?The Dim Lighting Company is faced with a proposal that could potentially revive themselves from the 15 percent decrease in profits they have seen over the past two years. However, the new proposal for micro-miniaturization could put the Dim Lighting Company ahead of its competitors and contribute to higher profits despite the high costs of initiating the program. Jim West is the general manager and has been running the company for five years.
Robert Spinks is the director of R&D and joined the company three years ago. West knows that changes have to be made in order to stay in competition with other companies; however, he must look at all of the pros and cons of each decision before any actions are taken. It’s hard to see the long-term benefit of Spink’s proposal when the company needs to make profit now in order to be in existence to benefit from the long-term results. I. Problems A. Macro 1.
One of the biggest problems faced by Dim Lighting Company is the risk of failure and another year of lost profits if the new micro-miniaturization proposal made by Spinks is unsuccessful. The new proposal must be effective in order to keep Dim Lighting Company in competition with other similar companies. While Spinks gave the sales pitch he noted, “The energy crunch had long-term implications, and if they failed to move into new technologies, the firm would be competitively obsolete” (Brown, 2014, p. 81).
The Dim Lighting Company does not have the finances available without involving capital from corporate headquarters. This also puts strain on the already existing products within the company. B. Micro 1. Problems with equipment that is already in use can result in more expenses if the proposal is accepted it will create an even larger financial burden on the company. 2. If the proposal is objected, West is concerned that Spinks will resign from the company in fear of losing the head of the R&D department. II. Causes 1.
IntroductionWayne Swisher, CEO of SMC, is concerned with the company's future prospects. The unit volume sales of the SMC riding mower, which constituted 64% of the total sales of SMC, had plateaued in recent years. He is presented with an attractive private-brand arrangement that can impact SMC's prospects and has to decide whether to accept it. Alternatively, or additionally, he can decide to ...
The company does not want to risk new products that could potentially bring down profit levels even more. The Dim Lighting Company has already suffered from 15 percent profit margin decreases the last two consecutive years. Lack of product development plays a large part in the reason for diminishing profits. The micro-miniaturization proposal may have long-term benefits; however, because of the decrease in previous years, West is worried that if the next years are not successful it could potentially harm the company’s potential for long-term advancement.
2. The Dim Lighting Company has not been maintaining its equipment. Because of this, the company has more concerns for the short-term profits than it should. If the company had taken care of the equipment for the products it already produced, management would not have to take into consideration, the finances available for the new proposal. The money would not be necessary for the equipment. 3. The company hired Spinks knowing that he left a previous place of employment because the management lacked creativity and innovation in R&D.
West should have realized before he hired Spinks that the same problem could potentially occur if the management at Dim Lighting Company was reluctant to accept new proposals. III. Systems Affected “A system is a set of interrelated parts unified by design to achieve some purpose or goal. Organizations are systems. Every organization can be viewed as a number of interrelated, interdependent parts, each of which contributes to total organizational functioning and to the achievement of the overall organizational goal” (Brown, 2014, p. 38).