Precision Electronics have always focussed on manufacturing new electronic components and the repair side is a seen as a minor sideshow to their main business However, there is a major recession on and the directors of Precision Electronics are seriously worried that demand for new electronic components will fall and there will be a significant shift to the use of refurbished components. The question for them is do they have the capacity to deal with such a shift? Are their technicians skilled in repairing components which is a rather different skill set to that required in making new components? In addition, as they focus only on the UK, they are, compared to some new and emerging electronic component companies who operate internationally, a rather small company with the result that they do not use their plant effectively with the result that they have to charge higher prices to cover their costs than the new bigger internationally operating companies. Most customer enquiries and requests for components come by telephone or email to front office admin staff who then allocate the requests to sales staff. The sales staff currently negotiate prices with customers, which is where sales staff get most of their job satisfaction, and commission, by negotiating the highest price possible for their components which are therefore sold on to customers at a substantial profit. Precision Electronics back-office admin staff are responsible for raising invoices, processing payments, despatching orders and producing management reports. The issue here is that none of the back-office admin staff have any of the skills that one would expect for dealing with the financial side. In addition, there is a lack of accurate and detailed management information. There are no automated systems, for example, for analysing sales of different types of components or showing the performance of suppliers. This makes forward planning very difficult as trends in sales are not picked up quickly. As a result, the company's stock control system cannot respond to sudden changes in demand. In the past, they have tried to address this by keeping stock in their own stores but this has not proved cost effective as some items have not shifted whilst customers have requested items not in stock. Renting the space for these stores is also a significant overhead. You are a member of a team performing a iness management study: Precision Electronics with a view to recommending how it secures its business future. Your job is to recommend how Precision Electronics should proceed.

Precision Electronics have always focussed on manufacturing new electronic components and the repair side is a seen as a minor sideshow to their main business However, there is a major recession on and the directors of Precision Electronics are seriously worried that demand for new electronic components will fall and there will be a significant shift to the use of refurbished components. The question for them is do they have the capacity to deal with such a shift? Are their technicians skilled in repairing components which is a rather different skill set to that required in making new components? In addition, as they focus only on the UK, they are, compared to some new and emerging electronic component companies who operate internationally, a rather small company with the result that they do not use their plant effectively with the result that they have to charge higher prices to cover their costs than the new bigger internationally operating companies. Most customer enquiries and requests for components come by telephone or email to front office admin staff who then allocate the requests to sales staff. The sales staff currently negotiate prices with customers, which is where sales staff get most of their job satisfaction, and commission, by negotiating the highest price possible for their components which are therefore sold on to customers at a substantial profit. Precision Electronics back-office admin staff are responsible for raising invoices, processing payments, despatching orders and producing management reports. The issue here is that none of the back-office admin staff have any of the skills that one would expect for dealing with the financial side. In addition, there is a lack of accurate and detailed management information. There are no automated systems, for example, for analysing sales of different types of components or showing the performance of suppliers. This makes forward planning very difficult as trends in sales are not picked up quickly. As a result, the company's stock control system cannot respond to sudden changes in demand. In the past, they have tried to address this by keeping stock in their own stores but this has not proved cost effective as some items have not shifted whilst customers have requested items not in stock. Renting the space for these stores is also a significant overhead. You are a member of a team performing a iness management study: Precision Electronics with a view to recommending how it secures its business future. Your job is to recommend how Precision Electronics should proceed.

Management, Loose-Leaf Version

13th Edition

ISBN:9781305969308

Author:Richard L. Daft

Publisher:Richard L. Daft

Chapter10: Designing Organization Structure

Section: Chapter Questions

Problem 1ED

See similar textbooks