Case analysis:

AZUCARERA DE SAN LUIS.

Submitted to: Professor Benjamin Sandoval BA 101, Instructor

Submitted by: Alonzo, John Vincent Corpuz, MabelleZinah Cruz, Jonas Miguelito Karunungan, Francis Louie

BA 101 Case Analysis

[AZUCARERA DE SAN LUIS]

Morales, Ralph Paulo Turano, Nikki Marie Vinzon, Ramon Ma.

I.

STATEMENT OF THE PROBLEM How will Carlo implement the said plan without negatively affecting the companys relationship with its employees? *to be rephrased

II.

POINT OF VIEW Carlo Fortunato, the newly appointed president of Azucarera de San Luis.

III.

ASSUMPTIONS (1) Carlo is new in his position. Hence, having no influence over major changes in the company. (2) The Board of Directors decision is final. (3) All modernization proposals will be taken as is. (4) (5) (6) --

IV.

SWOT ANALYSIS

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BA 101 Case Analysis

[AZUCARERA DE SAN LUIS]

Weaknesses
(2) Newly appointed in his position.

Strengths
household manufacturer. (2) Has experienced crises in his previous company. (3) Executive MBA at London Business School (4) Grew up in the place where the Azucarera sugar mill is located. (5) No sentimental attachment with the

(1) Became president of a big multinational (1) No actual experience in laying off employees.

employees.

Opportunities
(1) Innovation in technology in the industry. (2) Industry is very profitable. (3)

Threats
(1) Rising and highly competitive market in the sugar manufacturing industry. (2) E.O #313 Doubling the out-quota tariff

V.

CRITICAL FACTORS OF SUCCESS (1) Increased efficiency and lower costs of production (via ROI) (2) Morale of employees (via productivity and evaluation)

VI.

AREAS OF CONSIDERATION (1) Family-owned nature of the company. (2) Employee bonds. (3) Financing plan and findings given by the external consultants.

VII.

ALTERNATIVES
PROS -Attain all benefits of reduced cost immediately CONS - High risk of employee strikes and low morale EXPECTED OUTCOME Best: Operations will continue; All savings from investments will be fully realized 2

ALTERNATIVES a. Immediate Layoff

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BA 101 Case Analysis

[AZUCARERA DE SAN LUIS]

- Bad image and company standing - High risk of employee strikes and low morale, especially from workers in transport sector - Will not immediately reap the benefits of proposed modernization Worst: Occurrence of strikes; Halt in operations Best: Highest savings and profits Worst: Inefficiency in transport sector, which would result to slowdown or possibly a halt in operations Best: Employees would easily accept the change; No employee strikes Worst: Slowdown production processes

b. Gradual Layoff (Based on ROI)

- Get the highest amount of ROI among the proposed investments

c. Gradual Layoff (Based on no. of workers)

d. Gradual Layoff (Based on complexity of implementation)

- Has least effect on employees morale - The first layoff will serve as an efficiency test on the planned course of action - Ease of implementation because of less distortion in production process

VIII.

RECOMMENDATIONS
DECISION (Y/N/Modify) No Modify

ALTERNATIVES (Programs) a. Profit Sharing b. Dialogue

OBJECTIVES N/A Were the clamors of the employees addressed fairly by management? Were the goals initially set by management (profit, teamwork, leadership, etc.) achieved? Is the project implemented effectively? Is the project implemented fairly? Does it empower the employees, or hinder their development? Does the added knowledge on technology really aid in top management decision-making? Do the seminars improve well roundedness? N/A

RECOMMENDATIONS

c. Casual Day d. Bayanihan Awards e. Reverse Mentoring f. Other Innovative Training Seminars

Yes Modify

Yes

Modify

Push through with the Basic and Topmanagement level forums but modify the one-on-one interviews into Direct Leader-Subordinate performance and satisfaction evaluation. Implementation should be executed even to the top-management. Budget should be lessened and prizes should not be non-monetary (e.g. travel packages). Optimal scheduling should be made so as to compromise the time for work of both manager and employee. Surveying should be done to be able to know which topics would be value-adding and interesting to the employees 3

|Alonzo|Corpuz|Cruz|Karunungan|Morales|Turano|Vinzon

BA 101 Case Analysis

[AZUCARERA DE SAN LUIS]

There are a number of ways Patricia Lim can tackle her problem. The first is to really convince the Board of the effectiveness and the necessity of her proposed programs - as they have the potential to lessen the problems that the company is experiencing as she sees them. The company is, without a doubt, strong in terms of the size of its workforce, but its high employee turnover rate and the weakening of its managers morale will prove to be detrimental to the company. Her programs are necessary to give employees additional incentives to stay in the company. They will help keep the hardworking employees in the company rather than them making it only a springboard to other companies. Programs like the Bayanihan award can give employees the idea that they do have a future in the company. Reverse Mentoring and Dialogue will improve the companys internal communication, and in turn, foster equality, efficient relay of information and reform the companys hierarchic nature. If Patricia can find that perfect balance between introducing groundbreaking innovation and keeping the companys well-kept tradition, she will surely be able to convince the board to implement her proposal. Patricia will be able to sell her ideas to the Board by striking the idea of expansion. Since she knows about the current status of the company as well as the rapidly-changing industry environment, she can tell the board about the opportunities of using technology in the increase of competitive advantage of the firm. If this opportunity would be capitalized upon, the firm will be left in the dust by the emerging firms who are employing technological innovations. One main problem in Patricia Lims case, though, is that the outcomes of her proposed projects normally cannot be measured quantitatively. Her projects are aimed not on increasing profits per se, but rather, on improving employee relationships to lower employment turnover and increase productivity to

|Alonzo|Corpuz|Cruz|Karunungan|Morales|Turano|Vinzon

BA 101 Case Analysis

[AZUCARERA DE SAN LUIS]

properly utilize the employees capabilities. Investments should therefore be in the people, in the technology and in arising opportunities. The best way to quantify the results of her projects is by setting initial goals and objectives (see chart above), then measuring its success by conducting surveys at the basic level and evaluations at top management level. From this evaluation, Patricia could then pick out the programs that are most effective, alter them when necessary and implement them fully.

RECOMMENDATIONS - Highest ROI change: regarding transportation (26.8%), next is increasing boiler capacity (19%), last is milling and steam (17.5%). Based also on complexity of task, of decreasing complexity: (1) Transportation; (2) Milling and steam; (3) Boiling House. - How to lessen the chances of union? - Criteria for retaining employees: a. Productivity measured thru evaluation b. At least one person to be retained per family - Diamond framework on how to buffer before you say something chever - Attractive retirement benefits coupled with livelihood programs - Salami method on how to separate by groups your audience - Pre-wiring: introduce the topic before speaking to a larger audience

FURTHER RECOMMENDATION |Alonzo|Corpuz|Cruz|Karunungan|Morales|Turano|Vinzon 5