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Chapter 1

Chapter 1. Adnan Alibegovic Jenny Hon Vivian Ngo Tom Spaulding. Case 1-1 Overview. Kirsten Malon owns a consulting firm: Computer and software repair and analysis Recently expanded to 25 technicians Customer based grown to 1,900 Customer: Businesses without vendor support

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Chapter 1

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  1. Chapter 1 Adnan Alibegovic Jenny Hon Vivian Ngo Tom Spaulding

  2. Case 1-1 Overview • Kirsten Malon owns a consulting firm: • Computer and software repair and analysis • Recently expanded to 25 technicians • Customer based grown to 1,900 • Customer: Businesses without vendor support • Retainer arrangement • Stabilizes CF • Wants to expand to publishing newsletters and books

  3. Case 1-1 Current Success Factors • Measure of Technician Efficiency • Retainer schedule may be a problem • Keep fixed force of 5 to support current customer base • Rest of staff could be contractors • Customer Satisfaction • Customer Retention • Follow up survey

  4. Case 1-1 Current Success Factors • Pursue high end customer • Profiling • Pricing • # calls per customer • % of customers on retainer

  5. Case 1-1 Future Success Factors • Needs different type of personnel added • Could contract out writing and publishing • Could use technicians for content • Use current customer base as well as expand • Measures • Volume of sales • Cost of publishing books vs. newsletters • Monitor sales of each line

  6. Case 1-1 Information Required • Products and Services costing • To determine pricing on each line • What is driving the cost • Effects decision pertaining to expand/contract • Planning and Decision-making • Business is getting more complex • Needs direction and goals

  7. Case 1-1 Information Required • Management and operation control • Not as significant • If it continues growing at this pace, then more important

  8. Case 1-3 Ethics/Pricing Overview • Manufacturer of airplane parts and engines • Civilian and military customers • Government is only buyer of rocket engines, AeroSpace is only provider • Rocket engine price is cost plus markup • New cost system under development is more accurate than old one • New system assigns lower cost to engines and higher costs to other products • Top management wants to scrap the new system

  9. Case 1-3 Ethics/Pricing • Option 1 - Scrap new system: • More profitable in short term • Discovery by government risks all military contracts and bad PR • Can’t ignore fact that other products are more costly than previously thought • Unethical

  10. Case 1-3 Ethics/Pricing • Option 2 - Implement new system • Loss of profit in short term • Opportunity to build goodwill with government • Begin to investigate how to make other products more profitable • Only ethical solution

  11. Case 1-3 What to do? • Investigate whether new system complies with government regulations • If not, use internally and keep profit • Tell management ethics requires using the new system • Refusal necessitates resignation and whistle-blowing

  12. Reading 1-7 to 1-16

  13. Reading 1-7 to 1-16 • Transition • Started with modernized technology • Lost of manual spreadsheets and gain of financial tools • Interpretation of results and how they relate to strategy of the business • Skill sets • Communication • Team-building skills • Analytical skills

  14. Reading 1-7 to 1-16 • Caterpillar Example: • Changes driven by corporate reorganization • Company-wide educational program • Meaning of numbers and its impact to the business • Internal leadership willing and capable of understanding information • Direct line of reporting to operations • Accountants accept new roles to survive • Expansion of roles and sharing of information for all

  15. Reading 1-7 to 1-16 • Obstacles • Lack of time, expertise, and support • Set of measures for new organization • Cultural change and mind set • Positives • Application relevant to all • Bring units together

  16. Q&A

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