Fundamental change forces have impacted the world economy in recent decades. The pace of technological change has accelerated. The costs of communication and transportation have been so greatly reduced that markets have become global. While opportunities have expanded, the forms, sources, and intensity of competition have also grown.

The strong, new change forces have had major impacts. The technological requirements for firms have increased. As the roles of computers and the Internet have expanded, every firm has been impacted by increased requirements for information technology systems. The requirements for human capital inputs have grown relative to physical assets. The knowledge and organizational capital components of firm value have increased. Growth opportunities among product areas are unequal. New industries have been created. The pace of product introductions has accelerated. Economic activity has shifted from manufacturing to services of increasing sophistication. Distribution and marketing methods have changed, particularly by the impacts of the Internet. The value chain has deconstructed in the sense that more activities are performed by specialist firms. Forces for vertical integration have diminished in some areas, but increased in others. Changes in the organization of industries have taken place. Industry boundaries have become increasingly blurred. The forms and number of competitors have been increasing.

These new change forces have interacted with traditional ones. In an enterprise system with many independent decision units, attractive growth areas stimulate multiple firms and expanding investments. Growth and profitability areas expand and decline. Investments in plant and equipment and inventories result in overcapacity and economic adjustment periods. Business fluctuations of varying lengths and severity affect all the nations of the world economy. Financial markets continue to experience overshoots both on the upside and the downside.

The traditional models in both microeconomics and finance have been timeless or static in their orientation. But with the increased pace of change and economic turbulence, the adjustment processes that firms are required to continuously engage in need to be studied and their implications analyzed. This casebook seeks to focus on the adjustment processes of firms in increasingly dynamic environments. The cases in this compilation include firms that have succeeded and those that have floundered in the new environment. The content of the cases overlap the traditional areas of micro-economics, business finance, mergers and takeovers, restructuring, and corporate governance. The title, Dynamic Finance, seeks to encompass multiple areas. A convergence of disciplines is emerging.

This casebook seeks to develop material that will illuminate general concepts and principles. The cases are of unequal lengths depending on the subject matter. The longer cases lend themselves to the use of role-playing in which teams can represent different points of view and interest groups. Most of the cases involve actual companies so can be continuously updated for analysis and discussions. We find it useful to obtain multiple analyst reports with their outlook discussion to add new issues and different orientations for further discussion and analysis.

We plan to continue to add new cases as more companies adjust to the changing environment. They will be available in the Pearson Business Resources Case Series and periodically in compilations. (Please view information on this program at www.pearsoncustom.com). The availability of individual cases will enable users to select different compilations.

Since this will be a continuing activity, any comments or suggestions will be welcomed. Please send them to the corresponding author at:

J. Fred Weston
The Anderson School at UCLA
258 Tavistock Ave.
Los Angeles, CA 90049-3229

Tel. (310) 472-5110
Fax. (310) 472-9471
Email: jweston@anderson.ucla.edu
Web site: http://www.anderson.ucla.edu/faculty/john.weston