CASE 3.

MOTORBUS COMPANY: Que Sera Sera

Engineer Hermogenes Ancheta has just received his appointment papers from his
new immediate superior, the Vice President for Operations. He has been promoted from
Assistant Manager to Manager of the Maintenance Department. After congratulating
him, his boss gave him a verbal directive that he should put some order in his department
and make it work in the most effective and efficient manner possible.

Engineer Ancheta has just been passed the board examination for Mechanical
Engineering when he joined Motorbus Company in 1993. By June 1995, he informed his
former classmates at the University of Santo Tomas that he was promoted as Assistant
Manager for Maintenance.

The former manager of the department, Engineer Gaudencio Inductivo, joined

the company since it started operations in 1989. A total of ten buses began plying the
Manila-Isabela route. A maintenance unit was put up at the Manila terminal in Sampaloc.
Another unit serves the Ilagan, Isabel terminal. Each unit has a full-time mechanic and
one assistant.

When a company bus comes in for repair, the mechanic diagnoses the various
automotive systems in the bus and later produces a list of parts needing replacement.
The mechanic sends the list to Engineer Inductivo, who, in turn, forwards the same to the
company accountant for the approval of the purchase request. Oftentimes, Engineer
Inductivo performs the actual purchasing himself. Later he sends the purchased items to
the mechanic who made the request.

The maintenance units were operating normally until 40 new buses were procured
by the company in 1993. Since then, every maintenance personnel was so busy that they
threatened to quit their jobs unless additional mechanics and assistants were recruited.
By the end of 1993, each unit has a personnel complement of 5 mechanics and 5
assistants.

Even with current developments, the old method of purchasing was not improved.
Purchase requests started to pile up. Mechanics and drivers began complaining to the
VP for Operations about the delays in the delivery of needed parts.

The VP for Operations immediately sent a note to Engineer Inductivo ordering that
the problem should be resolved immediately. Engineer Inductivo was hard pressed and
he could not offer an immediate solution. The next day, Engineer Inductivo informed the
VP for Operations that he is requesting for the approval for his application for retirement
as he is already 62 years old.
 The VP forwarded the request to the president with an endorsement justifying the
request. On the same day, the request for retirement was approved. The next day,
Engineer Ancheta received his appointment papers promoting him to Manager.

One of the first things Engineer Ancheta did was to inspect the storage rooms for
parts. He found out that the storage room was full of an uneven supply of parts. Some
parts were of excessive quantities, while some important ones were inadequately
stocked. A corner of the room contains a big volume of obsolete parts.

At the end of the day, Engineer Ancheta was informed by the VP that the
company will be fielding an additional 50 new buses within 30 days. This will mean that
by next month, about 100 buses will be servicing the various routes assigned to Motorbus
Company.

Engineer Ancheta is now mulling over how he will make the operations of his
department as efficient and effective as possible.
CASE 5. KUNDIMAN COMMUNICATIONS CORPOTATION: Mr. Lonely

The Kundiman Communications Corporation (KCC) is a local company with more

than 2000 persons in its payroll. The company’s top management is composed of the
President, the Vice President fo Marketing, the Vice President for Operations, and the
Vice President for Administration.

A member of the staff, Engineer Lorenzo de Guzman, an electronics engineering

graduate, has just received an order from his immediate superior, the VP for Operations,
to head the newly built telecommunication facility in Antipolo, Rizal. So far, he is the only
company personnel identified with the new facility. He was given three months to make
the company operational.

Engineer de Guzman appraised that for the Antipolo unit to operate, it will require
the services of the number of persons skilled in the various activities that will be
undertaken.

As he has been working with KCC for ten years (five years in the field and five years
in the head office), Engineer de Guzman is familiar with many aspects of the firm’s
operation. Some of the supervisors and three of the key officers are his friends.

Engineer de Guzman felt that the various trainings KCC provided him had really
prepared him well for the technical aspects of his new job. His exposure to the different
units of the head office will also be useful in som eways to the administrative aspects of
his position. However, his trainings and experiences have not provided him with the
expertise to recruit qualified persons to occupy the various positions that will be created.
To begin with he does not even have information on the number and nature of the
position to be created.

As he was inspecting the building in Antipolo where he will hold office, Engineer
de Guzman wondered if he could convince top management to transfersome of his
acquaintances in the head office to his new assignment.

Engineer de Guzman knows that his next promotion will depend much on the
success of his new facility under his direction. He thought that if he could only get the
right persons, his job would not be too difficult. With this in mind, he pondered on what
his first move must be.
CASE 6. NORTHERN CONTAINER CORPORATION: Time to cry

Engineer Godofredo Monsod, Jr., general manager of Northern Container

Corporation (NCC), was taken aback by a letter-reply from a prospective new customer
(see Exhibit 1). His company has been operation for only five years and is in need of new
customers with potentials of doing business with them in a long term basis.

NCC is engaged in the manufacture of general and sanitary tin cans, cooking oil
filing facilities, and moulds and dies fabrication. Its factory and administrative office is
located at Valenzuela, Metro Manila.

Since its first year of operation, Engineer Monsod worked hard to make NCC’s
operation at full capacity. The company’s various departments are manned by a
personnel complement of 323, growing by 5% annually.

The increasing number of employees is a result of the growing patronage of the

company’s products by customers. Engineer Monsod felt, however, that the company
needs one more good customer and their operations will be at full capacity. It was in
October 1996 that Engineer Monsod came in contact with the general manager of a
newly established company, Mr. Godofredo Tapiador. Engineer Monsod was able to
convince Mr. Tapiador to order his tin can requirements from NCC.

In January 10, 1997, NCC’s production manager informed Engineer Monsod that
unless new production order are received by his department, he will be forced to
recommend the lay-off of 12 workers in the factory. Five days later, 12 workers were
indeed laid off.

It was in January 25 that Engineer Monsod thought of making follow-up of the

agreement between him and Mr. Tapiador. A letter was sent on Mr. Tapiador on the
same day. On January 28, engineer Monsod read the reply of Mr. Tapiador.

After a while, Engineer Monsod composed himself and prepared to think hard
about what happened and what possible remedies could be worked out.

Exhibit 1
 RED RIBBON MANUFACTURING CORPORATION

1201 Putting Bato

Taytay, Rizal

27 January 1997

THE GENERAL MANAGER

Northern Container Corporation

1526 Amihan St.

Bakod Pare, Valenzuela

Metro Manila

Dear Sir,

This is in reply to your letter dated January 25, 1997 inquiring about whether we still
consider ordering tin cans from your company.

Please be informed that since we have placed our order with your marketing department
as early as December 1, 1996 and no reply was sent to us, we deemed it wise to deal
with another company as late as January 15, 1997.

Thank you for your interest and we hope to do business with you under other
circumstances.

Yours truly,

GODOFREDO TAPIADOR

General Manager
Case 4: BITS AND PIECS INTERNATIONAL CORPORATION: Little Things Mean a Lot

The Bits and Pieces International Corporation (BPIC) is one company that
appears to be succeeding and growth has become a part of its agenda for the next
few years. This is quite unusual for a company whose certificate of incorporation has
only been approved by the Securities and Exchange Commission four years ago.

BPIC is maintaining an office at Makati Avenue in Makati and a plant at Sta.

Rosa, Laguna. The company is producing various injection molded plastic products
classified as consumer and industrial.

The key officers of the company are as follows:

President and Chairman of the Board: Engineer Rodrigo Reyes

Vice President and General Manager: Engineer Jesus Ualat

Corporate Secretary: Mrs. Mildred Salazar

Treasurer: Ms. Purita Toquilar

Auditor: Ms. Elsa Marzo

Engineer Manager: Engineer Silvino Santiago

Production Manager: Engineer Severo Lagayan

The organizational chart of BPIC is shown in Exhibit:

1.

The company, classified as a manufacturing corporation, operates on two activities:

1. Production of stocks to be sold to the local market

2. Production as a subcontractor

BPIC does not maintain a sales force. The general manager acts as marketing
executive and directly transacts business with customers.
 The company’s average sales per month are as follows:

Product Average Sales per Month

Ball Pen Tips ₱ 340.000

Sputum Cups ₱ 900.000

Grease Cups ₱100.000

Bottle Caps ₱100.000

PVC Fittings ₱200.000

Total ₱1640.000

At current output levels, the company was declared profitable.

The following financial data were provided:

1. Profit margin (net income/sales) = 32%

2. Return on the total assets (net income/ total assets) = 72%
3. Annual turnover = 1.1
4. Acid test ratio = 1.05

An analysis of the company’s market potential convinced the top management to

consider expansion. It was also decided that a new product, the tissue holder, must be
added to its existing line of products.

The target sales for the next three years are as follows:

Product Year 1 Year2 Year3

Ball Pen Tips ₱6M ₱ 7M ₱ 8M

Sputum Cups ₱ 12 M ₱22 M ₱ 33 M

Grease Cups ₱ 12 M ₱ 13 M ₱ 14 M

Bottle Caps ₱ 24 M ₱ 36 M ₱ 54 M

PVC Fittings ₱ 48 M ₱ 58 M ₱ 70 M

Tissue Holder ₱ 48 M ₱ 58 M ₱ 70 M

Total ₱ 154 M ₱ 194 M ₱ 249 M

The company made provisions for improving its facilities including land, building,
machinery and equipment. The hiring of additional manpower was also proposed.

The following constitute the positions proposed:

Position Quantity

Finance Manager 1

Quality Control and Research

And Development Manager 1

Senior Machinist 1

Junior Machinist 2

Helpers 2

The president ordered the general manger to prepare an organization chart for the
new set up. The key officers of the company were directed to review the proposed set-
up and present their comments on an executive meeting scheduled next week. The
proposed organizational chart is shown in exhibit 2.

Engineer Lagayan is now contemplating on what credible points he is going to raise in

the meeting.