A management study sample implies the analysis of a specific case that raised managerial challenges. In general, management study appeals to either a real or fictitious scenario or it can be used as a training tool for business schools and firms. A typical form of a management study includes such crucial elements as the descriptions of the challenge, background, possible options, decision, and results. It should be noted that when a management study is conducted, other companies may apply its results as a business model in order to improve the management effectiveness.
Draenor Inc., specializing in the production of professional dishes, faces difficulties in cooperation between the procurement department and the financial department which causes the production’s occasional idleness.
From the beginning of 2014, the company has initialized the development of the product lines and new types of pans with non-stick coating were introduced. Since new pans required the purchase of additional materials that were not used by Draenor Inc. before, the financial department had to allocate funds for the procurement department. According to the estimations, nearly 200 thousand dollars should have been allocated monthly for purchasing innovative steel. However, the conflict between heads of departments Ally Berks and Lion Cromwell emerged. The head of the financial department Ally Berks noted that a required sum was allocated without interruption. The head of the procurement department Lion Cromwell wanted to adjust the sum since a steel supplier Netex increased a purchase price unilaterally.
The CEO of Draenor Inc. Ashton Keynes considered a few options that were the most relevant in the situation. The first option implied the dismissal of Lion Cromwell and hiring a new head of the procurement department who would be able to efficiently negotiate with Netex in terms of the price correction. The second solution supposes the conduction of workshops among heads of departments in order to make them skilled in finding compromises. The third and the most radical option was to merge functions of both departments in one combined department of supplies with a drastic reshuffle.
After continuous reasoning, Ashton Keynes made his choice in favor of the combination of departments. It required a lot of changes in a procedural documentation, as well as in the segregation of duties. In particular, Ashton Keynes decided to appoint Ally Berks on the position of the head of the supply department since, throughout all 10 years of her career in Draenor Inc., she has been demonstrating more proficient skills of negotiating and analysis than Lion Cromwell who remained as her deputy.
With the introduction of the supply department, the cooperation between Draenor Inc. and Netex considerably enhanced. Specifically, on the position of the head of the supply department, Ally Berks could reduce monthly sums to 150 thousand dollars due to the adjustment of a delivery system. Although Netex refused to change a purchasing price, Draenor Inc. increased purchases of an innovative steel on 32 percent. The combination of departments allowed to provide a more effective control over supplies since a direct link between the determination of expenses and the money allocation was established.
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