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Volume 2 Issue 3

IMA Educational Case Journal
ISSN 1940-204X


Tom Klammer,
Regents Professor Emeritus,
University of North Texas
This short case intentionally provides students with only limited background data on two clothing chains. Zara is a real firm with a major presence in Europe, a growing footprint worldwide, and only a limited presence in the United States. Wearable Wishes is a fictional firm that represents a conglomeration of clothing chains that serve customers with a substantial number of U.S. stores and compete to a lesser extent overseas. The use of this fictional firm gives the student the opportunity to do background research on a variety of firms in the fashion industry. Each firm has a somewhat different product and customer strategy, allowing the student to make choices about which are applicable to Wearable Wishes. The many variations in the approaches different firms utilize mean students make different assumptions and come up with diverse responses to the case requirements. This variety generates opportunities for discussion of why these differences exist. The case provides only minimal financial information, so students do not fixate on numbers (as they are prone to do). Instead, they must focus on underly¬ing strategic, production, informational, and behavioral factors that are influenced by the environment in which the firms operate.
Keywords: strategy, lean production, fashion, and competitive challenges.
Norman T. Sheehan,
University of Saskatchewan

The case describes how Richard Brown, EDS’ former CEO and chairman, effectively manipulated EDS’ management control system to encourage its employees to aggressively chase and win billions of dollars of mega-outsourcing contracts. The new contracts boosted EDS’ revenues at the same time as Brown cut staff and costs, leading to exceptional short term results. Unfortunately, EDS lacked systems to competently manage the risks which accompanied the mega-contracts and was unable to sustain this performance during a subsequent economic downturn. As a result of the unexpected decline in financial performance, EDS’ share price fell precipitously and in March 2003, Brown was forced to resign his position as CEO and chairman. Students are asked to employ risk management tools, including COSO’s ERM framework, to help diagnose why Brown failed. The case requires students to consider how to balance a CEO’s desire to maximize organizational performance with the need to manage risk when operating in environments with high rivalry, rapid technology change, and significant economic shocks.
Keywords: risk identification, risk assessment, risk management, levers of control, COSO’s Enterprise Risk Management Framework, and risk exposure calculator.
Jerry Kreuze,
Western Michigan University
The case illustrates how profit maximization goals have the potential to influence ethical decision making. Abby, the assistant director of manufacturing, has the opportunity to enhance both company profitability and reduce the purchase costs of a product for the brother of George Smilee, the director of manufacturing. However, that decision would shift costs to another customer, Breeland Ltd. Being a CMA, Abby is appropriately using the IMA Statement of Ethical Professional Practice as a guide to the proper course of action. The case requires students to assume Abby’s position. In so doing, students are challenged to investigate the appropriate course of action. Students are asked to use the IMA Statement of Ethical Professional Practice when answering the questions posed and in deciding upon an appropriate course of action for Abby.
Keywords: code of ethics, special orders, and ethics.