Case Name: Jones Company
Student Name: Ricky Sidhu
Student Number: 100201154
Short Cycle Process:
* I am the corporate controller and am to prepare a report to the president of JCL of my investigation into the areas of JCL that need management attention
* The relevant events occur in 2002
* Events occur in Canada
Organizational Structure – The president has an increasingly large workload which leads to the bottleneck effect, high rate of manager turnover, and purchase order lag.
Firm Unsure of Direction – Many managers have stated that the firm is unclear of where it is going with its divisions and a friend of the presidents suggested ...view middle of the document...
The president’s heavy workload has also led to a delay in purchase order approvals because he has so many other responsibilities. This has caused some long-term customers to take their contractor requirements to other dealers because JCL cannot guarantee delivery dates for purchase orders.
* One alternative would be to spread out the responsibilities of the president to the managers in order to reduce his workload. Hiring of employees could be done by the managers below the general manager. The general managers could take over some of the president’s responsibilities such as creating vacation schedules for the employees. The general managers could also be approving their respective division’s expenditures since they are responsible for achieving the budgets. The president could also raise the monetary amount for purchase order approvals. $200 is a small amount of a purchase order in the lumber industry and would require the president to approve a majority of orders. It would make it easier if he raised that to in between the $500-$750+ range and let the general managers approve anything below the amount the president chooses to lessen his workload. The accountant could handle the financial reporting.
* The other alternative would be to keep things as is. If no change is made the lumberyard would continue to run in a less efficient and less effective manner. With the continuous growth of the lumberyard the president’s workload would get even heavier to a point where operations and employees will be far less efficient and effective leading to even further reduced profitability.
Based on my analysis, the first alternative should be pursued. With JCL growing the president’s workload will only get heavier. Choosing this alternative would lessen the president’s workload significantly and provide more responsibilities to the managers leading to the managers being happier and a lower turnover rate. Most importantly, by choosing this alternative we can go back to the days when purchase orders were approved almost immediately and allowing JCL to guarantee delivery dates to its customers.
Strategic Planning Analysis
After interviewing the managers many of them had mentioned that the firm does not know which direction it moving with the two divisions. The manufacturing division is uncertain if its purpose is to provide lumber to the lumberyard division, or to operate as an independent division selling to both customers and a sister division. Similarly, the lumberyard division is unsure if its purpose is to be a retail outlet for the manufacturing division or maximize its own profits as a lumber supplier.
Strategic planning can address this issue and guide the firm to move in the right direction with its two divisions. Strategic planning will help JCL define its strategy and direction on how to allocate resources to implement this strategy. Strategic planning essentially answers the following three...