5 CA - Relevant Info for Decision Making in a Multi-National Environment

Behemoth Motors Corp . 1

Decision Making for Behemoth Motors Corp

Behemoth Motors Corp . 2

Business management has become one of the most popular jobs in the world . Wally Wizard , as GSPN manager , needs a keen eye to ensure that the business is running with no hitches , no obstacles to success and no decrease in revenues

First , it is important to define what Wally Wizard 's problem is Superficially , Mr . Wizard has no problem with the outfit , because statistics show that only 2 of their products fail quality control However , upon

closer inspection , Mr . Wizard does have a problem : the direct materials that they utilize are acquired pursuant to monthly contracts . Even though there are no future obligations under the contracts , BMC is still vulnerable to his suppliers ' whims : sudden increase in rates or the possible non-renewal of their contracts the following month

Now that the problem has been identified , what alternatives do Mr Wizard have ? A perfect opportunity in an offer made by Far East Enterprises , Ltd . comes along . Although production costs are a fraction higher than BMC /GSPN 's current operations , FEE offers a two-year contract that would presumably contain less risk than the current system . However , if Mr . Wizard opts for the outsourcing , what to do with their 100 strong employees

Mr . Wizard already has the relevant information he needs so that he can make a viable , intelligent and profitable decision

Behemoth Motors Corp . 2

FEE assures the same quality as the current BMC /GSNP quality

The FEE outsourcing is covered by a contract

The factory floor space vacated by the business operations can be a source of savings

FEE 's delivery schedule is as reliable as BMC 's

BMC 's supervisors can be absorbed by other BMC units

Therefore , the only problem is the laying off of 100 laborers . The solution to this would be intense collective bargaining agreements with the union . The FEE contract will commence on July yet , buying time for the company to make negotiations . Labor standards and regulations do not enjoin employers from discharging or laying off employees (Kim 2003 The employees may be given three months 'notices of their discharge . In lieu , Mr . Wizard can monetize the three months notice , which will provide ample support and time for the employees to gain employment Unions are amenable to notices specially if the workforce to be discharged is paid off . This is an opportunity cost for BMC /GSPN wherein Mr . Wizard quantifies the cost of sacrificing his workforce , in favor of obtaining the benefits of the FEE contract (Jay 2004

Mr . Wizard will wake a sound managerial decision by opting for the FEE

Behemoth Motors Corp . 3

Contract . Why ? Most of the qualitative factors in making decisions are soundly met (Relevant Costs

Quality is assured

Delivery schedules will be met

FEE is a reputable outsourcing company which will in turn uphold the reputation of BMC /GSPN and

As result , customer opinion will be high and their satisfaction guaranteed

To conclude , studies have shown that...