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Managerial Issues in Organisations – Fine Coating Inc Case Study


Introduction

Management and organisational performance are two imperative issues in the executive business management literature. Different studies emphasize that the two aspects are correlative to each other and equally coherent to organisations.

The achievement and drawbacks of several companies have always unswervingly associated with the forms of management with the urge and ability to handle managerial issues tactfully remaining a contested subject. Management in any organisation must consider all aspects related to organisational achievement, including all input and output attributes to the organisation.

Managers are always apt with the task of ensuring that organisations run smoothly by guarantying maximum policy development and implementation to enhance productivity. Policies and strategic planning must always reflect the interest of the organisations with loss control and profit maximisation being integral issues.

Customary care and public relations are among the obligatory factors that management must consider. Central to this reason, this study reviews the case study of Fine Coating Inc.

Problem statement

In the Fine Coating Inc., there are several problems underlying within the organisational paradigm. However, one major issue remains the focus to the case of Fine Coating Inc where the President or the chief executive of the organisation is in the states of mystery. Don Perucci is the Chief Executive Officer in of Fine Coating Inc, which is a coating company in Troy, Michigan.

The main issue becoming a contention in Fine Coating Inc is the idea of implementing the Electronic Data Interchange device that would reduce the service costs incurred by the clients.

Apart from the customary demands, the Fine Coating Inc cost of operation was as well increasing at an alarming rate as the process of receiving orders and completing deliveries was becoming increasingly expensive due to intensive manual operations.

Central to this matter, Perucci needs to identify strategic and operational information systems urgently in order to respond effectively to various corporate, market and environmental demands.

Customers are feeling that the process of ordering for services in the company is becoming hectic and costly. The service consumers are urging the company to integrate the Electronic Data Interchange device without considering the present circumstances unfolding within the organisation.

Two integral issues are, however causing a dilemma with Perucci and Smith unable to make informed decisions in implementing the two aspects. Purchasing the sophisticated Electronic Data Interchange device will obligate the company to incur more production costs at the advent of integration of EDI venture in the sense that some employees, especially the supervisors will require in-service training before its implementation.

The company will also require skilled network engineers and software technicians to manage all computers operations. The company also wants to acquire another coating plant in Mexico to expand their services and any investment in EDI device, would postpone their plans towards acquisition of this plant. Both issues are fundamental concerns and Perucci as the CEO has to make informed decisions.

Immediate issues affecting decision making in Fine Coating Inc

The contextual factor is the idea of identifying an apposite operational information system in order to respond effectively to various corporate, market and environmental demands. However, achievement of this aspect remains an uphill as the organisation has several issues that need immediate consideration as they are affecting the organisation instantaneously.

As postulated before, there are several organisational, environmental and market pressures that need immediate attention to enable the organisation conclude the objective of fixing the problem.

Organisational matters have largely influenced the basic organisational operations that have affected the customers directly, especially the procedures of order acquisition, delivery, documentation, preparations and the entire coating process as well.

Organisational issues stretch from the management of human resource available, technology integration and even customer issues that pose frequent challenges in handing procedures in Fine Coating Inc. Central to this issue, this analysis provides the organisational issues highlighted as pressure-factors to the management.

Before Perucci reaches a conclusion on the necessary solutions that the company needs in a bid to address the problem, they must deem some immediate issues in the organisation. Customer or clientele care is a prerequisite in any organisation and forms an integral part in organisational development.

Perucci must consider the grievances articulated by the customers on the escalating cost in service delivery and way the impact of integrating technological devices, including the implementation of the Electronic Data Interchange. Customer’s satisfaction is always a priority for many organisations since at all cost they depend on them for commercial growth.

Decision making in any organisation must also consider the correlation between idea implantation and financial or economic position of the organisation.

Perucci must consider the availability of finance before deciding on the implementation of the desired project. Another significant aspect of consideration in integration the Electronic Data Interchange in FCI is the availability of skilled human resource to operate this technology.

All the above-mentioned are terms of strategic importance to the firm, but each need different attention basing on the context of the existing problem. Integration of the new technology, including the Electronic Data Interchange seems an integral matter of immediate concern as the weakness seems noticed by the customers.

It is constantly an embarrassment for clients or customers to identify the innermost challenges affecting the organisation, especially the ones that affect them directly. Perucci and the other managers had to make sure that they continue maintaining the quality at an acceptable price to the clients while the competition was intensifying from thousands of developing companies surrounding their coating companies.

However, the competition on prices also escalated with the quality of services depending on technological advancement. Organisational pressures forced to ignore inventory records leading to overstocking and under-stocking with reports containing inaccurate inventory information. Based on such reasons, Perucci must consider integration of Electronic Data Interchange.

Case study analysis (Quantitative causal factors)

The case of the problem surrounding the Fine coating Inc is twofold with the causal factors being qualitative and quantitative in nature. Centralisation is one of the probable quantitative causes of the problem with the company requiring extra labour force to executive its duties effectively.

Most of the FCI branches this coating company were small in capacity and thus, could not accommodate several activities pertaining to the organisation. Due to this problem, FCI had decided to centralise most of its activities to the plant in Troy, Michigan, due to complexities in the procedures of coating and the small sizes of other plants that could not supports all services.

FCI centralised important procedural activities, including sales, billing, procurement, sales quotations, receipt of payments, accounting operations and even the vendor payment activities to the bigger Troy plant in Michigan. Based on such circumstances, the company had to employ extra labour to handle ordering and transport activities from the smaller plants to the plant in Troy for other basic services.

Another quantitative causal factor in the context of the FCI case is inadequacy of integral equipment. FCI was growing rapidly while intensifying its operations across several areas, but the major issue rested upon availability of sophisticated material.

The company was underequipped in several ways, including materials necessary for coating process itself as well as other indispensable organisational paraphernalia.

The company lacked technological devices, including the Electronic Data Interchange device that would effectively enable the organisation to undertake clerical duties including data sharing, storage and inventory control in a sophisticated manner than the tedious manual paperwork.

Integrated machinery to control and estimate the amount of chemical consumption was missing and records of chemical output into environment remained underestimated with calculation not revealing the actual emitted pollutants.

Lack of proper integration of these materials remained a challenge as several other coating companies seemed more technologically proficient than FCI, posing competitive challenges to this organisation.

Qualitative Causal Factors

As postulated before, the problem causal factors were twofold, with some qualitative factors being of important consideration in FCI. The clients request for Integration of the Electronic Data interchange device to enable consumers to place their purchase orders, request for bids, provide delivery schedules, rerouting information and make payments remained compromised.

The issue might not be necessarily the aspect of financial capital, but in some cases linked to the human capital. In fact, as demonstrated in the case study, FCI had enough financial capital to acquire the technological device with the dilemma in managers being what to consider most between the two integrals issues: purchasing EDI device or acquiring a new plant in Mexico.

At the advent of this quest, none of the managers or even the workers in FCI had prerequisite knowledge on how to handle EDI devices and therefore becoming a confrontation. Since none between Perucci and Smith had operational ideas over EDI software, they had to hire a network engineer and a technician to manage all computer operations at considerably high cost.

Constraints

Perucci and Smith have a critical decision making role to execute and tactfully balance between the constraints and opportunities that would determine the providence of the company at that given juncture. One of the greatest constraints that were limiting the implementation of the EDI was the lack of skilled workforce coupled with limitation in production over chemical consumption.

The company lacked appropriate labour force that acted as a hindrance to the entire development and implementation of the Electronic Data Interchange device in the organisation. Another important consideration as part of constraint is the augmenting competition from other competitive coating companies around Michigan.

For Perucci to provide a critical decision on the implementation of the EDI, must consider crucial factors like the prevailing market and customer demands as well as the availability of skilled human capital that would allow smooth integration of the sophisticated device.

Availability of experts to control and provide necessary operational skills and foreseen future ramifications of the EDI is also necessary to avoid unforeseen drawbacks in the sophisticated technology.

Opportunities

The environment in which the FCI operated was quite unsettled with intensifying competition and technological concerns overwhelming the industrial realm of Michigan and its environs.

Despite the growing concern over the integration of modern technologies useful in advanced record maintenance in companies, much of which management in FCI had little knowledge about it, the company had its unique opportunities compared to others.

FCI was among the oldest coating companies around Michigan with greater public reputation and customer loyalty that any other coating company in this region. Despite the increasing competition from other coating companies across Michigan, most customers remained contented with FCI’s service quality and the prising strategies used.

Their goodwill and good reputation of FCI was enough to continue expanding their services as well as integrating the new technology that would improve the existing rapport with consumers. The financial stamina of FCI was capable of accommodating the expenses incurred in implementing and the use of Electronic Data Interchange device.

Alternatives to address the problem

Creating an alternative in addressing the problem in FCI seems to be a complicated matter since one has to consider the current workforce employed by the company to handle manual paperwork and other sensitive activities.

Definitely, incorporating Electronic Data Interchange devices in data processing and management will reduce the workforce required to handle manual paperwork and imposing employee retrenchment might be an alternative. However, considering the prevailing life circumstances, the manager has to consider the impact of such cutbacks might affect individuals in the organisation.

Based on the opportunities affiliated with the organisation, the rapport between the organisation and its customers is still strong and the customers’ will is of necessary consideration.

Restructuring the organisation to accommodate the prevailing workforce is among the most apposite solution to consider before implementing the EDI device. Therefore, training all staff to handle the EDI and other sophisticated technological devices that may arise within the demand of the competition will be appropriate.

FCI has a greater financial capacity that might enable them to explore other services in the coating industry as well as expanding their competitive advantage by investing in other regions within Michigan and U.S.A.

However, since integration of the EDI was increasing becoming a prerequisite in the organisations to assist the business in controlling sales, undertaking financial accounting, procurement, and controlling inventory, FCI was in a position to manage this implementation.

The greatest opportunity in the company is the fact that FCI had initially not invested in the ERP technology that customers continuously criticised. Customers considered the low-end ERP products useless and that the consumption of such products remained considerably low.

Several coating companies, which formed the competitive environment to FCI have extensively invested in ERP products, which remained critical to the consumption sphere. The FCI had an opportunity, therefore to explore the use of sophisticated EDI in their services, as the technology seemed modernised and of high demand.

Decision Criteria

For Perucci and Smith to make well-versed decisions in the uphill task against them, they must consider important quantitative and qualitative factors before reaching a decision between the two alternatives.

Decision making in any organisation must consider qualitative criteria, including aspects of competitive advantage, strategic positioning, customer satisfaction, and business ethics governing the operations of the companies.

On the other hand, Perucci and Smith must consider quantitative factors, including profit margins, operational costs, market share, and the material capacity. In addressing a situation through critical decision-making, it is always imperative for the management to consider both qualitative and quantitative to allow balance and impartial policy formulation.

Quantitative principles

For the decision made by the two principals to remain impartial and enable the organisation continue operating with ease and stability, they must consider the relationship between implementation of Electronic Interchange Data device and the expected impact of profitability of FCI. Since the EDI device will offload the paperwork to single technological operators, the device becomes significant in that matter.

Ostensibly, one has to consider the relative cost associating with the integration and implementation of this device and the current financial capacity. If the current financial position of the company cannot accommodate the expenses, the implementation becomes a compromise. However, based on this case, finances were available and thus Perucci should implement the EDI.

Despite the intensifying market competition over coating services, the market share for the organisation at that juncture was adequate to accommodate the existing competition. For such reasons, implementing the EDI device would allow the company to have greater competitive advantage that will further broad its market share through customer satisfaction.

Qualitative Principles

The responsiveness of Perucci and Smith in handling the problem at FCI will have to consider numerous qualitative principles before determining the most apposite decision to make. Determining the prevailing competitive advantage in the organisation that associates with the rapport between FCI and customers is paramount.

They only competitive advantage affiliated with FCI include the existing goodwill and reputation that ranks it best among the existing companies, having greater customer loyalty. Since the implementation of the EDI device integration resulted from persistence from customers, it would be important for them to consider the use of EDI to enhance the existing relationship.

The strategic position of FCI will be a matter of great concern before reaching the desired consensus. The closer the company to the economic hubs and developed urban centres, the greater the urge to implement the use of EDI to withstand the technological competence.

Customer satisfaction should be a priority while making decisions on the two alternatives, since service delivery must meet customer’s needs. The purported alternative must fulfil unswerving business ethics governing the operational zones.

Assessing Alternatives and appropriate recommendations

Based on the critical assessment of the given alternatives, the above description of the decision criteria intended for use in making the decision is suitable considering the prevailing conditions in FCI. This criterion does not in anyway claim that its perfect, however, the most appropriate for the prevailing situation.

The customers are the livelihood of corporate development and managers cannot in any given circumstances, ignore their concerns. Nonetheless, the growing demand for FCI coating services among its consumers is an important factor and the expansion of the company is essentially imperative for the outreach of its customers.

Based on the contemporary issues influencing the company’s welfare, implementation of the EDI serves the desired urgency as the acquisition of the plant in Mexico waits.

Action and Implementation plan

The most suitable action to take is to implement the use of Electronic Data Interchange device that will have several influences on data planning and management as well as the entire production process. Perucci as the President and the Chief Executive of PCI should spearhead efforts in the implementation process.

First step is to establish an extensive investigation and research on companies that have already acquired experience in the use of EDI devices and identify its related significance and ramification. Development of an oversight committee to oversee the critical decision-making and its implementation is necessary.

Perucci and Smith should finally seek external advisory team to offer intellectual support towards the project. After finding appropriate procedures to follow, Perucci and Smith must come up with strategies of identifying skilled labour force necessary for proper handling and training the staff over the sophisticated devices.

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IvyPanda. 2020. "Managerial Issues in Organisations – Fine Coating Inc." July 3, 2020. https://ivypanda.com/essays/managerial-issues-in-organisations-case-study-of-fine-coating-inc/.

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IvyPanda. (2020) 'Managerial Issues in Organisations – Fine Coating Inc'. 3 July.

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