X had just completed his overseas contract and wants to invest a portion of his savings in
Question:
X had just completed his overseas contract and wants to invest a portion of his savings in the Philippines. Upon searching for a business buy instead of establishing his own, he found that there is one garment business for sale but he was informed beforehand that the business had not prospered because the owner did not know how to manage the people and the operations. The owner had other businesses in the field of services and not of product type. He just inherited the business from his father and that he too, would like to retire.
X observed the garments operations and found the following:
1.The nature of business is producing jeans both for men and women.
2.The business appears to be profitable.
3.Payment to sewers was on a daily wage basis; meaning no incentive for those who perform above standard, and gives more weight to those who perform lower than standard.
4.There were 15 personnel, all sewers reporting to the General Manager, also a sewer.
5.The sewers buy the raw materials or everything they need to produce the jeans.
6.Process Flow is not fully established
7.No registration papers could be presented.
8.The profile of the major personnel is shown below:
1. If you are in the shoes of X, will you still be interested in the business? Why or why not?
2. If yes, how will you re-organize the set-up?
3. What do you do with qualifications and expertise of personnel?
4. If ever X buys the business, should he continue the daily wage system or use a per piece basis for payment to sewers?