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TerraCog Global Positioning Systems Conflict And Communication On Project Aerial Case Solution

Solution Id Length Case Author Case Publisher
1851 1051 Words (5 Pages) Michael Beer, Sunru Yong Harvard Business School : 2184
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The sensible thing to do by Richardson would be to cut the costs, as much as, possible without compromising on the quality. This would make the design and development department unpleased but in the long run it would benefit the company. Also, there is a need for a slight reduction in the profits margins of the product to make the shelf price in par with the price of their counterparts. Also, once the product has launched, the reputation of TerraCog would increase the revenues received from sales of its Satellite GPS.

Following questions are answered in this case study solution

  1. How have departmental and individual objectives led to the current situation?

  2. What is the Current Decision Making Process?

  3. What are the strategic and organizational implications for each of the company’s options?

  4. What should Emma Richardson Do?

Case Analysis for TerraCog Global Positioning Systems Conflict And Communication On Project Aerial

1. How have departmental and individual objectives led to the current situation?

TerraCog is a company that provides state of the art Global Positioning Systems (GPS). They pride themselves at being able to develop a strong relationship with their customers. They have a strong grasp on the knowledge of their customer’s usage and preference requirements. TerraCog’s products are more technologically advanced and user friendly than their competitor’s products.

Posthaste introduced a satellite based GPS system before TerraCog. The concept was deemed non-essential by TerraCog decision makers, and they decided on not to venture into this idea, however, the buyers of Posthaste products found the concept exciting. Terracog underestimated the popularity of the Posthaste product and were soon forced to come up with their own satellite based GPS as the company’s sales and profits were taking a hit. Ed Pryor, the company’s sales Vice president demanded the company to make a similar product, if their sales targets were to be achieved. Allen Roth, the company’s director for design and development was not confident about the idea and rejected it at first but was forced to comply with the market requirements by the company president.

When the product was designed, it was priced quite higher than their counterparts due to higher costs of the parts required to build the product. The sales department threatened on not to market the product, if the costs were not brought down. The production department was also not confident about the price, so they cut costs by a meager 7-8% which was still high according to the sales department. Due to higher price of the product, the sales department advocated a cut in price by cutting down on profit margins, which was immediately dismissed by the finance department which saw it as a fall in revenues and profits.

Every department was of its own view and tried to advocate their own point of view into launching the product which made it hard for the company’s executive vice president to make a decision.

2. What is the Current Decision Making Process?

Emma Richardson, the company’s executive Vice President was tasked to take the company towards operational alignment and increase the relationships between all the departments of the organization when she was promoted to this job.

The decision making process of the company generally involves the president to discuss a matter with the executive vice president. The EVP than takes the proposition to the design and development department where Allen Roth, the director gives the tasks away to the people working for him. Allen Roth has the power to control the design and the process of any prototype that his department is tasked to produce. Sales department has no power in decision making process per se, but they are the one who are tasked with marketing the product, and their input in the product is taken as an important point. 

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