What about Michael? Michael Smith is the bookkeeper for Danielle’s Distributing

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What about Michael? Michael Smith is the bookkeeper for Danielle’s Distributing Company, a distributor of soft drinks and juices. Because the company is rather small, Michael performs all the daily accounting tasks himself. Danielle, the president and owner of the company, supervises the warehouse/delivery and front office staff, but she also spends much of her time jogging, skiing and going to the beauty spa. For several years profits were good and sales grew faster than industry averages. Although the accounting system was working well, bottlers were pressuring Danielle to computerize. With a little guidance from a CPA friend and with no mention to Michael, Danielle bought a new computer system and some accounting software. Only one day was required to set up the hardware, install the software, and convert the files. The morning the vendor installed the computer system, Michael’s job performance changed dramatically. Although the software company provided two full days of training, he had trouble learning the new system. As a result, Danielle decided he (Michael) should run both the manual and computer systems for a month to verify the new system’s accuracy. Michael continually complained that he lacked the time and expertise to run both systems by himself. He also complained that he did not understand how to run the new computer system. To keep accounts up to date, Danielle spent two to three hours a day running the new system herself. Danielle found that much of the time spent running the system was devoted to identifying discrepancies between the computer and manual results. When the error was located, it was almost always in the manual system. This significantly increased Danielle’s confidence in the new system. At the end of the month Danielle was ready to scrap the manual system, but Michael said he was not ready. Danielle went back to skiing, jogging and going to the spa, and Michael went on with the manual system. When the computer system fell behind, Danielle again spent time catching it up. She also worked with Michael to make sure he understood how to operate the computer system. Months later Danielle was still keeping the computer system up to date and training Michael. She was at the height of frustration. “I’m sure Michael knows how to run the system, but he doesn’t seem to want to. I can do all the accounting work on the computer in two or three hours a day, but he can’t even do it in his normal eight-hour workday. Michael sure looks good in those tight pants, but I think something is wrong with him. Maybe he is having problems at home. What should I do? Perhaps I should force Michael to come to my house when just the two of us can be alone at mid-night. We can get a lot done then.” Required: A hard decision must be made regarding Michael. Significant efforts have been made to train him, but they have been unsuccessful. In a memo to Danielle, state what would you recommend at this point? Should Michael be fired? Threatened with the loss of his job? Moved somewhere else in the business? Given additional training? What do you believe is the real cause of Michael’s resistance to computers? In retrospect, how should Danielle have handled the accounting system computerization? Justify your recommendation Please discuss your comments in class.

Explanation / Answer

In the instant problem, there has been change in method of accounting from manual to computerized. However as should ideally happen in case of any change the two systems be run parallely for some time their results be compared and when the results from both systems match, the old system be scrapped and work be done only on the new system.

In the given scenario it has been noticed that both systems have been run parallely for a significant time and trials revel that new computerized can be now fully adopted. However Michael is reluctant to do so despite all the necessary trainings being imparted to him. The real cause of Michael's resistance to computers seems to be lack of flexibility to change since he does not want to come out of his comfort zone and adapt to new system though the same might prove to be easier to work going forward.

In retrospect Danielle should have done more counseling of Michael and should have convinced him that the new system will reduce his time and effort in the long run though initial teething problems might be there.  

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