Scenario -- Precision Electronics Precision Electronics are a family run company employing around 400 people.The company is rather informal in that there are no specific job descriptions for any employee, but there is a very formal hierarchy and it is expected that supervisors keep a close eye on their subordinates and see that they do the job“their”way. There are 4 directors of the company – all members of the same family; they undertake all the decisions,do not take advice from their senior management team(and certainly not from anyone below that level),and are known to run a very tight ship.Major suppliers to the company find that the directors are very business like but are impossible to build any rapport with. The Directors of the company are Operations - responsible for the manufacture and refurbishment of electronic components; Commercial – responsible for ensuring that purchasing is undertaken maximising quality and minimising prices paid; Financial; Sales and Marketing. Precision Electronics provide electronic components to anyone who wishes to purchase from them. They manufacture a wide variety of electronic components and repair (refurbish) broken electronic components so that they operate almost as new. Precision Electronics are one of the best known suppliers of electronic components in the UK, and whilst they have an excellent reputation for delivering on time, many customers complain that they are rarely able to deliver quickly when the customer needs stock urgently. Indeed, sales have shown to have been lost as a result of not being able to meet certain orders urgently. 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 business management study for Precision Electronics with a view to recommending how it secures its business future. Your job is to recommend how Precision Electronics should proceed. Q1: Describe the key issues that need to be addressed if Precision Electronics are to remain a viable business Q:2 Approach – step by step Consider which departments within Precision Electronics should be outsourced and which should be kept in-house. Give all of your reasoning for your conclusions. For those departments that are to be outsourced are there any particular recommendations that you may make in the way that they are outsourced? Q:3 Approach - questions Write out 5 questions that will be important in an “invitation to tender” document and explain why, in this scenario, you regard them as so. Q:4 Organisational Behaviour Your thoughts about the current management style and how it will need to be modified to maximise the success of a new business model as you have described above.