First-year MBA Research Articles

Effectiveness of AI-Based Personalised Reading Platforms in Enhancing Reading Comprehension

This study aimed at evaluating the effectiveness of microlearning in higher education. The sample consisted of first-year MBA students, and a post-test control group design was used to assess the effectiveness of a microlearning module. The results indicated that the use of microlearning was significantly related to learning performance and participants' reactions to the module. Moreover, the microlearning group scored significantly higher than the control group. The findings suggest that microlearning has the potential to improve learning outcomes and enhance participant engagement. However, the study has certain limitations, and future research is needed to gain a comprehensive understanding of the optimal design and delivery of microlearning modules. The study supports the use of microlearning in higher education as an effective instructional strategy.

Microlearning and Learning Performance in Higher Education: A Post-Test Control Group Study

This study aimed at evaluating the effectiveness of microlearning in higher education. The sample consisted of first-year MBA students, and a post-test control group design was used to assess the effectiveness of a microlearning module. The results indicated that the use of microlearning was significantly related to learning performance and participants' reactions to the module. Moreover, the microlearning group scored significantly higher than the control group. The findings suggest that microlearning has the potential to improve learning outcomes and enhance participant engagement. However, the study has certain limitations, and future research is needed to gain a comprehensive understanding of the optimal design and delivery of microlearning modules. The study supports the use of microlearning in higher education as an effective instructional strategy.

The biasing impact of positive instructor reputation on student evaluations of teaching

A naturally-occurring intervention in a longitudinal field setting (4 months) was used to examine the presence and biasing impact of a positive reputation on subsequent ratings of work performance (student evaluations of teaching). During pre-semester interactions, first-year MBA students received information from second-year MBAs about their upcoming professors and classes. Favorable information about the two professors and course examined in the present study caused a positive reputation. Results indicated that despite four months of experiencing actual performance, the positive reputation hindered students’ decision-making process resulting in biasedly inflated ratings of instructor performance and halo error judgments of course materials, grading, and amount learned. The problematic implications of using biased student evaluations of teaching to measure faculty performance is discussed, along with suggestions of ways to mitigate against overreliance on this evaluation method and to possibly minimize reputational effects.

Rohvi

Study level/applicability This case was successfully taught in a second-year MBA marketing course on the science of behavior change. It would be suitable for first-year MBA and executive education programs. The material would work well on courses on women in business, women as leaders and women in data science. The female protagonist creates a tech platform and uses a data-driven model. Subject area Marketing – it was used in a module around leveraging existing insights and creating new ones in marketing strategies. The course is structured around a “pathway to behavior change” framework. This case focuses on the analysis segment of the model, introduces targeted behavioral challenge(s) and lends itself to identifying consumer insights, biases and behaviors. It uses that analysis to learn about the market, competition and gaps to fill. Case overview This case uses a startup in the retail industry to explore the leverage of behavioral science to enrich a business model and structure a marketing campaign. The material unfolds the testing of an innovative process and use of persuasion to align business practices with human behavior and scale. In addition, it gives the opportunity to discuss how a minimal tech solution could bring in market data and provide a test platform to larger clients.The founder of Rohvi, Sara Whiffen, created a platform that allowed shoppers to buy clothing items from local retail stores, use them and after a few wears, return the items for partial store credit. The business model was based on Whiffen’s experience in the automobile industry with used cars. Following her first few years in the business, Whiffen had to make some decisions around engaging clients on two sides – retailers and consumers. How can an innovative startup leverage behavioral science to persuade multiple stakeholders? Expected learning outcomes • Learn marketing concepts in material and a tech platform featuring a female protagonist and team; • practice evaluating a product and capturing value using behavioral science; • understand consumer/business biases and practice forming and delivering a persuasive message; • learn to leverage and create new insights to aid behavior change in business-to-consumer (B2C) and business-to-business (B2B) contexts; • analyze behavioral insights to identify new opportunities in a competitive marketplace; • unfold a framework to explore consumer motivation in recommerce; and • explore the use of experimentation in changing consumer behavior and improving decision-making. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Social implications Females need to be represented in core business education curriculum such as data analysis in addition to classes focused on social equity and business. This all female executive team pursued an innovative process built on a technology platform using a data-driven model to gain enterprise clients. The material offers an opportunity to explore sustainability. Subject code CSS 8: Marketing

Ferrari five: How to recover control of the traditional channel in Colombia?

Learning outcomes The learning outcomes are as follows: to analyze host market characteristics and consumer behavior to develop sound value propositions; to distinguish the characteristics of traditional retail as opposed to the ones of modern retail; to identify the potential benefits and challenges of working with traditional retail; to discuss how informality may affect business relations; and to identify potential avenues to align divergent interests between the focal firm and traditional retailers. Case overview/synopsis The case described the situation faced by French International Company (FICO), a leading manufacturer of cigarettes, after the acquisition of Fosforera Colombiana (FOCOSA) in Colombia. FICO aimed to leverage the leadership position of FOCOSA and of its flagship brand Ferrari Lights that possess a 60% market share. However, after just a few months, it was clear that the acquired subsidiary was not performing adequately. The financial results obtained were disastrous. To face this situation, FICO appointed as the new marketing director to Waldo Tarantini who has experienced dealing with informal markets. To be aligned to the Colombian consumption pattern of five cigarettes daily, Waldo decided to launch a new presentation of the leading brand denominated Ferrari five, a package of 5 cigarettes at COP 1000. Considering that more than 60% of the sale can be explained by traditional retail, it was mandatory to secure its participation. Nevertheless, traditional retailers obtained up to 56% margin by selling single sticks. Waldo and his team rapidly needed to craft a commercial strategy to secure the participation of traditional retailers in a market plagued by informality, smuggling products and lack of control from national authorities. Complexity academic level The case is intended to be used at the early stages of post-graduate studies and in executive education programs addressing issues such as emerging markets, informality, the base of the pyramid, trade marketing and product launches. In particular, the case can be used in MSc in Marketing’s students, first-year MBA students or executives following short courses. The field of studies in which the case should be taught is marketing or trade marketing in particular when analyzing emerging economies. Supplementary materials Teaching notes are available for educators only. Subject code CSS 8: Marketing.

AmNet

Purpose Micro organizational behavior – an individual level of analysis (i.e. motivation, personality, attitudes, learning, etc.). Meso organizational behavior – team/group level of analysis (i.e. communication, team dynamics, power, politics, etc.). Macro organizational behavior – an organizational level of analysis (i.e. strategy, structure, culture, control, etc.). Marketplace or external environment (PESTEL analysis). Research methodology The research was conducted by a consultant in the role of a participant-observer. Case overview/synopsis The focus of the case is a disguised nonprofit organization, the American-Netherlands Foundation (AmNet), based in Chicago. The organization faced leadership and organizational challenges related to conflicting strategic and operational priorities among the board of trustees, the president and staff. An unexpected contribution of $750,000 increased the salience of these differences. The case provides students an excellent opportunity to apply their analytical skills and knowledge gained in a management and business course. Complexity academic level Organizational behavior; organizational design; organizational development; and organizational theory. Levels – upper-level undergraduate through first-year MBA students.

Swatch Group and Francogeddon

This case illustrates how exchange rate shocks affect international businesses. The focus is on one recent stark example: the effect on Swatch Group of the Swiss National Bank's January 2015 decision to end its policy of putting a ceiling on the euro/Swiss franc exchange rate. It is useful for an introductory class that defines different exchange rate concepts, illustrates why managers should care about exchange rates, and motivates/previews the study of the macroeconomics of exchange rates, capital flows, and monetary policy. This case is appropriate for use in a first-year MBA course that deals with international economics or finance, though it is written to be standalone and thus could also be employed in an advanced undergraduate or master's level course on international macroeconomics or finance. Excerpt UVA-GEM-0167 Oct. 29, 2018 Swatch Group and Francogeddon “The Swiss National Bank has decided to discontinue the minimum exchange rate of CHF 1.20 per euro with immediate effect and to cease foreign currency purchases associated with enforcing it.” Thomas Jordan, Chairman, Swiss National Bank With that one sentence uttered on a cold Zurich day in early 2015, Thomas Jordan ended the Swiss National Bank (SNB) policy to hold the Swiss franc (CHF) down against the euro (EUR). The policy, which had been in place since September 2011, had SNB purchasing foreign currency in exchange for the Swiss franc in order to maintain a floor of CHF1.2 per euro (or, equivalently, a ceiling of EUR0.83 per franc). Within a week of removing this policy, the franc appreciated over 20% and the stock price of Swatch Group, a Swiss watch manufacturer and exporter, fell by over 20% (Figure 1). Swatch CEO Nick Hayek Jr. proclaimed, “Words fail me! Jordan is not only the name of the SNB president, but also of a river and today's SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country.” . . .

The prediction of the success of first-year MBA candidates: One business school as a case study

Abstract The focus of this study was to determine the best predictors of academic success of first-year MBA students. Selection criteria and variables are tested for the reliable prediction of successful completion of the first year of an MBA programme (MBAI). A longitudinal quantitative research design is followed using data of students from a South African business school, enrolled between the years 2006 and 2013. The study population consisted of a total of N =777 students enrolled on the MBA programme for this period. Numerical- and verbal cognitive ability assessments gathered as part of enrolment assessment were used and compared to MBAI examination results. Logistic regression analysis was used to determine the significance of different variables to predict MBA first-year success, defined here as the successful completion of all first-year MBA modules within the first academic year. Results indicate that cognitive ability is related to MBA first-year success. The numerical was a better predictor than the verbal cognitive assessment. Type of undergraduate education was found to play a role in MBA first-year success. Language of delivery proved to have an influence on academic performance and Younger students performed better than their older counterparts did. Determining the best predictors MBA first-year success has practical implications on selection processes and throughput.

Teaching Notes to Accompany Case: How Helpful are Charity Watchdog Ratings?

The objective of this case is to provide students an opportunity to learn about nonprofit financial statements and perform a basic financial analysis. In performing the analysis, students will become familiar with the unique financial and operational challenges faced by nonprofit organizations (NPOs). The case is written for junior or senior level finance or accounting majors or for first-year MBA students.

Mexico: Walls or Doors?

This case is about the economy of Mexico as of 2018, and particularly the challenges it faces with respect to managing its currency and inflation, the renegotiation of NAFTA, and long-term growth. The case updates students on the current economic situation in Mexico, helps students weigh the economic pros and cons of protectionism via the classic tariff supply-and-demand diagram, and encourages students to apply to Mexico previous lessons on growth, stability, and stabilization. It is designed to be used in the latter half of a first-year MBA course on international economics as an application of earlier key concepts and models (e.g., the Solow growth model, open economy IS/LM model, and balance of payments). However, while the case presupposes some knowledge of macroeconomic data, it is written to be standalone and thus could also be employed in an advanced undergraduate or master's level course on international macroeconomics or finance. Excerpt UVA-GEM-0166 Rev. Feb. 14, 2019 Mexico: Walls or Doors? In August 2018, Agustin Carstens traveled to Jackson Hole, Wyoming, to speak at the Federal Reserve Bank of Kansas City's Economic Policy Symposium, one of the world's leading annual forums on international macroeconomic policy. On December 1, 2017, Carstens had become the general manager of the Bank for International Settlements (BIS), the central bank for central banks, after leaving his position as governor of Mexico's central bank, the Banco de Mexico. Carstens was likely proud of his service to Mexico, having risen through the ranks of the bank as a young economist in the 1990s before becoming the country's minister of finance in 2006 and head of the central bank in 2010. The Mexican economy he had left was very different than the one in the 1990s, a period defined by skyrocketing inflation (Exhibit 1), staggering government bond yields (Exhibit2), and a crushing, deep recession (Exhibit 3) in the wake of capital outflows (Exhibit 4) and the December 1994 Mexican peso crisis. In contrast, much of the 2000s and 2010s had seemed almost ordinary: Carstens presided over moderate inflation (Exhibit 1) and stable real economic growth (Exhibit 3). However, as Carstens reflected on his eight months at his new job in Switzerland, he must have wondered if his country's economy was, like him, at a turning point. Inflation had risen to almost 7% in late 2017, a 17-year high (Exhibit1). The current account balance had been consistently negative, and the Mexican government had been running budget deficits for years (Exhibit 5). And while the Mexican economy was growing, it wasn't experiencing explosive BRIC-style growth despite lagging behind Brazil and Argentina in GDP per capita (Exhibit6). . . .

Love plastic: Ashiyana Pipe’s journey to redefine the positioning of plastic

Subject area The case specifically discusses the role of stakeholders and non-market forces and how they can potentially influence the strategic choices of firms. Participants need to have some basic understanding of non-market forces, and stakeholder theory. The case is suitable for courses on sustainable supply chain management, closed loop supply chain management, reverse logistics, green business, environmental management, strategic management and business in emerging economies. Study level/applicability The target audiences for the case are bachelor and first-year MBA students and trainees who are interested in learning the relevance of non-market forces in sustainable growth of an industry and the importance of stakeholder management in the smooth conduct of business. Case overview The case study details how the plastic industry in Kerala faces a non-market threat and how it affects the progress of the industry by using the example of Ashiyana Pipe. Though plastic is a unique material by virtue of its reusability and non-perishable characteristics, it has invited a lot of criticism, as there is a wide spread perception regarding its detrimental impact on the environment (such as choking drains, preventing the degradation of solid waste because of its impermeability, etc.). But the reason for experiencing the detrimental impact of plastic can also be attributed to the inability of the supply chain of the plastic industry to reach a closed-loop status, especially in developing countries such as India, as all categories of post-consumer plastic are not reaching recycling plants. Lack of awareness, lack of community participation in proper segregation and aggregation at the source, absence of incentive systems, weak regulations and poor monitoring are discussed as the common barriers hindering the achievement of closed loop status of plastic supply chain. Detailing the barriers, the case study explains the failure of informal and formal recycling markets in Kerala. Finally, the case study proposes a model with involvement of all the key stakeholders to reposition the hate toward plastic into love through recycling initiatives. Expected learning outcomes Expected learning outcomes of the case are listed below: illustrate the importance of stakeholder involvement in achieving a sustainable business and to stress the importance of a decentralized approach. Illustrate the relevance of non-market forces in sustainable growth of an industry that has significant impact on the surrounding environment and society. Critically analyze the existing business models (based on market mechanism) and suggest possible improvements and alternatives. Understand the challenges that will be faced while implementing an inclusive model with involvement of all stakeholders to reduce the negative impact of non-market forces. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 11: Strategy.

Advertising Experiments at the Ohio Art Company

This case is intended to be part of a first-year MBA marketing course, or a second-year elective in advertising, integrated marketing communications, market research, or marketing analytics. The case provides students with examples of two real advertising experiments and the challenges involved in executing the experiments. It allows for a discussion of the need for advertising experiments, and also, at a more general level, the need to measure the return on marketing. Biases surrounding the field experiments allow for a discussion of the problems with establishing a causal relationship between advertising and sales. Excerpt UVA-M-0752 Rev. Jan. 30, 2012 Advertising Experiments at The Ohio Art Company Headquartered in Bryan, a small northwest Ohio town, the Ohio Art Company was best known for its classic drawing toy, Etch A Sketch. In stark contrast to the faddish toys that crowded the toy market during the late 20th and early 21st centuries—as well as the increasing prevalence of toys featuring a licensed identity—the company's flagship product had endured for more than 40 years, sold over 100 million units, and appealed to children in dozens of countries worldwide. About 25% of the firm's revenues were derived from the sale of toys for writing and drawing. One of the oldest toymakers headquartered in the United States, Ohio Art produced about 50 toys in all, including the popular Betty Spaghetty line of dolls as well as water toys, children's drum sets, and sports sets. The company's slogan, “Making Creativity Fun,” emphasized its focus on arts-and-crafts-oriented toys. Although toys generated the majority of Ohio Art's annual sales, the production and sale of custom metal lithography contributed about one-third of the company's revenues. Exhibit 1 provides pictures of some of the major toys sold by the Ohio Art Company. Recent Performance History In recent years, Ohio Art had experienced a bumpy ride, alternating between profits and losses throughout the 1990s and up through much of 2006. The recession of the early 1990s helped Ohio Art to a certain degree, because many of its toys retailed for less than $ 20 and thus appealed to budget-conscious parents. Sales and profits peaked at $ 55.6 million and $ 3.4 million in 1992. Product placement of Etch A Sketch in the hit animated film Toy Story was a shot in the arm for Ohio Art in 1995. . . .

University of Virginia Health System: The Long-Term Acute Care Hospital Project

This case is best taught in a first-year MBA finance course and with a series of cases based on cash flow analysis. Its primary objective is to portray the major differences in project analysis for nonprofit organizations compared to for-profit companies and to highlight the unique issues relevant in a health care environment. Students must decide, based on cash flow analysis and nonfinancial factors, whether or not to propose a long-term acute care hospital (LTAC) project to the board of directors of the U. Va. Health System. Students must use the assumptions outlined in the case to create a cash flow analysis and then compute a net present value (NPV) calculation and internal rate of return (IRR) for the project. After assessing the base-case results and sensitivity analysis of the assumptions driving those results, students must decide if the project should be taken to the board of directors.

Advertising Experiments at the Ohio Art Company

This case is intended to be part of a first-year MBA marketing course, or a second-year elective in advertising, integrated marketing communications, market research, or marketing analytics. The case provides students with examples of two real advertising experiments and the challenges involved in executing the experiments. It allows for a discussion of the need for advertising experiments, and also, at a more general level, the need to measure the return on marketing. Biases surrounding the field experiments allow for a discussion of the problems with establishing a causal relationship between advertising and sales.

Is Dell's Business Model Broken?

A candidate for a consulting position prepares an analysis of Dell Corporation. For years, Dell's efficient supply chain innovations and successful leveraging of technology in offering made-to-order computers at competitive prices made it a world leader in market share. But conditions—and profits—seem to have leveled off. To what extent is this a matter of a business model in need of revision, and to what extent is something more fundamental at work?This review of a company's trajectory and strategic hurdles has been used in executive education classes but would serve equally well in first-year MBA courses in strategy or operations management. Excerpt UVA-OM-1416 June 21, 2010 Is dell's Business Model Broken? Danielle McCarren had only a few hours to prepare. She had been given advance notice that her interview at a well-known consulting firm would include questions analyzing Dell Corporation (Dell): What factors had led to Dell's incredible success? What was the business model that had made it happen? More important, was Dell now vulnerable to investors downgrading their evaluation of Dell? Was Dell in trouble, and if so, how should it remedy the situation? McCarren recalled from her MBA program's operations class that Dell's revenue growth had slowed over the previous three years and that net income had dropped in FY2007 and FY2009, although it had grown every other year (Exhibit 1). She knew that, as recently as 2006, Dell had been on Fortune's list of most admired companies, recognized as one of a handful that had consistently outperformed the market over the previous 15 years, but she also was aware that its return on assets had dropped over the previous 3 years and its stock price had stagnated (Exhibit 2). Having researched the firm's history, she sat back and pondered its remarkable trajectory. Dell's Roots . . .

Salmones Puyuhuapi: Production Planning

This case is appropriate for undergraduate, MBA, and MBAE audiences, but is specifically designed for Decision Analysis and Decision Analysis and Optimization, first-year MBA electives. It is related to but separable from Puyuhuapi (A) (UVA-QA-0749). That A case was about whether to harvest salmon early due to the threat of a virus, and it used a simple approximation for relating the value of a harvested salmon to its live weight. This production planning case addresses in detail how harvested salmon are processed and sold. Here, the plan Elisa Perez develops will determine how much value Salmones Puyuhuapi achieves from a day's harvest of salmon from one of the company's sites in southern Chile. Excerpt UVA-QA-0753 Rev. Apr. 7, 2014 Salmones Puyuhuapi: Production Planning Are you ready? The first boat with the harvest is on its way to the plant. Everything is set up to start processing in four hours, right? I just sent you an e-mail with the harvest specifications. Elisa Perez was at first surprised and then petrified when she received the phone call about the harvest's impending arrival. How could she have forgotten about this? She immediately remembered a previous discussion she had had with the CEO of the company, Osvaldo Correa. Correa's last words to her were “I'm going to give you one last chance. The next time, you are out.” As the commercial manager of Salmones Puyuhuapi (SP), Perez was in charge of developing production plans for SP's salmon processing plant. One of her main duties was to determine the best production mix based on each harvest's characteristics (number of salmon, average weight, weight dispersion, and quality), the processing plant capacities (the freezer tunnel was often a bottleneck), and market conditions (prices and customer requirements). . . .

Salmones Puyuhuapi Part Iii

This case series is appropriate for undergraduate, MBA, executive education, and MBA Exec audiences but is specifically designed for decision analysis, a first-year MBA core course. In the Part I case, Osvaldo Correa, CEO of Salmones Puyuhuapi (SP), must decide how to respond to news that the ISA virus has infected a competitor's salmon farming site. The alternatives include harvesting SP's 900,000 salmon two months early, waiting for the fish to grow and risk losing fish to the virus, and vaccinating the fish. The harvest now alternative is evaluated using normally distributed fish weights. It is necessary to account for monthly growth of the fish and mortality to value the ends of the decision tree. Other alternatives (e.g., testing the water, fish, and marine life) can be studied with the expected value of perfect information. Vaccination is an example of the value of perfect control. Excerpt UVA-QA-0776 Sept. 15, 2011 Salmones Puyuhuapi PART I Osvaldo Correa, CEO of Salmones Puyuhuapi (SP), was in a tense meeting with bank officials, negotiating the terms of his firm's line of credit, when he received a text on his BlackBerry. The news was not good. Correa tried to remain calm in front of the bankers as he read the terse message about a suspected outbreak of the infectious salmon anemia (ISA) virus in a competitor's salmon farm. Correa knew that if the virus were to spread to his firm's Jacaf Fjord site in northern Patagonia, Chile, it could wipe out his nearly one million salmon two months before they were to be harvested. That would have a devastating impact on his firm's cash flows. Excusing himself to go to “los servicios” (the only excuse he could come up with), Correa e-mailed his assistant to set up a meeting later that day with Jorge Richards, his operations manager, and Sergio Rivas, the company's veterinarian. Salmon Farming in Chile Chile was a relatively small country of nearly 16 million inhabitants whose economy was driven principally by mining, agribusiness, forestry, and aquaculture. In particular, the salmon industry, although relatively new, had been wildly successful. The industry was established in the early 1980s to take advantage of natural conditions in the south of the country (moderate sea temperatures, sheltered sites, and ideal salinity levels). It achieved nearly 20 years of 42% annualized growth, allowing it to join Norway as the world's largest salmon producers. In 2006, these two countries shared 78% of global production. Salmon farms, which thrived in the southern regions of Chile, dominated the local economies and led to high rates of employment. . . .

University of Virginia Health System: The Long-Term Acute Care Hospital Project

This case is best taught in a first-year MBA finance course and with a series of cases based on cash flow analysis. Its primary objective is to portray the major differences in project analysis for nonprofit organizations compared to for-profit companies and to highlight the unique issues relevant in a health care environment. Students must decide, based on cash flow analysis and nonfinancial factors, whether or not to propose a long-term acute care hospital (LTAC) project to the board of directors of the U.Va. Health System. Students must use the assumptions outlined in the case to create a cash flow analysis and then compute a net present value (NPV) calculation and internal rate of return (IRR) for the project. After assessing the base-case results and sensitivity analysis of the assumptions driving those results, students must decide if the project should be taken to the board of directors. Excerpt UVA-F-1676 Rev. Nov. 20, 2013 UNIVERSITY OF VIRGINIA HEALTH SYSTEM: THE LONG-TERM ACUTE CARE HOSPITAL PROJECT On the morning of March 2, 2006, Larry Fitzgerald knew he had to complete all the last-minute details for the board meeting the following day. Fitzgerald, the vice president for business development and finance for the University of Virginia Health System (U.Va. Health System), was eager to see the board's reaction to his proposal for a new long-term acute care (LTAC) hospital. His excitement was somewhat tempered that the board had rejected the LTAC hospital concept when Fitzgerald had first joined the U.Va. Health System in 1999. Since that time, however, the regulations regarding LTAC facilities had changed, which gave Fitzgerald reason to give the project another chance. The bottom line was that Fitzgerald thought that a LTAC hospital would improve patient care and, at the same time, bring more money into the U.Va. Health System. As he looked at the memo on his desk from his analyst Karen Mulroney regarding the LTAC facility, Fitzgerald began to consider what guidance he could give her that would lead to the best possible proposal to present to the hospital's board of directors. . . .

Dominion Gas Holdings, LLC—Anticipatory Interest Rate Hedging

The case examines interest rate risk management at a U.S. utility company, Dominion Gas Holdings. In November 2012, as part of its new financing plan, it wanted to hedge the interest rate risk involved with the company's 2013 planned issuance of $1 billion in debt. While the coupon rates for the planned debt were unknown as of November 2012, the company wanted to lock in its financing costs one year ahead since interest rates were at historically low levels. The company was considering entering into a number of forward-starting interest rate swaps. The use of forward-starting interest rate swaps as a pre-issuance hedging tool could cause some accounting and regulatory risks, and some other utility companies chose not to hedge at all. A bank had approached Dominion Gas with an indicative quote for the forward-starting swap, and the Treasurer had to decide whether it was a fair rate. This case has been used in a first-year MBA class that focused on valuation of financial markets, and a more advanced second-year elective that focused on derivative securities. Excerpt UVA-F-1754 Rev. Nov. 3, 2017 Dominion Gas Holdings, LLC: Anticipatory Interest Rate Hedging In November 2012, Dominion Resources, Inc. (DRI), one of the largest producers and transporters of energy in the United States, was planning the creation of a subsidiary that would consolidate the major components of Dominion's regulated gas businesses under one intermediate holding company entity. The timeline called for the formation of a new legal entity, Dominion Gas Holdings, LLC (Dominion Gas), around September 2013 by transferring several regulated gas subsidiaries from DRI to Dominion Gas. As part of its new financing plan, Dominion Gas planned to issue at least $ 1 billion in debt in November 2013. The offering would consist of senior notes, and the maturities would be a combination of 3-year, 10-year, and 30-year notes. While the coupon rates for the planned debt were unknown as of November 2012, the company wanted to lock in its financing costs ahead of time. Interest rates were at historically low levels (see Exhibit 1), and market commentators were predicting rising interest rates with the end of the U.S. Federal Reserve's monetary quantitative easing looming. The company was considering entering into a number of interest rate swaps to mitigate the interest rate risk associated with the anticipated long-term debt issuance. One particular set of swaps the company was considering was designed as a pre-issuance hedge for the portion of the 3-year debt offering that assumed a $ 250 million principal amount of such notes would be issued in November 2013. Dominion Gas Holdings, LLC . . .

Salmones Puyuhuapi (a)

This case series is appropriate for undergraduate, MBA, executive education, and MBAExec audiences but is specifically designed for decision analysis, a first-year MBA core course. In the A case, Osvaldo Correa, CEO of Salmones Puyuhuapi (SP), must decide how to respond to news that the ISA virus has infected a competitor's salmon farming site. The alternatives include harvesting SP's 900,000 salmon two months early, waiting for the fish to grow and risk losing fish to the virus, and vaccinating the fish. The A case evaluates the “harvest now” alternative using normally distributed fish weights. The B case provides probabilities for the various virus outcomes. The C case gives vaccination cost information and discloses the fact that vaccination will reduce growth. Although the case is written in English, the comments of the three managers are given in their native Spanish with an (imperfect) English translation provided in an exhibit. The idea here is to give students some small opportunity to work with others who speak a different language. Excerpt UVA-QA-0749 Rev. Jan. 3, 2012 Salmones Puyuhuapi (A) Osvaldo Correa, CEO of Salmones Puyuhuapi (SP), was in a tense meeting with bank officials negotiating the terms of his firm's line of credit when he received a text on his BlackBerry. The news was not good. Correa tried to remain calm in front of the bankers as he read the terse message about a suspected outbreak of the infectious salmon anemia (ISA) virus in a competitor's salmon farm. Correa knew that if the virus were to spread to his firm's Jacaf Fjord site in northern Patagonia, Chile, it could wipe out his nearly one million salmon two months before they were to be harvested. That would have a devastating impact on his firm's cash flows. Excusing himself to go to “the services” (the only excuse he could come up with), Correa e-mailed his assistant to set up a meeting later that day with Jorge Richards, his operations manager, and Sergio Rivas, the company's veterinarian. Salmon Farming in Chile Chile was a relatively small country of nearly 16 million inhabitants whose economy was driven principally by mining, agribusiness, forestry, and aquaculture. In particular, the salmon industry, although relatively new, had been wildly successful. The industry was established in the early 1980s to take advantage of natural conditions in the south of the country (moderate sea temperatures, sheltered sites, and ideal salinity levels). It achieved nearly 20 years of 42% annualized growth, allowing it to join Norway as the world's largest salmon producers. In 2006, these two countries shared 78% of global production. Salmon farms, which thrived in the southern regions of Chile, dominated the local economies and led to high rates of employment. . . .