Reference no: EM133212909
The Asha Company Case Study
Asha Company Inc., located in a large city in western Canada, is a medium sized manufacturer of clothing and equipment relating to outdoor activities. Asha Company experienced significant growth approximately 10 years ago. Recently they have been considering expanding their facilities and product lines again to take advantage of the rapidly growing outdoor activities industry.
While the company has grown slowly and has many loyal employees, the manufacturing expertise of their current employees is questionable. Asha Company has traditionally promoted from within and occasionally recruits from outside the organization. The production equipment, techniques and processes are out of date. There is concern that the company may not be ready to compete as they have not kept up to speed with technological advances. There is an opportunity to acquire a manufacturing business whose production line and techniques have been updated.
Currently Asha Company employs approximately 700 individuals, mostly in the following departments:
- 30 in accounting
- 10 in information systems
- 20 in finance
- 10 in human resources management
- 510 in manufacturing
- 100 in marketing and sales
- 10 in research & development
The accounting group consists of CPA's and bookkeepers. As a group, they lack the knowledge of recent computerization of accounting practices. In addition, several have failed to remain current about recent changes in corporate tax laws.
The finance department has traditionally managed the capital structure of the firm. Currently the firm has relatively small debt.
The human resources department was titled the personnel department until recently and its major function has been record keeping. The top position in the department is held by a former sales representative that was moved laterally into a staff position in the department and then inherited the top position when the former job holder retired. Recruitment, selection and training of employees have been left to managers and individual departments. Recently, threats of slowdowns have been heard from the manufacturing workers.
The manufacturing department is the largest in the company. It has lacked cohesion and has experienced significant inefficiencies due to some out-of-date equipment and production techniques. The department has a rigid hierarchy and all managers have been promoted within the department. Managers are salaried, and the rest of the department - all union workers - are paid on an hourly basis. During the past two years they have accrued significant amounts of overtime.
The marketing department has primarily included sales representatives and their managers. One manager has also had the responsibility for the advertising program in the company, and the advertising has been contracted to outside organizations.
The research and development group is small. Although increasing funds have been allocated to research and development, most managers in the company feel that it has little impact on sales. R & D has spent a lot of effort on developing new fabrics for outdoor clothing but has done little product development or equipment innovation beyond that.
The information systems department includes primarily computer operators and a few programmers who are responsible for automating the accounting practices in the company. There is no management information system or human resources information system. Computer software is primarily used for customer billings, payroll, and purchasing.
Questions
Part 1 - The Strategic Plan
How can they achieve their plan for long-term success and remain competitive?
What, given their current situation, specific changes are required? Why?
What would the possible barriers to success be?
Consider environmental factors and acquisition opportunities in your response.