As Director of New Projects, You Have Just Learned That

question 156

Essay

As director of new projects, you have just learned that cash flow problems have forced your organization to cut back product-development activities. This means that two of the eight projects currently being developed must be terminated, along with the employees working on those projects (about 25 per cent of employees in your unit). You have a good knowledge of these projects as well as the performance and seniority of employees who work in your unit. While some projects clearly have a high chance of success, the long-term potential of a couple of them is unknown. Identify the best level of employee involvement in this situation and describe three factors (contingencies) that support this level of involvement.

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Definitions:

Consideration Transferred

Refers to the payment made by a buyer to acquire assets or services, which can include cash, assets, or other financial instruments.

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in a current transaction between willing parties.

Net Assets

The total assets of a company minus its total liabilities, reflecting the company's financial position at a specific point in time.

Acquisition

Taking over another corporation by buying out its equity or assets.