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Case Study Of Dorrence Corporation

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Dorrence Corporation, large U.S.-based pharmaceutical company with worldwide sales and operations, had incredibly grown over past 28 years. The company did not have any loss during this period. Nine Dorrence Corporation Operating Committee members would make very important decisions, and they traditionally employed consensus management. The CEO of this company should play a decisive role to persuade them to pass the bill that the company submitted to the meeting.
Dorrence’ sale compound annual growth rate is 12% a year during the past 10 years, and its profits have risen from 132 million dollars in 1979 to 558 million dollars in 1989, 15% on annual average. Consequently, Dorrence’s stock increased in value considerably. 65% of about 30,000 …show more content…

The company lowered incentives and bonuses and the value of its stock dropped about 20% in 1989. Dorrence, therefore, should make some changes on its budget plan for 1990. The CEO considered its 1990 budget based on a 5% increase in profit. The number of 5% profit on a basis of 558 million dollars in the current year, is 27.9 million dollars. The total expected amount of profit is 585.9 million dollars. This number is not enough to continue to maintain the past expenses. The CEO must think of cut-down and other considerations on its budget based on reduction in …show more content…

The medicine sale was excluded on its 1990 budget because the U.S. Food and Drug Administration required a new test for endotoxin. The result of the test was that Savolene had a very low level of endotoxin. Even if the Philippine government knows a new American regulation that they do not have yet, they need this medicine because half the kids with measles in the Philippines died last

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