Case 4.

JONA CAR RENTAL: Before the Next Teardrop Falls (Page

66-67)

For fourteen months, Mr. Jose Naguimbing acted as general manager of Jona
Car Rental. The company has branches in Angeles City, Olongapo City and
Baguio City. The main office is located in Makati City. Jose succeeded his
brother Pedro who founded the company and was well-liked by his
subordinates. The car rental company was very lucrative when Pedro left it to
establish another business. Jose was very enthusiastic during the first few
months of his stewardship. At the fifth month, his staff members began
losing confidence in his abilities to run the firm. One time, when a purchase
order for three units of Toyota car was presented to him by the office
manager for his signature, he signed it immediately. The manager filed the
order with a dealer on the same day. The next morning, however, Jose
instructed the office manager to cancel the order. He also directed the
manager to buy three units of Mitsubishi cars from a dealer. When the
position of branch manager for Angeles City became vacant, he appointed
someone whom his immediate staff thought to be the least deserving of the
three candidates. After three months, his staff members were proven right:
the revenues of the branch was drastically reduced. Compared with a
competitor in the area, the performance of the branch was dismal. When Jose
decided to establish another branch he asked his staff to identify three
potential sites for him to choose from. He picked Laoag City. It turned out
that Laoag has the weakest potential. In contrast, the competitor who put up
a branch in Santiago City in the same year was registering substantial
revenues. Santiago City was one of the potential sites forwarded to Jose for
consideration.
QUESTIONS:

1.) What would you suggest to Mr. Jose Naguimbing to improve his
performance?

Answer: I suggest to Mr. Jose Naguimbing to follow the decision-making

process to improve his performance. If he follows the right process he will
never failed again in making decisions for the company. For example, in
choosing the right place for his another branch, he will not going to pick
Laoag rather than Santiago City because in decision-making process it
includes analyzing the environment. If he analyzes the environment properly
he will know that Laoag has the weakest potential to make his another
branch to be successful.
 2.) Is there anything that Pedro missed when he allowed his brother Jose
to succeed him? What should have been done by Pedro before leaving
the company?

Answer: Pedro missed to consider his brothers capability in running the

company. He shouldve taught first his brother about decision making and
some techniques to do for the companys benefit, before he leaves the
company.

Case 5. CAMELOT RECORDS: Those Were the Days (Page 82-84)

Mr. Miguelito Salde worked very hard as salesman of recorded music. He

represented a company which distributes compact discs and cassette tapes
with foreign labels. For about ten years, he personally called on dealers in
Metro Manila and the provinces to convince them to buy his products. His
exposure to the industry provided him with the right mindset to establish his
own recording outfit. With his mind working, Miguelito hatched a plan on how
he will go about operating his own company: the Camelot Records. In
addition to his knowledge about the market, he collected information on the
production aspect of recording. The plan and the required information were
all stored in Miguelitos memory. Later, Miguelito mentally prepared a
financial plan, as well as a personnel recruitment program, no matter how
crude they are. When he thought that his business plan is complete, he
began to implement it with the required speed. He worked systematically by
following a procedure he alone knows, and explaining to his recruits the
exact functions of each of them. Within a few months of operating, the
company was able to produce two long playing cassette tapes and CDs with
recordings of original Filipino music. Local singers and composers were
tapped. The market received moderate response. Miguelito went on
producing more recorded music until one of the first ten albums became a
commercial hit! This feat catapulted the company to recognition by the
industry. The companys commercial hits were followed by other hits in
succession. All of the successful moves of the company were made without
the benefit of a written plan. What Miguelito did was to personally supervise
all activities from hiring talents to providing directions to salesmen. This he
did vigorously with the companys total workforce of 51 employees. As the
company grew with more productions and more than 200 employees,
Miguelitos immediate subordinates are getting worried that their boss must
be feeling the burden of a workload that is getting heavier as the years pass.
The staff feels that their leader must begin to delegate some of the
responsibilities to qualified persons. They thought that to be fully organized,
a written plan must be devised so every employee could effectively assist in
implementing the various projects of the company. When the staff mentioned
to Miguelito about the importance of a written plan, Miguelito replied by
saying: This company was organized without written plan; it became
successful without a written plan; it will continue to be so without a written
plan.

QUESTIONS:

1.) How sound is Miguelitos arguments?

Answer: I think Miguelitos arguments has a point too because it is true

that the company was organized without a written plan and it became
successful. So theres a chance that he can still continue running the
company without a written plan, but his perspective should only implement if
he has a small company.

2.) Assuming that Miguelito will welcome suggestions, what will you say to
effectively counter his arguments?

Answer: Now that his company has grow, I think he should make a
written plan for his company to be fully organized because he cant control
and organized the company by himself, he need the help of a qualified
person to do it. He need to make a written plan so that his employees will
know their functions and obligations for the company. In a written plan all the
employees will also know what to do to achieve the desired situation of Mr.
Miguelito. So the written plan will really help Mr. Miguelito to continue
running successfully his company.

Case 6. HILLBILLY CABLE COMPANY: All Kinds of Everything (Page

107-108)

The adjoining towns of Gapan, San Isidro, and Cabiao in Nueva Ecija were
identified by Mr. Rodolfo Fajardo as the right area for the proposed company:
the Hillbilly Cable Company. Together with two other former classmates,
Efren Puyat and Lamberto Buluran, they were able to raise more than P1
million as initial capital. The trio initially determined the market and technical
feasibility of the project. They were satisfied with their findings. The last
aspect that they will have to work out is the organizational set-up of the firm.
 The partners agreed that the structure will depend on the various activities
inherent to the firm. So, they sat down and prepare a list of the activities
involved which are as follows:

1. Soliciting subscriptions
2. Installing cable connections to the subscribers homes
3. Billing subscribers
4. Bookkeeping and related matters
5. Procurement of transmission rights
6. Actual operation of the network
7. Receiving payments from subscribers
8. Repair and maintenance of facilities
9. Disbursement of funds
10. Coordination of the various activities
11. Securing the office and transmission facilities
12. Typing and filing
13. Delivering subscribers bills
14. Driving the service vehicle of the company

The partners want to produce an organization chart and job descriptions of

the various positions that will e identified. However, they find it little difficult
to begin drawing the chart.

QUESTIONS:

1.) If you were assigned to draw the organization chart of the firm, how
will it appear?
PRESIDE
Answer:
NT

-RECEIVING - - - -ACTUAL -SOLICITING

PAYMENTS PROCUREME BOOKKEEPI DISBURSEMEN OPERATION SUBSCRIPTIONS,RE
FROM NT OF NG AND T OF FUNDS- OF THE PAIR
SUBSCRIBE TRANSMISSIO NETWORK- &MAINTENANCE OF
RS- N RIGHTS- -BILLING FACILITIES,COORDI
SUBSCRIBERS - NATION OF THE
-TYPING INSTALLING VARIOUS
AND CABLE ACTIVITIES,SECURI
CONNECTIO NG THE
NS TO THE OFFICE&TRANSMIS
AREA 1 AREA 2 AREA 3 AREA 4 AREA 5 SUBSCRIBE SION
RS HOME- FACILITIES,DELIVER
ING SUBSCRIBERS
BILLS,DRIVING THE
 2.) How would you divide the organization into units? What units will be
formed?

Answer: I divided it using the Hybrid Design, combination of divisional

units and functional departments located at corporate headquarters. The
units that formed are Sales, Legal, Audit, Finance, Production, and Human
Resources.

Case 7. LIGHTHOUSE INSURANCE COMPANY: Help Me Make It

Through the Night (Page 125)

The Lighthouse Insurance Company was founded in 1970. It is engaged in

selling non-life policies specifically those related to fire and allied lines, motor
car, marine, personal accident, bonds, and miscellaneous lines. The company
is a stock corporation with 51 branches all over the Philippines from Northern
Luzon to Southern Mindanao. It employs a total of 305 employees manning
the head office in Makati City and all the branches. The companys Human
Resource Department is composed of five employees including its head, Ms.
Emerenciana Soriano. The department maintains a file of the companys
record of personnel who are trained at the head office from one week to one
month. When the position of branch manager (BM) becomes vacant, the
general manager pulls someone out from the Marketing Department to fill
the vacancy. The performance of new branch managers is lackluster in the
first few months. After a year, either their performance improves, or they fail
totally. When a BMs position becomes vacant, the HRD immediately
coordinates with the Vice President for Marketing and without much fuss,
facilitates the transfer of the most senior of the eligibles to assume the BMs
post. This year, the vacancies for the BMs was unusually higher than last
year. Last years vacancy for BM consists of only one and it was immediately
filled up. At the beginning of the third quarter of this year, six vacancies have
already occurred of which only three could be filled up. After five months, still
no suitable replacements could fill the other three vacancies. Ms. Soriano is
now thinking of the best move to solve the problem.

QUESTIONS:

1.) If you were in Ms. Sorianos position, what will you do?

Answer: If I were in Mrs. Sorianos position I will open a big hiring for the
position of the branch managers to solve the problem. I will recruit and select
qualified persons for the job and before they work for the company I will train
them properly to have a consistent and productive employees/branch
managers.

2.) How could such embarrassing situations be prevented from

happening?

Answer: To prevent such embarrassing situations from happening, Mrs.

Soriano should give monetary rewards or promotions to the branch
managers and other employees if they did a good performance. In such way
she can motivate the persons to have a good performance and to stay longer
with the company.

Case 8. JUPITER DRUG CORPORATION: Crying Time (Page 142-143)

Ms. Justina Concepcion has been working for the past three years as branch
manager of Jupiter Drug Corporation in Cabanatuan City. As branch manager,
she oversees the operations of five stores located in different parts of the
city. The stores open at 8:00A.M. Each store is manned by a store manager
plus nine other employees consisting of an inventory clerk, a cashier, a utility
boy, and six salespersons. Ms. Concepcion has the full authority to hire and
fire any employee within her branch except the store managers. It was one
morning when she was browsing on various documents forwarded to her,
that she noticed four letters of resignation. The letters were prepared by two
cashiers and two salespersons. She thought that she must act quickly on the
resignations. The letters indicated reasons that she finds hard to accept. One
employee stated that he is resigning because he would attend to the needs
of the family farm. With Ms. Concepcions experience with the company, one
resignation per year is considered normal, but four resignations in a month is
too much, she thought. She immediately contacted a trusted employee to
seek out the real reasons. She found out that the two cashiers made a
written request two months earlier about swapping assignments with one
another. They said that once approved, their new assignments will bring
them within walking distance of their residences. One of the salespersons
resigning indicated that she was confused in doing her job. Most of her time
is spent on entertaining customers, but at other times, she is ordered to
perform bookkeeping functions. When she was reprimanded by the store
manager for logging in the lowest sales records, she filed her resignation.
The other salesperson resigned because he thought the store manager was
unfair to him when an amount equivalent to three days absence was
deducted from his weekly earnings. The salesperson objected by saying he
only made one day absence on account of illness. The store manager,
however, was not convinced. Ms. Concepcion is now considering the moves
she will have to make.

QUESTIONS:

1.) What possible communication errors may have been committed by the
branch manager? By the concerned store managers?

Answer: * The possible communication error that may have been

committed by the branch manager is that she did not properly
communicated and explain well the responsibilities and obligations of her
employees, thats why one of the salesperson was confused in doing her job.
A proper understanding of responsibilities is a function of effective
communication. A person will perform according to what she perceives she is
supposed to do.

There are also physical barrier between the branch manager and the two
cashiers because Mrs. Concepcion found out that the two cashiers made a
written request TWO MONTHS EARLIER about swapping assignments with
one another. She didnt able to provide feedback maybe because of physical
barrier. A communication channel that is overload may also prevent
important information to reach the intended user. While, the possible
communication error that may have been committed by the concerned store
manager is that there is a personal barrier between the store manager and
the other salesperson. People with different values will find it hard to
communicate with each other. Poor listening habits of a receiver (store
manager) frustrate the communication efforts of the sender (salesperson)
thats why the salesperson decided to resign.

2.) What measures must be instituted to prevent the recurrence of such

problem?

Answer: To prevent the recurrence of such problems the branch manager

and the store manager should learn from their errors. They should also do
the following:

Use feedback to facilitate understanding and increased the potential

for appropriate action
Repeat messages in order to provide assurance that they are properly
received.
 Use multiple channels so that the accuracy of the information may be
enhanced.
Use simplified language that is easily understandable and which
eliminates the possibility of people getting mixed-up meanings.

Case 9. INDIANA SALES: Skyline Pigeon (Page 160-161)

Five years ago, Mr. Narciso Cortes was hired as salesclerk by Indiana Sales, a
firm engaged in retailing and financing motorcycle sales. He was the first
employee recruited by the newly assigned manager of Santiago City branch.
When Mr. Cortes was hired, the branch was only one week old. Within five
years, the branch has a full complement of twenty persons including the
branch manager, a cashier, a credit and collection supervisor, a sales
supervisor, and a parts and services supervisor. Mr. Cortes record as
salesclerk was commendable and the branch manager was considering him
for promotion as sales supervisor. The salesclerks job consist of entertaining
inquiries from prospective customers. If a sale is made, he prepares the
various documents required including the deed sale, invoice, and receipt.
The sales supervisor, on the other hand, is responsible for overseeing the
activities of the salesclerk, the utility boy, the driver, the records clerk, the
documents clerk, and the stock clerk. Oftentimes, the sales supervisor has to
leave office at 8:00 PM due to the requirements of the job. Mr. Cortes
indicated to the branch manager that he is happy with his job as salesclerk
and he does not aspire to have bigger responsibility. The branch manager,
however, was very insistent, and he informed Mr. Cortes that next month, he
will be replacing the current sales supervisor who will be promoted as branch
manager and will be assigned to another area. Since the announcement of
the impending promotion, Mr. Cortes behavior began to change. Although
the reports he previously prepared were error-free, the ones he is currently
accomplishing are filled with some mistakes in computation. His perfect
attendance record is now marked with a few absences. He easily gets
irritated when customers ask a lot of questions. The branch manager is
perplexed and is now pondering on the wisdom of pushing through with the
promotion of Mr. Cortes.
QUESTIONS:

1.) What could be the reason for the change of behavior of Mr. Cortes?

Answer: I think the reason why Mr. Cortes suddenly change his behavior
is because he doesnt want to be promoted as a sales supervisor. If he
disappoint the branch manager about his change of behavior the branch
manager might change his decision about the promotion of Mr. Cortes.

2.) If you are the branch manager, what would you do?

Answer: If I were the branch manager, I will try to convince/motivate Mr.

Cortes to accept the promotion by giving him rewards to improve his
performance, but if he still insist to reject the promotion, I will respect his
decision. I will not pursue to promote him as a sales supervisor because if I
do, he might not perform well as a sales supervisor and it will affect the firm.
In order to have a good performance Mr. Cortes should have the willingness
to do the job, unfortunately he doesnt have that willingness; so as a branch
manager, I will not continue to convince him if he really dont want the
promotion.

Case 10. KOOKABOORA CONTAIINER CORPORATION: Maybe

Tomorrow (Page 177-178)

When the Clark Special Economic Zone in Pampanga opened its gates for
investors in light and medium industries, the Kookaboora Container
Corporation (KCC) was among the first ten companies to locate in the zones
premises. KCC manufactures containers of various shapes and sizes which
are used by manufacturers of industrial chemicals, food products, cooking
oil, motor oil, and others. The production department of KCC is headed by
Engineer Nicolas Aisporna, a licensed mechanical engineer. He is a tickler for
discipline. When even small mistakes happen in his department, he
personally calls the offending employees and metes the appropriate penalty.
As a result, his department was judged best in efficiency. Very minimal
wastages in materials and time were recorded by the department. Under the
direct supervision of Engineer Aisporna are 10 supervisors who are graduates
of engineering courses and with an average of three years work experience.
Ten workers report to a supervisor. All of the workers are high school
graduates. All employees including the supervisors and the workers are paid
on a monthly basis. The workers, however, are required to produce a
minimum number of units per day. During slack-seasons, workers are
engaged only from 50% to 75% of their normal working hours due to lack of
sufficient job orders. No worker is laid off by the company and everyone
receives full pay. This is so because of the strong recommendation made by
Engineer Aisporna to the top management. Slack seasons last up to three
months. At the fourth month, job orders begin to pour in and everybody
starts to cover 100 % of their working time. On the seventh month of the
current year, orders were received at more than the normal capacity of the
company. For the first time since the company began operating , the
department will be required to work overtime. No additional compensation
will be given except for free meals in the evening. When Engineer Aisporma
called the departments entire workforce to a meeting, he explained the
importance of accepting the additional orders and working on them on
overtime. He said he is expecting everybody to lend a hand in the additional
effort. When he asked for comments, only one indicated his availability.
Engineer Aisporna could not believe the cold response of his subordinates. As
the hours pass by, the anger felt by Engineer Aisporna gets deeper and
deeper and he thinks he can no longer contain it. He was thinking aloud:
What kind of people are these? During periods of less work, they are not laid
off; and they dont think of it as a favor! They could not reciprocate
management kindness!

QUESTIONS:

1.) What is it that Engineer Aisporna failed to recognize in this case?

Answer: I think Engineer Aisporna failed to recognize in this case is

employee orientation. A leader is said to be employee-oriented when he
consider employees as human beings of intrinsic importance and with
individual and personal needs to satisfy. Theres a reason why only one of his
employees indicated his availability, maybe the other employees save their
time for personal reasons.

2.) What immediate solutions may be used to solve the problem? What
long-term solutions must be put in place?

Answer: An immediate solution to solve the problem is that Engineer

Aisporna should give an additional compensation to the employees to make
them agree for the overtime and also motivate them to work hard. While, the
long-term solution that must be put in place is that Engineer Aisporna should
change his style of leadership, for him to have the support of his
subordinates. He should use the supportive leadership style, so the next time
he ask favor from his employees, they will help him.

Case 11. THIRST FIRST BOTTLING COMPANY: S.O.S (Page 196-197)

Competition in the soft drinks industry is very intense that every means to
improve a companys sales position is explored. Advertising and promotional
efforts are heavily relied upon by Thirst First Bottling Company to drum up
customers interest in the companys products. The company is engaged in
the production and marketing of soft drinks. It operates plants, warehouses,
and sales offices throughout the Philippines. The company has been serving
the Philippine market for more than 50 years. The manager in charge of
advertising and promotion is Mr. Rolando Calanday, a graduate of a
marketing course in the College of the Immaculate Conception in
Cabanatuan City. The advertising and promotion unit coordinates with
advertising firms in the design and production of advertising materials like
billboards, posters, and streamers. The unit often produces t-shirts printed
with advertising messages which are used as promotional items. The
company spend more than P20 million annually for the purpose. Periodically,
the ad and promo unit sends the advertising and promotional materials to
managers of the various sales offices of the company. The managers, in turn,
hand over the materials to their respective sales teams for proper disposal.
The drivers of the delivery trucks with the assistance of helpers are directed
to install the billboards and streamers on appropriate places and paste the
posters in conspicuous corners of retail establishments. At the beginning, the
drivers appropriate for themselves a small portion of the advertisement and
promotional materials. Some of the billboards are used as partitions in the
houses of the drivers. The posters are used to reinforce the walls. The t-shirts
are not handed over to customers but to family members and friends. The
materials are clearly not used as intended but nobody in the sales offices
questions the practice or even care to know. One day, the general manager
of the company, Mr. Marcelino de Vega, received a letter from a concerned
employee reporting about the unethical practice. Immediately, the general
manager called Mr. Calanday and inquired on how he was getting about his
responsibility of promoting the companys products. Mr. Calandays reply did
not satisfy the general manager. On the same day, Mr. Calanday received an
order from the general manager to clear up the problem regarding the
unethical practice or he will be replaced as head of his unit.

QUESTIONS:

1.) What important management function was neglected by the company?

Answer: The important management function that was neglected by the

company is Controlling. They also failed to check of their advertising
products were properly distributed. Mr. Rolando Calanday didnt supervise
the advertising products thats why he didnt know what happened to the
advertisements.

2.) If you were Mr. Calanday, what will be your first move?

Answer: If I were Mr. Calanday my first move will be is to fired the drivers,
because if I didnt fire them, they might continue their unethical practice.
And also I will make them pay for the portion of advertising products they
take.

Case 12. SERVI-QUICK MOTOR REPAIR: Its Just a Matter of Time

(Page 218-219)

Mr. Apolonio Angeles is a highly skilled mechanic who is patronized by

discriminating car owners for the repair of their vehicles. The heavy demand
of his services prompted him to open a shop in a 500 square meter lot. He
was able to convince a sister in the United States to finance the construction
of a suitable building and the purchase of needed equipment. The shop was
patronized by customers so he hired five experienced mechanics, a specialist
in electricals, and twelve assistants. Apolonio took care of supervising the
work of the mechanics and the specialist. He provided them with direction
and expert advise whenever required. For the past two years, Mr. Angeles
was able to attend every important training sessions in motor car repair and
maintenance handled by experts along the line. He shared with his
subordinates the knowledge he acquired. The facilities of the shop are
updated every now and then. The tools used are the latest models available
and are kept in tip-top condition. The shop is even equipped with
computerized engine analyzer. Major repairs like engine overhaul are
accepted. Repair of malfunctioning electronic systems of cars are also
accepted. Because the shops services are varied and specialized, customers
just keep coming in. The shop is open from Monday to Saturday, 9:00 A.M to
9:00 P.M. Customer traffic is heaviest on Saturdays and lightest on
Wednesdays. When Mr. Angeles drew a graph of the demand for services
provided by the shop, he did not like what he saw. Mr. Angeles feels that if
only 5 of the 25 units served during Saturdays could be moved to
Wednesdays, his subordinates and facilities will not be overburdened during
Saturdays. He really wants to improve the situation but he is at a loss on
what to do.

QUESTIONS:
 1.) If you were asked to help Mr. Angeles to solve his problem, what would
you advise?

Answer: I suggest to Mr. Angeles, if he really wants to lessen the works on

Saturdays I think he should change and lessen his time schedule during
Saturdays, or he can do some discounts during Wednesdays. Also, he can
hire more employees to be not overburdened during Saturdays.

2.) Will there be other disadvantages if nothing is done about the

problem?

Answer: The disadvantage of this problem is that Mr. Angeles might not
finish all the works on time, during Saturdays because of the loads of work.
Also, the quality of his work might lessen because he was hurrying to finish
the work.

Case 13. CUTIE PIE FOODSHOPPE: The Name of the Game (Page
232)

After thirty years of serving the Metro Manila market, the management of
Cutie Pie Foodshoppe (CPF) decided to open branches in provincial cities.
CPFs traditional products consist of bread and cakes. After so many years of
operation, the original shop expanded its store to accommodate fast food
customers. The company also expanded its assortment of products by
adding more options in terms of variety and price. The original shop located
in Quezon City became the model for all branches. The original shop is well
patronized by customers who are either Metro Manila residents or transients.
The branches within Metro Manila are moderately successful, but most of
those in the provinces could not duplicate the performance of the original
shop. Miss Teodora Payumo, a resident of Malolos, Bulacan often dines at the
CPFs original shop. This she does whenever she goes to Manila. She has
been a faithful customer since she was a college student in one of the well-
known universities of Metro Manila. When CPF opened a shop in Malolos, Miss
Payumo anticipated the delicious meals she used to have at CPF Quezon City.
She was surprised, however, when she found out that the quality of the food
served cannot be compared favorably with those served at the original shop.
After five months of operation, the Malolos branch of CPF could not generate
enough sales to justify its continued existence. The branch manager, Isidro
Castillo, is not even aware of the case of Miss Payumo. Mr. Castillo keeps on
producing advertising posters to stimulate demand. He even hired a person
to distribute leaflets to prospective customers. The effort, however, do not
seem to produce the desired effect. Mr. Castillo sought the opinion of the
general manager in Quezon City but he could not get the insights he needed.
He was told to observe the original shop and duplicate its activities. He
thought that this will be difficult for him to do because he cannot afford to
leave even for a day his shop in Malolos.

QUESTIONS:

1.) What do you think is the problem with the Malolos branch?

Answer: The problem with the Malolos Branch is that the quality of the
foods served cannot be compared favorably with those served at the original
shop. The taste of the products might changed by the Chef of the Malolos
branch, thats why it is not good enough compared to the ones served at the
original shop.

2.) What would you advise Mr. Castillo?

Answer: I suggest to Mr. Castillo to follow the opinion of the general

manager because if he follows that opinion he might notice the problem
about the change of quality of the foods served at his branch and also he
should sought some opinions from the customers about the taste of his foods
served from his branch.

Case 14. QUE SERA CERAMICS COMPANY: Im Leaving It All Up to You

(Page 251)

The sales generated by Que Sera Ceramics Company is growing at a steady

rate of 15% annually. The firm has been in existence for 25 years and its
products consist of plain and decorative wall tiles, floor tiles, cement tiles,
cappings and fittings. The company maintains a network of dealers in Metro
Manila and the provinces. Majority of the companys stocks are owned by the
Soriano family. Specifically, fifty one percent (51%) of the companys total
capitalization of P265 million is jointly owned by the Soriano sisters and
brothers. The president and general manager of the company is Miss Dalisay
Soriano. The 15% sales growth of the company is limited only by the
available capital. A growth rate of 25% can be achieved if an additional P50
million is added to the companys finances. Miss Soriano figured out that the
company has three options:
 1. To require her siblings to invest more money;
2. To invite new investors through the sale of additional shares of stocks;
3. To borrow from banks.

If Miss Soriano chooses to seek additional funds from her siblings, only P30
million will be available immediately, the rest will be handed over after 12
months. If inviting new investors becomes the choice, it will take five months
of good financial work before the cash requirement comes in, assuming that
there will be a sufficient number of investors interested in buying the
companys stocks. Borrowing from banks will take a few months of
paperwork before the loaned amount is actually delivered to the company.
Miss Soriano is preparing her list of criteria before she submits her
recommendation to the board of directors.

QUESTIONS:

1.) What factors must Miss Soriano consider before she submits her
recommendation to the board?

Answer: The factors that Miss Soriano must consider before she submits
her recommendation to the board is that the various fund sources have their
own individual strengths and limitations, it is wise to find out through
analysis which will benefit the business firm most.

2.) What other possible sources of funding must be investigated first

before a decision is made?

Answer: The other possible sources of funding are cash sales, collection
of accounts receivable, loans and credits, sales of assets, ownership
contribution and advances from customers.
 CASES IN
MANAGEM
ENT1

Submitted By:

IRISH T. BARCELON

Submitted To:
Mrs. Evangeline P. Dayao