1.

Problems leading to the current situation arose from both personal and individual objectives
which were contrary to one another. In terms of the Sales staff, their concern was to have a
GPS device that would be superior to their competitors’ and would be priced competitively. The
Product Design & Development team, in responding to their needs, attempted to design a
product that didn’t sacrifice quality for cost.

Richard Fiero, President, was influenced by Ed Pryor, Vice President of Sales, to launch the
Project Aerial. His objectives ran with those of Ed Pryor which were to create the quality
product quickly at a low cost. Richard failed to consult Allen Roth, Director of Design &
Development, or with Harold Whistler, Vice President of Design & Development, before making
the decision to move forward on the project.

Emma Richardson, Executive Vice President, didn’t make her objectives clear. We can guess
that she wanted to bring both the Sales and Design & Development teams onto the same page,
but her lack of leadership led us to be unsure of her real objectives.

Ed Pryor, Vice President of Sales, wanted to launch the quality product quickly with a cost that
would compete with BirdsI. He wanted in response to customer requests which were coming
though his sales representatives.

Allen Roth, Director of Design & Development, who was stepping up for Harold Whistler (since
he would be retiring shortly) wanted to produce a quality product without being rushed into
cutting corner or cutting costs. He didn’t want his other projects to suffer as a result of Project
Aerial.
As a result of the conflicting departmental and individual objectives, there is a lack of consistent
vision. There is also a lack of leadership and communication due to an unstable executive
team. (These will be addressed more clearly in following responses.)

2. The decision-making process at TerraCog was problematic. First, the decision to undertake
the project was made somewhat hurriedly. Fiero failed to consult the important players before
deciding to move forward. Instead, he simply took the advice of Pryor. Because of the
Representativeness Heuristic he likely didn’t see any reason that Project Aerial would fail given
the success of BirdsI. He also expected the price point to be competitive given both
Representativeness Heuristic and Anchoring and Adjustment when considering the success of
BirdsI.

Pryor decided that the price of Project Aerial should have been more competitive due to
Anchoring and Adjustment: he was quoted a price by Roth, which became his anchor price;
also, the price of BirdsI was also an anchor price. He also was making decisions about the
product and pricing as it related to his sales team rather than how feasible it was. He was even
willing to set the price low (with low to no margins) with the anticipation that Product & Design
would be able to cut costs and thereby increasing the margins in time. He did this without
considering the process costs.

Roth’s decision-making was individualistic in nature and highly related to internal causes. He
wanted to create a product that he could claim as his own in order to position himself to move
into Whistler’s position.

Tony Barren, Director of Production, made decisions based on the fact that he was held
responsible for quality issues in past. He didn’t want quality to be a concern again as this affect
his own job.
Richardson seemed to want to get a consensus among the key players. However, she failed to
lead a productive meeting whereby she would mediate and make overriding decisions. Instead
she merely postponed meetings and decisions, asking both parts to make some amends. As a
newly appointed VP, she may have avoided conflict despite the fact that this conflict could’ve
resulted in a clearer direction for all parties involved.

The decision-making process at TerraCog was unclear given that there was no obvious
direction given. Each department appeared to make their own decision in silos rather than
consulting with the departments as a cohesive team. In this sense, the heads of the
departments failed to become a team in and of themselves. (They failed to Form, Storm, Norm
and Perform as a team as is shown in Tuckman’s model.)

To improve decision-making TerraCog should have a strong leader, a cohesive group with a
consistent vision, and have more effective and ongoing communication.

3. In terms of the structure, all of the players (with the exception of Ross) were on the same
level of the organization reporting directly to Fiero. Without Fiero’s guidance and decision-
making, it was unclear who had the final decision therefore no person wanted to make great
concessions. We believe Richardson should have given more authority either in general, or
within the scope of this project as the Team Leader. Whether or not she was officially the Team
Leader, she failed to step up to mediate, gain a consensus, or make decisions.

A key issue leading to the situation at TerraCog is the lack of and quality of communication.
Communication should have been consistent and ongoing. Instead, the fact that the project
would not be able to be completed at the desired cost was revealed late in the project design.

Early on, there wasn’t a discussion or consensus regarding the technological capabilities or
quality that Project Aerial would offer. This also led to a disjoint regarding the price. Further,
nobody seemed to discuss if this was the right time to move forward with this project given that
Design & Development was already working on several up-and-coming projects. There seemed
to be no discussion about the opportunity costs of setting projects aside.

In terms of the communication process, there was a lack of feedback from all parties. Whether
or not they intentionally ignored the messages coming from the other departments is unclear,
but what is clear is that each department held to their own opinions without how Project Aerial
should unfold. (It should be noted however, that Design & Development managed to reduce
costs 8%.)

During the Resumption of Aerial Pre-Launch meeting several sub-groups formed which led to a
communication break-down. Also, when Barren made his points, they were sometimes harsh,
sarcastic and abrupt. Rather than giving the facts in a respectful manner, he opened the door to
conflict. He was merely imposing his views on the others without a willingness to take in their
feedback.

Although meeting face-to-face to discuss the project was the correct channel. It should have
been coupled with documentation from each side addressing their needs, difficulties and
anything else relating to the project so that all parties would be informed and prepared prior to
the meeting. Given the lack of understanding with respect to the background of each person’s
viewpoint, there was no basis for compromise.
Also, the voicemails to Richardson were not informative enough. Roth informed that he was
able to cut costs by 8%, but left it at that. Richardson should have requested documentation to
show what the costs were and precisely what was cut

The other message, from Fiero, was not very informative either. He didn’t provide a clear sense
of what direction he wanted Richardson to take. Should she have the costs reduced further?
Should she make the quality suffer? What other options did Fiero want her to explore? These
were all left unclear.

There may have been some information overload with the team heads. In order to overcome
this they should have each provided the other teams with documentation, facts, figures and
specs.

In terms of different styles of communication, Richardson followed a more typical “female”

approach. She was indirect and less ostentatious then her male counterparts. The men used a
more “masculine” approach and were direct, though they didn’t offer much compromise. Also,
Ross used language to mark his independence. This may have been to position himself for
Whistler’s position.

4. The alternatives for the project are as follows:

Lower Quality – Although TerraCog has built its business on quality over technological
superiority, lowering the quality would be an option in order to bring the product to market at the
desired price. Production would suffer the most in the sense that Barren has already been
reprimanded for producing low quality in the past. Also, given that TerraCog’s business was
built on quality, it wouldn’t likely make sense to not remain consistent with the company’s image.

Launch Product at $475 – Sales would suffer tremendously at the expense of Design &
Development and Production. In the end, this option wouldn’t make any sense since sales drive
the business.

Launch Product at $400 – At this price, the margin would suffer with no direct impact on any of
the departments. After launch changes could be made to the design or production based on
market response. Although no department would be directly impacted because of this, the
organization would suffer an overall loss. We don’t believe this is a good option.

Lower Technological Capabilities – Design & Development would suffer as would the end
product. With inferior performance, it remains unclear if the product would be competitive based
on the quality, cost and reputation alone.

Launch at a Later Date – TerraCog could give themselves more time to develop all aspect of the
project to decide what should be changed before going to market. However, this is not a good
option because they are already losing their share of the market. They will also miss out on
holiday shoppers if they don’t launch on time. In this case all departments will suffer. Also, the
departments will suffer in terms of their appearances in that they may appear incompetent by
not managing to complete the project on time. Richardson, being newly appointed will suffer
with her image. Ross, wanting to be positioned for Whistler’s position will also suffer greatly.

Abandon Project – The company could realize the inability to make a quality product at a
competitive price and cut its losses now rather than realizing a greater hit when going to market.
In this case all departments will suffer given the amount of time and money they’ve invested.
They will also miss out on potential sales and customers. Further, they may be perceived as
incompetent and be less likely to be promoted and their positions may also be in danger. We
feel that this would only be a good option after exploring the option below.

Some Combination of Quality/Technological/Price Reductions – The teams could come together

to effectively compromise and come up with a win-win situation. In this case all teams need to
be on same page with the direction of Richardson. In this instance, Richardson should work
one-on-one with each team leader then bring all together. She should also enlist in the help of
Whistler given his experience in product design and launching new products. If Ross is to be
involved in these meetings it will give him a great opportunity to be mentored by Whistler whilst
still working independently. Richardson should also address her leadership skills. She needs to
be more assertive and direct. She is lacking a clear vision which needs to be communicated to
the others. We think that this is the best option. We recognize that the project may be
somewhat delayed as a result, but if Richardson is able to make changes quickly they may be
ready to launch for Q3.

5. In order to prevent another occurrence like the current one, both Fiero and Richardson need
to improve their leadership skills. Fiero needs to improve his initiating structure. At present
time, the task is ambiguous since the project hasn’t been clearly identified. Also, the teams are
in conflict. As a result, Fiero needs to be more directive. Also, he needs to be more confident in
taking decisions by articulating goals. Richardson needs to follow this style as well.
Additionally, Fiero should support the departments either by being personally available or by
enabling Richardson to represent him.

A clear vision needs to be clarified and agreed upon by all parties. This should be discussed
amongst the group, but ultimately decided upon by Fiero and Richardson.

Cross-departmental teams should be formed amongst the players. Rather than arguing at a
meeting, they may be capable of putting their heads together to come up with a better solution.

Whistler’s experience, as stated above, should be well utilized.

Communication is the key issue in this case. It is essential that ongoing communication is
established. Richardson should collect key points from each department head before meeting
so that an agenda can be created, distributed and followed. During the meetings, an action plan
should be created and minutes should be distributed thereafter. Changes or difficulties should
be communicated to the other parties as they arise so as not to have any surprises. Also, each
department should provide the others with ongoing feedback as they are a part of the same
team.