Group 05

Amarjeet Gandhi
Chandramani
Neh Nirjhar Singh

The Case of the Misdirected Direction

This case is about the Dashman Company which was used to manufacture equipment for the
armed force of United States. It had more than 20 plants. Mr. Manson, companys president
was worried about the increasing difficulty in securing certain essential raw materials. To look
after this issue he appointed a person named Mr. Post as vice president in charge of
purchasing. He also gave him full freedom for doing his job. Mr. Manson also appointed Mr.
Larson as assistant to Mr. Post. Mr. Post was very experienced and knew many of the plant
executives personally.
The first decision taken by Mr. Post was to centralise the companys purchasing
procedure. In order to do so, he wanted each plant executive to notify him whenever the
contract purchase exceeds $10,000 and contracts were being prepared at least a week before
they were signing it. This proposal was approved by the board of directors. This plan was
adopted just three weeks before the peak buying season of the company. So, he prepared a
letter for the plant executive of the company to adopt the mentioned plan. The letter
mentioned, the company is facing difficulty is securing essential supplies and how this plan
would help them overcome this issue.
This letter was shown to Mr. Larson for his comments. Mr. Larson suggested him to visit
each plant and deal with each plant executive individually. But he refused the idea, because of
the not having that much of time. He straight away sends those letters. He even got assured
replies from most of the plant executive. During the next six weeks head office didnt received
any contract notification from any of the plant. Other department executives who were
frequent visitor reported that the plants were busy in their usual routine, which might be the
cause of not notifying the head office.

PROBLEMS

The company is facing difficulties in securing certain essential raw materials

This is main problem in this case as it is directly affecting the company.
This was the reason Mr. Manson, the president of the company appointed Mr. Post as
the vice president of the purchasing department. This was because of decentralised
way of working that the company followed. Each plant was working independently. They
never reported their purchases to the head office.
Centralize purchasing procedure
This was a problem for the plant executives as they were not habituated to the new
policy which was implemented by Mr. Post just before three weeks of the peak buying
season.
In this plan they had to report the head office before a week of signing the contract
exceeding $10,000, which was difficult for them to do.
The plant executives had only two weeks for adopting this new implemented policy.
Sudden change in hierarchy of the companys decision making
The plant executives were facing this problem as Mr. Manson introduced a new post for
Mr. Post which was the Vice president in charge of purchasing.
Before this most of the plant executive was free and independent of taking purchasing
decision of their own.

Neglecting the Mr. Larsons idea

This was the problem for the company as Mr. Post refused the Mr. Larson idea to meet
all of the plant executives individually. It was difficult for Mr. Post to do so.
It created a communication gap between head office and the plant executives. As the
letter was not alone impactful mean for conveying the new plan.
ALTERNATIVES
Centralized purchasing procedure
o This will reduce the price of the raw materials purchased as the head office will
buy the raw materials in a bulk.
o It will increase the transparency in the company.
o It will reduce the work load of the company.
o Coordination between the plant executive and the head office will increase.
o It will omit uncontrolled purchasing of the company plant.
Mr. Post should have organised a meeting to convey the new plan to all of the plant
executives in a proper
way. As it would have created a more impact on the plant
executives. Face to face interaction with the plant executives is more effective in
comparison of sending them a letter.