Read the case and discuss the following questions in groups. Come up with a solution to the problem.

1. What were the main mistakes made by the Marketing Manager?
2. Which marketing strategies do you think he employed to sell the 800 units?
3. What should he do to improve the situation?
4. Which are your solutions to the problems described in the text?

 

The Decision-Making Dimension of the Systems Approach to Management ^[5]

Okumkom Ltd. is a company that processes wood into furniture for export. It has six departments, namely Finance, Procurement, Quality Control, Production, Human Resource, Administration and Marketing. On the basis of a marketing research analysis, the Marketing Manager made a decision that the company should manufacture 3.500 units of sitting room furniture instead of the normal quantity of 2,500 for its European market. As a result of his technical mind in marketing intelligence issues, management accepted the suggestion from the Marketing Manager to produce the 3,500 units of sitting room furniture without any form of inter-departmental consultation. The other departmental managers were not happy that they were not consulted on the implementation of the Marketing Manager's decision which has the tendency of affecting the fortunes of the entire organization negatively. Their concerns were ignored by the Marketing Manager claiming that he was in control of the Marketing Department and had the prerogative right to make marketing decisions he deemed fit.

Since the availability of the 3,500 units of furniture was time bound, the Human Resource Manager was charged with the responsibility of hiring additional casual hands to augment the existing staff to produce the furniture on schedule. The Finance Manager was also directed to apply for an overdraft facility of $20,000 to enable the company procures the necessary inputs for the job. The Company's bank granted the facility which was given to the Procurement Manager to purchase all the required inputs to produce the 3,500 units of furniture. The inputs were given to the Production Manager, who in collaboration with the Quality Control Manager churned out the 3.500 units of the furniture on schedule.

All the units of furniture were ready on schedule since all the departmental managers played their respective roles in spite of the fact that they were not happy with the decision of their colleague Marketing Manager. The Marketing Manager was given the mandate to distribute and sell all the furniture in the European market. Regrettably, the Marketing Manager was able to sell 2,700 units of the furniture leaving a difference of 800 units. It became difficult for the Marketing Manager to dispose of the difference of 800 units. All the marketing strategies employed by the Marketing Manager to sell the 800 units proved futile. Disaster stared glaringly in the face of the company. Comments of 'We told you so' ostensibly directed at the Marketing Manager flowed from all angles. The Marketing Manager was full of remorse for a wrong decision which was likely to bring untold hardship to the company. He regretted refusing to subject the decision to increase production from 2,500 to 3,500 to comments and discussion with his departmental colleagues.

The following are some of the probable unavoidable costs that are likely to characterize the inability of the Marketing Manager to dispose of the unsold furniture on time:

a. Accumulation of interest on the overdraft facility of $20,000

b. Warehousing cost at the distribution center in Europe. The Company rented bonded warehouse.

c. Difficulty in meeting payment of wages and salaries for the staff including the additional casual hands that were employed.

d. Accumulation of some unpaid overhead expenses.

The Marketing Manager was given the option of doing everything possible to dispose of the 800 units of furniture or get fired.

Case Study 2

Read the text and discuss the following questions:

1. Discuss the consequences each management decision mentioned has now.

2. What other management decisions and findings that made the history can you remember? Which of them were the most revolutionary and radical ones that changed the world?

The Greatest Management Decisions that Made the History ^[6]

In the history of business and professional management a great range of decisions have been taken in the last one hundred years or so that brought forward great changes in the modern quality of life and our thinking practice.

Hanging on the Telephone: The management decision of Bell & Co. to stick to their invention despite odds

Alexander Graham Bell and his company's persistently hanged on their discovery of telephone. This business decision of sticking to the invented device whose functional properties were not at all satisfactory at that point of time and had been discouraged by the other big companies and from all social backgrounds, had been taken by the company to be the most popular device of communication for millions.