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TerraCog

TerraCog. Organizational Decision Making Decision To Proceed with Aerial made by the president (Fiero) based on pressure by the vice-president of sales (Pryor). Initial decision to proceed with satellite imagery was rejected giving competition a head start.

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TerraCog

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  1. TerraCog

  2. Organizational Decision Making • Decision To Proceed with Aerial made by the president (Fiero) based on pressure by the vice-president of sales (Pryor). Initial decision to proceed with satellite imagery was rejected giving competition a head start. • Ariel more of a match of technology with competitor rather than innovation. • Production costs is considerably higher than expected due to expensive components. • CFO’s profit margin makes it impossible to match competitors price point.

  3. Decision To Be Made At End of Case • Launch Ariel at full price to maintain standard margin • Launch at competition price $425 at zero profit while working on redesign while working to reduce cost • Delay Ariel while working on lower costs re-design • Abandon Ariel

  4. Conflict Based Individual Goals • Pryor (Sales), concerned with compensation change and not disappoint sales team • Barren (Director of Production), Recent production problem which he was held responsible for. Job insecurity and maybe resentment for being blamed may lead to him being very conservative. • Roth (Design and Development), team not excited about project—other projects more exciting—interested in being promoted to be VP of design and development.

  5. Wu (software designer)—at meeting defends design not understand why costs are so high since he only tweaked the firmware • Whistler (VP of design and development) no longer fully involved in the company. Retirement soon. • Richardson (Executive VP)-difficult position, recently promoted, middle of a problem did not create. Needs to reach a solution but not hurt her relationship with other managers.

  6. Factors that contributed to the problem • Design and development had little involvement into the decision to move forward again with Ariel • Sales not asked to make recommendations with respect to reduction of cost. • Problem of cost discovered late.

  7. Group Factors • Team not united on common goal • Not clear what the meeting is about– is it meeting to set a price point on Ariel-to set a overall marketing plan for the product-to set an overall strategic direction for new products. • Group needs time to digest the information about the price problem.

  8. Possible Actions—Things To Consider • Try to get areas of agreement—launch product at zero profit margin • Deal with concerns of individuals-compensation for sales—conservative estimate and risks of underestimating costs—succession in leadership Roth and Whistler • What is the next meeting about or should there be a next meeting of the group? • What individuals should be involved in the next meeting? • What type of decision needs to be made?

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