Pelican Instruments Inc

1049 WordsApr 26, 20155 Pages
Pelican Instruments, Inc. 1. Prepare the Report that you feel Amy Shultz should present to Mr.Park. 2. Put yourself in the position of the following six managers: general manager(EM); marketing manager (EM); manufacturing manager (EM); general manager (EI); marketing manager (EI); manufacturing manager (EI). These six managers compete for a share in the company's bonus pool. For each of the six, how would you make a case for your obtaining a share of the bonus pool? Six managers, three from the EM division and three from the EI division compete for a share in the company’s bonus pool. For the purpose of this analysis, we take into account different variances within each division, From the EM side, the General Manager could argue that…show more content…
Because his division is focusing on a differentiation strategy, he could claim that the increase in variable cost per unit comes from value-added features that will allow the company to have a better product than its competitors. 3. As Mr. Park, how would you feel about the 1997 performance of each of the six managers who are competing for a share of the bonus pool? Taking into account the fact that the EM business is a “Harvest” business dealing with a mature product, Mr. Park should seriously consider getting rid of the division by slowly discontinuing the product, as it is performing worse than budget and losing $ 4MM in profits for the company as a whole. If Mr. Park decides to maintain the division, the best way for it to compete will be by following a low cost strategy. Based on the characteristics of a “Harvest” business, EM managers should be strictly held to budget, and total compensation should be based more on base salary and less on performance measures. In analyzing each manager’s performance, Mr. Park should feel positively about granting the bonuses to both the Marketing Manager and the General Manager, but not the Manufacturing Manager, as his variable costs per product increased, going against the low cost strategy discussed. In terms of the EI division, this is a high potential market segment that is growing exponentially and the company is doing well in this business. This division follows a
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