Management Essay, Research Paper

In the Threshold Team Competitor, a simulating program that manages details of a small manufacturing company, the class was broken into 13 small groups who competed against one another in a simulation. The goals of the simulation were for the groups to develop decision-making skills in financial management, human resources, marketing, research, and inventory control. Our company goals were to be ranked in the top three performers in the simulation, to have a sizeable market share, to have a high quality, and a high demanding product. Our mission was to establish our company as the premier purveyor of the finest plastic products in the industry. Our ability to identify essential signs of growth and loss of income, then basing our decisions on our analysis of reports from the previous quarters can make our company successful.

Managerial duties and roles were shared among all members of the team. Decisions and ideas were introduced by individual team members and then debated and by the team, then implemented if a majority agreed with the plan. Usually a team member would present an idea, showing data and his reasoning for implementing it into the company. In order to get his idea approved the submitting team member usually has to compromise on how the idea is to be implemented or on certain aspects of his idea or plan. All of the companies planning and strategies were formed using this method of team-based decision-making.

We felt that the company and the inputs required for Threshold Competitor were small enough to be shared by the entire group. The group also felt that using a team based decision-making style would be the best way to determine the will of the group (Daft 41-42). We felt that if we gave each individual total control over certain aspects of the company, it had the possibility of forming two types of negative results. First, a member might be unfairly saddled with an aspect of the company that might prove to be more difficult and time consuming than others. Secondly there was the possibility that a member may not do his assigned task, leaving the group little time to react and do that assigned role (Child 25-30). By utilizing a team based decision model, we eliminated these two problems while giving the group the ability to collaborate on all matter involving the company. If a member did not participate in meetings of the team, there could be little dispute by that member on his performance because feedback was instantaneous. In our team of five, there were two members who believed in completely different strategies. One member favored aggressive growth and pricing strategies, while the other favored a conservative approach to both growth and pricing. The other three members usually decided which path the company would take by using their own ideas and pieces of the other two members strategies. While arriving at decisions was often laborious, the decisions did represent the consensus of the group as a whole.

One drawback that we suffered using this approach was time constraints (Draft 325-326). Often one or two members would feel strongly about an idea and heated disagreements would occur amongst the team members. This would result in time losses and often distracted the group from aspects of the company s operation that needed attention. Arguments on small details often derailed the team from seeing the bigger picture or missing ominous signs such as the huge adverting expenses the company was incurring. Working as a team could also be laborious because of the conflicts in personalities, differences of opinion, and egos. However, as a group, we believe that using this team-based decision-making was the best method, encouraging involvement and allowing everyone to have an equal voice in all aspects of the company. By working together the group was able to determine which member of the team was better at certain skills. The team often turned to that member for his expertise in that area when a critical decision was needed. Having so much input enabled the team to look at the effects of making a decision from many different views and anticipates benefits or problems that would be incurred by making a certain decision. By working together pros and cons of a decision were weighed and measured and the most logical path of action was taken. But most importantly working in a group allowed everyone a chance to have an equal voice, and the ability to help steer the company to the common goal of becoming successful.

Although there were great advantages to the team based structure of managing, it also posed obstacles that reflect our ranking amongst the ranks. The disadvantages of using the team-based structure are stifled agendas, formation of alliances, and the production of a work environment structure that is highly organic. The combination of these factors produced a work environment that yielded mediocre results (325-326).

During the decision making process for the simulation, agendas were not successfully communicated because of the formation of the team-based structure. For example, the team-based structure used in-group four was an example of a mixture of democratic leaders trying to perform functions simultaneously. This method often allowed for certain thought processes host by members of the group not to be communicated. This disadvantage persisted throughout the entire simulation. For example, from the very start when ideas were discussed and rejected by the majority voice in the group, the good ideas and strategies that were hosted by group members appeared as hollow voices in the wind. There was a clear and concise break down of communicating ideas and agendas as relative to group four s decision-making process. Ideas and agendas were stifled because of the strong presence of rejection hosted by the democratic leaders within group four.

Also the formation of alliances proved a force to be reckoned with because after numerous decisions the general personalities exhibited by the group could be seen. After a couple of decisions were made, individuals tended to shift toward the formation of ideologies formed by certain group members and did not deviate even when the results deemed to prove that the methods were wrong. These alliances affected the larger group negatively. Although it encouraged participation in the group, the alliances posed a stronghold on the communication channels within the group. The coalition formed within our company gave a relative view as to how to function with them in management related fields. The alliances exposed the temperament of group members within the group. For instance, when a decision was made and the process of discussing the decision was taking place, normally the majority within the group would generally favor with the concepts and ideas for the decision given certain people. Initially, this was the culminating point that led to the demise of the group.

Another factor of the team method of approaching this simulation that detrimentally was functioning in a work environment that was highly organic (Bourgeois 25-30). The work environment was flawed because of the absence of rules and regulations that governed the procedural method of forming decisions. Also, our highly organic work environment lacking rules made the decision making process moderately difficult because there was not a hierarchy or a structured method of submitting the decisions. The process was totally subjective and generally based on past decisions and knowledge based on experience brought to the group from other classes and not on the reports and information, with the exception of marketing, that the simulation offered. This made the group less effective initially, but as we changed the strategy to one that was based on the information that the simulation had to offer, our position amongst the ranks increased in the later stages of the simulation.

Although the four mentioned effects listed generally served as vices to the group; they were learning experiences and were very useful in the corporate/management environment.

Triple C & Associates in this simulation was a compilation of brilliant independent minds that were forced to work with each other even though their abilities would have allowed for them to complete the simulation in a ranking position alone. The personalities within the group were very different; everyone hosted different methods of communicating and management styles.

Jeremy Chambers was very easy to work with for everyone in the group with the exception of Lewis. Everyone in the group favored his radical methodologies of governing the decision making process and the approaches that he suggested that the group should make. He was very outgoing and persistent in communicating his ideas. Mr. Chambers was heavily involved in the advertising and pricing aspect of the company. Although some of his positions were very aggressive, he would compromise and modify his ideas to meet the will of the group.

On the other hand, Lewis Reddick was the black sheep of the group. Lewis ideas were pretty far-fetched, and at the same time he had no logical reasoning behind any of the ideas that he thought the group should take (Eilon 369-372). Although Lewis was very dedicated to the project, he left no space for compromise. With Mr. Reddick, there were only two choices in making our groups decisions. There was either his decision or what he thought would be the wrong decision. Mr. Reddick and Mr. Chambers had two radically different methods and approaches in which they thought the organization should have been operated.

Chris Taylor was committed to the project; he was the group s premiere organizer. Chris Taylor contributed to the group by serving as a parliamentarian of sort. Chris s main focus was on the human resources and production. He manually inputted the decisions after the group had reached a general consensus. Mr. Taylor normally favored the decision making process of Jeremy and their thought processes were linear. In times when the group was halted by the decision making process and could not formulate an agreeable method of responding to the decisions, Chris Taylor and Corey Synagogue would be the deciding factors for the fate of the group.

Corey Synagogue displayed his commitment to the group by revealing his great attitude and moderate temperament. Corey never displayed much enthusiasm. His temperament served as the backbone for the group and allowed the group to reach a final decision. Corey was very patient, but could have been a little more aggressive. Mr. Synagogue was very interested in the expenses that were incurred during the stint of the company.

Chris Richards initially rarely participated in the group. He missed over half of the group meetings and by the end of the simulation his contribution was minimal. Mr. Richards was part of the reason that we made a very large advertising campaign. He had a great attitude but simply did not express much interest in the group.

In the beginning, our weakness outshined our strengths. By the time we realized the strength of each member it was too late to implement it into our decisions. As a group, we spent more time early in the simulation process focusing on our weaknesses rather than trying to find out what each of our strengths were and utilizing it in our decision making process.

The graph above is a relation of demand, price, and quarter and how the demand changed according to our price throughout the simulation. Because of the established relationship between price and demand, another constant, product quality was a contributing factor in initializing products poised for profit growth. Product quality assisted with creating a high demand and was a third constant that assisted in equilibrium attainment via profit maximization. We found the equilibrium price, but we did not accept it. We should have left our prices at the equilibrium to keep our demand at the maximum rate, and then we would have been in first place.

Due to this increase in demand, we had to increase labor to meet our high demands. When our demand was high, we could not meet the demand with our current labor without incurring overtime charges. So we decided to meet our demand with our current amount of workers. This was not too smart because we acquired overtime charges, which had to be deducted from our income. If we would have produced the maximum amount each worker could produce without overtime charges, we could have raised the price because we could not meet our demand (Colander 80).

There are two issues that determine how the demand for products is translated through firms into a demand for labor and other factors of production. These issues are changes in the demand for a firm s product and changes in the factors of production (Colander 810). The first principle is almost self-evident. An increase in the demand for a product leads to an increase in demand for laborers who produce that product. This increase pushes the price up, raising the marginal revenue product of labor, which is the price of our companies product times the additional units of output that hiring an additional worker will bring (816). In other words, the cost of labor to our company was determined at the same time the price of our product and profitability were determined. The next principle is determining the demand for labor after changes in production. The net effect on the demand for labor is unclear; it depends on how much we increase output, and how much our price is affected (818). We never could determine the final effect on demand, but when we used our resources as efficiently as possible, we minimized expenses. Changes in these factors make demand for labor shift around extensively.

This is a graph of our income statement. Incorporated within this graph is net sales, cost of goods sold, gross profit, selling and administrative expenses, and net income. The income statement is a summary of revenues and expenses for a specific period of time and this time period represents our eight decisions. The income statement also reports the excess of the revenue over the expenses incurred this excess of the revenue over the expenses is called net income. If the expenses exceed the revenue, the excess is a net loss (Howard 679-685). Net sales are units sold times the price per unit. The cost of goods sold is the total value of the ending balance in finished goods inventory. This includes raw materials, labor cost, overhead, product quality, and depreciation; the summation of all of the expenses divided by the number of units produced is equivalent to the unit cost. The unit sold multiplied by the unit cost reveals the total manufacturing cost of goods sold. Gross profit is total net sales minus manufacturing cost of goods sold. Selling and administrative expenses are our marketing ads plus office expenses marketing research and refunds.

In the first couple of quarters our cost of goods sold and net sales increased, also our net income decreases. Gross profit and net income decrease. Net sales increased because the product posed the highest quality at an affordable price. The cost of goods sold was rising because the overtime cost were prevailing, and an overage in finished goods inventory existed. The cost of goods sold was high because we produced more units than our workers could produce in the set time period that we set for them. Because of this we incurred overtime expenses. We also had an ending balance in our finished goods inventory, so this also made our cost of goods high. If units produced were decreased, our labor costs would have been less. In return our unit costs would have been less. As a result our manufacturing cost of goods sold would have been lower. Assuming all of the situations stayed the same, gross profit and net income would have yielded a profitable result. This enhances our ability to identify our losses of income and to help us to make better decisions and help us in the upcoming quarters.

In quarter four net sales were low, gross profit decreased but still was above net income because unit cost were extremely high. Unit cost were high because workers were improperly utilized which resulted in low of unit production. Since labor is a fixed cost, the maximum amount of units should have been produced with regards to the size of the workforce. Hence, more units would have been produced, unit cost would have been lowered, and total value of finished good inventory would have been minimized. A result of the mentioned factors would have ultimately created a lower cost of goods sold. This would have directly increased net income by creating a higher gross profit. Recognizing the loss of income in cost of goods sold was demonstrated in quarter five via the graph

Quarter eight established progression in net sales, even though cost of goods sold was still high. Even though gross profit increased, cost of goods sold and selling and administrative expenses were high, which in return gave us a negative net income. Unit cost for product two was higher than what we were selling it. Unit cost was so high because we had over-time premiums; if resources had been balanced between product one and two and did not exceed the workforce capabilities overtime premiums would be extinct. All things remaining constant, unit cost would have been lowered and total value in finished goods inventory would have been lowered. Since our total value in finished goods inventory is lowered the cost of goods sold would have ultimately decreased. Therefore, gross profit would increase. This in return would have given us a high net income. Marketing research caused selling and administrative expenses to be high; this could have increased our net income.

If we were able to recognize our losses in income, we would have better success in the simulation. As a group if we would have utilized better analysis strategies of previous reports better results would have been forthcoming. We should have continued with the path of the conservative strategy instead of accepting a radical perspective. Once we discovered that the radical strategies were not beneficial to the company, it was too late to change. This led to our failure. In an essence, there was not total failure because when the company had its downfall, we were able to bring ourselves out of the slump, but not get up to par because of the lack of time.

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6. Howard, Ronald A., Decision Analysis: Practice and Promise, Management Science 34, 1998, 679-395