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| Case Search |
Corporate Governance
| Unauthorized Disclosure: Hewlett-Packard's Secret Surveillance of Directors... |
| Nov 7, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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In 2006, HP admitted it had hired outside investigators to spy on members of its board of directors and journalists to uncover the source of several leaks of confidential board deliberations. The investigators used methods, including “pretexting” (using an assumed identity in order to access others’ telephone records) which were possibly illegal and almost certainly unethical. Newsweek summed up the situation: “Lying, spying, name-calling, finger-pointing—all of it is a tragicomedy that Shakespeare might have penned if he had gotten an MBA.” This descriptive case uses primary documents to present various perspectives on HP’s leak investigations, including those of the non-executive chairman, CEO, former CEO, various board members, managers, and investigators. What problem was HP attempting to address in its investigation? Were its methods ethical? Did the company's behavior conform with accepted standards of good corporate governance? What, if anything, should the company have done differently? Ultimately, the case revolves around a classic ethical dilemma: were the means employed by HP and its investigators justified by their ends—to halt breaches of confidentiality in board deliberations? |
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Ethics and Social Responsibility
| Centurion Media Doing the Right Thing |
| Jul 6, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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Richard Bennett was faced with a serious ethical dilemma that would impact his career, family, and co-workers. Bennett, a regional Vice President in the Cable Division of Centurion Media believed that a contract recently executed by the new President of his division, Joseph Fowler, would cause significant financial losses for Bennett’s own division and their company.
Bennett was only two years from retirement. If he chose to stand up to Fowler and take the issue up the corporate chain of command, he could jeopardize his own financial security and that of his family. He would probably be fired. Additionally, his actions might endanger the careers of other employees and co-workers. The personal relationship between the CEO of Centurion Media, Chuck Reilly, and Fowler made Bennett’s decision more difficult. When Bennett contacted the General Counsel and Controller in the corporate office of Centurion Media, they suggested he back off. He was surprised by their stance that the financially disastrous contract was in the best interest of the company. The Controller went so far as to remind Bennett how near he was to retirement, emphasizing that he should be concerned about protecting his job and his family. It did not seem like anyone other than Bennett was interested in doing the right thing.
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Finance
| Aquarius Ales: How Much Should the Brew Cost? |
| Jul 16, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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Abstract: Aquarius Ales is a small Texas bar that has carved a niche in the pub business by providing a desirable combination of sports and music to its patrons. Its owners are ready to sell, but want to be sure they will receive a fair price for their establishment. The student must determine what is a fair valuation for the business, using discounted cash flow and comparable company information and make a recommendation. |
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| Private Equity Case: Merger Consolidation |
| Dec 12, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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Abstract
The case purpose is to determine whether ACE Equity Partners, a mid-size private equity fund, should acquire two physical therapy (PT) companies in order to develop them for subsequent sale to a larger private equity firm. This situation represents another opportunity for ACE to implement its “buy and build” investment strategy for its fund investors or Limited Partners. ACE’s general investment strategy is to buy several private firms in the same industry, develop them for three to five years with revenue and cost synergies, and, then, sell the larger consolidated company to a larger private equity company who may take the company public after further development. ACE’s specific investment strategy can be summarized in three major points: 1) grow EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), 2) use arbitrage: buy at lower EBITDA multiples and sell at higher EBITDA multiples, and 3) use leverage: starting at 50% debt financing of the original purchase and usually growing to 70% debt financing during the investment holding period.
This is a decision-based case written from the point of view of the ACE General Partner, Aaron Brown, who is now in charge of this physical therapy investment opportunity. For the last several months, Aaron has been involved in the “due diligence” process of gathering information about the potential acquisition of the two PT firms. For financial accounting analysis and forecasting assistance, ACE has engaged consultants from one of the “Big Four” Certified Public Accounting (CPA) firms to investigate these two PT firms. Aaron is now reviewing their reports as well as investment bankers’ prospectus on these two PT firms and financial analysts’ reports on this industry. He must make a recommendation on this investment opportunity at the upcoming General Partners’ investment committee meeting.
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Organizational Behavior, Design, and Theory
| Reflexite Corporation: An Employee-Owned Company |
| Dec 2, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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In March, 2007 Michael Foley, Chief Executive Officer of the Reflexite Corporation had to decide whether to proceed with a change in company’s employee stock ownership plan. The management and employees had held two rounds of “town meetings” to discuss changes in the allocation formula that determined how much stock employees would receive. Their recommendation was to change to allocate stock based on corporate-wide performance. Previously, the company based allocations on business-unit performance, causing wide variance in the amount of stock employees received. While the non-binding “town meeting” vote favored the change by a wide margin, the Chairman of the Board of Directors was adamant in his opposition. Foley, still in his first year as CEO wondered; the employees had spoken, but when the man who had built the company strongly objected, shouldn’t one listen? Compensation, Employee Stock Ownership Plans, Motivation, Entrepreneurship, Srategy |
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Strategic Management and Business Policy
| J&J Electrical Contractor's Inc.: Remaining viable in a highly competitive industry |
| Nov 22, 2008 |
| Published in Volume: 28 Issue: 1 (Winter 2008) |
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The J&J Electrical Contractors case is a good example of a small regional family business that has found a niche of sorts performing electrical contracting work for local school districts, though this may not be enough for long-term success. The case describes the Electrical-Contracting industry, factors that affect competition in the industry, how bids are won or lost in the industry, the regional and local competition, and the growth strategy of J&J. The case closes with the important strategic issues facing the co-principals, the most important of which are how to return the firm to profitability in the near term and how to identify a strategic direction for the firm in the longer term. |
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