Matriz Dofa

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Case 1 United Products, Inc.

Teaching Notes

Copyright © Gareth R. Jones, 1994


Synopsis


United Products, Inc., is a small office products and supply company, headed by the son of the founder, George Brown, President. Brown is a laissez-faire president/owner who is about to leave on a three-week European vacation. He doesn’t want much growth because he is unprepared to put forthextra effort. Growth is limited by his motivation to work harder. Students will tend to be critical of Brown, his management style, and organizational strategy and structure.

Brown has a good track record as president: His company has grown at an enviable 20 percent a year, and the functional organizational structure works well. Brown knows how to delegate and decentralize control. He allowsemployees to demonstrate their abilities and rewards them for performance, and he creates an enjoyable organizational culture. His time on vacation or playing golf is a tribute to his management skills and ability to design a structure that allows for delegation. The case considers basic management issues such as what organizations do.


Teaching Objectives


1. To familiarize students with smallcompany operations and present the meaning of competition, strategy, and structure.
2. To critique the management style of a president who appears lazy, but is actually entrepreneurial.
3. To expose a functional organizational structure and a simple hierarchy and show role relationships in an organic structure.

This case can be used after Chapter 1 or 2 as the first case of the semester. Itis easy to analyze and understand, and is a good preview for many organizational theory topics in the text. Encourage a negative perspective of Brown and then show the opposite side of the picture. This strategy promotes debate, and also allows the students to begin to think creatively about management.


Pop Quiz Questions


1. What kind of structure does United Products use?

Answer: Afunctional structure

2. True or false: George Brown delegates too much authority to lower-level employees.

Answer: False


Issues and Discussion Questions


1. Critically evaluate George Brown’s management style. What does he do well or poorly?

Discuss his personal attitudes and behaviors that appear to be somewhat negative:

1. By his own admission, he doesn’t work long hours.2. Coming from a wealthy background, he lacks ambition and drive.
3. He is not willing to exert effort and energy to help the company grow faster than 20 percent per year.
4. His family comes first.
5. He took a 10-month vacation from his company a few years ago.

Consider his managerial policies:
1. There are no formal job descriptions.
2. He has very conservative financial policies andavoids all debt.
3. There are no specific performance standards for employees; salespeople have no specific sales quotas, but are paid a percentage of sales.
4. There is no formal planning process.
5. There are no profit goals.
6. The size of the workforce and facilities is too large for the volume of business, thus increasing costs.
7. There are very weak training programs; employees trainthemselves.

It is clear the company is not doing well, and that Brown is a lazy, spoiled millionaire.

2. How well is UPI doing?

From a financial standpoint UPI is very successful. Sales have doubled in the last four years. In 1973 sales were up 22 percent, profits rose 40 percent above 1972, and net worth increased by $123,500. From the stakeholders' viewpoint, employees earned above-averagewages; sales suggest customer satisfaction. Brown goes out of his way to create a good working atmosphere, and has a personal relationship with employees and high ethical standards. It seems that the organization is satisfying stakeholders.

3. What explains UPI’s level of performance; for example, is it Brown, luck and chance, or the strategy pursued by the company over time?

The question...
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