Chapter 6

STRATEGY EVALUATION AND CONTROL

Learning Objectives:
After you have studied this chapter, you should be able to:
1. understand the meaning of strategic control;
2. identify and enumerate the steps in the strategic control process; and
3. know the different modes of corrective action.
Strategic control focuses on the evaluation of the strategies implemented, if they have
resulted on what was planned. It ensures that the strategic aims are achieved.
Schreyogg and Steinmann (1987 cited in Julian and Scifres, 2002) developed a
strategic control process that operates on a continuous basis. Strategic control for them
is the critical evaluation of plans, activities and end results which form a basis for future
action.
They designed a 3-step model that is far better than the classical feedback model.
Pearce and Robinson (2003) added another step in the strategic control process called
special alert control.
STEP 1 – Premise Control
STEP 2 – Implementation Control
STEP 3 – Strategic Surveillance

Figure 6.i. Strategic Control Process Model by Schreyogg and Steinmann

The first step is premise control. Premise control is designed to check whether the
prem-ises set at the beginning of the planning and implementation processes are still in
place. Prem-ise control also involves the checking of the conditions of the environment
which would affect the strategies.
It is very important for managers to study the environmental and industry conditions by
which the strategies have been implemented. Environmental forces such as inflation
rate, interest rates, among others will affect a set of strategies. On the other hand,
industry factors like what had been discussed by Porter will also pose a big impact on
the implementation of the strategies.
Implementation control is designed In some cases, the strategies are revised. As a to
monitor the overall strategy vis-a-vis form of corrective action, strategies are changed
the results associated with the steps in the which are more appropriate to the given
implementation of the overall strategy. It objectives. There may be times also that the
functions on a continuous basis. structure or system is changed. One underlying reason
is an error in the organizational.
The first approach is the monitoring structure and reporting relationships. But of
strategic programs. Managers can the most common corrective action is seen approve
early in the planning process in the activities or programs during the which programs
are critical in the success implementation of the strategies. of the strategy. The second
approach is to assess whether to push through or not particular programs based on
time, costs, among others.
The second approach is the review of significant highlights in the development of a
particular program. The review will help in determining the direction of the company wi
iether the implementation of the strategy should continue or not; whether it should be
refocused or realigned.
Strategic surveillance is focused on monitoring a broad range of events, both external
and internal that is likely to affect or pose a great impact on the firm's strategy. In a way,
it is generally environmental scanning because it is designed to safeguard or protect the
estab-lished strategies on a continuous basis.
An additional step, theorized by Pearce and Robinson is special alert control. It is a fast
yet thorough monitoring of strategies on the grounds of sudden or unexpected events
such as disasters, chemical spills, product defects, war, and the like.
Strategic control should look at strategies to be consistent with goals and policies.
Incon-sistencies should be changed when needed. To be consistent, it is necessary for
strategies to be adaptable and flexible with the external environment. An organization
should also see to it that it possesses the skills and competencies needed to carry out a
strategy. These knowledge and skills should display superiority if not competitive edge
over competitors.
Control is in the form of feedback. Feedback from the strategy evaluation depicts how
effective a particular strategy is. Feedback has six stages:
• Find out what to control. It determines the objectives of the organization in the light of
the strategy.
• Come up with control standards. It provides a guide in setting out targets and toler-
ances.
• Measure performance. It sets the actual standards.
• Compare actual performance to standards. It compares end results vs. perfor-mance
standards.
• Determine the reasons for the deviation. The deviations of actual performance against
standards are analyzed. • Take necessary corrections. It corrects activities that are not
aligned in the objec-tives of the organization.

MODES OF CORRECTIVE ACTION

Managers can choose from different modes of corrective action based on control stand-
ards.
• Normal mode. It is a normal, routine approach, wherein the organization has no crisis
to confront with.
• Crash mode. It expedites the response process to face the problem at hand.
• Preplanned crisis mode. There is a planned response so it usually increases the
capacity for handling strategic surprises.
Usually managers identify the areas that need corrective action. There is a need to
revise the standards when they are not attuned to the strategies being implemented.
Sometimes, the objectives have to be revised. There are certain forces in the
environment which may af-fect the strategic objectives; therefore, circumstances may
prompt managers to change them rather than the standards.
In some cases, the strategies are revised. As a form of corrective action, strategies are
changed which are more appropriate to the given objectives. There may be times also
that the structure or system is changed. One underlying reason is an error in the
organizational structure and reporting relationships. But the most common corrective
action is seen in the activities or programs during the implementation of the strategies.
CHARACTERISTICS OF A GOOD EVALUATION
A good strategic evaluation possesses several qualities. Strategic control should neither
be too costly nor too cheap. It does not work well when there is too much information or
there is too little information either. In line with this, the evaluation should be in
consonance with the firm's objectives. For example, when a product is launched, it is
important to have a weekly monitoring of its status in the market. However, it is not good
to keep on monitoring the research and development every other day as this will
become dysfunctional. Frequent measurement may ruin a strategic control, if the
company only requires at least a monthly control.
Strategic control should project a true picture of what is really happening in the compa-
ny subject to environmental conditions. For example, quotas are not being met even
though employees are working hard. The situation outside reveals an inflation rate to
the highest level and the company's product offerings are severely affected.
Controls should be action-oriented. They should also work hand in hand with the goal of
achieving company objectives and not dominate decisions. To be action-oriented, it
should therefore be familiar with the external environments as well. There are cases
when a company only work on the internal forces, unmindful of external ones.
On the other hand, control systems should be sound. There should always be a wise
use of informafion without becoming an information-overload. Information should be
used meaningfully without exaggeration or reservations.
STRATEGIC INSIGHTS
(Adapted and inspired by the book: On the Profession of Management by Peter
Drucker, 2003)
Innovation opportunities come in a few situations. Yet, not all product launches and
innovations succeed. A large multinational company launched a powder claimed that
when it is dissolved in water, the solution can remove germs from fresh fruits and
vegetables, better than ordinary tap water. However, it did not deliver what had claimed
by the said product. It is hard to see any marked difference between the washed fresh
fruits and vegetables using the solution and the tap water.
Innovation is work in many areas. It is not a work of a genius. For example, just like the
computer, the cell phone has undergone several transformations before it became what
it is today. More than the work of a genius, more than talent and the power of
knowledge, innovation requires focus. When there is focus, there is purpose. Behind the
purpose is commitment.
An innovation also requires beyond what it has produced. The entrepreneur works for
distinct strategies for the innovation to succeed and satisfy the customers.
ACTIVITY 1
General Electric's Standards
Instructions: Read and analyze GE's standards of control and then critique.
A global brand like General Electric has the following standards of control:
Profitability standards. These provide the basis for the generation of profits of General
Electric.
Market position standards. These enable GE to know its market share in the industry
where it competes. Productivity standards. These indicate the criteria by which final
products should be generated within the organization.
Product leadership standards. These provide the levels of innovation and
development which would make GE products as leaders in the market.
Personnel development standards. These indicate GE's standards on honing and im-
proving employees' performance.
Employee attitude standards. These provide basis on the attitudes and behavior em-
ployees should inculcate and adopt.
Public responsibility standards. These are standards on GE's obligation to society
where it operates. Standards reflecting balance between short-range and long-range
goals. These indicate the relationships between short- and long-range objectives of GE.
ACTIIVITY 2
Cecilio Kwok Pedro and Alfredo 'Ma: The Toothpaste and Fruit Drink Moguls
INSTRUCTIONS: Read the short article and answer the following questions. (Adapted
from www.thefilipinoentrepreneur.com/2008/02/18/a-blessing-in-disguise.htm and
www.lamoiyan.com; www.tsinoy.com/article_item.php?articleid=294)
Cecilio Kwok Pedro entered the toothpaste market, which was formerly dominated by
foreign-owned companies. He used to supply the makers of Colgate and Closeup
aluminum collapsible containers for their toothpastes. Later on, these two companies
decided to use plastic laminated tubes instead of aluminum. The loss in demand for
aluminum created an opportunity for Pedro. He established Lamoiyan Corporation and
created his own brand of toothpaste, Hapee, which now ranks number 3 in the local
market. One of his assets is his having employed deaf and mute workers.
The success of Hapee catapulted Pedro as one of the Philippines' outstanding entrepre-
neurs. There are now several varieties of Hapee toothpaste. Lamoiyan also
manufactures Dazz dishwashing detergent and Gum-tect, a special gum-formula
toothpaste.
Pedro has expanded his business in neighboring countries such as China, Vietnam, and
Indonesia. Hapee is now a preferred brand in Asia.
Alfredo Yao is better known as Mr. Zest-O. Aside from a well-known fruit juice brand,
Yao pioneered in doy pack, widely used now in beverages and seasonings. Yao also
expanded his business to include Quickchow noodles and Beam toothpaste. He holds
the local franchise for RC Cola soft drink.
Yao also opened a thrift bank, Philippine Business Bank (II BB) and Export and Industry
Bank (EIB), a commercial bank. PBB has 18 branches and EIB has 31 branches.
Like Pedro, Yao also extends his helping hand through philanthropic activities. While
Pedro employs the deaf and mute, Yao established AMY Foundation to provide
scholarships to students from poor families.
Questions for Analysis:
1. What do you think are the philosophy in life of Cecilio Kwok Pedro and Alfredo Yao?

2. How did they apply their philosophy in business?

ACTIVITY 3

Porter's Supply Chain Model

Instructions: Read the summary of the model below. Michael Porter's supply chain
model helps in analyzing the activities related to competitive advantage. This helps in
monitoring the company's logistics and provides the company some form of control over
its operations. Research on the competitive advantage created by applying this supply
chain model using the 10 cost drivers. Identify each cost driver and relate to the primary
and secondary activities.
The primary activities are the following:
• Inbound Logistics include receiving, storage, inventory control, and transportation
planning.
• Operations include machining, equipment maintenance, and other activities.
• Outbound Logistics include warehousing, transportation, and distribution.
• Marketing and Sales include channel selection, advertising, promotion, selling, among
others.
• Service includes support, repair services, installation, among others.
The secondary activities are the following:
• Procurement of raw materials, spare parts, machines, etc.
• Technology Development includes research and development, design and process
automation.
• Human Resource Management includes recruiting, development, compensation,
among others.
• Firm Infrastructure includes legal, finance, accounting, quality management, etc.
ACTIVITY 4
Contingency Planning
INSTRUCTIONS: Read the meaning of contingency planning and make your own
research on the contingency plans of a company which has recentlyw launched a
product. What can be its contingency plans in case the product does not make it? On
the other hand, what is the contingency plan of a particular company which is about to
withdraw one of its products? Use actual companies based on recentness.
A contingency plan provides measures for the company to use in case something unfa-
vorable happens. But a contingency plan draws more on the plan's ability to foresee
opportu-nities at the same time, other than predicting something unfavorable.
KEY CONCEPTS TO REMEMBER
premise control — designed to check whether the premises set at the beginning of the
planning and implementation processes are still in place
implementation control — designed to monitor the overall strategy vis-a-vis the results
associated with the steps in the implementation of the overall strategy strategic
surveillance — focused on monitoring a broad range of events, both external and
internal that is likely to affect or pose a great impact on the firm's strategy
special alert control — a fast yet thorough monitoring of strategies on the grounds of
sud-den or unexpected events such as disasters, chemical spills, product defects, war,
among others normal mode — a normal, routine approach, wherein the organization
has no crisis to confront with
crash mode — an approach that expedites the response process to face the problem
at hand
preplanned crisis mode — a, planned response so it usually increases the capacity for
handling strategic surprises

END OF CHAPTER QUESTIONS

1. Can a company avoid making corrective actions? Why or why not?
2. What is strategic control? Discuss the 3-step model by Pearce and Robinson.
3. Are GE's standards too ideal? Why or why not?
4. Can a company do away with premise control and go straight to implementation
control instead? Why or why not?
5. What measures should a company take during crisis or disasters?
6. Is there a definite time that a company can change its modes of corrective action?
Explain.
7. Which GE standards are applicable for the following companies: Jollibee, Universal
Robina Corporation, and United Laboratories?
8. Can a company shorten the feedback stages? Why or why not?
9. Is it a must to exercise control for all companies? Explain and defend your answer.
10. Discuss strategic surveillance.
Chapter 7
Before tackling the cases, this chapter introduces two products that have succeeded in
employing the strategies needed to make it in a very competitive market. As an
example, Apple introduced a new product in 2006: iPod having single colors and a
round click wheel. This has competed with the very successful MP3 market. The
success of iPod made Apple's sales increase from $5.7 billion in 2002 to $19.3 billion in
2006.
LG Electronics: Chocolate Phone
(Adapted from Jang, Seongkein, Yoon, Yongki Lee Inseong Kim, Jimwoo, Design-
oriented New Product Development: LG Electronics' Chocolate Phone illustrates what it
takes to be success-ful, Research, Technology Management Publications, March 1,
2009.)
The project development team conceptualized the phone as not merely a device but as
part of the consumer's life. In other words, consumers keep the mobile phones beside
them when they sleep and carry them wherever they go.
The design for Chocolate Phone is simple, a pure black color for the exterior of the
prod-uct and removal of unnecessary decoration. All buttons are hidden under a black
veil but then this surface is touched, it would unveil itself. This creates a sense of
mystery which consumers prefer.
The success of the phone relies on maintaining a simple design concept while incorpo-
rating functions that give it a competitive edge. One example is the multitasking support.
This includes listening to music, taking pictures, using SMS, and accessing the Internet.
Another advantage is the MP3 chip and a 52-MB built-in memory. This superiority is
seen in its com-petitors with only less than 100 MB of memory.
LG's global marketing to meet the needs of its consumers globally includes an all-out
launching all over the world. The phone was introduced in 1.00 countries in 2006.
L.G has adopted different strategies in different continents. In Europe, LG concentrated
its promotion efforts with the black label series, a strategy consistent with the European
market that traditionally values design. In North America, to suit local tastes, LG applied
diverse functions to highlight the music-phone market. It included a touch wheel key on
the phones front surface to permit controlling music and added a BlUetooth stereo
headset to support a wireless music experience. There is an added feature of 2 GB of
external memory to store ove-500 songs.
The Chocolate Phone enjoys a total support from top management coupled with the
strong determination and trust of the head of mobile lab on the product.
The head compared and analyzed the would-be competitor of Chocolate Phone to
recognize and understand the market better. The customers' point of view provided a lot
of insights in developing the Chocolate Phone.
The following cases describe certain issues in strategic management and business
policy. The names of the companies and their personnel were disguised to protect their
names and reputation. There were revisions done to make the issues fit the topics
discussed.
Case 1
PRIDE AND PROSPER, INC.
This case is intended for classroom discussion only and is not intended to show correct
or incorrect mangement of a case. It is patterned from an actual situation of the
company S.-ne personal details and information of the characters involved are altered
and the structures and procedures of the organization are purely hypothetical to fit in the
situation
Being portrayed in the case. The company is disguised to protect the identity of the
owners.

This company takes pride in being a pioneer in the manufacture of soaps. These soaps
have become household names, thus, making Pride and Prosper one of the more
successful companies today.
Pride and Prosper made its first ever beauty soap, Mild in the early `30s. Mild has
become a successful brand, thanks to the housewives who have become hooked to
daytime dramas on national television, which were then sponsored by Mild beauty soap.
Mild has also advertisements in radio and print.
The success of Mild prompted the Pride and Prosper to manufacture detergents, tooth-
pastes, lotions, and shampoos.
The company gave importance to brand management and new product research and
development, which other manufacturing companies have neglected at that time. Their
suc-cess relied heavily on a combination and integration of consumer research,
advertising, and distribution.
Recent Developments
The company has not been very successful recently. Annual sales growth has declined.
This decline started over the last few years. The decrease ranges from 2.6%-5% in the
last 5 years. This prompted its CEO, Dick Harrigan to meet its management team and
find out the cause of the steady decline in sales.
Another three years of decline would mean cutting off at least 30% of its 7,000 of its
workforce. It also means a complete reorganization and alignment of jobs and positions.
Corporate Culture Overhaul
The management team led by Harrigan has all reasons to believe that one of the cul-
prits is its present corporate culture. Through third party consultants hired six months
ago, the consultants concluded that Pride and Prosper's culture is conservative, slow--
moving, and bureaucratic. The recommendations discussed the need to change the
present corporate cul-ture into a fast-moving, modern, more fast-paced Internet-savvy
organization. These recom-mendations are now being studied by the management
team. It was only now that it has been studied and being considered. It was set aside for
awhile to attend to more important matters, as perceived by the management team.
Management also wants to do away with too much confidentiality of information and red
tape. Saies goals were also not aggressive. Pride and Prosper needs to do these
ambitious restructuring plans right away.
Joint Ventures
Management is also considering a joint venture with a manufacturing company, Gil-
ligan's Gum Company, because of its massive distribution structure. Gilligan
manufactures gums, mint candies, and breath fresheners. Pride and Prosper believes it
can give the compa-ny a boost in the distribution of its products. Soon, the market will
have a combined product from Gilligan's breath freshener and Pride and Prosper's
toothpaste, Fresh.
Management Dilemma AM these plans should be acted upon by Management the
soonest possible time. Harrigan and the rest have to prioritize and make the right moves
and priorities. They have to act now.
Name: ____________________________________ Date: _________________

CASE Analysis
Pride and Prosper
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Case 2
HAMBURGER PLUS
(This case is intended for classroom discussion only and is not intended to show
correct or incorrect management of a case. It is patterned from an actual situation of the
company understudy. Some personal details and information of the characters involved
are altered and the structures and procedures of the organization are purely
hypothetical to fit in the situation being portrayed in the case. The company is disguised
to protect the identity of the owners.)
Hamburger Plus has thousands of outlets all over the world. Records show that about a
thousand branches are opened every month in many parts of the world. Because of its
ziot-sE operations, it is planning to spend $1.5B over the next 5 years to make its
operations mastered through a system called Creative.
This move is prompted by a rapid decline in sales and a bulk of customer complaints
and there, from one branch to another.
Creative is an ambitious multimillion dollar project which would allow Hamburger Pius
management to monitor and actively see how many burgers, fries, chicken, and other
prod-ucts are being consumed at any of its stores at any time of the day. Furthermore,
managementn see if a customer in a particular outlet is being served at the desired
number of minutes.
Creative's cost, however, would mean a 200% reduction in stockholders' shares plus
closing down at least 300 of its outlets within the next 5 years. After that, Creative will
do its work and Hamburger Plus will recoup its investments.
Creative would bring Hamburger PlUs back to what it is known for: fastest, most
consistent service in the industry.
Despite the very promising outcomes of Creative, there are members in the
management team who are not in favor of Creative. The vice president for Operations
said that not worth it. Everything will just go down the drain. It will not deliver what it is
supposed to deliver, adding to the fact that it is costly.
Another said that the faltering customer service is due largely to a slow flipping of
burgers ers or simply put, is a general slowdown of cooking burgers. Customers are so
irritated C' long lines and long periods of waiting time before burgers are served.
One stockholder said that Hamburger Plus hasn't introduced another hit product in the
likes of burger patty strips in 1985. Its signature burger, the ever-famous Jumbo
Hamburger is already 35 years old.
Majority of the stockholders believe that the upcoming technology is not the answer foc
sending customers away during lunch break but the sluggish customer service provided
by the service crew.
Despite the objections, the CEO is very optimistic to invest in Creative. He believes that
t would give the executives the opportunity to monitor operations and see to it that the
uct is consistent and the service lives up to customer expectations.
Based on the points and issues raised for and against Creative, the CEO would now
decide for Hamburger Plus' future. The deadline to communicate the decision to the
Creative people will be tomorrow at 9 a.m. It may be a go or shelve the project
indefinitely.

Name: ____________________________________ Date: _________________

CASE Analysis
Hamburger Plus
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Case 3
BEST ENGINEERING CONSULTANCY, INC.
(This case is intended for classroom discussion only and is not intended to show correct
or incorrect management of a case. It is patterned from an actual situation of the
company understudy. Some personal details and information of the characters involved
are altered and the structures and procedures of the organization are purely
hypothetical to fit in the situation being portrayed in the case. The company is disguised
to protect the identity of the owners.)
An engineering firm, Best Engineering Consultancy, Inc. made a partnership with a
consulting firm, through an outsourcing arrangement. Best would outsource some of its
engineering functions.
Within a span of two years, the number of engineers directly employed with Best dimin-
ished from 30 to 5. Moreover, the customers felt that engineering work was of low
quality, at a high value and beyond schedule. The chief engineer was so disappointed
that he resigned.
At the time of the partnership, the said firm had 30 personnel whereas the said out-
sourcing firm had 30 also. As mentioned, because of resignations and terminations only
5 employees remained at Best.
More so, Best's billing reflected the consultant's overhead costs and profits. The
consult-ant also charged the owner overhead costs to accommodate the employees
that were moved to the new partnership office.
Supposedly, the budget for a project should be determined by negotiations between the
sponsor and the project engineer. It should stay within the boundaries allowed for a
particular project.
Partnering arrangements like Best did with another consultancy firm made it easy for
the two firms to trade their secrets. Of course, there is a belief that outsourcing will
substantially lessen fixed costs, despite exchanging some trade secrets. However, the
fixed costs are not properly charged to the project's budgets. Therefore, there are
miscomputations and misap-propriation of costs.
The Chief Executive Officer of Best Engineering is very much bothered with what is
happening. The contract between the firm and the outsourcing company ends next year.
To preterminate the contract will mean a penalty of P100,000.00. It would also take
awhile to think of another strategy after the partnership.
Name: ____________________________________ Date: _________________

CASE Analysis
Best Engineering Consultancy, Inc.
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Case 4
JAMIESON DRUGS, INC.
(This case is intended for classroom discussion only and is not intended to show correc:
incorrect management of a case. It is patterned from an actual situation of the company
understudy. Some personal details and information of the characters involved are
altered ana the structures and procedures of the organization are purely hypothetical to
fit in the situation being portrayed in the case. The company is disguised to protect the
identity of the owners.)
Jamieson has been in the industry for more than 25 years. To maintain its position as
one of the top pharmaceutical companies in the country, the company is pressed to
cope with the demands arid expectations of its customers. Since there is a massive
turnover of sales person-nel, sales operations become paralyzed. There is inefficiency
in product detailing among hos-pital administrators, clinicians, and doctors because
recruitment has become very inefficient. HR has depleted its talent pool. Adding to it is
the cost of using the print media, Internet post-ing, and job fairs to get qualified
applicants. Sales have gone down to 2% of target this month due to this sales
personnel turnover. Where have all the sales representatives gone?
Jamieson's History Jamieson Drugs was founded with the concerted efforts of its
General Manager and Southeast Asia Regional Marketing Manager, Louie Franklin.
Jamieson Drugs is a division of the Jankinson Drugs Phils. Jamieson, since its founding
in 1980, has achieved a compounded annual growth rate of 35%. It is now one of the
top 10 companies which competes in the antidiarrheal, antihistaminic, anti-acne, and
analgesic markets. In 1990, Jamieson has devel-oped from a purely Ethical
(prescription only) drugs to Over-the-Counter (OTC) drugs. This has brought in more
sales growth to Jamieson.
Sales Representatives Manpower Complement
Jamieson's Manpower consists of sixty percent (60%) sales representatives and 40%
other key positions. Manufacturing since its inception has been contracted out by
International Laboratories. This decision was made by Mr. Franklin after several closure
of manufacturing plants due to the infiltration of radical elements of unions.
Sales Manpower Complement
Sales Reps Total
New Hires 170
Tenured 82
Total 250
From the total of new hires, 150 were hired only last year. Based on the latest data ze-
on the reasons for their resignation, 20% will try their luck outside the country; 25% will
apply as call center agents, 30% did not specify their plans but just said they're just
tired and want to try another field, and 25% will start a family. The latter are women
representatives
The Outsourcing Proposal
A well-known firm, Manpower Magnate (MM) has offered outsourcing services to Jamie-
son in the likes of some HR functions such as recruitment, training, and payroll.
Jamieson is looking on the possibility of outsourcing initially its recruitment function.
However, the HR head, Joseph Nierras is contemplating on using a third party since this
is the first time that the company is outsourcing the entire function. The most HR did
before is the executive search for sensitive positions and hiring a manpower agency to
source out temporary hires. This particular move might pose some opposition from
various departments specifically Marketing and Sales Department since the first
assignment if ever of MM is to source out sales representatives.
This Department is always known for being meticulous in hiring salespeople. Sales su-
pervisors always take time out to interview shortlisted candidates for sales. They also
make sure that sales representatives undergo very rigid testing and interviewing to
ensure that they are the right fit.
Manpower Magnate
Manpower Magnate is relatively new in the outsourcing industry. Barely four years, MM
started operations in 2003 with call center operations. Then in 2005, it also offered
services for Business Process Outsourcing (BPO) and has major clients here and
abroad. BPO functions include payroll, recruitment, compensation surveys, and legal
services.
Among the four functions, recruitment is relatively new. It was only in the early part of
2007 that MM has been hired for recruitment services of a multinational company.
Jamie-son does not have any feedback yet. MM maintains confidentiality of its clients
and has not revealed their identity. Jamieson has to rely on what MM says as having an
excellent track record in outsourcing.
The Decision
At this point, Mr. Nierras has to decide within three days if it will outsource its recruit-
ment function. The company's sales figures are not getting higher. Incumbent sales
repre-sentatives are complaining of heavy workload since they have to fill in also those
who have resigned.
Name: ____________________________________ Date: _________________
CASE Analysis
Jamieson Drugs, Inc.
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Case 5
CARLO RECIO
Carlo Redo has been in the maintenance crew for eight years now. Carlo's uncle was a
national sales manager for the infant formula plant and arranged a part-time job for
Carlo, who then finished vocational school and went on a full-time job from janitorial to
maintenance. Carlo learns quickly and he has acquired a variety of skills in addition to
his specialized training. He has also maintained a good relationship with the other
employees.
The maintenance supervisor suffered a heat stroke recently and decided to take an
early retirement at 55 years old. The plant manager told Carlo that he is highly
recommended by the maintenance supervisor. Carlo knows very well that the
supervisor would always be called over in the wee hours of the morning or midnight to
supervise emergency repairs. Some of his coworkers advised him to accept the offer
but he does not know the consensus of the major-ity. He is also concerned with Al who
relieved the supervisor several times when the latter was sick.
Later on, Carlo decided to accept the position. The plant manager warned that he
should exercise his authority on the job. Carlo made a pattern of his performance based
on the for-mer supervisor. He empowered the crew to do the job on their °Ain and is
only after the end results. He is also fair in pointing out problems. On the other hand,
the crew likes his supervi-sion and has respected him as a supervisor.
There are no significant events in the plant except that Carlo has noticed some horsing
around on the job. When he pointed out this attitude, the crew displayed a certain
coolness. Later on after a few weeks, he sensed resentment whenever he tried to help
a crew member about a particular assignment. He now feels a certain ill feeling about
being a manager.
However, he continued. It is now time to make important strategies that would be help-
ful for the plant. The strategies to be implemented need the cooperation of the crew. He
is quite hesitant on the implementation of the strategies for he feels no one will support
them.
The strategies should require extra hours of work although the crew will be given over-
time pay and meal allowance. It will entail a sacrifice of six weekends. He is still
uncertain of their support and cooperation and these changes should be implemented
two weeks from now.
Name: ____________________________________ Date: _________________

CASE Analysis
Jamieson Drugs, Inc.
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