Sunflower Incorporated-APA

Running Head: ECONOMICS 1

Sunflower Incorporated

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ECONOMICS 2

Sunflower Incorporated

Sunflower Incorporated is a distribution company that deals with snack foods and liquor.

Some of the foods are chips, cheese curls, peanuts and tortilla chips. A variety of national and

local liquor is available. Each brand’s distribution depends on the tastes and preferences of the

locality. There are over 5000 employees working with the company over the 22 regions it has

established in the USA and Canada. Every region is autonomous having separate salespeople,

central warehouse, purchasing department and finance department. It has had an outstanding

performance during its operations, apparently from the amount of $700 million sales in 1991. In

addition, the direct diversification the company has had over various edible products indicates it

has been determined to satisfy its customers (Brainmass 2012).

In an effort to enhance efficiency and transparency, a different financial reporting was

adopted in 1989. It analysed sales, costs and profits in all regions. There was established a large

margin in the profit made by these regions. A standardisation mechanism needed to be devised in

order to have some common aspects in the regions. The management believed there could be low

quality products being produced by the regions that made high profits. Consequently, they

speculated this would tarnish the reputation Sunflower Incorporated had over the entire region.

Some other regions require strategising upon counteracting stiff competition offered by Bordens,

Standard Brands, Frito-lay among other companies offering similar products (Brainmass 2012).

The company’s president later decided on creating a new position to implement this

standardisation under the title director of pricing and purchasing. The position holder was

answerable to the vice president. Ms. Agnes Albanese was the first to hold this position. She was

bestowed with powers to establish any rules that she deemed appropriate. She was to gather

ECONOMICS 3

information from each region in order to help her make informed decisions. She decided on

standardised price of products across all regions. She requested the regional financial executives

to notify her on the local price changes over 3%. Moreover, she decided to have all new

contracts of purchases exceeding $5000 cleared through her office. She felt the need to have the

implementations done promptly before the peak season would approach. The vice president tried

to induce her into taking her time and visit the regions herself and take her time, but she

disagreed suggesting that visiting would take long and was expensive too. Although the financial

executives in the regions agreed with the order, they did not heed to it despite normal activities

going on in the regions (Brainmass 2012).

Director of pricing and purchasing is a senior position that requires complete coverage of

the company’s operations. The sensitivity of decisions made and the implication of the same

could result into extreme outcomes to Sunflower Incorporated. There are several mistakes

observable in the actions taken by Ms. Albanese. To start with, she does not take time to analyze

the company. She is new in the challenging she position, which requires that she does not

comprehensively understand all the issues surrounding the entire company. Various aspects need

to be analysed. Organizational behaviour is one of them. The company employees have not been

used to a centralised form of administration. A sudden change could not be well embraced, and

its implementation required gradual adoption into the system.

In addition, financial implications of her action need to be analysed, which requires time.

Some price could be higher than most customers in a region can afford while it would be too low

for a certain region that might be having an expensive access to raw materials operating at a loss.

Moreover, the increased contact that will result from the regional executives consulting her for

the price and notifying her of contracts exceeding $5000 will be an extra cost to the company.

ECONOMICS 4

This is a role that possibly requires a change in the organizational structure, and possibly

addition of extra employees and resources. Expenses increase would definitely lead to decreased

profit especially if the expenses are not contributing directly to improvement of products.

She does not heed to any advice given by the company’s vice president. The vice

president is relevant with the company’s operations, having been in the company for longer than

she has been. He has worked in the position for some years, implying he can understand the

company more than Ms. Albanese can. He gives his opinion on some matters including the time

taken to fully apply the changes as well as the method she should use to reach the regional

executives. However, she does not seriously consider what she is told. The vice president trusts

her and leaves the decision for her to make.

Additionally, she does not evaluate any problem at a broad perspective. This starts with

the main problem of ensuring the prices are standardised. She could use some other policy that

could be adaptive and effective on the company’s attainment of objectives. She additionally has

to make minor decisions as she implements the decision she makes. For instance, she uses emails

as the way to communicate with finance and purchasing executives at the regional level. The

vice president cautions her against this, but she does not seriously consider that. Moreover, she

sets her implementation phase at a short timeframe. She has the only reason as wishing to

implement this before the peak season so that sales will be optimised. It is hence evident that she

does not evaluate other alternatives and considers her initial decision the best.

Another mistake that Ms. Albanese makes is the lack of incorporation of teamwork. She

is observed to be making decisions and implementing them all by herself. Other employees, who

are stakeholders in the company that will be adversely affected by the change of protocol, should

ECONOMICS 5

be consulted in the plan to have the prices standardised. Customers should also be represented in

the decision so that it is established the price that could be fair for them as well as the company.

Developing teamwork could mean frequent meetings with other people, brainstorming ideas,

assist in coming up with the most ideal decision, and collectively work towards achieving the

realistic value of the decision (Allwood & Selart 2001).

She also takes the concept of opportunistic costs too far. She values ways that could save on time

and spent. She decides not to visit the regions personally and also to have the information

relayed to the executives through the internet based on this ideology. However, she does not

consider the sensitivity of the matter. She is bound to make a long term decision, implying its

effects could be widespread along a large time horizon. Saving on time and costs now could cost

the company a big deal in the future. Therefore, this could be considered a mistake because the

outcome is not clearly established (Marschan-Piekkari & Welch 2011).

There may possibly be a variety of reasons why she is not getting notices from branch

executives. To start with, they could have not kept proper records. If there were available

compiled reports, they could have just been forwarded to her. There is no information detailing if

they were being periodically audited at the regional level, where the managers made final

decisions. This could imply that they could give any figure so far as it meant profit to the entire

organization.

Corruption could be another reason as to why she does not get feedback. The managers

have been all along entrusted with the operations at their level. They could have been giving

wrong information regarding their operations. Giving Ms. Albanese the records could reveal

some of the deals they had that could lead them into problems. For instance, they could have

ECONOMICS 6

been selling products higher than the organization recommended, or exaggerating costs only to

record the amount of money expected by the organization and then embezzle the rest. Giving

records would show that they have been selling the products expensively, which could make

them be sacked. This further explains that they could have been manipulating records for the

time she had not received them. They needed to get information right to avoid being caught. This

could require writing new backdated records and having the relevant people sign them to justify

credibility. Convincing all the people concerned could take time (Decision-making 2010).

Moreover, the managers had been used to making their own independent decisions

without being monitored over some actions. Ms. Albanese comes in and immediately decides to

order them. They would have felt the freedom they had enjoyed for long being denied. Giving

records could mean they have given in to her authority. They would not tell what else they would

be required to do from them, making them insecure over their freedom.

The managers could also have been contented with the trust the company had over them.

They had never experienced that, which could mean they might have developed a mentality that

the organization had confidence in them. Ms. Albanese seems not to be satisfied with this, from

their point of view of the issue. Therefore, they could have worried why the procedure had

changed, and whether their position will maintain its powers. The policy to have the contacts

exceeding $5000 cleared through her office, for instance, could suggest to them that their

position would have less power, and they had to keep consulting her for such deals.

Regional executives do not clearly understand the motive of her directive. As a result,

they might have questioned among themselves the explanation on why she wants to acquire the

information. Lack of an appropriate and convincing reason as to why they have to deliver it

ECONOMICS 7

could lead them to turning down the order. For instance, having transactions exceeding $5000

done through her office could not be making sense to them since there could be no difference if

the process has been transparent all along. This further explains why she should have visited the

regions personally, and gives comprehensive information on the entire strategy (Press 2010).

Time could be another reason why they have not given the reports. The executives have a

lot of duties and responsibilities that are scheduled for their positions. Giving the information

could not be one of the duties they have been doing. Since the records need to be analysed and

precisely written to give the required information only, it need them to provide sufficient time for

it. This being the reason could mean that given some extra time they could have submitted the

information.

There are some things Ms. Albanese does wrong. She sends the emails to the regional

executives to deliver her message. This could have been better if she did it herself. There could

imply how serious she is about the move, and have the executives understand everything in the

change she wants to implement. There could be questions the executives have that the email

cannot answer. She is in a better position than they are in giving the correct response. There is an

alternative of her calling them for a meeting, either individually or collectively, and tell them of

what she requires them to do. Therefore, using emails to deliver sensitive and highly regarded

information was absolutely wrong (Eden & Ackermann 2010).

She directs that purchases of over $5000 be done through her office. This is wrong since

a lot of inconvenience could result from the many requirements that would need to be followed

before any sales and purchases are made. Customers would consequently be dissatisfied by the

lengthened time of waiting before a deal could be done. In addition, the motive as to the action is

ECONOMICS 8

not well established. Having the contracts comprehensively done at the regional level did not

mean any difference to the internal financial position. It could only complicate the organization

(Mullen 2002).

Moreover, she aims at standardising the prices of products in different regions. This is

economically wrong since this will lead in change in sales. Setting a price that would favor the

entire market could be a challenge. Price would sometimes depend on the accessibility of

supplies of resources and the nature of neighbourhood. A low price could increase the sales, but

lead to an extremely small profit margin, which could result at a loss. A high price could

decrease the number of sales, but increase the profit margin. There is a challenge to arriving at a

price that would strike a balance between the extremes and additionally optimise profit as desired

by the company. However, the existing strategy where each region is significantly independent

with the other makes it possible for each region to have a price that fits it best (Bell et al., 1988).

Consulting the executives is another wrong thing she does. There are probabilities of

embezzlement of money, suggested by the large range in the prices being currently offered by

the company. It could mean some executives could have their prices exaggerated. Asking them

to give the prices is not enough since the records can be manipulated. As a result, she should go

to the ground and have the real information without bias. Concisely, she should conduct a

research where she would use primary source of data, which is more reliable than secondary

data.

Ms. Albanese implements the policies of another company. She has taken an incredibly

little time to come up with a strategy that is not assessed among other alternatives. She is from a

finance department of a competing company before being posted in Sunflower Incorporated.

ECONOMICS 9

This clearly shows that she takes strategies from the other company and adopts it in Sunflower.

The context could differ in various aspects as customers, organization, financial position and

market share is different (Zsolnai 2009).

A manager needs to have some considerations before any decision making and

implementation is made. The role bestowed on them could make the company immensely change

either for the better or for worse of its current condition. One of the most significant factors that

are realized in the study is the culture an organization has been following. Any changes intended

on culture should be gradual, and employees should be consulted and convinced on how relevant

the changes would be to them and the organization at large. Consequently, they would cooperate

to ensure some development in the organization. Additionally, consultation has been realized to

be essential in decision making so that different ideas are given. The decision to be implemented

would arise from the best alternative. Another consideration identified is time. Any decision

implementation needs time to fully be achieved (Management & Management 2008).

The study has also revealed some qualities a competent manager should adopt, which

include open-mindedness, considerate and knowledgeable. In addition, one should listen to

authorities before any major decision making. A conceived idea should be scrutinised at all

management levels. Managers should learn from her experience about the things that are

anticipated of them by any organization in which they are. They should avoid the mistakes and

the things she does wrong. Although the contexts could vary, it is evident that managers should

have a wider approach to every decision they make so that there are no ambiguity in the

implementation of the same. Therefore, this study is crucial for decision makers at whatever

position they can be holding in an organization.

ECONOMICS 10

References

Allwood, C. M., & Selart, M. (2001). Decision making: Social and creative dimensions.

Dordrecht : Kluwer Academic Publishers.

Bell, D. E., Raiffa, H., & Tversky, A. (1988). Decision making: Descriptive, normative, and

prescriptive interactions. Cambridge: Cambridge University Press.

Brainmass. (2012). Sunflower Incorporated: Changes and implementation. Viewed

http://brainmass.com/business/business-policy/440085

Decision-making, H. (2010). The Influence of Emotions in Embodied Agents on Human

Decision-Making. Significance, 357–370.

Eden, C., & Ackermann, F. (2010). Decision making in groups: theory and practice. In P. C. Nutt

& D. C. Wilson (Eds.), Handbook of decision making (pp. 231-272).

Management, D., & Management, K. (2008). Document Management vs. Knowledge

Management. Knowledge Management, 4(4), 87-90.

Marschan-Piekkari, R., & Welch, C. (2011). Rethinking the case study in international business

and management research. Cheltenham: Edward Elgar

Mullen, J. D. (2002). Decision-making: Its logic and practice. Rowman & Littlefield 2002.

Press, H. B. (2010). Developing a Business Case. Business (p. 128). Harvard: Harvard Business

Press.

Zsolnai, L. (2009). Responsible decision making. New Brunswick, N.J: Transaction Publishers.

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