Financial Management Cases1

The case method is an approach to management education and development of professional skills
complementary to the traditional lecture.
The traditional teaching of matrix Continental ideally sees the student as an empty basket, presenting the
teacher the opportunity to, in the time available, insert knowledge, hoping that this remains once the study
period of the discipline is over.
However, the methodology of the cases presented in this text already considers the learner as an "ideal"
basket full of knowledge ready to be "activated". The teacher’s task is to endeavor to, through the development
of the case, reach out and interpret the issues in such a way that the knowledge, studied also in textbooks,
becomes expertise, and will remain as the student’s overall cultural experience
The proposed case methods identify a methodological process useful for the analysis of different business
realities.
The study and analysis of the cases necessitates "team work" in cooperation with other peers (peer
education).

1. The case method - the approach

The approach that we want to take with the present chapter is the following:
1) Reading and analysis of the business case;
2) Enriching skills required by consulting textbooks and other sources of information;
3) Discussion in subgroups;
4) Development of the case through preparation of a "Report" Analysis of the case;
5) Discussion and debate in plenary.

The logical process is outlined in the following chart.

1 by Paolo Pietro Biancone. Only for internal use

 Business Case

Yes

The student has The student

all the knowledge discusses the case in
and information subgroup
for analysis?

no
no

The student studies

The student
reference manuals
has
identified a
solution?

Yes

Plenary Preparation of the

discussion Report of the case

The conditions for proper development of a business management methodology approach through the
use of cases are the following:
1. Mutual respect between teacher and students and among students.
2. Students:
a) Discuss the cases after a thorough investigation (case study, reading texts and other sources of
information appropriate to the discussion).
b) Simulate managerial behavior with high discipline and be willing to consider different points of view.
c) Listen and participate actively in all the discussion groups and in the classroom.
d) Contribute with ideas, analysis, and personal experience, rather than simply present the facts included
in the cases.
e) Develop each other’s comments and constructive criticism and debate different points of view.
3. The teacher:
a) Present the case and the educational objectives contained in it.
b) Indicate the course of the group discussion that allows learners to analyze the case.
c) Evaluate the work of the students and the achievement of specific educational milestones.
d) Provide feedback on the work of learners.
e) When discussing as a whole class or in small groups, prepare the path of confrontation, the opening
question, the questions for discussion, and closing remarks. Stimulate student-student discussion and
encourage the participation of all students.

1.1. The analysis of the case.

The analysis of the business case needs, in addition to some basic knowledge acquired through texts
and/or work experience, a methodological approach that is as suitable and relevant as possible to the
identification of business needs and addresses them through choices consistent and well-founded on
assumptions documented.
The Report of the conduct of the case presented below is intended to provide a "universal" guideline to address
different business situations with varying complexity.
 The report is made up of main points divided into subsections. Through proper and consistent
construction, the solution of the identified "business problem" represents a natural development of the factors
taken into account.

EXHIBIT 1 – FRAME FOR THE DEVELOPMENT OF THE ANALYSIS

Case Report

Title of case analysis

Name
Date

Summary
(A brief statement of what is going on: Who is acting? Why? What the result been?
Sentence/paragraph format with punctuation.)

The problem
(A concise one-sentence statement (seven to nine words). Must contain “doer”.)

Cast of characters
A) People
Name, job title, age
Number of years experience, if relevant
Experience or influence
Additional facts, if relevant

Name, job title, age

Number of years experience, if relevant
Experience or influence
Additional facts, if relevant

B) Institutions
Name
Influence or effect, if relevant
Additional facts

Name
Influence or effect, if relevant
Additional facts
Events
Name or description
Influence or effect
Additional facts, if relevant
Chronology
(What happened – facts and events only. No evaluation in this section. Reverse chronological order. Include
date if possible.)

Today
Yesterday
Detail of event
Last year

Issues
(What important aspects of the situation are in conflict or are relevant to the problem(s) at hand? What
factors do we need to take into consideration for our options?)
Major point 1
Minor point
Detail of point

Major point 2
Minor point
Detail of point
 Options
(List possible courses of action. Evaluate each one individually.)

Course of action 1
Advantages
………….
………….
Disadvantages
………….
………….
Course of action 2
Advantages
………….
………….
Disadvantages
………….
Recommendation
(Clearly state the course of action you support. One to three sentences.)
Reasoning and rationale

Plan of action
(Clearly and briefly state the successive steps involved in bringing your recommendation to a successful
conclusion.)

Major step
Major part of step
Minor part of step
Detail of step
Detail of step

2nd Major step

Major part of step
Minor part of step
Detail of step
Detail of step

1.2. Elements useful for the analysis and development of the case
The following describes the contents of individual points.

1) Summary:
The fundamental function of the summary of the case is to synthesize the business reality presented;
highlighting relevant aspects that turn out to be useful for the development of the solution. The summary should
not contain opinions or interpretations of events, but must faithfully reflect the situation. Any enrichment may
include contextualization that emerges non-directly from the case, such as the environment and any general or
specific characterizations of the industry.

2) The problem (must contain the doer)

This part contains surely one of the most difficult aspects in the analysis of the case. As well as in business
realities (and not just simulated) the complex issue is to understand and identify the real problem that then will
be the subject of a solution by the person who has to make the decision. With the identification of the problem,
a natural course of conduct of the case is also identified, which involves a high degree of consistency.
The definition of the problem should not be made out of impulse, maybe trying to interpret the purpose
of the case (and therefore operating erroneously becoming too influenced by the situation presented and
described by the actors in a business context), but after a thorough discussion among participants of the group.
For example, considering a case where a company is presented with a significant fixed cost structure, the
problem may be related to the type of business and the market in which to operate, rather than the flexibility of
the production.
 3) Cast of Characters
The identification of the actors and their responsibilities enables the representation of different business
functions and the different roles assigned to subjects. The characterization of the team of corporate governance
highlights the skills and willingness of management to make decisions of a certain type.
The ‘Cast of Characters’ section also covers institutions (companies, organizations, etc.) involved in the
business case. The study of their characteristics, structure and their history can be relevant in identifying possible
solutions.

4) Events
Events can affect the management of a company because they determine moments of discontinuity in the
normal course of business. Identifying and analyzing the key moments allows contextualizing the business
decisions made over the course of time.

5) Issues
With regard to the definition of the main issues, the reader needs to make a selection from among the
various points of information in the case that are useful for making decisions. Also in this part, the order listed
must be consistent with the development of the case. If among the important elements there are factors such as
cost structures, new investments or launching a new product, then those factors that allow the student to
effectively complete the logical reasoning for the solution must be stated first. It is important to remember that
management is not an "Exact Science" where there is only one correct solution, but there are several possible
solutions compatible with the reference scenario. The good manager, through a proper methodology, aims to
identify and propose the best solution that will allow the company to perpetuate its instrumental function of
producing goods and services for the satisfaction of human needs.

6) Options
The section on "options" contains a list of possible actions to be taken individually, highlighting the
advantages and disadvantages. In order to make a correct choice it is necessary to identify more options and
analyze the positive and negative elements while taking care not to "become attached" to an impulsive solution,
but rather make a choice via an objective process.

7) Recommendation
The recommended choice is the "solution" to the case, where the reasons accompanying the decision need
to be spelled out clearly. Obviously, for consistency, the recommended choice is the first among the options
mentioned above.

8) Plan of action
The last phase of the development of the business case is the most detailed and complex.
It identifies all steps needed to implement the decision, focusing on the complete resolution of the
problem. It’s important to note that the plan of action should be concrete, sustainable with existing or potential
company resources and must be accompanied by a risk assessment that will help to identify any critical factors.
An action plan contains a division into phases and a breakdown of each relevant step.