Case studies

Frankies For You is a comprehensive case on standard costing. It stresses the importance of adopting cost control tools like budgeting by small organizations. FFY is a small food joint started by Mr. Raj Singh. After the first month of operation, he finds that though sales volume has increased compared to the budget, the actual profit has fallen. Detailed variance analysis has to be used to find the cause for this anomaly, to evaluate the performance of the staff and to assign responsibilities. The case also refers to Activity Based Pricing, an important contemporary costing principle.

This case is in four parts, highlighting the crossroads at which the protagonist Savita finds herself in and the difficulties she faces in balancing her career aspirations with family responsibilities. A Fellow of Indian Institute of Management (IIM) Ahmedabad, Savita's dilemmas concern working in a prestigious management institute in Kolkata versus getting a job in Mumbai in order to psychologically and financially support her family and get married; joining her husband in China on his posting versus going to the US on a prestigious fellowship prioritizing her career, and finally, starting a family versus postponing the decision till the couple were together and reasonably settled in their respective careers.

In 2009, Brigade Enterprises Limited, with operations in the real estate sector and construction in South India, prepared a blueprint for implementing Total Transformation in the organization. A central communication channel was identified as a “must” area for improvement. Aided by Wipro Consulting Services, active and passive measures were adopted to make the internal communication vibrant, which would, it was envisioned, change organizational culture and bring about attitudinal change. However, the review after 18 months pointed towards gaps in the existing model. Should BEL continue with the existing strategies or amend? Given the organizational dynamics, what new changes, if necessary, can be initiated?

This case deals with hedging and risk management in companies. Surya Textiles had significant export revenues in euros and was looking for innovative ways of hedging foreign exchange risk to make their treasury a profit centre. Target Redemption Forward which hedged the euros into dollars was an attractive option which their Chief Financial Officer wanted to try. This instrument was designed to be a net-zero-premium hedging strategy that could provide Surya with monthly hedging rates that were better than market rates. The case analyses the pros and cons of this instrument.

The case describes the performance evaluation system that has been put in place by Ravi Kumar, the MD to ensure that Oystar Hassia is able to design, deliver, service, sell its packaging machines seamlessly in all parts of the world. The performance evaluation system is periodic, regular, able to take track the progress of the people within the system. The benefits accrued from performance evaluation system are also detailed in this case.

The case described the issues faced by a mid-sized Indian generic pharmaceutical firm, in its attempt to acquire a small unlisted Japanese generics manufacturer. It showcases the strong motivation of a successful emerging market pharmaceutical firm to expand into the developed market, buoyed by its cost competitiveness. The case presents an opportunity to discuss the trade-offs involved with most of the dynamic decisions in a cross-border acquisition, such as estimation of synergies and value, bidding, and financing the acquisition. The case may be used in programmes on valuation, and mergers and acquisitions.

The Constitution of India guarantees freedom of speech and expression to its citizens. This freedom is not absolute and the State can impose reasonable restrictions. Of late, certain incidents have shown this freedom to be under threat. The case highlights some of such events. It makes the readers think about the importance of this right, reasonableness of restrictions, and the measures needed to protect it.

As a new corporation, the Delhi Metro (DMRC) began its relationship with the media, with a clean slate, and its care with the public relations function made for the establishment of a very cordial relationship with the print media and led to positive image building in the public eye. However, with the rise of electronic media and the proliferating channels' greater emphasis on sensationalism, the warmth in the relations began to subside. A major standoff with the electronic media and the experience of accidents during construction of Phase II of the project, led to the restructuring of the approach to media relations as well as internal restructuring of the PR department. The challenges and major incidents turned out to be hard-learnt lessons in managing the media in a dynamic environment.

Innovative Always (IA) is a small manufacturing unit which has implemented Standard Costing. It has five departments which are headed by five partners. For cost control monthly budgets are prepared. At the end of each month, actual are compared with budgets and variances are calculated. Performance of the five partners alongwith their respective departments have to be evaluated with the help of detailed variance analysis. The case also throws up some conceptual issues like Normal Output, Interdependence of Variances and Recalculation of certain variances for assigning clear cut responsibilities to concerned departments. A comprehensive case on Budgeting and Standard Costing, it showcases the importance of Flexible Budget and Variance Analysis for cost control and performance evaluation.