Case Study: Opportunity to Work

Pages: 7 (1977 words)  ·  Bibliography Sources: 0  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper

¶ … opportunity to work with you on the issue that is facing Coastal Uniforms. The report is attached. Following is a summary of salient points.

Major Issue

After examination of the case it has become obvious that there have been several ethical violations committed by managers of the company. Bonuses were not paid to employees as contracted, fees charged to customers were not elaborated, and employees made deliveries with no customer contact as per contract.

Steps to be taken are:

Determine the responsible parties, and take appropriate action up to and including termination.

Repay customers for un-negotiated fees.

Implement a customer bonus plan that offers discounts on future purchases.

Repay all contracted bonuses to employees immediately.

Rework growth forecast and sales goal structure to take pressure off of employees.

Analysis and Limiting Factors

Because some of the violations were egregious, there may be sanctions imposed by various agencies. This could make it necessary to implement more drastic measures such as bankruptcy. By trying to regain trust with employees and customers, more serious problems may be avoided.

Please feel free to call if there are any questions regarding this report.

Case Analysis

Background

Coastal Uniforms is faced with some difficult decisions based on circumstances both in and out of their control. Although the company has been a model of efficiency and an industry leader for many years, it is now faced with the prospect of lowering revenues and a failing economy. People who have trusted the uniform maker for many years are finding reason to find fault with their business practices and products. Coastal uniform has many issues that it needs to address, and major problems which may mean difficult times ahead for the business.

Possible Problems

There are many issues that Coastal Uniforms is facing; some of them were conditions either of the market or the economy, but other were self-inflicted. This paper needs to cover all potential problems that that company has to deal with in order to conduct an analysis that will be valuable. This section will begin with market or competition driven issues and end with those that the company caused.

When Coastal Uniforms first started experiencing problems with growth of revenue and profit, there was no recession and they had an honest expectation that the company could continue to grow in the manner to which it had become accustomed. Unfortunately, the company must not have conducted a SWOT review. If this had been done then the managers would not have been surprised by the business lost due to increased competition. Coastal Uniforms seemed to believe that they were so large that none of their smaller competitors could challenge them, and they offered superior service which meant that they would continue to thrive in a competitive market. The oversight was predictable with a small amount of planning.

The economy is also an unpredictable force that effects companies such as Coastal Uniforms much more than it does others. The reason for that is that Coastal uniforms supplies a product that is considered unnecessary when budgets have to be cut. Therefore, when the clients that Coastal Uniform relies on started to lose business, and therefore revenue, those companies slashed their uniform budgets which meant that Coastal Uniforms was going to lose a great deal of clients. This loss was, of course, exacerbated by the fact that competitors were already undercutting the costs that Coastal Uniforms had driven up.

The company also has to deliver the goods that it sells, and this means that if there is a rise in fuel costs that will also affect them. The company also requires supplies to make the uniforms, so they have to pay increased prices for those goods. The company has been able to defray some of those added costs by passing them on to customers.

Unfortunately, some of the problems that the company is having are due to poor management of their own business. The company experienced zero growth in 1999 for the first time in company history, and the management at Coastal Uniforms believed that they had to take action to increase the likelihood that they would have growth. Some of these growth efforts may have been responsible for the problems that Coastal Uniforms experienced. There are basically two methods that a company can increase their growth rate. The company can either raise the stakes with their employees, or they can raise the fees that they charge their customers. Coastal Uniforms decided to do both.

After the company experienced zero growth, managers realized that they were going to have to increase sales goals to reverse the trend. Sales employees initially had their sales targets raised by 20% in 2000, and they remained "aggressive" in 2001. The company lost 20% of its sales force, but these people were quickly replaced by people who did not mind the high sales goals. Starting in 2000 the delivery personnel were also asked to take an increasing role in sales. This led the sales staff to start being late to calls, and sometimes leaving product without checking in with the customer. This led to both a disgruntled sales staff and unhappy customers.

The final issue that the company had was that they started to add fees to the customer's bills without first advising the customers that they were going to be charged. The charges are not the issue here; the fact that the company did not remain honest with their customers is. Besides adding fees that were in essence hidden, the company also started using cheaper fabrics. They also reduced the quality of their product by cutting back on the stitching and fasteners which the uniforms previously had. The managers at Coastal Uniforms seemed to believe that as long as they did not tell the customer what they were doing, and the customer did not make an issue of it, then it was not an issue. However, they found out differently. The company began getting bad reviews in publications and they started to lose large amounts of customers.

Major Problem

The biggest issue that the company has is the deceit that they are practicing both with their employees and with their customers. The company has not only forced employees to increase sales goals to untenable levels, but they also did not pay at least some bonuses after the company reached its 35% growth goal. One employee was still owed $20,000 when the case was written. This means that the company is going to lose necessary customers and valued employees due to its questionable ethics.

Recommendations

Coastal Uniforms has made a mistake that could end up costing them a lot more customers, and prevent them from gaining anymore in the future. The solution to this major issue is to go back to the ethics that made them a successful company in the first place. The company must begin a program immediately which will guarantee all people involved (customers and employees) that they will operate ethically going forward. This means that they need to tell all customers about the increased fees that they have begun charging, and they need to make sure that anytime they raise fees there is a good explanation as to why. The increased trip charge was a legitimate business expense that every person doing business is going to understand. Ethics violations could also be investigated by the FCC and other organizations which could shut the company down. By admitting a wrong, Coastal Uniforms may be able to either completely avoid fines or at least minimize them.

The company also needs to make an effort to regain lost trust with employees. Although, it would be difficult for the employees to leave because of the economic downturn that does not mean that they should be taken advantage of. The one employee who claims that he was not paid a legally agreed to bonus has an issue that he could take to a labor review board. It does not sound like the employees are unionized (there was no mention of it in the case), but there are still laws regarding equitable treatment of employees. Not paying wages that are written into a contract is a serious offense.

The solution would have to happen in several different steps. First the company should critically analyze the management staff that made the unethical decisions in the first place. Some of the managers may have to be terminated, but the company can hire from within to alleviate any cost to themselves. Second Coastal Uniforms should make amends to customers by either repaying any fees that were collected dishonestly. They could also give customers deals on the uniforms that they have either just ordered, or the ones that they will order in the future. The goal is to rebuild the trust that they lost, and Coastal Uniforms should be willing to take losses initially to realize gains in the future. After the company has implemented these steps to maintain the customers they have, they should make attempts to retain the… [END OF PREVIEW]

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Opportunity to Work.  (2011, October 25).  Retrieved July 18, 2019, from https://www.essaytown.com/subjects/paper/opportunity-work/3594474

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"Opportunity to Work."  Essaytown.com.  October 25, 2011.  Accessed July 18, 2019.
https://www.essaytown.com/subjects/paper/opportunity-work/3594474.