This case study examines Stryker Corporation's capital budgeting process and why modifications made in 2005 slowed capital project requests. Specifically:
- Stryker implemented a new Capital Expense Request (CER) process in 2005 that increased documentation requirements and added review layers, intended to improve alignment.
- However, the increased complexity and short timeframe to submit requests discouraged employees from submitting projects. The number of requests dropped sharply.
- While rigorous processes are important for oversight, the changes did not achieve the intended benefits at Stryker and hurt employee morale around capital projects.
The opportunity to explore how a company uses the Capital Asset Pricing Model (CAPM) to compute the cost of capital for each of its divisions. The use of Weighted Average Cost of Capital (WACC) formula and the mechanics of applying it are stressed.
TD Mergers & Acquisitions Competition 2015
We created a presentation on the potential bid structure and analysis of the transaction based on HBS case 9-210-040 "Roche's Acquisition of Genentech".
Team members:
Catherine Qian
Jenny Li
Terence Leung
Yu Cao
The primary objective of the project is to understand the process of Project Appraisal for Term Loan & assessment for Working Capital Requirements. This includes evaluation of Financial Statements, Purpose for which facility is availed, Technical & Financial feasibility of project, Credit History, Managerial Competence and Past Experience in case of Term Loan.
The opportunity to explore how a company uses the Capital Asset Pricing Model (CAPM) to compute the cost of capital for each of its divisions. The use of Weighted Average Cost of Capital (WACC) formula and the mechanics of applying it are stressed.
TD Mergers & Acquisitions Competition 2015
We created a presentation on the potential bid structure and analysis of the transaction based on HBS case 9-210-040 "Roche's Acquisition of Genentech".
Team members:
Catherine Qian
Jenny Li
Terence Leung
Yu Cao
The primary objective of the project is to understand the process of Project Appraisal for Term Loan & assessment for Working Capital Requirements. This includes evaluation of Financial Statements, Purpose for which facility is availed, Technical & Financial feasibility of project, Credit History, Managerial Competence and Past Experience in case of Term Loan.
POSITION OF INTERNAL AUDIT IN THE CORPORATE FRAMEWORKHaresh Lalwani
This presentation is my endeavor to bring to notice the new position that internal audit enjoys today in the corporate framework, expectations of the industry and emerging opportunities for the professionals.
Tricks of the Transformation Trade: Disruptive Disintermediation, Agility Age...UMT
A vast majority of U.S multinational firms – 93% in fact, according to a recent survey – are at some stage
of undergoing or preparing for business transformation initiatives. This is being driven by an unprecedented
confluence of changes in customer behavior, disruptive technology and domestic competition, among other
key triggers. It’s constantly “transform or wither” in today’s volatile global business, and
agility is the executive imperative of the day, albeit an elusive one. An organization’s long term success or failure
depends on its capacity to consistently identify opportunities and risks and renew itself faster than rivals do.
Business leaders need to be more efficient and effective at updating and implementing strategies than ever
before. If wielded correctly, an important weapon in their agility war chest is a new style of enterprise program
management office (PMO) that is more comprehensive than in the past.
CSMT 442 Top of FormConstruction Management IIBottom of FormMargenePurnell14
CSMT 442: Top of Form
Construction Management II
Bottom of Form
Homework 4 : 30 points
answer all questions
1- What are the Stages of a VE study?
2- what does SWOT stand for? What is there purpose?
3- What would you do as a project manager if you have a great worker that was unsafe but has never had an accident in his twenty year career but he started to encourage new employee to be unsafe how can you convince the employee to reject his idealism?
4- How much retainage is usually taken out each pay period? When will the GC get the funds back?
5- tell me in your own words what the best qualities that you already have developed an what's your weaknesses? how can your weakness is hurt your leadership and what must you do to improve those weaknesses?
6- What are the keys to a successful project? how can you turn unsuccessful project into a successful project?
Chapter 14 office of CIO
Today we find that certain trends, such as globalization, mergers and acquisitions, competition for market position and market share, regulatory compliance, and maintaining strategic advantage, have become cornerstones in radically shaping business dynamics.1 Agility, having a holistic view of the enterprise, doing more with less, and lean methodologies have become more than just buzzwords in the corporate IT world. As a result, CIOs and their leadership teams are demanding that IT investments be spent wisely and that there is a compelling business case that demonstrates why they need to approve and fund new IT projects and justifies the risks and rewards. Many global corporations have launched dedicated efforts and/or disciplines by forming enterprise architecture departments, program management offices, or strategic planning groups.2 These disciplines exist at various levels of maturity ranging from intermediate for some to advanced for others. These disciplines typically work in concert with each other. The goals are many, including, but not limited to, rationalization of the IT landscape; building the next generation of the core competencies; leveraging real-world guidelines and applying industry best practices; and identification, prioritization, and management of portfolio investments in order to assess value, increase efficiencies, and realize long-term gains. The content described in this chapter represents the results of such rationalization efforts for a global corporation, which led to: the key recommendations in the form of the creation of various project proposals and business cases; provision of project oversight by establishing cross-functional organizational structures, processes, and governance mechanisms to maintain alignment over time; adoption of standard software suppliers; and creation of integration competency centers (ICCs). Situation For the aforementioned global corporation, the information landscape was comprised of the multifaceted portfolio of tools, applications, and projects across data warehouses (DWs), data marts, mas ...
Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Glo...Accenture Insurance
As they reshape the financial services industry in light of the 2007-2008 financial crisis, global regulators have introduced a series of structural reform regulations to help build resilience. Global Structural Reform (GSR) is creating a new financial services ecosystem for institutions.
Accenture’s 2015 Global Structural Reform Study finds senior management working to thrive in what amounts to an all-new financial services landscape. They are investing effort and funds in their response to GSR, but their focus is on meeting regulatory demands. While that represents a good starting point, our study finds institutions might be missing out when it comes to meeting the strategic implications of reform and using reform as an opportunity to reposition the organization for sustainable growth
Accenture 2015 Global Structural Reform Studyaccenture
Accenture’s 2015 Global Structural Reform Study – based on a survey of 131 banking, insurance and capital markets institutions across regions – confirms that, while institutions are investing in their response to Global Structural Reform (GSR), their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform.
Highlights from the study's conclusions include:
- GSR is re-writing the financial services landscape
- Investment is clear, but strategy less so
- Three suggested principles for unlocking the potential of GSR
Download the report and visit https://www.accenture.com/accenture-2015-global-structural-reform-study.aspx to learn more.
Measure What Matters - New Perspectives on Portfolio SelectionUMT
Stock market investors articulate their goals explicitly or implicitly by following the philosophy and methodology of a market expert that fits their investment objectives and appetite for risk. For example, for value and income stocks they may rely on the research conducted by Wharton finance professor Jeremy Siegel¹ or read up on market pros like War-ren Buffet. Much like the stock market investor, companies investing in change face similar challenges when considering where to allocate budget and resources to meet financial and strategic objectives.
White Paper: Predictability Through Planning AgilityHost Analytics
Outperform your competition by making financial processes more relevant in driving organizational excellence, efficiency and informed decision-making, while improving forecast and budget accuracy.
INTRODUCTIONThe increasing discussion about rising healthcare co.docxvrickens
INTRODUCTION
The increasing discussion about rising healthcare cost is fuelled by reports that General Motors paid more for healthcare than for steel per vehicle in 2004,1 and Starbucks paid more for health insurance than for coffee in 2005.2 The continuing rise in development costs for drugs has increased pressure on R&D organisations to contribute to higher efficiency in the overall process of coming up with new drugs.
In the last few years the industry has made significant efforts to address these challenges3 and to increase the productivity of the drug development process. Some of the initiatives have without doubt led to considerable improvements. Examples are the earlier determination of a drug's toxicology profile and early tests to investigate the suitability of a new drug candidate for oral administration or once a day dosing. The question is no longer how good we are in what we are doing but whether we are doing the right things. Further improvements of the overall process should shift from attempts of enhancing effectiveness to a greater emphasis on the efficiency of the processes applied.
In this context a lot of emphasis is put on portfolio management. In the broadest definition, portfolio management describes the process of maximising the value of R&D portfolios through proper resource allocation. This requires an alignment of portfolio management with strategic business objectives. Such objectives should not only be general (e.g., innovation) and quantitative (eg ROI or sales targets). They should also define disease areas of interest, clearly outline the remaining medical needs, and specify the indications that are considered worth pursuing. This will enable decision makers and functional R&D managers to identify projects with both strategic fit and a high value proposition. Depending on the size of the organisation, either a corporate or therapeutic area strategies need to be developed, approved, and endorsed by the entire organisation.
Value-driven project and portfolio management implies quantitative financial and risk analysis of individual projects and overall portfolios. Such analyses elucidate options for improving the value and risk structure of individual projects on the one hand and therapeutic areas or overall corporate portfolios on the other hand. They are applicable and relevant to companies of any size. Value-driven project and portfolio management is a methodology enabling the alignment of project decisions with corporate strategy and defined business objectives.
Although portfolio management has been applied in the financial industry for many years and Harry Markowitz was honoured with the Nobel Prize for outlining this concept it was only around the end of the last century that the application of value-driven portfolio management in the pharmaceutical industry was published. 4 Around the same time, an investigation across various industries provided evidence that portfolio management based on quantitative fin ...
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
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@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
1. Harvard Case Study -
Stryker Corporation: Capital Budgeting
Term Paper
Laini Tsang
Golden Gate University
MS Finance, FI 312
Summer 2013
2. Stryker’s Capital Budgeting Harvard Case Study
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Table of Content
Case Background and Summary
Pharmaceutical Industry’s Landscape
Stryker’s New CERS and why it is “painful”?
Propositions
Conclusions
3. Stryker’s Capital Budgeting Harvard Case Study
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Case Background and Summary
Founded in 1941 in Michigan, Stryker Corporation is a fast-paced company with continuously
exceptional growth rates. Over the last 27 years, the company historically increased revenues
by 20%. The company’s culture prides itself on service ethics, integrity, innovations,
accountability, and customer relationships; it is one of the world’s leading medical technology
companies with history of successful stories. Stryker’s products focus on implants for joint
replacement, trauma, spinal surgical products, neurologic and endoscopic equipment. The
company has well diversified product portfolios with solid fundamentals. Over the years, the
company’s accretive mergers and acquisitions brought operational synergies and cost
efficiency, strengthening the pipeline with increasing profitability.
This paper examines Stryker’s capital budgeting process (CER – Capital Expense Request) and
why this process, after its modifications in 2005, had slowed down the company’s internal
capital project requests. From the company’s financials, we can see their capital expenditure
from 2000 to 2005 was doubled; however, it was surprisingly to see a drop of 20% in 2006, one
year after the CER process modifications were brought into. Employees did not feel great on
the changes; their morale was hurt; they concluded that they were not motivated as
previously as they had been due to the modifications.
The framework of this analysis is to first look into pharmaceutical technology industry
landscapes to understand why capital budgeting process is so vital to the growth in the
industry, and what regulatory changes had occurred to put pressure on the industry to
implement more rigorous implementation on capital budgeting process. Secondly, I will focus
on the modifications made in Stryker’s capital budgeting process, and why their employees felt
“painful”. Lastly, I will propose to refine the process as recommendations of this paper.
4. Stryker’s Capital Budgeting Harvard Case Study
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Pharmaceutical Industry Landscape
During the late 90s, Stryker heavily financed its acquisitions of Howmedica. Stryker was not
alone in the industry engaging in M&As; other major companies such as Pfizer and
GlaxoSmithKline were amongst the infamous mega-mergers at that time. According to the
Institute of Mergers, Acquisitions and Alliances, M&As in the Pharmaceutical industry peaked
from 1998 to 2000. After all, these companies had to reconfigure their acquired transactions
and settled for a while. But M&A popularity reappeared in 2006 to 2008 until the collapse of
financial market. These trends were the same across Northern America and worldwide during
the period.
The main driving forces behind the M&A-centric environment in pharmaceutical industry are
mainly due to that fact that: 1. operational synergies which means not only do new market
territories enlarge, sales pipeline becomes consolidated after acquisitions. 2. Acquirers also
look for cost cutting to help boost the company’s value for market capitals. The merger
approach was seen effective for Strykers as the company was doing very well in revenue and
constant earnings per shares. 3. Risk diversification that pharmaceutical companies engage in
competitive innovations to gain market shares and prevent itself from being taken over.
5. Stryker’s Capital Budgeting Harvard Case Study
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Stryker’s New CERS and why it is “painful”?
Stryker’s Capital Expense Request (CER) process was built upon a foundation of a formal
submission and structured approval process: specific guidelines in terms of levels of approvals
in relations to dollar limits are detailed. Generally a project proposal is discussed, vetted and
prioritized within a division. Divisional heads receive corporate’s financial metrics to drive
capital spending to the level that the corporate expects. In 2005, a modification procedure
was implemented. Besides, the spending authority thresholds at the divisional and group
levels have been increased as well. There was also a new layer of authority created for large
CERs: they are the Capital Committee comprised of the company’s CEO, CFO, Controller,
General Counsel, and other upper management. The new CER process also created a liaison for
the division heads; the liaison is either the controller for operational capital projects or the VP
of Business Developments for M&A projects.
In essence, the new CER refined the documentation process and added opportunities for
divisional heads to consult with their sponsor (the controller or the VP of Business
Development), and it was supposed to help alignment. The increase in threshold dollars for
approval limits was also thoughtful. However, because of the increased complexity of CER
submission forms and the added level of details requested in the submission process, two
weeks being given to requesters to finalize their proposal and analysis was not considered
sufficient. Moreover, the Capital Committee is described being “virtual” and did not facilitate
project feasibility and vitality discussions. The transition to the modified process unfortunately
slowed down the capital request submissions, resulting only 30 requests, compared to 300
requests in the previous years. This was unfortunate because if it was not due to the process
modifications, Stryker would have approved more capital projects, further enhancing the value
of the company. These projects could have been some highly strategic M&A propositions,
trying to capture the industrial dynamics of the second wave of bullish M&As environment in
2006. And Stryker’s growth, more or less, could have been positively impacted by the potential
acquisitions.
6. Stryker’s Capital Budgeting Harvard Case Study
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Proposals
Capital budgeting involving millions to billions of dollars of investments. The necessity of
submitting complete, detailed analyses to justify investments is understandable as this
indicates that upper management cares about maintaining the highest quality and integrity of
financial operational processes that are pertinent to the company’s internal controls and
financial reporting purposes. From investors’ point of views, the modified CES process should
be given some credits.
However, from employees’ perspective, the new process seems to decelerate the overall
operational efficiency. The expected synergy between the sponsors and the divisions did not
work out very well. Therefore, divisions were reluctant to submit requests due to obstacles
they encountered during the documentation and consultation processes. In my opinions
however, this disconnect could be avoidable.
To compensate employees’ faith lost, a simple solution for the company to do is to continue to
make the CER templates simpler in formatting and wiser in terms of the ways of gathering
information. The company should also consider hiring a designated project management team
to kick off the capital budgeting process and ask them to manage from pre-start to finish. Let
the project team help facilitate the stakeholders and the sponsors. If necessary, hire a group of
change management consultants to educate the stakeholders why the changes are necessary.
Have the project team facilitate all related discussions, negotiations and streamline the vetting
process so that top down alignment is ensured and expected results are to be delivered within
the timeframe.
As capital budgeting process is a top down approach where upper management needs to set
corporate goals to align with their strategic planning and all other related investment
opportunities, it is divisions’ responsibilities to plan and sort out the analyses of the related
capital and strategic alliance projects to facilitate the financial appraisals and project
7. Stryker’s Capital Budgeting Harvard Case Study
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evaluations by the company. All final decisions made are closely tied to their documentation
support and analyses so it is required that all work papers must be as concise as possible.
More importantly, once these projects have been approved, the planning documentations are
to guide the direction to facilitation, controls, monitoring, and the overall execution of the
projects, leading to successful implementation of these capital projects, which is equally
critical. Therefore, having concise, detailed capital project proposals is crucial to the success of
a company.
Conclusions
We can argue that during the time after CER process’s being modified, it is possible that
Stryker might have lost an opportunity to acquire any strategic partner(s) due to the reduced
enthusiasm of their employees. Employees should also be responsible for adapting the
changes and attempt to master the modifications. However, it could be the time given to the
stakeholders being too short or the transition taking too long for people to adapt while M&A
market was starting to die down; that means the timing was bad. Therefore, time is critical -
once stakeholders have adapted the process, it is advisable that the company should not make
any further changes again in the near future. Once everything is rolling and refined, and the
process should not be considered “painful” again.
This case study focuses on the operational aspects of capital budgeting process, which by
itself, is not only a number-crunching process but also requires strategic planning, deep level
of research, thorough documentations, human resources coordination, time and financial
investments by a company. More importantly, it is the people who are submitting the capital
budgeting requests; therefore, they need to feel comfortable with the process in the first
place. In addition, numerous dynamics such as corporate’s politics, divisional competitions and
company’s cultures also play a part. The success of a capital budgeting process is to ensure
good projects being selected to help maximize the company’s value. Therefore, whoever is
8. Stryker’s Capital Budgeting Harvard Case Study
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running the logistics for the process requires be highly trained and experienced, and someone
who is neutral, separating from any divisions, and being unbiased.
Stryker’s CER modification was intended to support the growth of the company and allow
employees focus more on research and analysis rather than administrative tasks; however, the
modification turned out to make the process “painful” which could have been avoided if a
group of well-trained finance project management team to liaise and fulfill the gap that
sponsors and the divisional heads overlook. For Stryker to continuously grow with remarkable
records, a smooth CER process is essential!
Provided below is a sample capital program process suggested by a confirming firm
specializing consultations for companies’ capital budgeting process.
Source: Decision Lens
9. Stryker’s Capital Budgeting Harvard Case Study
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Reference
Barton, Rhonda W., When the Rubber Misses the Road – or Late Starts. The University of
Tennessee Medical Center. August 2010
Brokerage Research Digest. Zack.com. May, 14, 2013
Capital Planning, Resource Allocation and Budgeting. Decision Lens. 2009-11
Hornke, Matthias and Mandewirth, Sven. Commentary: Merger and Acquisitions (M&A) in the
pharmaceutical industry: the wheel keeps on turning. Journal of Business Chemistry. May 2010
Maris, David, What’s Really Driving the Pharma M&A Frenzy. Forbes. April 27, 2012
Mergers and Acquisitions in the Healthcare Industry, a collection of A.T. Kearney case studies.
A.T. Kearney, Inc. 2010-7
Luehrman, Timothy A., Stryker’s Capital Budgeting Harvard Case Study. Harvard Business
School. January 2009