Next Generation Management Development - Term Paper Example

? BUSINESS CAPSTONE Table of Contents Table of Contents 2 PART 3 Issue 3 Causes 3 PART 2 4 Decision Criteria 4 Alternatives 5 Solutions 6 Implications 6 References 8 PART 1 Issue A company has to deal with several issues throughout its lifetime. The issues however arise due to different causes and the level of impact also differs. Sundararajan (2005, 53) claimed that even the renowned and well established business houses are bound to face with different type of challenges and issues. The concerns generates either from the external environment or from the internal environment of the organization. The issues that companies mostly deal with are unionization, implementation of change, threat of new entrants, issues pertaining to law and sometime faces intimidations due to turbulent business and political environment. In this study, the issues faced by CSC Australia will be uncovered. CSC is an Australian company involved in providing technology enabled business solutions and services to the clients (CSC). The company caters to both the private as well as the government clients. The company supplies desktop computers to the client sites. The supplies are made at the local corporate head offices of the client (Background 2012). However, the company is now working with an oil and Gas corporation, whose onsite delivery refers to delivering of desktops to the offshore locations. Delivering desktops to abroad locations creates huge environmental risk and if anything goes wrong during the delivery process, CSC Australia will be liable and may need to compensate the client. Moreover, the client is also asking for unlimited liability rather initial capping on contract. In this context, according to the vice president of CSC Australia, Michael Horton, CSC Australia is facing issues related to liability capping. Liability capping is generally carried out or negotiated prior initiating the contract, but allows renegotiations (Issue 2012). Therefore it can be stated that the company is presently dealing with issues pertaining to law suits. Causes The primary reason behind the arising legal issues is mainly related with the liability capping. CSC Australia fears that, if unlimited liability is accepted, it may cause serious damages to the company’s financial position. Apart from that, acceptance of unlimited liability may create more burden on CSC as their client may ask to compensate the entire worth of their company. For example, if anything worst happens and if the client is a large company, the compensation claimed by them can be far more than the actual worth and can ruin the financial stability of CSC Australia. Hence it can be stated that unlimited liability may pose huge threat to the company. Nevertheless, for the company to successfully close the deal and ensure lowest possible liability capping, negotiation with the client needs to be properly carried out (Cause 2012) The first section of the study has identified the issue faced by CSC Australia and its causes. Now in the next half of the project, the solution or how the issue can be addressed by the company will be suggested. In this process several alternatives will be developed and the best alternative will be chosen for implementation. PART 2 Decision Criteria In order to deal with the legal issue, CSC Australia needs to make proper decision. Although to get rid of the concern, the company will have a number of alternatives, but to deal with the issues effectively, the company needs to choose the best alternative. A decision criterion refers to the factors, based on which the alternative courses of action are developed (Gupta, Gollakota, and Srinivasan 2005, 589). Therefore it is extremely important to develop decision criteria for selecting the alternative solutions (Introduction to Business 2006). In addition, several authors’ states that, it is always better employ some decision making criteria, rather than randomly choosing the alternatives. Now in this context of the study, the alternative course of action will be developed for CSC Australia to deal with the issue of liability capping. The decision criteria as developed are provided below: - The alternative to be developed for dealing with the issue needs to be realistic and achievable (Cecil and Rothwell 2006, 118). The course of action must increase the profitability of the firm. It should ensure less risk involved. It should not harm the corporate image of the firm and maintain satisfaction of the customers. The alternative course of action must ensure that it directly addresses the issue and handles it effectively. Apart from that, some of the general decision criteria are that, the implemented solution must not impact the environment in any way. In addition, it should also ensure that the internal environment of the organization do not gets affected. Alternatives Based on the aforementioned criteria, the alternative courses of action need to be developed. Since the company is dealing with the issue of liability capping, the alternatives also needs to be developed keeping in mind about the legal reforms of Australia. However to deal with this issue following are the alternative courses of action: - Alternative 1 (Shared Liability): - One of the viable alternatives for the company to deal with the issue of liability capping is shared liability. In this context, the company and the client can mutually share the liability. This will reduce burden of both client and the company. In addition, the financial risk of both the companies will get reduced to a large extent. Alternative 2 (Insurance): - CSC Australia can consider insuring the desktops to avoid any kind of financial losses. If the company insures all the products that it will be supplying offshore or to the client’s site, the financial risk gets minimized to a large extent. In addition, the company will also be able to satisfy the client and can gain their confidence. Alternative 3 (Negotiation with the Client): - The deals are closed by the sales person and therefore they should be the one to negotiate with the clients regarding the contract. The sales person should negotiate with the client and bring down the liability capping to the lowest possible level. In addition, the sales personal should also negotiate with the clients to convince them within the highest level of liability capping by the company. Solutions In the last section, there are three alternatives identified for dealing with the issue of liability capping. The report will now analyse and justify the alternatives on the basis of its selection or rejection. Justification for Alternative 1 For the first alternative i.e. shared liability, it can be an effective solution but it will be difficult to convince the client of sharing the burden. Hence this strategy should not be implemented. Justification for Alternative 2 On the other hand, the second alternative was about insuring the products. Although it is one of the safest approaches of exporting products, but there is a limitation. For insuring all these products, the company has to bear large sums of insurance premium. This will in turn reduce the profitability margin for the company. Hence this strategy should also not be implemented. Justification for Alternative 3 The last alternative was to negotiate with the client and convince them to accept lowest possible liability capping. If the company succeeds to implement this approach, the risks pertaining to financial stability and legal suits will be reduced to a large extent. Hence, it is recommended that the company should adopt the third alternative i.e. negotiation with the client to deal with the issue of liability capping. Implications Once the alternatives have been developed, the next task is to ensure that the best alternative has been chosen (Monappa and Saiyadain 2001, 34). In general, there is no definition of the best alternative, but we consider the alternative that offers the maximum benefit to the firm. Therefore choosing the alternative is also another important task. Finally, as the alternative gets selected, the most important task is to implement that strategy as until and unless, the new strategy is implemented, the benefits cannot be experienced. Now in this context of the study, the strategy or the alternative chosen for implementation is the negotiation with the client. To implement the same, the company should consider the following steps: - 1. Form a committee: A committee must be formed with top leaders and managers of the organization. This will allow CSC Australia to handle the issues more efficiently. 2. Encourage Collaboration: It is important that during the crisis period every department, staff, leaders and management personnel collaborates with each other. The collective effort from the organization will provide better result. 3. Training of Sales Force: CSC Australia must impart quality training to the sales force and let them know about the pros and cons of accepting unlimited liability. In addition, the company should also enlighten the sales force about the highest level of liability capping that the company will be able to embrace. This will allow the sales people to negotiate capably with the clients. 4. Risk Involved: - The Company should notify each of the employees, especially the sales force about the risk involved in accepting unlimited limited liability. As the risks will be known, the chances of such deals will reduce largely. 5. Adequate Resource: - The Company must ensure that it has adequate resource, to implement and handle the best alternative course of action. 6. Implement: - Finally, if all these criteria are matched, the strategy must be put into practise and periodic reviews should be carried out. References Background: What does your organization do and how is it different? 2012. Curtin University. https://mcmaweb01.curtin.edu.au/segment.php?content_id=469&segment_id=7569. Cause: What caused this issue to arise and why is it important? – Law. 2012. Curtin University. https://mcmaweb01.curtin.edu.au/segment.php?content_id=469&segment_id=7579. Cecil, Robert D, and William J. Rothwell. 2006. Next Generation Management Development: The Complete Guide and Resource. New Jersey: John Wiley & Sons. CSC. “About Us”. Accessed December 28, http://www.csc.com/about_us. Gupta, Vipin, Kamala Gollakota, and R. Srinivasan. 2005. Business Policy and Strategic Management: Concepts and Applications. New Delhi: PHI Learning Pvt. Ltd. Introduction to Business: An Approach to Case Analysis. 2006. Acadia University. http://plato.acadiau.ca/courses/Busi/IntroBus/CASEMETHOD.html. Issue: What is an important issue that your company is currently facing? – Law. 2012. Curtin University. https://mcmaweb01.curtin.edu.au/segment.php?content_id=469&segment_id=7578. Monappa, Arun, and Mirza S Saiyadain. 2001. Personal Management. Noida: McGraw-Hill Education. Sundararajan, N. 2005. Effective Business Communication. Chennai: Sura Books. Read More