CASE STUDY #1

I.

Introduction

A large American company has chosen the decentralized form of organization and each
manager is measured on the basis of profit contribution, market penetration and return on
investment. If one fails to meet the objectives established, it is usually results in demotion or
dismissal of center management. By means of anonymous survey, managers revealed that they
felt pressured to compromise their personal ethical standards to achieve the objectives of the
company.
II.

Context

It is when the Chief Executive Officer (CEO) of the company found out and is disturbed
by the findings of the survey conducted.
III. Point of View
In this kind of situation, the problem solver is the CEO of the company.
IV. Objectives
Generally, this case study aims to determine the root cause of the problem that caused the
employees to be pressured on meeting their goals.
Specifically, this case study aims to:
Short-term
1.
2.
3.
4.
5.

Abolish demotion as punishment;

Promote and establish ethical values;
Establish ethical tactics for sale purposes;
Provide right incentives to pursue employees to do well; and
Give more attention on the quality of the products.

Long-term
1. Maintain ethical values without sacrificing the profit;
2. Maintain healthy competition; and
3. Abolish mindset on focusing on money and start focusing on making value.

V. Areas of Consideration
Strengths
Weakness
Decentralized form
Strict Policy
Competitive, creative and initiative
Unethical procedure
employees
Opportunities
Threats
Loyal consumers
Marketing strategy
Higher Demands
Government intervention
Strengths

Decentralized form of organization can be considered as strength of the company. This

form of organization is very suitable in large company, like the company mention in the
case. Through this, they can establish division of labor. Works can be done efficiently and
effectively because there so many individuals that can contribute their knowledge and
opinion for the welfare of the company.
Competitive, initiative and creative employee can be created. Through decentralization,
they are required to think of different strategy to improve their credibility of being an
employee. It also allows them to make better use of the knowledge and experience they
have gained and implement some of their own ideas.

Weakness

Strict policy can be considered as their weakness because due to it, employees as well as
the manager pressured theirselves to meet the goal.
To be able to meet the goal, employees uses unethical procedure like questionable tactics
and etc. It serves as their weakness, because there is a competition within the company. It
portrays that there is no cooperation and lead for them to not meet their objectives.

Opportunity

Higher demand consider as opportunity in the way that the company may grab this
opportunity to create what the consumers needed, to contribute to generate profit.
Loyal consumers are an opportunity because the company surely gains their sales because
of them.

Threats

The company uses market penetration meaning they offered existing product in an
existing market. But, being a highly competitive industry, their rival may use different
strategy that can beat them.
Government intervention also considers threats. Being a highly competitive industry, we
can assume that can generate high profit. High profit means higher tax; their income
arrived for so many deductions therefore there aiming more.

VI. Alternative Courses of Action

In order for the company to meet the objectives set, the company provides solutions for
the problem.
1. Change the form of the business from decentralized to centralized form of the
organization.
Advantages

Extremely efficient in the business decision; and

Easily develop the companys objectives, mission and vision.

Disadvantages

No division of labor; and

Multiple tasks for the manager.

2. Improve the company policy.

Advantage

Upon redefining the companys policy, the company would enforce and establish
strong policy, promoting ethical values that would be followed as an effective
guideline in responding to the present issue being faced by the company as well as
overcoming the possible problems in the future.

Disadvantage

If it is executed incorrectly, it may result to chaotic scenario. It would be difficult

for the employees adapt to the changes that occur, that will eventually affect the
company as a whole that will worsen the problem.

3. Enlighten the viewpoint of the manager about the companys objectives.

VII. Recommendation
The most applicable solution for this problem is improving the companys policy.
VIII. Operational Plan
In order for the company to implement the first solution, the company must: first, hold a
meeting about the current problems that the company is facing. In this meeting they must tackle
all the problems and solution on how are they going to solve the problem. Second, they must
create new policy that will be more effective for the company to have a better outcome. Third,
they must orient the managers about changes that were implemented so that they can easily adapt
the changes. Lastly, they must observe and hold another meeting regarding these changes, if the
implementations
of
new
policies
are
effective
to
the
company.

TIME TABLE
ACTIVITY
Memo Distribution/ Disciminating
Holding the Meeting (General
Meeting)
Plotting the new policies (HR)
Approval of improved policies
if necessary, revision of
improved policies
Approval of revised improve
policies
Disciminating of Memo
Meeting for the
improved policies (board of
directors)
Memo disciminating for the
managers
Meeting of the managers
Seminars for managers
Employees' seminar by
department
transition period
Implementation and observation
Disciminating of memo (w/
finance)

Augus
t
1
2
5
0

September
5

1
0

1
5

2
0

2
5

October
3
0

1
0

1
5

1
6

2
0

2
5

3
1

TIME TABLE
November
7

1
5

2
0

2
5

December
2
6

3
0

1
0

1
5

2
0

January
2
5

3
1

February

Mar
ch
2

IX. Contingency Plan

If the first solution for problem will not be able to solve the current issue, the second
solution must be implemented. If their behavior will not be changed even if they improve the
companys policy then probably it is not the main problem. If it is the case, then the company
must change the form of business from decentralized to centralized form. If this will be
implemented, we can easily set our objectives on how are we going to achieve our goals and
there will be a little room for errors because the basic processes and detailed operations are in
place.