Icelandic Volcano, 1;

Global Commerce, 0
This volcano has a funny nameEyjafjallajokullbut its impact was not so funny
to global businesses, both large and small.38 When it erupted on April 14, 2010, the
plume of volcanic ash that spread across thousands of miles disrupted air travel and
global commerce for a number of days.
As thousands of flights were canceled across Europe, tens of thousands of air
travelers couldnt get to their destination. For example, Marthin De Beer, vice president
of emerging technologies at Cisco Systems, was headed to Oslo to discuss the final
aspects of its acquisition of Tandberg, a Norwegian teleconferencing company.
However, when his flight was canceled, he and Tandbergs CEO, Fredrik Halvorsen,
used their merged companies equipment to hold a virtual press conference. Other
businesses werent as lucky, especially those with high-value, highly perishable
products such as berries, fresh fish and flowers, and medicines and pharmaceuticals.
African farmers, European fresh-produce importers, and flower traders from Kenya to
the Netherlands found their businesses threatened by the air traffic shutdown. Even
manufacturers were affected. For instance, BMW had to scale back work hours and had
even prepared for possibly shutting down production at its Spartanburg, South Carolina,
plant because it depended on trans-Atlantic flights to bring transmissions and other
components from German factories by air. A spokesperson at another automobile
company, Mercedes-Benz, said, There has been disruption in our parts supply. We
expect that there may be shortages of some parts or delays in some instances.
Questions
1. Could a company even plan for this type of situation? If yes, how? If not, why not?
2. Would goals be useful in this type of situation? What types of goals might a
manufacturing company like BMW have in such a situation? How about a global
airline? How about a small flower grower in Kenya?
3. What types of plans could companies use in this type of situation? Explain why
you think these plans would be important.
4. What lessons about planning can managers learn from this crisis?
Nur Faizah Fauziah A31115018

Answer:

1. Managers must be plan about this case before because planning involves
establishing strategies for achieving their goals. In making a strategies managers
must be prepare about all the change that they can face in the future. Planning
reduces uncertainty by forcing managers to look ahead, anticipate change,
consider the impact of change, and develop appropriate responses. Although
planning wont eliminate uncertainty, managers plan so they can respond
effectively. How managers plan for this situatiation? By make planning by
analyzing the working area. with it, they can know anything that can slow down
their work at any time.
2. Goals always be useful in any type of situation, because that goals make a firm
think abaout what they must do now and next. The type of goals that all the three
firm might have is a real goals, those goals an organization actually pursues
observe what organizational members are doing. Their act defined their priorities.
And priorites in this sitiation is how they can respon changes effectively. So their
firm can survive. For BMW, they should change their plans before the volcano
interup. Because thats must be a signal. So they must order the transmission
and other compenents erlier. For global airlanes they should find another
direction to go to the destination that doesnt pass the vocano, if that cant
usefull, then just wait for the effect of that vocano stop. For the small flower
business in Kenya, they needs to cover their garden of flower with glass, it can
protect the flowers from the volcano ash, or at least the flower can be covered by
use plastic. This is the cheapest and easiest way.
3. When uncertainty is high and managers must be flexible in order to respond to
unexpected changes, directional plans are preferable. Directional plans are
flexible plans that set out general guidelines. They provide focus but dont lock
managers into specific goals or courses of action. That provide focus and also
allow direction in implementation.
4. Lessons about planning can managers learn from this crisis is they have to
prepare for unexpected changes. So they can respond effectively. They have to
prepare not only for the internal problem, but also the external problem.