Bayside Motion Group (A) Case Solution

2. Employees and their Families

It would not be wrong to state that Avi Telyas has managed to develop a strong culture at Bayside Motion. Within the culture at Bayside Motion, employees felt about themselves as a part of the organization rather than a labor force on a contractual basis. The employees were loyal to the company, as well as, the owner. For instance, during the recession of 2001, all employees were willing to have their pay cut by five percent and forego their 401K contributions. Furthermore, this also suggests the caring attitude of Avi Telyas towards his workforce because through the pay cuts the need of layoffs was minimized.

Employees at Bayside Motion would have been directly affected by the decision taken by Avi Telyas. Employees would have been most beneficial if Telyas opted to fund through the internal cash reserves of the company. In case of taking a bank loan, employees would have felt more pressure. With a bank loan, there would be an additional cost of interest which would decrease the overall profits of the company. This implies that the employees would have been deprived of their cash bonuses which they used to receive under the title of “Cell of the Month”. Furthermore, increased cost of interest would have put more pressure on the salaries and wages of the employees. Since Telyas was looking to grow the business further, maintaining the level of salary wages with the additional cost of interest would have decreased the overall profit reserves of the company. Finally, the most unlikely decision for the employees would have been an addition of the new equity partner. This is because it is not necessary if the new equity partner would think under the same terms as Telyas did for his employees.

3. Effects on Customers        

Bayside Motion had the philosophy of satisfying its customers at any cost. A happy and satisfied customer was one of the major values and the reason of Bayside Motion’s success. Customers were highly valued by Telyas. However, Telyas was faced with a strong dilemma on keeping the customer satisfaction uptight with the expansion conditions faced by the company. If Telyas decided to bring in a new equity partner, then the visions of the two parties could have been contradictory. As Telyas had pointed out a demand gap that customers would begin to look for broader motion control solutions rather than just technical product components. Telyas could have capitalized on this demand gap and earned a fortune for the company. Similarly, if the company ought to go for a bank loan then there was a high risk that the overall quality and output would have been affected. Therefore, to ensure that Bayside Motion continued to provide value added products to its customers, it was necessary to engage the employee motivation level. This could have been only achieved if employees were kept away from stressful demand conditions. This left Telyas with only one option if it opted to expand the business through internal cash flow reserves.