Jimmy Fu and Moog Inc.

This case was written by Rhonda Engleman and Jisun Yu under the supervision of Professor Andrew H. Van de Ven of the Carlson School of Management at the University of Minnesota. We also appreciate the editorial assistance of Julie Trupke and useful comments of Gyewan Moon and Margaret Schomaker. We gratefully acknowledge Stuart

This situation can lead to negative consequences for a business when its executives or management direct the organization to act in the best interest of themselves instead of the best interest of its owners or shareholders. Stockholders of the enterprise can keep this problem from arises by attempting to align the interest of management with that of themselves. This normally occurs through incentive pay, stock compensation, or other similar incentive packages that now cause the managers financial success to be tied to that of the company (Garcia, Rodriguez-Sanchez, & Fdez-Valdivia, 2015; Cui, Zhao, & Tang, 2007; Bruhl, 2003; Carols & Nicholas,

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Grueber should report to the CFO about the issues affecting Steelcase. The reason for this report is to give management a new perspective of its own performance. The report could also serve to make them aware of the impact of their breakdown in communication to analysts or investors, which resulted in the company losing credibility. In other words, the communication breakdown that Steelcase experienced was a result of management’s failure to provide transparent, “insight into decision making at the company or strategic direction of the company”(Argenti, 2013).

In 2006, Merrill Lynch became the lead book runner for a $5 billion convertible bond issue for MoGen, Inc. This was the single, largest convertible bond issuance in history and required a considerable amount of effort on the part of Merrill Lynch’s Equity Derivatives Group to convince MoGen’s management to choose Merrill Lynch over its competitors. The case is focused on Merrill Lynch’s choice of the conversion premium and coupon rate to propose to MoGen management. This pricing decision requires students understand the concept of valuing a convertible as the sum of a straight bond plus the conversion option. Valuing the conversion option as a call option requires the

The instructor may vary the emphasis on different issues by altering the study questions and by the choice of video clips. The case is well suited for courses and classes concerning corporate governance, valuation, mergers and acquisitions, and corporate social responsibility. The following objectives of the case allow students to:

* any other issues you believe should be brought to the attention of the CEO and the board

In 2002 the Hershey trust company board decided to sell school shares from Hershey stock. The board wanted to sell the 33% of Hershey shares at premium and reinvest the money in another company to make profit for the school. The board was responsible to oversees the investment and make sure the school was doing fine. Looking on this issue as financial personnel the board decision was better to sell stocks at premium and reinvest in another company.

In the summer of 2008, InBev NV, a Belgian-based brewing company formed from the merger of InterBrew and AmBev, offered a bid of $46.6 billion to acquire Anheuser-Busch Co to create the world’s largest brewing company at $65 a share. The initial offer was subsequently declined in part because the company felt the offer undervalued the company greatly. InBev later increased their offer to $70 a share and in Mid-July, Anheuser-Busch accepted the offer making the total cost of the deal $54.8 billion dollars. The issue then becomes whether the offer of $70 is justifiable to InBev’s shareholders. The merger brings about two different management styles. The culture at InBev focused on extreme cost-cutting measures and profitable incentive-based compensation programs. However, Anheuser-Busch’s culture differed in that they prided itself on philanthropy, diversity, and community involvement. In addition, this company possessed many luxurious offices and corporate fleet of aircrafts. Furthermore, they invested heavily in advertising, derived most of their profits in the United States, and possessed a lackluster international expansion plan. Issues the financial managers face will be differing business philosophies in regards to marketing (“Grow/Defend/Maintain/Cash” matrix approach vs the large marketing budget of Anheuser-Busch), culture (cost cutting measures vs company perks), and the future of the twelve

The amount of cash that Ford is carrying on its balance sheet is too much considering that additional money not used for the advancement of the company belongs to the owners of the firm, the shareholders. Having too much cash on its balance sheet will be a disincentive to Ford’s employees who consequently will feel not feel an urgency to perform and add value to the company. Notwithstanding the fact that the company is always on the lookout for acquisition targets even after already purchasing Jaguar Cars, Volvo Cars, and Land Rover in the past ten years, it is imperative that the company does not engage in such activities for the sole purpose of “empire

Faced with an overwhelmingly complex situation, Alan Mulally has been brought in as Ford Motor Company's new president and CEO. As diverse global dynamics confront the company and competitive pressures continue to build, he has the challenging task of improving Ford's brand image and returning the company to profitability. Mulally has invited your consulting firm to advise his management team on restoring the company's reputation and viability. Assigned to the project, you have been asked to evaluate Ford's situation and prepare a report with the following content:

Unfortunately, the same issues that existed with the overall governance existed here. The company may have been acting as an exemplary corporate citizen, but with no overall strategy and minimal communication, there was no consistency or coordination, and the company was not getting the public relations benefits that they might have otherwise gained (Veleva, 2010).

I believe this decision is appropriate because it greatly increased the efficiency of their employees allowing them to feel that the company is partly owned by

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4. How does this case illustrate how strategic intent needs to be matched by both organizational capability and managerial competence; and show how such