Volume 4 Issue 1
IMA Educational Case Journal
Alfred J. Nanni, Jr.
Alfred J. Nanni, Jr.
Paul Mulligan, Alfred J. Nanni, Jr.DRÄGER Medical Systems, Inc. is a company based in Lubeck, Germany with a long history of innovation in medical instruments. The company has a strong market presence in Europe, but only modest market penetration in the United States. The success and growth of operations at Dräger Medical’s U.S. headquarters, near Boston, Massachusetts, is critical to sustaining European market share and improving the company’s U.S. market share. This case describes the preparations for a proposed consolidation of manufacturing operations into the existing office site currently housing related research and development, management, and marketing personnel. The prime challenges outlined in the case are twofold: modify the assembly operations to handle potential increased demand in a space with a 45% smaller footprint, and significantly improve production efficiency. Students have the opportunity to assess the proposed plans from both operational and financial performance perspectives and argue for changes, where warranted.
Keywords: strategic alignment, cost behavior, differential analysis, lean production, payback period, process design, process analysis, and relevant costs.
Implementing Sustainability at Tata Steel
WHILE FIRMS INCREASINGLY RECOGNIZE THE imperative of becoming sustainable, the challenges of sustainability are also increasingly evident. The case highlights the role of management control and accounting in support¬ing implementation of environmental, social, and economic aspects of sustainability in a multi-stakeholder global environment. Techniques including dashboards, quality costs, and cost-benefit analysis are shown to increase the effectiveness of planning and control of sustainability. The case also considers the reality of conflicts within stake¬holder interests underlying sustainability issues, and the role of accounting in measuring and managing the risks and associated costs in these more complex and uncertain scenarios.
Keywords: sustainability, management accounting, control, measurement, quality, and social responsibility.
Let’s Go Aero Travel Trailers: Incorporating the New Model of the Organization into the Teaching of Budgeting
LET’S GO AERO introduces students (undergraduates, MBAs, executive audiences) to budgeting. The setting is a manufacturer of aluminum trailers. The rich background material allows students to explore budgeting as a planning and coordinating tool. Preparation of multiple budget scenarios emphasizes the interdependency of the functional areas (marketing, purchasing, production, and accounting). The case identifies company policies for monthly inventory needs which are used, along with other projections, to prepare production, purchasing, and cash budgets. By preparing a series of budgets, students are introduced to the potential negative impacts of uneven sales and counter-productive reward schemes.
Keywords: budgeting, purchases, cash, level production, and reward schemes.