CHAPTER 3

Management Decision

Purpose: Though an organization might have a disciplined strategy, ample resources, and strong management, it may still be ineffective because of external factors that it cannot control. This case assignment gives students an opportunity to consider how changes in the external environment affect an organization, and what steps an organization might take to deal with those changes.

Read the case and answer the questions that follow.

No Paved Roads?

Wow, what a great opportunity! you thought to yourself after a meeting with your supervisor. After just two short years at your global shipping firm, youve been offered a great promotion, a chance to head up your companys first venture overseas, a sorting and shipping facility in India. Youre thrilled at the chance to learn about a new culture and meet different people, but most of all, by the opportunity to produce stunning results for your company by tapping into a rising technological titan that has some of the best minds in the world.

But as you think about how exciting it will be to be the boss in India, you recall the first time you went to visit there and how it seemed utterly impossible to get around conveniently. It was almost like everywhere you went, you had to fight through a mass of cars and people on the pot holeriddled streets, all fighting for space and maybe a little bit of exhaust-free air. Why, the trip from the airport to your hotel, just barely ten miles, took more than two hours! During monsoon season, all of the potholes would fill with water, making the streets into a small maze of ponds. How long, you wonder, would it take for my employees to get to work every morning? To get our trucks to the facility? How long will my drivers have to sit in traffic? Will they be able to handle next-day shipments?

The Indian government is certainly aware of the problems with the countrys infrastructure. In fact, the government has pledged to spend $500 billion by 2012, and $1 trillion by 2017, to improve the countrys roads, bridges, rails, and airports. But, as you learn from research, all of that money may not be enough to make a difference, because the real source of Indias infrastructure problems are a lack of civil engineers. Most Indian students opt to study business, computer science, or information technology to take advantage of the growing number of tech firms that are outsourcing to India. Even those trained in civil engineering mostly end up working in tech companies, which pay two or three times more than civil design firms.

The realization slowly sinks in that this is the environment that you will be working in a place full of skilled people but plagued with terrible roads, traffic, and long travel hours. And your initial excitement at the opportunity slowly melds into anxiety.

Source: Vikas Bajaj A High-Tech Titan Plagued by Potholes New York Times. 25 Aug 2010, accessed January 19, 2015, from www.nytimes.com/2010/08/26/business/global/26engineer.html.

Questions:

1. Given the external environmental conditions presented by the state of Indian infrastructure, would you choose to open a new facility there? Why or why not?
2. Should your company take action to help improve infrastructure? Or, should it just look for another place to do business?