Short Case Scenario 8-1

question 93

Essay

Short Case Scenario 8-1
Bridget Jones has been the manager of the research office at her company for over a year. She is beginning to wonder if she will ever be comfortable in this role. Her employees seem dissatisfied and are not working their hardest. Bridget leaves work most days feeling that there must be a better way to manage.
Remembering the lessons of the Hawthorne studies, Bridget works hard to praise her employees regularly. The work that her employees do is relatively interesting and there are considerable opportunities for advancement and growth. Bridget holds regular staff meetings to get input from her employees before making decisions. In spite of these efforts, Bridget's employees seem to be dissatisfied.
At the company's annual meeting, she runs into Cliff Richards, her predecessor in the job. She shares her frustrations and asks him for advice. Cliff says, "Management is simple-people are naturally lazy and uncooperative. To make them productive, they must be punished for negative behavior and rewarded when they work hard." Bridget finds this hard to accept, but replies with "Thanks for the advice, Cliff. I'll think about what you've said."
-How could Bridget implement MBO? What benefits might she expect from this approach?

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Definitions:

Net Present Value

A valuation method that calculates the difference between the present value of cash inflows and outflows over a period, used to assess the profitability of an investment.

Accounts Receivable Approach

A method for estimating uncollectible accounts based on outstanding receivables, which can impact a company’s financial analysis and credit management policies.

Monthly Interest Rate

The interest rate for a particular period of one month, often used to calculate the interest due on a loan or mortgage.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as materials and labor.