A few years after successfully launching a new outdoor
advertising business, Sean Richeson found himself
spending 16 hour days running from one appointment to
another, negotiating with customers, drumming up new
business, signing checks, and checking up as much as
possible on his six employees. The founder realized that
his own strength was in selling, but general managerial
responsibilities were very time consuming and interfered
with his sales eff orts. Richeson even slept in the offi ce one
or two nights a week just to try to keep up with his work.
Despite his diligence, however, Richeson knew that
his employees weren’t organized and that many problems
needed to be addressed. For example, he lacked the time
to set personnel policies or to draw up specifi c job descriptions
for his six employees. Just last week, he had been
warned that one employee would sometimes take advantage
of the lax supervision and skip work. Invoices often
were sent to customers late, and delivery schedules were
not always kept. Fortunately, the business is profi table, in
spite of the numerous problems.
Question 1 Is Richeson’s problem one of time management
or general managerial ability? Would it be feasible to
engage a management consultant to help solve the fi rm’s
Question 2 If Richeson asked you to recommend some
type of outside management assistance, would you
recommend a SCORE counselor, a student consulting team,
a CPA fi rm, a management consultant, or some other type
of assistance? Why?
Question 3 If you were asked to improve this company’s
management system, what steps would you take fi rst?
What would be your initial goal?
Jonathan Tandy, owner of a small furniture manufacturing
firm, is trying to deal with the firm’s thin working
capital situation by carefully managing payments
to the company’s major suppliers. These suppliers
extend credit for 30 days, and customers are expected
to pay within that time period. However, the suppliers
do not automatically refuse subsequent orders when a
payment is a few days late. Tandy’s strategy is to delay
payment of most invoices for 10 to 15 days beyond the
due date. Although he is not meeting the “letter of the
law” in his agreement, he believes that the suppliers
will go along with him rather than risk losing future
sales. This practice enables Tandy’s firm to operate
with sufficient inventory, avoid costly interruptions in
production, and reduce the likelihood of an overdraft
at the bank.
Question 1 What are the ethical issues raised by Tandy’s
Question 2 What impact, if any, might these practices
have on the fi rm’s supplier relationships? How serious
would this impact be?
Question 3 What changes in company culture, employee
behavior, or relationships with other business partners may
result from Tandy’s practices?