Reference no: EM132397201 , Length: 1200 words
CASE APPLICATION - Funny Name, Not So Funny Effect
This volcano has a funny name "Eyjafiallajokull" but its impact was not so funny to global businesses, both large and small. When it erupted in April 2010, the plume of volcanic ash that spread across thousands of miles disrupted air travel and global commerce for a number of days. As thousands of flights were canceled across Europe, tens of thousands of air travelers couldn't get to their destinations.
For example, Marthin De Beer, vice president of emerging technologies at Cisco Systems, was headed to Oslo to discuss the final aspects of its acquisition of Tandberg, a Norwegian teleconferencing company. However, when his flight was canceled, he and Tandberg's CEO, Fredrik Halvorsen, used their merged companies' equipment to hold a virtual press conference.
Other businesses weren't as lucky, especially those with high value, highly perishable products such as berries, fresh fish and flowers, and medicines and pharmaceuticals. African farmers, European fresh produce importers, and flower traders from Kenya to the Netherlands found their businesses threatened by the air traffic shutdown.
Even manufacturers were affected. For instance, BMW had to scale back work hours and had even prepared for possibly shutting down production at its Spartanburg, South Carolina, plant because it depended on trans-Atlantic flights to bring transmissions and other components from German factories by air. A spokesperson at another automobile company, Mercedes Benz, said, "There has been disruption in our parts supply. We expect that there may be shortages of some parts or delays in some instances."
The eruption of the Icelandic volcano Eyjafjallajokull that produced a huge drifting ash cloud throughout Europe resulted in flight cancellations that disrupted global commerce. The halting of air travel for several days impacted managers' plans for the production and distribution of goods and services and many other scheduled business operations.
DISCUSSION QUESTIONS
1. Could a company even plan for this type of situation? If yes, how? If not, why not?
2. Would goals be useful in this type of situation? What types of goals might a manufacturing company like BMW have in such a situation? How about a global airline? How about a small flower grower in Kenya?
3. What types of plans could companies use in this type of situation? Explain why you think these plans would be important.
4. What lessons about planning can managers learn from this crisis?