Teaching Note | HBS Case Collection | September 2012

Stryker Corporation: Capital Budgeting (TN)

by Timothy A. Luehrman


This case examines some parts of Stryker Corporation's systems and procedures for approving and authorizing capital spending of many different types, including buildings, machinery, and working capital for existing businesses, as well as transactions with third parties such as acquisitions, joint ventures, and licensing agreements. The case is set in early 2007, nearly two years after significant modifications in these systems and procedures. Stryker has compiled a remarkable track record of consistently high growth in profitability over more than 20 years. The modifications to its capital budgeting procedures are partly intended to support the company's efforts to continue this success.

Keywords: capital budgeting; capital expenditures-equipment; capital expenditures-machinery; valuation; internal rate of return; discounted cash flows; net present value; Cost of Capital; Valuation; Cash Flow; System; Organizational Culture; Policy; Business Processes; Capital Budgeting;


Luehrman, Timothy A. "Stryker Corporation: Capital Budgeting (TN)." Harvard Business School Teaching Note 213-039, September 2012.