Read the following and answer the questions in detailed analysis: You are the CE
ID: 408521 • Letter: R
Question
Read the following and answer the questions in detailed analysis:
You are the CEO of Crazy Clothiers Industries with its corporate manufacturing headquarters in Boston, Massachusetts. CCI has taken major set backs in sales for the past 5 years, then last year saw a phenomenal up-swing in profits. So, CCI made its greatest gains in 20 years. However, most of the clothing industry has moved to China, Pakistan, and India but you have no factories there. Outsourcing may be a good choice at this time if you had factories overseas or simply offshored with a global partner. A decision which must shut down one of your plants and move up to 20 percent of your business overseas to cut down on operating costs. An upgrade in technology with nearly $100,000 could set your company on a better footing to compete for the European market; with specialized fashions that are now becoming the new craze there. Market research shows that the Europeans might cater more to your brand than the Far or Middle East. CCI has 4 uniquely manufactured clothing dyes that have not been duplicated yet. You have minimally marketed this dye globally (since it’s not your lead product), and its sales could be a major source of financial sustainability. CCI mission is that of a manufacturing rather than a retail company. The founding owners of this now publicly owned firm have a mission of remaining primarily a manufacturer and wholesaler. It’s been their sale driver.
Middle level and Front Line managers have endured cuts in pay for 3 years. If the current trend of organizational profits continue in the next year it would be possible to give raises and to boost some incentive programs, but you must allocate new funds there. The loyalties of employees have been tested to the limit and some good talent may leave if things don’t change. CCI has two young multinational locations in Mexico and in Canada. The Mexican market is slow and barely surviving because of national political and environmental issues. However, last year’s sales improved for the first time ever but only slightly. The Canadian factory is booming; and its profits accounted for 30% of the contribution to last year’s total global profits for CCI. The US market though waning, still accounts for the largest share of all profit generation each year. However, global challenges and opportunities persists. These are CCI’s main strengths: It has a 40 year history in the clothing industry. CCI’s products cater to middle and low income earners and they have never been pushy for sophistication, and its dyes are world renown, even in Europe.
The Republicans now control both houses of Congress, but Barack Obama even as a lame duck President vows to oppose most of their initiatives. He proposes and is supported by his party to raise new taxes on Business, and tariffs on imported goods next year, but also to slash corporate taxes too by allowing the tax loopholes to continue. He favors retaining NAFTA (North American Free Trade Agreement). His Universal Health Care program although limping and unpopular, still remains, adding more cost to business. The Republicans along with Red-State Democrats vow to eventually repeal it, or trim the most unpopular parts. All companies must comply or pay very stiff penalties, and it would add between $30,000 to $60,800 extra yearly investments in health provisions for all your employees beginning January 2015. Energy costs have tanked at their lowest levels. Cost of gasoline is minimal now; but no one knows for how long. The cost of raw textiles which feeds your clothing manufacturing increased but only by 2% for the last two years. Market analysts say it will escalate beginning in 6 months. It might affect profits depending on what you do!
Make some Leadership decisions to benefit Crazy Clothiers Industries.
1. Describe in detail the context of Crazy Clothiers Industries within today’s economy. Discuss in detail 3 major areas of
competitive challenges facing this organization. You should also identify and discuss 2 things that might help in their
competitive situation as they address their HR needs. If we assume that because of available funding, you can only raise
the pay of one group of managers who have suffered cuts, which ones would you do first? Provide a manager’s rationale.
2. Should CCI outsource or not? Make the case with 4 reasons on why you should or why not? What plant would you close if
you do? If you don’t, what alternative would you initiate? Is it time to upgrade with technology? Why? How would you
offset the cost of such investment and make up for it? What 1 thing should CCI absolutely not do NOW? Give 3 reasons.
3. Consider that CCI intends to keep the Mexican Branch. Two applications after all interviews and background checks
have been done arrive on your desk to fill the CEO position there. A new Leader is needed to save the sagging firm. Both
applicants are equally qualified with very minor differences. One of them is a Mexican raised in Mexico with 15 years of
Sales experience and an MBA from Harvard. The other is a Caucasian born and raised in the United States. He graduated
with a Masters from Stanford with an MIS degree, as well as accumulated a combined 16 year Marketing/Management
experience in Cuba and Guatemala. Who would you hire? Explain the pros and cons ONLY for the hired candidate. I
need you to provide rationale in at least THREE items in each category for the hired candidate ONLY.
4. Was your decision prejudicial or discriminatory (unethical/illegal discrimination)? Defend whatever answer you give
with 3 reasons. This question takes application from legal and ethical considerations and not merely from common logic.
5. Write a Mission Statement for CCI in less than 30 words. Explain fully 2 important items in that statement? Describe
Short-term Business and HR goals for CCI? Describe in 15 words Crazy Clothiers’ Quality Imperative Challenge.
Explanation / Answer
1) Describe in detail the context of Crazy Clothiers Industries within today’s economy. Discuss in detail 3 major areas of competitive challenges facing this organization. You should also identify and discuss 2 things that might help in their competitive situation as they address their HR needs. If we assume that because of available funding, you can only raise the pay of one group of managers who have suffered cuts, which ones would you do first? Provide a manager’s rationale.
CCI is a leading textile manufacturer with rising profits in its country.But being in USA CCI does face certain competetive challenges:
Though , the goverment regulations cannot be changed or amended accordingly, CCI can take advantage of other situations according to them. As the clothing industry is established and predominant in China, Pakistan and India it can take necessary measures to set up a facility in one of their countries and pioneer the markets in manufacturing with the use of their unique dyes. Apart from that CCI can also hedge themselves from the market movements and interest rates by entering into the right derivative contracts with regard to them. Hence, by hedging themselves CCI can overcome most of their challenges.
Owing to the current condition of CCI is important to retain the talent group rather than differentiating between the middle level and front managers. Though the bell-curve system does not have much weight in the current scenario when it comes to the personal growth of the company and a choice its better to stick to the preferred decision. In the current situation the company is facing it is better to go with a bell curve model in assessing and ranking the right talent and preserving the top talent employees by raising the pay of the top talent managers.
2)Should CCI outsource or not? Make the case with 4 reasons on why you should or why not? What plant would you close if you do? If you don’t, what alternative would you initiate? Is it time to upgrade with technology? Why? How would you offset the cost of such investment and make up for it? What 1 thing should CCI absolutely not do NOW? Give 3 reasons.
Outsourcing is the best way in which CCI can further increase their brand value and stand profitable. Yes, CCI should outsource.This is because:
They can close the mexican market as its performance is not upto the mark. In a busines it is important to grow rather than to multiply in number of plants or locations. A right step is the right saviour. Closing the mexican market at the time improving on the canadian and the US market and establishing in China or India through outsourcing is the right decision that should be taken at moment for hedging the business and growing.
Yes, it is time to upgrade with technology. Having a plant outside and outsourcing on far away cluntries expanding globally CCI should have its own enterprise resource planning softwares to keep a right and simulatneous check on each of their activities and report time to time. A perfect ERP system would keep all its activities on loop and keep the system updated time to time. Though the installation of an ERP and addition of technology is a higher expense it is important hence it is required to make funds for it. It is the right time to find investors for the company and dilute a minor stake to them in order to get the required funding for upgrading of technology.
CCI right now should not:
3)Consider that CCI intends to keep the Mexican Branch. Two applications after all interviews and background checks have been done arrive on your desk to fill the CEO position there. A new Leader is needed to save the sagging firm. Bothapplicants are equally qualified with very minor differences. One of them is a Mexican raised in Mexico with 15 years of Sales experience and an MBA from Harvard. The other is a Caucasian born and raised in the United States. He graduated with a Masters from Stanford with an MIS degree, as well as accumulated a combined 16 year Marketing/Managementexperience in Cuba and Guatemala. Who would you hire? Explain the pros and cons ONLY for the hired candidate. I need you to provide rationale in at least THREE items in each category for the hired candidate ONLY.
I would hire the mexican guy with an MBA from Harvard and sales experience because:
I dont think there would be any cons by selecting the mexican guy.
4)Was your decision prejudicial or discriminatory (unethical/illegal discrimination)? Defend whatever answer you give with 3 reasons. This question takes application from legal and ethical considerations and not merely from common logic.
The decision is legal and there is no unethicality in it.
5) Write a Mission Statement for CCI in less than 30 words. Explain fully 2 important items in that statement? Describe Short-term Business and HR goals for CCI? Describe in 15 words Crazy Clothiers’ Quality Imperative Challenge.
Mission: To be a pioneer in manufacturing of clothes and expand globally with their unique strategies.
Their short term goals are to sustain their company profits and expand their brand value and operations globally.
Thier quality imperative challenge is to maintain equal quality all thorugh and pioneer in produce and manufacture high quality clothing from the brand,
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