DYNAMICS OF GROUP

BEHAVIOUR
CASE ANALYSIS

TERRACOG GLOBAL POSITIONING SYSTEM: CONFLICT AND

COMMUNICATION ON PROJECT ARIEL

Faculty: Dr. Saleena Khan

Submitted by: Group 4
Aditya Ramkumar 2015072

Nikunj Agarwalla 2015103

Aman Malhotra

2015079

Radhika Rathi

2015111

Chitrini Chalmela 2015091

Srikant Hegde

2015118

Karan Shah

Surabhi Kumari

2015121

2015095

INTRODUCTION
The manufacturer of high quality GPS as well as fishing Sonar equipment
TerraCog, was founded in the year 1977. TerraCog has a good brand value and is
also quite eminent in the market. The products produced by TerraCog adhered to
the quality and also met customer needs effectively. TerraCogs competitor
Posthaste introduced Birds1- a prototype model of GPS with satellite imagery
which was a huge success. TerraCog failed to decipher the threat by PostHaste
which led to late realization by TerraCog. In order to not lose its market share,
TerraCog formulated plans to launch GPS with the feature of satellite imagery by
its Project Aeriel. This was done to save its market share by involved high cost
and was an expensive affair. The cost of the project should be Rs.425 but according
to estimate the cost could not be curtailed to less than Rs.475.
OBJECTIVE
To analyse how a difference in opinion between two departments of a
corporation leads a conflict and creates a problem in effective decision making.
CASE HIGHLIGHTS
Terracog was a privately held company founded in 1977, specializing in high
quality GPS (Global Positioning System) and fishing sonar equipments.
Terracog always being late to the market manages to surpass its competitors
with its new innovative product by addressing customer needs.
GPS product line was built specifically for outdoor enthusiasts and was
appreciated in the market due to its durability and value added features like the
integrated compass and barometric altimeter.
Major competitor-Posthaste- introduced GPS prototype called BIRDSI that
displayed satellite imagery.
Terracog thought the product will not be a great success but it was reported that
BIRDSI had impressive sell-through rates nationwide and was a huge success.

 Customers demand for GPS with satellite imagery increased after the launch of
BIRDSI and it was embarrassing for Terracog as they were unable to introduce
such product in the market.
In order to gain back their status in the market Teraacog decided to launch GPS
with satellite imagery and named the initiative, Project Aerial.
The product was to be launched without any delay therefore a redesign within
the existing GPS platform was proposed.
A pre-launch meeting was held in order to finalize decisions on cost, pricing
and initial production volume.
The cost estimates put forward by the sales team were considered to be high by
the other members of the company which led to long conversations in the
meeting.
The meeting was wrapped after long debates and the sales team was given one
more week to look for opportunities to cut down the cost.
Another meeting was held after one week where the sales team came up with
cost reduction solution and managed to lower the price to $475 as compared to
earlier price of $550.
Still the price estimated was too high as compared to their competitors who
were selling the same product for $400 and $395.
The cost estimate given by the sales team was the lowest and they cant reduce
cost more because it would lead to reduction in their margin requirements
which in unaffordable.
The meeting featured anger, finger pointing, blame and bewilderment, but
produced no effective conclusions.
ISSUES
Not being proactive and ineffective time management: TerraCog started losing
its market share after introduction of the GPS prototype BirdsI in the market
by competitor-Posthaste. Early realization on BirdsI success could have
helped TerraCog to take timely decision on launch of Aerial.
Wrong beliefs/Incorrect market insights: TerraCog teams strong belief that
BirdsI popularity wouldnt last long in the market unfortunately proved to be
wrong.

 Unclear objective and planning: TerraCog was in an extreme rush to enter into
the market with its device Aerial with minimum costs of $425 per unit which
was extremely hard to achieve. There was no pre-designed plan on how to
proceed about Project Aerial.
Innovation sacrificed: To save on costs the team decided to compromise on
innovation and decided to redesign with the existing GPS platform.
Due to lack of time and cost reduction factors, the product development team
accepted the Project Aerial with least enthusiasm.
Increased group size: Richardson worried that inclusion of much more
employees in Project Aerial than in past product launches, might hamper the
focus and delay decision making.
Lack of cohesiveness/common vision: Individual group members were
concerned more about their personal ideas and preferences, rather than reducing
conflicts and acting upon together to achieve a common objective.
Inter group conflicts made it more difficult for Emma to push the team to come
to a consensus.
Lack of leadership: Emma Richardson, Executive Vice President, who was
assigned with the task of overseeing the project, was not able to get all the
parties concerned to reach to a consensus on the proposed price point for Aerial.

President
Richard Fiero

Executive VP
Emma
Richardson

Director,
Production
Tony Barren

CFO
Becky Timmons

VP, Design &

Development
Harold Whistler

VP, Sales
Ed Pryor

Regional Sales
Managers

Director,
Design&
Development
Allen Roth

Manager,
Software &
Firmware Design
Cory Wu

Manager,
Hardware Design
Alice Gorga

THEORITICAL CONCEPTS
Group property
1. Roles: All the members have well defined roles, but there is lack of
leadership and this has led to ineffective functioning of the group.
2. Norms: the members are expected to conform to the deadlines and report the
work when required.
3. Size: In this the size of the group is large, which is a cause of concern for
Emma Richardson, Executive Vice President. As the size of group increases
the probabability of conflicts and ineffective decision making increases.
4. Cohesiveness: Here the members lack cohesiveness, which is related to
productivity. The main reason being the large size of the group.
5. Diversity: The members are from different backgrounds which adds value to
the group, leads to generation of new ideas, but also leads to higher
conflicts.
Leadership
1. Richard Fiero, the president of Terracog failed to give proper direction to the
team members. For example:

2. Delay in reacting to the launch of Birdsl If the terracog management would

have taken a prompt decision to shift to satellite imagery soon after
Posthaste did, there would be much less damage.
3. Did not consult managers upon being persuaded by sales VP Ed Pryor,
Richard Fiero decided to launch Aerial without consulting managers from
other departments like design, development and production
4. Did not consult Whistler whistler and Richard Fiero had always been
making joint decisions when it came to new products and the development.
Whistler wasnt consulted due to his impending retirement.
5. Moreover, an authority should have been established. All teams of various
departments; namely sales, production and design and development, report
to one assigned manager to ensure better cordination.
Departmental Objectives Conflict
1. The Team working on this problem is not on the same page about the goal.
The work of different department was not aligned, they were working
independently rather than working in unison.
2. Allen Roth, and his design and development department are unhappy as
other projects are being compromised in order to work on Aerial. Also,
project Aerial might prove to be an impediment in process of Roth becoming
VP of design and development department.
3. Ed Pryor of sales department is more interested in compensation packages
and the sales team.
4. Tony Barren of Production department wants to prove himself after some
earlier fiasco relating to production. He want guaranteed success this time.
Conflicting Individual Objectives
1. Harold Whistler is about to retire. He is not worried about targets and work,
he is taking up some duties part time.
2. Allen Roth wants to develop product line irrespective of it being required by
the organization, he wants to ensure his promotion.
3. Cory Wus approach is only limited to his part of the work. He believes that
cost of labor and hardware shouldnt be of concern
4. Ed Pryor is worried about not being able to meet the sales target which was
going to benefit in way of better compensation.
5. Tony Barren wants his work timelines and quality to be perfect in order to
prove himself

6. Alice Gorga is interested in trying how sales would position the product
differently rather than working on development optimization to reduce cost.
Problem in Decision making process
The Management was late in identifying the demands of market and slow in
meeting the demand. There was no proper communication cannel established and
management lacked control over all departments. Inefficient decision making took
place and management decisions were over ruled. The departments were
competing against each other which hindered the process of decision making.
Review of the decision making process when it is in its mid cycle caused in failure
of recognizing problems faced.
Communication Problem
There were no fixed agendas for any of the meetings. Team kept shifting back and
forth discussing about price point setting, product positioning in the market and
design of the product.
Task Conflict
The engineering team and sales team are trying to complete a task but are not able
to reach a consensus about the cost that will be incurred.. This is also a
dysfunctional conflict as the group performance is affecting and they are not trying
to reach a conclusion.
Structure Conflict- due to the various positions held by the team and different roles
and responsibilities, the team has a conflict
Perceived conflict - the conflict is not personal. However the team is in
disagreement
Competing - the various subgroups in the team (sales, finance, and engineering)
are all trying to achieve their objective and not thinking about the other team.
Collaborating - Initially the team collaborated to reach an optimal cost for the
product to sell to the customer. But the second meeting showed that everybody is
trying to achieve their own short time goals and not thinking about the company's
position.

ALTERNATIVES
Launch the product AERIAL at premium price of $475 and request the sales
team to come up with strategies which would enhance sales of the product .
Cost cutting on the product will reduce the quality of the product and
compromising on quality will hamper the brand name.
Launch the product with reduced margin i.e focus on low price. ($425). This
would have immediate market presence along with competitiors and would
also help Aerial to capture sales during holiday season.
Reduce the cost of AERIAL to $425 by asking the production department to
tweak the hardware of the TERRACOG GPS. Sales team will not be able to
sell the product to customers with premium price band way above the
competitors.
Cancel the launch of Aerial for now, redesign the product, and come up with
a whole new designed product in a few months. Production team has
mentioned that they can provide a better and reliable product under cost
effective prices if they have another 6-7 months.
Cancel the launch of the product and shift the focus to cycling and fitness
applications and try to capitalize in that new market.
SOLUTIONS
Alignment of Individual and departmental goals with the goals of organization.
Each department head should realize the benefits that they will gain from
working towards common goals rather than individual goals. All the
departments should be lead towards united goal.
Currently Terracog is ineffective in conflict management technique. In order to
implement a efficient technique conflict management all the team leaders
should address the important agendas
Interdepartmental team should be formed as a core functioning group every
time a new product is to be launched
Emma Richardson should cancel the launch of AERIAL as the team is not able
to come to a unanimous decision for launching the product.
1. TERRACOGs one of the USP is the Quality they offer. Accordingly, the
company should not compromise on the Quality even if it results into the

2.

3.

4.
5.

6.

delay of launching of the product. This would help to maintain its paramount
quality and surpass competitors in future.
TERRACOG has always lagged in launching new products in the market
compared to their competitors but have always provided the most innovative
products to customers due to which they have a good customer base.
Delaying the launch of the AERIAL product by 6 months will allow the
production team to create an alternative design with more features and faster
processing which will allow selling the product at $475.
This will also give the Sales and Marketing team enough time to generate
strategies to sell the product to the customers with ease.
Even though the TERRACOG may face a short time loss during the holiday
season, they will be able to create a product that can capture the market for
the foreseeable future.
In the meantime, TERRACOG can make changes with their GPS
applications to capture the cycling and fitness customers which is a growing
industry.

MANEGERIAL LEARNINGS
As a future manager we should always take into consideration the following points
that we have learnt from this case study:
In order to survive in the market place, we should always have a long-term
perspective and delve upon the implications of our actions in the long run.
Working in haste can definitely tamper the brand image of our company.
It is always effective to give both quality and cost equal importance so that
our market share is maintained and we dont lose our customers easily.
Appropriate leadership is the key for efficient group functioning and
decision making and there should always be coordination between working
of various departments.
Last but not the least, it is better to be proactive than to be reactive!