The history of Biotech can be traced back to 1922 when Barney took over Ulan’s apothecary shop and renamed it Burney Apothecary. Many changes have taken place since that time with the opening of a manufacturing plant in 1932, production of Night relief in 1936 and changing the name to Barney Elixir and Life Plants. The company continued expanding over the years and by 2000 its sales volumes had reached 1.1billion. In 2002 it controlled approximately 20% of the market for supplement business which had close to $20 billion in sales. Biotech has continued to expand its operations in the global market. This paper examines the use of management functions of organizing, leading and controlling in Biotech in its Boomer project which intends to produce three different products with the first one being a pill that has the potential to reduce blood sugar levels. The paper will examine the different functions from the perspective of Luis Montego who is the head of the project.
Organizing
This is a process of developing an organizational structure including the allocation of workers to achieve the desired objectives. Establishing a structure will help an organization to coordinate its efforts. From the case scenario, organizing involves designing individual jobs in the firm. It involves decision making on the activities that must be carried out to produce the pill. It also includes the manner in which the jobs should be carried out and therefore Luis will be engaged in job design decisions. He will have to design the job in a way that guarantees maximum use of the employees. It is at this point that Luis should strike a balance between jobs that will demand specialized employees and those that will require autonomy and variety. Managers are trying to design jobs based on job enrichment, empowerment, and teamwork.
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From the Boomer Bangs project, Luis Montego from the New Mexico Branch is tasked by the management to lead the project of producing the pill that helps reduce blood pressure. Luis is to serve as a model for the entire organization where the product will be rolled out concurrently. Some of the areas related to the organizing process that need to be addressed include new technology, the layout, labor, inputs, production cost.
The production of the new pill requires that the company obtains new technology for the production process. Luis estimates that a new production line will be required for the new product. Similarly, two conveyor belts will; be required for the process. Additionally, the production floor according to the scenario is inadequate for the planned activities given that all branches have a similar setup. Space is inadequate for the production process as estimated by Luis where an additional 200 square feet is required. The current set up must be rearranged allowing for the production of the pills.
Technology, in this case, is a critical issue with the production of the pill. It includes things like machinery, production lines, and the conveyor belts. Technology will also involve other issues like computer systems if any and testing equipment. The plant layout should take all these issues into account. Current technology and potential additions in the near future must be considered to avoid cases of disruptions and demolitions to accommodate the machinery that is to be acquired by the company.
Factory layout is another issue that needs serious consideration. The space according to this scenario is inadequate for the production of the pill. Luis must consider possible options that will ensure that the entire process runs smoothly without causing any complications or congestions. It is evident that 200 square feet of additional space is required for the company to start manufacturing the pill. It is desirable that the facility should be up and running before it can be replicated in other branches. Therefore it should accommodate the production line, the two conveyor belts, any other machinery adequate working space and storage location. The relocation of some of the machinery and line setup will help to create some space for the production line and the conveyor belts. However, Luis can decide to hire more space for the new production line given that trying to fit a new line and conveyor belts will congest the current facility. Additionally, the pill must be produced away from direct sunlight and also it should be stored at low temperatures. Decisions on factory layout are very important as they will affect the productivity of the employees, determine space requirement and help to prevent any forms of occupational hazards. They also help in the cleaning and routine maintenance of the facility.
Labour is an important consideration for Luis given that the new pill requires additional manpower to manufacture. According to the scenario, additional personnel will be required. There will be a trained pharmaceutical machine operator who will be working during the day and two operators who will work at night. According to the case, a trained line worker earns an additional $3 per hour compared to the untrained worker. The new workers will also need to be supervised so that they can achieve the desired output. The floor staff might be restructured depending on the needs and performance of each staff.
Another issue in the case is about the raw materials for the pill. The key ingredients are sourced from India where one of the ingredients Chinaberry is difficult to obtain. Such challenges are likely to affect the cost of research and development. The difficulty in obtaining the ingredient will affect the production cost for the pill. Raw material plays an important role in the manufacture of a product. They determine the ultimate costs of a product as they form part of the input cost. Managing the costs will boost the revenues of the business.
The case scenario raises issues of cost of production. From the data, the cost of research and development is likely to increase due to challenges of shipping Chinaberry from India. Similarly, Luis is estimating that the additional labor cost and the cost of the rare Indian ingredient raises the production cost for one bottle which contains 60 pills to $5.75 including the packaging.
Research and development is the final issue identified in the case. The case states that the R&D cost is likely to increase by $0.075 per pill. Research and development are used by organizations to innovate. The ability to produce new products enables an organization to compete as new products gives it an edge over competitor's products. Companies invest heavily in research and development to be able to identify new ways of doing things, new products and new market segment. It is, therefore, appropriate to focus on research and development as lit gives the company a competitive edge over companies producing similar products.
All areas need immediate attention as they are related to each other. Luis can start by reorganizing the factory floor in preparation for the new production line and two conveyors. Similarly, he needs to recruit the appropriate workers and to purchase the new production line. He also needs to procure for the raw materials so that they can be readily available when production commences. Throughout the entire process, Luis will be conducting a cost-benefit analysis to determine the viability of the projects and to ensure that expenditures are within the projected range. Similarly, Luis must ensure that the current operations of the company are not affected by the realignment of the activities.
Leading
From the case scenario, the employees are demoralized because Biotech promises to keep people in the biotech family. The company encourages employees to engage in additional training to improve their skills and professional qualifications. Employees who advance their careers receive financial assistance from the company as long as they are willing to advance their career opportunities in Biotech. Older employees realized that their well-trained line workers earned $3 more per hour than they did. The employees were unhappy as they felt that the company was only misusing them and by hiring from outside rather than training the existing workforce which is willing to take over the jobs and earn additional income. Employees started to show concern and it was evident that some were unwilling to contribute to the common goal of the company. The cause for the outcry by older employees is because they have not engaged in career advancement activities like training for new skill. The younger generation which is well trained earned more than the older employees. It a fact that older employees did not take advantage of the opportunities offered by the company by not attending professional training which was paid for by the company. The low morale of the employees is a serious issue that needs to be addressed by the management or else it will blow out of proportion. According to the older employees, the company is favoring outsiders to those who have worked in the company for a long time despite the fact that they lack professional qualification
Luis has an uphill task of trying to motivate his employees to build their morale. Even though Luis cannot guarantee a pay hike, he can demonstrate leadership skills by talking to the employees and showing interest for their concerns he should be open to the employees and allow them to voice their concern in a constructive way. Luis should not promise employees something that he cannot deliver but by understanding the concerns of his team, their morale is likely to be boosted. Luis should also promote open communication within the team. Through communications, he can understand the plight of the employees and establish mechanisms for dealing with employee issues as they emerge. Luis should give the employees a reason to believe by focusing on the vision of the company. He should also show that he cares by relating with the employees beyond the normal day’s work by being involved in the life of the employees not only as a boss but also as a friend and family. Any good should be recognized and Luis should try to use fringe on each employee and he should also encourage employees to play together. Luis should also promise to follow with that human resource department and ensure that the issues raised by the employees are addressed by the human resources. Luis should encourage the older employees to identify professional courses that they can study to benefit from increased wages for the trained category. He can encourage the employees to enroll in the local institutions as part-time students and therefore can continue learning while still engaged at work. As a leader, Luis should try to engage the human resources so that they can develop another program for example share ownership plans which gives the employees an opportunity to own some shares in the company and therefore are likely to be motivated as they are aware that a part of the income will also benefit them. Luis can also propose a new program that also focuses on the experienced yet lowly educated employees. Such a program should identify mechanisms in which the lowly paid employees can befit more for example by raising the minimum pay or harmonizing the pay for the two categories of worker. The latter initiatives are long-term and require the input of the management and the human resources department. Luis should not wait unlit the human resource has dealt with the issue but can use nonmonetary motivators like recognition and establish an award for the best employee in the department. Similarly, he can develop tasks that must be handled by groups to encourage group work and team spirit. He can also organize for a retreat for all employees to allow them to bond from outside of the work environment. Lastly, Luis should stress to the staff that the ultimate objectives of all employees including top management are to achieve the desired goal.
One critical factor that can interfere with Luis attempt to build moral is the inequality between different groups. The older employees see the young and more educated group as different and not deserving the high wages. Bringing trying to motivate the less experienced employees may be difficult in that they have already developed a negative perspective against the other group. It can be difficult to address the differences between the two groups given that the older employees blame the professionally trained subgroup accusing them of their current situation and inability to rise up the corporate ladder. Inequality can bring resentment and hatred for a group of employees. It can be serious issues that will continue affecting the organization unless the root cause is addressed. , both groups will start a blame game where the older will see the young generation has taken over its opportunities yet the younger staff will blame the older employees for being lazy and content with their state.
No matter how much effort Luis place on enhancing the morale of the two groups, he cannot achieve this objective because there are serious underlying issues that remain unresolved. Luis will, in this case, have to identify a different approach to address the issue before his effort can bear any meaningful results. Luis must be aware of the impact if the issue on the wellbeing of the company and if the situation is beyond some levels, he should request for an urgent meeting with the top management and the human resources department.
Controlling
Controlling in this scenario compares the standards and the actual output to determine any variances in the data. Most of the data shows that the cost per 60 pill bottle is different in the five branches. The standard cost was $5.75. Three branches produced at lower costs than the standard. The three are Wittlich, Los Lunas, and Sao Paulo. Detroit and Melbourne had high cost compared to the standard. The time taken also differed for each branch with Los Lunas recording the lowest time. Detroit recorded the highest time of 7.46 against the standard of 7.36. The standard for quality control problem ratio for 500 had a standard of was 1 yet the outcome was from 1.5 to 4.75 Wittlich had 1.5 followed by Melbourne then Detroit at a distance four and Sao Paulo had the highest values. On shipping problems and 10,000 b0ttles, the standard was1 but the actual values ranged from 0.148 for Wittlich to 1.178 for Sao Paulo. The rest were 0.22 for Detroit and 1.133 for Los Lunas and 1.51 for Melbourne. The total number of bottled produced by the different branches are as follows; the standard was 400, 000 however, Sao Pauli made 401000 followed by Detroit at 500,000 followed by Wittlich at 600,000 followed by Los Lunas. Melbourne produced the largest number of bottles produced in that year.
From the table, it is evident that the results are different from the standard. There are problematic areas that performed against the standards. Luis should investigate any adverse results from the company performance over the last year and take corrective actions. The following should be investigated for performing dismally. There were cost overruns in Detroit. Similarly, the branch had issues with time as more time was used than the standard. There was also a similar case with Melbourne. All the branches had quality control problem ratio per 500 bottles which were more than the standard. The shipping problems or damages per 10,000 bottles were more than the standard in Los Lunas, Sao Paulo, and Melbourne.
Areas that showed positive results include cost per 60 pill bottle which reported prices that were lower than the standard in four branches; Wittlich, Los Lunas, Sao Paulo and Melbourne. Time was also favorable in Wittlich, Los Lunas, Sao Paulo and Melbourne. Shipping problems or damages per 10,000 bottles had less than standard figures in Wittlich and Detroit. All branches reported more than the standard number of bottles required in a year.
Corrective Actions
Arthur Mike should take corrective actions once the causes of the favorable and unfavorable outcome are known. There are many explanations that can be given to explain the above results including the management style, economic conditions, demand, supply, machine breakdown, unrealistic target or low target that could easily be hit. A proper investigation should, therefore, be done to unearth the cause for the outcome and then appropriate actions can be taken to avoid the occurrence of the issue. If the targets are found to be low, they can be scaled up to motivate the employees to continue working hard to hit the target.
Report on Potential Concerns
Boomer 1 was successfully accepted and rolled out after it was presented to the strategic planning committee. The first product from the project is a pill that has the ability to reduce the blood sugar levels. According to market information, the pill is likely to be the most successful of the three products in the project the reason why it is the first to be rolled out. Luis Montego from Los Lunas branch is the leader of the project and was to serve as a model for organizing to be copied by other branches with the expectations that the rollout will be concurrent. There were issues identified in the initial stages on the factory floor and the need for additional production lines that required changes in the current set up. Space was identified to be an issue with an additional 200 square feet needed for the additional line setup and two conveyor belts. Additionally, machines will have to be relocated as the new pill needs to be produced away from direct sunlight and also storage must be at low temperatures. Newly trained personnel will be required for the project. The project will also require a supervisor and the factory floor staff could be rearranged. The Pill uses four major ingredients which are sourced from India.
Key Issues from the Branches
According to the initial production, there is a general view that the company should go ahead and produce the pill. However, there are issues with inadequate space on the production floor. The quality of the pill and was negatively affected by excessive heat in the plant. All managers also met the standards. There were morale issues in three branches as older employees wanting to be trained to benefit from the high hourly pay for the line jobs.
Conclusions
The following three issues will have serious repercussions for long-term survival of the project and the entire company; there is inadequate space on the production floor for the manufacture of the pill. Space is critical to the success of the project given that it determines the placement of the production line which affects the productivity of the plant. Quality control is also another issues as the heat in the current facilities affect the quality of the pill given that it needs to be stored in cool conditions. The third issues are morale problems from older employees who want to be trained to take o new positions that pay higher wages. Lack of morale will affect the productivity of employees and the entire organization in general.
The control process and long-term planning are two different concepts but with many similarities and interconnections. Planning comes before control but control succeeds planning and the two are inseparable
Recommendations
The company should expand its factory flow as this will address the issue of limited space and quality control as heat will no longer be an issue. Secondly, the management should address its compensation program to ensure that older employees do not feel like they have been left out.
