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TerraCog. Organizational Decision Making Decision To Proceed with Aerial made by the president (Fiero) based on pressure by the vice-president of sales (Pryor). Initial decision to proceed with satellite imagery was rejected giving competition a head start.

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TerraCog

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Terracog

TerraCog


Terracog

Organizational Decision Making

  • Decision To Proceed with Aerial made by the president (Fiero) based on pressure by the vice-president of sales (Pryor). Initial decision to proceed with satellite imagery was rejected giving competition a head start.

  • Ariel more of a match of technology with competitor rather than innovation.

  • Production costs is considerably higher than expected due to expensive components.

  • CFO’s profit margin makes it impossible to match competitors price point.


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  • Decision To Be Made At End of Case

    • Launch Ariel at full price to maintain standard margin

    • Launch at competition price $425 at zero profit while working on redesign while working to reduce cost

    • Delay Ariel while working on lower costs re-design

    • Abandon Ariel


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  • Conflict Based Individual Goals

    • Pryor (Sales), concerned with compensation change and not disappoint sales team

    • Barren (Director of Production), Recent production problem which he was held responsible for. Job insecurity and maybe resentment for being blamed may lead to him being very conservative.

    • Roth (Design and Development), team not excited about project—other projects more exciting—interested in being promoted to be VP of design and development.


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  • Wu (software designer)—at meeting defends design not understand why costs are so high since he only tweaked the firmware

  • Whistler (VP of design and development) no longer fully involved in the company. Retirement soon.

  • Richardson (Executive VP)-difficult position, recently promoted, middle of a problem did not create. Needs to reach a solution but not hurt her relationship with other managers.


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  • Factors that contributed to the problem

    • Design and development had little involvement into the decision to move forward again with Ariel

    • Sales not asked to make recommendations with respect to reduction of cost.

    • Problem of cost discovered late.


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  • Group Factors

    • Team not united on common goal

    • Not clear what the meeting is about– is it meeting to set a price point on Ariel-to set a overall marketing plan for the product-to set an overall strategic direction for new products.

    • Group needs time to digest the information about the price problem.


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  • Possible Actions—Things To Consider

    • Try to get areas of agreement—launch product at zero profit margin

    • Deal with concerns of individuals-compensation for sales—conservative estimate and risks of underestimating costs—succession in leadership Roth and Whistler

    • What is the next meeting about or should there be a next meeting of the group?

    • What individuals should be involved in the next meeting?

    • What type of decision needs to be made?


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