tag:blogger.com,1999:blog-89028429656013560292024-03-19T08:18:49.802+05:30THE ONLOOKERA Blog to play the role of onlooker on whatever comes in its perviews.......Unknownnoreply@blogger.comBlogger356125tag:blogger.com,1999:blog-8902842965601356029.post-21646070809841363862020-03-28T00:56:00.000+05:302020-03-30T01:59:26.956+05:30Improvement Project of Science Construction CS<div dir="ltr" style="text-align: left;" trbidi="on"><br />Abstract<br />Science Construction’s business is in planning, developing and building road projects. The major of its clients are municipalities, city governments, and other public sector entities. While the bankruptcy rates for these clients is very low, when economic downturns happen, their ability to pay in a timely fashion also suffers. This leads to businesses such as Science Construction needing to take on additional debt and to find creative methods in order to stay afloat during times of recession. Methods such as selling accounts receivables at discounted rates and taking larger lines of credit through banks and other lending institutions are some of the ways organizations can remain viable when their cash inflows have turned into a trickle. Science Construction is asking the Turkish Courts to postpone their bankruptcy proceedings for a year while they attempt to restructure. Through this, suggestions such as forcing shareholders to pay their debt to the organization, gaining credit lines with the public sector accounts receivables securing the loans, and looking into establishing a futures market for the purchasing of asphalt and other raw materials needed for their projects have been proposed and examined as ways to help Science Construction to remain a viable organization.<br />Keywords: Restructuring, Bankruptcy, Secure Loans, Futures Market<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 3<br />Introduction<br />Science Construction PLC is a Turkish company that operates in project design, development and financing, contracting services, and providing the equipment to service highways, roads, tunnels, and viaducts (Erer, 2013). Its customers are mostly metropolitan, city, and local governments. Science Construction often must place bids for projects months prior to buying the materials needed and must absorb any increase in costs associated with the needed materials. Further, in 2008, a financial crisis severely hurt Science Construction’s customers from paying their outstanding debts within the contracted terms, and Science Construction is now facing bankruptcy. Science Construction has appeared before the court under the Turkish Execution and Bankruptcy code to postpone its bankruptcy proceedings for one year. This will allow Science Construction to restructure its accounts payables and other debts in order to remain a viable company (Erer, 2013).<br />Problem Identification and Diagnosis<br />Science Construction’s main problem is that the financial downturn of 2008 increased the costs of materials needed (asphalt), while decreasing Science Construction’s public sector customers’ ability to pay, thus leading Science Construction having to sell its debt for pennies on the dollar in order to meet the needs of new projects, as well as forcing Science Construction into financial ruin.<br />Financial Metrics Support<br />There are some financial metrics that support Science Construction’s problem, such as its accounts receivables turnover ratio, which shows how effective an organization is at collecting on its accounts receivables as well as “how well a company uses and manages the credit it extends to customers and how quickly that short-term debt is collected or is paid,” (Kenton & Murphy, 2019).<br />Other metrics would be based on the cost of goods sold such as the gross margin (net sales minus cost of goods sold) (Bloomenthal, 2019), the profit margin (“profit per sale after all other expenses are deducted” (What are the Main Income Statement Ratios, 2019)), and the operating margin (“operating income divided by net sales” (What are the Main Income Statement Ratios, 2019)).<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 4<br />Further, Science Construction should evaluate how much it is losing by selling its debt to factoring companies at discounted rates.<br />Causes of the Problem<br />The root cause of the problem is that due to a financial downturn, Science Construction’s public sector customers stopped paying their debts in a timely fashion. These public sector customers (municipalities, city governments and the like) cannot “go under”, and so the postponing of paying their debts greatly affects the organizations they do business with (Erer, 2013).<br />Another cause is the difference in the price paid for materials based on the prices of materials at the time projects are bid on and financed (Erer, 2013). Science Construction had been lucky for years in that there had been minimal cost differences between the price they bid out the materials, and the actual cost of buying the materials once the job was ready to begin.<br />Unfortunately, once the market turned, this led to a huge difference that lead to eating away at the project’s gross margin.<br />Finally, selling its debt at discounted rates to ensure cash on hand is a detrimental move if consistently done over a long period of time. While its accounts receivables are an asset for Science Construction, it only is useful debt if paid. Selling these accounts offers a “stead and substantial income stream” for Science Construction, except for the fact they are not being paid the full amount, thus they take a loss for every account sold (Song, 2017).<br />Possible Alternatives<br />Science Construction CS’s Approach<br />The case study highlights having the shareholders to have a capital funds influx. This will also include collecting money owed from shareholders. Collecting of the funds owed by a shareholder is vital; however, many other shareholders (or new investors) may be hesitant to increase their investments, as shareholders are the last to be paid out if an organization goes bankrupt (Rodeck, 2016).<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 5<br />Science Construction is planning to cut its raw materials costs by providing its own transportation. Additional analysis should be complete before enacting this to identify the wages, insurance, gas, maintenance, and lost opportunity costs associated with these company assets not being used on projects while they are being used to transport the raw materials.<br />A third alternative given in the case study is to lay off the employees who are not actively working to save on salaries and subsidiary costs.<br />It is proposed that consumption caps set by the budget will be enforced, which could be detrimental to the ability of the organization completing projects on time. Things can happen on the worksite that force the need for additional supplies (accidents, materials used incorrectly, mistakes in engineering that need to be corrected, acts of nature), so to limit consumption and say that not additional amounts will be authorized is premature at best.<br />It is suggested to cut the number of vehicles used by management; however, in many cases, it can be less costly for the employee to provide a fleet of vehicles vs. reimbursing for personal use of one’s automobile. A total cost of ownership should be conducted, calculating the breakeven point, against the mileage, as well as looking at the job functions where a vehicle is a necessity (Company vehicle or reimbursement? Tips on setting fleet policy, 2014).<br />The suggestion of issuing credit cards for the purchase of consumables should be revisited as well, as often it is less expensive to buy consumables in bulk through one account, than to allow many individuals to order what they and their team needs. Investments in new lighting should wait until after Science Construction has fully emerged out of the possibility of going bankrupt. While this will save money in the future, it is not addressed how much it will actually cost the organization upfront.<br />Other Options<br />Other suggested options are to make it a policy never to allow shareholders to owe money to the organization. It is not explained why this happened in the first place, yet, the shareholder in question has been allowed full rights to voting, etc., yet has not fully paid for these rights.<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 6<br />Additionally, Science Construction should look into stopping the reduced sale of its receivables for quick cash flows, and instead look at securing a line of credit, backed by the receivables of the public sector accounts. It is sited that “historically, the annual default rates for municipal debt are miniscule,” with only “one of every 1,668 eligible general-purpose local governments (0.06 percent) filed for bankruptcy protection from 2008 through 2012,” (Cities 101-- municipal bankruptcy, 2016). While collecting these accounts might require a longer timeframe, they are more secure accounts.<br />The final option is to look into buying the raw materials and asphalt in a futures type contract. This is done in the oil and gas industry often. Through Crude Oil futures, “the contract buyer agrees to take delivery, from the seller, a specific quantity of crude oil at a predetermined price on a future delivery date,” (Crude oil futures trading basics, n.d.). This will allow Science Construction to have a much firmer grasp on its raw materials costs when it is in the planning phase of the project.<br />Recommended Plan of Actions<br />The recommended plan of action is to ensure the shareholder with the outstanding debt pays on time, and do not allow this practice to happen again. From here, it is suggested analysis to be completed to see if it is better to pay for raw material delivery, or to use company vehicles, as well as looking into whether it is better to keep a fleet of vehicles or to require employees to use their own, and be reimbursed. The organization is paying for meals and other services as stated “the employees that does not work… Thus, the salaries and the subsidiary costs (e.g. meals, services) will decrease,” (Erer, 2013), the meals and services for all employees should be suspended at this time, to be reevaluated in the future if the organization finds itself in a better financial position to offer these perks again. Securing bank loans with the receivables as collateral and investing in raw materials futures are also recommended actions.<br />How to Measure Success<br />Success can be measured through tracking the accounts receivable turnover rates, profit margins, operating margins and the costs associated in selling debt vs. securing loans. These are the prime metrics that will show Science Construction if its plan of action is working.<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 7<br />Relevance to The Study of Business<br />The relevance to the study of business of this case is that most organizations do business using credit. Either they are taking out loans, or they are essentially doing work on the promise to pay in the future. This is the typical business scenario, and not a unique situation for Science Construction. With this said, when the economy turns, organizations feel the squeeze in multiple ways. The direct costs associated with doing business such as the costs of raw materials and such can skyrocket, but it can also hurt these organizations from being able to collect on their receivables. These scenarios require the ability to digest the situation, to find the path of least financial destruction. Taking out loans will cost an organization fees such as interest and administrative costs; however, selling debt at reduced rates can be a much costlier option. Analysis needs to be completed to identify the best way to gain the needed cash.<br />IMPROVEMENT PROJECT OF SCIENCE CONSTRUCTION CS 8<br />References<br />Cities 101 -- municipal bankruptcy. (2016, December 16). Retrieved December 17, 2019, from https://www.nlc.org/resource/cities-101-municipal-bankruptcy<br />Crude oil futures trading basics. (n.d.). Retrieved December 17, 2019, from https://www.theoptionsguide.com/crude-oil-futures.aspx<br />Erer, M. (2013). The improvement project of SCIENCE Construction Plc. Journal of Business Case Studies (JBCS), 9(3), 227-234.<br />Kenton, W., & Murphy, C. (2019, June 30). Why the Receivables Turnover Ratio Matters. Retrieved December 17, 2019, from https://www.investopedia.com/terms/r/receivableturnoverratio.asp<br />Rodeck, D. (2016, November 09). Who gets paid first when a company goes bankrupt? Retrieved December 17, 2019, from https://work.chron.com/gets-paid-first-company-goesbankrupt-7496.html<br />Song, J. (2017, April 20). What Happens When Credit Card Companies Sell Your Debt. Retrieved December 17, 2019, from https://www.valuepenguin.com/2017/04/whathappens-when-credit-card-companies-sell-your-debt<br />What are the Main Income Statement Ratios? (2019, July 15). Retrieved December 17, 2019, from https://www.investopedia.com/ask/answers/102714/what-are-main-incomestatement-ratios.asp</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-43395812660392763402020-03-28T00:55:00.000+05:302020-03-30T01:59:27.078+05:30Improvement Project- Science Construction PLC <div dir="ltr" style="text-align: left;" trbidi="on"> <br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Abstract</span></div><br /><div align="center" style="text-align: center;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span></span></div><br /><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">This paper will look at <span style="mso-bidi-font-weight: bold;">Science Construction PLC and its ability to create an improvement plan to avoid total collapse/ bankruptcy. <span style="mso-spacerun: yes;"> </span>This paper will layout the case study, what the major problem was regarding financial metrics, what alternatives or solutions could have been used and why it is important to business. </span></span><br /> <br /><br /> <br /><div align="center" style="text-align: center;"><br /></div><br /><br /> <br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div align="center" style="text-align: center;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 200%;"><br /></div><br /><div style="line-height: 27.0pt; mso-line-height-rule: exactly;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Intro-</span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-bidi-font-weight: bold;"> </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Science Construction PLC (SCPLC) in as organization that supplies development, provisions financing and services to highways, roads, tunnels and viaducts within Istanbul, Ankatam, Ismir, Bursa, and Kocaeli Metro areas (Erer, 2013). </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span>During the 2008 financial crisis the organization took a downturn since many organizations stopped making progress with rebuilding their infrastructures and focused on preservation during the crisis. This financial crisis was the biggest ever seen since the great depression and many organizations that were “too big to fail” needed to be bailed out by the governments (Amadeo, 2019). This then caused the governments to not spend money elsewhere including the highways & roads that SCPLC worked with. Even when the contractors would get business the organizations were too slow with repayment and thus costed SCPLC higher fees from their borrowers, thus creating a vicious circle. </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span>For this reason, the SCPLC started the bankruptcy process which also included an Improvement Project to get themselves out of bankruptcy. <span style="mso-spacerun: yes;"> </span>The improvement projects are designed to allow organizations to use their own resources and abilities to re-structure themselves to then get out of bankruptcy (“Introduction to Business”, 2012). </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span>This paper will look at SCPLC and explain what were the main problems, the cause for the bankruptcy and problems, talk about alternatives that could be used, recommend a plan of action and lastly talk about why it is important to the study of business and concluded. <span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Problem- <span style="mso-tab-count: 1;"> </span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">The main problem for SCPLC is loss of business and not receiving payments on time from the business that they have gotten. From a financial standpoint this loss of business would drive down sales and impact the overall net income ratio that shows the amount of profits made from sales (Heisinger & Hoyle, 2012). This has a major impact as the net income allows a company to stay afloat and help to plan for the future, hire more people and expand. </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-tab-count: 1;"> </span>Another major problem was SCPLC not being able to collect payments from their contracts on a timely basis. From a financial standpoint the organization has outstanding bills, and this could mess up the Overdue ratio. The overdue ratio can help an organization see what bills have not still been payed and thus could cost them money in the long run because they still need to pay back loans that may have been used to secure the contract (Heisinger & Hoyle, 2012). </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;"><span style="mso-spacerun: yes;"> </span></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Root Cause(s) of the Problem- <span style="mso-tab-count: 1;"> </span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Overall root of the problem was from the external environment, which was the financial crisis of 2008. This led many organizations to crumble, less money being put into the economy and organizations pulling back on expansions. This included many of the public organizations that SCPLC was working with and at the same time the public organizations were bailing out other organizations that were needed to avoid collapse. This is one thing that was also <i>unknown</i> we do not know how the governments that were mainly working on infostructure building (roads, highways ect.) were budgeting their money and if they were losing money to fund other areas. </span></div><br /><div style="line-height: 200%;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Alternate Solutions- </span></b></div><br /><div style="line-height: 200%; margin-left: .25in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">The case study mentioned that the organization create an improvement plan that could help the organization get themselves out of bankruptcy. Some of the amin points were- </span></div><br /><div style="line-height: 200%; margin-left: 40.5pt; mso-list: l0 level2 lfo1; text-indent: -27.0pt;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">a.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Increasing capital by getting additional money in set increments to help boost the cash flow as well as collecting receivables from the shareholders that currently collect money thus increasing the profits. These were setup with dates associated to make sure that they meet the requirements needed to pay off debt. </span></div><br /><div style="line-height: 200%; margin-left: 40.5pt; mso-list: l0 level2 lfo1; text-indent: -27.0pt;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">b.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Cutting costs by using their own transportation that would cut down costs by 21% per unit price on all raw materials (14 overall cost reduced to 11 thus 3/14 to get 21%) (Erer,2013). Cutting down the labor force, where jobs that were not needed were cut and employees that underproduced were put on temp leave. </span></div><br /><div style="line-height: 200%; margin-left: 40.5pt; mso-list: l0 level2 lfo1; text-indent: -27.0pt;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">c.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Budget control on all levels to help control where money is being spent. Close monitoring on the budget with quarterly review to make sure budgets are on course. If they are not on course, then re-structured to be on course for the future. </span></div><br /><div style="line-height: 200%; margin-left: .25in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">I would suggest implementation that involves getting everyone in the organization involved and talking about the bankruptcy to help boost morale and be financially transparent. This approach would start with upper management and work its way through each level to get a couple buy in strategy. Once at lower levels I would create a very open communication channel that would promote expert training in positions to promote efficiency, creating clear expectations, tracking and monitoring of daily activities to help create trends that would notice problems quickly and thus mitigate the problems (“Avoid Motivational bankruptcy”, n.d). </span></div><br /><div style="line-height: 200%;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">SCPLC Action & Implementation- </span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">SCPLC will want to have carful considerations during the rollout and make sure that they are monitoring their actions within the organization and outside the organization because if they start to tilt in a negative direction it could cause them to crumble. Using the actions above can help SCPLC stay completely transparent within the organization which in turn should help to boost morale and thus create more efficiency. </span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">They can also incorporate six sigma and/or SPC (Static process control analysis) to better get an idea on which changes would have the better outcome. These analyze the current setup and help to derive an optimal solution that can help reduce waste, promote optimization and efficiency (Knowles “Quality Management”, 2011).<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;"></b></span></div><br /><div style="line-height: 200%;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Conclusion & Importance- </span></b></div><br /><div style="line-height: 200%;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;"><span style="mso-tab-count: 1;"> </span></span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Although SCPLC was impacted by an external environment they can use an internal approach and plan to help get them back on their feet and build themselves stronger than before. By completing the improvement project, they can get themselves out of the financial whole and once the economy comes back from the recession they will have a strong environment in place within the organization that will help them differentiate from the pack. While we have many <i>unknown</i></span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;"> facts that could help us analyze deeper, there is enough to create a broad plan of attack. </span></div><br /><div style="line-height: 200%;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;"><span style="mso-tab-count: 1;"> </span>This case study is important as it shows that organizations need to be ready for the external environment. Then once something critical happens it shows that a strong response is needed and with the correct plans in place an organization can stay afloat even in a financial crisis. </span></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; text-align: center;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Resources</span></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Amadeo, K. (2019). What Caused the 2008 Financial Crisis and Could It Happen Again? Retrieved March 4, 2020, from <span><a href="https://www.thebalance.com/2008-financial-crisis-3305679">https://www.thebalance.com/2008-financial-crisis-3305679</a></span></span></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Avoid Motivational Bankruptcy: Six Tips for Motivating Your Staff. (n.d.). Retrieved from https://www.amanet.org/articles/avoid-motivational-bankruptcy-six-tips-for-motivating-your-staff/</span></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Erer, M. (2013). The Improvement Project of Science Construction PLC. Journal of Business Case Studies, 9(1), 227-234.</span></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Heisinger, K., & Hoyle, J. B.(2012). Accounting for Managers. Saylor Foundation. Creative Commons by-nc-sa 3.0.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Introduction to Business (2012). Lardbucket.org. </span></div><br /><div style="line-height: 200%; margin-left: 2.0in; text-indent: -1.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Chapter 12 - The Role of Accounting in Business, Chapter 12, section 4 pp. 653-666.</span></div><br /><div style="margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Knowles, G. (2011). Quality management. Bookboon.com. Download the pdf.</span></div><br /><div style="margin-left: .5in; text-indent: -.5in;"><br /></div><br /><div style="margin-left: 1.0in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Chapter 9 and Chapter 15.</span></div><br /><div style="margin-left: 1.0in; text-indent: -.5in;"><br /></div><br /><div style="line-height: 200%; margin-left: .5in; text-indent: -.5in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold;">Wool, M. (2017, September 26). How to Disclose Company Financials . . . Like a Boss. Retrieved from https://www.entrepreneur.com/article/300861</span></div><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-1543449525895756002020-03-28T00:52:00.000+05:302020-03-30T01:59:27.169+05:30Science Construction PLC<div dir="ltr" style="text-align: left;" trbidi="on"><br />Introduction:<br />Science Construction PLC is a Turkish company offering end-to-end road and construction<br />services for the public sector in Turkey. The company found itself in financial trouble due to<br />the changing environment during the financial crisis of 2008. Turkish law allows such<br />companies to restructure themselves to save the business and if successful the bankruptcy is<br />being postponed for 12 months.<br />The situation when the liabilities of the company exceed its assets is called insolvency. The<br />circumstances when a business cannot receive enough resources to meet its obligations or to<br />clear debts as they become overdue. Correctly named technical insolvency may happen still<br />while the value of a company's entire assets surpasses total liabilities.<br />Analysis:<br />Science Construction PLC is a large company that operates solely in the public construction<br />market, which is funded by the local authorities and state money. This sector usually provides<br />a constant flow of work and income for construction companies. However, when the financial<br />crisis occurs, this sector is the first one to stop its investments and therefore it impacts the<br />company’s cash-flows and causes accumulated debts.<br />Identify the problem: What financial metrics support the problem you identified?<br />The company does not control its costs and is reliant on a single source of revenue (public<br />sector) nor it can affect its raw materials suppliers from changing/raising the prices as they<br />please.<br />BUS 5910 - AY2020-T3<br />Diagnose the cause(s): Describe the root cause. How does this cause a link to the financial<br />metrics you have selected<br />The root cause is that the company became a “second-day” company, which according to Jeff<br />Bezos is when organizations become doomed. He said “The outside world can push you into<br />Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re<br />probably fighting the future. Embrace them and you have a tailwind” Quora. (2017, April 27)<br />The causes:<br />1. The company purchases its raw materials and inventory with the current market value.<br />2. The company does not control its costs regarding the projects, there is no monitoring<br />embedded in the project management.<br />3. The company does not reduce waste, it is not lean, therefore it is using too many<br />resources to generate profit.<br />4. Accumulated debt puts pressure and affects the decision-making process, making<br />things more damaging. The current ratio of 0.95, 0.90 and 0.82 for the years 2008,<br />2009 and 2010 explains that it is a big issue for the company.<br />5. Operating profit and net income have deteriorated over the last three periods as a<br />result of increased costs that were not connected to an increase in revenues.<br />6. The company is not protected from outside factors as it has no diversification of<br />customers, it serves only the public sector and only the Turkish market (assumption).<br />BUS 5910 - AY2020-T3<br />7. Science Construction PLC had issues with collecting receivables and therefore used<br />factoring which was not included in their business calculations. This leads to<br />removing the profit from the economic equation.<br />8. The timing of income did not end up with business decisions so the company had no<br />cash for investing and purchasing materials its cash flow was affected.<br />The selected ratios:<br />Gross Profit Margin : GPM is a test of the efficiency of how a company is utilizing its raw<br />materials and labor during the production process. The value of GPM varies by industry. The<br />higher the GPM, the more effective a business is.<br />GPM = (revenue – The cost of goods sold) / Total revenue<br />Direct Material Cost per unit:<br />Direct materials cost is the central ingredient of a product's total cost among direct labor cost<br />and manufacturing expenses. Direct materials cost may encounter more variations from<br />emerging procuring conditions. Given the risk of production costs influenced by materials<br />purchases and production processes, companies often assign proposed or anticipated costs to<br />a product by applying planning budgets, managing and controlling costs, and evaluating cost<br />management performance. (Standard cost system)<br />DMCPU = Total Material Cost / Sales Volume<br />BUS 5910 - AY2020-T3<br />Direct Labour Cost per unit:<br />Calculating a standard direct labor cost per unit rate permits to set a threshold limit of direct<br />labor variance expenses. It can be used to identify whether actual costs are higher or lower<br />than regular direct labor per-unit costs. Identifying the direct labor cost per unit makes<br />pricing and margin control more manageable.<br />DLCPU = Total Labour Cost / Sales Volume<br />Fixed Overhead Cost per unit:<br />"Fixed overhead is a set of costs that do not vary as a result of changes in activity. These<br />costs are needed to operate a business. One should always be aware of the total amount of<br />fixed overhead costs that a business incurs, so that management can plan to generate a<br />sufficient amount of contribution margin from the sale of products and services to at least<br />offset the amount of fixed overhead. Otherwise, it is impossible to generate a profit. "Bragg,<br />S. (2019, September 23).<br />FOCPU = Total Fixed Overhead Cost / Sales Volume<br />Operating Profit Margin:<br />Operating Profit Margin is a profitability ratio applied to determine the percentage of profit a<br />business generates from its operations, before taxes and interest costs.<br />OPM = (Operating Profit / Sales Revenue) * 100<br />BUS 5910 - AY2020-T3<br />Selling and Distribution Cost per unit:<br />Selling and Distribution Costs are related to every operation that has to happen and the<br />service required to make a sale happen. It can be freight, commissions, repair, and<br />maintenance, delivery, insurance and many more. Those costs are crucial and every business<br />should understand them.<br />SDCPU = Selling and Distribution Cost / Sales Volume<br />Administration Cost per unit:<br />Administrative costs are not directly joined to a particular function such as production,<br />construction, or sales. These costs are associated with the organization as a whole.<br />ACPU = Administrative Cost / Sales Volume<br />Gearing:<br />“This ratio is widely used by accountants. Financial accountants look at historic gearing<br />values; corporate finance accountants look at the structure of companies. Management<br />accountants look at the same fundamental formula but typically look at the business or even<br />activities within a business rather than necessarily the company as a whole.”<br />10 Ratios of Management and Cost Accounting. (n.d.)<br />G = ( Debt / Debt + Equity) * 100<br />BUS 5910 - AY2020-T3<br />Return on Net Assets:<br />“The RONA ratio shows how well a company and its management are deploying assets in<br />economically valuable ways, and a high ratio result indicates that management is squeezing<br />more earnings out of each dollar invested in assets. RONA is also used to assess how well a<br />company is performing compared to others in its industry.”Kenton, W. (2020, February 05).<br />RONA = (Operating Profit / Net Assets ) * 100<br />Return on Capital Employed:<br />“ROCE is a useful metric for comparing profitability across companies based on the amount<br />of capital they use.” Kenton, W. (2020, February 14).<br />ROCE = (Operating Profit / Total Assets - Accounts Payable and other creditors ) * 100<br />Prescribe possible alternatives<br />1. Rethink the purchasing system for raw materials and inventory management, diversify<br />the sourcing of materials and sign contracts that guarantee the prices for a fixed<br />amount of time. The timing of purchases and operational needs for materials should<br />be done by cooperation of both departments to avoid issues with cash flows.<br />2. Costing should be taken into account on all levels of the organization, this should be<br />done as an element of financial security. Wht’s more factoring, should be used as the<br />last option available, the company should transfer some risk of receivables to<br />BUS 5910 - AY2020-T3<br />insiurance and count it as an element of the price for each product/service. This will<br />allow the company to grow and be sure that it will be paid, and the contracts will not<br />end up unprofitable due to factoring costs.<br />3. HR management should be utilized to remove the unnecesary human resources and/or<br />assign them to the places where whty are needed and provide value for the<br />organization. Moreover, using procurement and hiring contractors might be the way<br />to remove HR overhead that cannot be controled.<br />4. Budgeting should be implemented, but in a smart way, it should have some slack and<br />be designed using data from the monitoring of business operations. Without this the<br />proposed caping of budgets might make projects fail, due to lack of resources and<br />lower quality of work.<br />5. The company should use all of the above elements and implements as Standard Cost<br />System (SCS). “With standard costing, the general ledger accounts for inventories<br />and the cost of goods sold contain the standard costs of the inputs that should have<br />been used to make the actual good output. Differences between the actual costs and<br />the standard costs will appear as variances, which can be<br />investigated.”AccountingCoach. (n.d.)<br />6. The company should move to other customer segments, create a distribution network<br />and work both for the public and provate sector. This will allow Science Construction<br />PLC to diversify the risk. Additionally the possibilieis for large construction<br />companies in the private sector are always there becase there is always a demand for<br />such a wide variety of services as the presented company can provide.<br />Recommend a plan of action (decision/implementation): How do you measure success?<br />BUS 5910 - AY2020-T3<br />The process of strategic business redesign and planning is usually composed of several steps.<br />First, the strategic plan is utilized to sketch business objectives and used to gather the<br />opinions by which those objectives can be achieved, in our case this means making the<br />company profitable again within new market conditions. Second, the operational plan that<br />comes into play which is a comprehensive approach and guideline for each section or<br />department on how to manage resources to accomplish the business goals. It is necessary to<br />create strong connections linking the strategic plan to the operational plan to promote<br />operational efficiency and thus allow things to happen across the entire organization.III, G.<br />N. (2016, October 26)<br />Further with the strategic business redesign in financial and operational terms, the company<br />should check the relationships across the entire business, which means Customer<br />Relationships, Customer Segnments, Revenue Streams, Channels, Key Activities, Key<br />Resources, Key Partnerships, Cost Structure. Business model Canvas can help with<br />identyfing what is wrong in the company not in just financial and operational ways, but in all<br />the others. The below graphic should provide more information about how it works:<br />BUS 5910 - AY2020-T3<br />Asei-Dantoni, S., Denise, Daines, S., Remi, Iqbal, J., Lauren, . . . Cheng, S. M. (2016,<br />December 01).<br />The proper identification, of issues and redeisiging the business is an ongloing process<br />therefore it is impossible to recommend a plan that will provide the solution to all pains, the<br />above proposal is just a tip of the iceberg, but it provides a starting point to find what is<br />hidden beneath and what cannot be seen otherwise.<br />Why this case is important and relevant to a study of business.<br />Busineses sometime fail, even if they are on the market for a very long time. This is a sad<br />truth, but every business should get a chance to restructure itself in order to become profitable<br />again. If this is done properly we can still have it running, it can still provide value to its<br />customers and deliver on its promises. This is all what business is about and if it is gone it<br />BUS 5910 - AY2020-T3<br />cannot do that. Proper restructurization is hard, it requires a long time changes, sometimes it<br />can be painful but it is crucial for every business to understand that it is possible to become<br />profitable again. However every business should do everything it can to avoid this type of<br />situation. This is precisely why understanding that is extremely essential for any business.<br />Conclusion:<br />Insolvent businesses require a complete overhaul of the company's key business processes.<br />That process aims to get the company to become the most efficient version of itself in a short<br />period by slashing slack and waste, decreasing costs, and enhancing management.<br />The success of that shift is usually measured using profitability metrics. Since it is a<br />comprehensive overhauling, a company may undergo layoffs, workflow disruption, and it<br />possibly will be costly and time-consuming before seeing the results. In the case of Science<br />Construction PLC, it is even harder because of legal time limitations, however, with the<br />aforementioned suggestions it can be done.<br />BUS 5910 - AY2020-T3<br />References<br />10 Ratios of Management and Cost Accounting. (n.d.). Retrieved from<br />https://www.dummies.com/business/operations-management/10-ratios-of-management<br />-and-cost-accounting/<br />Asei-Dantoni, S., Denise, Daines, S., Remi, Iqbal, J., Lauren, . . . Cheng, S. M. (2016,<br />December 01). Business Model Canvas. Retrieved from<br />https://diytoolkit.org/tools/business-model-canvas/<br />Bragg, S. (2019, September 23). Fixed overhead. Retrieved from<br />https://www.accountingtools.com/articles/what-is-fixed-overhead.html<br />III, G. N. (2016, October 26). Links Between Strategic & Operational Plans. Retrieved from<br />https://smallbusiness.chron.com/links-between-strategic-operational-plans-17407.html<br />Kenton, W. (2020, February 14). Understanding Return on Capital Employed. Retrieved from<br />https://www.investopedia.com/terms/r/roce.asp<br />Kenton, W. (2020, February 05). Understanding Return on Net Assets. Retrieved from<br />https://www.investopedia.com/terms/r/rona.asp<br />Quora. (2017, April 27). What Is Jeff Bezos's "Day 1" Philosophy? Retrieved from<br />https://www.forbes.com/sites/quora/2017/04/21/what-is-jeff-bezos-day-1-philosophy/#<br />277eaa091052<br />What is standard costing?: AccountingCoach. (n.d.). Retrieved from<br />https://www.accountingcoach.com/blog/what-is-standard-costing</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-48747242529636971892020-03-28T00:44:00.001+05:302020-03-30T01:59:27.332+05:30CASE STUDY: Blaze Manufacturing<div dir="ltr" style="text-align: left;" trbidi="on"><br />CASE STUDY: Blaze Manufacturing<br />Introduction<br />Blaze Manufacturing is a textile manufacturing company based in the upstate of New York,<br />United States. The company was founded in the early 2000s. The company specialized in the<br />manufacturing of bedspreads and curtains for institutional customers, which includes Hotels and<br />Hospital, and other hospitality outfits. This company operates as a job, and it does not mass<br />produce inventory items for sale through normal retail channels. Insted the company placed its<br />priority on producing goods to fill specific customer orders received. The company products are<br />relatively standard layout and of high quality; bedspreads in all kinds of bed sizes, and curtains<br />to fit various sizes of windows. According to the giving article each customer chooses the fabric,<br />the colour and the styles that go into making the items it orders. Personalized and customized is<br />also available for customers.<br />Identify the problem: Define the problem in financial terms<br />Blaze Manufacturing is facing problems in its manufacturing business. Local manufacturing<br />companies face additional costs compared to their foreign counterparts due to government<br />regulation, policies and environmental concerns. The high costs have increased Blaze<br />Manufacturing’s overall costs and have made it difficult to operate. Many textile manufacturers<br />in the United States of America have gone out of business due to the increased costs of<br />operations and manufacturing cost ( Causseaux & Caster, 2016). Although Blaze Manufacturing<br />has managed to survive and was able to scale through all the obstacles, it has faced struggles in<br />the past related to profitability. It has lost most of its customers to its foreign competitors and<br />there are concerns from its managers regarding its ability to survive in the nearest future.<br />Countries like China and India when the cost of labour are very low and government regulations<br />are not very rigids, it is very easier for competitors from those regions to produce with low cost,<br />compared to countries like the United States, Canada , and the United Kingdom.<br />Diagnose the Cause(s): What Operational Situation (s) created the problem?<br />One of the main challenges Blaze Manufacturing is facing is its management system. Joe had<br />been the Blaze Manufacturing’s president since the inception of the company and he has<br />BUS 5910 Management Capstone-Term 3, Unit 4, 2019-2020<br />served for at least twenty years of the company's existence. This may have been a hindrance to<br />the company’s operational and its ability to create more model ways of doing things in order to<br />beat the competitive market, as there was likely to be little chance to improve the company’s<br />operations and strategies by appointing another president or managing director. The other<br />operational concern that the Blaze Manufacturing faced was that Bill the salesman who joined<br />the company after Joe was underpaid, This caused the employee not to be motivated well<br />enough. Blaze Manufacturing paid him salary and an annual bonus which was based on the<br />company’s revenue ( Causseaux & Caster, 2016). The company is a small company, which had<br />little revenue at the end of each fiscal year. This meant that the salary Bill got at the end of the<br />year was not enough to motivate him for better performance.<br />Blaze Manufacturing failed to utilize financial rewards as a tool of motivation, to ensure its<br />employees are motivated to provide the company with the right results and better performance.<br />Monetary rewards are as effective as non-monetary rewards ( Kreisman, 2002).<br />This both provides the company and employees with win-win conditions if they are dispensed<br />effectively. In this case, the company should have tied the bonuses and other payments to the<br />performances of its employees. Such strategies would have helped the manager to become<br />motivated in executing their responsibilities. There is also a problem in the company’s reporting<br />system. First, Wendy the new manager is different from other managers and employees. He<br />earns a salary plus an amount of overtime. The problem with his allocation is that he also spends<br />time repairing and operating the plant. According to Wendy, Bob’s labour should be considered<br />indirect ( Causseaux & Caster, 2016).<br />Possible Alternatives<br />a. The margin analysis here represents the percentage of the total sales revenue that Blaze<br />Manufacturing keeps as gross profit after deducting the costs directly related to producing<br />the goods sold, and services provided. Blaze Manufacturing needs to use this analysis as<br />a decision-making tool to help the company maximize its potential profit. But fortunately<br />this transaction is not favorable and the results are consistent with Wendy’s original<br />conclusion. The only alternative here for both the company and customers is for the<br />BUS 5910 Management Capstone-Term 3, Unit 4, 2019-2020<br />company to do price review with their customers. Blaze Manufacturing should ensure<br />that their customers have a good sense of how the company prices compare to the<br />services the company is offering and implication for the company losing money on this<br />transaction.<br />b. Variable Cost per Unit is higher than Selling price, which means that the contribution<br />margin per unit will result for the company to source for funds to cover the lost. The<br />profit margin ratio here compares profit to sales and portraits how the company is<br />handling its financial overall. Based on this, Blaze Manufacturing should not accept the<br />order at the current price, the company have two option here<br />1. The company needs to reprice the order by reviewing the price with the customer.<br />2. The company should reject the order, although this should be the last alternative,<br />as there is always a room for renegotiation.<br />c. The negative contribution Margin Ratio indicates that Blaze Manufacturing Variable<br />costs and expenses exceed the company sales, but the company has the alternative of<br />eliminate the negative contribution margin by:<br />1. Raise selling price<br />2. Reduce variable costs<br />3. Or do combinations of both, raise selling price and reduce variable costs.<br />If the customer will not accept the price increase in order for Blaze Manufacturing to cover its<br />variable costs, the company is probably better off not having the sales.<br />Recommendations<br />a. It is very important that the company takes into account that ecommerce and the internet has<br />made the world a global community, by which customers can order products and get it in a very<br />short period of time from any part of the world (Donald, 2010). Countries like China and India<br />have a very low labor cost, this means production costs are very cheap in those countries, and<br />customers can get cheaper prices for the same product from those countries, although the quality<br />BUS 5910 Management Capstone-Term 3, Unit 4, 2019-2020<br />might not be the same. So manufacturing and non-manufacturing indirect costs required to<br />manufacture the company Fabric, Curtain and bedspreads. I recommended that Blaze<br />Manufacturing review its fixed cost which includes the rent/mortgage payment for its corporate<br />office and factories, the property taxes and utilities expenses. Because this has a huge effect on<br />the cost of production. Blaze Manufacturing has to accept the reality that customers have<br />choices, customers can decide to take their business elsewhere, if the customers think he/she can<br />get a cheaper price for the same product or products.<br />b. Variable Operating Costs: These are the actual operations cost of the factories or plant and<br />are measured based on the number of operating hours and energy output of each unit of<br />production. Example Electricity, Natural Gas, other utilities, drag-reducing agent, corrosion<br />inhibitor, and cost incurred in connection with or related to the operation of the facility (Carroll,<br />1953). I recommended that Blaze Manufacturing review all of its variable operating costs,<br />because this has a huge deficit effect on the contribution margin.<br />c. I recommended that the company shouldn’t take Joe and Bill's suggestion, that suggested that<br />manufacturing overhead should be spread out over more units. This will not make the orders<br />profitable. If the company increases its sales in the same proportion as Joe and Bill suggested,<br />the company will experience larger losses. The reason is that since the order has a negative<br />contribution margin, selling more units will only increase the losses for Blaze Manufacturing.<br />The best thing to do is to renegotiate prices with the customers, if possible!<br />Conclusion<br />It Is obvious that Joe does not care about the ethical aspect of it proposal, rather, his concern is<br />all about the sales bonus is intended to gain if he can pull the sales through, rather than the<br />long-term viability of Blaze Manufacturing. Every employee holds the obligations of ensuring<br />that their company survives and runs a smooth operation that will benefit both the company and<br />its employees. The fact remains, that, there is no way a company can survive with a negative<br />contribution margin; every company needs to make money to keep afloat, and to carry out its<br />general operations (Ken, 2018). This can only happen when a company makes profit from its<br />product(s) and services.<br />BUS 5910 Management Capstone-Term 3, Unit 4, 2019-2020<br />Reference:<br />Causseaux Wanda & Caster Bruce. (2016). The Impact of Inventory Valuation Methods on<br />Corporate Financial Reports .<br />Journal of business case studies . - Littleton, Colo., ISSN 1555-3353, ZDB-ID 2442106-6. - Vol.<br />12.2016, 1, p. 13-18<br />Kreisman, B.J. (2002). Insights into Employee Motivation, Commitment and Retention.<br />www.btedemo.com/retrieved/02/18/2020 .<br />Carroll Phil. (1953). How to control Production cost, 1st Edition. New York. McGraw Hill<br />Donald J. Wheeler. (2010). Reducing Production Costs. Knoxville. SPC Press, Inc.<br />Ken Wentworth. (2018). http://wentworthfinancialpartners.com/retrieved/02/24/2020.<br />BUS 5910 Management Capstone-Term 3, Unit 4, 2019-2020</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-69625148610603786902020-03-28T00:44:00.000+05:302020-03-30T01:59:27.257+05:30Blaze Manufacturing decision making <div dir="ltr" style="text-align: left;" trbidi="on"> <br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Introduction</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">This paper is about the company Blaze Manufacturing which is a textile manufacturing company in New York. The company manufactures per order and does not mass produce inventory items. Joe is the president of the company, since the foundation 20 years ago. Bill is the lead salesman of the company. Wendy is a temporary controller, till the place is filled again. Bob is the plant manager of the company. Omega Consulting Partners provides consulting and management advisory services to companies, which also include Blaze manufacturing. Wendy is the financial and management consultant of Omega and temporarily functions and controller at the Blaze manufacturing company. The completion is high in the U.S., especially with foreign producers, who are excluded from many of the environmental and safety regulations which</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">impose additional costs on domestic companies<w:sdt citation="t" id="286706317"><span style="mso-no-proof: yes;"><span style="mso-spacerun: yes;"> </span>(Causseaux & Caster, 2016)</span></w:sdt>.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Bill recently negotiated a large order form which he thinks the company will make a huge profit. Wendy as a controller performed a profitability analysis and found that the company will make no profit with the order. This paper is about discussing the analysis of Wendy and recommend the best decision for the company<w:sdt citation="t" id="1931310689"><span style="mso-no-proof: yes;"><span style="mso-spacerun: yes;"> </span>(Causseaux & Caster, 2016)</span></w:sdt>.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Problem definition in financial terms</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">There is a discussion between the controller and the lead salesman about accepting a large order. The controller thinks this order will not be profitable for the company, while the lead salesman is sure that the order will be profitable and bring a huge amount of revenue for the company<w:sdt citation="t" id="-1639029107"><span style="mso-no-proof: yes;"><span style="mso-spacerun: yes;"> </span>(Causseaux & Caster, 2016)</span></w:sdt>.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Operational situation(s) that created the problem</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Wendy made the decision based on examining the whole manufacturing process. Without knowing the whole manufacturing process, it is not possible to make a statement about the costs. So Wendy walked through the whole manufacturing process to make an accurate financial analysis. After calculating the gross margin profit and the contribution margin profit, both analysis showed that the company would make no profit by accepting this order<w:sdt citation="t" id="368726796"><span style="mso-no-proof: yes;"><span style="mso-spacerun: yes;"> </span>(Causseaux & Caster, 2016)</span></w:sdt>.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Possible alternatives</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">The gross profit has been determined. The gross profit is the net sales minus the cost of the goods sold <w:sdt citation="t" id="2146243712"><span style="mso-no-proof: yes;">(Bond & Auerbach, n.d.)</span></w:sdt>. The contribution margin has also been determined. The contribution margin is the sales revenue minus the variable cost<w:sdt citation="t" id="-1684281009"><span style="mso-no-proof: yes;"><span style="mso-spacerun: yes;"> </span>(Contribution Margin Definition, n.d.)</span></w:sdt>. Both of them has been determined per unit and showed no profit. In the case can be seen that maximum 80 items can be made a day. The same analysis can be done for 80 items. The variable cost will increase. But the fixed costs like salary is determined per working hours and not per unit. So the salary will be a fixed value per day. If the gross profit margin will be determined per 80 items, then it can be determined if the order can be accepted or not. The data for decision is now limited, because the analysis has only been done per unit and not per day or per whole order.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Plan of action</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">The plan for now is to do further analysis. Each day 80 units can be made. How many units will be made for this order? The fixed costs will be fixed every day. The variable cost will be varying per unit needed to be produced. The gross profit margin and contribution margin needs to be done per day and also for the total units which are needed for this order. The fixed cost like salary will be the same every day, so the profit margin may change after doing further analysis. If the company will have a gross margin and contribution margin profit, then the order can still be taken.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Importance and relevance of the study</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">This case study is important for the decision making process. Only looking at the costs per unit limits the data for deciding whether to take the order or not, because of the difference in fixed and variable costs. It is good to have such a case to empower the critical thinking of the student on how to decide based on broad financial analysis.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">Limitations</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%;">The gross profit margin has been done for the case study per unit. What also can be done is the breakeven analysis. This will show how much units at least needs to be made to no profit at all. And after this can be decided if the order will be cancelled or the price should be increased to make the ordered amount. The amounts of units to be made is missing. The salaries per person per hour and how many units are made in one hour. This information could give a more detailed result about what to decide about this order.</span></div><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><br clear="all" style="mso-special-character: line-break; page-break-before: always;" /></span> <br /><br /> <br /><w:sdt docparttype="Bibliographies" docpartunique="t" id="-567187715" sdtdocpart="t"> <br /><h1>References<span style="color: windowtext; font-size: 11.0pt; line-height: 107%; mso-ascii-font-family: Calibri; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-font-family: Calibri; mso-hansi-theme-font: minor-latin;"><w:sdtpr></w:sdtpr></span></h1><br /><w:sdt bibliography="t" id="-573587230"> <br /><div style="margin-left: .5in; text-indent: -.5in;"><span style="mso-no-proof: yes;">Bond, E., & Auerbach, A. (n.d.). <i>How to Analyze Profitability</i>. Retrieved from Edward Lowe Foundation: https://edwardlowe.org/how-to-analyze-profitability-2/</span><span style="font-size: 12.0pt; line-height: 107%; mso-no-proof: yes;"></span><w:sdtpr></w:sdtpr></div><br /><div style="margin-left: .5in; text-indent: -.5in;"><span style="mso-no-proof: yes;">Causseaux, W. K., & Caster, A. B. (2016). Blaze Manufacturing: An Ethical Analysis. <i>Journal of Business Case Studies, 12</i>(1).</span></div><br /><div style="margin-left: .5in; text-indent: -.5in;"><i><span style="mso-no-proof: yes;">Contribution Margin Definition</span></i><span style="mso-no-proof: yes;">. (n.d.). Retrieved from Investopedia: https://www.investopedia.com/terms/c/contributionmargin.asp</span></div><br /><br /> </w:sdt></w:sdt> <br /><br /> <b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-76644129752814493132020-03-28T00:43:00.000+05:302020-03-30T01:59:27.411+05:30Case Study: Blaze Manufacturing<div dir="ltr" style="text-align: left;" trbidi="on"> <br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b style="mso-bidi-font-weight: normal;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Introduction</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>This case study is about Blaze manufacturing, a textile company operating in upstate New York.<span style="mso-spacerun: yes;"> </span>They specialized in making textile products such as bedspreads and curtains for institutional customers, primarily hotels and hospitals. In the past years, textile manufacturing companies in the U.S are faced with tough competitive pressure from foreign companies in terms of lower wages, environmental and safety regulations laws that were heavily imposed on the U.S companies by the Government (Causseaux, W. & Caster, B. 2016). These imposed regulations had significant production costs on domestic companies such as Blaze Manufacturing. In the recent past years, Blaze had managed to struggle through these tough seasons without making profits. Now due to loss of its long-standing customers to foreign competitors, Blaze managements are very concerned that they may not show a profit in the current year either (Causseaux, W. & Caster, B. 2016). Based on this information, my goal for this assignment is to explain some of the financial problems, recommendation and possible solutions that Blaze Manufacturing can take in order to be out of their financial problems.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Here are the key members of this company: </span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Joe president of Blaze since it was founded 20 years ago; Bill the lead salesman, Mike company controller retired, and Wendy is filling in as temporary staff. From the case analysis on there seem to be some ethical issues here because Wendy is an employee of Omega Consulting, while George assigned Wendy to filling the position of controller at Blaze. Plus, George created Omega Consulting for the purpose to invest in troubled companies then restore them to profitability, and after sell their investments at a substantial profit. George and his family currently own a significant amount of stocks in Blaze Manufacturing this is conflict of interest since George also owned Omega Consulting and also huge amount of stock from Blaze (Causseaux, W. & Caster, B. 2016).</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b style="mso-bidi-font-weight: normal;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Definition:</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>According to business dictionary conflict of interest can be defined as a situation that has the potential to undermine the impartiality of a person because of the possibility of a clash between the person's self-interest and professional interest or public interest. A situation in which one party's responsibility to a second party has limits his/her ability to discharge its responsibility to a third-party (Business dictionary.2018). As little as it might sound, conflict of interest is very important issue that many companies don’t take lightly. With this case study, I will be looking at the financial in term of operational situation that causes the problem, possible alternatives, recommend a plan of action to implement and how<span style="mso-bidi-font-weight: bold;"> important this case is to study of business.</span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Identify the problem: Define the problem in financial terms:</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Government Regulations: Based on government regulation here in the U.S, Textile manufacturing companies are faced with tough business decision compared to foreign textile companies. Foreign producer companies have advantage edge over U.S companies in term of paying lower wages, less government rules on the environment and safety.<span style="mso-spacerun: yes;"> </span>Many domestic companies had close down because of this issue. Also, those that did not close down like Blaze manufacturing are not making profits. It has been financial struggled for Blaze in the past recent years and due to low price that foreign companies offer. Blaze have not run a profitable business in recent years. In spite of not making profit, they lost a number of their long-standing customers to foreign competitors, so now management is very concerned that Blaze may not show a profit in the current year either (</span><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Causseaux, W. & Caster, B. 2016).<span style="mso-bidi-font-weight: bold;"></span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Strong price competition: From the cost analysis in this case study it shows that foreign textile companies can afford to charge very low price for the same product because they don't have additional overhead operation cost such as safety measure training, and proper waste disposal <span style="mso-spacerun: yes;"> </span>that another problem that Blaze manufacturing have to deal with. </span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Diagnose the cause(s): What operational situation(s) created the problem?</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>From diagnose of this case, I found that Blaze Manufacturing had management problem. First problem was with Joe, as a president of Blaze Joe was not willing to change ways of operation ever since the company was founded 20 years ago. </span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Salary inequality is second operational situation affecting Blaze Manufacturing. Some of the staffs at Blaze were underpaid example was Bill the salesman who joined the company shortly after Joe was underpaid. Based on the analysis Blaze paid Bill salary and an annual bonus which was based on the company’s revenue and for years the company had no profitable revenue (Causseaux, W. & Caster, B. 2016). Which meant that Bill salary had not increase for years this in return can cause lack of motivation for Bill not to perform at his best. Another inequality as to do with Bob salary as plant manager, his earnings is different from other managers and employees. Bob earns regular salary plus an amount of overtime for doing other job within the company like spends time repairing and operating the plant (Causseaux, W. & Caster, B. 2016).</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Third, operational situation that created problem for Blaze Manufacturing have to do with their employee benefit package. Blaze can create a new program that will tie employee's bonuses and other payments to their performance this way employees can become more motivated.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Prescribe possible alternatives: The case study provides proposed solutions on page 16 of the case. Review and evaluate these solutions by providing pros and cons for each.</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">1. From the contribution margin analysis, presented in Table 2, shows if Blaze accept this order, it will create a negative contribution margin per unit.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>Cons</span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">: Meaning that at this current selling price the variable cost per unit exceeds the selling price per unit.<span style="mso-spacerun: yes;"> </span>These results are consistent with Wendy’s original conclusion. </span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span><b>Pros: </b>To me this order might not be profitable but accepting it will keep the company running and breakeven at the end. But if they reject the order based on the contribution margin analysis presented by Wendy, they will lose the customer and still wouldn't have profit so it a win or lose situation.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">2. Accepting this order at the current price will reduce Blaze’s overall profits.<span style="mso-spacerun: yes;"> </span>An unprofitable order like this one should either be re-priced (to be profitable) or rejected.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Pros: </span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">Accepting this order at this current price will reduce Blaze's overall profits indeed but this type of order price can be renegotiate to something that will generate little profit at least above overall profits limit.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Cons:</span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"> Unprofitable order like this could lead to losing the customer if order reject or not re-priced</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">3. No other financial information would be useful in further analyzing this case.<span style="mso-spacerun: yes;"> </span>In fact, no further analysis is needed: An order with a negative contribution margin reduces the company’s overall profitability and under normal circumstances should not be accepted. </span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Pros: </span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">I still believe other financial information could be useful in this case such as Blaze's raw material financial logs, past sales logs other foreign textile sales log to compare price for this type of order and properly calculate how bad this order will affect their contribution margin.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Cons: </span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">Blaze management can decided to take any action or they go with Wendy's recommendation.</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">4. Wendy has taken numerous actions that meet the IMA standard</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;">With this last option, I truly believe Wendy's suggestions are right for the fact that she think first responsibility to solve Blaze operational problem is to start with communication follow by cost analysis<span style="mso-spacerun: yes;"> </span>information to help aid management decision making process regarding the order. And finally, she present hypothesis to backup her analysis theory if taken. </span></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Recommend a plan of action (decision/implementation)</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>I really believe that Blaze Manufacturing should consider mass produce in their inventory items for sale through normal retail channels. They can all explore international opportunity where they can penetrate other culture. Wendy could report her discovered standard violations to the Financial Accounting Standards Board because<span style="mso-spacerun: yes;"> </span>it is her ethical duty to report such violations, and any dilemma that arises in the ramifications of the financial report of a company. Moreover, </span><span style="background: white; border: none windowtext 1.0pt; color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-border-alt: none windowtext 0in; mso-themecolor: text1; padding: 0in;">as controller she can never let the desire to earn a better living and acquire more possessions get in the way of ensuring that they follow ethical guidelines for financial reporting.</span><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"></span></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">In addition, each case study response should also state why this case is important and relevant to a study of business.</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>This case study is important and relevant to study of business because explained in detail what domestic business owners are facing on daily basic in term of foreign competition. This case also discussed how </span><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">cost analysis, gross margin versus contribution margin as tools good for analyzing product profitability. Finally, how to<span style="mso-bidi-font-weight: bold;"> perform a proper profitability analysis. </span></span></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Support your observations with research and logic. Discuss what limitations exist with the case study information provided. What other material would be important to your analysis<i>?</i></span></b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span>Limitation that I noticed with this case study is conflict of interest. Since Wendy work for Blaze and Omega Consulting, I feel she is giving all these suggestions to Blaze management just to benefit Omega Consulting. Because once Blaze Manufacturing reach good financial standard that of a substantial profit then it will be easy for George owner Omega Consulting to sell all Blaze stocks. This had happen in the past example with Enron<span style="mso-bidi-font-weight: bold;"> and Arthur Andersen case where Arthur Andersen was the same private auditing company that Enron hired and also paid auditors(</span>Brown, K. & Dugan, I. 2002)<span style="mso-bidi-font-weight: bold;">. In this way the auditing company will never issue unfavorable financial report on Enron if they want to get paid. That is what I believe Wendy is going to do with Blaze Manufacturing. </span></span></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Conclusion</span></b></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-weight: bold; mso-themecolor: text1;"><span style="mso-tab-count: 1;"> </span>In conclusion, </span><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">based on the past experienced and things happening daily around us, it really clear that great products are build by business owners who know how to tell their stories to target audience with similar interest. A good story telling always involves elements of some truth whether you are into manufacturing product or retail or just running a business, to me honest and trustworthy is the number one key in building strong customer relationships based on common shared values.<span style="mso-bidi-font-weight: bold;"></span></span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br /></div><br /><div align="center" style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">References</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Brown, K. & Dugan, I. (2002, June 7). Arthur Anderson's' Fall from Grace Is a Sad Tale of Greed and Miscues. <i>Wall Street Journal. </i>Retrieved February 24th, 2020 from http://archive.is/nwoK</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Business Dictionary.(2018). Conflict of Interest. Retrieved December 10, 2019 from http://www.businessdictionary.com/definition/conflict-of-interest.html</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Causseaux, W. & Caster, B. (2016). Blaze Manufacturing: An Ethical Analysis. Journal of Business Case Studies, 12(1), 13-18. Retrieved February 21, 2020 from https://my.uopeople.edu/pluginfile.php/592738/mod_book/chapter/210803/U4%20Blaze%20Manufacturing.pdf</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-bidi-font-style: italic; mso-themecolor: text1;">Hill, D. (2012, December). Misrepresentation of Financial Statements: An Accounting Fraud <span style="mso-tab-count: 1;"> </span>Case from Turkey</span><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">. Retrieved February 23, 2020 from https://www.researchgate.net/publication/255967967_Misrepresentation_of_Financial_Statements_An_Accounting_Fraud_Case_from_Turkey</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 200%; mso-themecolor: text1;">Rowan, K. (2014, Apr 15). Conflict of Interest Examples: Avoiding Lawsuits in the Workplace. Retrieved February 24, 2020 from https://blog.udemy.com/conflict-of-interest-examples/</span></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><br /><div style="line-height: 200%; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-23071505259699925742020-03-27T05:02:00.000+05:302020-03-30T01:59:27.502+05:30Now What Do I Do with Brad and Kerry<div dir="ltr" style="text-align: left;" trbidi="on"><br />Abstract<br />The case of this assignment has highlighted several problems which revolve around economic<br />recession and probability of employment loss. Retrenchment , ethical dilemmas, among many<br />others, are revealed in the given case study of the company, with Jason as the manager, and his<br />employees, Brad and Kerry, as the engineering officers. However, in terms of human resources,<br />the problem identified is insufficient human labour during periods of economic recession.<br />Introduction<br />NewBuild is a construction and architectural design company that was founded in 1909. Like<br />every other construction company that existed during the great world economic recession in<br />2008, this company experienced some economic dilemmas as the results of the 2008 global<br />economic recession. Before this period, this company has enjoyed conservative and steady<br />growth since its establishment. According to the given article, this company had no long-term<br />debt and held substantial cash reserves with which to withstand a long term economic decline.<br />The company mission statement was built around customer delight, high integrity, and<br />dedication to each of its employees development and growth. The economic dilemmas of 2008<br />have resulted in a situation when the company has to make a decision on which of its newly<br />hired engineers to keep and which among them to let go. According to the given article, Jason<br />has been a project manager in NewBuild for the last six years, since he joined the company as a<br />part-time associate. Through hard work, he has grown through the company to become a project<br />manager with over ten engineers to look after. Jason is responsible for managing both Brad and<br />Kerry, as the company is deciding their fate with the company. Jason had to make a decision of<br />which of the two employees, Brad and Kerry, to be assigned to the next project, as the project<br />can only accommodate one engineer. This responsibility is under the purview of Jason as the<br />team lead and the Head of the Engineering Department. Both of these individuals directly<br />report to Jason for the period they have been with the company. Sadly, there was a strong<br />possibility that if the economy continued with this decision, the one not chosen to be on the new<br />project team could be terminated due to insufficient jobs available to the engineers.<br />/<br />Identify the problem: Define the problem in Human Resource Terms.<br />The problem of less and insufficient human labour is caused by the main problem in the case<br />study which is economic recession. During this time, many employees are subjected to<br />retrenchment, which later accumulates a lot of work to the company, hence the need to hire more<br />experts, and hence the problem. Retrenchment is, therefore, a human-based cause of the issues in<br />this case. The roots of this problem are neither caused by the company nor the management of<br />the company. Rather, they are caused by the global economic recession that rocked construction<br />industries and many other industries across the globe. The financial downturn has impacted both<br />developed as well as developing economies and caused deeper depression due to the increase in<br />job losses that followed the 2008 global recession.<br />Diagnose the cause(s): what Human Resource situation(s) created the problem?<br />As the given article made us understand, the severe recession began in 2008 and was impacting<br />the commercial construction industry in general. NewBuild planned to spend a significant<br />portion of its reserves in order to avoid layoffs of its employees through 2010. This should have<br />been the case before the recession, because both Brad and Kerry are both capable with nine<br />months experience with the company. The human resource department owns the obligation of<br />ensuring that the company retains its best employees. The decision of who to keep between<br />these two employees required a technical evaluation of both of them, notwithstanding the fact<br />that the human resource did not create the problem of economic recession. But human resources<br />together with the management would have planned for the unforeseen.<br />Prescribe Possible Alternatives.<br />a. Productive employees relations: The given article stated the flaws of both Brad and<br />Kerry. This shows the way those employees would have acted to improve their<br />relationship with Jason. Maybe this would have given Jason more understanding about<br />their abilities and capabilities. So, therefore both employees must create a balanced<br />relationship with Jason in order for him to be able to have a personal understanding of<br />each of them.<br />/<br />b. As the article stated, both Brad and Kerry must learn how to work effectively with their<br />boss, Jason, in order for them to be able to assess his style of work.<br />c. Brad and Kerry must clarify goals and expectations with Jason. Although it is a bit too<br />late it is still doable. This will allow them to check regularly in order to be able to<br />determine if these change overtime.<br />d. It is very important for both Brad and Kerry to have determined Jason’s personal<br />objective. This will allow both of them to ensure that they did not work against them.<br />e. Open communication: Both Brad and Kerry must adopt open communications with<br />Jason. This includes asking follow-up questions about upcoming projects and the goals<br />for the month, quarterly, and annually. The article made us understand that Brad has the<br />problem of communicating his thoughts and observations. Brad must address this in order<br />for him to have a good review from Jason.<br />Apart from highlighting the solutions given in the case study, new solutions can also be noted,<br />for instance in subjecting both Brad and Kerry to an interview in order to select one of them.<br />The pros of this approach is that interviews minimize biases hence fairness will be administered.<br />The cons, however, is that too much work will be left behind for one engineer, be it Brad or<br />Kerry.<br />Recommend a plan of action<br />I will recommend that NewBuild employs more people and the pros is that work efficiency will<br />be met at the same time and will not be wasted. However, the cons is that this will incur more<br />costs for NewBuild, which is what company is trying to avoid. As the hired engineers will need<br />to be paid; hence these difficulties. Therefore, the plan of action is for NewBuild to take its<br />initiatives and hire a replacement of Brad who seems qualified based on its academic and work<br />experiences for this proposed work. Hence he is the one likely recommended to be given the<br />promotion.<br />The importance and Relevance to a Study of Business.<br />The company’s employees are its greatest assets and resources. Managing employees well and<br />providing them with opportunities to help the company achieve its idea and ace the company<br />business plan (Michael, 2016) is one of the areas this case study is relevant and important to the<br />/<br />study of business. Secondly, this case study shows how Jason and NewBuild can improve the<br />company’s bottom line with the knowledge of both engineers. Brad and Karry demonstrate how<br />their services will affect the company's success if the right decisions are not taken. Managers<br />like Jason with expertise in employees’ management strategy participate in business<br />decision-making that underlines the current staffing assessments and projections for the future of<br />the company. This needs to be based on the current situation of the company.<br />Based on the case of discussion, the Human Resources management aspects are very useful and<br />important. If the company has to be able to make decisions based on employees fairness, the<br />company must apply strategies that are supported by the Human Resources Department, not just<br />Jason alone (Patrick, 2002).<br />Conclusion.<br />In this regard, an ethical dilemma plays out as Jason is in a dilemma, and unsure about who to<br />select as the promoted engineer to become the engineer for the new project being planned for.<br />Therefore, despite the fact that interviews may be done to use justice and personal presentations<br />of the candidates, Jason would still find it hard to select one of them to be the engineers, when<br />thinking about how the other one would feel. Hence this clearly demonstrates how an ethical<br />dilemma comes.<br />Additional resource are:<br />Glynn Lowth, Malcolm Prowle, and Michael Zhang. (2010). The impact of economic recession<br />on business strategy planning in the UK companies. Nottingham. Nottingham Business School.<br />https://www.cimaglobal.com .<br />Churchill NC and Lewis VL (1984) Lessons for small business from the recession. Journal of<br />Small Business Management 22(2): 5–17.<br />Bertola, G, A Dabusinskas, M. Hoeberichts, M. Izquierdo, C. Kwapil, J. Montornes, and D.<br />Radowski, Price, Wage and Employment Response to Shocks: Evidence from the WDN Survey,<br />2010.<br />/<br />Reference:<br />Patrick Lencioni. (2002). The Five Dysfunctions of a Team: Leadership.San Francisco. Wiley<br />printing Press.<br />Michael Bungay Stainer. (2016). The Coaching Habit. Say Less, Ask More & Change the way<br />your lead Forever. Toronto. Box of Crayons Press.<br />Glynn Lowth, Malcolm Prowle, and Michael Zhang. (2010). The impact of economic recession<br />on business strategy planning in the UK companies. Nottingham. Nottingham Business School.<br />https://www.cimaglobal.com .<br />Churchill NC and Lewis VL (1984) Lessons for small business from the recession. Journal of<br />Small Business Management 22(2): 5–17.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-28177102399358589992020-03-27T05:01:00.001+05:302020-03-30T01:59:27.689+05:30NOW WHAT DO I DO WITH BRAD AND KERRY<div dir="ltr" style="text-align: left;" trbidi="on"><br />NOW WHAT DO I DO WITH BRAD AND KERRY - CASE STUDY 2<br />Now What Do I Do with Brad and Kerry - Case Study<br />For this assignment, we need to discuss the case of Jason, a project manager who had to<br />make a choice of which of his two most recently hired engineers, Brad or Kerry, would be<br />assigned to the next big construction project. I’ll define the problem in human resources terms,<br />diagnose the cause and prescribe possible alternatives while evaluating the pros and cons of<br />each. I’ll recommend which employee should be promoted. In addition, I’ll explain why this case<br />is important and relevant to a study of business.<br />Introduction<br />NewBuild was founded in 1909 and it has enjoyed conservative and steady growth since<br />its establishment. The company had no long-term debt and it held substantial cash reserves with<br />which to withstand a long-term economic decline. A severe recession began in 2008 and was<br />impacting the commercial construction industry dramatically. NewBuild planned to spend a<br />significant portion of its cash reserves in order to prevent layoffs, but if the economy doesn’t<br />recover, the company would struggle to break even due to its high overhead expenses.<br />Jason is a project manager at NewBuild who has faced with a staffing dilemma. He had<br />to decide whom to promote among his two most recently hired engineers to the next big<br />construction project. Unfortunately, there was a strong possibility that the one not chosen to be<br />on the new project team would be terminated due to lack of work (Mento, Cougnet & De Vader,<br />2012).<br />Problem Identification and Root Cause<br />The problem that Jason is facing is that he has to make a decision that is best for<br />everyone based on a finite amount of information. From the human resources perspective, this<br />study focuses on issues such as the psychological contract between the company and the new<br />NOW WHAT DO I DO WITH BRAD AND KERRY - CASE STUDY 3<br />employees. To do this, Jason needs to consider Brad’s and Kerry’s engagement in the important<br />skill, identify their important values, assumptions, beliefs, and expectations, that nevertheless<br />direct employee behavior. Jason can also use the written email communication of lessons learned<br />for understanding stylistic communication differences between two employees. Performance<br />appraisal data was also available as were observations of both engineers on a negotiation<br />simulation. Jason had to synthesize this information to form a clear picture about whom to<br />promote to the project team (Mento, Cougnet & De Vader, 2012).<br />The Alternatives<br />In this human resource dilemma that he is facing, Jason has only two options: to choose<br />Brad or to choose Karry. It is not an easy dilemma, because both of them have a similar<br />performance so far and no one is significantly better than the other. But there are some other<br />differences between those two employees.<br />Brad is an introvert who doesn’t speak much, so Jason has to actively questioned Brad for<br />any updates regarding his responsibilities. Brad has no idea about Jason’s goals and objectives,<br />and he doesn’t know how to best provide Jason with needed information (Mento, Cougnet & De<br />Vader, 2012). That is why Jason has concerns if Brad’s introverted personality and passive<br />behavior would prevent him from doing a better and more active job providing Jason with<br />important information when he needs it, and in the form that he needs it.<br />On the other hand, Kerry regularly provides Jason with updates on her unfinished tasks<br />and gave elaborate details of her important conversations. Jason also has a better understanding<br />of Kerry as a person. She acts like she intuitively knows what Jason needs to know and she is<br />acting in a way to facilitate a big picture perspective of the situation.<br />NOW WHAT DO I DO WITH BRAD AND KERRY - CASE STUDY 4<br />Based on their performance on negotiation, Brad passively went along with the situation<br />and with whom he aligned, while Kerry demonstrated thinking on her feet and manifest some<br />skills that are important for dealing with contractors. Also, Brad is more self-centered and focus<br />on him, while Kerry is centered on performance within a larger context.<br />From the email communication, Jason can conclude that Kerry manifested an ability to<br />reflect on own behavior and that she has developed insights on how to personally improve in the<br />future, while something like this cannot be seen from the Brad’s email.<br />The Recommended Plan of Action<br />Based on provided information, Jason has decided that Kerry is ready to be promoted.<br />For Jason, Kerry seems more compatible to work with, that she is better for managing and<br />leading. I would partially agree with this decision.<br />Based on all provided information, Brad has some qualities. First, he is not a poor<br />performer. But he requires more time to be devoted to him for coaching. He needs to start<br />learning from experience through refection. It is most likely that all this is a result of Brad’s<br />being introvert. And that is where I have some doubt about the recommended action. Society in<br />general tends to favor extroverts, sometimes to the detriment of introverts (Sarkis, 2019). But<br />introverts have some qualities that can be useful to the company, like there are great observers,<br />they don’t need external reinforcements and they don’t require other’ approval (Sarkis, 2019).<br />Introverts have strengths that are often seen as weaknesses in a world where the loud and bold<br />are lauded. Introvert employees can bring a lot to the table and they’ve been doing so for years<br />while being tagged as shy or unremarkable (Surban, 2017). That is why Brad should not be so<br />easily removed, especially in case when his rival, Kerry, is not so much better than him.<br />NOW WHAT DO I DO WITH BRAD AND KERRY - CASE STUDY 5<br />Importance for Business<br />Dealing with people is probably the most difficult thing, because people are very<br />complex creatures. This is even more true because the complexity and variety of people we met<br />in a workplace. At the same time, people are vital assets for the organization. Managers need to<br />understand that employees are valuable assets, not just numbers in a spreadsheet. In addition, no<br />employee should be favored, but employees should continually improve their knowledge. All<br />this is important for success of any business, which makes this subject and studying this case<br />essential part of it (Senyucel, 2009).<br />NOW WHAT DO I DO WITH BRAD AND KERRY - CASE STUDY 6<br />References<br />Mento, A.J., Cougnet, J.E., De Vader, C.L. (2012). Now What Do I Do with Brad and Kerry?<br />Journal of Business Case Studies, 8(1), 51-66.<br />Sarkis, S. (2019, January 31). Introverts Can Be Your Most Valuable Employees. Forbes.<br />Retrieved from https://www.forbes.com/sites/stephaniesarkis/2019/01/30/introverts-canbe-<br />your-most-valuable-employees/#18465cc62400<br />Senyucel, Z. (2009). Managing the Human Resource in the 21st Century. Bookboon.com.<br />Surban, G. (2017, May 12). Palo Alto Software. Retrieved from https://articles.bplans.com/howto-<br />manage-quiet-introverted-employees/</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-25120359658871141942020-03-27T05:01:00.000+05:302020-03-30T01:59:27.583+05:30Now What Do I Do With Brad and Kerry Case Study<div dir="ltr" style="text-align: left;" trbidi="on"><br />WA Unit 7: Now What Do I Do With Brad and Kerry Case Study<br />Founded in 1909, New Build is a construction organization that prides itself on its<br />reputation for high integrity, customer excellence, leadership, and employee’s personal career<br />growth (Mento, Cougnet & Vader, 2012). The company has benefited from steady growth since<br />its establishment. To their benefit, they have no long-term debt and substantial cash reserves.<br />The Problem<br />Currently, New Build is riding a Great Recession. The economic implications of the<br />recession have included prudent measures to assess the current economic landscape and<br />realistically acknowledge that the economy may continue downward. Lack of work will translate<br />to cuts in the workforce. Therefore, the next promotion as project manager between two<br />Engineers will mean continuous employment, leaving whoever is not promoted to be terminated<br />eventually. Jason, a project manager at NewBuild, is faced with a difficult decision to make.<br />During the harsh economic times, which Engineer, Kerry or Brad, would he assign the next big<br />construction project? The client is extremely demanding and expects peak performance (Mento<br />et al., 2012). The Engineer assigned to this client must have proficient communication skills, be<br />proactive, and be able to think on their feet. The two candidates, Kerry and Brad, have their<br />strengths and weaknesses. Jason must collect all the data he has on Kerry and Brad to make the<br />best selection out of the two.<br />The Cause<br />According to Senyucel (2009), “organizations need a flexible structure that enables them<br />to adapt to and cope with constantly changing circumstances of the business environment”<br />(p.50). NewBuild has found itself in a precarious situation as the economy has taken a negative<br />BUS 5910 3<br />turn. Clients are limited, and the amount of work to be distributed among staff members is<br />scarce. Retaining and continuing to meets the client’s expectations is crucial.<br />The human resource situation that has created the problem is attributed to Jason’s<br />increase responsibilities, which have not given him the opportunity to develop and nurture his<br />newest employees, Kerry and Brad. The two Engineers may not be ripe for the upcoming project.<br />They may lack the skills needed to take on the new project because their Superior, Jason, did not<br />have the time or opportunity to get them ready for such a position.<br />Possible Alternatives<br />The alternatives at this point are only two, either promote Kerry or Brad. Since both<br />candidates received the same performance evaluation (3 out of 5), the next step is to review their<br />individual “lessons learned emails,” assess their performance negotiation skills and ascertain<br />their values, assumptions, beliefs, and expectations (VABEs).<br />Jason: After reviewing the “lessons learned email” from Jason, it is evident that “he<br />assigns blame to others and puts himself in a one-up position by correcting them” (Mento et al.,<br />2012, p.64). For instance, Brad stated, “When asking a question to bidders have them explain to<br />me how they envision the work being performed. Then, either correct them or consider their<br />view. This way, I know what they understand and what they are confused about” (p.64).<br />Attribution to poor performance tended to be outer-directed. During the negotiating interaction,<br />he toned down his arguments and allowed his opponent to save face. Next, Jason’s VABEs are<br />“somewhat self-centered and focused on him” (p.64). Pro’s in selecting Jason include promoting<br />an individual who focuses on what others can do to do their job betters. His use of power<br />language and the fact that he is a male can give him an advantage and present him as an<br />BUS 5910 4<br />authoritative figure. Con’s in selecting Jason include a lack of accountability. Jason would need<br />to spend more time coaching Jason.<br />Kerry: When analyzing Kerry’s “lessons learned email,” it is apparent that she readily<br />accepts fault that she assigns to herself. For example, she stated, “I missed information on the<br />drawing set I didn’t look at” (Mento et al., 2012, p.64). She acknowledges her weakness and<br />what she did incorrectly. Kerry also manifested a keen ability to reflect on her own behavior and<br />develop insights on how to improve in the future personally. During the negotiating interaction,<br />Kerry actively challenged her competitors. Her VABEs were centered on her performance within<br />a broader context. This indicates that she can view situations from a broader perspective (2012).<br />A pro in selecting Kerry is better compatibility with her direct superior Jason. Also, Jason would<br />spend less time coaching her because she is more adaptable to the changing circumstances and is<br />effective at keeping Jason constantly informed. A con in selecting Kerry includes promoting<br />someone with less technical expertise, which may make her feel in over her head.<br />Recommended Action Plan<br />Select Kerry and invest in her personal and career development. Although some<br />individuals may be better equipped to assume leadership roles, leadership training can enhance<br />their abilities (Germaine, 2008). Jason can help Kerry develop the abilities and skills to reach the<br />company’s goals and objectives successfully. More importantly, Kerry is more introspective and<br />is able to make the necessary improvements to enhance her performance. She seems to be ready<br />now to be promoted. (Last Name, Year)<br />The Relevance of Case Study and Limitations<br />More than ever before, the economy can change in the blink of an eye. For NewBuild, the<br />recession presented them with challenging situations. Fewer projects for their employees. As a<br />BUS 5910 5<br />result, cuts in the workforce. The pandemic we are witnessing is affecting every single industry.<br />Managers must make challenges decisions regarding their staff, who to retain, and who to let go.<br />Limitations in the case study include no data for each employee's performance evaluation. Other<br />information useful for the decision-making process includes an interview of each candidate for<br />the position being offered.<br />BUS 5910 6<br />References<br />Germaine, M. (2008). Traits and Skills Theories as the Nexus between Leadership and Expertise:<br />Reality or Fallacy? Paper presented at the Academy of Human Resource Development<br />International Research Conference in the Americas (Panama City, FL, Feb 20-24,<br />2008). Retrieved from: http://files.eric.ed.gov/fulltext/ED501636.pdf<br />Mento, A.J., Cougnet, J.E., De Vader, C.L. (2012). Now What Do I Do with Brad and Kerry?<br />Journal of Business Case Studies, 8(1), 51-66.<br />Senyucel, Z. (2009). Managing the Human Resource in the 21st Century. Bookboon.com.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-36451183499161656742020-03-27T05:00:00.000+05:302020-03-30T01:59:27.759+05:30From OEM Supplier To A Global<div dir="ltr" style="text-align: left;" trbidi="on"><br />ABSTRACT<br />Firms in developing countries generally have lower technological and marketing capabilities<br />compared to firms in developed countries. Joining OEM alliances can help firms with fewer<br />capabilities to learn from their partners and then upgrade their technological capabilities. In this<br />kind of scenario, learning firms in OEM alliances are usually from developing countries, and they<br />play the role of suppliers; on the other hand, teaching firms are usually from developed countries<br />and play the role of buyers. Although OEM alliances provide a platform for acquiring,<br />transferring and creating knowledge, few suppliers can sufficiently upgrade their technological<br />capabilities to reach a higher level and develop marketing capabilities in order to complete in the<br />global market. Therefore, it is an important issue to know how an OEM supplier from developing<br />countries can become a leading firm in the global market. In this study, we choose Giant Bicycles<br />to explore this issue. We conduct a case study to explore the growth of Giant Bicycles from an<br />OEM supplier to a leading company in the bicycle industry.<br />Keywords: OEM; Giant Bicycles; Global Strategy<br />INTRODUCTION<br />n the economic system of globalization, in order to focus resources on value chain activities with high<br />additional value (such as R&D and marketing), multi-national enterprises of developed countries tend to<br />outsource production to developing countries that have a lower labor cost. This practice is called original<br />equipment manufacturer (OEM). Generally speaking, OEM buyers are usually from multi-national enterprises in<br />developed countries, and OEM suppliers are from developing countries. The cooperative model of OEM has<br />different strategic meanings to buyers and sellers. For the buyers of OEM, reduction of the product cost is the main<br />factor. When the suppliers lose the advantage of labor cost due to economic development in their countries, these<br />buyers will search for OEM in other countries that have a cheap labor cost.<br />For the suppliers in developing countries, OEM plays a totally different role. We classify OEM suppliers<br />into three types. First, for most of suppliers, the acquisition of foreign OEM orders usually means they will have<br />excellent financial performance in the short term. However, if these suppliers only rely on cost advantage, they will<br />easily lose orders from the buyers when developing countries with a better cost advantage enter the labor market.<br />Hence, suppliers will have to either move their plants to countries with lower labor costs or stop their operations.<br />Secondly, for a small number of suppliers, OEM forms an excellent learning platform. In order to meet basic quality<br />requirement, in the OEM process, buyers in developed countries will conduct technological transfer related to<br />product knowledge to the suppliers, which then have the opportunity to learn the basic manufacturing techniques of<br />the industry. Subsequently, according to the product knowledge obtained from the OEM process, suppliers invest in<br />R&D and enhance the core technology of the product. Sometimes their technique and capacity can be superior to<br />that of the OEM buyers that taught them the basic product knowledge. Thirdly, for a very few number of suppliers,<br />they can cultivate their core capacity of product manufacturing through the OEM process, and also develop their<br />own brands instead of simply producing products for the buyers.<br />Generally speaking, for suppliers, having brands in the global market should be a critical factor of<br />sustainable operations. However, numerous challenges can be encountered during the process. For instance, the<br />I<br />Journal of Business Case Studies – Third Quarter 2014 Volume 10, Number 3<br />Copyright by author(s); CC-BY 226 The Clute Institute<br />suppliers must invest in more funds in uncertain R&D, and they will encounter the threats of losing the buyers’<br />orders and unfamiliar marketing. Thus, OEM suppliers in developing countries tend to fail when developing their<br />own brands. In this study, we will analyze Giant Bicycles, which has created a successful brand. Giant is a family<br />enterprise founded in Taiwan in 1972. In early times, it mainly relied on manufacturing. However, through the use<br />of prominent global strategies, Giant has become one of the leading bicycle suppliers in the world. We will find how<br />Giant enhanced its core capacity through the use of precise global strategies and arrangements at different stages,<br />which could serve as a reference for the OEM suppliers in developing countries.<br />GIANT<br />In 1972, Giant was founded in a small town in central Taiwan. In early times, it was a small-scale family<br />enterprise and was not familiar with bicycle manufacturing techniques. However, forty years later, Giant has<br />become one of leading bicycle suppliers in the world, with a global business volume reaching 54 billion dollars. It<br />has more than 12,000 retail partners around the world and has received numerous product design awards. Giant is<br />the best example of an OEM supplier in a developing country transforming into a brand name company. In the<br />beginning, it learned manufacturing techniques through OEM cooperation, while at later stages it developed its<br />prominent core capacity and competitive advantages. At different stages, Giant gradually constructed its core<br />capacity through strategic alliances and global arrangements. This study suggests that Giant developed its core<br />capacities by integrating internal and external resources, and enhanced this capacity through global arrangements.<br />CASE ANALYSIS<br />Using interviews, corporate annual reports, and secondary reports (Lin, 2008; Giant Bicycles website,<br />2014), this study will analyze the core capacity development of Giant. Table 1 shows the important events since the<br />foundation of Giant and the strategies of growth. We will divide the growth of Giant into four stages: the foundation<br />stage, the technical development stage, the growth stage, and the brand growth stage. The content is shown below.<br />Foundation Stage<br />At the beginning, Giant was unfamiliar with bicycle manufacturing techniques, and it could only imitate<br />and learn from Japan. Through entering an OEM agreement with Schwinn, the leading bicycle enterprise in the U.S.<br />at the time, it obtained knowledge transfer and enhanced its bicycle manufacturing techniques.<br />Technical Development Stage<br />With the technological base from the foundation stage, Giant combined the R&D capacity of external<br />academic institutes (the Industrial Technology Research Institute of Taiwan), developed a carbon fiber bicycle, and<br />applied new techniques using composite materials to bicycle manufacturing. Giant was aware that China had opened<br />the labor market, and that Schwinn could withdraw its orders at any time; therefore, Giant started promoting its own<br />brand and selling the brand in Europe and America.<br />Growth Stage<br />At this stage Giant possessed the differential R&D and manufacturing capacities needed to support<br />development of its brand. During this time Giant expanded to China, taking into consideration of the dual role of<br />China as the world market and the world factory. In Taiwan, Giant opened life experience stores under direct<br />management, thus reaching out to its customers, enhancing its service, and listening to customers.<br />Brand Growth Stage<br />In regards to the price competition in newly industrialized countries, Giant formed industrial alliances with<br />its main rivals and component suppliers in Taiwan, thereby upgrading the bicycle industry in Taiwan and avoiding<br />price competitions with other countries. In addition, it sponsored important bicycle competitions to increase its<br />brand reputation and product quality. Finally, it created a bicycle-friendly environment in Taiwan.<br />Journal of Business Case Studies – Third Quarter 2014 Volume 10, Number 3<br />Copyright by author(s); CC-BY 227 The Clute Institute<br />Table 1: Giant Bicycle’s Global Strategy<br />Year Events Strategies of Growth<br />Foundation<br />stage<br />1972-1984<br />1972<br />Founded in Taichung County, Taiwan,<br />with a capitalization of 4 million dollars<br />and more than 30 employees.<br />It learned basic bicycle manufacturing techniques<br />from Japan.<br />Based on industrial standards and Japanese<br />specifications, it convinced its partners and<br />component suppliers to upgrade the product quality.<br />1978<br />Schwinn, the leading bicycle company in<br />the U.S., started procurements from<br />Giant.<br />It enhanced its bicycle manufacturing techniques<br />through the manufacturing process for Schwinn.<br />It started marketing the Giant brand in Taiwan.<br />Technical<br />development<br />stage<br />1985-1991<br />1985<br />Signed contracts with the Industrial<br />Technology Research Institute to develop<br />carbon fiber bicycles.<br />By cooperation with external national R&D institutes,<br />it constructed its core technical capacity.<br />1986<br />China opened its low-cost labor market<br />and buyers began turning to China.<br />It started constructing marketing networks for its<br />brand.<br />Founded branches in Europe and the U.S.<br />1991<br />Terminated the OEM relationship with its<br />main buyer, Schwinn.<br />Development turned from OEM manufacturing to<br />brand development.<br />Growth stage<br />1992-2001<br />1992<br />Successful development of one-piece<br />carbon fiber bicycles and aluminum alloy<br />bicycles.<br />It supported brand construction through technical<br />development.<br />1992 Started investments in China.<br />It expanded in potential markets and lowered its<br />production costs.<br />1998 Invested in Hodaka of Japan.<br />2000<br />Founded the first life experience store<br />under direct management.<br />By operating a direct sales store, it demonstrated a<br />consumer-oriented culture and reproduced this<br />experience in the operation of following stores.<br />2001<br />Awarded by Forbes as a global top 20<br />small-scale enterprise.<br />Brand growth<br />stage<br />2002-present<br />2002<br />To combat low-price competition from<br />China and countries in Southeast Asia,<br />Giant recruited bicycle suppliers in<br />Taiwan to found an industrial alliance<br />called the A-team, to create bicycles with<br />high additional value.<br />It avoided cost competition with new markets,<br />developed industrial alliances, upgraded the overall<br />bicycle industry in Taiwan, and created the market for<br />high-value bicycles.<br />2002<br />Sponsored professional bicycle teams in<br />Europe.<br />By implementing sports marketing, and through the<br />feedback from professional bicycle riders, it enhanced<br />its techniques.<br />2004<br />German T-Mobile won the grand<br />championship of the Tour de France<br />riding a carbon fiber bicycle produced by<br />Giant.<br />2006<br />Formed a brand reconstruction team and<br />invited Interbrand to be the consultant.<br />By cooperating with the consulting companies of<br />foreign brands, it reconstructed the brand thinking of<br />international market.<br />2007<br />King Liu, the founder and president of<br />Giant, toured Taiwan by bicycle at the<br />age of 73.<br />It created the biking culture.<br />2008<br />Founded the first female bicycle store in<br />the world.<br />It enhanced the segmentation of different markets.<br />2009 Expanded to bicycle travel. Diversified operations<br />2011<br />Held “Taiwan rolling forward,” an<br />activity marking the one hundredth<br />anniversary of Taiwan. More than<br />110,000 people across Taiwan rode<br />bicycles at the same time, breaking the<br />Guinness World Record.<br />In the Taiwan market, it enhanced biking culture. By<br />constructing bicycle-friendly environments and life<br />attitudes in Taiwan, it established a market with<br />national competitive advantages.<br />Journal of Business Case Studies – Third Quarter 2014 Volume 10, Number 3<br />Copyright by author(s); CC-BY 228 The Clute Institute<br />LESSONS LEARNED FROM GIANT<br />1) For suppliers in newly industrialized countries, learning from international OEM alliances is an important<br />channel of corporate growth. However, the key for sustainable operations is the business owners’<br />continuous investment in R&D to enhance the core capacity. In the beginning, Giant was an OEM supplier<br />for Schwinn, and through this it learned the basic techniques to manufacture bicycles and obtained<br />important business revenues. However, OEM has both advantages and disadvantages. It helps the growth of<br />suppliers in newly industrialized countries. However, when foreign clients acquire other low-cost labor<br />sources and immediately withdraw their orders, OEMs will encounter significant operational crises. Giant<br />serves a great example. After it learned the basic knowledge of bicycles during the OEM process, it started<br />cooperating with external academic institutes and the Industrial Technology Research Institute to develop<br />carbon fiber bicycles, develop differentiated manufacturing techniques, and promote products with its own<br />brand. Because of its brand, Giant survived when Schwinn, which represented 75% of Giant’s business<br />revenue, changed its orders to China.<br />2) Small and medium enterprises should be actively internationalized to find the needs of consumers in<br />different areas, as the feedback of consumers in different markets can be used to enhance their techniques.<br />According to the author’s interview with Giant, sponsorship of international bicycle teams can not only<br />expose the brand but also be helpful to upgrade the company’s core technical capacity. In addition,<br />consumers in developed countries have different needs for bicycles, in comparison to Taiwanese<br />consumers. As regards to Giant, the riders’ continuous practicing and demands for functions were new<br />challenges for its R&D personnel. By satisfying the riders’ needs, Giant was able to upgrade its technical<br />capacity.<br />3) Since competitive advantage based on low cost usually does not last for long, industrial upgrading is the<br />solution for sustainability. Although Taiwan has been an important exporter of bicycles, at the end of the<br />1990’s it gradually lost its competitiveness due to low-price advantages in China and Southeast Asia.<br />Hence, Giant recruited component suppliers and its main rival Merida to form a bicycle industry alliance,<br />called the A-team. Through this alliance, the members of the alliance disclosed the important product<br />manufacturing techniques and upgraded the quality of MIT (made in Taiwan) bicycles. Therefore, MIT<br />bicycles can be segmented from bicycle markets in low-cost countries.<br />4) Many enterprises starting as OEMs tend to have manufacturing and cost-oriented thoughts. However, only<br />marketing and consumer oriented thoughts can lead to successful transformation of enterprises. Through<br />sports marketing, Giant considerably enhanced its brand reputation. For instance, it sponsored the German<br />T-Mobile teams which had several excellent performances in the Tour de France. When the riders won the<br />championship, their Giant bicycles became the company’s best marketing tool. Giant effectively changed<br />the bicycle environment in the market of its home country (Taiwan) and consumers’ concepts about<br />bicycle. After the founder accomplished a bicycle tour around Taiwan at the age of 73, consumers in<br />Taiwan not only treated bicycles as transportation and recreational tools, but also regarded them as the tool<br />to explore Taiwan and fulfill self-realization. The brand value of Giant was thus enhanced. In addition,<br />Giant developed the first bicycle store exclusively for female consumers. This business was expanded to<br />include bicycle travel. Giant also constructed planning and sponsorship for bicycle-friendly environments<br />in the cities of Taiwan. The marketing points were based on not only the functional appeal of the products,<br />but also the biking culture.<br />DISCUSSION QUESTIONS<br />Overall, Giant presents a successful business story.<br />1. Can Giant’s growth strategies apply to the bicycle industry of your country?<br />2. Can its growth strategies apply to other industries?<br />3. What do you think that how Giant can be stronger in the future?<br />Journal of Business Case Studies – Third Quarter 2014 Volume 10, Number 3<br />Copyright by author(s); CC-BY 229 The Clute Institute<br />AUTHOR INFORMATION<br />Wei-Li Wu is an Assistant Professor at the Department of International Business at Chien Hsin University of<br />Science and Technology. He received his PhD in International Business from the College of Management at<br />National Chi Nan University in Nantou, Taiwan. His research interests include knowledge management,<br />international business management, and organizational behavior. E-mail: wuweili0709@yahoo.com.tw<br />Yi-Chih Lee received her PhD in Business Administration from the Fu Jen Catholic University of Taipei, Taiwan.<br />Currently, she is an Assistant Professor at the Department of International Business in Chien Hsin University of<br />Science and Technology, Zhongli, Taiwan. Her research interests include health industry management, data mining,<br />and customer relationship management. E-mail: lyc6115@ms61.hinet.net (Corresponding author)<br />REFERENCES<br />1. Lin, C. Y. (2008). Legend of Giant: Global brand management of Giant. Taipei: Commonwealth<br />Publishing.<br />2. Giant bicycles website. Retrieved 12 January 2014 from http://www.giant-bicycles.com/en-us/<br />3. 2012 Giant Manufacturing annual report.<br />Journal of Business Case Studies – Third Quarter 2014 Volume 10, Number 3<br />Copyright by author(s); CC-BY 230 The Clute Institute<br />NOTES</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-53955341800135950412020-03-27T04:58:00.000+05:302020-03-30T01:59:27.841+05:30Now What Do I Do With Brad And Kerry?<div dir="ltr" style="text-align: left;" trbidi="on">1<br />Anthony J. Mento, Loyola University in Maryland, USA<br />Jay E. Cougnet, Loyola University in Maryland, USA<br />Christy L. De Vader, Loyola University in Maryland, USA<br />ABSTRACT<br />As the Great Recession continued, Jason, a project manager for the past six years with a large general contracting firm, NewBuild, pondered the burden of being an effective leader and manager in such trying times. He had to make a choice of which of his two most recently hired engineers, Brad or Kerry, would be assigned to the next big construction project. Both were direct reports to Jason for the past nine months. Unfortunately, there was a strong possibility that if the economy continued downward, the one not chosen to be on the new project team could be terminated due to lack of work.<br />Jason, a project manager at NewBuild a large general contracting firm was faced with a staffing dilemma that confronts many managers in tough economic times. He had to decide whom to promote among his two most recently hired engineers to the next big construction project. Unfortunately, there was a strong possibility that the one not chosen to be on the new project team would be terminated due to lack of work.<br />His charge was to take a comprehensive view of the situation and make a decision that was best for Brad, Kerry and NewBuild. As is always the case, a manager has a finite amount of information from which a decision must be made. Complicating matters was the gloomy economy for NewBuild as well as the prospect of providing a challenging job in a no growth environment.<br />This note focuses on issues such as the psychological contract between NewBuild and the new employees as providing a context that serves either to fully engage new employees or which provides a milieu which only ensures physical presence on the job. Jason also needed to consider the extent to which Brad and Kerry engaged in the important skill of upward management. He wanted to stretch his understanding of Level 3 leadership (Clawson, 2009) by carefully sifting through what he knew about Brad and Kerry in order to identify important values, assumptions, beliefs, and expectations, (VABEs) arising at the unconscious level that nevertheless direct employee behavior. Finally, he needed to assess the significance of written email communication of lessons learned through Tannen's (1995) lens for understanding stylistic communication differences. Performance appraisal data was also available as were observations of both engineers on a negotiation simulation. Jason had to synthesize this information to form a clear picture in his mind about whom to promote to the project team and who by default is left in limbo perhaps awaiting the pink slip to downsize.<br />This decision critical incident which is based on a true incident in a disguised organization</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-62915373843758950722020-02-25T18:11:00.000+05:302020-03-30T01:59:27.955+05:30BP and the Deepwater Horizon Disaster<div dir="ltr" style="text-align: left;" trbidi="on">Introduction<br />This paper is a discussion for the case study “BP and the Deepwater Horizon Disaster of<br />2010” (2012). We will focus on the organization culture towards change, rather than the<br />engineering flaws which lead to that disaster. The Deepwater Horizon oil spill and explosion in<br />the Gulf of Mexico was a result of adopting the wrong leadership style relating to the<br />organization’s critical industry, hierarchal structure, and crisis management. There would have<br />been significantly important approaches to be followed such that to create radical changes within<br />the organization.<br /><br />The Deepwater Horizon oil spill disaster in the Gulf of Mexico in 2010 is considered one<br />of the most significant environmental and management crises. Also BP’s reaction will be always<br />remembered as an example of the worst crisis management as well. I think that BP failed to deal<br />with this disaster by all means, especially the response of their CEO at that time, Tony Hayward.<br />He showed unethical, selfish and irresponsible behavior when he said, “I’d like my life back”.<br />BP had a similar incident in 1990 when the BP-chartered tanker American trader ran over its<br />anchor off Huntington Beach in Orange County, and consequently 400,000 crude oil gallons<br />were spilled in the ocean. BP’s response in this accident was totally different from that in the<br />Gulf of Mexico. Oil skimming vessels, the company’s crisis team, 36 specialists, and the<br />chairman James Ross arrived the site within 24 hours. Ross took the responsibility saying “Our<br />lawyers tell us it’s not our fault. But we feel like it’s our fault and we are going to act like it’s our<br />own fault.” On the other hand, when the oil rig Deepwater Horizon was destroyed, 11 workers<br />were killed, and the environment was hit hard by the oil spillage, Hayward commented that the<br />amount of oil was “relatively tiny in a very big ocean” (Jaques, 2015). Luo (2015) discussed 4<br />aspects which added to the inefficient crisis management by BP regarding the 2010 incident:<br /><br />1. Shifting the Blame. BP blamed other contractors like Transocean for the rig explosion.<br />Hayward said: “This wasn’t our accident. This was a drilling rig operated by another<br />company. We are responsible not for the accident, but we are responsible for the oil and<br />for dealing with it and cleaning the situation up.”<br /><br />2. Unconcern for Victims. Instead of expressing remorse and apologies for the victims,<br />reports showed that BP asked the cleanup workers and the people who got affected by the<br />oil spillage to sign waivers and confidential agreements in order to escape responsibility.<br /><br />3. Inadequate Ability for Solutions. BP took more than 3 months to stop the oil leak.<br />Moreover, the amount of barrels leaking daily was estimated by around 1000 barrels/day,<br />however BP kept changing the rate to end up by 100,000 barrels/day.<br /><br />4. CEO’s Inappropriate Words and Actions.<br /><br />Regarding the corporate attitude towards change, Reardon et al (1998) stated four basic<br />styles that describes combinations of the basic styles called “patterns”. These so-called patterns<br />define the complexity behind leader behavior and competencies for radical change. So, these<br />four styles are: commanding, logical, inspirational, and supportive. Therefore, it is obvious that<br />style adopted by BP’s management at that time was purely commanding. The top management<br />should have adopted the logical leadership style in terms of showing accountability and<br />responsibility towards the accident rather than denying and shifting the blame. Moreover, they<br />should have followed the supportive style relating to the victims and their families, as well as the<br />whole community affected by the oil spillage throughout many years.<br /><br /><br />References<br /><br />Ingersoll, C., Locke, R., & Reavis, C. (2012). BP and the Deepwater Horizon Disaster of 2010.<br />Cambridge, MA. This work is licensed under the Creative Commons Attribution-<br />Noncommercial-No Derivative Works 3.0 Unported License. Retrieved from:<br />https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20<br />Horizon%20Locke.Review.pdf<br />Jaques, T. (2015). Lessons from an oil spill: how BP gained - then lost - our trust. Retrieved<br />from: http://theconversation.com/lessons-from-an-oil-spill-how-bp-gained-then-lost-ourtrust-<br />40307<br />Lou, S. (2015). BP Oil Spill: “What not to do” in A Crisis Management. Retrieved from:<br />http://prssa.syr.edu/2015/04/05/bp-oil-spill-what-not-to-do-in-a-crisis-management/<br />Reardon, K.K., Reardon K.J., & Rowe, A.J. (1998). Leadership styles for the five stages of<br />radical change. Acquisition Review Quarterly, 2. Retrieved from:<br />http://www.au.af.mil/au/awc/awcgate/dau/reardon.pdf</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-66205740143366522412020-02-25T18:07:00.000+05:302020-03-30T01:59:28.037+05:30Turnaround and Transformation of ICA<div dir="ltr" style="text-align: left;" trbidi="on">Case Study: Transformation<br />Jill Medvedow stepped in and turned the failing organization, the Institute of<br />Contemporary Art (ICA) in Boston around. Through vision, determination, and tenacity, she was<br />able to make it profitable and establish a cultural legacy for the city. In this case study, I will<br />demonstrate where she used different leadership styles to get things done, and how different<br />leadership styles were successful in those circumstances.<br />Issues Facing the Organization<br /><br />Issue A When Medvedow took over as leader of ICA, the organization had a small<br />budget of less than $1 million a year and an attendance of 25,000 visitors. These are both meager<br />in relationship to other art museums (Reavis, 2010).<br /><br />Issue B Due to the limitations of the building, lack of interest, and inadequate funding,<br />ICA didn't have a permanent collection. ICA lacked brand identity; it failed to build patronage of<br />donors and draw repeat visitors (Reavis, 2010). It was attempting to compete with other wellfunded<br />museums in the area that showcased arts.<br /><br />Issue C Having the new museum built on a waterfront property in Boston required state<br />and city approvals, amounting to millions of dollars in fees (Reavis, 2010). Additionally, the<br />original construction company was behind schedule due to legal issues surrounding accidental<br />deaths at other sites (Reavis, 2010).<br /><br />Leadership Styles<br /><br />Jill Medvedow's overall leadership style is transformational leadership. In various areas<br />within the case study she focused on the big picture to build a contemporary art museum that<br />could reach a broader audience (Ellis, 2015). She actively communicated her ideas with<br />stakeholders addressed their concerns and provided frequent updates about reaching the target<br />for the new location of the ICA (Reavis, 2010; Ellis, 2015). She offered high visibility, regular<br />communication, and consistent reminders to those within and outside the organization about<br />progress or lack thereof. Through her vision and charisma, she was able to get a big Bostonian<br />real estate developer and philanthropist Ed Sidman on board who introduced to groups that could<br />help her facilitate her dream of a waterfront location (Reavis, 2010).<br /><br />Issue A Medvedow took on the role of situational leader or coach she set fundraising<br />directives and mentored new Director of External Relations Paul Bessire and her team to launch<br />a $50 million campaign that surpassed goals to $62 million (Ellis, 2015; Reavis, 2010). The<br />campaign was launched with only $6 million, which was less than 10% of the total goal; this was<br />an unconventional strategy but proved Medvedow and ICA were invested in the community<br />(Reavis, 2010).<br /><br />Issue B Medvedow took on the role of a democratic leader she realized she was up<br />against operational and logistical issues. To make the big move to the waterfront, she needed to<br />get support from the public, local politicians, residents, and area artists. Through her leadership,<br />ICA connected with people who are normally overlooked, prior to the property being secured<br />(Ellis, 2015). She finalized decisions but only after communicating with internal and external<br />stakeholders.<br /><br />Issue C With the roadblocks and issues that arose around construction Medvedow had to<br />take an autocratic approach to avert and adjust to the crisis. State and city approvals took time<br />and had to be handled with precision. Once permissions were granted, deadlines for completion<br />had to be rescheduled, and Medvedow took action to replace the construction company.<br />In conclusion, this case study exemplifies Medvedow's adaptability to the situation and<br />being able to maneuver beyond her preferred transformational leadership style. With a project,<br />the size of ICA it required a person with a clear vision. In an interview with Boston<br />Magazine, Medvedow said: "I became invested in this idea of different communities being<br />served by the ICA, and the ICA being strengthened by different communities." (Stackpole, 2018,<br />para. 8). This statement alone speaks to her vision and ambition. Through her charisma and<br />fortitude, she was able to pull it off, with attendance soaring to 450,000 museum attendees in<br />both 2008 and 2009 from ICA’s original attendance of a paltry of 25,000 visitors a year (Reavis,<br />2010).<br /><br /><br />References<br /><br />Ellis, A. (2015). Different types of leadership styles — What type of leader are you? Retrieved<br />from https://www.wayup.com/guide/community/different-types-of-leadership-styleswhat-<br />type-of-leader-are-you/<br />Reavis, C. (2010). Turnaround and transformation: Leadership and risk at Boston’s Institute of<br />Contemporary Art. In<br />https://my.uopeople.edu/pluginfile.php/550206/mod_book/chapter/202418/BUS%205411<br />%20WA5%20Turnaround.pdf (pp. 1-21). Boston: MIT Sloan Management.<br />Stackpole, T. (2018, July 10). . The interview: Jill Medvedow. Retrieved from<br />https://www.bostonmagazine.com/arts-entertainment/2018/07/10/jill-medvedow-ica</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-46544962386904892562020-02-25T18:05:00.000+05:302020-03-30T01:59:28.121+05:30Case Turnaround and Transformation<div dir="ltr" style="text-align: left;" trbidi="on">Introduction<br />Identifying the critical issues/problems in the case and analyzed the key facts<br />related to the issues/problems<br /><br />Jill Medvedow became the director of Boston's Institute of Contemporary Art (ICA)<br />in 1998 at a time when the Museum was facing significant challenges in its operations.<br />During this time, the Museum struggled with visitation, funding, membership, and also a<br />collection of antiques. Moreover, ICA was operating from a building that was converted from<br />being a police station within the streets of Boylston, which had been purchased through<br />public donations. However, before Medvedow's leadership, Boylston Street lacked an appeal<br />and thus becoming less of the visitors' choice. Medvedow reign changed the ICA museum<br />through innovative and transformation leadership (Ifeanyi George Ogbonna, 2013).<br /><br />The organizations significant challenges<br /><br />Discuss the facts which affect these issues<br /><br />Before Jill Medvedow's leadership, the organization was facing significant challenges,<br />most of which included its location, funding, art collection, as well as traffic, which was<br />being faced in the area. Initially, the budget ICA's budget stood at One million dollars figure,<br />which was way low as compared to the other museums in the United States. Moreover, the<br />visitation of the Museum was about 25,000 patrons annually, which translated to<br />approximately 68 visitors in a day. In one year, the Museum would have only four shows<br />signifying many months of without activities as compared to other museums in Boston,<br /><br />which would have approximately ten shows within one year. An analysis of the issues that<br />led to these challenges indicated the lack of sufficient space to expand its exhibitions and<br />antiques. Poor leadership of the Museum also had critical effects, including a lack of<br />foresight on community involvement and the establishment of a permanent collection that<br />would attract visitors. The organization focused on preserving its culture rather than<br />expanding local interest (Reavis, 2010). Therefore, the organization required efficient<br />leadership that would effectively influence power by motivating the subordinates. ICA's<br />initial leadership failed to focus on the interests of the local community, thus pushing away<br />wiling donors, patrons, as well as investors. Consequently, such critical stakeholders could<br />not provide their services, such as funding the organization or providing revenue through the<br />number of visitations. The Museum also operated on an old building, which was unattractive<br />to attract innovation in terms of expansions and promotions.<br /><br />Cultural Change Needed<br /><br />Discuss your tentative solution to the problem<br /><br />Therefore, Museum required an organizational cultural change through transforming<br />its traditional culture into a more articulate strategy. In order to achieve this, the Museum had<br />to change its leadership to focus on a transformational leader who would change several<br />factors within the organization. Jill Medvedows’ appointment made this possible through her<br />transformational leadership (St. Thomas University, 2014). According to the studies, the<br />transformational leader poses certain skills such as motivating the subordinates and creating<br />an efficient system of communication (Avolio & Yammarino, 2013). A transformational<br />leader takes a proactive role in changing the organizational structure and norms through the<br />implementation of positive ideas based on collaboration and consultation with the other<br />stakeholders (Clark, 2011).<br />Studies also indicate that such leadership involves strategic innovation in ideas,<br />promotion of creativity, as well as providing a solution to the issues incurred within the<br />organization (Jian & Fairhurst, 2016). Therefore, in relevance to such a scholarly perspective,<br />Medvedow utilized her skills in transforming the Museum. Medvedows’ exercised her<br />political upbringing, which was based on serving the others and civilian involvement. She<br />had museum leadership experience and thus provided her with an increased opportunity to<br />expand her business. Therefore, to provide solutions to Boston's ICA, Medvedow brought in<br />her transformational leadership.<br />Relocation and new Leadership<br /><br />How could a solution be implemented<br /><br />After her appointment as ICA director in 1998, Medvedow relocated the Museum to a<br />more spacious and conducive for the patrons. Through her leadership, a new ICA building<br />was constructed at the Boston Waterfront (Shelton, 2012). This would lead to an enormous<br />attendance and membership due to its attractive and sufficient space to accommodate more<br />people (Avolio & Yammarino, 2013). In addition to this, Medvedow involved the community<br />in the improvement of the Museum through hiring local architects and designers in charge of<br />the Museum. The move provided the non-prominent team, most of whom were locals, to<br />participate in bringing building the Museum. Consequently, the annual attendance if the<br />Museum rose from 25, 000 patrons to approximately 280,000. Similarly, the number of<br />members also increased significantly, showing the efficiency of the changes provided through<br />Medvedow leadership.<br /><br />One of the main focuses of Medvedows’ leadership was the involvement of artists,<br />nurturing talents, and providing training for the local people interested in art. The practice<br />was not initially adopted within the Museum and thus served as one of the main factors of<br />community motivation and involvement in the local development. In addition to these<br />achievements, Medvedow brought in the permanent collection to the Museum and support for<br />the teen art programs within the Museum (Ifeanyi George Ogbonna, 2013). In order to<br />provide the solution to lack of funds, Medvedow involved the government and local<br />leadership in campaigns aimed at raising funds for the creation of significant endowment and<br />facilitates the building of the Waterfront building. All these achievements can be associated<br />with transformational leadership (Shelton, 2012).<br /><br />Conclusion<br /><br />In conclusion, this paper is based on the analysis turnaround and transformational<br />leadership of Jill Medvedow, who was appointed as the director of Boston's ICA in 1998.<br />Through transformational leadership, Medvedow involved the locals in changing the<br />challenges affecting ICA. These included lack of funds, low visitations, lack of space, and<br />issues regarding its location.<br /><br />References<br /><br />Avolio, B. J., & Yammarino, F. J. (2013). Transformational and Charismatic Leadership:<br />The<br />Road Ahead. Bingley: Emerald Group Publishing.<br />Clark, D. (2011, October 7). Transformational Leadership. Retrieved October 8, 2019, from<br />Big Dog, Little Dog.<br />Hussain, S. T., Lei', S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt<br />Lewin's change modA critical review of the role of leadership and employee<br />involvement in organizational change. Journal of Innovation & Knowledge , 3 (3),<br />123-127.<br />Ifeanyi George Ogbonna, J. A. (2013). Transformational vs. Transactional Leadership<br />Theories: Evidence in Literature. International Review of Management and Business<br />Research , 2 (2), 355-361.<br />Jian, G., & Fairhurst, G. T. (2016). Leadership in Organizations. Wiley , 6 (2), 25-65.<br />Reavis, C. (2010). Turnaround and Transformation: Leadership and Risk at. Massachusetts:<br />MIT Sloan Teaching Innovation Resources.<br />Shelton, E. J. (2012). Transformational Leadership: Trust, Motivation and Engagement.<br />Bloomington: Trafford Publishing.<br />St. Thomas University. (2014, November 25). What is Transactional leadership, how<br />structure leads to Results. Retrieved October 8, 2019<br />6</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-74311771973476814992020-02-25T18:01:00.000+05:302020-03-30T01:59:28.204+05:30What Should be the Leadership Style for Success? <div dir="ltr" style="text-align: left;" trbidi="on">Abstract<br />In some scenarios, leadership is about creating change in both individuals and the communities in which they live, through inspiring positive change through authentically motivating and influencing people to achieve what they never thought possible (Transformational Leadership, n.d). In this paper I will briefly describe the critical issues outline in the case study and then identify and discuss different leadership theories as well as leadership styles demonstrated by Jill Medvedow.<br />Keywords: Leadership<br /><br /><br />Leadership Styles for Success<br /><br />In this paper I will discuss the case of “Turnaround and Transformation: Leadership and Risk at Boston’s Institute of Contemporary Art” by Reavis (2010), specifically focusing on the leadership styles of Jill Medvedow in her role as Director of the Institute of Contemporary Art (ICA). Following the identification of her leadership styles, I will conclude with a strategy that can be considered to develop future leaders in the contemporary art scene. The case outlines the success story of Jill Medvedow, who was hired to turnaround the ICA. Through her stewardship and leadership style, she created a compelling vision for the ICA and radically changed the contemporary art scene in Boston.<br />Identification of Major Issues in the Case<br /><br />Reviewing the case study of Reavis (2010), several critical issues influenced the leadership style and decision made by Medvedow, which will now be summarised. Medvedow was hired to turn the ICA around, and decisions related to her being hired were based on certain leadership traits, such as having a strong intellect, being level headed, centred and authentic and she demonstrated a passion for her field and had a strong vision for the future (Reavis, 2010).<br /><br />Briefly reflecting on Medvedow’s leadership traits, Rouse and Sparapani (2015) notes that “leadership traits are the personal qualities that shape effective leaders” (para. 1). Perhaps Medvedow’s inherent traits assisted her in being successful in her role as Kirkpatrick and Locke (1991) note that there is empirical evidence that traits do influence leadership style and leaders can be distinguished from non-leaders based on six traits, which include drive, motivation, honesty and integrity, self-confidence, cognitive ability and knowledge of the business, much of which Medvedow possessed.<br /><br />The situation that the ICA was in when Medvedow started in her role was “marginal” and needed to be totally reinvented in order to remain relevant. The organisation required a leader with a vision to reinvent the contemporary art scene in Boston and create an institution that was relatable, non-elitist and supported the community in which it operated (Reavis, 2010).<br /><br />Leadership Styles of Medvedow<br /><br />It is evident from the success of the case that Medvedow was a leader who could adapt to various situations while leveraging her strengths. It could be postulated that her success could be related to Fiedler’s contingency theory, where she was hired for the role based on her leadership style and was successfully able to adapt to various situations, as presented in the case (Vroom & Jago, 2007).<br />A number of leadership styles were displayed by Medvedow, such as transformational leadership where style is characterised by the leader positively influencing followers based on trust and commitment to motivate them to achieve or surpass their goals, which is what the ICA had achieved (Bin Sayeed & Shanker, 2009). The use of transformational leadership style was necessary in order to inspire and influence stakeholders to the future vision of the ICA, which is what Medvedow achieved.<br /><br />Another leadership style clearly displayed by Medvedow was participative leadership. The participative or democratic leadership style is characterised by the leader including various stakeholders in the decision-making process whereby the leader would express the priorities of what needs to get done and would get the group involved and obtain their suggestions and feedback in the process, however the leader would ultimately make the final decision (Lewin, Lippitt, & White, 1939). In her role, she ensured that she included both internal and external stakeholders in various business decision, some critical to the success of the ICA. Branch (2002) notes that the participative management is about being inclusive, both for employees and external stakeholder, in organisational decision making and, this approach assisted the ICA to create value and a competitive advantage over other contemporary art institutions.<br /><br />Conclusion and Future Considerations<br /><br />The success of Medvedow in turning the ICA can be attributed to her excellent leadership skills, being able to adapt, being inclusive and being able to inspire positive change. As a last thought, being a successful leader requires that leader to grow and develop the next generation of leaders. A proposed strategy that Medvedow could consider is to include a relational or people-orientated leadership style, which according to Russell (2011), is characterised by the leader being motivated to support, coach and develop their followers, to perhaps become future leaders in the contemporary art field.<br /><br />References<br /><br />Bin Sayeed, O., & Shanker, M. (2009). Emotionally Intelligent Managers & Transformational Leadership Styles. Indian Journal of Industrial Relations, Vol. 44, No. 4, 593-610. Retrieved from https://www.jstor.org/stable/27768233<br />Branch, K. M. (2002). Participative Management and Employee and Stakeholder Involvement. In Management Benchmarking Study (pp. 1-27). Retrieved from http://www.au.af.mil/au/awc/awcgate/doe/benchmark/ch10.pdf<br />Kirkpatrick, S. A., & Locke, E. A. (1991). Leadership: Do Traits Matter? Academy of Management Executive, Vol 5, No. 2, 48-60.<br />Lewin, K., Lippitt, R., & White, R. (1939). Patterns of Aggressive Behavior in Experimentally Created Social Climates. Journal of Social Psychology 10, 271–301.<br />Reavis, C. (2010). Turnaround and Transformation: Leadership and Risk at Boston’s Institute of Contemporary Art. MIT Sloan Management.<br />Rouse, M., & Sparapani, J. (2015, September). Leadership Traits. Retrieved from Tech Target: https://searchcio.techtarget.com/definition/leadership-traits<br />Russell, E. (2011, September 08). Leadership Theories and Style: A Transitional Approach.<br />Transformational leadership. (n.d.). Retrieved from Langston University: https://www.langston.edu/sites/default/files/basic-content-files/TransformationalLeadership.pdf<br />Vroom, V. H., & Jago, A. G. (2007). The Role of the Situation in Leadership. American Psychologist, Vol. 62, No. 1, 17-24.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-28329164960148539522020-02-25T17:58:00.000+05:302020-03-30T01:59:28.285+05:30The Deepwater Horizon Case Study<div dir="ltr" style="text-align: left;" trbidi="on"> <br /><div align="left" style="text-align: left;"><span style="font-family: "Times New Roman",serif;">In this case study, we will analyze how BP caused systemic damages to a lot of stakeholders through the Deepwater Horizon crisis. We will analyze how the organizational culture of an organization shapes the behavior of its people and in order for this to change, the management team needs to take the right actions. In addition, we are going to think about how we should proceed if we want to implement a radical change program at BP following such a crisis.<span style="mso-spacerun: yes;"> </span></span></div><br /><div style="tab-stops: .5in; text-indent: 0in;"><span style="line-height: 200%; mso-bidi-font-size: 11.0pt;"><span style="mso-tab-count: 3;"> </span>Keywords: <i style="mso-bidi-font-style: normal;">leadership, management, crisis, radical change.</i></span></div><br /><div style="text-indent: 0in;"><br /></div><br /><b style="mso-bidi-font-weight: normal;">Considering the leadership styles from this week’s reading, evaluate which one would be the most beneficial to execute radical change within the organization as it is described in the case study.</b><br /> <br />According to Rowe, Reardon, and Bennis (1995) who developed the Leadership Style Inventory (LSI), there are four leadership styles: commanding, logical, inspirational, and supportive. In this given organization, there is a need for a leader who has a mix of commanding and logical. The commanding leader will focus on results, will persuade by directing, will make changes rapidly and will learn by doing (Reardon, K. K., Reardon K. J., & Rowe, A. J., 1998, p.132). This is important because the nature of the business is very risky, the types of individuals that work in this business are very difficult to manage and if the leader isn’t able to command his team with authority in a stressful situation, then the whole team will suffer the costs of poor leadership. In addition, the leader who will lead BP’s team must be logical. This industry is highly technical and there is a lot of rational and systemic thinking that is required in order to identify solutions. This company is focused on process management and the leader must be able to cope with this rigor. <br /> <br /><br /> <br /><b style="mso-bidi-font-weight: normal;">Then, assume that the organizational culture is still similar today. How would you recommend that the organization implement a radical change process from fossil fuels to renewable energies? In other words, how would you address each of the five stages of organizational change?</b><br /> <br />The company needs to redefine its corporate values. The safety culture survey showed that BP culture is not obsessed by safety which is alarming (Ingersoll, C., Locke, R., & Reavis, C., 2012, p.5). BP works in a high risk industry. When they make a mistake, the consequences are disastrous. For a company with the ability to create so much damage when they mess up, it’s very dangerous for the CEO to encourage its staff to take more risk (Ingersoll, C., Locke, R., & Reavis, C., 2012, p.3). In order to change from a company that works with fossil fuels to renewable energies would mean a complete revamp of the company’s brand identity and what its core values. The CEO of the company would need to embrace a new way of doing business and that is respectful of the environment and all stakeholders. It may require that the company looks for a new CEO that would be able to walk the talk. The technical aspect would be dealt with by the engineering teams and senior management. The biggest challenge would be to change the corporate culture and the public image and then to walk the talk in the long run by building a new brand identity. In addition, I believe that the management team should instill a “what is the worst case scenario if I mess up?” mindset in their staff. Those who work with BP should be obsessed by security, accuracy and engineering prowess. However, they will focus on the things that the management will tell them to focus on and for which they may be incentivize on.<span style="mso-spacerun: yes;"> </span><br /> <br />In addition, BP should stop leasing employees from other organization. This create chaos and confusion. Moreover, these artificially assembled teams aren’t able to develop a synergy and a good team spirit. Furthermore, with different individuals with different corporate cultures and methodologies, there is going to be clashes regarding who is in charge and who has the right way of doing things. Internal competition may override team work and collaboration.<br /> <br /><br /> <br />I would address the five stages of organizational change by: <br /> <br /><div style="margin-left: .75in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><span style="mso-list: Ignore;">1)<span style="font: 7.0pt "Times New Roman";"> </span></span>Planning: Take time to think about the main issues of this company</div><br /><div style="margin-left: .75in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><span style="mso-list: Ignore;">2)<span style="font: 7.0pt "Times New Roman";"> </span></span>Enabling: Meet with employees irrespective of the hierarchy to discuss my plans</div><br /><div style="margin-left: .75in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><span style="mso-list: Ignore;">3)<span style="font: 7.0pt "Times New Roman";"> </span></span>Launching: Implement the roadmap – step by step and being mindful of risks</div><br /><div style="margin-left: .75in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><span style="mso-list: Ignore;">4)<span style="font: 7.0pt "Times New Roman";"> </span></span>Catalyzing:<span style="mso-spacerun: yes;"> </span>Communicate on the progress made to inspire and keep a positive spirit across the organization</div><br /><div style="margin-left: .75in; mso-list: l0 level1 lfo1; text-indent: -.25in;"><span style="mso-list: Ignore;">5)<span style="font: 7.0pt "Times New Roman";"> </span></span>Maintaining: Ongoing monthly meetings in order to keep the momentum going</div><br /><br /> <br /><div style="margin-left: 2.5in; tab-stops: .5in;"><b style="mso-bidi-font-weight: normal;">Conclusion<span style="mso-tab-count: 1;"> </span></b></div><br /><div style="tab-stops: .5in;">Radical change leadership tends to be considered when it’s too late. Leaders in all types of organizations make wrong decisions. However, leaders who work for organizations like BP must be more careful because when they fall it resonates across the world. Leaders tend to make use of radical change when they are forced to as a last resort. People are known to resist change and leaders must learn how to persuade their followers that the change will be beneficial to them and the whole organization. They must be change agent well before external circumstances compel them to change. By driving change proactively, they are in a better position to face future disruptions in their industry. </div><br /><span lang="EN-GB" style="font-family: "Times New Roman",serif; mso-ansi-language: EN-GB;">References</span><br /> <br /><div style="line-height: 200%; text-indent: .5in;">Ingersoll, C., Locke, R., & Reavis, C. (2012).<span style="mso-spacerun: yes;"> </span>BP and the Deepwater Horizon Disaster of 2010. Cambridge, MA. This work is licensed under the Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License. Retrieved from <span><a href="https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon%20Locke.Review.pdf">https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon%20Locke.Review.pdf</a></span></div><br /><div style="line-height: 200%; text-indent: .5in;"><br /></div><br /><div style="line-height: 200%; text-indent: .5in;">Reardon, K. K., Reardon K. J., & Rowe, A. J. (1998). Leadership styles for the five stages of radical change. Acquisition Review Quarterly, 2. Retrieved from, <span><a href="https://pdfs.semanticscholar.org/2ce9/d455805aa59af93ded632f478bdefdbdc0e0.pdf">https://pdfs.semanticscholar.org/2ce9/d455805aa59af93ded632f478bdefdbdc0e0.pdf</a></span></div><br /><div style="line-height: 200%; text-indent: .5in;"><br /></div><br /><div style="line-height: 200%; text-indent: .5in;">Rowe, A. J., Reardon, K. K., & Bennis, W. (1995). <i style="mso-bidi-font-style: normal;">The leadership style inventory</i>. Developed at the University of Southern California Marshall School of Business.</div><br /><div style="line-height: 200%;"><br /></div><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-68278675202807061122020-02-25T17:55:00.000+05:302020-03-30T01:59:28.367+05:30British Petroleum and Deepwater Horizon<div dir="ltr" style="text-align: left;" trbidi="on">This paper discusses a case study about the Deepwater Horizon environmental disaster that<br />occurred in 2010. It will present a summary regarding the work culture and leadership that<br />existed at the time of the event within the British Petroleum organization, and how this directly<br />impacted the disaster happening. Additionally, it presents the issues that lead up to the disaster,<br />identifies stakeholders, and explores how radical change might be implemented within British<br />Petroleum if the same culture were present today.<br />Keywords: leadership style, radical, change<br /><br />Background<br /><br />British Petroleum (BP) is a multinational company based in the United Kingdom, as of<br />2018 the company had over seventy thousand employees, and total equity at over $101 billion<br />U.S. dollars. In April 2010, BP’s Macondo oil well located in the Gulf of Mexico blew out<br />causing the Deepwater Horizon rig to explode. The result was seventeen injured, eleven dead,<br />and one of the world’s worst environmental disasters that lasted over two and a half months.<br />Numerous attempts were made to cap the oil well, but all failed which allowed 171 million<br />gallons of oil to leak into the Gulf causing horrific damage to the wildlife, coastal communities,<br />and businesses that depended on the Gulf for their livelihoods.<br />Stakeholders<br /><br />The stakeholders most affected by the Horizon Deepwater disaster are the injured and<br />dead employees, the environment, the Gulf of Mexico wildlife, coastal communities, coastal<br />businesses, the state of Louisiana, the state of Texas, the state of Mississippi, the state of Florida,<br />the fossil fuel industry, the economy, and British Petroleum employees.<br />Corporate Culture<br /><br />Nine years later, history holds the dysfunctional leadership that was in control of BP<br />responsible for the weak response to the crisis. Corkindale (2010) states that then “CEO Tony<br />Hayward presided over an organizational culture that sanctioned extreme risk-taking, ignored<br />expert advice, overlooked warnings about safety issues and hid facts” (2010, para 4). This<br />incubated an organizational culture that was extremely flawed and influenced BP’s poor initial<br />response to the situation. Instead of owning their accountability, BP’s leadership chose to try and<br />spin to deflect blame. According to Corkindale (2010), in a crisis “leaders must recognize when a<br />crisis cannot be spun” (2010, para 5).<br /><br />Examples of the toxic culture at BP can be found in a letter from the House Energy and<br />Commerce Committee to then BP CEO, Tony Hayward, that outlined findings at the time of the<br />disaster. (Moynihan, 2010). The findings state “the project was late and costing at least $500,000<br />a day in overruns; engineers were hurrying; they cut corners on the well design and safety<br />features and tests.”<br /><br />Furthermore, according to an AP report, in an email, four days before the well exploded a<br />BP official wrote of an engineer’s recommendation to use 21 “centralizers”: “It will take 10<br />hours to install them. I do not like this.” Later that day, another official recognized the risks of<br />proceeding with only six centralizers but commented: “Who cares, it’s done, end of story, will<br />probably be fine.” (Moynihan, 2010, para 4). These findings speak volumes towards the<br />company’s attitude regarding change, if it cost time and money, they did not care for it. Another<br />issue is that in the late 1990s the asset federation model was put into practice and this allowed<br />each site manager (rig manager) to manage their “asset” autonomously. This also allowed each<br />manager to be compensated based on its performance (Ingersoll, Locke, & Reavis, 2012). This<br />created a culture where there was no incentive to share information among managers regarding<br />any risk management best practices. (Ingersoll, Locke, & Reavis, 2012).<br /><br />The leadership style that would have benefitted instilling radical change within BP at this<br />time would have been a CEO that recognized versatility as a requirement in leading change.<br />Someone who was aware that acquiring information, strategizing, and sharing information were<br />the keys to planning out a pathway for ethical and functional work culture.<br />Pathway from Fossil Fuels to Renewables<br />Radical change calls for five distinct stages and according to Ingersoll, Locke, & Reavis<br />(2012), they are planning, enabling, launching, catalyzing, and maintaining. Additionally, each<br /><br />stage has its focus and a leadership style that works best with it. These characteristics are detailed<br />in the table below.<br />Table 1<br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo12GSF696roaaQC_WLT_Fk-Me4XnajefvLeLlIU0dBbpUEi7FdAlJXtf6JTG8V74BC1-o6qAR8wo37GQpEKBLIjrddo-Nw4ZS5Tn9n2UpWnQu9AWZL2W7II658WXcAaeHmRoDwKhFm5gy/s1600/Capture.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1341" data-original-width="1600" height="335" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo12GSF696roaaQC_WLT_Fk-Me4XnajefvLeLlIU0dBbpUEi7FdAlJXtf6JTG8V74BC1-o6qAR8wo37GQpEKBLIjrddo-Nw4ZS5Tn9n2UpWnQu9AWZL2W7II658WXcAaeHmRoDwKhFm5gy/s400/Capture.JPG" width="400" /></a></div><br />Radical change stages<br /><br />Note. Adapted from “BP and the Deepwater Horizon Disaster of 2010“, Ingersoll, Locke, &<br />Reavis (2012).<br />Assuming that the organizational culture at BP is still dysfunctional, implementing<br />radical change would require a reset from the top down with respect to culture. Having the<br />company move from fossil fuels to renewable energies would entail a planning phase to acquire<br /><br />information on climate change and how the use of fossil fuels plays into it. It would mean<br />looking at how the employee structure at BP would be affected; possible job losses versus gains.<br />Gathering information on the possible economic gains from any switch.<br />In the enabling phase any initial plans that were developed during the planning phase<br />would be shared with employees. Requests for feedback on the plans would be sought out, with<br />the key of involving employees at the grassroots level. The launch would entail beginning the<br />steps of any transitions, ensuring that all are participating, having a regular check in and progress<br />process to see where all are at in the change. In the catalyzing phase the focus would be on the<br />people affected by the change. For example, are there opportunities being offered in the plan for<br />retraining into occupations for the renewable energy markets that BP would be going into? If so,<br />are employees being supported and encouraged to take the training?<br />In the maintaining phase, the focus would still be mostly on the people involved.<br />Ensuring that there is an “ongoing emphasis on input and involvement” (Ingersoll, Locke, &<br />Reavis, 2012, p. 12). At this stage of the process, progress is also still being gauged in a longterm<br />sense. Change maintenance is just that, maintaining a momentum over a long period of time<br />and keeping the people engaged with it.<br /><br />References<br />Corkindale, G. (2010, June 28). Five Leadership Lessons from the BP Oil Spill.<br />Retrieved from https://hbr.org/2010/06/five-lessons-in-leadership-fro.<br />Ingersoll, C., Locke, R., & Reavis, C. (2012). BP and the Deepwater Horizon Disaster of<br />2010. Cambridge, MA. This work is licensed under the Creative Commons Attribution-<br />Noncommercial-No Derivative Works 3.0 Unported License. Retrieved from:<br />https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon<br />%20Locke.Review.pdf.<br />Moynihan, C. (2010, June 18). MercatorNet: Management attitudes behind the<br />Deepwater Horizon disaster suggest another problem the company needs to address. Retrieved<br />from https://www.mercatornet.com/articles/view/bps_creaky_ethical_machinery/.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-30185826029153959762019-07-01T03:04:00.000+05:302020-03-30T01:59:28.450+05:30Why do we need to adhere to standards?<div dir="ltr" style="text-align: left;" trbidi="on"><br />Cost and time are very essential to every project and its success however, standard compromise could cause a project set back which could incur more cost than budgeted on the project and even waste more time than necessary. Standards are measure, or model in comparative evaluations set to prevent excesses or inequalities. In project management, “project planning standards defined project activities and address the specific requirements of individual projects” (Finn, 2019). Suffice to mention that “Stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success” (Project Management, 2018). At the project planning phase, identification of stakeholders, analysis of their interest and effective communication to them and everyone directly or indirectly involved in the project is crucial as it helps maximize success and reduce risks. Project success depends on effective communication as it helps to define and clear doubts on the expectations of everyone involved. In summary, I totally agree that adherence to the standard is not negotiable in managing project, impact analysis to stakeholders as well as effective communication to all the parties involved.<br /><br /><br />Innovation and Standard are two different things that should be segregated for proper checks. Many of the product that were developed today did not start with safety in mind. Just as the author stated “just doing it”, the idea started with a thought to just make something of value. Take for example, when the first airplane was built, the wright brothers did not factor in activities like routing maintenance, the level of training for pilot, run way design and many more. But as the invention evolve, some other specialists came into the industry to study the entire chain of process and began to develop standard of operations for air flight. Also is social media, it can present a huge advantage to innovative organizations that strive to provide cutting-edge products and services, but there can also be negative consequences – innovation cannot occur at the cost of compliance (Secpage, n.d.). “Compliance insures the safety, health and wellbeing of consumers” (Secpage, n.d.). The essence of having someone else handle the rule and standard other than the innovator is to ensure holistic look at the safety standard of the product and ensure compliance to regulations. I believe rules and regulation exist for human safety and the understanding of it ensures properly application of it and unbiased. In conclusion, innovative people cannot and should not be the ones to apply standard however, there are those trained to question every aspect of the invention for safety compliance. Those trained on rules and regulations should lay out the standards for innovator's compliance. The only way to have a balanced ecosystem.<br /><br />All project life cycle phases are essential to a successful project outcome however, within the context of the story, the planning phase of this magnitude of project is critical. The planning phase is where project manager break down the larger project into smaller tasks, gather teams and prepare a schedule for the assignments completion (Lucidchart Content Team, 2017). The planning phase is where the risk is anticipated, issues that may put the project on hold are identified and the approach to mitigate the risk is developed. This is why it is extremely important that a certified contractor was used for such project. A certified individual tasked with such job will take into consideration the acceptable standard to follow when executing the project of that nature because every project is unique and require unique and professional approach for it to be a success and last.<br /><br />References<br />Finn O. (2019). Setting Standards for Project Management and the Project Plan. Retrieved from: https://www.brighthubpm.com/project-planning/37861-project-management-planning-standards/<br />Lucidchart Content Team (2017). The 4 Phases of the Project Management Life Cycle. Retrieved from: https://www.lucidchart.com/blog/the-4-phases-of-the-project-management-life-cycle<br />Project Management (2018). What is Stakeholder Analysis? Retrieved from: https://project-management.com/what-is-stakeholder-analysis/<br />Secpage (n.d.). The balance between innovation and compliance. Retrieved from: https://www.specpage.com/innovation-compliance/</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-51228132102294475882019-07-01T02:59:00.000+05:302020-03-30T01:59:28.528+05:30Why an impact analysis is important?<div dir="ltr" style="text-align: left;" trbidi="on"><br />Yes, I agree with the statement of the question above. The ‘hidden cost’ reminds me of the quote “if you think it is expensive to hire a professional to do the job, wait until you hire an amateur”.<br />“A better adherence to the standards” means the professionals have responsibilities to complete the project within its ‘budget’. As stated by Finn Orfano (n.d.) the standards point to the project planning standards is such a guidance that contains specific requirements of individual projects, such as thoroughgoing goals and objectives, budget and schedule, to ascertain all the team members could identify and comply it effectively and efficiently, including risk management standards with the purpose of minimizing disruptions and ensuring the smooth process (Orfano, nd.). Michelle LaBrosse (2010) mentioned when the project is guided by standards, it means the professional team members are having a commitment to follow the rules and regulations that are stated in the agreement. <br />Furthermore, as many factors that affect the project’s result, a project manager needs to learn the stakeholder impacts on their projects and being innovative to find out unexpected situations, for instance through the intense communication (LaBrosse, 2010). He needs to ensure that the project outcome meets or even exceeds the stakeholder expectations by implementing any necessary changes. If the outcome did not satisfy the stakeholders, there is a possibility that the professional needs to change the original objectives or even the clients would cancel or terminate the agreement.<br /><br />The author concludes the article with the following statement: “in a world enamored with people -just doing it- and -thinking outside the box-, we need folks who still know how to learn the rules, understand why they exist and create a safe environment for all." Do you agree that innovative people cannot be also people that understand, apply and adhere to standards? Why or why not?<br />Adaptability is one of the management abilities in order to overcome the challenges that come along with the project (Parker, 2019). From my point of view, to be innovative is one of the requirements as a project manager in today’s global era where there are fierce competitions with dynamic challenges. A manager must be able to deal with the variety of unfamiliar situations especially for the problem-solving. Therefore, innovative people do not apply and adhere to standards, it does not mean they did not understand, but they need for being flexible to adapt to the fast-changing circumstances, find and apply the appropriate solutions, even though sometimes they have to disregard the standards. For example, Tesla’s Model S sedans with 'access to self-driving options'. It does not mean that the company was not aware of the standard safety, as Tesla CEO, Elon Musk specified that this style is not fully autonomous vehicles and warned people to drive carefully by keeping their hands on the wheel (McCormick, 2015).<br /><br />I believe the crucial phase in the project life cycle phase is the planning phase. According to Adrienne Watt (2014), in the planning phase, the team members would develop the project solution through the proper objectives to meet the desired goals, including to estimate the expenses in budget preparation, the quality planning, human resources, identify and try to reduce the obstacles and failure rate, appropriate dateline and build communication to stakeholders.<br />Without adequate planning, the project would be like lost in the middle of nowhere without any directions, besides it would be hard to convince the stakeholders of successful project management. Therefore, this phase has a significant role as it would lead this project’s activities from start until the ending point, how the plan would be achieved and confirmed.<br />While for the fundamental knowledge area, I think managing the team-work is the most crucial part, where the manager must be able to find the right person for the right job. Dinnie Muslihat (2018) observed that the project achievement because of a good collaboration on teamwork, especially through communication, sharing ideas, and commitment. The way a manager does his responsibility to delegate people based on their experiences, individual work style, skill, and knowledge. Furthermore, he must encourage engagement among teamwork and coordinate to do the tasks, clearly specify the preferred outcomes, discuss timelines and deadlines.<br />The efficiency delegation is very important for the business continuity, as it would improve the decision making, reduce the work overload for managers, intensify the faster decisions, and build morale employees (Bhasin, 2018). On the contrary, the unsuccessful delegation would have some negative impacts, such as the performance degradation, the employees become less confidence and unhappy on their job as the inappropriate job responsibilities those cause the continuous failures.<br /><br />References:<br /><br />Bhasin, H. (February 2018). The Importance of Delegation. Marketing 91. Retrieved from: https://www.marketing91.com/the-importance-of-delegation/<br />LaBrosse, M. (2010). The Hidden Costs and Dangers of the Shortcut. Project Smart. https://www.projectsmart.co.uk/the-hidden-costs-and-dangers-of-the-shortcut.php<br />McCormick, R. (2015). Tesla owners are ignoring autopilot safety advice and putting the results on Youtube. The Verge. Retrieved from: https://www.theverge.com/2015/10/21/9589724/tesla-autopilot-videos-youtube-safety-advice-ignored<br />Orfano, F. (n.d.). Setting standards for project management and project plan. Bright Hub Project Management. Retrieved from: https://www.brighthubpm.com/project-planning/37861-project-management-planning-standards/<br />Roworth, G. (2017). Ineffective Delegation: The third critical business mistakes. Living Now. Retrieved from: https://livingnow.com.au/ineffective-delegation-business-mistake/<br />Stewart, G. (2013). When delegation goes wrong…. Lead Change Group. Retrieved from: https://leadchangegroup.com/when-delegation-goes-wrong/<br />Watt, A. (2014). Project Management. BCcampus Open Textbook project. Licensed under the Creative Commons Attribution 4.0 Unported License.<br /><br /></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-58432792674810240242019-07-01T02:53:00.000+05:302020-03-30T01:59:28.612+05:30Can innovative people be also people that understand, apply and adhere to standards? <div dir="ltr" style="text-align: left;" trbidi="on">I do agree that following standards, taking all stakeholders in mind and having efficient communications with all parties involved in the mentioned issue would have avoided the catastrophe. Following standards is crucial for any project. The fact that the project manager didn’t follow the rules and didn’t get any permits for his work lead to the spillway compromising and the catastrophic after that. All of that could have been avoided if a certified project manager was taking the lead as he would have followed the rules, knew the nature of the project land and at the end avoided any harm for any of the stakeholders. Talking about the stakeholders, certified project managers takes into account all stakeholders of the project and tries to weigh all stakeholders impact of the projects. Finally, projects managers are good communicators by nature, they are used to communicate with each party and ask all the tough questions to make sure that the project is on the right track.<br />I do agree as well with the author’s endnote that we still need rules and people who understand them and the reasons behind them in order to have a safe environment for everyone. Innovative people follow the rules all the time but at the same time, they try to find new innovative ways to get things done. The borderline here is if the innovative solution is adhering to the rules and laws or is it breaking them, are there any stakeholders who will be affected by these new ways, what is the level of that effect and is there a way to decrease it or better to eliminate it. New ideas shouldn’t be implemented without answering these questions or a catastrophe like the one mentioned earlier will be in the making.<br />The PMBoK state ten knowledge areas and five project life cycle phases (PM PrepCast, 2017) and they are all important to any project. For the story mentioned in the article, the most crucial knowledge areas were the project risk management which is the calculation of all risks during the project life cycle determining how to handle them and reduce them, the second one is the project communications management which meant to take care of communications between all personnel in the project and make sure they are all aware of every aspect of their job in the project, and the third was project stakeholder management which identifies all the stakeholders that can affect or be affected by the project. These three knowledge areas would have helped the project manager to know the risks of the project and the stakeholders of the neighboring area that got flooded and the communication would have been better with authorities to know more about the area. As for the five project life cycle phases, the most crucial would have been the initiation phase. In this phase, the project outlines are put in place with the critical success factors, risks and full scope of the project. This would have required more information about the place of the project and would have saved the spillway from being compromised leading to the catastrophe<br /><br />References:<br />PM PrepCast (2017). PMBOK® Guide 6th Edition Knowledge Areas for Project Management - Process Groups and Processes - The Complete Guide. Retrieved from: https://www.project-management-prepcast.com/pmbok-knowledge-areas-and-pmi-process-groups</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-7790853050825558442019-07-01T02:29:00.000+05:302020-03-30T01:59:28.695+05:30How to address stakeholder? <div dir="ltr" style="text-align: left;" trbidi="on">Stakeholders<br /><br />Internal stakeholders for this project include students, the teachers, and the school<br />administrators. They would all need to be partners in some way to make the project work.<br />External stakeholders would be parents, tax payers, local government and private investors.<br />These subjects would also need to be partners in order for the project to be successful.<br /><br />Committees<br /><br />For internal stakeholders, there should be a committee that addresses issues that arise on<br />a daily basis due to the new initiative. Internal stakeholders will be directed affected and will<br />have their own particular concerns over the duration of the project. Students can use this<br />committee to express any learning difficulties or environmental changes that can come as a result<br />of the classroom consolidation. Teachers will be able to discuss new challenges in the classroom<br />due to the project with the committee, who will be responsible for creating solutions. The school<br />administration can also use this committee to address concerns about the project that affect<br />school resources, capacity, etc.<br /><br />External shareholders should have a committee that acts as a combination of internal and<br />external so that external shareholders are informed about what exactly is taking place during the<br />project. For instance, the second committee should be comprised of particular teachers and<br />faculty of the school, along with relevant government representatives, tax payers and private<br />investors. This way, internal concerns can be taken into account when addressing external<br /><br />concerns. Stakeholders who are on the outside looking in should have a committee that serves<br />updates on progress, next steps, and addresses internal concerns from the external perspective.<br />Articulate how you would integrate the external stakeholders into the strategic management<br />process and how you would keep stakeholders informed.<br />External stakeholders would be kept informed through committees that focus primarily<br />on relevant information regarding the strategy of the classroom consolidation. This committee<br />would prepare weekly or monthly materials that will be distributed to external shareholders, as<br />well as hold public forums for shareholders to voice concerns about parts of the strategy.The<br />most productive way to communicate to these shareholders is to have an agreed upon list of<br />shareholders needs and wants that can be compared to each step in the strategy, during these<br />public forums. This will highlight the connection between their concerns and the steps being<br />taken.<br /><br />Optimal Solution<br /><br />The best solution to problems that may arise when consolidating students to create larger<br />classrooms is to redesign curriculum to be conducive to a larger class size. The resources saved<br />by using less teachers should be used partially to create extra support for students like tutoring<br />and emotional support. More students means more concerns and less authority to handle those<br />concerns. In order for the project to fulfill its goals--properly educating and supporting students<br />within the resource constraints of the school administration, there has to be a substitute for the<br />loss incurred by the project. The optimal solution is to balance out that loss.<br /></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-17081284117469295492019-07-01T02:27:00.000+05:302020-03-30T01:59:28.775+05:30How to involve stakeholders? <div dir="ltr" style="text-align: left;" trbidi="on"><br />Strategy management is a process that requires the ability to manage change (Ketchen, 2012, page 38). This essay is about the role of internal and external stakeholders in project management. This explains why it’s important to involve and to communicate.<br />Keywords: Internal & exernal factors, Strategic Management, Decision-making process, Transparency.<br /><br />We leverage the example of a school which wants to consolidate classes to save on teachers’ wages. We first list the stakeholders and their arguments. We then explain how we integrate the different stakeholders into the strategic management process. Last, we propose a solution that seems optimal.<br />Stakeholders review and main arguments<br /><br />First of all, there are four internal stakeholders: 1) pupils. While they won’t benefit from lower taxes unless their parents somehow reinvest the savings into extra activity (cultural, sportive or private teacher), they would be directly impacted by classes’ consolidation. Indeed, this means less focus from the teacher and less time for individual coaching.; 2) teachers. This would mean more complexity to properly manage their classroom and less time to personalize coaching. Losing one teacher would probably result in extra workload to handle the non-teaching tasks (e.g. school projects). All in all, this could lead to less motivation and lower retention (Ratcliffe, 2017). We assume that there is no room for increasing wages of teachers; 3) non-teaching staff. They often play an active role in school management (catering, nurse, maintenance, teacher’s assistant) and contribute to the development of children. They also enable teachers to focus on teaching. They would fear for their job too; and 4) the school’s director. S/he would be impacted as there is a need to handle change and unsatisfaction from internal stakeholders This might also require extra work to handle external stakeholders (parents’ representative, city council…) and less focus on core work.<br /><br />Besides, there are five external stakeholders: 1) Pupils’ parents and their representative: While they would probably bless paying less income, they would hardly compromise on teaching quality and would probably be skeptical about the quantity of kids per classroom, 2) Representatives of the city council (in charge of education). They probably need to deliver the promise they made of reducing local taxes. They would downplay the impact of class consolidation and would bring benchmark from other cities. However, fewer classrooms or perceived lower quality of teaching would make the city less attractive to settle in; 3) Local representative of ministry of Education. The education system is different from one country to another. In my country, the State - the ministry of Education - is the accountable body and assigns district managers, who make final decisions about the opening or closing of a classroom. The district manager would need to answer objections from the city, from the parent’s representative and from the school’s director and bring counter-arguments. While the State may be interested in reducing taxes, its direct<br /><br />responsibility is not on local taxes; 4) Tax payers. Any local tax saving may be good news at first glance for inhabitants, especially for those who have no kids attending this specific school, and 5) other local schools. They are indirect stakeholders. They might provide less crowded classrooms and be attractive for parents who worry about pedagogic quality. This brings competitiveness between schools and may amplify the variation of number of pupils per school / classroom. A local school would be pleased to welcome a few extra kids to consolidate classes, especially if one classroom is at stake.<br />1<br />Management Process<br /><br />We would assign a team to set the diagnosis on class consolidation and its impact. This team would involve parents’ representative, school director, teachers’ representative and non-teaching staff’s representative. They would work together to gather data, to handle break out by age brining projection for coming years. This team would handle the topic from different viewpoints (pupils, teacher, non-teaching staff, parents, school director). The output would consist in sharing diagnosis with the steering committee.<br />The steering committee would have quarterly meetings as per the operational rhythm of local schools. It gathers parents’ representatives, teachers, school director, spokesperson of non-teaching staff, representative of city hall, district representative of the Ministry of Education. The output of the team would be presented and discussed. Broader perspective at city and district level would be brought, together with new arguments or thresholds. Timelines would be shared. Minutes of the meeting would be mailed to parents. Parents’ representative may put higher pressure on city council or district representative of the Ministry of Education through specific actions to demonstrate their satisfaction.<br /><br />This is why it’s important to assign a second team to work on solutions or scenario planning. What would be the organization if one classroom was to be discontinued? How could the school deliver savings without closing a classroom? This could be done by postponing renovation investments or by further sharing non-teaching staff or by negotiating better costs for catering. This should involve local schools’ directors and a broader team from the city council to get the full picture. The output would be shared in the next quarterly steering committee and conclusions would be sent out to the district representative of the Ministry of Education and all stakeholders would be informed. In my home country, s/he would be the final decision maker and would value the efforts made to screen different scenario and to come with impact study.<br /><br />Recommendation & conclusion<br /><br />In my view, we can’t compromise on education. The quality of the educational system is a major driver of attractiveness. Nevertheless, I would strongly value the data-driven output of the two teams. Whichever final decision is made, I would consider that efforts have been made on the right thing by involving all stakeholders (Business Stakeholders: Internal and External, n.a..).<br /><br />References:<br /><br />Business Stakeholders: Internal and External. (n.a..). Retrieved from:<br />http://oer2go.org/mods/en-boundless/www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/overview-of-key-elements-of-the-business-19/business-stakeholders-internal-and-external-117-6595/index.html<br />Ketchen, D & Short, J. (2012) Strategic Management: Evaluation and Execution. This book is licensed under a Creative Commons by-nc-sa 3.0 license.<br />Ratcliffe, R. (Jan 31, 2017). The reality of budget cuts in schools – survey. Retrieved from:<br />https://www.theguardian.com/teacher-network/2017/jan/31/the-reality-of-budget-cuts-in-schools-survey</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-64836292932719842942019-07-01T02:23:00.000+05:302020-03-30T01:59:28.859+05:30Strategic management<div dir="ltr" style="text-align: left;" trbidi="on">Strategic management can be defined as an inclusive process that requires the ability to manage change (Ketchen, 2012). Each word is important. First thing first, this is a process. This means that different steps are undertaken over a period of time to set and plan the strategy for the year to come or for the coming years. This also means that year after year, the process serves as a framework to guide the thinking, to set milestones or to sort roles within the organization. Moving to inclusive, this means that several stakeholders should be involved in the process. This would of course change from an organization to another. Yet, all functions are generally incorporated in the planning process. There might have a business planning or strategy & insights department that leads and coordinates the process. Alternatively, someone may be assigned and should engage and energize the different functions behind the strategic process. Whichever option, many functions are engaged. Top management plays an important role at key milestones to decide which option to choose or which target to set.<br /><br />Change management requires to have a deep understanding of the internal and external environment. Consumers’ voice is often considered through surveys or reports from the customer service. This enables to identify major drivers and restraining factors of satisfaction, together with appeal for potential new solutions. Suppliers and customers’ dynamics are often tracked as important forces (Porter, 2008). What ‘s the dynamic? Have they strengthened or weakened their position? Should the organization diversify its set of retailers or suppliers to diminish the risk? Another stakeholder to take into account when setting or updating strategy is competition. For instance, the organization should consider how its share of market has evolved, whether there are new entrants or alternative segments. Employees should be also considered through the HR and culture angle. Concretely, does the organization have the right people and skills to deliver its strategic goal? Should it invest in specific training or develop specific behavior? As part of the external environment, the legislation, activists and local communities should be carefully analyzed to understand whether it may threaten the business. Last but not least, shareholders’ interests should be also considered when setting financial targets and growth plan to rightly balance short-term earnings and sustainable results. The board of directors would be involved in the process.<br />CCEP Sweden case<br />I used to work at Coca-Cola European Partners (CCEP) Sweden as category strategy manager. CCEP is the leading bottler in Sweden commercializing the beverages from different companies, namely The Coca-Cola Company, Monster inc (energy drinks), Capri-Sun AG (juices). In my role, I have been a contributor to the year-to-come strategy. The process was led by the head of strategy within CCEP Sweden and the kick off was early March. A feature team was designed covering different functions within CCEP. A RACI approach (responsible, accountable, consulted, informed) was used to define who does what (Kantor, 2018). Milestones were set with specific deliverables. Ideation session were also set. Overall, we did not start from scratch but used the process of the previous year and stepped back to decide what to keep and what to change to make the process more efficient. Also, we reviewed the strategy aligned for the actual year. Analyzes about the external environment using tools such as SWOT and about the internal environment were conducted. We also considered the innovation pipeline and how it fit with the local business needs either to set priorities or to spot the gaps. I found really interesting to connect with peers from the different European countries to better understand what worked and did not work in their country and to better understand how they handled the business planning process. <br />Once the landscape was assessed (external and internal factors) together with the status on current strategies and the identification of top opportunities and major vulnerabilities, an important effort was to get alignment with the different brand owners about the joint strategic plan for the year to come. This was carried out through different sessions during which the focus was on how to close the potential gap between CCEP and a specific brand. This could lead to the identification of specific actions to be taken such as mitigation or stretch plans. Once an agreement was set, the strategic plan was not only deployed in the right and crisp format to the different teams but more importantly was used through the year as a reference. Team and individual objectives were also in line with the strategic plan.<br />Conclusion<br />Strategic management is an important task for organizations. This is one way to get strong engagement from teams. This does not mean everything is graved in stone and the realized strategy would somehow differ from the intended strategy by taking into account unexpected opportunities and challenges (Ketchen, 2012). Execution and agility matter too.<br /><br />References:<br />Kantor, B. (Jan 30, 2018). The RACI matrix: Your blueprint for project success. Retrieved from :<br />https://www.cio.com/article/2395825/project-management-how-to-design-a-successful-raci-project-plan.html<br />Ketchen, D & Short, J. (2012) Strategic Management: Evaluation and Execution. This book is licensed under a Creative Commons by-nc-sa 3.0 license.<br />Porter, M (Jan 2008). The Five Competitive Forces That Shape Strategy. Retrieved from:<br />https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy<br /> </div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-43030633228427865332019-07-01T02:22:00.000+05:302020-03-30T01:59:28.942+05:30how strategic management applies to a variety of organizations<div dir="ltr" style="text-align: left;" trbidi="on"><br /><br /> Ferrari is a well-known luxury sports car manufacturer. In this discussion, I am going to discuss its strategy using Mintzberg 5 Ps of strategy. The 5 Ps of strategy is meant to cover and articulate the broad subject of strategy (Ketchen & Short, 2012). It is useful in analyzing strategies, as shown below: - <br />Strategy Analysis<br />Plan<br /> Ferrari new plan for the 2018-2022 period is to produce 15 new models that are mainly hybrid cars and an SUV (Flak & Rebaudo, 2018). Ferrari CEO stated that "not everyone who loves Ferrari loves driving sports cars" (LILLI, 2018, para. 2). Therefore, management are trying to capitalize on the Ferrari brand to sell more cars to other consumers while remaining true to the Ferrari spirit. <br />Poly<br /> Current hybrid cars are silent when it comes to exhaust sounds. Ferrari is a leader in sports cars that enjoys an appealing sport sound of their vehicles. So, how can Ferrari enter the world of fully electric and hybrid engines without compromising its passion and position? Well, its chief technology officer has said that the sound will continue to be part of the Ferrari experience, and the music will deliver “a punch to the stomach” as he described it (LILLI, 2018, para. 5). Therefore, Ferrari seems to utilize sound as poly to penetrate markets that were not possible for current manufacturing to penetrate due to lack of the sport sound in their cars.<br />Pattern<br /> Ferrari strategy pattern is to immerse itself in research and development to stay a leader in the luxury sports cars industry. Innovating is an obligation for Ferrari to continue producing cars with state-of-the-art technology. Although lately, Ferrari is shifting paradigms while staying true to its passion with hybrid engines.<br />Position<br /> Luxury sports car brand with extreme performance cars build about Ferrari formula one heritage while selling merchandise under the Ferrari brand; a car that is owned by the few. The few should be celebrities and known figures, not any person who has money such as criminals. For this, a background check of the purchaser is mandatory before selling any car (Bhasin, 2018). Exclusivity as an emotional benefit and loudness and aggressiveness as brand personality is vital to remain true to its roots.<br />Perspective <br /> Ferrari was lagging in entering the SUV markets that competitors such as Porsche benefited from early with its luxury Cayenne SUV and luxury four-seat cars such as Porsche Panamera. Ferrari, later on, manufactured the four-seaters Ferrari GTC4 Lusso in response to Porsche, which is a step toward expanding their market share while also keeps exclusivity intact by keeping the prices very high. Therefore, although Ferrari was lagging when it comes to expanding their product line, it is now entering those markets with a plan that guards their position well.<br />Conclusion<br /> Ferrari brand has invested a lot into building such sustainable competitive advantage through its strong brand. They will exist as long as it continues its excellence, and as long as rich people exist. They capitalize on exclusivity by charging higher prices and limiting its car supplies. Ferrari needs to return to win Formula 1 races if they want to save their heritage as a leading formula one winner.<br />References<br />Bhasin, H. (2018, March 21). Marketing Strategy of Ferrari - Ferrari Marketing Strategy. Retrieved June 24, 2019, from https://www.marketing91.com/marketing-strategy-ferrari/<br />Flak, A., & Rebaudo , S. T. (2018, September 18). Ferrari plans 15 new models, SUV to deliver earnings growth. Retrieved June 24, 2019, from https://www.reuters.com/article/us-ferrari-strategy/ferrari-plans-15-new-models-suv-to-drive-earnings-growth-idUSKCN1LY0KJ<br />Ketchen, D & Short, J. (2012). Strategic Management: Evaluation and Execution. This book is licensed under a Creative Commons by-nc-sa 3.0 license. Retrieved from: http://jsmith.cis.byuh.edu/books/strategic-management-evaluation-and-execution<br />LILLI, E. (2018, September 18). Ferrari Reveals 2018-2022 Roadmap With More Hybrid Models. Retrieved June 24, 2019, from https://www.motor1.com/news/266493/ferrari-reveals-roadmap-more-hybrids/</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8902842965601356029.post-15848360375458690732019-07-01T02:20:00.000+05:302020-03-30T01:59:29.025+05:30Why strategy is important? <div dir="ltr" style="text-align: left;" trbidi="on">Will Kenton (2019) defines strategic management as the management of an organization’s resources in order to achieve its goals and objectives. Included in strategic management are goal setting, analysis of the competitive environment, analysis of the internal organization, consistent evaluation of strategies, and proper roll out of strategies organization-wide by management. Ketchen & Short (2012) provide plenty of examples of strategic management which include various ancient, traditional, and modern organizations and situations. In addition, it is further explained that creativity is essential in strategic management, which ultimately is part art and part science and involves multiple conceptualizations of strategy based on recent on historical events and situations (Ketchen & Short, 2012). It can also be argued that flexibility and adaptation are essential as a part of strategic management, as strategies will evolve and new strategies will emerge for organizations based on the industry and organizations climate, events, and trends. In order to be successful long-term, an organization must be able to adapt to change. Ultimately, implementing strategic management is a means of survival for an organization, where actually putting strategic management into place is the most important aspect of the planning in this multi-step process (Kenton, 2019). Many organizations have successfully utilized strategic management en route to current success. One such company that exemplifies proper strategic management is Amazon.<br />Understanding Michael Porter’s five forces model, which indicates that there are five competitive forces that determine domain profitability: bargaining power of customers, threat of substitutions, bargaining power of suppliers, threat of new entrants, which all lead to rivalry (Kroenke, 2007), has allowed Amazon to respond to the competition and provide value to its customers. Because Amazon competes with a variety of companies that include well-established firms, such as Walmart, small brick and mortars stores, as well as other e-commerce businesses, Amazon must analyze Porter’s five forces and react, which will result in creating a competitive strategy. As it stands, it appears that Amazon faces and must address the significant forces of rivalry, the bargaining power of the consumer, the threat of substitution, and to a lesser degree, the bargaining power of the supplier (Greenspan, 2017a). Realistically, at this point in time, the threat of a new entrant isn’t a driving force for Amazon, as they are the industry behemoth. Because rivalry is so prominent in Amazon’s industry, Amazon must prioritize this force as a competitive strategy. The competition in retail is extremely aggressive, thus creating plenty of options for the customer (substitution). In addition, it is easy for the customer to switch brands, as there are low switching costs in the retail industry. On top of low switching costs and high availability of substitutes, there is a plethora of high-quality information for the consumer, giving the consumer plenty of bargaining power. To address these forces, Amazon must continue boosting its strong brand reputation and image, focus on service quality, and continue to enhance the usability of its website to improve and optimize customer experience (Greenspan, 2017a). Identifying where Amazon’s focus is in regards to the competitive forces of the industry allows for Amazon’s value chain to be analyzed to identify where and how Amazon offers value to the consumer.<br />Upon identifying a competitive strategy, a value chain is generated, which is a network of value-creating activities (Kroenke, 2007). Porter created a generic value chain which consists of five primary activities (In-bound Logistics, Operations, Out-Bound Logistics, Marketing and Sales, and Service), followed by four supporting activities (Firm Infrastructure, Human Resources, Technology Development, and Procurement). The primary activities amass costs while adding value to the product, where the net result is the total margin (the difference between total value added and total costs incurred). Meanwhile, the supporting activities indirectly contribute to the production, sale, and service of the product (Kroenke, 2007). Within the value chain, there are linkages, which are interactions across value activities.<br />The transport, storage, and delivery of goods coming into a business are referred to as inbound logistics (Ingram, 2018). The backbone of Amazon’s inbound logistics is “Fulfillment by Amazon,” which sellers can also use by storing their goods in Amazon fulfillment centers. In this case, Amazon is responsible for logistics, customer service, and returns. Amazon’s operations are divided into three segments: North America-focused Amazon websites, international-focused Amazon websites, and Amazon Web Services (AWS). AWS focuses on global sales of computing, storage, database, and other services that can be provided to start-ups, enterprises, government agencies, and academic institutions (Dudovskiy, 2018). Outbound logistics includes the same goods as inbound logistics, but refers to them going out of the business (Ingram, 2018). Amazon’s outbound logistics include its 109 fulfillment centers around the globe, where technology is used to manage the receipt, storing, and shipment of products. In addition, Amazon uses digital delivery for downloadable products, as well as physical stores, since it recently acquired Whole Foods. Amazon’s marketing expenses exceeded that of Walmart, Target, Kroger, Best Buy, and Home Depot combined in 2016. The marketing message illustrates the promise of the largest selection of products and services, attractive prices, fast delivery of products and overall superior customer services. Finally, Amazon’s unprecedented customer service consistently ranks #1 in the Customer Satisfaction Index for both the UK and America (Dudovskiy, 2018). As explained through the value chain analysis, Amazon provides significant value to its customers in each of the five primary activities. Amazon’s success isn’t an accident, it is a result of understanding the competitive forces, and its ability to evolve based on them.<br />Jeff Boss (2017) suggests that staying relevant in today’s landscape, to maintain a competitive advantage, a company must be able to adapt, and because of Amazon has displayed their value of adaptability, they have become the giant that they are. Amazon’s business strategy is the epitome of adaptability. Upon its inception in 1995, Amazon was a virtual bookseller, allowing them to sell books directly to the customer while giving the customer a significantly larger selection than any bookstore, at lower prices. The lower prices were a result of not possessing much of its own inventory, coupled with not having to maintain an actual storefront or a large retail staff. In 1998, Amazon began selling music and movies, adapting to the competitive forces that drove the company. Soon thereafter, Amazon altered its strategy to become the online version of Walmart, giving the consumer the “best place to buy, find, and discover any product or service online,” including electronics, toys, apparel, food, travel services, and jewelry, amongst others. At the same time, it rolled out an auction service similar to eBay. These new offerings forced the company to increase costs by expanding its warehouse and distribution centers, as well as hiring a significant amount of employees. Again adapting, in 2001 and 2002, Amazon cut prices, offered free shipping, and leveraged its technology infrastructure to supply e-commerce services to other companies. Further adapting and refining its business strategy to become more efficient in operations by consolidating orders prior to shipping, in order to reduce shipping costs (Laudon & Laudon, 2007). Yet again adapting, Amazon then introduced Amazon prime, a subscription service that offers perks to subscribers, entered the grocery business with the purchase of Whole Foods, and again adapted with AWS, and its ability to offer cloud services, compute resources, networking and computing services (Dudovskiy, 2017). Redundantly speaking, Amazon has become what it is and maintained its competitive advantage because of its ability to adapt.<br />Despite the various markets Amazon participates in, it maintains a competitive advantage in all of them. Regardless of what it is that the customer is looking for, Amazon provides the customer with a fast, reliable service at a lower price. Due to its wide array of products and services, Amazon has millions of customers. It maintains and keeps the millions of customers because of the aforementioned reasons, plus its ability to efficiently fulfill orders, on top of its excellent customer service. Finally, it has a knack of staying ahead of the competition, despite the competition quickly copying Amazon’s strategies. Amazon still controls 40% of the U.S. e-commerce book market, its Echo devices own roughly 75% of the smart speaker market, it operates a major Hollywood studio, and its AWS possesses about 40% of the cloud computing market (Cohan, 2018). To top it all off, which may be Amazon’s largest competitive advantage, 55% of Americans begin their product searches on Amazon.com, which most likely leads to the majority of those shoppers finishing their shopping at Amazon as well (Levy, 2016).<br />Despite its strengths, Amazon does have weaknesses and opportunities for improvements. Although it has a strong brand and extensive product mix, Amazon has a very imitable business model, have a very limited brick-and-mortar presence, and have yet to strongly penetrate developing markets (Greenspan, 2017b). In addition, in recent years Amazon has had counterfeit products sold on its site, plus elements of cybercrime, which has obviously led to discontent amongst its customers, as well as those who sell their products on Amazon. These weaknesses and threats lead to opportunities for Amazon. Amazon can dedicate efforts into using technology further to its advantage and tighten security plus address and eliminate counterfeit sales to protect itself, its vendors, and its customers. On top of that, Amazon can focus on penetrating developing markets prior to other companies emerging in these markets. Finally, Amazon has the opportunity to open more brick-and-mortar stores (Greenspan, 2017b).<br />Amazon is the industry giant for many reasons. It’s recognition of the competitive forces, using its value chain to bring value to the customer, maintaining its competitive advantage by consistently adapting. Amazon has a mass of products, various places of distribution, its promotion and marketing is second to none, it prices are value and market-oriented, and it has amassed millions of people as customers, not to mention the customer service. Richard Koch (as cited by Cannivet, 2018) elucidates that two types of businesses succeed over time: price simplifiers, such as Walmart (people shop to save money), and proposition simplifiers, such as Apple (people shop to engage in the experience). While most companies strive to compete in one area or the other, Amazon not only competes but dominates in both by simplifying the price and the proposition for its customers. As a result, Amazon has risen to the top of the chain and will continue for the foreseeable future. Thus, Amazon is the epitome of proper implementation of strategic management. From its inception, there were goals, constant evaluation both internally and externally, implementation and evaluation of strategies, and a significant amount of creativity and flexibility, which allowed Amazon to go from an idea to a multi-industry behemoth that shook and disrupted many industries.<br />Resources<br />Boss, J. (2017, June 20). Amazon's Competitive Advantage Isn't Cost Or Convenience, It's This. Retrieved June 22, 2019, from https://www.forbes.com/sites/jeffboss/2017/06/20/amazons-competitive-advantage-isnt-cost-or-convenience-its-this/#48e11bff4958<br />Cannivet, M. (2018, February 02). 3 Secrets Of Amazon's Success Anyone Can Emulate. Retrieved June 22, 2019, from https://www.forbes.com/sites/michaelcannivet/2018/02/02/3-secrets-of-amazons-success-anyone-can-emulate/#269ab1504826<br />Cohan, P. (2018, February 05). 3 Reasons Amazon Is The World's Best Business. Retrieved June 22, 2019, from https://www.forbes.com/sites/petercohan/2018/02/02/3-reasons-amazon-is-the-worlds-best-business/#73d135b46356<br />Dudovskiy, J. (2018, August 05). Amazon Value Chain Analysis. Retrieved June 22, 2019, from https://research-methodology.net/amazon-value-chain-analysis/<br />Ferguson, E. (2017, February 20). Amazon.com Inc.'s Marketing Mix (4Ps) Analysis. Retrieved June 22, 2019, from http://panmore.com/amazon-com-inc-marketing-mix-4ps-analysis<br />Greenspan, R. (2017a, February 20). Amazon.com Inc. Five Forces Analysis & Recommendations (Porter's Model). Retrieved June 22, 2019, from http://panmore.com/amazon-com-inc-five-forces-analysis-recommendations-porters-model<br />Greenspan, R. (2017b, February 20). Amazon.com Inc. SWOT Analysis & Recommendations. Retrieved June 22, 2019, from http://panmore.com/amazon-com-inc-swot-analysis-recommendations<br />Ingram, D. (2018, June 26). Outbound Vs. Inbound Logistics. Retrieved June 22, 2019, from https://smallbusiness.chron.com/outbound-vs-inbound-logistics-77016.html<br />Ketchen, D., & Short, J. (2012). Strategic Management Evaluation and Execution. Retrieved June 21, 2019, from https://my.uopeople.edu/pluginfile.php/515745/mod_page/content/6/strategic-management-evaluation-and-execution compressed.pdf<br />Kenton, W. (2019, June 09). How Strategic Management Works. Retrieved June 21, 2019, from https://www.investopedia.com/terms/s/strategic-management.asp<br />Kroenke, D. (2007). Organizational Strategy, Information Systems, and Competitive Advantage. Experiencing MIS. Upper Saddle River, NJ: Prentice Hall.<br />Laudon, K. C., & Laudon, J. P. (2007). Information Systems, Organizations, and Strategy. Management Information Systems: Managing the Digital Firm 10th ed. Upper Saddle River, NJ: Prentice Hall.<br />Levy, A. (2016, November 29). Nobody talks about Amazon's true competitive advantage. Retrieved June 22, 2019, from https://www.businessinsider.com/amazons-competitive-advantage-over-walmart-and-target-2016-11</div>Unknownnoreply@blogger.com0