C O U R S E M A T E R I A L S

2013

Articles

Books & Chapters

Cases

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Harvard Business Publishing serves the finest learning institutions worldwide with a comprehensive catalog of case studies, journal articles, books, and eLearning programs, including online courses and simulations.

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CASES

Cases, slices of business life, focus on actual problems and decisions facing a company. Students are challenged to put themselves in the protagonist’s place and suggest business strategies, tactics, and solutions.

New Cases

Allied Electronics Corporation Ltd: Linking Compensation to Sustainability MetricsThe CEO of family-owned Allied Electronics Corporation considers linking the firm’s compensation system to sustainability performance. The firm has made a commitment to sustainable development and the CEO is concerned that managers are more concerned about meeting financial targets than sustainability targets. Harvard Business School #412075

Community Medical ImagingA radiologist at Community Medical Imaging in London, Ontario, is asked to consider providing on-call radiology services to a local hospital. While the work would be both interesting and beneficial to the company’s reputation, he must consider the effect of increased demand on his team and the financial benefits of operating as a government-funded business. TN Ivey School of Business #W11776

Dow Chemical: Innovating for SustainabilityDow Chemical has transitioned from a chemical company to an advanced materials company focused on sustainable products and services. The vice president for the company’s sustainability advisory council must decide if the company’s 10-year goals should be incremental improvements or ambitious targets to encourage innovation throughout the company. Harvard Business School #112064

Groupon and the SECThe revenue recognition practices at Groupon drew the attention of the SEC in advance of the company’s IPO. The firm recognized substantially higher revenue, non-GAAP earnings, and ACSOI by excluding certain marketing expenses from profit calculations. TN Ivey School of Business #W12666

Integrated Assurance at Philips Electronics N.V.Philips Electronics has provided investors with integrated reporting on financial and non-financial performance for several years. The company is preparing for the next integrated report and asks its auditor to provide additional assurance on environmental, social, and governance performance metrics to help integrate sustainability into the company’s core strategy and operations. Harvard Business School #412054

Kreative Kasuals Inc.The owner of a small Ontario-based textile manufacturer must decide whether to bid on two government contracts. He analyzes the bids by calculating direct, absorption, and full costs while considering the impact of adding each bid to the company’s current production schedule. He must also consider the difference between one-time and multiyear tender contracts. TN Ivey School of Business #W12826

LinkedIn CorporationLinkedIn Corporation is an early-stage, high-growth social media company with a great deal of uncertainty around its fundamental value. Seven weeks after its initial public offering, many analysts wonder if the company will ever be worth the current market valuation and disagree on what the valuation should be. Harvard Business School #112006

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Mike Mayo Takes on Citigroup (A)An influential banking analyst questions some of the accounting policies at Citigroup. In particular, he questions Citigroup’s lack of a valuation allowance against its deferred tax assets despite the firm’s recent losses. In this case, students consider the challenges faced by analysts who provide negative opinions of a company. TN Harvard Business School #112025

Natura Cosméticos, S.A.Natura Cosméticos is a cosmetics company in Brazil with a strong brand and a strategic focus on using social and environmental responsibility as a source of innovation. Management considers implementing integrated reporting to highlight the firm’s financial performance as well as nonfinancial performance on sustainability. Harvard Business School #412052

Strategy and Governance at Yahoo! Inc.Yahoo! faces strategic and governance challenges trying to compete with rivals like Google and trying to monetize relationships with Alibaba Group in China and Yahoo! Japan. The company is valued at almost half the offer that Microsoft made to acquire it in 2008 and the board faces investor pressure to improve performance. Harvard Business School #112040

Tough Choices for the Illinois Pension SystemThe Illinois pension system faces possible insolvency unless the governor can raise the funds needed for the state’s annual contribution. He must also consider options for preventing future insolvency, such as changing the asset allocation, tackling entitlements, or implementing a package of bonds, taxes, and employee contributions. TN Harvard Business School #311139

Popular Cases

Bridgeton Industries: Automotive Component & Fabrication PlantSales at Bridgeton Industries are declining. To become more competitive, the company classifies its products into three groups and chooses to outsource the lowest category of products. However, the residual costs for the outsourced products do not go away and the remaining products now become candidates for outsourcing. TN Harvard Business School #190085

Chemalite, Inc.A chemical engineer sets up a company to manufacture and market one of his inventions and tries to prepare his state-of-the-corporation report. This case is designed to introduce students to basic bookkeeping and accounting functions. TN Harvard Business School #177078

Citibank: Performance EvaluationA regional president struggles with a tough decision: how to evaluate an outstanding branch manager who has scored poorly on an important customer satisfaction measure. This case provides a scoring sheet for the student to complete and an explanation of the ramifications of the decision for the business’s strategy. TN Harvard Business School #198048

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Depreciation at Delta Air Lines and Singapore Airlines (A)The accounting practices and principles used by Delta Air Lines and Singapore Airlines differ in significant ways despite the many similarities between the two companies. Depreciation is an important expense for both airlines and the differences in the depreciation assumptions have dramatic consequences when they are compared. TN Harvard Business School #198001

Destin Brass Products Co.Destin Brass Products, a specialized brass manufacturer, is troubled by competitive pricing in pumps and higher-than-expected margins for flow controllers. Management suspects that cost accounting and cost allocations to products may be to blame. Students develop activity-based costs for comparison and then decide which system is most useful to company managers. TN Harvard Business School #190089

“ I have employed this wonderful case to drive the concept of activity-based costing to managerial students and participants. The scope that it gives the instructor to drive diverse concepts relating to cost allocation is really worthy of appreciation.” — Case review from Harvard Business Publishing for Educators web site*

Kanthal (A)A multinational company needs an improved cost system to determine the profitability of individual customer orders. The goal is to direct sales resources to the most profitable customers: those that buy standard products in large predictable quantities with minimal demands on technical resources. TN Harvard Business School #190002

Microsoft’s Financial Reporting StrategyMicrosoft’s overall financial reporting strategy is explored through an examination of the company’s treatment of two accounting issues—software capitalization and revenue recognition. The case provides a forum to discuss reasons for Microsoft’s accounting and disclosure choices and to discuss the Securities and Exchange Commission’s investigation into Microsoft’s accounting practices. TN Harvard Business School #100027

Salem Telephone Co.The president of Salem Telephone Co. considers several alternatives for improving the performance of a subsidiary offering data services. The subsidiary appears unprofitable and the president must analyze the information as reported while considering cost behavior before making his final recommendation. TN Harvard Business School #104086

Super ProjectThe manager of financial analysis at General Foods questions the suitability of the company’s capital budgeting system in evaluating a proposal to introduce a major new product called Super, a new instant dessert. Several costs may have been omitted from the analysis and need to be considered in assessing the value of this new product investment. TN Harvard Business School #112034

Wilkerson Co.Wilkerson Co. supplies valves, flow controllers, and other products for the water purification industry. Faced with declining profits, the president of Wilkerson struggles to understand how one product line faces tough price competition while another does not. The controller suggests an activity-based cost model to better understand the demands each product line makes on indirect resources. TN Harvard Business School #101092

TN Teaching Note Available

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BRIEF CASES

Rigorous and compact, Harvard Business School Brief Cases present realistic management challenges for students to discuss.

Biovail Corporation: Revenue Recognition and FOB Sales AccountingBiovail Corporation, a major Canadian pharmaceutical company, announces that it will miss its quarterly earnings target by $25–$45 million. The company blames $10–$15 million of the shortfall on a truck accident that occurred on the last day of the quarter. Explores the concepts of revenue recognition, the ethics of earnings management, relationships with analysts, and the enforcement role of the SEC. TN #4011

Depreciation at Delta Air Lines: The “Fresh Start”After Delta adopts fair value accounting as part of its “fresh start” emergence from bankruptcy, the company changes its approach to depreciating its aircraft. Introduces students to depreciation policy and the links between accounting policies and financial reporting choices. TN #4013

Jimmy Fu and Moog, Inc.: Understanding Shareholder’s EquityJimmy Fu is interviewing for a job at Moog, Inc. The vesting and termination language for the stock plan in the job offer leads Jimmy to investigate the Shareholders’ Equity section of the Moog balance sheet and he finds more activity than he expects. Students must complete a quantitative analysis of the financial transactions related to Shareholders’ Equity. TN #4203

Lyons Document Storage Corporation: Bond MathA manager must consider the possible consequences of the refunding of bonds issued in 2000 when interest rates were higher. Students must calculate the present value of interest and principal payments. TN #3215

Merrimack Tractors and Mowers: LIFO or FIFO? A CFO proposes changing from LIFO to FIFO to maintain earnings growth, but the plan has income tax consequences. The case demonstrates that firms often have choices about accounting policies. TN #3217

The Talbots, Inc. and Its Subsidiaries: Accounting for GoodwillFocusing on the firm’s acquisition of J. Jill, the case demonstrates what goodwill is, how it originates, how it is measured at acquisition, and how it is amortized or impaired. TN #3254

Æ Find more cases and Brief Cases at hbsp.harvard.edu

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MULTIMEDIA CASES

Multimedia cases put students in the center of business dilemmas by bringing concepts to life with animated charts, audio, and video segments. Available on CD-ROM for Windows.

The Future of Financial ReportingIn 2007, the SEC chairman invites Robert C. “Bob” Pozen to chair an advisory committee of experts to explore two changes to GAAP. Students must put themselves in Pozen’s shoes and make actionable recommendations on the future of fair-values accounting and principles-based accounting. TN Harvard Business School #110701

Enterprise Risk Management at Hydro OneCanadian energy giant Hydro One was an early adopter of Enterprise Risk Management. The company anticipated new threats and opportunities in the past but the CEO believes that the company’s risk profile has changed. TN Harvard Business School #110707

Æ Find more multimedia cases at hbsp.harvard.edu

POPULAR ARTICLES

Articles from Harvard Business Review and other renowned journals provide up-to-the-minute ideas from the best business thinkers.

Balanced Scorecard: Measures That Drive PerformanceCreating a balanced scorecard requires translating a company’s strategy and mission statement into specific goals and measures. It requires an examination from four different perspectives: customer satisfaction, internal processes, innovation, and shareholder value. Harvard Business Review #R0507Q

Control with Fairness in Transfer PricingInterviews with nearly 150 executives at 13 companies show that transfer pricing schemes are a means of generating information and control for implementing corporate, business unit, or product strategy. A company’s transfer pricing policy, which includes whether to source inside or out, and the way it is administered depend on the situation and the direction of the organization. Harvard Business Review #83606

How Much Cash Does Your Company Need? Following a merger with rival Warner-Lambert, pharmaceutical giant Pfizer has a net cash position over $6 billion. Most large companies with healthy revenues increase leverage but Pfizer is a knowledge-intensive company with many intangible assets. A large cash position may be beneficial. Harvard Business Review #R0311J

Measure Costs Right: Make the Right DecisionsThis article explains the power of activity-based costing to provide a more accurate view of product costs and profitability. Virtually all of a company’s activities exist to support the production and delivery of goods and services. Companies need not scrap their official cost systems to use activity-based methods. Harvard Business Review #88503

TN Teaching Note Available

One Cost System Isn’t EnoughNo one cost system gives managers all the information they need to promote operational efficiency and produce the highest-quality product at the lowest cost. Cost systems must serve three functions—inventory valuation, operational control, and product cost measurement. Harvard Business Review #88106

Time-Driven Activity-Based CostingTime-driven activity-based costing is a new approach that deals with the problems of large-scale ABC implementation. Under the new system, managers take into account time that is idle or unused. Includes concrete examples of how managers can obtain meaningful cost and profitability information. Harvard Business Review #R0411J

Using The Balanced Scorecard as a Strategic Management SystemThe balanced scorecard revolutionized conventional thinking about performance metrics. This article includes a one-page preview that quickly summarizes the key ideas and provides an overview of how the concepts work in practice along with suggestions for further reading. Harvard Business Review #R0707M

Why Good Accountants Do Bad AuditsIs corruption the main cause of bad audits? Or is the problem an unconscious bias? Because of the often subjective nature of accounting and the close client relationships between companies and their auditors, even the most honest and meticulous of auditors can unintentionally massage numbers and mask a company’s true financial status. Harvard Business Review #R0211G

Æ Find more articles at hbsp.harvard.edu

SIMULATIONS

Online simulations present real-world management challenges for students and encourage classroom interaction and discussion. Results are available immediately for a comprehensive debrief session. All simulations include a detailed Teaching Note.

Finance Simulation: Capital Budgeting In this single-player simulation, students assume the role of a member of the capital committee at a high-end doll manufacturing company. Students review 27 different proposals over 5 simulated years to decide which projects to fund across the company’s three divisions. Ultimately, students must develop a capital budgeting strategy and choose projects with the greatest impact on the firm’s profitability. Seat Time: 60–90 minutes TN #3357

“I prefer this simulation to the case approach because students can learn by doing and because it provides instant feedback to learn from.” — Simulation review from Harvard Business Publishing for Educators web site*

NEW! Working Capital Simulation: Managing GrowthIn this single-player simulation, students act as the CEO of a small business that distributes nutraceuticals. They must choose to invest in growth opportunities while also considering working capital requirements and improvements to cash flow. A successful strategy requires an understanding of the relationships among the income statement, balance sheet, and statement of cash flows. TN #4302

Æ Find more simulations at hbsp.harvard.edu/list/simulations

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ONLINE COURSES

Available in Sections: Online Courses introduce complex subjects and can be used in advanced undergraduate business courses, used as prematriculation requirements for MBAs, or assigned as homework over a semester or year. Online courses are available as complete courses or in sections.

Finance Online CourseThis course introduces core concepts in Finance ranging from ratio analysis to valuation and from pro forma estimating to capital structure. The storyline provides a meaningful and engaging context in which students learn the material. Seat Time: 13–15 hours TN

� Complete Course #208719 � Introductory Section #6000

Financial AccountingThe course teaches students how accounting systems are used to record the day-to-day economic activities of a business. Special emphasis is given to understanding accounting terminology. Seat Time: 18–22 hours TN

� Complete Course #105708 � Introductory Section #6002 � Advanced Section #6003

Mathematics for ManagementFollowing the story line of several family-owned businesses, students learn how to apply math concepts to solve problems, analyze data, and predict outcomes. Seat Time: 12–20 hours TN

� Complete Course #3350 � Algebra Section #6004 � Calculus Section #6006 � Statistics Section #6007 � Probability Section #6008 � Finance Section #6009

Quantitative MethodsSet in a Hawaiian resort, this course teaches statistics and regression analysis from a management perspective. Students develop statistical models for making better business decisions. Seat Time: 20–50 hours TN

� Complete Course #504702 � Regression Section #6012

“The Quantitative Methods Online Course is a perfect support for teaching Quantitative Analysis.” — Online Course review from Harvard Business Publishing for Educators web site*

Spreadsheet ModelingDemonstrates how to use Excel functionality to solve business problems. Seat Time: 10–20 hours TN

� Complete Course #3252 � Introductory Section #6010 � Advanced Section #6011

Æ Find more Online Courses at hbsp.harvard.edu/list/online-courses

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ONLINE TUTORIALS

Online tutorials allow students to learn basic concepts outside of class, freeing up class time for other learning objectives. Each tutorial requires approximately 2 hours to complete, depending on students’ abilities and backgrounds.

ABC Pen Factory Tutorial An introduction to activity-based cost systems. Part one reveals the problems created by a traditional, labor-based cost system when a company adds variety to its product line and part two covers a simple activity-based cost system. #103704

Alternative Choice Decision AnalysisStudents learn how to use information on costs and revenues to decide among possible future courses of action. The tutorial presents two case examples of differential cost analysis. TN #105706

Buying TimeThe tutorial covers the key concepts related to cash flows occurring in different time periods including present value, future value, compound interest, annuities, and net present value. #104708

Cost-Volume-Profit ModelsStudents use the cost-volume-profit model to determine profit at various levels of unit volume and learn how to calculate a breakeven point. The tutorial includes explanations of fixed, variable, and semi-variable costs and their roles in building and interpreting cost-volume-profit models. TN #105705

Internal Control ProcessIntroduces the internal control process by detailing its five components: the internal control environment, risk assessment, internal control activities, information and communications, and monitoring. TN #107705

Introduction to Cost Accounting SystemsThis tutorial covers the basics of cost system design and demonstrates how costs are assigned to cost objects. Key concepts include direct and indirect costs, two-stage allocation, cost pools, and cost drivers. TN #105701

Introduction to Responsibility Accounting SystemsResponsibility accounting systems generate financial and related information about the activities of a company’s responsibility centers. Lessons include budgets, performance reports, variance reports, and transfer prices. TN #105703

Æ Find more online tutorials at hbsp.harvard.edu/list/elearning

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COURSE MODULES

Course modules offer a road map to the best teaching materials, with recommendations on how to organize them. Each module suggests 4–6 items plus some alternate suggestions. Popular modules in Accounting have been updated and include the following:

� Activity-Based Costing and Activity-Based Management  � Asset Accounting and Revenue Recognition  � Cost Information for Decisions  � Introduction to Cost Accounting  � Liabilities, Cash Flows, and Stockholders’ Equity

Æ Find more course modules at hbsp.harvard.edu/list/course-module

BOOKS & CHAPTERS

Individual chapters may be integrated into course materials, while books may serve as primary class texts.

Cost and Effect: Using Integrated Cost Systems to Drive Profitability and PerformanceRobert Kaplan and Robin Cooper present the principles and practice of activity-based costing (those systems that measure where time and resources are actually spent), how they differ from traditional systems, and how they will evolve during the next few years into an integrated part of a company’s financial system. Harvard Business Review Press. Available in chapters. #7889

Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic RenewalBased on a 10-year examination of control systems in over 50 U.S. businesses, this book by Robert L. Simons broadens the definition of control and establishes a critical bridge between the disciplines of strategy and accounting and control. Harvard Business Review Press. Available in chapters. #5592

Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher ProfitsMany executives who try to implement ABC on a large scale find the approach limiting and frustrating. In this book, Steven R. Anderson and Robert S. Kaplan demonstrate how to implement time-driven activity-based costing (TDABC), an easier and more powerful way to implement ABC. Harvard Business Review Press. Available in chapters. #1711

Æ Find more books and chapters at hbsp.harvard.edu/list/book-chapters

TN Teaching Note Available

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Harvard Business Publishing is an affiliate of Harvard Business School.

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