Ivey Publishing

International Political Economy

Oatley, T.,5/e (United States, Longman (Prentice Hall), 2011)
Prepared By Dr. Tatiana Vashchilko,
Chapter and Title Chapter Matches: Case Information
Chapter 1:
International Political Economy

CHINA'S ECONOMY 2012
David W. Conklin, Danielle Cadieux

Product Number: 9B10M050
Publication Date: 5/19/2010
Revision Date: 5/23/2012
Length: 5 pages

By 2010, China's economy faced a series of challenges that could threaten its growth and trade balance. This case presents a structure for students to discuss China's economy in the context of these threats. Prior to this time, there had been general feeling that China could continue indefinitely with its exceptionally high growth rate of approximately 10 per cent annually. The substantial gap between wages in economically advanced nations and China might continue to attract huge volumes of foreign investment indefinitely. This optimism was being questioned by 2010.

Teaching Note: 8B10M50 (3 pages)
Industry: Public Administration
Issues: China; Growth; Government and Business; Growth Strategy; Globalization
Difficulty: 4 - Undergraduate/MBA



CANADA'S ECONOMY 2012
David W. Conklin, Danielle Cadieux

Product Number: 9B09M008
Publication Date: 1/7/2009
Revision Date: 5/28/2012
Length: 5 pages

This case points to the challenges that Canada faces in regards to its ongoing productivity gap with the United States and its ongoing failure in regard to international competitiveness. This case also discusses the regional differences within Canada in regard to international competitiveness. This case also discusses the regional differences within Canada in regard to economic structure and public policy issues. Finally, the case indicates a series of strategies that Canadian businesses and governments might pursue in order to deal more effectively with Canada's economic challenge.

Teaching Note: 8B09M08 (3 pages)
Industry: Public Administration
Issues: Government and Business; Globalization; Growth; Growth Strategy
Difficulty: 4 - Undergraduate/MBA



HUNGARY'S REFORM PROCESS
David W. Conklin, Danielle Cadieux

Product Number: 9B06M081
Publication Date: 8/22/2006
Revision Date: 9/21/2009
Length: 17 pages

By 2006, Hungary had experienced more than 15 years of transition from central planning to free markets. The reform process had involved several distinct phases. The initial leap to the market, with its widespread privatizations, included a dramatic deregulation with a guillotine procedure. A more refined process of regulatory impact assessments (RIAs) followed this period. A newly empowered competition office sought to strengthen the extent of competition within markets dominated by a single firm or a small group of firms. The goal of EU membership was a consistent driver of the reforms as early as 1991, since the EU model was compulsory for EU members. These years had been turbulent, and the transition was not yet complete. In 2006, Hungary faced the challenge of a fiscal deficit that was 9.5 per cent of GDP, and responded by raising corporate tax rates from 16 per cent to 20 per cent as an attempt to close the fiscal gap. However, Hungary was in an intense competition with Poland, the Czech Republic and Romania to attract opportunities. Tax rates were an important element in this competition, but so were the regulatory impediments and distortions that still remained in the economy. How to create a rapidly growing economy was a question at the forefront of public policy debate. A 2006 Financial Times article discussed this dilemma.

Teaching Note: 8B06M81 (8 pages)
Industry: Public Administration
Issues: Government Regulation; Globalization; International Business; Deregulation
Difficulty: 5 - MBA/Postgraduate



POLITICAL AGENDA OF GEORGE W. BUSH: IMPLICATIONS FOR BUSINESS
David W. Conklin, Danielle Cadieux

Product Number: 9B05M041
Publication Date: 6/14/2005
Revision Date: 10/1/2009
Length: 11 pages

As George W. Bush entered his second term as president, he had implemented a number of important pieces of his political agenda. In the beginning, it was thought that Bush's political agenda would be good for business, however; many analysts felt the policies hurt economy, devalued the U.S. dollar and jeopardized international economic relations. In his first term he implemented major tax cuts and dealt with international trade issues. In his second term, he was focusing on social security reforms, new energy policies and tort reforms; however, within the Republican Party there were a number of distinct groups, each with its own agenda. There was only one policy they all agreed on, reducing tax rates, but the tax cuts implemented in 2001 had created annual deficits and threatened to destabilize the country. Whether Bush's policies would really be good for U.S. business was hotly debated.

Teaching Note: 8B05M41 (6 pages)
Industry: Public Administration
Issues: Government and Business; Government Regulation; Business and Society
Difficulty: 4 - Undergraduate/MBA


Chapter 2:
The World Trade Organization and the World Trade System

ELI LILLY IN INDIA: RETHINKING THE JOINT VENTURE STRATEGY
Charles Dhanaraj, Paul W. Beamish, Nikhil Celly

Product Number: 9B04M016
Publication Date: 5/14/2004
Revision Date: 3/13/2017
Length: 18 pages

Eli Lilly and Company is a leading U.S. pharmaceutical company. The new president of intercontinental operations is re-evaluating all of the company's divisions, including the joint venture with Ranbaxy Laboratories Limited, one of India's largest pharmaceutical companies. This joint venture has run smoothly for a number of years despite their differences in focus, but recently Ranbaxy was experiencing cash flow difficulties due to its network of international sales. In addition, the Indian government was changing regulations for businesses in India, and joining the World Trade Organization would have an effect on India's chemical and drug regulations. The president must determine if this international joint venture still fits Eli Lilly's strategic objectives.

Teaching Note: 8B04M16 (20 pages)
Industry: Manufacturing
Issues: Joint Ventures; Emerging Markets; International Management; Strategic Alliances
Difficulty: 4 - Undergraduate/MBA



CANADIAN AUTO TARIFF DEBATE
James H. Tiessen

Product Number: 9B01M034
Publication Date: 8/9/2001
Revision Date: 12/21/2009
Length: 13 pages

In 1998 it appeared that Japanese auto companies could be forced to pay duty on their non-NAFTA imports into Canada. The U.S. Big Three auto makers (GM, Ford and Chrysler), in contrast did not have to pay such a tariff on their offshore imports such as those made by Ford-owned Jaguar (United Kingdom) and GM's Saab (Sweden). The Japanese and U.S. firms were treated differently because of the 1966 Auto Pact that made all Big Three imports duty-free. However, in the early 1980's, in order to encourage auto investment, the Canadian government granted virtual Auto-Pact status to Japanese firms (Toyota and Honda) that located in Ontario. This eliminated tariffs on the Japan-made models they sold in Canada. Public debate arose during the Free Trade Agreement (1989) and North American Free Trade Agreement (1994) trade negotiations. The U.S., under the Big Three influence, pushed Canada to withdraw the Pact-like benefits it used to attract the Japanese factories. Canada eventually complied with the U.S. demands, while leaving the Pact in place for U.S. automakers. This led the Japanese government to challenge the fairness of the proposed tariff at the World Trade Organization (WTO). While waiting for the WTO process to unfold, the Japanese and U.S. automakers were considering how to respond to the forthcoming judgement.

Teaching Note: 8B01M34 (9 pages)
Industry: Wholesale Trade
Issues: Negotiation; Tariffs; International Trade; Government and Business
Difficulty: 4 - Undergraduate/MBA


Chapter 3:
The Political Economy of International Trade Cooperation

CHINA'S TRADE DISPUTES
David W. Conklin, Danielle Cadieux

Product Number: 9B09M018
Publication Date: 3/9/2009
Revision Date: 8/5/2009
Length: 17 pages

By 2009, China's exports had increased dramatically from $250 billion in 2000 to a projected $1,500 billion in 2009. This enormous growth of exports severely damaged competing businesses in the advanced nations, particularly the United States and Europe. China's entry into the World Trade Organization (WTO) in 2001 guaranteed China's right to export to these nations, but at the same time the WTO required China to adhere to certain rules that sought to support fair trade and create a level playing field. Several broad subjects each gave rise to a series of trade disputes: the protection of intellectual property, health and safety concerns about China's products, labour and environmental standards, China's manipulation of their currency, and costs and prices determined by the government rather than free markets. This case examines each set of trade disputes and China's attempts to resolve them. Many disputes were embedded in cultural practices and ideological positions and so they might not disappear quickly. Shortcomings in China's legal and judicial system hampered enforcement. In addition, many rested on the government's desire to protect the interests of Chinese businesses and their employees, and so China might alter its practices only if confronted with credible retalitory threats. China's central government experienced the principal-agent problem where its wishes and decisions could be ignored by local governments and firms. Meanwhile, changes in industry structure within the advanced nations were altering the negotiation positions of Western governments. The case examines the WTO dispute resolution procedures and enforcement mechanisms that have been directed at China's trade disputes.

Teaching Note: 8B09M18 (8 pages)
Issues: China; International Business; Government and Business; Globalization
Difficulty: 4 - Undergraduate/MBA



AIG AND CHINA'S ACCESSION TO THE WTO
Jean-Philippe Bonardi, Tony S. Frost

Product Number: 9B02M021
Publication Date: 10/29/2002
Revision Date: 12/3/2009
Length: 5 pages

AIG is an American insurance company. A trade dispute between the United States and the European Union threatens to block the accession of China to the World Trade Organization, and AIG plays a role - it is the only foreign firm to own fully-controlled subsidiaries in China. The disagreement concerns what will happen to these existing subsidiaries, as well as potential new ones that AIG might seek to establish in China in the future. What are the issues from the perspective of each of the stakeholders and what options are available that will resolve this dispute?

Teaching Note: 8B02M21 (12 pages)
Industry: Finance and Insurance
Issues: China; International Management; Trade Agreements; Political Environment
Difficulty: 4 - Undergraduate/MBA



BOMBARDIER VERSUS EMBRAER: CHARGES OF UNFAIR COMPETITION
David W. Conklin, Trevor Hunter

Product Number: 9A99M004
Publication Date: 7/20/1999
Revision Date: 1/15/2010
Length: 23 pages

One of Canada's high-tech success stories, Bombardier, changed the airline industry with the introduction of its short-haul turbo-prop planes and jets in the early 1990s. By the mid-1990s, a new player from Brazil, Embraer, had entered the market and was capturing a lot of business from Bombardier. Bombardier claimed that the success of Embraer was due to unfair subsidies through a government program, so Bombardier challenged the policies through the WTO. Embraer charged back that Bombardier had long received subsidies through Canadian government loans and grants. In an industry which was expected to double in the next five years, the stakes were high. This case discusses the dispute resolution process within the WTO, and the impacts that subsidies and WTO subsidy restrictions may have on industry structure.

Teaching Note: 8A99M04 (8 pages)
Industry: Transportation and Warehousing
Issues: Trade Agreements; Subsidies; Government and Business; Aerospace
Difficulty: 5 - MBA/Postgraduate


Chapter 4:
A Society-Centered Approach to Trade Politics

PORTER AIRLINES: A POLITICAL FIGHT FOR FLIGHT
Guy L.F. Holburn, Michael Deluce

Product Number: 9B09M025
Publication Date: 5/11/2009
Revision Date: 5/14/2010
Length: 15 pages

The case describes the political, regulatory and stakeholder challenges confronting the founder of Porter Airlines, located in Toronto, Ontario, during the 2002/03 period when he was seeking formal permits to launch the airline from Toronto City Centre airport. The case also includes information on the market opportunity for a new airline, enabling students to assess a) the business case for new entry into a hyper-competitive industry, b) the appropriate competitive strategies for successful performance and c) the political or non market strategies for managing stakeholder and political opposition.

Industry: Transportation and Warehousing
Issues: Political Environment; Market Entry; Entrepreneurial Business Growth; Government and Business
Difficulty: 4 - Undergraduate/MBA



ETHYL CORPORATION OF VIRGINIA: THE MMT BATTLE IN CANADA (A)
Tony S. Frost, Gerry Keim, David T.A. Wesley

Product Number: 9B02M048
Publication Date: 2/27/2003
Revision Date: 12/3/2009
Length: 5 pages

When its main products, gasoline lead additives, were banned in most developed countries, a U.S. company introduced an environmentally friendly, octane-boosting gasoline additive, methylcyclopentadienyl manganese tricarbonyl (MMT). The product was approved for use in Canada, but not sanctioned for use in Europe or the United States, due to health concerns. In response to public concerns about environmental hazards, the Canadian government introduced legislation that would ban both the import and transport of manganese-based substances, including MMT. Faced with the possibility of losing both its current Canadian market and the possibility of trade in other countries, the company considers a political strategy. Supplement to this case is Ethyl Corporation of Virginia: The MMT Battle in Canada (B), product number 9B02M049.

Industry: Manufacturing
Issues: Politics; Political Environment; Government Regulation; Trade Agreements
Difficulty: 4 - Undergraduate/MBA



BEIJING JEEP CO. AND THE WTO
Justin Tan, Michael N. Young

Product Number: 9B01M061
Publication Date: 10/17/2001
Revision Date: 12/22/2009
Length: 20 pages

Beijing Jeep Corporation Ltd. was one of the first joint ventures between an American company, DaimlerChrysler Corporation and a Chinese enterprise, Beijing Automotive Works. Early in its operations, Beijing Jeep was given preferential treatment on tariffs and foreign exchange, and had spent many years developing relationships with senior government officials that protected them from import competition. After several years of negotiations, there was an agreement of terms for China to enter into the World Trade Organization. Terms of this agreement called for a steep reduction in tariffs for imported automobiles, which would lower entry barriers to the Chinese automotive industry, thus creating more competition for the company. Tariffs on components imported from the United States would also be reduced but this would not be enough to offset the flood of imported vehicles into the market. Entry into the World Trade Organization would mean a lot of changes, and Beijing Jeep must determine whether they should continue focusing on the relationships they have built with the government, or approach their joint venture partner for additional support.

Teaching Note: 8B01M61 (4 pages)
Industry: Manufacturing
Issues: China; Automotive; Cross Cultural Management; Partnership; Manufacturing
Difficulty: 4 - Undergraduate/MBA


Chapter 5:
A State-Centered Approach to Trade Politics

SUBSIDIES: RATIONALES AND TRADE AND INVESTMENT DISTORTIONS
David W. Conklin, Danielle Cadieux

Product Number: 9B11M061
Publication Date: 6/30/2011
Length: 17 pages

Governments throughout the world have offered subsidies for a wide variety of reasons, including increasing investments and jobs (particularly those that are high-tech), stimulating economically depressed regions, supporting domestic agriculture, and preventing bankruptcies through “bail-outs.” Subsidies now play a key role in business location decisions, and impact international competitiveness. Recipients of subsidies can offer their goods and services for sale at lower prices than would exist in the absence of subsidies. Foreign-based corporations may regard these lower prices as unfair competition in international trade. Consequently, international trade negotiations have come to focus on many of these subsidy programs as trade distortions that should be limited by formal international agreements. Some countries, especially the United States, impose special countervail duties if their corporations are being hurt by foreign subsidies. With current and projected reductions in trade barriers, subsidies will become relatively more important as a trade-determining process. Nevertheless, subsidies are implemented to pursue certain social objectives, and so an intergovernmental pact that limits subsidies may diminish, rather than improve, the well being of signatories.

Teaching Note: 8B11M061 (7 pages)
Issues: Globalization; International Business; Subsidies; Bailouts; Tax Concessions
Difficulty: 4 - Undergraduate/MBA



GLOBALIZATION AND THE CANADIAN PUBLISHING INDUSTRY
Gerry Keim, Barbara Jenkins

Product Number: 9B01M045
Publication Date: 1/24/2002
Length: 18 pages

The founder of a Canadian publishing company is nearing retirement. His mission has been to promote Canadian authors and he has actively pursued government assistance and policies to protect Canadian cultural industries. However, there are often policies against free trade of cultural products which has hurt exporting. Discussed is how firm value is affected by government policy and the trade-offs of cultural protectionism.

Teaching Note: 8B01M45 (8 pages)
Industry: Manufacturing
Issues: Cultural Customs; Globalization; Government and Business
Difficulty: 4 - Undergraduate/MBA


Chapter 6:
Trade and Development I: Import Substitution Industrialization

MEKONG CORPORATION AND THE VIETNAM MOTOR VEHICLE INDUSTRY (B)
David W. Conklin, Danielle Cadieux

Product Number: 9B07M074
Publication Date: 1/4/2008
Length: 5 pages

At the time of the Mekong Corporation (Mekong) and the Vietnam Motor Vehicle Industry (A) case, product 9A96H002, some analysts felt that the Vietnamese automotive market was about to expand substantially. By 2007, the industry's capacity had increased enormously to nearly 150,000. However, the domestic sales had only expanded to approximately 40,000, and exports were negligible. This (B) case examines the government's interventionist policies that stimulated the expansion of production capacity while restraining vehicle sales. A key element was the continuation of very high import tariffs and other taxes that maintained a protected market for domestic manufacturers. In this context, Mekong continued to operate successfully. This case encourages students to consider the appropriate role of government in stimulating economic development, as well as appropriate corporate strategy in a protected market.

Teaching Note: 8B07M74 (3 pages)
Industry: Manufacturing
Issues: Business Policy; International Business; Globalization
Difficulty: 4 - Undergraduate/MBA


Chapter 7:
Trade and Development II: Economic Reform

THAI TELECOMS IN THE NEW ECONOMY: PRIVATIZATION & LIBERALIZATION
David W. Conklin, Brock Judiesch

Product Number: 9B01M064
Publication Date: 11/9/2001
Revision Date: 12/22/2009
Length: 26 pages

The economic crisis that ravaged Thailand in 1997 was an impetus that started the county down the difficult road of privatization and liberalization. The major issues involved in the transformation of the telecom industry from a state-run duopoly to a free market-based sector were daunting: the process for corporatization and the subsequent privatization of the state-owned telecom operators; the conversion of revenue-sharing agreements between private operators and the two state-run telecom agencies; the process of establishing a regulatory body to oversee privately-owned corporations; and finally the full liberalization of the sector by 2006, with the reduction or elimination of foreign ownership restrictions, under an agreement with the World Trade Organization. The stakes involved in the liberalization of the industry were high. Thailand's entry into e-commerce and the new economy would depend upon the new technologies and enhanced efficiencies that privatization and liberalization of the telecom sector might bring.

Teaching Note: 8B01M64 (12 pages)
Industry: Information, Media & Telecommunications
Issues: E-Commerce; Globalization; International Business; Business Policy
Difficulty: 5 - MBA/Postgraduate



MEKONG CORPORATION AND THE VIET NAM MOTOR VEHICLE INDUSTRY
David W. Conklin, Huan Ngo

Product Number: 9A96H002
Publication Date: 9/3/1996
Revision Date: 2/10/2010
Length: 29 pages

Mekong, a joint venture among Japanese, Korean and Vietnamese auto assemblers, is facing significant changes in the business environment in Vietnam. As the government of Vietnam has implemented its economic and administrative reform program, foreign and domestic companies in Vietnam have had to deal with changes in regulations and competitive forces. In addition, Vietnam's membership in ASEAN (Association of South-East Asian Nations) has further complicated the business decisions that foreign companies have to make in this newly-opened economy. Students will be challenged to devise a strategy for Mekong as a multi-national company operating in the Far East.

Teaching Note: 8A96H02 (5 pages)
Industry: Manufacturing
Issues: Government Regulation; Economic Conditions; Management in a Global Environment; International Business
Difficulty: 4 - Undergraduate/MBA



ESCORTS LIMITED: 1993
Jay Anand, Andrew Karl Delios

Product Number: 9A95M009
Publication Date: 10/12/1995
Revision Date: 2/19/2010
Length: 17 pages

Escorts, a large historically successful Indian conglomerate, was confronted with a dramatic change in its external environment caused by liberalization policies in its domestic market. At issue is the formulation and implementation of the company's restructuring strategy in response to the changed conditions. The case should be used in a general management/business policy course to illustrate the formulation and implementation of strategic responses to similar environmental changes occurring in a number of developed and developing countries. A second case, Escorts: A Restructuring Plan, 9A95M011, documents Escorts' 1994 plan of response. A third case, Escorts: The Tractor Division, 9A95M010 concerns a specific division and illustrates implementation barriers otherwise unapparent in the previous cases.

Teaching Note: 8A95M09 (16 pages)
Industry: Manufacturing
Issues: Growth Strategy; Technology; Market Analysis; International Business
Difficulty: 4 - Undergraduate/MBA


Chapter 8:
Multinational Corporations in the Global Economy

MAHINDRA & MAHINDRA IN SOUTH AFRICA
Jean-Louis Schaan, Ramasastry Chandrasekhar

Product Number: 9B11M106
Publication Date: 12/1/2011
Revision Date: 3/15/2012
Length: 17 pages

Mahindra & Mahindra Ltd. (M&M) is a manufacturing leader in the utility vehicles (UVs) segment in the Indian automotive industry. Since 2004, M&M has been exporting UVs to South Africa, the only country in the African continent with a significant middle-class population. M&M has set up a fully owned subsidiary in South Africa, which enjoyed the growth wave in the South African automotive industry up to 2007, then fell into a three-year slump, largely as a result of a recession in the global automotive industry. Now on the verge of industry renewal in 2011, the subsidiary needs to plan its next steps. The case is positioned in May 2011, when M&M’s subsidiary must choose from four alternatives. M&M can continue with its prevailing business model of importing completely built units (CBUs) from its Indian operations to meet local demand while using South Africa as a re-export hub for the burgeoning markets in sub-Saharan Africa. It can also choose to collaborate with a local vendor to assemble vehicles locally from completely knocked down (CKD) components imported from India. Alternatively, M&M may choose to set up its own manufacturing facility in South Africa, like many of its competitors. Lastly, M&M can choose to wait and watch until it notes definitive signs of revived demand. The case provides an opportunity for students to examine each alternative and make a decision on M&M’s way forward in South Africa.

Teaching Note: 8B11M106 (13 pages)
Industry: Manufacturing
Issues: Globalization; Market Expansion; Contract Assembly; Re-export Hub; Customer Segmentation; Automotive; India; South Africa
Difficulty: 5 - MBA/Postgraduate



TALISMAN ENERGY INC.: THE DECISION TO ENTER IRAQ
Pratima Bansal, Natalie Slawinski

Product Number: 9B09M035
Publication Date: 5/13/2009
Revision Date: 7/2/2009
Length: 17 pages

In June 2008, the chief executive officer of Talisman Energy Inc. (Talisman) and his senior executive team met with the company's board of directors. The purpose of this meeting was to debate Talisman's proposed entry into the oil-rich Kurdistan region of Iraq. This move was potentially very lucrative for Talisman but was fraught with risks. These risks were exacerbated by Talisman's previous foray into Sudan; during that expansion Talisman had been accused of complicity in human-rights abuses, stemming from industry-accepted royalties and fees it had paid to the government. This payment of fees was held as an example by public interest groups to allege that Talisman was indirectly funding the Sudanese civil war. Talisman's reputation had suffered to the point where the ire of investors and U.S. and Canadian governments was sufficient for Talisman to exit Sudan in 2003. There were many questions about the proposed move to Iraq, including the political situation, the views of the U.S. and Canadian government, and especially the US$220 million fee payable to the Kurdistan Regional Government. Should Talisman enter Iraq, and if so, could they avoid experiencing the same outcome as Sudan?

Teaching Note: 8B09M35 (11 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Corporate Responsibility; Risk Management; Political Environment; Sustainable Development
Difficulty: 4 - Undergraduate/MBA



ROYAL DUTCH SHELL IN NIGERIA: OPERATING IN A FRAGILE STATE
Isaiah A. Litvak

Product Number: 9B06M021
Publication Date: 3/17/2006
Revision Date: 3/3/2009
Length: 19 pages

Stuck in a quagmire of violence and political issues in Nigeria, Royal Dutch Shell's challenge was to establish socially responsible business practices to enable the company to sustain and expand its operations in Nigeria and the Niger Delta in particular. A conflict resolution and public policy consultant was brought in to develop some constructive ideas on how best to address the problems Royal Dutch Shell faced in Nigeria. This case is intended to introduce students to some of the complex issues faced by multinational corporations in developing countries.

Teaching Note: 8B06M21 (8 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Corporate Responsibility; Corporate Governance; Conflict Resolution; Pressure Groups
Difficulty: 4 - Undergraduate/MBA



DIVESTING THE ZAMBIAN MINING INDUSTRY
Luka Powanga

Product Number: 9B04M060
Publication Date: 10/13/2004
Revision Date: 10/15/2009
Length: 19 pages

The Zambian government embarked on a divesture of its mining industry in 1992. However, by July of 2004, 67 per cent of the mining assets were still in government hands and the government is still looking for equity partners. This case can be used as a basis for discussing political and country risk analysis, international negotiations, feasibility study analysis, managing strategic failure, and ethical and social responsibility issues.

Teaching Note: 8B04M60 (13 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Mining; Nationalization; Political Environment; International Business
Difficulty: 4 - Undergraduate/MBA



PROCTER & GAMBLE IN EASTERN EUROPE (A)
Jeffrey Gandz, David W. Conklin, Maurice Smith, Asad Wali

Product Number: 9A97H001
Publication Date: 3/20/1997
Revision Date: 2/4/2010
Length: 32 pages

Procter & Gamble must determine an entry strategy for Eastern Europe. The case examines the former Soviet Bloc countries, the opportunity they provide for a business endeavor like Procter & Gamble, and the product choices Procter & Gamble has available to them. Students must examine the political, economic, societal, and technological (PEST) environment and determine if the newly liberalized economies of Eastern Europe provide appropriate investment opportunities for Procter & Gamble. Students must also determine the scope of the necessary investment, the time profile and the difficulties it may face. A follow-up case (9A97H002) is available.

Teaching Note: 8A97H01 (13 pages)
Industry: Manufacturing
Issues: Globalization; Uncertainty; Business Policy
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
The Politics of Multinational Corporations

GLOBALIVE: CHANGE IN THE CANADIAN WIRELESS TELECOM INDUSTRY
Adam Fremeth, Tony S. Frost, Guy L.F. Holburn, Kevin Chan, Peter Walker

Product Number: 9B11M003
Publication Date: 2/3/2011
Length: 11 pages

This case describes the situation for Globalive in 2009 shortly after its bid to enter the Canadian wireless telecommunications sector had been denied by the regulatory agency on the grounds that it breached foreign ownership restrictions. The case covers the background to Globalive and the events leading to the regulator’s decision. Andrea Wood, the chief legal officer of WIND Mobile, the wireless brand owned by Globalive, must decide what recommendations to make to Globalive’s chief executive officer.

Industry: Information, Media & Telecommunications
Issues: Non-market Strategy; Market Entry; Lobbying; Regulatory Agency; Wireless Telecommunications; Egypt; Canada
Difficulty: 4 - Undergraduate/MBA



SPECIAL ECONOMIC ZONES (SEZS) AND TAX HAVENS
David W. Conklin, Danielle Cadieux

Product Number: 9B06M076
Publication Date: 8/22/2006
Revision Date: 9/21/2009
Length: 13 pages

Many nations have created geographically distinct areas with special features designed to attract foreign investment. In deciding where to locate various operations, businesses today must investigate the benefits and incentives offered by a plethora of special economic zones (SEZs) throughout the world. The business location decision involves a comparison of many alternative sites, each with its own set of incentives. Many small nations have put in place minimal corporate tax rates as a way of gaining some revenue by attracting head office functions, particularly those tasks related to finance. This government revenue may be only a very small percentage of a corporation's international profit; nevertheless, it may form a significant portion of the tax haven's income. Many businesses make their international location decisions so as to accumulate their taxable profits in tax havens. Apart from these zero-tax regimes, countries impose a wide range of corporate profit tax rates. A business can often find a country with a tax rate lower than both the country where it was incorporated and the country where it wishes to invest. By funneling profits to a zero-tax or even a lower tax jurisdiction, a business is able to minimize its aggregate tax payments. Although recent international agreements have sought to limit these practices, opportunities are still available for tax minimization. Tax havens, as well as SEZs, can play an important role in business location decisions.

Teaching Note: 8B06M76 (5 pages)
Issues: Globalization; Location Strategy; International Business
Difficulty: 5 - MBA/Postgraduate



INDIA'S FAILURE TO ATTRACT FDI
David W. Conklin, Danielle Cadieux

Product Number: 9B06M082
Publication Date: 8/29/2006
Revision Date: 9/21/2009
Length: 15 pages

This case uses several reports to compare China and India, and it encourages students to analyse the long list of public policies that have restrained India's economic growth and FDI inflows, and that have acted as barriers to liberalization reforms. Presented are the historical realities that supported India's political philosophy of autarky and government intervention. Finally, the case leads students to consider the future prospects for India, and potential foreign investors there, through comparisons with China.

Teaching Note: 8B06M82 (6 pages)
Industry: Public Administration
Issues: Developing Countries; Government Regulation; International Business; Deregulation
Difficulty: 4 - Undergraduate/MBA



PROCTER & GAMBLE IN EASTERN EUROPE (B)
Jeffrey Gandz, David W. Conklin, Maurice Smith, Asad Wali

Product Number: 9A97H002
Publication Date: 3/21/1997
Revision Date: 2/4/2010
Length: 23 pages

Procter & Gamble has been in Eastern Europe for 2 1/2 years. The case outlines the problems, missed opportunities and difficulties Procter & Gamble has had in transplanting their corporate culture onto the newly liberalized economies of Eastern Europe. The case requires students to generate alternatives for Procter & Gamble's future strategy in Eastern Europe given the political, economic, societal, and technological (PEST) environment.

Teaching Note: 8A97H01 (13 pages)
Industry: Manufacturing
Issues: Strategic Planning; Business Policy
Difficulty: 4 - Undergraduate/MBA


Chapter 10:
The International Monetary System

BASEL III: AN EVALUATION OF NEW BANKING REGULATIONS
David W. Conklin, David Blaylock

Product Number: 9B10N029
Publication Date: 9/24/2010
Revision Date: 3/11/2013
Length: 19 pages

The most recent recessionary period and credit crisis has precipitated discussions on the importance of stable financial systems. Many national governments are considering enacting stricter regulation on financial markets and bank liquidity. National and international supervisors will implement regulatory adjustments through coordinated efforts or independently in the next few years. There will be major developments in the banking industry within the near future. This case provides a structure for discussing past international efforts to coordinate a strengthening of banking systems. The primary focus is the 2010 Basel negotiation to create new and more extensive internationally accepted regulations. Students can be encouraged to debate the basic concept of international rules, as well as possible versions of these rules. A central message is that such negotiations will likely continue indefinitely. China, India and other emerging nations have indicated that they are not prepared to enforce the 2010 Basel III. Furthermore, the process of analyzing banks’ financial reports in order to develop evaluations of their position vis-à-vis the rules will likely be a long and complex process. With each of the major issues, this case presents the rationales for change and the strengths of Basel III’s provisions, as well as the weaknesses of the proposed changes.

Teaching Note: 8B10N29 (4 pages)
Industry: Finance and Insurance
Issues: Government and Business; Government Regulation; Financial Institutions
Difficulty: 4 - Undergraduate/MBA



ING AND GLOBAL FINANCIAL INTEGRATION (B)
David W. Conklin, Danielle Cadieux

Product Number: 9B08M027
Publication Date: 4/1/2008
Length: 3 pages

Global financial markets had changed dramatically in the decade following the ING (A) case, product # 9A99M022. This (B) case points to the nature of these changes, creating an opportunity for students to discuss them. Meanwhile, ING had also altered its global strategy, eliminating its attempts to create a global investment bank, and focusing its activities on specific financial sectors, each of which reported directly to head office. This new structure enabled ING head office to maintain closer control over its numerous local institutions. Students can analyze alternative potential strategies for ING in the context of the major financial changes. The (B) case presents summaries of: the 2007-08 global financial crisis; the attempts, like Basel II, to establish global reserve requirements; the economic prospects of the European Union and emerging markets; and ING Direct's success in e-banking.

Teaching Note: 8B08M27 (2 pages)
Issues: Financial Institutions; Globalization; Government Regulation
Difficulty: 5 - MBA/Postgraduate



THAILAND, 1997
David M. Currie

Product Number: 9B01M024
Publication Date: 9/27/2001
Revision Date: 12/21/2009
Length: 20 pages

For most of the 1990's, Thailand's economy was one of the fastest growing in the world. Thailand was popular with foreign investors, and the country's currency was stable due to the central bank's currency peg. However, overspeculation, high interest rates, lower than expected exports and job losses were causing speculation that the central bank would abandon the currency peg. The Bank of Thailand must decide whether to continue or to abandon the peg of the baht to the U.S. dollar. Was the country through the worst of the economic problems or was there more to come? The supplementary cases enable role plays designed to provide an understanding of the forces influencing a decision about appropriate monetary policy as importer (9B01M022 - Exclusive Autos of Bangkok), exporter (9B01M023 - Thai Shoes PCL), investor (9B01M027 - International Assets Investment Company), lender (9B01M026 - Hokkaido Bank), currency speculator (9B01M029 - Quantile Investment Fund), the IMF (9B01M028 - International Monetary Fund), and the Bank of Thailand (9B01M025 - Bank of Thailand in June 1997).

Teaching Note: 8B01M24 (20 pages)
Industry: Public Administration
Issues: Economic Conditions; Developing Countries; Government and Business; Exchange Rates
Difficulty: 5 - MBA/Postgraduate


Chapter 11:
Cooperation, Conflict, and Crisis in the Contemporary International Monetary System

BUDGET CRISIS: WHO SHOULD BEAR THE BURDEN OF REDUCING THE DEFICIT AND DEBT?
David W. Conklin, Danielle Cadieux

Product Number: 9B11M076
Publication Date: 8/16/2011
Length: 3 pages

By 2011, many nations had experienced an escalation in deficits and debt. It appeared that some might be unable to service their debt, and might have to default. The United States had a budget crisis in which “left-wing liberal” Democrats wanted to raise taxes on the wealthy while “right-wing conservative” Republicans wanted to cut expenditures. A philosophical divide existed over the role of personal responsibility versus the role of government. In the European Union, the “PIIGS” — Portugal, Italy, Ireland, Greece, and Spain — seemed on the verge of default, and other members of the eurozone created new loan programs to assist them in their budget crises. However, these loans included a requirement to move towards balanced budgets. Citizens in the borrowing nations objected to the severe tax increases and expenditure cuts, while citizens of the successful nations asked why they should have to pay. It was not clear who would bear the burden of reducing the deficits and debt.

Teaching Note: 8B11M076 (4 pages)
Industry: Public Administration
Issues: Government and Business; Business and Society; Economic Crisis; Loan Requirements; Eurozone; United States
Difficulty: 4 - Undergraduate/MBA



GREAT RECESSION, 2007-2010: CAUSES AND CONSEQUENCES
David W. Conklin, Danielle Cadieux

Product Number: 9B10M008
Publication Date: 1/20/2010
Length: 11 pages

A recession in the U.S. economy began at the end of 2007. Concerns deepened as an epic financial crisis shattered business and consumer confidence. By the fall of 2008, the United States was in the midst of the worst recession since the 1930s, and major financial institutions were on the verge of bankruptcy. The financial crisis and recession spread around the world. Many saw a risk that the global financial system might collapse, perhaps precipitating a repetition of the lengthy economic devastation of the 1930s depression. Governments reacted by creating huge stimulus packages that greatly increased national deficits and debts, and by loosening monetary policies with interest rates close to zero and huge expansions of the money supply. In their efforts to save the financial system, governments also offered bail-out packages to banks, including loans, guarantees and equity. By the fall of 2009, the crisis had stabilized, and the appearance of green shoots gave promise of recovery. By 2010, it was possible to put the financial crisis in perspective, and to raise questions about the causes and consequences. Of particular concern was whether new regulations might be needed to prevent a recurrence, and whether some of the tighter regulations should be international in scope. A related concern was whether such regulations should be applied to non-bank financial institutions as well as banks. Governments were also trying to determine how to exit the unique fiscal and monetary positions that now seemed to put their economies at risk of ongoing deficits and future inflation.

Teaching Note: 8B10M08 (5 pages)
Industry: Finance and Insurance
Issues: Business and Society; Government and Business; Government Regulation; Financial Institutions
Difficulty: 4 - Undergraduate/MBA



THE 2007-2008 FINANCIAL CRISIS: CAUSES, IMPACTS AND THE NEED FOR NEW REGULATIONS
David W. Conklin, Danielle Cadieux

Product Number: 9B08N014
Publication Date: 6/30/2008
Revision Date: 4/29/2010
Length: 13 pages

The financial system is the heart of free market economies. The 2007-2008 financial crisis raised concerns that the global financial and economic system might experience a truly substantial collapse. New financial instruments had proliferated to the degree that it had become impossible to calculate the market value of many of them, and so it had become impossible to know the market value of institutions that held them or that guaranteed them. The initial disaster occurred with the U.S. subprime residential mortgage market, but it quickly spread globally to institutions that held new financial instruments related to these mortgages. Firms that had guaranteed these financial instruments found that their net worth was disappearing, leading to concerns about the institutions that had relied on their guarantees. Meanwhile, new kinds of hedge funds introduced the risk of greater volatility, and they exposed investors to sudden shocks. Many banks were caught in this web and suddenly had to obtain additional equity capital in order to meet regulatory requirements and maintain the confidence of depositors. As a result of these developments, liquidity disappeared from the financial system. It seemed that recession in the United States was inevitable. Previous expectations that other economies had become decoupled for the United States were being replaced by fears that economies throughout the world would follow the United States into recession. Central banks reacted dramatically with attempts to reduce interest rates and to increase financial liquidity, and the U.S. government cut personal taxes through a tax refund program. It was not clear whether monetary and fiscal policies could prevent a long and deep recession. Debate arose concerning the advisability of a wide variety of new regulations that might be able to prevent future recurrence of such a financial crisis.

Teaching Note: 8B08N14 (5 pages)
Industry: Public Administration
Issues: Government Regulation; International Business; Financial Institutions
Difficulty: 4 - Undergraduate/MBA


Chapter 12:
A Society-Centered Approach to Monetary and Exchange-Rate Policies

CHINA'S BANKS 2012
David W. Conklin, Danielle Cadieux

Product Number: 9B10M078
Publication Date: 9/24/2010
Revision Date: 5/23/2012
Length: 3 pages

In the 1990s, considerable debate arose concerning the strength and stability of China's banks. Of particular concern were the debts owed to the banks by state-owned enterprises (SOEs). Many SOEs were experiencing financial difficulties and so they might not have been able to repay these loans. Some analysts emphasized that, since the banks and the SOEs were both owned by the government, the only relevant concern was the financial strength of the government and its preparedness to take responsibility for any of the banks' non-performing loans. In the early years of the 21st century, the government undertook a widespread program aimed at improving the balance sheets at the banks by purchasing non-performing loans from the banks and then reselling these at a discount, often to foreign private sector financial institutions. Prior to 2010, this process provided a generally accepted faith in the stability and security of China's banks. Total non-performing loans as a per cent of total bank loans decreased from 20 per cent in 2003 to three per cent in 2008. The year 2010 brought a new realization that the non-performing loan problem had reappeared. However, China's banks now had private as well as government shareholders, and so the solution had become more complex. The government's response was to insist that China's banks increase their capital base by issuing new equity.

Teaching Note: 8B10M78 (3 pages)
Industry: Finance and Insurance
Issues: China; Financial Institutions; Government Regulation; Government and Business
Difficulty: 4 - Undergraduate/MBA



MINISTRY OF FINANCE, JAPAN
David M. Currie, Laurel Adams

Product Number: 9B08M013
Publication Date: 5/6/2008
Length: 4 pages

In June 1997, the Bank of Thailand must decide whether to continue or to abandon the peg of the baht to the U.S dollar. Recent economic performance in Thailand has caused speculation that the central bank will abandon the currency peg, but the bank's stated policy for many years has been that it will maintain the peg. Background about the Thai economy is presented in the core case, product 9B01M025. Other cases enable students to play roles of importer, exporter, investor, lender, currency speculator, the International Monetary Fund, Japan's Ministry of Finance and the Bank of Thailand. The teaching purpose is to provide students with an understanding of the forces influencing a decision about the appropriate policy relating to exchange rates.

Teaching Note: 8B01M24 (20 pages)
Industry: Public Administration
Issues: Developing Countries; Economic Conditions; Exchange Rates; Government and Business
Difficulty: 4 - Undergraduate/MBA



INDUSTRIAL AND COMMERCIAL BANK OF CHINA
David W. Conklin, Larry Li, Trevor Hunter

Product Number: 9A97G019
Publication Date: 11/12/1997
Revision Date: 2/4/2010
Length: 8 pages

A government-owned bank is struggling to transform itself into a modern, internationally competitive financial institution. However, as a state-owned bank, it had limited freedom to reduce and train staff, to be selective in its lending, or to experiment with new kinds of financial services. Furthermore, many concepts that were common in non-communist countries had not yet become part of the Chinese banking system, such as collateral, security, risk analysis, and credit references. The bank faced the likelihood that foreign banks would soon be creating far more intense competition than the Chinese banks had had to face in the past. Somehow, the bank had to create a strategy that would enable it to survive this competition. This case explores the elements that might be the basis for a new strategy.

Teaching Note: 8A97G19 (4 pages)
Industry: Finance and Insurance
Issues: China; Financial Institutions; Business Policy; Strategic Change; Environmental Change
Difficulty: 4 - Undergraduate/MBA


Chapter 13:
A State-Centered Approach to Monetary and Exchange-Rate Policies

GULF BANK: RE-BUILDING A BANK
Walid Busaba, Zeigham Khokher, Assem Safieddine, Ken Mark

Product Number: 9B11N008
Publication Date: 10/31/2011
Revision Date: 10/15/2012
Length: 22 pages

In December 2009, about a year after it suffered a crisis when clients walked away from massive derivative losses, Gulf Bank’s new CEO is trying to change the governance and operation of Gulf Bank. This case focuses on a turnaround situation and provides students with insight into evolving corporate governance standards in Kuwait. After assessing the situation that the CEO faces, students have to decide what change he should pursue and how he should carry it out. From a broad industry governance perspective, students can examine the state of banking regulation and oversight in Kuwait and suggest ways that corporate governance can be strengthened.

Teaching Note: 8B11N008 (6 pages)
Industry: Finance and Insurance
Issues: Financial Institutions; Financial Management; Government and Business; Bailouts; Middle East; Kuwait
Difficulty: 4 - Undergraduate/MBA



TOWNEBANK: OF DAVID AND GOLIATHS
Anil Nair, Joseph Trendowski

Product Number: 9B11M073
Publication Date: 10/7/2011
Revision Date: 10/11/2011
Length: 18 pages

During the summer of 1998, Bob Aston and his partners, all bankers, spent many days discussing their plans to start a bank in southeastern Virginia, United States. Deregulation was transforming the banking industry. In Virginia, mergers and acquisitions in the industry had led to the emergence of large banks that had headquarters in other states. Aston felt that banking as he knew it was disappearing. However, before they could start a bank, Aston and his partners faced many questions and decisions: How would they raise the capital? Who would the bank serve? How would they compete with the larger banks that had emerged due to the deregulation?

The decisions they made at the founding had a lasting effect on TowneBank. This became evident a decade later as financial institutions around the country experienced a severe crisis that was triggered by exposure to risky mortgages, while TowneBank remained relatively unscathed. However, the management team had to consider several issues as the crisis unfolded. Should they accept the Troubled Asset Relief Program (TARP) funds that the U.S. Treasury had offered to banks (even those that were unlikely to fail and were adequately capitalized)? How could they ensure TowneBank’s growth? Should they acquire distressed banks in the local market?


Teaching Note: 8B11M073 (13 pages)
Industry: Finance and Insurance
Issues: Banking Deregulation; Bank Founding; 2008 Financial Crisis; TARP; United States
Difficulty: 4 - Undergraduate/MBA



MASKWA RESOURCES: FINANCING WITH A EURO BOND
Stephen Sapp, Ken Mark

Product Number: 9B05N023
Publication Date: 6/30/2008
Revision Date: 10/4/2009
Length: 8 pages

The president of a small mining company is faced with an opportunity to purchase a mining refinery to complement its existing mining operations. It has the potential to bring the company into a situation of positive cashflow, but the small size of the company and high risk of the mining industry has left the president with few alternatives to raise the capital. The case focuses on the issuing of a Euro-denominated bond to finance this purchase and provide funds for future acquisitions. The case discusses the alternatives available in such a situation as well as the risks associated with changes in the price of metals and the value of the U.S. dollar, Canadian dollar and the Euro on the ability to make regular payments on the Euro-denominated bond and other financing alternatives.

Teaching Note: 8B05N23 (10 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Capital Markets; Risk Management; Hedging; Foreign Exchange; Financial Strategy
Difficulty: 5 - MBA/Postgraduate


Chapter 14:
Developing Countries and International Finance I: The Latin American Debt Crisis

WAL-MART PUERTO RICO: PROMOTING DEVELOPMENT THROUGH A PUBLIC-PRIVATE PARTNERSHIP
Myrna Comas, Julia Sagebien

Product Number: 9B10M024
Publication Date: 5/5/2010
Length: 14 pages

Sowing the Development of the Country (SDC) was a public-private partnership between Wal-Mart Puerto Rico (Wal-Mart PR), the island's Department of Agriculture as well as its Economic Development Bank (EDB), two NGOs Caborroje's Pro Salud y Ambiente (Caborroje's Pro Health and Environment) and ConectaRSE (a corporate social responsibility (CSR) promotion non-governmental organization(NGO)), and a group of local farmers. The objective of the project was to promote sustainable development on the island by encouraging farmers to become entrepreneurs by developing small agro-businesses. Wal-Mart acted as the primary buyer. The project faced many challenges, such as farmers' difficulties in meeting quality standards and delivery schedules, the lack of an existing vehicle through which to access funding from the EDB, and, most importantly, changes in the political party in power. Project partners had to develop a position from which to negotiate a new alliance with the incoming government administration. Since Wal-Mart was determined to guarantee the continuity and expansion of the SDC project, Wal-Mart had to step into the project champion role.

Teaching Note: 8B10M24 (9 pages)
Industry: Agriculture, Forestry, Fishing and Hunting, Retail Trade, Wholesale Trade
Issues: Government and Business; Corporate Social Responsibility; Developing Countries; Partnership; Public Administration
Difficulty: 4 - Undergraduate/MBA


Chapter 15:
Developing Countries and International Finance II: A Decade of Crises

BANK FAILURE IN JAMAICA
Jenifer Daley

Product Number: 9B07M005
Publication Date: 12/1/2006
Length: 10 pages

This case provides a springboard for a general discussion of banking problems and the issues facing decision-makers as a result. The central issues deal with identifying the causes of banking problems and the resolution of these problems in a developing country context. Students will discuss: the causes of bank failures, the use of quantitative and qualitative data in assessing bank failures, alternatives facing decision-makers, and generally, the use of past information to predict future outcomes; the effects of, and responses to, the failures that contribute to an understanding of the Jamaican banking crisis and the related issues of regulation and supervision in three main ways.

Teaching Note: 8B07M05 (12 pages)
Industry: Finance and Insurance
Issues: Financial Analysis; Financial Crisis; Corporate Financial Reporting; Developing Countries
Difficulty: 4 - Undergraduate/MBA



CHAUVCO RESOURCES LTD: THE ARGENTINA DECISIONS (B)
David W. Conklin, Danielle Cadieux

Product Number: 9B06M024
Publication Date: 2/6/2006
Revision Date: 9/21/2009
Length: 5 pages

Argentina's fiscal deficit rose suddenly and substantially after 1995. This increase in deficits caused an increase in Argentina's debt. Argentina's problem was that it did not generate enough foreign exchange through exporting or through foreign investment in Argentina to cover its debt service payments in U.S. dollars. In order to prevent a run on its currency, the government of Argentina raised interest rates, but this caused high unemployment and business losses. In 2001, a foreign exchange panic did develop, and the peso fell by two-thirds vis-a-vis the dollar. Argentina was no longer able to service its debt, resulting in a debt default. This drastic action of devaluing the peso and defaulting on debt lead to economic recovery. However, by 2005, inflation had climbed once more. Perhaps the inflation/devaluation cycle was about to reappear. Meanwhile, external debt was still very high. Perhaps Argentina would have to default once again. Argentina's president rejected IMF policy recommendations, and he pointed to the IMF as the cause of the 2001-2002 recession. Instead, he relied on price controls and borrowed from Hugo Chavez in Venezuela.

Teaching Note: 8B06M24 (3 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Business Policy; International Business; Government and Business
Difficulty: 4 - Undergraduate/MBA


Chapter 16:
Globalization: Consequences and Controversies

SUNCOR’S POLITICAL ROLE IN FORT MCMURRAY
Michael Valente

Product Number: 9B11M034
Publication Date: 6/21/2011
Revision Date: 11/20/2013
Length: 14 pages

In the midst of massive growth in the oil sands, Suncor’s chief executive officer (CEO) is growing concerned about the local government’s inability to cope with unprecedented growth of oils sands development in Fort McMurray, Alberta. Crime, prostitution, drug use, social inequality, and ecological deterioration have begun to cripple Fort McMurray and the surrounding area largely because the local government has been unable to support the massive growth with appropriate public services and environmental protection. As part of a major oil and gas company in the region, the CEO is aware of the harsh lessons learned by Shell in Nigeria in 1995, where the company’s reluctance to get involved in political activities led to a massive boycott and tarnished reputation. The CEO is concerned that inaction may make Suncor complicit in the social and ecological issues in the region.

Teaching Note: 8B11M034 (9 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Political Roles of Corporations; Stakeholder Management versus Engagement; Sustainable Development; Public Welfare; Alberta Oil Sands
Difficulty: 4 - Undergraduate/MBA



RBC - FINANCING OIL SANDS (A)
Michael Sider, Jana Seijts, Ramasastry Chandrasekhar

Product Number: 9B10M015
Publication Date: 1/27/2010
Revision Date: 4/27/2010
Length: 16 pages

Under pressure from the Rainforest Action Network to make their lending policies more sustainable, executives at the Royal Bank of Canada who deal with issues of corporate citizenship and sustainability must decide whether to continue financing companies involved in extracting oil from the tar sands of Alberta, Canada. The case asks students to consider the following questions: 1) Should banks lend to any business or industry the government deems to be sustainable? 2) What are the risks of lending to businesses some stakeholders deem unsustainable? 3) How should banks respond when pressured by an interest group? 4) How does a bank decide what is sustainable lending practice? The supplement B case RBC-Financing Oil Sands (B), product number 9B10M016, is also available.

Teaching Note: 8B10M15 (7 pages)
Industry: Finance and Insurance
Issues: Sustainable Development; Environment
Difficulty: 5 - MBA/Postgraduate



CITY WATER TANZANIA (A): WATER PARTNERSHIPS FOR DAR ES SALAAM
Oana Branzei, Kevin McKague

Product Number: 9B07M025
Publication Date: 6/15/2007
Length: 17 pages

This case examines how the Tanzania government intends to address a pressing deterioration in the infrastructure and services of Dar es Salaam's Water and Sewage Authority. The decision process unfolds in the spring of 2002, on the heels of the Cochabamba uprising in Bolivia and an increasing dispute over the involvement of the International Finance Corporation and the World Bank in other water development projects in Ghana, Mauritania and South Africa. At that time, the World Bank was already sponsoring similar projects in Angola, Benin, Guinea-Bissau, Niger, Rwanda Sao Tome and Senegal, despite some vocal local opposition. This multi-part case series is ideally suited for core or elective courses in strategy and sustainability to illustrate the types of ongoing tensions and divergent decision angles that influence the formation and performance of public-private partnerships and managing in a global context. It also provides a rich and graphic account of the special threats and opportunities in the water sector - a wealth of complementary teaching resources can also stimulate larger debates by juxtaposing the case decision with a broader crisis of confidence in for-profit solutions to water and sewage provision in Africa and in Latin America.

Teaching Note: 8B07M25 (13 pages)
Industry: Utilities
Issues: Partnership; Strategic Alliances; Management in a Global Environment; Sustainable Development
Difficulty: 4 - Undergraduate/MBA



GLOBALIZATION THREATENS CANADA'S AUTO INDUSTRY: IMPLICATIONS FOR THE ECONOMY AND SOCIETY
David W. Conklin, Danielle Cadieux

Product Number: 9B06M008
Publication Date: 1/13/2006
Revision Date: 9/17/2009
Length: 12 pages

For many decades, the automobile industry had played a major role in Canada's economy. A large portion of Canadian jobs depended on the auto industry, both directly and indirectly. However, by 2005, Canada faced serious globalization threats. Analysts were stating that in the future the number of automobile-related jobs in Canada would depend upon the international competitiveness of Canadian plants. To continue to increase wages would raise Canadian production costs so far above the levels in Mexico, China and other emerging nations, that the assemblers would shift production to low-cost jurisdictions. Meanwhile, the Big Three were losing market share to their non-union competitors, especially Toyota and Honda.

Teaching Note: 8B06M08 (9 pages)
Industry: Manufacturing
Issues: Globalization; International Business; Business and Society
Difficulty: 4 - Undergraduate/MBA