Jose Tomas Romero

BUSA 1005 - Introduction to Business

October 12th 2010

Case Analysis: “Trouble at Heavenly Gum”

1. Summary of Facts and Assumptions

‣ Heavenly Gum Inc. started in Abbotsford, BC in 2007.
‣ Its founders where three immigrants who met at BCIT and each respectively had
background experience in chemistry, gum manufacturing and marketing exotic
stamps.
‣ It started with its three founders and grew up fifty employees which all are
immigrants.
‣ They produce a sugarless bubblegum that when chewed properly it can reduce
commuter fatigue and frustration by up to 100%.
‣ Heavenly Gum international sales have been growing so fast that a black market
started among Surrey commuters due to lack of availability of the gum.

1.1 Assumptions
‣ There is no solid human resource department to handle personnel issues.
‣ None of the founders is trained to control the organization internal environment.
‣ The fast market environment has put pressure on the company forcing them to play
catch up with growth and productivity.
‣ More time is needed to support production and marketing needs.
‣ There’s no a concrete plan to move the company forward.

2. Problem(s)
a) Accounting Department
‣ Major suppliers, banks and even customers are complaining about the time the
accounting department needs to process data, even though enough people were
hired to run the department.

b) Productivity
‣ The company can’t meet the international demand for its gum and it’s losing
many potential customers who are forced to go to the black market.

3. Analysis of Causes
‣ Ernest Bighter, a young bookkeeper in the accounting department, is creating conflict
with other employees and has the tendency to deny making errors and even blaming
others for “setting him up”, therefore slowing down the department duties.
‣ The owners of the company can’t seem to agree on a single decision, like who gets
the job for running the department.
‣ Although the three owners have experience in their own specialization, none of them
have enough knowledge and experience to handle human resource problems,
planning, improving productivity or other organizational problems.
 ‣ Growth of the company has been fast but founders have failed to build management
teams to keep up with that growth.
‣ Lack of a management team capable of making the most beneficial decisions based
on accurate information and experience.

4. Presentation of Alternate Solutions

‣ Leaving Marla as the head of Accounting and laying off Ernest.
‣ Hiring a management team to help organize the different departments to make better
decisions that will benefit the company.
‣ Restructuring the accounting department from top to bottom.
‣ Let Ernest have the position of running the Accounting Department given his seniority
within the company.
‣ Outsource all bookkeeping and accounting duties to a third party.

5. Identification of Best Solution

‣ A new management team overseeing the operations of the company will facilitate
decision making and will provide a better output for the organization structure and
goals. Solving the conflict of the Accounting Department would be the first task.

6. Justification
‣ Several subjects from this nature were discussed during class and more can also be
found on the book “Understanding Canadian Businesses”. On chapter 7 when
referring to Managing a Small Business it states that “The number-one reason for
small -business failure is poor management.” Also on the same chapter it overviews
what is a Business Plan and how to write one, touching on key factors such as:
building a management team and having a manufacturing plan. There are more
references further in the chapter related to managing employees and using outside
consulting advice when help is needed in the early stages of the business.