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Responsibility

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published: 12 Jan 2005

  • Topic: Responsibility
  • Industry: Insurance Brockerage
  • Region: Global

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Abstract:
This case deals with the problems facing MMC in three of its key business areas, which surfaced in quick succession in 2003 and 2004. Its focus is primarily on the reputation risks facing the firm, and how shareholder value can be destroyed when such risks materialize. In two of the three cases, the market capitalization losses dwarf the accounting losses attribuable to fines, penalties, restitution, restructuring, etc., associated with the events.

Pedagogical Objectives:
Key teaching points relate to the sources and consequences of operational risk in the financial services sector. These include: Was the problem, in part, a product of rapid growth through acquisitions, which might have made it difficult to build a culture resistant to exploiting conflicts of interest? Was it related to the emergence of an aggressive winner-take-all culture at MMC, especially during the latter years? Was it a matter of established industry patterns of questionable conduct, where MMC was simply among the most aggressive players? Was it, in part, a product of the times, with prosecutors

Keywords:
Reputational Risk, Insurance, Insurance Brokerage, Mutual Funds, Financial Conglomerates, Ethics, Financial Services, Operational Risk Risk

published: 12 Jan 2004

  • Topic: Responsibility
  • Industry: Steel Industry
  • Region: Other Regions

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Abstract:
For a century, Tata Steel has provided a level of “compassion” that is unmatched in its sector or its country. But the onslaught of global competition and, crucially, global capital markets have sparked serious debate on the role, level and the sustainability of social spending at Tata Steel. In particular, a new emphasis on EVA risks upsetting the century-old commitment to CSR.

Pedagogical Objectives:
The aim of this case study is to help provide a framework that supports an intelligent discussion of the benefits versus the costs of compassion ? and to facilitate articulation of the components of CSR. How can the company maintain its reputation for caring and, at the same time, remain a leading player in an increasingly competitive industry?

Keywords:
Corporate Social Responsibility, India, Ethics, Developing Economy, Reputation, Employee and Industrial Relations, Corporate Marketing

published: 07 Jan 2004

  • Topic: Responsibility
  • Industry: Logistics, Mail, Transportation
  • Region: Global

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Abstract:
The case narrates the first year of the Moving the World Program, a public-private CSR-driven partnership between TPG and the UN World Food Program. It describes the five joint initiatives, where the organizations would merger their experience and capabilities in the pursuit of enhanced performance in humanitarian operations worldwide.

Pedagogical Objectives:
The case can be used to discuss the process of implementing a CSR initiative, most specifically how to choose a cause and a partner that aligns with the organization's objectives and capabilities. It is also useful for teaching a strategic approach to corporate philanthropy. Lastly it fosters a discussion about how to build the business case for CSR internally and get management's support.

Keywords:
Corporate Social Responsibility, Humanitarian, Logistics, Un World Food Programme, Tpg, Tnt Logistics, Moving the World, Business Ethics, Partnerships

Prizes won:
- Winner of 2005 EFMD Case Writing Competition, Corporate Social Responsibility Category

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published: 06 Jan 2004

  • Topic: Responsibility
  • Industry: Logistics, Mail, Transportation
  • Region: Global

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Abstract:
The case narrates the internal processes of choosing and implementing a corporate social responsibility (CSR) initiative. It illustrates the process of choosing a cause, selecting partners, creating a working plan, and finally getting the company's executive board's commitment.

Pedagogical Objectives:
The case can be used to discuss the process of implementing a CSR initiative, most specifically how to choose a cause and a partner that aligns with the organization's objectives and capabilities. It is also useful to teach a strategic approach to corporate philanthropy. Lastly it fosters a discussion about how to build the business case for CSR internally and get management's support.

Keywords:
Corporate Social Responsibility, Humanitarian, Logistics, Un World Food Programme, Tpg, Tnt Logistics, Moving the World, Business Ethics

Prizes won:
- Winner of 2005 EFMD Case Writing Competition, Corporate Social Responsibility Category

Related:

published: 06 Jan 2004

  • Topic: Responsibility
  • Industry: Non-Food Retail
  • Region: Europe

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Abstract:
This (A) case describes how Guy Wyser-Pratte, a pro-active investor and corporate governance advocate, puts pressure on Royal Vendex KBB, the leading non-food retailer in the Netherlands, to alter its corporate governance system. In an impassioned speech at the 2002 annual meeting of shareholders, he challenges Vendex Supervisory Director, Harry Langman, to discard the company's dysfunctional corporate governance system by dismantling its anti-takeover structure, and granting more voting rights to its shareholders. How will the Board react and what will be the next step for Wyser-Pratte? Fresh from his victory for increased shareholder rights, corporate raider Wyser-Pratte, together with a coalition of active investors, tries in this (B) case to use these new found rights to influence the strategic direction of the Vendex company. In contrast to Wyser-Pratte's comments in the previous year, one investor - K Capital Partners - pressures management and the Supervisory Board to consider selling the company, in the belief that the conglomerate is undervalued, and that an acquirer would easily pay a 100% to 200% premium over the current share price, thereby maximising shareholder value.

Keywords:
Corporate Governance, Investors, Stakeholders and Accountability

Related:

published: 06 Jan 2004

  • Topic: Responsibility
  • Industry: Non-Food Retail
  • Region: Europe

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Abstract:
Please refer to part A for the abstract.

Pedagogical Objectives:
The purpose of Case A is to allow a discussion on shareholder power and the response of the Supervisory Board in "Rhenan Capitalism" countries to this increased shareholder activism. Students can thereby discuss if they believe the motives/arguments of active investors in increasing shareholder value. Or do active investors merely look for short-term gains and a quick exit from their investment? The purpose of Case B is to allow a discussion on who is really in the best position to make strategic decisions within a company, management or shareholders? Students can discuss if they believe that active investors act in the interests of all shareholders (or stakeholders), or that they are simply looking for whatever short-term gains they can get? Does an increase in share price reflect the long term value creation potential of the company or merely give investors the opportunity to divest?

Keywords:
Corporate Governance, Shareholder Activism, Supervisory Board, Board of Directors, Shareholder Pressure, Strategic Decision-Making, Corporate Governance, Investors, Stakeholders and Accountability

Related:

published: 10 Jan 2003

  • Topic: Responsibility
  • Industry: Pharmaceuticals
  • Region: Global

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Abstract:
The objective of this teaching case is to place students in the complex moral and legal environment of AIDS in South Africa. During the 1990s, South Africa, along with many other developing countries, agreed to accept World Trade Organization disciplines with respect to trade in intellectual property – the so-called TRIPS agreement. In 1997, however, the South African Government passed a new Medicines Act, which a group of pharmaceutical companies argued was in violation of South African patent laws and of the TRIPS accord. The lawsuit was quickly attacked by such leading non-governmental organizations as Oxfam. This case forces students to address pharmaceutical company policy in the face of the AIDS pandemic.

Pedagogical Objectives:
By using this case, business students will grapple with some of the most complex issues of corporate social responsibility that they could confront during their professional careers. Students will also learn to appreciate the perspectives of different ?stakeholders? including governments and non-governmental organizations. By addressing the problem of AIDS in South Africa, students will gain a deeper understanding of the social environment they could confront as their companies engage in business in the developing world context.

Keywords:
Aids, Corporate Social Responsibility, Pharmaceuticals, Patents, Non-Governmental Organisations, Ngos

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