V.G. Narayanan
Thomas D. Casserly, Jr. Professor of Business Administration
Chair, MBA Elective Curriculum
Research I research topics in management accounting. In particular, I am interested in performance evaluation and incentives. I am using field experiments to understand how firms can use incentives and performance feedback to improve performance. I am studying how financial incentives can be used as a catlyst to form desirable habits and to harness other motivators such as peer pressure. I use analytical modeling and field data to research this topic. I am also very interested in understanding how CEO compensation affects the risk levels at banks.
Education
- Phd in Business, Graduate School of Business at Stanford University, June 1995
- MA in Economics, Economics Department Stanford University, June 1994
- MS in Statistics, Statistics Department Stanford University, June 1993
- MBA, IIMA, India, March 1990
- Chartered Accountancy, Madras, India, May 1988
- Bachelors in Commerce, University of Madras, May 1988
Work Experience
- September 1994 to present - Professor, Harvard Business School. I have taught Financial Reporting and Control (a first-year required course), Measuring and Driving Corporate Performance (a second-year elective), Management Control and Performance Measurement (a doctoral course), and several executive education courses.
- March 1985 to May 1988 - Audit Assistant with J. Gowrikanthan & Co., Chartered Accountants, Madras.
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Article
| Journal of Management Accounting Research
Testing Strategy with Multiple Performance Measures: Evidence from a Balanced Scorecard at Store24
Dennis Campbell, Srikant M. Datar, Susan L. Kulp and V.G. Narayanan
We analyze balanced scorecard data from a convenience store chain, Store24, during the implementation of an innovative, but ultimately unsuccessful, strategy. Quarterly strategic reviews, based in part on the firm's balanced scorecard, led executives at Store24 to identify problems with, and eventually abandon, this strategy over a two-year period. We find that formal statistical tests of the hypotheses underlying the firm's balanced scorecard and strategy map reveal problems with the strategy on a timelier basis. We also test alternative hypotheses to those underlying the firm's formal strategy map and scorecard that are consistent with concerns expressed by some of Store24's top executives during the initial stages of implementing the new strategy. Our analysis demonstrates that this firm's balanced scorecard contained useful and timely information for distinguishing between these alternatives. These results provide some of the first field-based evidence on the potential for a firm's balanced scorecard to provide useful information for detecting problems in its strategy.
Keywords: Balanced Scorecard;
Business Strategy;
Retail Industry;
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Article
| Journal of Management Accounting Research
A Field Study on the Acceptance and Use of a New Accounting System
V.G. Narayanan, Ranjani Krishnan and Jamshed J. Mistry
This study examines the attitudes, use, and acceptance of a new accounting system in a pharmaceutical corporation that switched from an Activity Based Costing System to the Theory of Constraints System (TOC). Using structuration theory as a framework, we posit that user responses and attitudes towards TOC are influenced not only by the technical features of the system and the potential economic benefits, but also by the fit between TOC and the existing structures of the users' environment. When users interact with TOC on an ongoing basis they form interpretations of the new system, and based on such interpretations, they exhibit actions with respect to the use of TOC ranging from championship to rejection of the system. We explore cross sectional variations in the use of the system and link such variations to the practical features of the new system as well as the social structures of the users' environments.
Keywords: theory of constraints;
structuration;
field study;
Accounting;
Innovation and Invention;
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Working Paper
| HBS Working Paper Series
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2011
The Impact of Forward-Looking Metrics on Employee Decision Making
Pablo Casas-Arce, F. Asis Martinez-Jerez and V.G. Narayanan
This paper analyzes the effects of providing forward-looking metrics on employee decision making. We use data from a southern European bank that, in April 2002, started providing its branch managers with customer lifetime value (CLV) information about mortgage applicants. The data allow us to gauge the effects of enriching the information set of these employees in an environment where incentives and the allocation of decision rights remained unchanged. We find that CLV availability resulted in a significant shift in attention towards the more profitable client segments (the weight of the top segment in the portfolio of customers increases from 26% to 34%), but we do not find evidence of improved cross-selling (except for an increase in the sale of insurance products). Moreover, the use of CLV information did not have a negative impact on pricing, as some of the literature suggests, nor on default risk, indicating that managers increased sales to more profitable customers by providing better customer service.
Keywords: Customer Value and Value Chain;
Decision Choices and Conditions;
Mortgages;
Employees;
Information;
Knowledge Use and Leverage;
Service Delivery;
Banking Industry;
Europe;
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Case
| HBS Case Collection
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July 2016
(Revised July 2016)
Revenue Recognition at Silver Bank
V.G. Narayanan and Ashley Hartman
Rob Mitchell, the Chairman of the Audit Committee of Silver Lake Bank, had just flicked on the latest episode of Dancing with the Stars when he received an urgent phone call from Diego Alvarez, the CEO of the bank. Alvarez had recently spoken with the auditors, who had completed reviewing the 2013 financial statements and stated that the bank had been incorrectly recognizing profit on its loans for years. The auditors believed the bank should recognize profit immediately upon the receipt of a loan application, but the bank had been taking a conservative approach, waiting until it sold the loan on the secondary market to recognize revenue. Mitchell knew that management had to make a decision well before Silver Lake’s annual meeting in April, but he was conflicted about the right way to account for these loans – was it better to follow the mainstream practice of big banks, which recognized revenue when they received applications, or stay with a more conservative approach?
Keywords: Accounting;
Fair Value Accounting;
Revenue Recognition;
Banking Industry;
Citation: Narayanan, V.G., and Ashley Hartman. "Revenue Recognition at Silver Bank." Harvard Business School Case 117-026, July 2016. (Revised July 2016.) View Details
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Case
| HBS Case Collection
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June 2016
Controversy over Executive Remuneration at BP
V.G. Narayanan and Ashley Hartman
In March 2016, BP disclosed that its chief executive officer, Bob Dudley, would receive a $19.6 million compensation package, a 20% increase in total compensation over the previous year. BP justified the amount, emphasizing that the company delivered strong results despite an exceptionally challenging environment, which included a nearly 50% drop in oil prices. However, shareholders questioned the massive payout and ultimately rejected BP's remuneration report in April 2016. Was BP right to give a generous pay package despite the industry slump? Or was it “unreasonable and insensitive,” as shareholder Royal London Asset Management claimed?
Keywords: Executive Compensation;
Executive Compensation;
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Case
| HBS Case Collection
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March 2015
Guiding Professional Accountants to Do the Right Thing
Paul Healy, V.G. Narayanan and Penelope Rossano
The Ethics Advisory Committee of the Institute of Chartered Accountants in England and Wales (ICAEW) provides training and support for member Chartered Accountants to help them deal with difficult professional situations. Members can seek help through call centers and in-person meetings with accounting experts in the field to discuss how to best handle difficult situations. In addition, the Ethics Advisory Committee meets regularly to identify new issues that raise questions for professional standards. This case examines professional standards for ICAEW Chartered Accountants and a number of challenging ethical situations that members have faced.
Keywords: accounting;
ethics;
professional conduct;
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Case
| HBS Case Collection
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May 2014
Building a High Performance Culture at IDFC
V.G. Narayanan and Vidhya Muthuram
IDFC was set up in 1997 to direct private finance to infrastructure projects in India. Over the years, it expanded its capabilities to become a 'complete solutions provider' offering financing solutions including debt and equity, investment banking, brokerage and asset management services to clients in the infrastructure sector. With nearly 50% of its employees joining through acquisitions, there were significant cultural differences within the company. In 2009, the company embarked on a journey to build 'One-Firm' with a unifying culture and governance system across business groups. IDFC aimed to provide seamless access to products and expertise across business groups, increase its competitive position and maximize interactions with its clients. A critical component of the One-Firm initiative was a technology-enabled performance management system that articulated metrics for individual and group performance, and aligned these with the overall performance of IDFC. While the new system had several strengths, it also raised questions on whether a common system allowed IDFC to recognize and retain talent across its diverse businesses. This case examines if a uniform performance management system provided autonomy and flexibility needed to build a culture of high performance across varied business groups.
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Simulation
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June 2014
Balanced Scorecard Simulation
V.G. Narayanan
In this multi-player simulation, students experience the benefits and challenges of using a scorecard to implement strategic initiatives and monitor firm performance. Small teams of students work together to choose a strategy for their company, create a strategy map, develop a balanced scorecard, choose initiatives to implement their strategy, and use feedback from the balanced scorecard to adjust their implementation approach over a series of 8 rounds. At the conclusion of the simulation, each team's company will be purchased by a private investor. The goal of the simulation is to maximize firm value at the time of buyout-the buyout price being based on the company's financial position and future prospects. Strategy Simulation: The Balanced Scorecard is designed as a multi-player experience but can also be played as a single-player. Instructors have the option of allowing students to play practice rounds and assigning certain teams to a "control group." The simulation debrief section provides key statistics and visuals that summarize student performance.
Citation: "Balanced Scorecard Simulation." Harvard Business School Simulation 114-701, June 2014. View Details
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Supplement
| HBS Case Collection
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May 2013
Transport Corporation of India (D): Business Development across Divisions
V.G. Narayanan and Saloni Chaturvedi
Transport Corporation of India was a logistics company that provided multi-modal transport solutions to its customers. Set up in 1958, TCI had grown from a 'one man, one truck, one office' set-up to a company with revenues of $400 million in half a century. TCI's growth had been assisted by the creation of individual divisions that provided specialized services to its clients—Freight, Express, Supply Chain Solutions, Seaways and Global. In 2012, the company renewed it efforts to foster cross-selling across the divisions with the hope that this would increase customer-stickiness and foster growth. However, as the company tried to push the cross-selling agenda across its various divisions, it faced myriad issues. It needed to educate its divisional sales-staff about the services provided by divisions other than their own; to motivate them to cross-sell; and to create intra-division confidence to facilitate cross-selling. While the Joint Managing director, Vineet Agarwal, under the guidance of his father D.P. Agarwal, Vice-Chairman and Managing Director, TCI, and in conjunction with TCI's Executive Committee, had introduced initiatives like training across divisions, competitions on cross-selling, and tracking of cross-selling leads, he was not sure that these were enough. Were there other ways in which TCI could successfully cross-sell? Could they put in place a system that specifically incentivized cross-sales to motivate sales staff? The (A) case focuses on TCI's cross-selling efforts and the strategic decisions before it. Cases (B), (C), and (D) discuss specific situations that demonstrate issues related to the cross-selling initiative.
Keywords: Transportation Industry;
India;
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Supplement
| HBS Case Collection
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May 2013
Transport Corporation of India (C): Dealing with Shortcomings in Service Quality
V.G. Narayanan and Saloni Chaturvedi
Transport Corporation of India was a logistics company that provided multi-modal transport solutions to its customers. Set up in 1958, TCI had grown from a 'one man, one truck, one office' set-up to a company with revenues of $400 million in half a century. TCI's growth had been assisted by the creation of individual divisions that provided specialized services to its clients—Freight, Express, Supply Chain Solutions, Seaways and Global. In 2012, the company renewed it efforts to foster cross-selling across the divisions with the hope that this would increase customer-stickiness and foster growth. However, as the company tried to push the cross-selling agenda across its various divisions, it faced myriad issues. It needed to educate its divisional sales-staff about the services provided by divisions other than their own; to motivate them to cross-sell; and to create intra-division confidence to facilitate cross-selling. While the Joint Managing director, Vineet Agarwal, under the guidance of his father D.P. Agarwal, Vice-Chairman and Managing Director, TCI, and in conjunction with TCI's Executive Committee, had introduced initiatives like training across divisions, competitions on cross-selling, and tracking of cross-selling leads, he was not sure that these were enough. Were there other ways in which TCI could successfully cross-sell? Could they put in place a system that specifically incentivized cross-sales to motivate sales staff? The (A) case focuses on TCI's cross-selling efforts and the strategic decisions before it. Cases (B), (C), and (D) discuss specific situations that demonstrate issues related to the cross-selling initiative.
Keywords: Transportation;
Transportation Industry;
India;
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Supplement
| HBS Case Collection
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May 2013
Transport Corporation of India (B): Choosing the Right Candidate
V.G. Narayanan and Saloni Chaturvedi
Transport Corporation of India was a logistics company that provided multi-modal transport solutions to its customers. Set up in 1958, TCI had grown from a 'one man, one truck, one office' set-up to a company with revenues of $400 million in half a century. TCI's growth had been assisted by the creation of individual divisions that provided specialized services to its clients—Freight, Express, Supply Chain Solutions, Seaways and Global. In 2012, the company renewed it efforts to foster cross-selling across the divisions with the hope that this would increase customer-stickiness and foster growth. However, as the company tried to push the cross-selling agenda across its various divisions, it faced myriad issues. It needed to educate its divisional sales-staff about the services provided by divisions other than their own; to motivate them to cross-sell; and to create intra-division confidence to facilitate cross-selling. While the Joint Managing director, Vineet Agarwal, under the guidance of his father D.P. Agarwal, Vice-Chairman and Managing Director, TCI, and in conjunction with TCI's Executive Committee, had introduced initiatives like training across divisions, competitions on cross-selling, and tracking of cross-selling leads, he was not sure that these were enough. Were there other ways in which TCI could successfully cross-sell? Could they put in place a system that specifically incentivized cross-sales to motivate sales staff? The (A) case focuses on TCI's cross-selling efforts and the strategic decisions before it. Cases (B), (C), and (D) discuss specific situations that demonstrate issues related to the cross-selling initiative.
Keywords: Transportation Industry;
India;
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Case
| HBS Case Collection
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May 2013
Transport Corporation of India (A): The Cross-selling Conundrum
V.G. Narayanan and Saloni Chaturvedi
Transport Corporation of India was a logistics company that provided multi-modal transport solutions to its customers. Set up in 1958, TCI had grown from a 'one man, one truck, one office' set-up to a company with revenues of $400 million in half a century. TCI's growth had been assisted by the creation of individual divisions that provided specialized services to its clients—Freight, Express, Supply Chain Solutions, Seaways and Global. In 2012, the company renewed it efforts to foster cross-selling across the divisions with the hope that this would increase customer-stickiness and foster growth. However, as the company tried to push the cross-selling agenda across its various divisions, it faced myriad issues. It needed to educate its divisional sales-staff about the services provided by divisions other than their own; to motivate them to cross-sell; and to create intra-division confidence to facilitate cross-selling. While the Joint Managing director, Vineet Agarwal, under the guidance of his father D.P. Agarwal, Vice-Chairman and Managing Director, TCI, and in conjunction with TCI's Executive Committee, had introduced initiatives like training across divisions, competitions on cross-selling, and tracking of cross-selling leads, he was not sure that these were enough. Were there other ways in which TCI could successfully cross-sell? Could they put in place a system that specifically incentivized cross-sales to motivate sales staff? The (A) case focuses on TCI's cross-selling efforts and the strategic decisions before it. Cases (B), (C), and (D) discuss specific situations that demonstrate issues related to the cross-selling initiative.
Keywords: India;
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Supplement
| HBS Case Collection
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December 2012
(Revised July 2015)
Nalli Silk Sarees (B)
V.G. Narayanan, Namrata Arora and Vidhya Muthuram
Presents the company's perspective using an interview format. Ramnath K. Nalli, vice chairman of Nalli Silk Sarees Private Limited, and his daughter, Lavanya Nalli (HBS MBA 2011), the fifth generation entrepreneur to be involved in the family business, discuss customer preferences, buying behavior, and price sensitivity for cotton and silk sarees.
Keywords: Family Business;
Consumer Behavior;
Entrepreneurship;
Apparel and Accessories Industry;
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Case
| HBS Case Collection
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July 2012
(Revised July 2015)
Nalli Silk Sarees (A)
V.G. Narayanan, Namrata Arora and Vidhya Muthuram
Nalli Silk Sarees Private Limited was a family owned and operated business that retailed Indian ethnic wear. This 83-year-old company had enjoyed impressive growth with a $95 million turnover, a 22-store retail footprint, and had outdone its competitors by being the only player in its segment to have a national presence. Headquartered in Chennai, India, the company built its unique national brand by emphasizing innovation, customer-centric practices, quality, and honesty across the store's retail operations. In 2011, with changing dynamics in the Indian apparel market, the company started to face intense competition from small and large Indian and foreign retailers. The company's chairman, Dr. Nalli Kuppusamy Chetty, announced a $25 million expansion plan and proposed the opening of 12 new stores over a period of two years. This case focuses on the company's pricing strategy, merchandising process, and product assortments to support its own competitiveness and overall customer experience.
Keywords: Price;
Strategy;
Apparel and Accessories Industry;
India;
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Teaching Note
| HBS Case Collection
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June 2011
Whose Money Is It Anyway? (TN) (A), (B), and (C)
Richard G. Hamermesh, V.G. Narayanan and Rachel Gordon
Teaching Note for 810-008, 810-013, and 810-031.
Keywords: Health Industry;
Citation: Hamermesh, Richard G., V.G. Narayanan, and Rachel Gordon. "Whose Money Is It Anyway? (TN) (A), (B), and (C)." Harvard Business School Teaching Note 111-128, June 2011. View Details
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Case
| HBS Case Collection
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January 2008
(Revised October 2010)
Sara Campbell Ltd. (A)
Romana Autrey, V.G. Narayanan and Julia Rozovsky
Describes a situation in which Sara Campbell, the CEO of a women's apparel company, must decide how to resolve the tense relationship with her Financial Controller and ex-brother-in-law, Stephen Holt. Holt was employed by Campbell for 10 years, took on the majority of financial responsibilities for the firm, and knew the business very well. Although he was bright, Campbell was often disappointed by his poor judgment and disorderly nature. By 1999, two incidents by Holt forced Campbell to question how she should proceed in terms of his employment. Students are given context to debate whether Holt's behavior was detrimental enough to overshadow a successful ten-year working relationship and his monetary obligations to Campbell's immediate family.
Keywords: Accounting;
Judgments;
Governance Controls;
Employee Relationship Management;
Behavior;
Apparel and Accessories Industry;
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Case
| HBS Case Collection
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April 2009
(Revised June 2010)
Supply Chain Partners: Virginia Mason and Owens & Minor (A)
V.G. Narayanan and Lisa Brem
Virginia Mason Medical Center (VM) hired Owens & Minor (O&M) as its alpha vendor for medical/surgical supplies in 2004. By 2005, O&M was performing Just-in-Time and Low Unit of Measure services for VM, but they believed the pricing model in the industry was outdated. VM and O&M partnered to create the Total Supply Chain Cost (TSCC) pricing program, an activity-based model that assigned all the cost drivers of distribution and inventory handling to VM, but also assured O&M of a profit. The TSCC incented VM to streamline its distribution activities, since these would directly impact its fee. After beta testing the TSCC for one year, VM's Daniel Borunda and O&M's Michael Stefanic believed that TSCC was a better and more cost-effective pricing model, but could they convince their companies to continue to invest in TSCC?
Keywords: Activity Based Costing and Management;
Price;
Distribution;
Supply Chain Management;
Medical Devices and Supplies Industry;
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Teaching Note
| HBS Case Collection
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June 2010
Shareholder Activists at Friendly Ice Cream (TN) (A1), (A2), (A), and (B)
Fabrizio Ferri, V.G. Narayanan and Lisa Brem
Teaching Note for 109013, 109014, 108024 and 108073.
Keywords: Food and Beverage Industry;
United States;
Citation: Ferri, Fabrizio, V.G. Narayanan, and Lisa Brem. "Shareholder Activists at Friendly Ice Cream (TN) (A1), (A2), (A), and (B)." Harvard Business School Teaching Note 110-074, June 2010. View Details
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Teaching Note
| HBS Case Collection
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July 2009
Kim Park (B): Liabilities (TN)
David F. Hawkins, Gregory Miller and V.G. Narayanan
Teaching Note for [110018].
Keywords: Accounting;
Citation: Hawkins, David F., Gregory Miller, and V.G. Narayanan. "Kim Park (B): Liabilities (TN)." Harvard Business School Teaching Note 110-021, July 2009. View Details
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Case
| HBS Case Collection
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May 2009
(Revised June 2009)
Areva
V.G. Narayanan and Lisa Brem
Areva, the world's market leader in civilian nuclear power, was positioned to take advantage of the resurgence of nuclear power. However, three issues clouded the positive outlook: (1) a 1.7 billion euro loss on the construction of the first next generation nuclear reactor in Finland, (2) the decision of German company Siemens to pull out of its partnership in Areva NP and exercise its 2.1 billion euro put option, and (3) the projected investment budget shortfall of 3 billion euros in 2008. How can Areva best generate cash to finance its investments for 2008 and beyond?
Keywords: Budgets and Budgeting;
Financial Statements;
Energy Generation;
Cash Flow;
Investment;
Energy Industry;
Europe;
Citation: Narayanan, V.G., and Lisa Brem. "Areva." Harvard Business School Case 109-092, May 2009. (Revised June 2009.) View Details
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Case
| HBS Case Collection
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September 2008
(Revised October 2008)
Shareholder Activists at Friendly Ice Cream (A1)
Fabrizio Ferri, V.G. Narayanan and James Weber
Two activist investors, one a founder and one a hedge fund manager, seek to improve board oversight at a chain restaurant company. Prestley Blake founded Friendly Ice Cream in 1935 with his brother, and the two created a chain of full-service restaurants. In 1979, they sold the business and retired. In 2000, Blake became concerned that Friendly's CEO, who owned approximately 10% of Friendly and also owned a larger percentage of another restaurant company, was shifting expenses between the businesses in a way detrimental to Friendly shareholders but personally advantageous to the CEO. Further, Blake believed that Friendly's board of directors was not meeting their fiduciary obligations to shareholders by properly overseeing the activities of the CEO and that the directors had conflicts of interest because they were involved with the CEO's non-Friendly business activities. In 2003, Blake filed a lawsuit against the CEO and the company. In 2006, Sardar Biglari, a hedge fund manager who had invested in Friendly, entered into negotiations with Friendly for him to join the board of directors to help improve the management of the business. When these negotiations failed, Biglari launched a proxy fight against Friendly in 2007. While these two activist investors shared similar objectives, they worked independently and chose different strategies. The A1 case ends as activists Sardar Biglari and Phil Cooley prepare to meet with CEO Don Smith at Friendly's headquarters in September 2006.
Keywords: Investment Activism;
Governing and Advisory Boards;
Lawsuits and Litigation;
Business or Company Management;
Business and Shareholder Relations;
Conflict of Interests;
Food and Beverage Industry;
United States;
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Supplement
| HBS Case Collection
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September 2008
(Revised October 2008)
Shareholder Activists at Friendly Ice Cream (A2)
V.G. Narayanan, Fabrizio Ferri and James Weber
The A1 and A2 versions of the “Shareholder Activists at Friendly Ice Cream (A)” split the original A case into two parts. The A1 case ends as activists Sardar Biglari and Phil Cooley prepare to meet with CEO Don Smith at Friendly's headquarters in September 2006. The A2 case resumes the story just after the meeting and details Biglari's and Friendly's actions from that point on. The A1 and A2 cases are provided for instructors who wish more flexibility in the teaching plan. These cases do not omit or abridge any information contained in the original A case. Two activist investors, one a founder and one a hedge fund manager, seek to improve board oversight at a chain restaurant company. Prestley Blake founded Friendly Ice Cream in 1935 with his brother and the two created a chain of full-service restaurants. In 1979 they sold the business and retired. In 2000, Blake became concerned that Friendly's CEO, who owned approximately 10% of Friendly and also owned a larger percentage of another restaurant company, was shifting expenses between the businesses in a way detrimental to Friendly shareholders, but personally advantageous to the CEO. Further, Blake believed that Friendly's board of directors was not meeting their fiduciary obligations to shareholders by properly overseeing the activities of the CEO and that the directors had conflicts of interest because they were involved with the CEO's non-Friendly business activities. In 2003, Blake filed a lawsuit against the CEO and the company. In 2006, Sardar Biglari, a hedge fund manager who had invested in Friendly, entered into negotiations with Friendly for him to join the board of directors to help improve the management of the business. When these negotiations failed, Biglari launched a proxy fight against Friendly in 2007. While these two activist investors shared similar objectives, they worked independently and chose different strategies.
Keywords: Investment Activism;
Business and Shareholder Relations;
Governing and Advisory Boards;
Conflict and Resolution;
Lawsuits and Litigation;
Business or Company Management;
Food and Beverage Industry;
United States;
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Case
| HBS Case Collection
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April 2008
(Revised September 2008)
Shareholder Activists at Friendly Ice Cream (A)
Fabrizio Ferri, V.G. Narayanan and James Weber
Two activist investors, one a founder and one a hedge-fund manager, seek to improve board oversight at a chain restaurant company. Prestley Blake founded Friendly Ice Cream in 1935 with his brother, and the two created a chain of full-service restaurants. In 1979 they sold the business and retired. In 2000, Blake became concerned that Friendly's CEO, who owned approximately 10% of Friendly and also owned a larger percentage of another restaurant company, was shifting expenses between the businesses in a way detrimental to Friendly shareholders, but personally advantageous to the CEO. Further, Blake believed that Friendly's board of directors was not meeting their fiduciary obligations to shareholders by properly overseeing the activities of the CEO, and that the directors had conflicts of interest, because they were involved with the CEO's non-Friendly business activities. In 2003, Blake filed a lawsuit against the CEO and the company. In 2006, Sardar Biglari, a hedge-fund manager who had invested in Friendly, entered into negotiations with Friendly for him to join the board of directors to help improve the management of the business. When these negotiations failed, Biglari launched a proxy fight against Friendly in 2007. While these two activist investors shared similar objectives, they worked independently and chose different strategies.
Keywords: Investment Activism;
Governing and Advisory Boards;
Lawsuits and Litigation;
Business or Company Management;
Business and Shareholder Relations;
Conflict of Interests;
Food and Beverage Industry;
United States;
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Teaching Note
| HBS Case Collection
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April 2003
(Revised April 2008)
Store24 (TN)
Dennis Campbell, Susan L. Kulp and V.G. Narayanan
Teaching Note for (9-103-058).
Keywords: Retail Industry;
Citation: Campbell, Dennis, Susan L. Kulp, and V.G. Narayanan. "Store24 (TN)." Harvard Business School Teaching Note 103-078, April 2003. (Revised April 2008.) View Details
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Case
| HBS Case Collection
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March 2008
Ujjivan: A Microfinance Institution at a Crossroads (A)
V.G. Narayanan and Pamela Freed
Samit Ghosh, the CEO and founder of Ujjivan, a major microfinance provider in Bangalore, wants to grow his business rapidly and become financially sustainable, but he's struggling with staff fraud, high costs, and how to stay true to Ujjivan's mission of poverty alleviation, while simultaneously reaching out to higher-income customers. The case explores how Ujjivan can grow, looking at such issues as new technology, diversifying product offerings, and how to hire the best staff.
Keywords: Financial Institutions;
Microfinance;
Ethics;
Mission and Purpose;
Growth and Development Strategy;
Financial Services Industry;
Bangalore;
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Case
| HBS Case Collection
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February 2003
(Revised March 2007)
Internet Customer Acquisition Strategy at Bankinter
Francisco de Asis Martinez-Jerez, V.G. Narayanan and Lisa Brem
Bankinter, a relatively small Spanish bank, has a large presence as an Internet financial services provider. Leading the way to profitability through the Internet will give Bankinter a major competitive advantage over the larger, more established Spanish banks. Ann Peralta, director of the Internet network in Bankinter, must evaluate whether the thousands of new customers pouring in from other portals are profitable for the bank. Peralta uses tools such as customer relationship management, activity-based costing, customer profitability, and lifetime value computations to determine the value of this cohort of new customers for the bank and in doing so, can decide on future customer acquisition strategies.
Keywords: Customer Relationship Management;
Internet;
Activity Based Costing and Management;
Customer Value and Value Chain;
Banks and Banking;
Banking Industry;
Spain;
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Teaching Note
| HBS Case Collection
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February 2006
(Revised October 2006)
Introduction to Cost Accounting Systems (TN)
David F. Hawkins, V.G. Narayanan, Michele Jurgens and Jacob Cohen
Keywords: Cost Accounting;
Citation: Hawkins, David F., V.G. Narayanan, Michele Jurgens, and Jacob Cohen. "Introduction to Cost Accounting Systems (TN)." Harvard Business School Teaching Note 106-045, February 2006. (Revised October 2006.) View Details
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Tutorial
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September 2004
(Revised January 2006)
Introduction to Cost Accounting Systems
David F. Hawkins, V.G. Narayanan, Jacob Cohen and Michele Jurgens
Covers the basics of cost system design, demonstrating in a clear, step-by-step fashion how costs are assigned to cost objects. Key concepts include direct and indirect costs, two-stage allocation, cost pools, and cost drivers. Also provides a brief review of several variations of cost systems, explaining the difference between job and process costing, direct and full cost systems, as well as standard cost systems. Provides exercises throughout the tutorial to test understanding of the material.
Keywords: Cost Accounting;
Cost;
System;
Citation: "Introduction to Cost Accounting Systems." Harvard Business School Tutorial 105-701, September 2004. (Revised January 2006.) View Details
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Tutorial
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October 2004
(Revised January 2006)
Introduction to Responsibility Accounting Systems
David F. Hawkins, V.G. Narayanan, Jacob Cohen and Michele Jurgens
Responsibility accounting systems generate financial and related nonfinancial information about the actual and planned activities of a company's responsibility centers--organizational units headed by managers responsible for a unit's performance. The principal components covered are budgets, performance reports, variance reports, and transfer prices. Describes these components and walks students through how a responsibility center's actual performance is compared to its planned (budgeted) performance and how resources can be transferred from one center to another. Also explains the management planning and control process. Provides numerous exercises to test understanding of the material.
Keywords: Business or Company Management;
Cost Accounting;
Governance Controls;
Financial Reporting;
Performance Evaluation;
Budgets and Budgeting;
Planning;
Citation: "Introduction to Responsibility Accounting Systems." Harvard Business School Tutorial 105-703, October 2004. (Revised January 2006.) View Details
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Tutorial
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January 2006
Alternative Choice Decisions Analysis
David F. Hawkins, V.G. Narayanan, Jacob Cohen and Michele Jurgens
Shows how managers use information on costs and revenues to decide between possible alternative courses of action. Presents two case examples of differential cost analysis. The first, a make or buy decision, examines two alternatives in which only costs vary. The second presents a situation in which both revenues (changes in price and volume) and costs (including fixed costs) change. Both analyses allow students to act as managers and conclude which of several alternatives yields the greatest differential profits.
Keywords: Cost;
Profit;
Revenue;
Information;
Management Analysis, Tools, and Techniques;
Problems and Challenges;
Conflict and Resolution;
Citation: "Alternative Choice Decisions Analysis." Harvard Business School Tutorial 105-706, January 2006. View Details
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Tutorial
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January 2006
Cost-Volume Profit Models
David F. Hawkins, V.G. Narayanan, Jacob Cohen and Michele Jurgens
Covers fixed, variable, and semivariable costs and their role in building and interpreting cost-volume-profit models. Introduces the cost-volume and contribution-volume-profit models and identifies some of their uses and limitations. Teaches how to use the cost-volume-profit model to determine profit at various levels of unit volume and how to calculate a breakeven point. Includes multiple exercises throughout the tutorial.
Keywords: Volume;
Cost;
Profit;
Mathematical Methods;
Citation: "Cost-Volume Profit Models." Harvard Business School Tutorial 105-705, January 2006. View Details
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Case
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April 2005
(Revised May 2005)
Executive Compensation at General Electric (A)
V.G. Narayanan and Michele Jurgens
Faced with falling share prices and the critical eye of the media focused on Jack Welch's retirement plan, newly appointed CEO Jeff Immelt had the challenge of reassessing GE as a leader of corporate integrity and good governance. Presents the changes Immelt initiated in the board of directors, in Immelt's own compensation scheme, and in the compensation scheme for all GE executives, designed to address GE's corporate governance issues. Examines the use of stock options and alternative stock-based incentive schemes, along with the importance of each tool in a total compensation plan. A rewritten version of an earlier case.
Keywords: Executive Compensation;
Employee Stock Ownership Plan;
Governing and Advisory Boards;
Media;
Governance;
Corporate Accountability;
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Case
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March 2005
Henkel Iberica (A)
Francisco de Asis Martinez-Jerez, V.G. Narayanan and Lisa Brem
In 2002, Esteban Garriga, customer service director at Henkel Iberica, questions whether Collaborative Planning, Forecasting, and Replenishment (CPFR) would help manage retail promotions and limit their impact on the stock-outs and obsolete inventory. Describes the situation facing Henkel Iberica, the Spanish subsidiary of the German consumer products company Henkel KgaA, with respect to the management of retail promotions. The increasing number of promotions and the complexity of the company portfolio seriously taxed Henkel Iberica's sales, production, and distribution systems. Many in the organization believed the company should abandon or cut back promotions and adopt an everyday low pricing strategy. Garriga believes the solution to be in CPFR. Describes Henkel Iberica's operations and provides the necessary background to discuss whether CPFR is the adequate solution for its problems.
Keywords: Business Subsidiaries;
Forecasting and Prediction;
Price;
Distribution Channels;
Strategic Planning;
Commercialization;
Valuation;
Rail Industry;
Germany;
Spain;
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Case
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September 2003
Executive Compensation at Reckitt Benckiser plc
V.G. Narayanan, Krishna G. Palepu and Lisa Brem
Investors felt betrayed by the increasingly lucrative pay packages awarded to CEOs and other top executives at multinational companies. Yet, board members charged with adequately rewarding executives were forced to compete with rising packages of salaries and stock options. Bart Becht, CEO of Reckitt Benckiser, the Anglo-Dutch manufacturer of cleaning products, was the United Kingdom's highest paid CEO in 2003. With shareholder protests looming at its annual meeting, should the board reconsider Becht's pay package or ride out the storm? Examines the issues facing board compensation committees when trying to design remuneration packages that will keep CEOs performing and meet shareholder goals. Discusses the viability of stock options, proper balance between variable and nonvariable pay, setting effective performance targets, and how rising U.S. pay affects global companies.
Keywords: Design;
Stock Options;
Investment Activism;
Corporate Accountability;
Compensation and Benefits;
Employee Stock Ownership Plan;
Management Teams;
Business and Shareholder Relations;
Consumer Products Industry;
Netherlands;
United States;
Citation: Narayanan, V.G., Krishna G. Palepu, and Lisa Brem. "Executive Compensation at Reckitt Benckiser plc." Harvard Business School Case 104-006, September 2003. View Details
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Module Note
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June 2003
Design and Implementation of Activity-Based Cost Systems
V.G. Narayanan
Describes the main themes of the module on the design and implementation of an activity-based costing (ABC) system. Instructors can teach this module to second-year MBA students who have been exposed to activity-based costing in their first-year core accounting courses. Emphasizes how a firm's particular business context affects ABC system design and the factors that help an ABC implementation succeed.
Keywords: Cost Accounting;
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Teaching Note
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February 1998
(Revised April 2003)
Colorscope, Inc. TN
V.G. Narayanan
Teaching Note for (9-197-040).
Citation: Narayanan, V.G. "Colorscope, Inc. TN." Harvard Business School Teaching Note 198-110, February 1998. (Revised April 2003.) View Details
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Teaching Note
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April 1998
(Revised August 2002)
Hamptonshire Express TN
V.G. Narayanan and Ananth Raman
Teaching Note for (9-698-053).
Citation: Narayanan, V.G., and Ananth Raman. "Hamptonshire Express TN." Harvard Business School Teaching Note 698-073, April 1998. (Revised August 2002.) View Details
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Case
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September 1995
(Revised June 2002)
Intel Pentium Chip Controversy (A), The
V.G. Narayanan and James D Evans
Following Intel Inc.'s decision to replace flawed Pentium chips, the company faces revenue recognition choices. Events leading up to IBM's decision to halt shipment of computers that have Intel's microprocessor inside and Intel's decision to replace all the flawed chips are outlined. Intel must decide whether to: make a provision for the costs of replacing the chips, defer recognition of revenue on the flawed chips that it has now agreed to replace, or make no entries on grounds of materiality.
Keywords: Business or Company Management;
Decision Choices and Conditions;
Revenue Recognition;
Computer Industry;
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Case
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August 1999
(Revised May 2001)
Catanese and Vulcan (A)
V.G. Narayanan and Sanjay Pothen
A small CPA firm puts in a new performance measurement system, and profits increase by 350% in less than a year. This case illustrates the reasons for improved profitability as well as the sustainability of levels of growth, the opportunities, and the threats that await the company.
Keywords: Cost Accounting;
Performance Evaluation;
SWOT Analysis;
Profit;
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Teaching Note
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June 2000
Catanese and Vulcan (A) and (B) TN
V.G. Narayanan and Lisa Brem
Teaching Note for (9-100-021) and (9-100-080).
Citation: Narayanan, V.G., and Lisa Brem. "Catanese and Vulcan (A) and (B) TN." Harvard Business School Teaching Note 100-108, June 2000. View Details
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Teaching Note
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April 1998
(Revised November 1999)
Lehigh Steel TN
V.G. Narayanan and Laura Donohue
Teaching Note for (9-198-085).
Keywords: Steel Industry;
Citation: Narayanan, V.G., and Laura Donohue. "Lehigh Steel TN." Harvard Business School Teaching Note 198-112, April 1998. (Revised November 1999.) View Details
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Case
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March 1998
(Revised April 1998)
Lehigh Steel
V.G. Narayanan and Laura Donohue
Lehigh Steel is a specialty steel manufacturer that plummeted from record profits to record losses in less than three years, driven by an inability to distinguish between profitable and unprofitable business. The scale and growth of service activities and overhead costs in an increasingly customized product line suggests that activity-based costing (ABC) could unlock the secrets of profitability. However, the high fixed-cost structure suggests that theory of constraints (TOC) could also be relevant. Lehigh must determine how to measure profitability to rationalize its products.
Keywords: Measurement and Metrics;
Product;
Cost;
Activity Based Costing and Management;
Profit;
Accounting;
Corporate Finance;
Steel Industry;
Citation: Narayanan, V.G., and Laura Donohue. "Lehigh Steel." Harvard Business School Case 198-085, March 1998. (Revised April 1998.) View Details
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Teaching Note
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June 1996
(Revised March 1997)
Romeo Engine Plant TN
V.G. Narayanan and Amy P. Hutton
Teaching Note for (9-194-032).
Keywords: Manufacturing Industry;
Citation: Narayanan, V.G., and Amy P. Hutton. "Romeo Engine Plant TN." Harvard Business School Teaching Note 196-142, June 1996. (Revised March 1997.) View Details
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Technical Note
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November 1995
Analyzing Standard Costs: Technical Note
V.G. Narayanan
Explains variance analysis. Concepts of price variance and quantity variance are introduced to analyze prime cost variances. Spending variance and capacity variance are used to analyze overhead variance. Consistent with conducting variance analysis in an activity-based costing setting. All concepts are illustrated graphically.
Keywords: Cost Accounting;
Cost;
Analysis;
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