Martin Guitar Company is an interesting blend of old and new. The company employees remain true to the principle of high standards of musical excellence and the customers expect exceptional quality. Like many businesses, Martin’s sales have dropped off—some 20 percent since fall 2008—as consumer spending nosedived. Guitars aren’t exactly necessities and consumers were being extremely cautious in spending. Meanwhile, the company’s inventories of its higher-priced guitars ballooned. Chris didn’t want to lay off employees, especially since it takes special woodworking skills to make the guitars. “The company figured it is better to find a way to keep workers occupied than face the challenge of having to train new ones after the economy recovered.” Chris and his managers came up with a solution: “Copy what many big retailers do by offering a lower-priced alternative.” The challenge was how to do that without sacrificing quality or harming its image.
1. How do you think good decision making has contributed to the success of this business?
2. A decision to move into a new market as Chris did is a major decision. How could he have used the decision- making process to help him make this decision?
3. What criteria do you think would be most important to Chris as he makes decisions about the company’s future?
4. Would you characterize the conditions surrounding C. F. Martin Guitar Company as conditions of certainty, risk, or uncertainty? Explain your choice. How would these conditions affect managerial decision making?