Nine-step approach to case analysis

When working on cases and problems in your , it is recommended that you follow this nine-step approach:

1. Skim the case.
2. Read the case closely.
3. Identify problems and issues.
4. Analyze the data.
5. Generate alternatives.
6. Select the decision criteria.
7. Analyze and evaluate the alternatives.
8. Make a recommendation or decision.
9. Write a report or action plan.

Some of these steps may not be necessary for the simple cases in the earlier levels of the CGA program. For example, you can expect short cases in Level 1 courses, so you probably don't need to both skim and read. It makes sense, however, to skim the multi-page cases in Level 4 courses to get an overview before you read the entire case. Similarly, courses at the earlier levels of the CGA program are more likely to identify the problem for you and provide you with alternatives and decision criteria. Your task might simply be to compare (or analyze) the alternatives and make a recommendation.

Applying the steps

Each of the nine steps is explained in detail below, along with helpful hints on how to formulate a successful response and avoid common pitfalls.

1. Skim the case.

It is worthwhile to skim any case longer than two pages. To skim effectively, read the first and last paragraphs (or sections), and take a quick look at any exhibits. When you skim, look for anything that indicates the important aspects of the case. Ask yourself these questions:

a)	What is required of me and what is my role?
b)	What is the main issue and why is it important to the organization?
c)	Why has the issue arisen, and why now?
d)	When does the issue need to be decided?
e)	How should I allocate my time on this case?

1. Read the case closely.

Next, read the entire case carefully, making sure you understand the information presented. As you read, gather background information and make notes on the case and the exhibits. The background of a case includes the environment, organization, stakeholders, and users, as well as any motivational aspects of those involved. Ask yourself these questions:

a)	How do the exhibits fit the case? Which ones are relevant, and which ones are not?
b)	What industry does the organization operate in? What is the state of the economy? What information do I have on competitive factors that are important to my analysis?
c)	What are the key organizational factors? (What is the reporting structure, and what are the organization's goals and objectives? What principles, rules, or values, if any, are at issue? What are the organization's planning and control systems? Are there any incentive systems that might affect behaviour? Which business functions are critical to success or failure?)
d)	Who are the affected stakeholders (investors, employees, managers, customers, suppliers, and members of the public or community)? What are their interests and what motivates them?
e)	Who are the readers of any reports that I might prepare? What decisions will be made based on my report?

1. Identify problems and issues.

Using the background information you gathered in step 2, ask yourself these questions:

a)	What do I know that will help me analyze this case and solve the problem?
b)	What, if any, ethical issues are involved?
c)	Are there any issues that are outside the scope of this case? (For example, while it may be cheaper to operate in another country, if the company has already made major investments in its current location, it has a commitment to that location. Recommending a move to the other country would not be a viable option. Similarly, if you are asked to provide a solution that can be implemented within a week, recommending that a new factory be built will not meet the requirement.)
d)	Am I missing information? If so, can I determine the missing information from the information I already have? What reasonable assumptions can I make that are supportable, given the information that I do have?

Analyze the data.

This step may include a number of separate tasks, as follows:

a)	Prioritize the issues.
b)	Determine the accounting procedure or business tool most appropriate to your analysis. Keep in mind that before you perform any analytical procedure, you should know what you are going to do with the results of the analysis. Analysis for its own sake, particularly in a test setting, is a waste of time. You should also have an estimate of the answer you expect to get. A common pitfall for students is to accept the number they arrive at after a calculation, even when it is a number they know couldn't possibly be right if they took the time to think about it. By having an estimate before you start, you will recognize an impossible result when you get it. Estimating allows you to check your work and make corrections before you proceed.
c)	Separate the cause from the effects. Make sure you know which is which. It is the cause you want to correct. The effects will follow.
d)	Where possible, use both qualitative and quantitative analysis.
e)	Identify any constraints and any opportunities.

1. Generate alternatives.

Use this step as a brainstorming activity to help you problem solve. Keep these points in mind:

a)	The alternatives should address the causes you identified in Step 4.
b)	When time permits, generate as many alternatives as possible. The process of generating alternatives often produces good ideas that don't immediately come to mind and would otherwise be overlooked.

1. Select the decision criteria.

Decision criteria help you sort through all the alternatives you have identified, ensuring that you apply a consistent standard to your analysis. Ask yourself these questions:

a)	Have I considered the four ethical heuristics? (These are autonomy, non-maleficence, beneficence, and justice.)
b)	Is there a value or principle involved that is so compelling it overrides the other decision criteria?
c)	What organizational goals, objectives, values, principles, or critical business functions must the decision be judged against?
d)	Have the criteria been developed while recognizing that all of the alternatives will be evaluated against the same criteria?
e)	Have I weighted the criteria? (Some criteria, such as the safety of personnel, are weighted more heavily than others, such as cost.)
f)	Have I given my basic values greater weight than other criteria? (Remember, you are the decision-maker and whatever decision you make reflects your values.)

1. Analyze and evaluate the alternatives.

This step helps you take a closer look at the alternatives you identified in Step 5. It may include these tasks:

a)	Determine the accounting principles, standards, and concepts for each alternative. (Following GAAP is a requirement, but when you have to choose among alternatives, you should also consider fair presentation and the financial statement users.)
b)	Determine the accounting procedure or business tool that is appropriate for the analysis.
c)	Use both qualitative and quantitative analysis.
d)	Determine the ethical, moral, and financial consequences of each alternative. Consider also how each alternative will affect the various stakeholders.
e)	For each alternative, consider what factors would have to change for you to evaluate it differently. You may find that changed circumstances can make possible what initially seemed impossible. It is helpful if you are prepared for unforeseen events and are able to recognize such events for the opportunity they present or, more importantly, the risk, if the change is negative. This type of analysis can help you suggest necessary changes before an alternative is considered any further. It is sometimes an important interim step in real-life situations.

1. Make a recommendation or decision.

Once you have completed your analysis, you are ready to make a recommendation or decision:

a)	Whether you make a decision or a recommendation depends on the requirements of the case. If your role is that of a manager, you may be the decision-maker. In other situations, you may be called on to make a recommendation because of your expertise in accounting and problem solving.
b)	Assess your decision using the decision criteria you identified. Remember the weight you gave to the different criteria; consider that as you make your decision.
c)	Your decision (or recommendation) must follow logically from your analysis.
d)	Accept responsibility for the decision you make. If you have done a thorough analysis, given due consideration to all known or available information, and been objective and fair to all parties' interests, your decision should not only be the optimal one, but one that you can live with in good conscience.

1. Write a report or action plan.

The final step is to articulate your decision or recommendation. Plan your report so it addresses the most important issues. Here are some helpful hints:

a)	Use exhibits to summarize or display numerical analysis. (Don't include all of the numerical analysis in the written text of your report. In all but the simplest situations, this can be confusing for the reader.)
b)	As part of your report, provide an overview of the most important background factors and variables. (Limit this overview to one brief paragraph.)
c)	List the issues or problems in order of importance.
d)	Include your analysis and alternatives. If there are many options, you might find it easier to begin by addressing those that are least attractive, but still possible. Briefly introduce and dispose of each of these. For more attractive but not recommended options, provide your analysis and state why you have not recommended them. Finally, present your preferred alternatives (no more than two or three) along with a detailed analysis. Explain the exhibits followed by the advantages, disadvantages, and limitations of each alternative.
e)	Make your recommendation. This should follow from your written analysis. If there are limitations, explain how these may be addressed. You should also indicate possible conditions that may necessitate changes to these plans and what changes would be appropriate.