Fayol’s organizing function is demonstrated when management gathers and synchronizes the resources of the organization (people, capital, and physical) to complete the goals set out in the planning stage.
One of the long-term goals set out by the Biotech’s strategic team is to increase sales in North America by 15%. The short-term goal to accomplish this increase in sales is to create a sales campaign that targets the Canadian market where sales have been dropping off ever since Nestle foods has sought to enter the supplement market.
One short-term goal that has come from the plan to increase sales is a contract with Walmart Canada to sell private labeled protein bars for Biotech. Walmart is known for getting the cheapest product they can because of the volume they sell. The contract would provide for 300 million bars every 3 months at a 2-cent reduction in price per bar. The first bars would be delivered to stores in two months. Production for protein bars in the Canadian plant is headed by Maurice Chevalier. He looks over the contract specifications and begins to set out goals and objectives that he would need to meet the order. There are three problems the order has:
To make the required profit margin of 3 cents per bar, costs have to be cut by 1.5%;
Recent supplies for the products have increased 1 cent because of a recent increase of shipping costs on Whey supplies from the US Chicago supplier;
Three new full-time line employees would have to be retained from the seasonal hiring in October. Although this is often how line staff are hired, the retention would not increase the budget but will affect the staffing schedules.
Write an email to the Operations Vice President outlining the goals and objectives Chevalier could use to organize the production line to meet the contract needs while still maintaining the 3-cent profit for Biotech. Be sure to explain why you have listed the ideas as goals or objectives.
Learning Activity #2 - Theme 2
In the sourcing of products Chevalier found a potential product that would be great in terms of costs but the quality was not quite up to Biotech standards. The product meet about 85% of the standards so it is not quite there. How would Biotech’s culture play into Chevalier’s decision?