MBA Case Study- Cool Initiative

7/29/2019 MBA Case Study- Cool Initiative

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Ultimo Efficacy, Inc

By

Group 1

A case study on

Cool Initiative


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Cool Initiative:

Initiative means taking the first step in anyventure. It determines success or failure of the

whole venture.

This case discusses about a company and itsemployee in the backdrop of recession.

Recession, is one of the 4 phases of business

cycles, caused due to problems arising out ofincreased operations during prosperity.


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Facts about the organization:

Ultimo Efficacy is a wonderful organization,doing very well even during recession times.

Adept at converting threats into opportunities.

Had valid excuse of recession to cut down onthe expenses. Even the normal expenses.

Suddenly it decides to impose cost control

measures.

The top management issues a circular to all the

employees.


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Steps taken by the company to reduce cost:

All the employees were requested toconcentrate on cost reduction.

Plans to slow down the salary rise and

promotions Avoid travel i.e. use the cheapest modes of

travel only if it is absolutely essential.

Start using both sides of paper for writing.

Pencils should be used rather than pens so that

u can save paper and the cost provided to

purchase pens


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Facts about the case:

One Mr. Simple Simpson, a junior officer inpurchase department decides to contribute his best

to the companys efforts.

It was summer time and every year the company

used to replace worn out water coolers with the

new ones.

Simple got a brainwave of substituting water

coolers with the earthen pots. The price of a water cooler was approximately

around $350- $400 and price of a pot was mere $1,

which showed huge potential of cost reduction.


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Continued

Simple then sent out enquiries for different

suppliers and finally selected one particular

supplier.

The supplier declined to lower his price but was

ready to give 20 more pots for the same value. Simple became a hero momentarily.

A young auditor who finds irregularities in the

procedures, sends a report on the same whichplaces him under enquiry.


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Reports from the auditor:

As per the budget provided, water coolersshould be provided and not earthen pots.

Discrepancy was found in number of pots that

physically exist and that quoted in the

requisition slip.

Mr. Simple Simpson who was in charge of

processing requisition said that he took all

these actions as per management directive ofcost reduction.


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A brief look on what had happened

Simpsons intentions What was supposed tobe done

Idea of substituting

water coolers with

earthen pots.

Ordering for the pots.

Negotiating with the

supplier, so that hecould bring down the

costs.

Consulting his superior

and seeking approval

from the top.

Written permission from

the boss.

Notify his boss. And tellthe suppliers offer to

him.


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Irregularities on the part of the MgmtPlan Result

Slowing down the

salary raises.

Saving money on

unnecessary travel. Seeking co-operation

of the employees in the

process of cost control. Have clean record of

everything.

Unrealistic paymentsmade to CEO & others.

Top executives

continued theirextravagancy on travel.

No ideas collected from

the employees. Ordered an enquiry

against a loyal

employee.


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Opinions:Not a very successful plan.

Lack of proper guidance.

No proper delegation of authority and

responsibility. Incomplete auditing.

Poor implementation.

No scope for employee contribution.


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Conclusion:

So initiative should not be single and it should

be merged with successful plan, properguidance, proper delegation of authority and

responsibility

Managementworkers co-operation is absolute

essential.


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Thank you


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MBA Case Study- Cool Initiative

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