Question

Exercise Overview Decision-making skills refer to the ability to recognize and define problems and opportunities correctly and then to select an appropriate course of action for solving problems or capitalizing on opportunities. In this exercise, you're asked to apply your decision-making skills to a situation calling for both good business sense and a sense of personal values Exercise Background You're the owner of a company that makes dress and casual shoes at two small factories, each with a workforce of 40 people. One is located in Smallville, Illinois, and the other in Modesto Texas, both small towns. You've been in business for 40 years, and both factories have long been profitable. Unfortunately, however, competitive conditions in the industry have changed in recent years. In particular, you're now facing stiff competition from Italian firms whose shoes not only sell for less money but boast higher quality You're confident that you can close the quality gap with new high-tech equipment, but your overhead is still 30 percent higher than that of your Italian competitors. At the moment, you feel that your best option is to close the Smallville factory and lay off the workers, but you're a little reluctant to do so. You're the major employer in Smallville, which is dependent on your factory and has just spent a good deal of money to improve utility service and highway access. In addition, most of your employees are older people who have lived most of their lives in Smallville Exercise Task Your instructor will divide the class into groups of three or four people each. Each group will meet as a management team responsible for deciding the fate of the Smallville plant.

Answer 1

If the factory is not closed to improve profitability, competitive forces will soon kill both the companies. The priority at present is to preserve the business by updating technology and hold market share with profitability.