Bughaw Multilines Corporation

A Case Writing Presented to

The Faculty of Ramon V. del Rosario College of Business
Decision Sciences and Innovation Department
De La Salle University- Manila

In Partial Fulfillment of
the Requirements in
System Theory and Development
(SYSTHEO)

Submitted to:
Professor Emilina Sarreal
by:
Baraquiel, Sunshine C.
Co, Joshua Anthony C.
Ilustre, Sabrina Ingrid C.
Sy, Melville Rachelle K.
Untalan, Royce Vincent D.
K32

August 23, 2014

I. Introduction

Bughaw Multilines Corporation is a 28-year-old service business that manufactures feeds

for poultry and for swine, and distributes veterinary medical goods to Region 4A and the
National Capital Region. Based on the results of the Entrepreneurial Intensity survey conducted
on July 18, 2014, with six participants ranging from middle to top managers, the company has
not introduced any new products or services for the past two years. According to the top manager
of the company, Dr. Teodoro Dimayuga, president and owner of the company, there are no plans
regarding the introduction of new products to their serviced markets farm owners and
agricultural product distributors belonging to the Southern Tagalog region.
Further queries with the president reveal that intensive research and development are
required to develop new products for the company because of the nature of its products, feeds,
which require formulations combining different ingredients to provide the proper nutrition for
their consumers. Despite the presidents acknowledgement of the need for research and
development to deliver new products to their existing line of 32 variants of feeds, the company
does not have a research and development department in its organizational chart. When asked
why the organization does not have the said functional area, the president reveals that his former
researcher started his own company, with a similar nature and an identical business model, upon
completion of the research requirements of the company during its period of growth and
expansion.
Marketing is not a priority of the company. The sales manager stresses that the activities
of the regular customers of the company have become stagnant; however the company still limits
its marketing activities to direct marketing through its four sales agents, who visit potential and
existing customers around the region. In a meeting with a partner company of Bughaw
Multilines Corporation, the potential agricultural activity of the 2015 ASEAN Integration was

discussed. According to the representative of the partner company, the Integration is a doubleedged sword while free trade can enable the Bughaw Multilines Corporation to import raw
materials and export goods tax free, there is also the threat of tax-free entry of foreign products
of a similar nature.
The company also exhibits a bureaucratic policy of manually documenting everything
that happens in the company, aside from inputting the same transactions in the information
system used by the company. The employees have become complacent in innovating the
business procedures of the company, sticking to the same ways of performing their functions
since the company settled in its current location in Malvar, Batangas in 2007.

II. Overview
This case will present the issue of Bughaw Multilines Corporation in developing an
intensive strategy to maintain its competitive advantage of being one of the first to establish a
big-scale feed-manufacturing establishment in the region. The students aim to recommend an
alternative to solve the problem of the company based on the analysis of its Entrepreneurial
Intensity (EI) survey and Corporate Entrepreneurship Climate Instrument (CECI) survey results
and a subsequent utilization of the TOWS Analysis to procure alternatives.

III. Analysis
A. EI and CECI Analysis
Table 3.1 Degree of Entrepreneurship
Mean

2.791667

Standard Error

0.224382

Median

2.916667

Mode

#N/A

Standard Deviation

0.549621

Sample Variance

0.302083

Kurtosis

3.511851

Skewness

-1.69396

Range

1.583333

Minimum

1.75

Maximum

3.333333

Sum

16.75

Count

Confidence Level(95.0%)

0.576792

Table 3.1 exhibits a mean of approximately 2.79 for the degree of

entrepreneurship in the company. Because the scale of the Entrepreneurial Intensity
survey places the strongly agree side on 1, and the strongly disagree option on 5, a mean
of 2.79 suggests that the participants of the survey were uncertain of the degree of
entrepreneurship of Bughaw Multilines Corporation.

Table 3.2 Frequency of Entrepreneurial Intensity

Mean

2.041666667

Standard Error

0.150231303

Median

2.125

Mode

2.25

Standard Deviation

0.367990036

Sample Variance

0.135416667

Kurtosis

-0.859171598

Skewness

-0.41807152

Range

Minimum

1.5

Maximum

2.5

Sum

12.25

Count

Confidence Level(95.0%)

0.386181859

Table 3.2 reveals a mean of approximately 2.04, meaning the frequency of

entrepreneurial activity, introducing new products in this case, is less in the past two
years. With a negative skewness of approximately 0.31, the data in the table suggests that
the answers of the participants were biased towards the right side of a normal
distribution, implying that the mean is less than the median of 2.125, the middle value of
all the values gathered.

Table 3.3 Entrepreneurial Intensity

Mean

2.566666667

Standard Error

0.181582549

Median

2.6875

Mode

#N/A

Standard Deviation

0.444784592

Sample Variance

0.197833333

Kurtosis

5.285261629

Skewness

-2.25273042

Range

1.183333333

Minimum

1.675

Maximum

2.858333333

Sum

15.4

Count

Confidence Level(95.0%)

0.466772803

Table 3.3 exhibits the entrepreneurial intensity of the company. The values were
computed by calculating the mean of the degree of entrepreneurship and the frequency of
entrepreneurial intensity. In addition to this, the variable will be multiplied to 70% and
30%, respectively.The mean of the entrepreneurial intensity of Bughaw Multilines
Corporation is approximately 2.57, implying that the company is uncertain of its
entrepreneurial activity and that it has not performed new product information in the past
two years. The skewness of -1.65 further implies that because the mean is less than the
median of 2.69, the entrepreneurial intensity may be inclined to being non-existent.

The tables that follow summarize the data gathered from the CECI survey, which
measures employees perception of their workplace and organization.

Table 3.4 Management Support

Mean

3.192982456

Standard Error

0.171714867

Median

3.289473684

Mode

3.368421053

Standard Deviation

0.420613806

Sample Variance

0.176915974

Kurtosis

-0.909678305

Skewness

-0.014367793

Range

1.105263158

Minimum

2.684210526

Maximum

3.789473684

Sum

19.15789474

Count

Confidence Level(95.0%)

0.441407119

Table 3.4 reveals a mean of approximately 3.19 for management support. This set
of questions focuses on the top managements emphasis on the significance of
incorporating entrepreneurship in work. The mean obtained for Bughaw Multilines
Corporation suggests a degree of uncertainty regarding the attention given by
management on entrepreneurial activity; this is ascertained by an almost 0 value of

skewness, assuring that the calculated mean is close to the median and the mode, the
value that is the most recurring in the data set.

Table 3.5 Work Discretion

Mean

3.366666667

Standard Error

0.140633487

Median

3.2

Mode

3.2

Standard Deviation

0.344480285

Sample Variance

0.118666667

Kurtosis

-1.034907209

Skewness

1.038855297

Range

0.8

Minimum

3.1

Maximum

3.9

Sum

20.2

Count

Confidence Level(95.0%)

0.361509888

The questions under the section work discretion reveal the preeminent structure of
the company mechanistic or organic. A mechanistic structure is somehow similar to
Bruno Dycks mainstream management principle, wherein decision-making is centralized
in top management and rigid, bureaucratic policies are followed. On the other hand, an
organic structure puts an emphasis on decentralized decision-making, allowing middle
managers and low-level employees to decide on matters for themselves instead of waiting

for their supervisors to do it for them. Because the mean obtained is close to 3,
approximately 3.37, the company may be exhibiting characteristics of either structure; by
taking into consideration the skewness of 0.76, it can be said that the data is inclined
towards the right, favoring the organic structure.

Table 3.6 Rewards/Reinforcement

Mean

3.611111111

Standard Error

0.102439383

Median

3.5

Mode

3.5

Standard Deviation

0.250924218

Sample Variance

0.062962963

Kurtosis

-0.648788927

Skewness

0.840031766

Range

0.666666667

Minimum

3.333333333

Maximum

Sum

21.66666667

Count

Confidence Level(95.0%)

0.263328817

Table 3.6 exhibits the results obtained from measuring rewards and reinforcement
of the CECI survey. This set of questions pertains to an employees expected upshots
depending on his/her actions. With a mean nearing 4, approximately 3.61, and a positive
skewness of 0.61, the results imply that the company favors rewarding the employees for

a job well done. Another implication for this is the companys positive relationship
between employees and managers, who acknowledge the efforts put into the betterment
of the organization as a whole by the employees.

Table 3.7 Time Availability

Mean

3.222222222

Standard Error

0.111111111

Median

3.25

Mode

3.5

Standard Deviation

0.272165527

Sample Variance

0.074074074

Kurtosis

-1.48125

Skewness

-0.382732772

Range

0.666666667

Minimum

2.833333333

Maximum

3.5

Sum

19.33333333

Count

Confidence Level(95.0%)

0.285620204

Time availability refers to the amount of time available to perform specific tasks.
Some examples are brainstorming with co-employees and finishing the tasks as defined
in their job descriptions. With a mean approximate to 3.22, the time availability of
Bughaw Mulitlines Corporation is again, uncertain. Considering the negative skewness of
roughly 0.28, it could be said that time availability is biased towards the unfavorable side,

meaning that there is not enough time for all the activities of the company. An underlying
assumption for this could be traced to the exorbitant amount of paperwork required to
accommodate the business processes of the company.

Table 3.8 Organizational Boundaries

Mean

3.404761905

Standard Error

0.149450998

Median

3.285714286

Mode

3.285714286

Standard Deviation

0.366078688

Sample Variance

0.134013605

Kurtosis

-1.740060295

Skewness

0.596249165

Range

0.857142857

Minimum

Maximum

3.857142857

Sum

20.42857143

Count

Confidence Level(95.0%)

0.384176022

Table 3.8 exhibits an approximate mean of 3.40 for organizational boundaries,

which refer to the degree to which expected outputs from the employees are specified,
and the degree to which how expected outcomes could be measured. Despite the
uncertainty of the results, the positive skewness of 0.44 show that the answers favored a
positive result, meaning that organizational boundaries are defined.

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Table 3.9 Specific Climate

Mean

3.305555556

Standard Error

0.138354528

Median

3.266666667

Mode

#N/A

Standard Deviation

0.338897996

Sample Variance

0.114851852

Kurtosis

-0.50186243

Skewness

0.597919024

Range

0.9

Minimum

2.933333333

Maximum

3.833333333

Sum

19.83333333

Count

Confidence Level(95.0%)

0.355651636

Finally, specific climate measures the degree of prominence of entrepreneurial

behavior of the company. The mean calculated from the observed data, approximately
3.31, again show uncertainty. It would be safer to assume that the specific climate of
Bugaw Multilines Corporation is not very prominent, considering also the results
obtained from the other sections of the EI and CECI surveys.
To summarize the results, the management of Bughaw Multilines Corporation is
uncertain in almost all aspects of entrepreneurial behavior, with the exception of

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frequency of entrepreneurial intensity, which gives an overlook on the introduction of

new products of the company.
Table 3.10 Correlation
Position

Years in the
Company

Degree of
Entrepre
-neurship

Frequency

EI

Manage
Work
-ment Suport Discretion

Rewards/
Reinforce
-ment

Time
Availability

Organiza
-tional
Boundaries

Specific
Climate

Position
1
Years in the 0.620263873
1
Company
5
Degree of
Entrepre
0.928476690 0.545853563
1
-neurship
9
6
0.442922534
Frequency 0.721110255 0.456254131
1
3
1
1
0.974926039 0.631327409
EI
0.982106121 0.585402316
1
9
9
9
3
Manag
0.204337107
-ement
0.290682144 0.284583361 0.045338333 0.257415227
1
4
Suport
8
9
42
8
Work
0.228872884 0.249805455 0.259975573 0.627201384
0.237022731 0.099076429
1
Discretion
7
9
3
6
6
68
Rewards/
0.433860915 0.080439966
- 0.210579893
0.670445001 0.359922147
Reinforce
0.522666278
1
6
65 0.664669083
2
5
7
-ment
5
Time
0.592577611 0.201469321
0.2 0.195517960 0.037139067 0.610170215 0.183571237
0.108465228
1
Availability
3
8
1
64
8
7
9
Organiza
0.159752127 0.379995684
0.729200820 0.354952093
0.446077091
-tional
0.350489143 0.717491914
0.232500373
0.345598956
1
3
2
3
1
5
Boundaries
3
2
Specific
0.031317307 0.224964407 0.082926106 0.933734965 0.670033901 0.526999285 0.526023824 0.891761629
0.152587063 0.543608810
Climate
06
6
99
8
4
6
7
9
7
7

Based on the results of the survey and the correlation of the averages of the data,
it can be derived that there is a negative correlation between the number of years in the
company and the Entrepreneurial Intensity, meaning the longer they work for the
company, the more they tend to adapt a risk averse, bureaucratic way of thinking, as
opposed to a risk taking, starting entrepreneur. However, the positive correlation and
closeness to 1, between the EI and the degree and frequency means they are almost the
same in nature and therefore are directly proportional with each other.

12

The CECI results, on the other hand, are almost all positively correlated except
for time availability and rewards/reinforcement. This means that all fields are
interdependent with each other and affect all aspects of management. But time
availability and rewards are not because the more projects an individual heads (and thus
more possibilities to earn rewards) means less time for oneself and vice versa.

B. TOWS Analysis
STRENGTHS
1. Positive relationships between the
1.
management and the employees 2.
2. Working reward systems for
3.
performance
3. Employee loyalty
4.
4. Use of Information Systems
5. Good financial standing
5.
6. Good reputation
6.
7. Customer loyalty
2.
7.

OPPORTUNITIES
1. Integration with similar
companies
2. New
technology
and
innovations available in and
out of the country
3. Free trade with ASEAN
countries
4. Continuous growth of the
agriculture industry despite
entrance of typhoons in the
country

S5, S6 & O1
With a good reputation and an
equally good financial standing,
the company could do horizontal
integration to absorb the product
lines of other companies of a
similar nature.

WEAKNESSES
No R&D initiatives
Weak marketing strategies
Absence of introduction of new
products
Bureaucratic procedures in terms
of paperwork
Centralized decision-making
Low level of entrepreneurial
behavior
Lacks Mission, Vision and Long
Term Objectives
W2, W3, W4 &O2
With todays new technology, a
lot can be improved within the
company. New products can
easily be researched on with
regards to its ingredients and be
made with new machines. The
company can be marketed
around the web with everyone on
it every single day. And
bureaucratic procedures can be
eliminated with todays new
systems.

S5 & O2
Using its financial standing as a
leverage, the company should take
on
new
technology
and
innovations that would help
develop new products or improve
old ones, also making operations W4, W5 & O2
more efficient, in turn making it The company could automate
grow.
business processes to be at par
with industry standards in

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S6 & O3
Having a good reputation to back
them up, the company should use
the free trade policies with
ASEAN countries to acquire more
customers, broaden its markets,
and increase its revenue.

technology and in innovations.

W1, W3, W6 & O3
The company could allocate
resources to incorporate research
and development within the
company.
With
increased
product offerings as a result of
research
and
development
activities, the company could
penetrate
the
international
market with innovative products.
At the same time, the company
could consider using products
from other countries as raw
materials for potential new
products.
W3, W6 & O4
Application
of
Concentric
Diversification.
Since
the
industry can be considered as
slow-growth but consistent, the
company should offer new &
related products and/or services
so they can remain competitive
in the market.
W2, W7, & O4
The company should focus on
establishing strategic intents
such as vision, mission, and
long-term objectives. This also
decrease the possibility of being
in stagnant position in the
market.

THREATS

S5, S6, S7 & T4

W1, W3, W6 & T2

1. Entry of competition from Use unutilized funds for market The company could incorporate

the ASEAN Region

2. Product development of local
competition
3. New companies in the
industry which offer more
products and/or services
4. Stagnated customer activity

research and product development

to give customers expanded
offerings, potentially increasing
their purchasing activity with the
company.
S4, S7 & T1

a dedicated research and

development department in its
organizational
structure
to
address the research-intensive
requirements
of
product
development of similar nature of
the company; new products

14

With the customer satisfaction

received by the company, its
system can undergo improvements
especially foreign competitors are
starting to come in. It is most
important to be close to what they
currently have.

could be introduced by the same

department.
W2, W3 & T1, T3, T4
The company could develop
marketing strategies to increase
product awareness, and market
share,
eventually,
of
the
company in its target market.
New products could also be used
to promote the company.

IV. Problem Definition and History

Bughaw Multilines Corporation has not had new product developments for the past two
years. Based on the EI and CECI survey results, the corporate culture of Bughaw does not put an
emphasis on entrepreneurial activity. Because of this, customer activity with Bughaw Multilines
Corporation, especially those of the regular customers, have become stagnant. In interviews with
the sales manager, regular customers rarely change their weekly orders; hence, the employees
themselves do not see the importance and the impact of implementing product developments.
The company has neither a mission nor a vision to guide the employees in the performance of
their jobs. In addition, the company also has no long-term goal.
Another reason for the absence of product developments is the lack of a research and
development department; even a pool of existing employees for product development does not
exist. As pointed out earlier in the paper, intensive research is required to develop new products,
given that the products of Bughaw Multilines Corporation aim to provide nutritional value for its
consumers. A typical research and development team is not enough to sustain the requirements of
the companys product development. A team of experts in nutrition and veterinary medicine must
collaborate to perform the task. Historically, Bughaw Multilines Corporation has had an
15

unfortunate experience with research and development, as well, because the researcher of the
company started a competing company after gathering highly valuable information from Bughaw
Multilines Corporation.
With a competitive advantage of being in the business for 28 years, Bughaw Multilines
Corporation is now at a standstill in terms of increase in the market share, which is now shared
among a multitude of competitors. In line with this, the group came up with the problem, how
could entrepreneurial activity enable Bughaw Multilines Corporation to maintain its competitive
advantage over local and foreign competition.

V. Problem Analysis and Impact

Because of the nature of the products of Bughaw Multilines Corporation, being feeds for
agricultural animals, general agricultural activity could have had an impact on the stagnation of
customer transactions. Customers with their own farms with animals intended for sale in the
market, for example, could be in a period of continued maturity, setting in concrete capacities,
eradicating the need for an increased influx of supplies from Bughaw Multilines Corporation.
Internally, the employees may feel that they do not need to exceed existing performance
levels because they do not have an organizational mission to live by and a vision to attain.
Although it seems that the employees have become complacent, their level of performance is
based on attaining only short-term goals set by the top management, ignoring the impact of
having a long-range goal that may be achieved only by prioritizing entrepreneurial activity.

VI. Case Questions

How could Bughaw Multilines Corporation increase customer activity?

16

How could entrepreneurial activity enable Bughaw Multilines Corporation to maintain its

competitive advantage over local and foreign competition?

What is the impact of converting bureaucratic measures into organic mechanisms on
entrepreneurial behavior?

VII. Proposed Resolutions

The group recommends the resolution formed by W1, W3, W6 & T2: The company could
incorporate a dedicated research and development department in its organizational structure to
address the research-intensive requirements of product development of similar nature of the
company; new products could be introduced by the same department.
As mentioned previously, the research and development department requires experts from
different fields to meet the demands of the job; this is the biggest disadvantage of the resolution,
since it will require the company to pay a sizable sum regularly. However, the companys good
financial standing could enable it to easily provide compensation for the new employees of the
company, compared to letting the companys assets sit in the bank. In opposition of the current
culture of the company that lacks an emphasis on entrepreneurial intensity, the entry of the new
department could influence the members of the other departments to embrace and manifest
entrepreneurial behavior.
The department will be asked to engage in concentric diversification activities, or
introducing products of a similar nature. By doing so, the company would not need to purchase
additional equipment to produce feeds, since the manufacturing of feeds varies only in the
amount of ingredients needed to be mixed and ground. The other departments of the company,
the sales and marketing department specifically, could, in turn, offer these new and related
products to customers, both new and proven to be loyal to the company.

17

VIII. Action Recommendations

Bughaw Multilines Corporation should first search for potential employees to hire for
the new research and development department. It could start with as little as one person
belonging to the entire department, and expand with an expected increase of product
introductions. More importantly, the legal aspect should be accomplished before hiring any
potential employees as to avoid the recurrence of what happened with the previous researcher of
the company. An employee contract is the optimal solution for this.
The new department should be given a flexible budget by the management. Product and
Research Development is expected to be costly because it undergoes a lot of procedures, such as
the research itself, introduction and implementation, and the participation of affected
stakeholders. But the results of this will most likely benefit the company in the future.
The company should retire some of the old products when they have converted customers
to purchase the new and developed ones. This could be done to reduce inventory costs, since new
products would have to be stored alongside old ones, diminishing the capacity of the warehouse
to hold a certain amount of one specific kind of product. Furthermore, the new products could
serve as an invitation to new customers in the agricultural market, who may be searching for
something more innovative, instead of traditional.

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