IMA Educational Case Journal
Volume 5, Issue 2
Deploying Sustainability at Solea
Jan Bell; S. Sinan Erzurumlu; Holly Fowler
SOLEA, A MULTINATIONAL FOOD AND FACILITIES MANAGEMENT COMPANY, announced a global sustainability initiative. Within Solea, sustainability meant considering the environmental and social impacts of operations along with profitability. This case focuses on how the implementation of the sustainability initiative created organizational conflict between the sustainability group and the supply management group. Most of the disagreement arose from supply management strategies, designed to increase immediate profits, which conflicted with sustainability strategies, aimed to yield longer-term impacts. Even with upper management supporting sustainability, the case demonstrates how complicated it is to implement sustainability when actions get in the way of immediate profits and financial data is missing. Students understand the need to explicitly link (map) the new strategy to financial performance metrics, to specify when and how the benefits of a new strategy should impact profitability, and to monitor lead and lag performance measures.
Keywords: sustainability, triple bottom line, incentives, performance measurement, balanced scorecard, long- versus short-term profits, supply chain management, sourcing, service operations, and strategy.
Caribbean Brewers: Transfer Pricing, Ethics, and Governance.
Douglas Kalesnikoff; Suresh Kalagnanam
CARIBBEAN BREWERS IS A FICTITIOUS COMPANY, although the case depicts a real international business situation focusing on transfer pricing, ethics, and governance. It exposes students to the role of management accounting concepts, such as cost allocation and transfer pricing, in terms of how they impact the performance and reward of individuals at different levels within the organization. Students are also exposed to the impact of the management accounting and control tools/methods used upon stakeholder interests. The case puts the new advisor to the Chief Financial Officer in a difficult position with respect to discharging his or her professional and ethical responsibilities when the interests of the different stakeholders are at odds with one another (e.g., majority and minority shareholders, individual managers, and tax authorities). It contains a good balance of quantitative and qualitative analyses, and forces students to delve into the issues in some depth. The ethical issue forces students to think hard about how they would react when facing similar situations. The case offers considerable flexibility to the instructor to emphasize different aspects contained within, depending upon the specific course and the level at which it is being used; it can also work well as an integrative case. The case is most suitable for use in advanced undergraduate management accounting courses as well as graduate level courses including those in MBA programs. It has been successfully used as a discussion case in an MBA capstone course; the positive student feedback, with mean ratings on four questions ranging from 7.7 to 7.9 on a ten-point scale, suggests that the case fulfilled its learning objectives.
Keywords: transfer pricing, governance, international business, and cost allocation.
Evaluating Strategic Business Expansion Opportunities
Thomas G. Canace; Paul E. Juras
GREG STORM, OWNER, IS STRIVING TO make his organization a market leader by finding unique ways to grow the business. He views his accountants as consultants who not only have the technical skills to provide financial and analytical information, but who also have the strategic thinking to provide valuable input to him and the busi¬ness leaders to help improve the profitability and expansion potential of the business. This case asks the student to play the role of a member of the accounting team and perform some financial and strategic analysis of operating results. The student is also asked to view the role of accountant as that of a strategic business partner by making a specific strategic recommendation to improve the operating results of the organization.
Keywords: cost behavior, budgeted income statement, and strategic analysis.