Question one
There are two ways Tom Taylor, the sales manager, can respond to the situation. The first approach is for Tom Taylor, the sales manager, should adhere to the instruction of his superior Carl Bauer regarding the customer orders. This means processing the order as expected despite being aware that the batch may not be sufficient for the customer. Essentially, being the junior employee, his supervisor will be held responsible in the event the customer is not satisfied with the supplied products. Furthermore, Tom’s supervisor Carl may have extra knowledge on how the shortage may be filled in time, but he has not shared the information with tom. Thus the failure to adhere to the instruction may lead to losses.
The approach may require Tom to engage with his supervision on the effects of delivering products that would partially meet the customer’s needs. Tom needs to emphasize the company’s importance in meeting the customer’s expectations based on the orders acquired. Tom needs to explain the consequences to Carl of failing to deliver the ordered batch of products to the customer. Based on the two courses of action, tom should proceed with the orders despite knowing it may not satisfy the customer’s need if his supervisor insists on the same.
Question two
A cost-benefit analysis (CBA) is the process used to measure the benefits of a decision or taking action minus the costs associated with taking that action. A CBA involves measurable financial metrics such as revenue earned or costs saved due to the decision to pursue a project. The cost analysis of the engineer appears to have a cost-saving mechanism that can assist the company to enhance its efficiency in processing orders by eliminating the time allocated in scanning products. More so, the cost of acquiring the barcode machine can be recouped within a period of two and a half months. From an investment perspective, the assessment appears to be suitable for the company. However, the engineer failed to indicate the reliability and longevity of the proposed automated barcode scanner.
The lack of this assessment indicates that the company cannot be able to ascertain how long the automated barcode scanner can be used without being replaced. Furthermore, like any other mechanical instrumental, the cost of maintaining and servicing the automated machine appears to have not been factored in the cost-benefit analysis. For instance, the engineer mentions that the benefit of using the automated barcode scanner is $1,500 per month, but there are no monthly or weekly maintenance costs. Therefore, for the above reasons, as the chief executive officer of the company, I can’t entirely agree with the way the engineer carries out his benefit-cost analysis.
Question three
The entrance of low-quality production can pose a significant threat to the company’s reputation for quality products. Therefore, ABC Company there are a couple of steps or strategies which the company can adopt. First, the company needs to undertake market analysis to analyze the tap of market or consumers being targeted by the low cost or quality products introduced in the market. In so doing, the ABC Company management will be able to understand if the entry of the low cost and low-quality products will hinder its sales and productivity in the market.
If the ABC Company anticipates significant threats to its revenues and market dominance, it can develop new strategies to counter the threats of new low products in the market. First, ABC Company can develop a new company or subsidiary with a unique name that can enable the company to start producing low-cost products at a low quality to compete in the market. Such a move will assist the company in maintaining its position in the market while expanding its market share to serve the interest of consumers who may require low-cost products. Business experts suggest that opening independent subsidiary firms enables a company to “tap” into multiple market segments. Such a move will enable the ABC Company to maintain its high-end consumers while meeting the needs of low-cost customers who maybe be served by the new competitors.
Moreover, the ABC Company has dominance and experience in the market. Thus, the ABC Company can use its economic and strategic resources such as lowering the price of its product to attract a large consumer-based. The ABC Company manager can adopt the principle of “simple elasticity by slightly lowering the cost of the product to stimulate demand in the supply curve. The move will significantly inhibit consumers from relying on low costs products due to low prices.
In retrospect, the ABC Company can merge with other existing players of industry regulators to enact policies that can limit new firms from producing low-quality products. The move can be viewed as controversial, but it has become an increasing practice in sectors where the interest of the consumers has to be safeguarded from unscrupulous businesses that seek to provide low quality products and services. Alternatively, ABC Company can consider focusing in sustaining the consumer base that require high end products. Essentially, product associated with high cost are typically viewed as the most suitable or desirable by all consumer even those unable to purchase the product. By focusing on producing high end products will enable to be viewed as luxurious brand, which can improve the image and brand of the company I the long run
Question Four
Part a
There are always risks (risks of failure) associated with the experimentation of a new manufacturing process or entry into a new global market. The ability of the owners or managers to overcome the challenges associated with a new market or manufacturing process plays an important role in determining the long success of the organization. In such a circumstance, there are ways in which a business can choose to proceed when venturing into the market. This is to examine the key elements or factors that are critical in enabling the business to be successful. These factors include nature/ size of the market, ease of doing business/ availability of skills/ infrastructure, and level of competitiveness in the market.
Ideally, when entering a new market or industry, it is essential for the management to examine the market. This means assessing the availability of potential consumers and whether they are capable of fulfilling the financial objective of the company. Marketing-based strategies can be used to examine how many people are likely to purchase the products being produced or sold by the company. Moreover, examining the existing level of market competitiveness is critical when entering a new market. Firms have to conduct an extensive market assessment to determine if offering stiff competition to enter and sustain the market. Failure to do so may negatively affect the performance of affirming in a new market.
There are risks associated with the introduction of a new manufacturing process in a company. The lack of expertise/ skilled human resources in handling the various production line processes can hinder its effectiveness. More so, the company managers have to analyze if there are sufficient economic resources such as cheap and reliable electricity to sustain the manufacturing processes. Overall, considering the above risk factors can enable a rim to consider the best suitable course of action to venture in.
Part b
Ideally, proper risks for a company to take are the ones typically within the company’s control. Specifically, the internally based risks can be suitable for a firm because the managers can develop strategies to overcome or solve the problems associated with risks. The internal risk can be related to employee competency or behaviour/ availability of capital or management practices, among others. Moreover, the company can use ratio analysis to examine the various types of risk facing the company and which types are managed within the operational limits.
Question five
The process of hiring and firing employees can be tedious or expensive, given the nature of the business. The decision to retain or maintain an employee is largely influenced by their contribution toward the overall performance of the company. More so, the nature of the termination plays an important role in determining if an organization can retain or discharge an employee. From a broad perspective, the newly hired ABC company engineer can be fired by the company. This is because due to the unexpected changes in the industry, their skills have become relatively ineffective in assisting the company in achieving its objectives. The engineer was hired to perform a specific role in the company; however, his responsibilities have been rendered “obsolete” due to sudden changes that favor a more sophisticated electric drive profession. Furthermore, it is difficult to retrain the newly hired engineer for other assignments in the company. This makes him more of a liability than an asset in the company, which increases the need for ABC Company to relinquish their contractual obligations.
However, the ABC Company can consider offering specialized training to the engineer to observe they can be able to adapt to the new sophisticated electric drives. This course of action can be considered if the ABC Company had a contractual agreement with the engineer when they were hired. The process of terminating a contract can be costly for the company because they will be required to make a significant amount of settlement as payment for the termination of the contract. Thus to avoid expensive settlement and loss of an experienced employee, ABC company can consider offering extensive training to the engineer.
Nevertheless, suppose the engineer can be terminated without any financial consequences incurred on the company. In that case, therefore, ABC Company can terminate the engineer’s employment because they may become a liability instead of an asset in the long run.
Question six
Sally needs to find suitable approaches to discuss the issue at hand with her director. She can propose the company acquire new management software tools, which can be linked to the director’s office. The management system can effectively provide frequent and updated reports and progress on the various activities delegated by the director through sally. To do this, sally has to organize an in-house demonstration from firms specializing in management software that minimize unnecessary office meetings, which may impede productivity in the long. A demonstration may convince sally’s director to consider the alternative of relay or information system. In turn, this can minimize the bad habit of calling up Sally unexpectedly to get detailed reports on various ongoing activities in Sally’s department.
Alternatively, sally can communicate how the daily or random requests from the director negatively impact the company’s daily operations. By highlighting the specific of how employees become counterproductive when employees stand by and make daily reports. To support her argument, sally can adopt the findings of various studies that demonstrate a significant relationship between employee routine interruption and counter productiveness in the workplace. For instance, a study conducted by Sykes, E. R. (2011) to examine “Interruptions in the workplace” notes that interactive behavior from the management can have negative consequences on the company’s performance. Thus, sally can adopt the findings of such studies to require her director Mark Hayes, the engineering director, to minimize his bad habit of calling up Sally unexpectedly to get detailed reports on various ongoing activities in Sally’s department.
Question seven
The longevity of an organization largely depends on its ability to satisfy the needs of its customers. Any delays in the delivery of products, especially from a major customer, can negatively affect the productivity of any company. Thus, as a production manager, I would first seek to renegotiate the timeline with the customer to seek additional extensions on delivering the delayed products. I can offer a sufficient explanation on why the delay has occurred and guarantee that future delays will not occur. To “woe” the customer, I can request the company to offer discounted prices on the supplied goods to convince the consumer to provide additional time to process the delayed orders. Furthermore, to minimize the delay of the processed orders, the finished product can be grouped into batches then shipped immediately to the customer in small quantities. This will serve as a countermeasure in regards to immobilizing the activities of the customer.
As the production manager, I would have ensured that the products were tested and quality was ascertained before the goods were shipped to the customer. Supplying defective or low-quality goods, which have been delayed can increase the probability of losing the customer. Therefore, I would explain to the company’s president the importance of ensuring that all the goods produced for the customer are met the desired market quality for both the company’s and consumer’s sake.
Moreover, I would conduct an immediate investigation within the production line to determine the sources of the delay. This will ensure that the persons responsible for the delays are held accountable for their actions. The severity of the punishment will depend on the level of negative effect or impact on the production process.
In addition, I would avoid making threatening remarks on my junior staff when faced with such a crisis. But rather offer to motivate them to meet the consumer demands and deadlines.
Question Eight
There are multiple rationales that can explain what went wrong in the delivery of the project. First, it appears that there was a “disconnection” between the project manager and the junior employees. This can be attributed to a lack of proper leadership skills. The manager was unable to mobilize the workers to work towards a common goal of the project. Essentially, the lack of leadership skills will result in people getting demotivated and eventually reduce their work performance. And because a project leader does not have a clear vision of the project market trend, such as timelines, or unexpected eventualities, the project may end up costing more and or delayed.
Moreover, due to poor leadership by the manager most of the workers working on the project were undermotivated to complete the assignment in time. This can also be attributed to the authoritarian leadership portrayed by the manager. Ideally, Autocratic leaders typically make choices based on their ideas and judgments and rarely accept advice from followers. This can pose significant challenges to the project’s success if the manager is unable to consider the input of his subordinate employees, as evident by the possibility of future cancellation of the project.
Lastly, the manager is not taking responsibility for the anticipated failure of the project. He posits that everyone would be equally to blame for the failure of the project. A manager with such a mindset is likely to underperform because of their inability to take charge and provide corrective strategies, which can be used to overcome the challenges facing the projects, which explains why the project is running late with a possibility of being late canceled.
As the manager, there are a couple of things I could have done differently. First, communicating effectively with the various teams on the ground on the significance and importance of the project to both the company and the customers. Secondly, encouraging employees to improve on their productivity in order to deliver the project on time. Thirdly, I would establish a work environment of openness where employees can suggest ways to enhance or expedite delivering quality work within the defined timeline. This will eliminate the perception of an autocratic leadership portrayed by the manager.
Question Nine
It appears that the approach, which the manager has used to “rectify” the situation of declining production capacity after lunch hours, was not effective. Furthermore, the manager’s strategy did not work to solve the initial problem but made the situation even worse. The problem could be that the manager failed to thoroughly analyze when productivity reduced on the first hour after the lunch break. Recent studies have shown that it is a common phenomenon for employees to reduce work productivity after lunch. A survey conducted among two thousand employees noted that most of the sampled individuals experienced reduced productivity after lunch. Thus, the manager did not understand that there is a correlation between lunch break and reduced employee productivity, which made the manager make hasty or “quick fix” solutions to solve the problem.
Nonetheless, there are numerous strategies, which the manager can adopt to tackle the problem of reduced work productivity in the production line. First, the manager can recommend the introduction of overtime. The strategy will allow workers to work for a few extra houses to maintain daily targets. More so, the workers will have sufficient time to bond and resume work with less stress.
Research has shown that one of the main problems that cause reduced productivity among workers after a lunch break or nap is the “easing up or slowing down on the people.” this means that the employees lose the sense of urgency typically associated with the morning routine. Thus, the manager needs to reinvigorate the workers by reviewing the expected goal or objective for the second part of the day. This can be achieved by reviewing the daily objectives, which the employees are required to attain before the end of the shift. In addition, reviewing the daily production capacity to be after lunch can assist the employees’ to rediscover their morning work routine and rhythm.
Furthermore, the manager can encourage the employees to engage and interact with each other when in the break session, such as tea or lunch breaks. Such a move will eliminate the need for the employees to spend too much time in the afternoon socializing consistently. Additionally, the manager should not “stagger” the lunch break by extending it to two hours but maintain the initial one-hour break. The extra time after lunch may have encouraged dullness and inactivity among the employees.
Question ten
The wage incentive program introduced by the manufacturing manager has negatively affected the company’s overall performance despite the noted increased in production and reduced cost per unit. There are two possible reasons for the problem facing Company X. As mentioned, the percentage of rejects had increased markedly, and that this was creating a backlog of rework requirements. This means that the quality of output has reduced significantly due to the introduction of the wage incentive program. Furthermore, indicating that the employees in the production line are focused on increasing production capacity at the expense of quality. Most of the wage incentive programs are based on the need to benchmark the employee’s earnings based on their unit out. However, such a perspective shifts the employee’s focus from focusing on quality to focusing on quantities, as evident with an increased number of defective goods requiring rework.
The second reasoning could be that the introduction of the wage incentive program may have reduced the motivation of employees. Milkovich, Newman & Gerhart (2011) posit that wage incentive programs can either increase or decrease an employee’s motivation to be productive. A high wage incentive program motivates employees to increase the output and quality of goods or services produced. At the same time, a minimal compensation mechanism can lower the motivation and productivity of employees in both the short and long run. Thus, based on the case of Company X, the wage incentive program may have appeared to lower the performance output of employees, as evident by increased costs of production associated with rework or produced goods.
Nevertheless, some strategies should be done to correct the situation in this production department. The strategy of implementing the wage incentive program should be reviewed to ensure employees are given competitive rates to level their performance. Essentially, having a rewarding wage incentive program can prompt workers to increase the quality of work. This will increase overall motivation among the employees working in the production line, translating to quality products. In addition, there should be a focus on the quality of products being produced. Company X’s manufacturing manager must factor in quality and quantity elements to improve overall performance and productivity.
Reference
Milkovich, G. T., Newman, J. M., & Gerhart, B. (2011). Compensation (ed.). Chicago, IL: Irwin.
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