Applying the Managerial Decision-Making Process to Engineered Plastics, Inc.

Ben Dooley and Casey Stringer stopped for coffee before heading up to the 35^th floor for a Board of Directors’ meeting of Engineered Plastics, Inc.

“You seem deep in thought,” Ben said, placing the two cups of hot coffee on the table.

“Watching Joanne and Robert in our previous Board meetings helps me to understand why the folks in Congress can’t get anything done,” Casey mused. “Both sides have stated their positions and nothing will budge them. I dread this meeting. I’d rather have a root canal.”

“While the Joanne and Robert battle it out, the rest of us will have to work out some sort of compromise. We outsourced manufacturing operations to China several years ago to cut costs and now things are changing rapidly and we have a major decision. Does Engineered Plastics make the best of the current situation in China?”

“…..Or do we re-shore?” Casey added.

“Someone will have to be the voice of reason today,” Ben said. “Robert has been in charge of our outsourcing to China. Initially, it was a great move.”

“I agree the cost savings were pretty amazing. The retooling and creation of a state-of –the-art factory in Wenzhou really propelled us to a new level of excellence within the industry,” said Casey.

“However, things have changed and we have a problem,” Ben replied.

“Yes. Robert is going to have to face the fact that if we stay in China, we have to move from Wenzhou,” Casey pointed out. “The worker shortage is bad and getting worse. The last estimate for that region was one million workers short of our needs. As wages go up and other opportunities present themselves, manufacturing jobs are losing their appeal in the Chinese cities. In our China plant, the managers have to come down and work on the production lines. That’s not good. To try to stave off a mass industrial exodus, the Chinese are now offering a stimulus to industries to relocate into the interior of the country. The interior offers more workers and lower wages.”

“But a factory move will delay manufacturing and make shipping even more difficult,” Ben replied. “Add to that the Chinese insistence on full payment before shipping and we’re looking at some potentially serious delays.”

“Joanne, on the other hand, is going to argue that the situation in China is an indication that now is the perfect time to re-shore and bring the jobs back to the good old U.S.,” Casey added. “She’s going to dig in her heels on this one. You and I know that at least two members of our Board are going to back off and let her have her way with no careful analysis of the pros and cons. I sometimes think Frank is a people pleaser. He’s always agreeable especially toward Joanne because she is the Chair of the Board. Furthermore, Mara usually doesn’t say anything, much less offer an opinion. She stares down at her hands when the going gets rough.”

“The pros for Joanne are obvious: bring jobs home where jobs are needed, shorten the supply line, reduce shipping costs, offer faster response to customers, and, (I believe) offer a better quality product. It is worth a little higher labor cost,” admitted Ben.

“And what are the cons?” Casey asked.

“The problems are the higher wages in the U.S. and the cost of retooling older U.S. factories that have been empty for a few years,” replied Ben.

Casey responded, “Although we probably would not have to build a new factory deep in China’s interior, will their interior workforce be adequately trained? I would guess not. The Chinese government will help with building and relocation costs, but still….”

“So both Joanne and Robert have strong arguments and some glaring weaknesses. Is there room for a compromise? That’s what I would like to see. They would both get something,” opined Ben.

“I don’t know,” Casey responded. “I’m eager to see how the Board will address the issues and determine the best solution. It should be an interesting conversation.”

“Or a very uncomfortable afternoon,” Ben said as the two headed for the elevator. “I wonder what you and I might do to help Joanne and Robert resolve this conflict. What do you think we should do, Casey?”

Casey suggested, “We could suggest that the Board follow the steps in the decision making process to help everyone decide on the best solution to the problems we are experiencing in China.”

Background Information for Engineered Plastics, Inc.

Engineered Plastics, Inc. (EP) is the premier supplier of custom machined plastic components. EP has extensive experience manufacturing custom engineered plastic parts specializing in the automotive, aeronautic, communications, instrumentation, oil and gas equipment, semiconductor equipment, and medical industries. For example, EP’s automotive products include automobile fenders, windshields, wiring and electrical systems, interior parts, and exterior body panels.

EP has over 35 years of experience providing cost effective custom (engineered) plastic parts with minimal production times and delivery times that meet the needs of their customers. These qualities have helped EP accomplish their strategic goals and maintain their market share in the highly competitive engineered plastic industry.

The engineering plastics market is growing even more competitive as companies globalize their businesses. In fact, the industry is predicted to grow 15-20% during the next five years. To stay competitive, all plastics companies (such as EP) are continuously looking for new developments and striving to become leaner, quicker, faster, lighter (products) at the same cost or lower. Modernized plants, up-to-date machining processes, and skilled workers are essential to the success of all engineered plastics companies and especially to EP.

Instructions for this Typed (Word-Processed) Assignment

This is an individual typed assignment. It is not to be prepared with another person or persons. Similar, hand-written, and/or late papers will be penalized.

This assignment involves you submitting a word-processed paper that applies the steps in the Managerial Decision-Making Process to the above case and background information. The Decision-Making steps should help the Engineered Plastics’ Board members make an informed, effective decision on the issues noted above. [The steps to the Decision-Making Process is described on pages 220-24 of our MGT 3000 textbook (8^th edition by Daft & Marcic) and outlined on the attached scoring rubric.]

As noted in the attached scoring rubric, you are to address Steps #1, 2, 3, 4a, 4b, and 6 of the Managerial Decision-Making Process. Number each part. (Step #5 is not required as part of this typed assignment.) All of the information you need to apply these steps to address the issues noted in this case is provided above and in the descriptions of the Decision-Making Process.No additional data collection or sources are needed nor will they be rewarded.

If you have questions, please contact your instructor.

MGT 3000 Decision Making Rubric (Fall 2014)

MSU Denver College of Business

Instructions to Students: Print (or type) your name, major and student ID number below. Turn in this page with your typed answers. Thank you!

Name:____________________________________________ Major: _________________________ Student ID #: _900- ___

Step/Rating	Unsatisfactory	Good (meets expectations)	Outstanding
1. Recognition of Decision Requirement	1. Problem (or opportunity) is not identified or is incorrectly identified.	1. Problem (or opportunity) is identified without any elaboration.	1. Problem (or opportunity) is accurately, clearly, and thoroughly described.
2. Diagnosis & Analysis of Causes of Problem	2. No cause is mentioned	2. At least two causes of the problem are noted	2. Three or more causes of the problem are noted
3. Development of Alternatives	3. Only one relevant alternative is described and/or alternatives reflect no understanding of the situation.	3. At least two different relevant alternatives are explained, and/or alternatives reflect a basic understanding of the situation.	3. Three or more different relevant alternatives are described AND alternatives reflect an in-depth understanding of the situation.
4a. Comparison of Alternatives (to enable 4b. Selection of desired alternative)	4a. When comparing alternatives, fails to address all alternatives generated in Step 3.	4a. When comparing alternatives, all alternatives noted in Step 3 are compared at a basic level referring to two causes identified in Step 2.	4a. When comparing alternatives, all alternatives noted in Step 3 are fully compared referring to all causes noted in Step 2.
4b. Selection of Desired Alternative	4b. The selection of best alternative is not justified with appropriate information.	4b. The selection of best alternative is appropriately justified.	4b. The selection of best alternative is justified with detailed explanations.
5. Implementation—not relevant at this time	5. Implementation—no discussion is needed for this assignment	5. Implementation—no discussion is needed for this assignment	5. Implementation—no discussion is needed for this assignment
6. Evaluation and Feedback	6. No mention of a need for follow-up evaluation of the effectiveness of the selected alternative.	6. The need for a follow-up evaluation of the effectiveness of the selected alternative is only inferred—not specifically mentioned.	6. The importance of a follow-up evaluation of the effectiveness of the selected alternative is emphasized.