ADMS 2511 Lecture 13: ADMS 2511 Lecture 13 Notes

John is a manager in the Gardening department at ABC Hardware. Last week the general manager was fired for incompetence. The chief executive officer appointed John to be the new general manager. John's salary will increase from $150,000 annually to $350,000 annually. John wants the job and is willing to accept the responsibilities that come with it.

The CEO said that there are many changes in the making and that everything will go digital. The employees are used to doing their work by handwritten orders. This new change will have to be implemented within the next 60 days. Most of the employees have never used a computer and do not understand what is meant by digital.

The CEO told John that the plumbing department, which consists of 25 employees, is not working efficiently. The workers continuously arrive late to work and do little or no work during the time that they are at work. The morale in that unit is very low. Their manager is attending school at night and could care less about the employees or the business. He has a total" hands-off "approach to running the business and totally neglects the business. The supervisor of the unit is off on disability caused by alcoholism, so no one is there to monitor the work.

The electrical department, consisting of 100 workers, is working efficiently, however, the morale is extremely low there. The workers are upset that they cannot advance and they have not received a wage increase in two years. John discovered that the manager continuously shows up to work late and never engages the employees. Sometimes he tells the workers that they are not professional and that they are lucky to have a job. Most of the workers are afraid of him and want to transfer or quit. It has been rumored that he sexually harasses the woman in the unit. The supervisor of this unit has been in the hospital suffering from a stroke for the past month. They are not sure if he will ever return to work.

Other than the above-mentioned problems, the company is doing well financially. Last year it made a profit of 100 million. It has the potential to make 500 million.

John has been given one year to turn these departments around. John comes to you and he asks your advice about how to turn this business around. He was told that if he did not turn these units around, he will be looking for a job as well. The CEO is a nice guy, but he is demanding and he has fired managers before.

You will be required to answer one of the four questions for your exam. You have 2 hours. You may not use your notes, books, or electronic devices.

1. Provide a written analysis of how John should tackle these problems. Explain the different approaches and the relative success that each approach might have.

2. Analyze the issue regarding "going digital" and explain how that change can be carried out. Also analyze the approach that should be taken regarding the managers and supervisors of both units.

3. Analyse what it will take for John to get the workers to accept the digital change, production improvement, and the morale increase.

4. Analyse the leadership skills that are necessary for John to be able to be successful in this new position. Analyze whether it would be necessary for John to use a team approach.

Scenario: Cabinets, Inc., is a large manufacturer of modular kitchen cabinets, sold primarily to builders and developers. The company uses a standard cost system. Standard production costs have been developed for each type of cabinet; these costs and any cost variances are charged to the production department. A budget also has been developed for the sales department. The sales department is credited with the gross profit on sales (measured at standard cost) and is charged with selling expenses and any variations between budgeted and actual selling expenses.

In early April, the manager of the sales department asked the production department to fill a rush order of kitchen cabinets for a tract of 120 homes. The sales manager stated that the entire order must be completed by May 31. The manager of the production department argued that an order of this size would take 12 weeks to produce. The sales manager answered, “The customer needs it on May 31, or we don’t get the business. Do you want to be responsible for our losing a customer who makes orders of this size?”

Of course, the production manager did not want to take that responsibility. Therefore, he gave in and processed the rush order by having production personnel work overtime through April and May. As a result of the overtime, the performance reports for the production department in those months showed large, unfavorable labor rate variances. The production manager, who in the past had prided himself on coming in under budget, now has very ill feelings toward the sales manager. He also has stated that the production department will never again accept a rush order.

(MUST POST FIRST) Initial Post – As an employee, write an internal memo to your manager addressing the following:

Identify any problem that you see in the company’s standard cost system or in the manner in which cost variances are assigned to the responsible managers.

Make recommendations for changing the cost accounting system to reduce or eliminate any problems that you have identified.

For your response post, you will be taking on the role of the manager and respond to your employee’s memo. Inform the employee as to what specific managerial decisions, conclusions, and/or judgments can you make from the information provided in that memo. Do not respond to a memo that has already received a managerial response.

John is a manager in the gardening department at ABC Hardware. Last week the general manager was fired for incompetence. The chief executive officer appointed John to be the new general manager. John's salary will increase from $150,000 annually to $350,000 annually. John wants the job and is willing to accept the responsibilities that come with it.

The CEO said that there are many changes in the making and that everything will go digital. The employees are used to doing their work by handwritten orders. This new change will have to be implemented within the next 60 days. Most of the employees have never used a computer and do not understand what is meant by digital.

The CEO told John that the plumbing department, which consists of 25 employees is not working efficiently. The workers continuously arrive late to work and do little or no work during the time that they are at work. The morale in that unit is very low. Their manager is attending school at night and could care less about the employees or the business. He has a total" hands-off "approach to running the business and totally neglects the business. The supervisor of the unit is off on disability caused by alcoholism, so no one is there to monitor the work.

The electrical department, consisting of 100 workers, is working efficiently, however, the morale is extremely low there. The workers are upset that they cannot advance and they have not received a wage increase in two years. John discovered that the manager continuously shows up to work late and never engages the employees. Sometimes he tells the workers that they are not professional and that they are lucky to have a job. Most of the workers are afraid of him and want to transfer or quit. It has been rumored that he sexually harassed the woman in the unit. The supervisor of this unit has been in the hospital suffering from a stroke for the past month. They are not sure if he will ever return to work.

Other than the above-mentioned problems, the company is doing well financially. Last year it made a profit of 100 million. It has the potential to make 500 million.

John has been given one year to turn these departments around. John comes to you and he asks your advice about how to turn this business around. He was told that if he did not turn these units around, he will be looking for a job as well. The CEO is a nice guy, but he is demanding and he has fired managers before.

Analyze the issue regarding "going digital" and explain how that change can be carried out. Also, analyze the approach that should be taken regarding the managers and supervisors of both units.