Disadvantage: * Technical evaluation after price negotiation causes an unfair price competition during auction between high quality suppliers and low quality suppliers. Suppliers with low quality may have lower cost structure comparing to high quality suppliers. Without setting the quality standard before the auction, it is likely that the auction winner may not be able to meet Casturn’s technical evaluation. * The cross-function time at step 5 have veto power. Even though this practice reduces the chance of making a bad re-sourcing decision, it wastes lots of time and energy from CMC and engineer team, and may discourage nominated supplier.
All of the ratios would be helpful to internal users because this would provide the company with the knowledge of if they would be approved for a loan that is needed or how much the company lost or gained as well as if the company looks as though it will be able to survive over a long period of time. Which ratios would external users be most interested in? Why? For external users I would say liquidity ratios and solvency ratios because both of these help with knowing if a company will be able to pay a loan back when called for. Which ratios would best help internal users manage the business?
Issues involved in resolving legal disputes could be customs, language, environmental, competition, misunderstandings, and even communications just to name a few. Any of these issues can create a large problem between international companies. An example of a legal dispute in the scenario is CadMex could make much more money than expected from the marketing of Gentura’s newly created agent and Gentura stops the production of the agent citing that the extra proceeds should be returned to them, not CadMex and breaking the contract. Practical considerations of taking legal actions against a foreign business partner are bringing in the attorneys used to create the initial contract. If an agreement cannot be made, another consideration is to proceed to international arbitration, which was the agreed upon method of dispute resolution between the two companies.
Also, a low profit margin decreases the price they proposed. For Union Stamping, a low indirect cost of manufacturing, benefit from high company productivity and management efficiency might be the key factor of low price. In conclusion to my cost analysis, I will give a recommendation of which price to take would be fair and reasonable to both Frich Turbo and the supplier, with consideration of their pros and cons. Then, I will explain the steps of implementing and ways of monitoring. ISSUE IDENTIFIED Mr. Fingold, from Frich Turbo Engine Company was in the process of purchasing a replacement valve.
Mr. Bailey must decide whether or not to support the merger and determine if the outcome is beneficial to the Opera. Mr. Bailey could show how the Opera’s financial stability, fluid business model and strong cash reserve could be hurt by the Symphony’s financial difficulties and union locked business model. This contrast showing how the Opera could become less economically stable by the merger would lead to the rational conclusion that the merger doesn’t have many positives to offer. Using Vroom Theory in this manner would motivate the Opera not to support the merger because the belief would be that the merger would leave them in a weakened economic state. The illustration of how unattractive this new financial situation would be hard to measure and speculation of losing their financial standing would move the Opera against the merger.
1. How would you define “Frozen Preferences” and what is the impact of this concept on strategy formulation, alternative analysis and recommendation? • Managers don’t like to make major strategic changes once decisions have been made (except in the case of overwhelming evidence) as they will look unprepared and ineffective and their creditability is damaged • Frozen preferences o Management has made a decision and over time analysis shows that their decision may not be the best choice o However they feel compelled to maintain their current strategy even if it is not the best course of action. • As management preferences becomes a larger part of the organization (personnel changes, budgets etc), it becomes more and more difficult to change direction. o A tendency to avoid reversing changes even if it was not the best choice o In reality, past expenditures are sunk costs and the organization should use a clean slate to look at new choices, but to the manager, this will come at great personal loss.
Do not feel pressured into an investment you do not yet understand or one you are not comfortable with. The following personality traits will hurt your chances of financial success: Fear: If you are unwilling to take any risk, you will be stuck with investments that barely beat inflation. Greed: As an investment class, 'get rich quick' schemes have the worst returns. If your expectations are unrealistically high, you'll go for the big scores, which usually don't work. It is generally a good idea to avoid making financial decisions based on emotional factors.
They also do not have to answer to shareholders. On of the disadvantages of executing this option is the fact that the banks will most likely lay down restrictive covenants which will impose restrictions on further form of funding. This may become a problem if Merit is maxed out on receiving financing and would need any additional capital for any other projects. There might be a lot of interference from the bankers in the form of periodic assessments and financial disclosures such as periodic cash flow
Selling – your businesses success or failure will rely on its ability to sell its goods/services. Even though you might have a brilliant idea the 4 p’s will need to be adopted offering the right product, at the right price, in the right place and promoted in such a way that the customer is persuaded to buy, which leads to the question do you have the ability to sell your idea or a partner who does? Management – these will be much more important once you get to a stage when you start to take on employees and an organisation structure starts to develop. There will be a need to communicate your ideas as well as co-ordinate the different functions, listen to feedback from colleagues, set targets and monitor progress. How will you do this?
It does not offer the fullest disclosure, objectivity, and transparency. “Members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism.” (AICPA) If the investors, creditors, and general public had found out about this questionable reporting, the integrity of the leadership of the organization would have been questioned a lot sooner. Investors would have been running away from WorldCom a lot sooner. Creditors would have stopped issuing resources in good faith. The general public and news reporting agencies would have created uproar.