cessful country manager for the U.K., has been
asked to take over the Italian subsidiary, which
has recently been struggling on several fronts.
Arnell must juggle the strategic objectives
of his manager (the head of Clayton Europe)
and of the firm’s Wisconsin-based CEO while
overseeing the day-to-day activities of the
business in this new setting. Many of Arnell’s
challenges derive from his dual responsibilities
of handling manufacturing as well as sales of
Clayton products in his new home country.
Hillary Clinton & Partners: Leading
Global Social Change from the
U.S. State Department
Rosabeth Moss Kanter,
Ai-Ling Jamila Malone
Harvard Business School Case
#313086 (24 pages) TN
As U.S. secretary of state, Hillary Rodham
Clinton acted on a long-standing interest in
public-private partnerships to elevate and
activate an Office of Global Partnerships
reporting directly to her. One major initiative
that also addressed her interest in women’s
empowerment was to create an alliance for
clean cookstoves, a significant environmental
and public health issue in developing coun-
tries. This case examines the change process
within the State Department and across the
federal government as well as the process of
developing partnerships, and looks at what
happens on the ground to deploy resources.
It raises the question of whether the alliances
will be sustainable when Secretary Clinton
leaves office.

Qantas Airlines: Twitter Nosedive
Jana Seijts, Paul Bigus
Ivey Publishing Foundation Case
#W12338 (6 pages) TN
The executive of Government and Corporate
Affairs at Qantas airlines faced a communica-
tion situation that was spiraling out of control.
Qantas had launched a contest through the
social media service Twitter, asking partici-
pants to use Twitter to describe their “dream
luxury in-flight experience.” However, the
competition dissolved as thousands of people
used the opportunity to express negative
comments about Qantas. By the second day,
nearly 15,000 people worldwide had used
social media to vent their frustrations with the
airline. The executive needs to devise a plan
of action before additional damage is incurred
by one of Australia’s strongest brands.
Research In Motion: The Mobile
OS Platform War
Alan MacCormack, Brian Dunn,
Chris F. Kemerer
Harvard Business School Case
#613001 (22 pages)
The case describes competition in the market
for smartphones in the U.S. and the position of
one player, Research in Motion (RIM), which
manufactures the popular BlackBerry line of
products. Early in 2011, RIM is in trouble. Its
stock price has plummeted amid poor busi-
ness results, and its future as an independent
company is in doubt. A new chief executive
officer, Thorsten Heins, must decide how to
position the company for the future. The case
finance
newly updated
Finance Simulation:
M&A in Wine Country V2
The second release of this simulation adds an
optional valuation exercise that introduces students
to the valuation techniques used in the simulation.
Students play the role of management at 1 of 3
publicly traded wine producers. Two companies
consider a merger-of-equals while a third considers
acquiring 1 of the other 2. Students review
confidential information to determine value and set
reservation prices before negotiating deal terms with
each other and accepting or rejecting final offers.
TN Teaching Note Available
general management — human resource management
allows students to understand the strategic
dynamics in platform-based industries in
general and to explore more specifically how
a firm that led the industry in 2007 could fall
to earth so dramatically four years later. The
case is based on data and information from
public sources.
Sony PlayStation: Security Breach
Jana Seijts, Paul Bigus
Ivey Publishing Foundation Case
#W12309 (12 pages) TN
In April 2011, Sony’s PlayStation and Qriocity
services were attacked by an illegal and unau-
thorized intrusion into the company network,
compromising user account information. For
five days, the corporation turned off both its
PlayStation Network and Qriocity services
while it conducted a full and complete inves-
tigation with the help of an external security
firm. Although brief statements about the
issue were posted on the PlayStation blog,
Sony did not publicly disclose the full extent
of the security breach or the expected date
when network services might return to
normal, leaving many people speculating
whether personal or financial information
had been illegally obtained. The timing was
complicated by the imminent announcement
of the launch of Sony’s first tablet computer.
With its public statement, Sony intended to
communicate key points of information about,
explanations of, and solutions to the network
interruption. With Sony having over 70 million
PlayStation Network and Qriocity services user
accounts worldwide, customers, industry
analysts, investors, consumer protection
#4805
Multi-player
Seat Time: 90 minutes
groups, and government officials were all
waiting for answers.
Sugar Bowl
Richard G. Hamermesh, Alisa Zalosh
Harvard Business School Brief Case
#913537 (14 pages) TN
Shelby Givens, a recent business school gradu-
ate, returned home to Raleigh, North Carolina,
to help rescue her family’s ailing and outdated
bowling alley, Westlake Lanes. Although she
cut costs and addressed inefficiencies, moving
the business from near-bankruptcy to profit-
ability in nine months, market conditions
threatened the long-term viability of the busi-
ness. Givens then sold her family on a new,
more youth-oriented concept, an urban lounge
called Sugar Bowl that could generate sizable
revenues from the food and beverage busi-
nesses already embedded in Westlake Lanes.
The case follows Givens as she builds Sugar
Bowl into a turnaround story through shrewd
decision making in finance, operations, and
marketing while contending constantly with
challenging surprises and disappointments.
The case also captures Givens’ reflections on
how the entrepreneurial drive has motivated
her. Sugar Bowl may be taught alone or after
“Westlake Lanes” (4431), which follows Givens
through the initial turnaround process.
HUMAN RESOURCE
MANAGEMENT
Honeywell’s CEO on How He
Avoided Layoffs
David Cote
Harvard Business Review Article
#R1306A (5 pages)
When David Cote arrived at Honeywell in
2002, the company had gone through three
CEOs in four years. It had repeatedly missed
earnings, and it had environmental liabilities
that had never been dealt with. Virtually no
pipeline of new products existed, because
managers had been disinvesting to boost
profits. Over the next five years Cote worked
to fix many of those problems, and by the end
of 2007 the company’s credibility had been
reestablished with investors and its share price
had more than doubled. Then the recession
hit. Cote’s view was that any restructuring
Honeywell did in response should have been
what was best for business efficiency and
hbsp.harvard.edu 1-800-545-7685 | 11
human resource management — information technology
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profitability over the long term—not solely a
reaction to the recession—and should not have
had any impact on the company’s ability to
outperform in recovery. The leadership team
settled on furloughs, and this is the story of
how they worked.
Massachusetts Financial Services
(Abridged)
Brian J. Hall, Karen Huang
Harvard Business School Case
#913036 (23 pages)
This case describes the compensation and
performance evaluations at an investment
management company. The senior man-
agement team of Massachusetts Financial
Services (MFS) Investment Management was
contemplating an introduction of hedge funds
at the firm, but many believed that typical
hedge fund manager pay (20% of the upside)
would harm the MFS culture, which glorified
“star performance but not star egos.” The case
presents the MFS compensation philosophy
and plan (including the plan’s emphasis on
subjective compensation), the types of people
it attracted, the resulting culture, and how
the senior management team approached the
hedge funds question. It includes side discus-
sion on firm-specific human capital. This is an
abridged version of an earlier case.
Say-on-Pay at The Walt Disney
Company
Ian D. Gow, Gaizka Ormazabal
Harvard Business School Case
#113052 (18 pages)
This case focuses on the lead-up to Disney’s
2012 annual meeting, where Disney would
face a vote on the compensation package of
its CEO, Robert Iger. Leading proxy advisory
firms were recommending that shareholders
reject the proposed compensation.
12 | fall 2013 Teaching Materials Newsletter
Southfield Packaging
Michael Beer, Alisa Zalosh
Harvard Business School Brief Case
#913562 (13 pages) TN
Southfield Packaging provides packaging
materials and services to medical device
manufacturers. The case examines the rela-
tionship between a corporate vice president,
Mark Sanders, and one of his direct reports,
Regional Manager Frank Belby. Sanders’
preparation for Belby’s annual performance
review provides a foundation for discussing
the common challenges and difficulties associ-
ated with performance reviews. Specific issues
include the need to clearly define criteria for
evaluation and the question of whether Belby’s
physical health should play a role in his perfor-
mance review. Overall, is Southfield’s appraisal
process a fair and effective way of evaluating
employee potential?
What Monetary Rewards Can
and Cannot Do: How to Show
Employees the Money
Herman Aguinis, Harry Joo,
Ryan K. Gottfredson
Business Horizons Case
#BH525 (9 pages)
Monetary rewards can be a very powerful
determinant of employee motivation and
performance, which, in turn, can lead to
important returns in terms of firm-level
performance. However, monetary rewards do
not always lead to these desirable outcomes.
We discuss in this installation of Human
Performance what monetary rewards can
and cannot do, and reasons why, in terms
of improving employee performance. Also,
we offer research-based recommendations,
including the following five general principles
to guide the design of successful monetary
reward systems: 1) define and measure
performance accurately, 2) make rewards
contingent on performance, 3) reward employ-
ees in a timely manner, 4) maintain justice
in the reward system, and 5) use monetary
and nonmonetary rewards. In addition, we
offer specific research-based guidelines for
implementing each of the five principles. In
short, our article summarizes research-based
findings and offers recommendations that
will allow managers and other organizational
decision makers to understand when and
why monetary reward systems are likely to be
successful in terms of enhancing employee
motivation and performance.
INFORMATION
TECHNOLOGY
Beyondsoft IPO (A)
Ning Jia, Hong Zhang
Tsinghua University Case
#TU0032 (24 pages) TN
B Case Available
Beyondsoft, a leading software outsourcing
enterprise in China, began to make prepara-
tions for its overseas listing in 2004, including
establishing a red-chip structure needed for
overseas listing and introducing overseas insti-
tutional investors. However, a global financial
crisis broke out when Beyondsoft was going
to submit its listing application to the U.S.
Securities and Exchange Commission in 2007.
As a result, Beyondsoft had no choice but to
temporarily shelve the listing plan and whole-
heartedly cope with the sudden crisis. Only
after Beyondsoft showed steady performance
and cash flow in 2009 did its listing get put
on the agenda again. However, the U.S. capital
market after the peak of the crisis was no
longer as booming as it had been in the past,
making it difficult to reopen a window for the
listing in the U.S. The question was whether
to wait patiently, looking forward to the next
boom in the U.S. capital market to come soon;
turn to other overseas markets; or resolutely
give up the overseas listing plan and go back
to the domestic A-share market. Beyond-
soft President Ben Wang fell into repeated
comparisons and options. Finally, Beyondsoft
chose to return to the domestic A-share market
and was successfully listed at the SME board
of the Shenzhen Stock Exchange on January
6, 2012. The cases of Beyondsoft IPO include
part (A) and part (B). (A) is used mainly for
classroom discussion and (B) is an after-class
reference for students.

EZ-Link and NETS E-Payment:
Creating a Standard and Building a
Platform Innovation
Christina Soh, Yvonne Chong
ABCC at Nanyang Tech University Case
#NTU036 (19 pages) TN
The e-payments landscape in Singapore was
previously dominated by two major card
issuers with non-interoperable cards. The
Infocomm Development Authority launched
an initiative to develop an innovative standard
that would provide an interoperable platform
in order to boost local micropayments and
open up e-payment services for consumers.
The result was a pioneering ISO standard—
the Contactless e-Purse Application Standard
(CEPAS). This open standard, with unique
security and high-performance features,
enabled multiple payment applications offered
by different issuers to be on a single smart
card, which consumers could use for bus, taxi,
and rail transport; car park and road usage
charges; and retail micropayments. The case
examines the significant challenges and trade-
offs in the development and deployment of
this platform innovation, such as orchestrating
the efforts of multiple stakeholders and balanc-
ing various stakeholders’ legitimate interests,
incentivizing investment in supporting infra-
structure and complementary innovations,
and promoting the adoption and diffusion
of the cards by consumers and merchants.
The CEPAS platform was also being leveraged
for the next generation of e-payment innovations,
such as payments via near field communication–
enabled mobile phones.
San Francisco International Airport
and Quantum Secure’s SAFE for
Aviation System
Daniel Diermeier, Evan Meagher
Kellogg School of Management Case Online Course
#KEL720 (12 pages) TN
ROI Calculations Available
In 2008 San Francisco International Airport
(known by its three-letter airport code, SFO)
had announced a $383 million plan to renovate
and reopen Terminal 2. Assistant Deputy
Director of Aviation Security Kim Dickie and
her team had selected Quantum Secure’s
SAFE software suite as the new Terminal
2 credentialing system, but she needed to
develop a business case quickly that would
convince senior management to give the green
light to fund the purchase. The case describes
TN Teaching Note Available
a scenario that occurs frequently in the real
world, in which a decision offers some real
but qualitative value in ways that are difficult
or impossible to quantify. The discussion
and analysis give students the opportunity to
consider the factors that will drive the internal
rate of return (IRR), net present value (NPV),
and discounted payback period calculations
without constructing comprehensive spread-
sheet models. Analysis of the case suggests
the limits of such approaches in cases where
perceived value is difficult to quantify. The
case prepares students to evaluate and justify
purchasing requests when interacting with
financial gatekeepers such as CFOs and CEOs
by introducing a framework to analyze the
quantifiable benefits of a capital expenditure
while keeping in mind important intangible
benefits.
Why IT Fumbles Analytics
Donald A. Marchand, Joe Peppard
Harvard Business Review Article
#R1301H (9 pages)
As managers seek to exploit the tremendous
amounts of data now available from internal
and external sources, they’re likely to use the
approach they use with all their IT projects—
that is, they’ll focus on building and deploy-
ing technology on time, to plan, and within
budget. That works for projects designed to
improve business processes and increase
efficiency, but when it comes to extracting
valuable insights from data and using infor-
general management
Management Communication
William Ellet, Brandeis University
and Harvard Business School
The Management Communication Online
Course covers three key topics—planning,
writing, and presenting—through the
scenario of 2 managers as they face various
communication challenges on the job. Includes
more than 30 expert videos, 50 interactive
exercises, writing and audio examples, and
checklists and templates, and each section
concludes with an exam. Available as a
complete course or in sections.
information technology
mation to make better decisions, managers
need a different approach and mind-set. A big
data or analytics project is likely to be smaller
and shorter than a conventional IT initiative,
such as installing an ERP system. It’s also
more like scientific research. Commissioned
to address a problem or opportunity, such a
project frames questions, develops hypotheses,
and then experiments to gain knowledge and
understanding. The authors have identi-
fied five guidelines for taking this voyage of
discovery: 1) place users—the people who will
create meaning from the information—at the
heart of the initiative; 2) unlock value from
IT by asking second-order questions and
giving teams the freedom to reframe business
problems; 3) equip teams with cognitive and
behavioral scientists, who understand how
people perceive problems and analyze data; 4)
focus on learning by facilitating information
sharing, examining assumptions, and striving
to understand cause and effect; and 5) worry
more about solving business problems than
about deploying technology.
Wooqer: Making Business Social (A)
Shankar Venkatagiri,
Yalla Veera Prakash
Indian Institute of Management
Bangalore Case
#IMB411 (21 pages) TN
B Case Available
Information technologies enable key divisions
of an organization, such as HR, training,
operations, and legal, to achieve operational
Complete Course #4337
Seat time: 18–22 hours
Writing in Business Section #4341
Seat time: 12–14 hours
Presenting in Business Section #4343
Seat time: 12–14 hours
Sample syllabus available
hbsp.harvard.edu 1-800-545-7685 | 13
information technology — international business ­
efficiency. In addition, IT can and must be
used to enhance the company’s strategic posi-
tioning by “socially” engaging an ecosystem of
stakeholders: employees, suppliers, and cus-
tomers. For this, the company’s back-end IT
Add outside infrastructure must be linked up with the front
material to line so that information can flow smoothly and
important decisions can be made in real time.
an HBP digital In this context, we make a distinction between
systems of record and systems of engagement.
coursepack The latter category of IT is now emerging
and will change the business landscape in
We’ve partnered with substantial ways. This case is about one such
platform of engagement called Wooqer, which
Study.Net to provide business heads can harness to tackle a variety
new coursepack tools of problems. Wooqer facilitates communities
of users to function independently, without
for educators. Premium requiring constant assistance from IT. The
Educators registered case begins by describing the information
systems that drive business at Madura Fashion
on our web site can: & Lifestyle, India’s largest apparel retailer.
In a rapidly expanding retail environment,
o Clear permissions for Madura’s strategy head has to decide between
course material from outside implementing point solutions to different
the HBP catalog technology problems and rolling out a system
o Upload personal material of engagement.
for use in a coursepack
o Deliver digital and print-
on-demand coursepacks
INTERNATIONAL
BUSINESS
see a video overview:
hbsp.harvard.edu/list/ Hedging Currency Risk at TT Textiles
help-videos
Rajesh Chakrabarti
Indian School of Business Case
#ISB009 (15 pages) TN
This case highlights the impact of currency
rate fluctuations on the profitability of an
export-oriented textile manufacturing firm, TT
Textiles. Against the backdrop of the economic
crisis of 2007-08, when the Indian rupee
(INR) was expected to appreciate to an unprec-
edented high of 35 INR per U.S. dollar (US$),
the company had entered into a swap deal
based on the historical stability of the Swiss
franc (CHF) against the US$. At the time of its
making, the deal had looked relatively safe and
very lucrative. But once the global financial
crisis struck in 2008, it started making sizable
Not a Premium Educator?
It’s free. Apply today and receive mark-to-market losses. The unexpected
full-text Educator Copies, Teaching behavior of the supposedly steady exchange
Notes, and an academic discount rate between the US$ and the CHF was
for students: perplexing. Fortunately, things turned around
in 2009 and TT Textiles was no longer in the
educatoraccess.hbsp.harvard.edu
red. Yet there was uncertainty about the future.
In March 2009, with three months left on the
contract, Sanjay Jain, the managing director,
14 | fall 2013 Teaching Materials Newsletter
was faced with the dilemma of whether to quit
then and there or hold the deal till maturity.
Innovation Clusters in the Global
Economy: The Welfare Technology
Region in Denmark
Laura Winig, Juma Calestous
Harvard Kennedy School Case
#HKS722 (23 pages) TN
In February 2012, Lars Kolind, chairman of
Welfare Tech Region, a cluster organization
in Southern Denmark that promotes the use
of technology to assist people with daily living
activities, considered the challenges that the
cluster organization’s member companies face
in developing and commercializing new prod-
ucts on the global market. The case explores
whether regional innovation strategies can
help foster the global competitiveness of small
countries. It focuses on critical issues related
to the development and commercialization of
new products, influenced by factors such as
national innovation culture, product choice,
access to capital, human resources, and ability
to attract talent.
L’Oreal Masters Multiculturalism
Hae-Jung Hong, Yves L. Doz
Harvard Business Review Article
#R1306J (6 pages)
As the cosmetics company L’Oreal has trans-
formed itself from a very French business into
a global leader, it has grappled with the tension
that’s at the heart of every global enterprise:
achieving economies of scale and scope
requires some uniformity and integration of
activities across markets. However, serving
regional and national markets requires the
adaptation of products, services, and busi-
ness models to local conditions. Since the
late 1990s, the L’Oreal Paris brand—which
accounts for half the sales of the consumer
products division—has dealt with that tension
by nurturing a pool of managers with mixed
cultural backgrounds, placing them at the
center of knowledge-based interactions in the
company’s most critical activity: new-product
development. L’Oreal Paris builds product
development teams around these managers,
who, by virtue of their upbringing and experi-
ences, have gained familiarity with the norms
and behaviors of multiple cultures and can
switch easily among them. They are uniquely
qualified to play several crucial roles: spot-
ting new-product opportunities, facilitating

communication across cultural boundaries,
assimilating newcomers, and serving as a
cultural buffer between executives and their
direct reports and between subsidiaries and
headquarters.
The New, Improved “Keiretsu”
Katsuki Aoki, Thomas Taro Lennerfors
Harvard Business Review Article
#R1309J (6 pages)
During the past decade, some of Japan’s
most dominant companies have been quietly
turning their supplier relationships into a tool
that helps them innovate faster while radically
cutting costs. This is the new “keiretsu”—a
modern version of the traditional system
in which buyers formed close, collaborative
associations with suppliers. Toyota provides
a compelling example of how keiretsu, which
lost luster during the cost-cutting of the 1990s,
is being revived and reinvented. The company
today has vendor relationships that are more
open, more global, and more cost-conscious
than traditional keiretsu ever were and that
provide even stronger bonds of trust, coopera-
tion, and educational support. The authors
examine the evolution of Toyota’s keiretsu and
explore the numerous lessons for developed-
world and emerging-market companies
seeking to improve their supplier relation-
ships for lasting gain. Such companies should
think short term and long term, know their
suppliers well and develop trust with them,
balance implicit and explicit communication,
identify the suppliers most worth improv-
ing, and involve suppliers in developing new
products. Those elements are critical even in a
hypercompetitive, cost-obsessed environment,
because as they speed production and boost
innovation, they reduce the hidden costs of the
arm’s-length supplier relationships prevalent
in the West.
MARKETING
Advertising Analytics 2.0
Wes Nichols
Harvard Business Review Article
#R1303C (10 pages)
Most marketers think they know how their
advertising affects consumer behavior and
drives revenue. They correlate sales data with a
few dozen discrete variables, and they rely on
consumer surveys, focus groups, media-mix
TN Teaching Note Available
models, and online last-click attribution. But to
treat advertising touch points as if each works
in isolation is to misrepresent the way today’s
complex combination of marketing efforts
influences purchasing outcomes. MarketShare
CEO Wes Nichols explains how many big com-
panies are now deploying analytics 2.0, a set of
capabilities that can chew through terabytes of
data and hundreds of variables in real time to
accurately reveal how advertising touch points
interact dynamically. The results: 10% to 30%
improvements in marketing performance.
Firms of various sizes can make the shift to
analytics 2.0 by engaging in three broad
activities: 1) attribution: quantifying the
contribution of each element of advertising,
2) optimization: using predictive-analytics tools
to run scenarios for business planning, and
3) allocation: redistributing resources across
marketing activities in real time. Nichols
argues that implementing analytics 2.0 means
building the required infrastructure and
entwining it in organizational culture, strategy
development, and operations. Any company
can begin that journey; businesses that don’t
will be overtaken by those that do.
Amazon, Apple, Facebook,
and Google
John Deighton, Leora Kornfeld
Harvard Business School Case
#513060 (18 pages) TN
Four businesses had, by 2012, grown to
dominate the infrastructure that all firms rely
on to reach online customers. Will the balance
of power among the four persist, will one take
command at the expense of the other three, or
are all four more vulnerable than they seem
to outside forces? What are the implications
for the pace at which consumers go online?
Amara’s Law claims that we tend to overesti-
mate change in the short run and underesti-
mate it in the long run.
Bosch in India
Seema Gupta
Indian Institute of Management
Bangalore Case
#IMB409 (24 pages) TN
The case describes the brand migration from
MICO to Bosch in India. The case elaborates
the integrated communication strategy for
change in corporate identity—advertising,
public relations, and media strategy. It details
the communication strategy adopted for differ-
ent stakeholders—employees, opinion leaders,
marketing
and aftermarket and original equipment
manufacturers. The metrics for measurement
of effectiveness of communication strategy
allow for a rich discussion of the extent to
which brand migration can lead to transfer
of equity. The case invites students to discuss
the extent to which brand equity of Bosch has
been built and the way forward.
Burberry’s CEO on Turning an
Aging British Icon into a Global
Luxury Brand
Angela Ahrendts
Harvard Business Review Article
#R1301A (5 pages)
As her top 60 executives arrived in London
for the first strategic planning meeting after
Ahrendts took the helm, she noticed that not
one of them was wearing a Burberry trench
coat, despite the damp, gray weather. It was a
sign of the challenges the company faced. Even
in a burgeoning global market, Burberry was
growing at only 2% a year. It had lost focus
in the process of global expansion: each of
the 23 licensees around the world was doing
something different. Ubiquity was robbing the
brand of its luster. Ahrendts realized that if
Burberry was going to be a great, pure, global
luxury brand, it needed to have one design
director—a “brand czar”—and it needed to
capitalize on its historical core: the trench coat.
The company decided to innovate at the core
to attract the luxury customers of the future:
millennials.
Juan Valdez: Innovation in
Caffeination
Michael I. Norton, Jeremy Dann
Harvard Business School Case
#513090 (24 pages)
Corporate entrepreneurs attempt to revive
Colombia’s famous Juan Valdez brand, in the
age of Starbucks, with café chain and packaged
coffee ventures. In the 1970s and ’80s, the
iconic Juan Valdez ingredient brand was the
most recognized in the world of coffee. The
success of advertising based on this character
garners the Colombian coffee industry price
premiums in international markets, especially
the U.S. By the 2000s, Colombia’s coffee
sector is being battered and its branding power
diminished as café chains such as Starbucks
increasingly capture profits in the value
chain. In reaction, Colombia’s coffee federa-
tion develops a semi-independent, for-profit
hbsp.harvard.edu 1-800-545-7685 | 15
marketing — negotiation
branding arm, Procafecol, to rebuild the Juan
Valdez brand. Procafecol launches the first
Juan Valdez cafés and a packaged coffee line,
putting Colombian coffee into competition
with many of its traditional customers. The
case examines the successes and failures of the
first five years of the new strategy, encouraging
discussion of what changes must be made to
Procafecol’s innovation program.
Online Ad Targeting at Thunderbird
John Zerio, Arvind Deshmukh
Thunderbird School of Global
Management Case
#TB0313 (13 pages) TN
Thunderbird has built a strong and efficient
Internet presence in the past five years. The
effort was supported by a consistent effort to
develop its internal online marketing capabili-
ties, resources, and technical infrastructure.
As the MBA recruitment process becomes
increasingly dependent on its online market-
ing strategy, the ability to buy media effectively,
measure performance, and adjust plans
quickly acquires incredible relevance. Kelly
Santina, the school’s online marketing
director, must assess the Google Analytics
data covering the past seven months of
website activity. Thunderbird’s online
marketing goals are defined as follows:
1) to improve the effectiveness of display/
sponsored ads placement; 2) to increase
traffic to the program’s pace by 25%; and
3) to improve conversions, measured by the
downloading of an application form, by 30%.
Royal Reels: Enhancing the
Customer Experience for Slot
Machines and Beyond
Kent Grayson
Kellogg School of Management Case
#KEL723 (14 pages) TN
CEO Richard Gedman has suddenly found
himself running two separate but potentially
related businesses: the slot manufacturing and
marketing business that he has been running
for years and a new online and mobile gaming
business that has grown incredibly fast over
the past couple of years. To sustain success
in both businesses, it seems clear that each
one will require significant R&D investments.
Should he invest in only one or in both?
16 | fall 2013 Teaching Materials Newsletter
To Tweet or Not to Tweet:
What Business Can Learn from
Social Movements
Paula Goldman
Rotman School of Management Article
#ROT199 (5 pages)
Social media has created widespread confu-
sion in many organizations. Some all but
beg people to “like” them on Facebook, while
others badger consumers to follow them on
Twitter. The fact is, hundreds of millions of
dollars are spent each year on social media
marketing strategies, and most of it achieves
very little in the way of creating a sustained
following. Successful social movements, by
contrast, have long managed to capture and
sustain followers over long periods of time—
for a tiny fraction of what private companies
spend on marketing. The authors describe five
lessons businesses can learn from social move-
ments and their organizers.
Understanding the Arab Consumer
Vijay Mahajan
Harvard Business Review Article
#R1305L (6 pages)
A growing middle class in the Arab world
yearns for progress and modernity but has
no interest in abandoning its religious tradi-
tions. Companies that gloss over the interplay
between culture and religion ignore a critical
factor for success in the region.
marketing
Popular Simulation
Marketing Simulation: Managing
Segments and Customers V2
Students develop and execute a successful
go-to-market strategy at a manufacturer of
motors used in medical devices. Students
must decide which customer segments
they want to acquire and which loyal
customer segments they must retain.
Teaching Note available.
NEGOTIATION
Carolina for Kibera
Kathleen L. McGinn, Beth-Ann
Kutchma, Cailin B. Hammer
Harvard Business School Case
#913701 (18 pages) TN
Carolina for Kibera (CFK) is an international
nonprofit organization whose mission is to
promote youth leadership and gender and
ethnic cooperation in Kibera, the largest
unstructured settlement situated in the heart
of Nairobi, Kenya. CFK’s programs construc-
tively leverage the power of the community,
acting as an exemplar of participatory develop-
ment. CFK’s affiliation with the University of
North Carolina offers a new model of social
enterprise. After eight years of success under
the founding leadership of Salim Mohamed,
Rye Barcott, and Kim Chapman, CFK is at a
critical juncture. Mohamed, executive director
of all operations in Kibera, is leaving to go to
graduate school. Barcott, founder and presi-
dent, has a new career and a growing family
and can no longer play an active role in
CFK’s operations. Chapman, chair of the
U.S. board of directors, has accepted a full-
time faculty position and must step down
from her roles at CFK. These departures
come at a time when the Gates Foundation has
just awarded CFK a two-year, $1 million grant.
The case ends as CFK begins to grapple with
impending changes in organizational leader-
ship and activities.
Marketing Simulation
MANAGING SEGMENTS FOR COURSES IN:
AND CUSTOMERS V2 Marketing
Marketing Strategy
Version 2
UPDATED
EDITION
by Das Narayandas
Harvard Business School
#7018
Seat Time: 90 minutes

Fighting Bonded Labor in Rural
India: Village Activist Gyarsi Bai
Tackles an Entrenched System
of Coercion
Kalpana Jain, Kessely Hong
Harvard Kennedy School Case
#HKS736 (19 pages)
In October 2010, the beating of a 30-year-old
bonded laborer—his punishment for staying
home sick from work—in India’s northwest-
ern state of Rajasthan triggered a movement
to end the practice of bonded labor in the
area. A holdover from feudal times, bonded
labor was outlawed in India in 1976 but was
still prevalent in some pockets of rural India.
Entrenched power systems protected the prac-
tice, with the lower castes most affected. In
this case, the bonded workers were members
of an indigenous tribe called the Sahariyas.
The case explores the negotiating strategy
used by Sahariya village activist Gyarsi Bai
and her allies to fight a powerful landowning
community and a local government adminis-
tration unresponsive to appeals from the poor.
It describes how Bai built coalitions with larger
activist groups and worked with them to gain
media visibility and secure support at the state
and national levels. These alliances pressured
village authorities to make changes. Two years
later, bonded labor continued to exist in the
area, but a growing number of laborers had
sought and received official freedom. In addi-
tion, a set of modest options—a local grain
bank, a village-run system of microcredit, and
an expanded government work guarantee—
gave bonded laborers viable alternatives to the
debt trap of the past. The case also shows how
larger activist groups were effective at finding
strategies that enabled the Sahariyas to be
agents for their own change.
How to Negotiate with VCs
Deepak Malhotra
Harvard Business Review Article
#R1305F (8 pages)
VC-entrepreneur partnership agreements
often contain flaws that become highly damag-
ing as the parties come up against issues of
power, trust, and much more. Yet many of
the flaws are systematic and predictable—and
hence preventable. The author, a longtime
consultant to the VC industry, outlines recom-
mendations for entrepreneurs sitting down at
the table with prospective funders. 1) Under-
stand your leverage. Your leverage is not only a
TN Teaching Note Available
negotiation — operations management
function of your alternatives; it has a lot to do
with the VCs as well. Seek to understand them,
and be prepared to educate the VCs about why
their exercising too much power could hurt
both parties in the long term. 2) Maximize
trust. Beneath all the financial projections, the
VC negotiation is a process in which people
are deciding whom they want to associate with
for years to come. If the VC is vulnerable, use
the opportunity to build trust rather than to
take advantage. 3) Focus on value—not just
valuation. Nonfinancial considerations such as
control are also important. 4) Strive for under-
standing. Seemingly abstruse provisions can
be highly consequential. And bear in mind that
the choices a VC makes when negotiating can
contain important clues about her assessments
and expectations. Above all, when you’re nego-
tiating with a VC, think not only about what
will look good in a press release today but also
about what will help you create and capture
value over the long run.
Negotiating with Emotion
Kimberlyn Leary, Julianna Pillemer,
Michael A. Wheeler
Harvard Business Review Article
#R1301G (9 pages)
Some people are practically phobic about going
to the bargaining table. If their minimum
needs are met, they’ll sign on the dotted line
just to end the stress of dealing with people
who have different agendas and styles. But
that can be an expensive aversion, the authors
write. When you’re facing an important
negotiation, rigorous preparation—running
the numbers, scouting the marketplace,
developing a plan B—is essential. But it’s only
half the story. The truth is that your passions
matter in real-life deal-making and dispute
resolution. You need to understand, chan-
nel, and learn from your emotions in order
to adapt to the situation at hand and engage
others successfully. The authors studied 20
seasoned negotiators to explore their thoughts
and feelings about the process. They invited
their participants to find and combine pictures
that metaphorically depicted those feelings
and to describe in in-depth interviews the
collages they’d created. Three reasons for the
stressfulness of the negotiation experience
emerged: lack of control, unpredictability, and
the absence of feedback. This article includes a
six-step warm-up exercise to help you prepare
emotionally to negotiate effectively.
The Virginia Carlton–Hunter Morgan
Sherwood C. Frey, Lucien Bass,
Mahmood Hassan
University of Virginia Darden School
Foundation Case
#UV6341 (7 pages)
Hunter Morgan had looked at several apart-
ments over the past week, and Taylor Hayden’s
apartment in the Virginia Carlton topped the list.
The Virginia Carlton was a newly constructed
and well-maintained apartment building on
Jefferson Park Avenue, located fairly close
to the central grounds of the University of
Virginia. If there were an available space in
the building’s underground parking garage,
Morgan’s car could be left there, and the bus
would be the principal mode of transportation
for the summer. In addition, the newness of
the building made for a bright and pleasant
ambiance. The big unknown was the cost,
which would be discussed tomorrow morning
during a meeting with Hayden. This case and
its companion case, “The Virginia Carlton–
Taylor Hayden” (UVA-QA-0781), describe a
predominantly distributive bargaining situa-
tion to which additional issues can be added
for the mutual benefit of both parties.
OPERATIONS
MANAGEMENT
Asterand: Learning from Failure
Anne Snowdon, Hannah Standing
Rasmussen, David Maslach
Ivey Publishing Case
#W12286 (11 pages) TN
This case chronicles the challenges of estab-
lishing an innovative tissue bank service to
accelerate the research and development
processes of biotechnology and pharmaceutical
companies worldwide. Asterand’s two major
challenges involved achieving a standardized
approach to collecting tissue samples in
hospitals all over the world and achieving
the highest possible quality of tissue samples
shipped to its primary customer, Amgen.
Despite the identified need for high-quality
tissue samples, Asterand was experiencing
multiple quality control problems in their pro-
cesses and procedures. Tissue samples were
being packaged poorly, labeled incorrectly, or
delivered at the wrong time or to the wrong
place. Additionally, there were quality issues
with the RNA analysis of the samples, which
was a critical factor in the usability of the
hbsp.harvard.edu 1-800-545-7685 | 17
operations management
tissue sample for research and development
of new therapies and drugs. The head of
pathology at Amgen’s California facility was
threatening to terminate Asterand’s existing
order and communicate the failure of
Asterand to all company employees, which
would have had a devastating ripple effect
across the industry and likely destroyed oppor-
tunities for any future orders with Asterand.
If this happened, Asterand would not have
been able to secure contracts with customers
and would’ve been at risk of losing investors
and going bankrupt.
Five Keys to Prepare for the
Business of Aging
Marta Elvira, Lluesma Carlos
Rodriguez, Nuria Mas
IESE-Insight Magazine Article
#IIR077 (8 pages)
Economic and demographic forecasts reveal
the unsustainability of health care systems in
industrialized countries. The rising proportion
of elderly and chronically ill people is putting
serious pressure on existing systems, which
were not designed to support long-term depen-
dents. This situation makes current systems
more inefficient and costly. Yet it also presents
more opportunities for employment, entrepre-
neurship, and improvements in the quality of
care. This article identifies best practices in the
organization and management of care services
for chronic patients and elderly people, based
on an ongoing transatlantic research project
spearheaded by IESE. A change in the health
care model is multidimensional and cannot be
reduced to the mere introduction of isolated
formulas, such as copayment, say the authors.
organizational behavior
newly updated
Change Management: Power and Influence V2
In the second release of this popular simulation, instructors can assign up to 4
scenarios for students to complete at their own pace. Students experiment with
18 ways to exert power and influence in order to convince key employees to adopt
a strategic change initiative.
“My class found the simulation extremely useful in learning the drivers behind
organizational change. By the end of the term, the class clamored to use the simulation.”
— Review on hbsp.harvard.edu*
18 | fall 2013 Teaching Materials Newsletter
Instead, it requires comprehensive solutions.
They recommend five key areas where efforts
need to be focused: using valid and open
indicators, creating legitimate jobs, develop-
ing better professional profiles, taking an
integrated approach, and involving everyone
to make the overall system better and more
efficient.
Harvest: Organic Waste Recycling
with Energy Recovery (A)
Deishin Lee, Baris Ata,
Mustafa H. Tongarlak
Harvard Business School Case
#611033 (14 pages) TN
B Case Available
This case describes the waste management
industry and a clean technology solution
for landfill diversion and renewable energy
production. The (A) case focuses on the
operational characteristics of waste manage-
ment and waste to energy as well as the charac-
teristics of the waste management industry.
The intent of the (A) case is to have students
perform operational analysis on the organic
waste-to-energy process to evaluate whether
a potential new plant is economically feasible
and attractive. The (B) case focuses on the
sourcing dilemma: pre-processing vs. source
separation. To ensure that its waste input fuel
is of sufficiently high quality (i.e., low level of
inorganic contaminants), the company can
either build a pre-processing facility to sort
incoming waste to filter out contaminants or
work with suppliers to source-separate their
waste stream.
Intel: Strategic Decisions in Locating
a New Assembly and Test Plant (A)
Juan Alcacer, Kerry Herman
Harvard Business School Case
#713406 (2 pages) TN
B Case Available
In mid-2005, Intel is examining its options
for where to locate its next assembly and test
plant. Its short list of potential sites includes
locations in China, India, Thailand, and
Vietnam. Each country has its own unique
benefits and risks related to infrastructure,
governance, education, business culture,
intellectual property protection, labor markets,
experience working with Western firms,
and tax breaks and other incentives. Intel’s
general manager for assembly and test, Brian
Krzanich, has to consider all of these factors
as well as Intel’s criteria for its new facility’s
location and make his recommendation to the
company’s board of directors. Which country
and location should Intel choose?
Inventory Basics
Harvard Business Publishing Exercise
#4388 (30 minutes) TN
An exercise illustrates a fundamental concept
in Operations Management and can be used to
reinforce key learning objectives in case stud-
ies and readings. In this single-player exercise,
students are responsible for managing stock at
a small, franchised hardware store. The exer-
cise includes 3 scenarios for 3 items stocked in
the store: wrenches, environmentally friendly
paint, and rock salt. Students play 1 scenario at
a time over 12 simulated weeks. Each product
has a different demand pattern, and students
must decide how many units to order to meet
#4345
Single-player • Seat Time: 90 minutes
*Reviews available to Premium Educators

the anticipated weekly demand. The exercise
allows students to develop an intuitive strategy
for balancing holding costs against ordering
costs while avoiding a stockout. Faculty can
use the exercise to launch a discussion of the
Economic Order Quantity (EOQ) model in dif-
ferent situations with demand variability. This
exercise can be used for courses in Operations
Management for both MBA and undergradu-
ate students. It is delivered entirely online and
requires 1 class meeting or less for students to
run the exercise and discuss the results.
Konys, Inc.
Deishin Lee, Tunay I. Tunca
Harvard Business School Case
#613065 (7 pages) TN
Spreadsheet Supplement Available
This case describes the sourcing policy for a
consumer electronics company. The company
must decide how to structure contracts with
its supplier—by using a purchase contract,
an option contract, or a combination of the
two. The company can also buy from the spot
market. The students use a spreadsheet model
with Monte Carlo simulation to analyze the
contracting options.
Managing with Analytics at
Procter & Gamble
Thomas H. Davenport, Marco Iansiti,
Alain Serels
Harvard Business School Case
#613045 (20 pages)
Senior management at P&G has put a strong
emphasis on using data to make “better,
smarter, real-time business decisions.” The
Global Business Services (GBS) organization
operations management
newly updated
Project Management Simulation: Scope, Resources, Schedule V2
The second release of this simulation adds a new scenario with multiple
unanticipated events and the ability to add prototypes to the project plan.
Students take on the role of a senior project manager and manage a team tasked
with developing a new product for an electronics manufacturing company. The
primary objectives are to execute a project plan successfully and deliver a
competitive product on time and on budget.
TN Teaching Note Available
has developed tools, systems, and processes
to provide managers throughout P&G with
direct access to up-to-date data and advanced
analytics. In addition, GBS has embedded
analysts within the business units to work
alongside leaders and managers in driving
real-time information-based decision making.
Equipped with the tools provided by GBS, Alan
Torres, vice president of North America Fabric
Care, must finalize the forecast for P&G’s
laundry detergent sales. Results for the two
months since the introduction of concentrated
powder laundry detergent in select retailers
show a surprising jump in sales of over 10%.
But would the trend continue as the concen-
trated detergents were introduced across North
America?
The Performance Frontier:
Innovating for a Sustainable
Strategy
Robert G. Eccles, George Serafeim
Harvard Business Review Article
#R1305B (10 pages)
Too often, companies launch sustainabil-
ity programs with the hope that they’ll be
financially rewarded for doing well, even when
those programs aren’t relevant to their strategy
and operations. They fail to understand the
trade-offs between financial performance and
performance on environmental, social, and
governance (ESG) issues. Improving one typi-
cally comes at a cost to the other. But it doesn’t
have to be this way. It’s possible to simultane-
ously boost both financial and ESG perfor-
mance—if you focus strategically on issues
that are the most “material” to shareholder
value and develop major innovations in prod-
operations management
ucts, processes, and business models that pri-
oritize those concerns. Maps being developed
by the Sustainability Accounting Standards
Board rank the materiality of 43 issues for 88
industries and can provide valuable guidance.
And broad initiatives undertaken by three
companies—Natura, Dow Chemical, and CLP
Group—demonstrate the kinds of innovations
that will push performance into new territory.
Communicating the benefits to stakeholders
is also critical, which is why integrated reports,
which combine financial and ESG reporting,
are now gaining in popularity.
Upgrading the Supply Chain
Management Strategy at Sichuan
Telecom
Chen Xu, Zhang Du, Li Zheng,
Ding Yichao, Liu Ying
Ivey Publishing Foundation Case
#W12148 (7 pages)
In the process of business development, many
enterprises have to deal with issues from
all dimensions of operations management
including inventory management, distribution
management, and network design. Sichuan
Telecom, a branch of China Telecom Co. Ltd.,
which was a Fortune Global 500 company,
achieved its highest market share in its broad-
band business and maintained strong growth
momentum in this segment. However, there
was a serious inventory management problem
concerning ADSL modems, a component that
most broadband users required. The problem
was that Sichuan Telecom’s ADSL modem
inventory was either too high or insufficient.
To reduce inventory costs and improve the
service level, the procurement manager
#4700
Single-player • Seat Time: 90 minutes
hbsp.harvard.edu 1-800-545-7685 | 19
organizationa l behavior — sales
conducted a comprehensive analysis of the
company’s sales and demand forecasting, pro-
curement and suppliers, distribution manage-
ment, warehouse management, and inventory
management. This case follows the procure-
ment manager in analyzing the company’s
existing operational management system for
ADSL modems in order to discover the cause
of the inventory problem and develop an effec-
tive plan to improve operations management.
ORGANIZATIONAL
BEHAVIOR
Andrew Ryan at VC Brakes
Frank V. Cespedes, Sunru Yong
Harvard Business School Case
#913552 (11 pages) TN
An aftermarket brake component manufac-
turer, VC Brakes, is bought out by a global
automotive parts corporation after the 2008
financial crisis. Unlike its previous parent
company, the new owner attempts to change
VC Brakes’ autocratic management style and
finger-pointing culture with a Total Quality
Management (TQM) program. Andrew Ryan
is a senior manager at VC Brakes. With the
guidance of a strong mentor and a reputation
as a successful change agent, he is selected
as a TQM site instructor. His initial excite-
ment turns to concern when organizational
challenges cause the quality initiative to falter.
A subsequent restructuring puts Ryan on the
wrong side of politics, and he must decide
whether to leave VC Brakes or stay with the
losing initiative.
Give Me a Break: The Role of
Work Breaks in the Quest for
Optimal Productivity
John Trougakos
Rotman School of Management Case
#ROT191 (5 pages)
Stress, exhaustion, and burnout have become
increasingly problematic for employees and
organizations alike. Understanding how
employees recover from the demands of work
is therefore increasingly important. The author
focuses on a little-discussed area of resource
renewal: within-workday breaks. He argues
that not all work breaks are created equal: an
individual’s personality and job design deter-
mine whether a break will lead to increased
productivity.
20 | fall 2013 Teaching Materials Newsletter
Hess Corporation
Jay W. Lorsch, Kathleen Durante
Harvard Business School Case
#413126 (3 pages)
On January 29, 2013, Elliott Management, a
hedge fund run by Paul E. Singer that owned
4.5% of Hess Corporation stock, put forward
a slate of five independent directors it wanted
elected to improve the company’s perfor-
mance. Elliott argued that Hess lacked focus
and was distracted by ventures outside its core
exploration and production business. Further,
it argued that John Hess, CEO and son of the
founder, was more interested in “maintaining
a family dynasty than instilling accountability
and addressing chronic underperformance.”
Operation Greenwash Gold:
Rio Tinto and the Tainted Medals
Jana Seijts, Benjamin Bigio
Ivey Publishing Case
#W13217 (21 pages) TN
Rio Tinto, a major multinational mining
company, signed a contract with the London
Organizing Committee of the Olympic Games
and the International Olympic Committee
to supply all the gold, silver, and copper for
medals to be awarded at the London 2012
Olympic Games. Just three months before the
opening ceremonies, a coalition of nongov-
ernmental organizations, titled Operation
Greenwash Gold, combined with labor unions
in Canada, Australia, and around the world
representing millions of workers to protest Rio
Tinto’s alleged environmental, human rights,
and labor relations abuses. A number of dam-
aging social media campaigns aimed to get
the Olympic committees to cancel Rio Tinto’s
contract were supplemented by street protests
in front of the company’s headquarters during
its annual general meeting. Rio Tinto’s chief
executive officer must decide on a communica-
tions strategy in order to respond to its already
tarnished reputation.
Robin Ash and Printzhof Press
Frank V. Cespedes, Lynda St. Clair
Harvard Business School Brief Case
#913554 (14 pages) TN
Robin Ash has just been promoted to chief
operating officer of Printzhof Press and vice
president of its parent company, Education and
Entertainment Holdings, Inc. Her first objec-
tive is to create an action plan that will achieve
two seemingly contradictory corporate objec-
tives: transform Printzhof into an aggressively
competitive 21st-century educational publisher
and maintain its close-knit and collaborative
culture. Because of new technologies chang-
ing how information is delivered and used in
higher education, the need for the company
to evolve along with the publishing industry
is obvious to Ash and other company leaders.
However, Printzhof’s history of success has
resulted in resistance to organizational change
among many longtime employees and senior
managers. Still, Ash must revitalize Printzhof
without destroying employee morale and loy-
alty. How far and how fast should she move on
the critical priorities she has identified?
SALES
What Entrepreneurs Get Wrong
Vincent Onyemah, Martha Rivera
Pesquera, Abdul Ali
Harvard Business Review Article
#R1305D (7 pages)
Salesmanship is central to a start-up’s success,
but many entrepreneurs ignore this simple
fact. They may believe that their idea will sell
itself or that there’s no point in visiting a pro-
spective customer without a finished product
in hand. Those who search for sales advice find
mostly tools and techniques for established
companies. In a study of 120 entrepreneurs in
six countries, more than half fully developed
their products before getting feedback from
potential buyers. Looking back, most said that
was a mistake. Those who did start selling
early did not spend enough time listening to
prospects’ reactions. Other mistakes included
offering discounts to close initial deals, making
early sales to family and friends, and failing to
choose first customers strategically. When they
did go on sales calls, the entrepreneurs fielded
tough questions about the efficacy of their
products, their credibility and experience, the
size of their companies, their prices, and the
cost of switching to an unproven offering. A
sales model geared to entrepreneurs accounts
for the fact that information gleaned during
the sales process can be crucial in designing
(or redesigning) the product itself. The model
calls for meeting with prospects as soon as
an idea is conceived, to learn if it has broad
appeal. The answer to that question deter-
mines whether the entrepreneurs jettison the
idea, return to the drawing board, or proceed
to prototype development and further testing
with potential customers.
 service management — social enterprise

service management
Agero: Enhancing Capabilities
for Customers
Robert L. Simons, Natalie Kindred
Harvard Business School Case
#113001 (22 pages)
Cross Country (renamed Agero in 2011)
operated call centers that coordinated with
thousands of small, independent towing
companies—Cross Country’s “service provider
network”—to deliver roadside assistance ser-
vices, such as vehicle towing and tire changes,
to motorists covered by automakers’ warran-
ties and insurers’ policies. The case describes
Cross Country’s evolution from 1972 to 2012
in three phases. This allows students to, at
various stages, grapple with defining Cross
Country’s business (what business is it, and
should it be, in?) and its primary customer
(vehicle makers and insurers? motorists?
service providers?). The answers to these
questions have important implications for
organization design. During the first phase,
from 1972 to 1998, founder Sidney Wolk built
the business through personal relationships
with clients. He is a passionate entrepreneur,
and his approach to growth—secure custom-
ers first, figure out how to make money later—
was remarkably successful, if sometimes
chaotic. Facing an increasingly commoditized
marketplace, in 1998 Wolk hired professional
managers who implemented formal perfor-
mance management systems and invested
in sophisticated data analytics. From 1998 to
2007 (phase two), these investments allowed
Cross Country to quantify service providers’
impact on motorist satisfaction, monitor
service providers’ performance, and introduce
programs to strengthen top-performing service
providers’ loyalty to Cross Country. Concur-
rently, the company undertook a two-step
organization redesign to focus more resources
on service providers (the new primary cus-
tomer?), improve market-focused innovation,
and increase client satisfaction. In phase three,
from 2008 to 2012, Cross Country entered
the high-tech telematics/connected-vehicle
business, invested in additional innovations
to strengthen its service provider network,
and rebranded itself as “Agero.” Wolk and his
team believed Cross Country had “more driver
information than any other company.”
SOCIAL ENTERPRISE
First Green Bank: Bringing Bloom
to Desert Landscapes
Christopher Marquis, Juan Almandoz
Harvard Business School Case
#413073 (17 pages)
First Green Bank is a bank start-up in the midst
of the financial crisis that aims to promote
sustainability while making money as a bank.
The case presents an ethical dilemma as the
bank considers a loan to an arms manufacturer.
iBakery: How a Hong Kong NGO
Ventures into Social Enterprise
Sammy Fung, Florence Chan, W.H. Lo
University of Hong Kong Case
#HKU995 (22 pages) TN
iBakery is the name of two social enterprises
(SEs)—a bakery shop and a café—established
by Tung Wah Group of Hospitals (TWGH) of
Hong Kong with a social mission to train and
employ people with disabilities through the
production and retailing of bakery products
and the operation of a café. The SEs originated
from a bakery workshop that trained people
with disabilities. In running the SEs, more
business elements have been introduced to
try to fulfill both social and economic goals.
iBakery is unique among SEs operated by
Hong Kong’s nongovernmental organizations
(NGOs) in that it has a group of business pro-
fessionals, called “iBakery Angels,” forming
an advisory board. With TWGH as their strong
backup, the iBakery SEs are striving to meet
the double bottom line. The SEs’ performance
in meeting the economic goal is far from
satisfactory, as they are presently loss-making
operations; however, they are achieving good
performance in meeting the social mission
when measured in terms of the Social Impact
Assessment Tool. This case sheds light on the
operations of SEs, how they attempt to strike
a balance on both economic and social goals,
and how performance measurement of social
enterprises may be conducted. It also allows
students to examine what the SEs should do to
achieve sustainability in the future.
Micawber Capital: For Mission
or Profit?
David Austen-Smith, Jeffery C. Burrell
Kellogg School of Management Case
#KEL712 (12 pages) TN
In July 2010, Robert Drake, senior director at
Micawber Capital, one of India’s largest micro-
finance organizations, needed to recommend
a corporate structure and organization for

service management

multimedia case—Now online

Zappos.com 2009: Clothing, Customer Service,
and Company Culture
Multimedia cases—enhanced with audio, animation, and video—are now available
online and can be added to digital coursepacks on the HBP web site. The founders
of online retailer Zappos believe the value of the company lies in its obsessive
emphasis on customer service. A merger with Amazon.com depends on the firm’s
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Registered Premium Educators (a free service) can see a full Free Trial online. #612701
Teaching Note available

TN Teaching Note Available hbsp.harvard.edu 1-800-545-7685 | 21

socia l enterprise — strategy
Micawber after its scheduled IPO in August
2010. The IPO would bring to Micawber new
stakeholders, primarily financial institutions.
Drake was skeptical that the new investors
shared Micawber’s commitment to help allevi-
ate poverty in rural India through microcredit
loans; he assumed Micawber’s primary inter-
est was a good return on its investments. The
two objectives—increasing ROI and meeting
the financial needs of the poor—seemed at
odds with each other. Drake had to consider
how the interests of clients and investors
would be represented in strategic decisions so
that they balanced the conflicting values of the
stakeholders.
Omidyar Network: Pioneering
Impact Investment
Michael Chu, Lauren Barley
Harvard Business School Case
#313090 (26 pages)
Omidyar Network (ON), having deployed over
$500 million in ways ranging from donations
to commercial equity capital, must decide
whether to back Anudip, an Indian organiza-
tion dedicated to rural employment. The social
impact of Anudip is high, but its financial
performance is lackluster. As Anudip is able
to deploy all the tools along the capital curve of
impact investing, which tool, if any, is optimal?
The case recounts the transition of eBay
founder Pierre Omidyar and his wife, Pam,
from the Omidyar Family Foundation (OFF)
to ON, going from a traditional grant-making
organization to a pioneer of impact investing:
the application of investment practices in the
delivery of high-impact social interventions,
with the intent of providing positive financial
returns to investors.
PATH and the Safe Water Project:
Making Safe Water Products More
Affordable
Stefanos Zenios, Lyn Denend,
Tim Elliott
Stanford University Case
#OIT109 (16 pages)
This case provides an overview of the nonprofit
organization PATH and its Safe Water
Project—a five-year effort launched in late
2006 with $17 million in funding from
the global development unit of the Bill and
Melinda Gates Foundation. The purpose of the
grant was to evaluate to what extent market-
based approaches could help accelerate the
22 | fall 2013 Teaching Materials Newsletter
widespread adoption and sustained use of
household water treatment and safe storage
products by low-income populations. One of
the key objectives of this effort was to explore
how the private sector could help make hazard-
ous waste tracking system (HWTS) products
more affordable. By conducting a portfolio of
field-based pilots in collaboration with com-
mercial partners, the PATH team sought to
better understand the effect of different pric-
ing, consumer financing, and subsidy models
on demand within the low-income population
in developing countries. Over several years,
the Safe Water Project team experimented
with different affordability models, includ-
ing microfinance loans for water filters and
a layaway program. Although specific results
varied across the pilots, which spanned India,
Cambodia, and Kenya, they collectively gave
rise to a series of important insights about the
affordability of HWTS products.
Progressive Education Network
(PEN): Creating Social Impact
in Pakistan
Arif Butt, Shezeen Hemani
North American Case Research
Association Case
#NA0204 (16 pages) TN
The case documents a boardroom scenario
where the directors of PEN, a nonprofit
organization, have met to reconsider an
important decision: whether to wait for the city
government’s approval regarding allotment of
government schools or consider other options,
strategy
Playing to Win
How Strategy Really Works
By Roger L. Martin, former Dean, Rotman
School of Management, and A.G. Lafley,
CEO, Procter & Gamble
“Lafley and Martin teach us how to develop
and then how to deploy strategy. Their
recommendations apply at every level—
corporations, business units, products,
and teams. This is a great book.”
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New! Available as a PDF eBook.
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such as building its own schools. Having
completed several rounds of unsuccessful
negotiations with the City District Government
of Lahore (CDGL), the founders are feeling
agitated and disappointed. Hence, at this point,
the members are considering the organiza-
tional models of CARE and TCF, two well-
known NGOs of Pakistan, and aim to finalize
the strategic decision, based on the assessment
of the two organizational models, given PEN’s
mission and vision and its organizational,
human resource, and financial capabilities.
STRATEGY
The Basque Country: Strategy for
Economic Development
Michael E. Porter, Christian H.M. Ketels,
Jesus M. Valdaliso
Harvard Business School Case
#713474 (25 pages)
The Basque country, with a population of 2.1
million and covering 7,233 square kilometers,
is an autonomous region located in the north
of Spain, physically separated from Spain by
the Pyrenees mountains. This case presents
the history of the region, which was highly
prosperous at the turn of the 20th century but
nearing bankruptcy by the 1950s. By 2001,
the Basque GDP per capita had risen to a level
well ahead of that of Spain and most European
countries. At the same time that the region
was enjoying the spoils of admirably executed
cluster initiatives, it was being threatened
#11202
ISBN 978-1-4221-8739-5
272 pages
Harvard Business Review Press

by the destabilizing violence of the Basque
separatist extreme, a slowing global economy,
and an always-precarious balance of power
between the Basque’s own government and
the government of Spain.
Home Plus: Riding the Korean
Retailing Roller Coaster
Youngwoo Lee, Martin Hemmert
Ivey Publishing Case
#W13140 (12 pages) TN
In the late 1990s, multinational retailing
giant Tesco selected a joint venture with the
Samsung Group as its market entry strategy
into South Korea and created a new brand,
Homeplus. Subsequently, the management
of Homeplus implemented various policies
aimed at localizing the business while also
introducing business practices from Tesco’s
British headquarters. It invested in growth
and diversification through large discount
stores offering an “all in one spot” shopping
experience, small-sized super-supermarkets,
private brands, and online shopping. At the
same time, the Korean retail industry had
become much more dynamic as competition
intensified between various types of market
players, including strong competitors affiliated
with local business groups. Homeplus needed
to rethink its position in a highly challenging
market environment.
Inside Coca-Cola: The Evolution
of an Iconic Brand
Neville Isdell, Karen Christensen,
David Butler
Rotman School of Management Case
#ROT211 (5 pages)
In a wide-ranging interview, the former CEO
and chairman of The Coca-Cola Company,
Neville Isdell, discusses his decision to take
on the role of CEO after he had already retired
from the company; the inherent challenges
of working with a world-famous brand; and
how Africa is the final frontier for business.
In a sidebar to the interview, Coca-Cola’s VP
of innovation, David Butler, describes the wide
variety of global initiatives Coca-Cola is under-
taking to make Isdell’s vision of “Connected
Capitalism” a reality.
TN Teaching Note Available
strategy
Jamba Juice (A) describes the uproar and the lessons it offers:
J. Bruce Harreld, Christian Karega 1) that “open” does not mean “easy” or “free”
and 2) that you need to get the crowd working
Harvard Business School Case
with you, not against you. TED did that, turning
#713536 (14 pages)
things around by adopting three practices:
James White, the new CEO of Jamba Juice, “listening loudly,” realigning the community
has successfully averted bankruptcy and must through shared purpose, and being strategic
now decide the future path for Jamba Juice, about the parts of the business it opened to the
the leader in the smoothie and fresh bar crowd and the parts it kept under tight control.
industry. This two-part case presents the
various strategic options White is considering.
It then asks participants to determine the
best strategic path and how this path should
be specifically implemented. The follow-on
(B) case describes what White actually did and CONTACT US
presents the results.
LEGO (A): The Crisis Customer Service HOURS
Jan W. Rivkin, Stefan Thomke, Monday through Friday:
Daniela Beyersdorfer 6 am to 8 pm ET
Harvard Business School Case Saturday and Sunday:
#713478 (11 pages)
9 am to 5 pm ET
As this case opens, iconic toymaker LEGO
stands on the brink of bankruptcy. Jorgen Phone 800-545-7685
Vig Knudstorp, LEGO’s young and newly +1 617-783-7600
appointed CEO, must size up changes in the (outside the U.S. and
toy industry, learn from the company’s recent Canada)
moves, and craft a strategy that will put LEGO
back on track.
EMAIL
When TED Lost Control of Its Crowd
custserv@hbsp.harvard.edu
Nilofer Merchant
WEB
Harvard Business Review Article
hbsp.harvard.edu
#R1304E (7 pages)
In 2009, TED, an organizer of highly
respected conferences on “ideas worth
spreading,” threw its doors open, allowing
anyone, anywhere, to manage and stage local,
independent events under its banner. In the
next few years, an army of volunteers produced
some 5,000 such TEDx events in more than
130 countries. The brand extension and new
content TED gained through these gatherings
would have cost millions to produce by tradi-
tional means. But they came with a risk: TED
no longer completely controlled its brand, and
an extended community of people who didn’t
work for TED were now capable of damaging
it. And when TEDx licensees began putting
dubious pseudoscientific presentations on
their programs, that risk became a real threat.
The blogosphere trashed TED for producing EDUCATORS
dumb content and questioned its overall cred-
Get updates from us at
ibility. In this article, Nilofer Merchant.
Twitter@HarvardBizEdu
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What the Numbers Really Mean hbsp.harvard.edu/list/ebooks
Great Firms to Fail #5851
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