Case1.

ALMA ELECTRONICS:

I’ll Dream of You

Mr. Andy Mallari opened a small shop selling transistor radios in 1979. His store was located at
one corner (Genera

l Luna St.) of the entire stretch of Burgos Avenue, the main thoroughfare of Cabanatauan City.

The demand for electronic parts made him carry a wide assortment of parts that are used in the
assembly and maintenance of radios, tape recorders, amplifiers and various related appliances.

By 1990, Mr. Mallari was able to save enough money for the purchase of a 300 square meter lot
along Del Pilar Street. He constructed a 10 meters x 15 meters two-storey building on the lot. The
ground floor is used as his store where sales are made to customers which grew in number month after
month. The second floor is used as his residence.

Mr. Mallari thinks that he can duplicate his feat in sooner big towns of San Jose City, Gapan and
Guimba. He has already started operating his stores in those towns and sales and repair. There are five
salesladies in Cabanatuan attending to the various needs of the customers. Those who bring their
appliances for repair are served by one of the six technicians. The parts used come from the stocks
maintained at the store.

Those who purchase parts from the store consist of technicians from the various towns of
Nueva Ecija. Sometimes the technicians send someday to do the purchasing of parts.

Mr. Mallari’s perspective has changed drastically after he met his former classmates Estelito
Chan in a class reunion at Araullo University; Mr. Chan has a well-established appliances assembly plant
in Manila. He indicated that he did not start big but rather as a subcontractor for a large assembly plant.
Slowly, Mr. Chan’s business picked up until he was able to establish his own factory.

Mr. Mallari thinks that he can follow the footsteps of his friend. As he is already 47 years old and
his oldest child is about ready to enter college, he thinks this is the best time for him to consider sending
his son to an engineering school. His decision will center on which school and which engineering course.
He feels that his children are keenly interested in whatever career he will ask them to take.

Mr. Mallari has three sons, all belonging to the top ten in their respective classes. He thinks all
three have the potentials to help him realize his dream of establishing his own assembly plant. His
immediate concern now is to identify the right college courses for his children.
Case Study in Decision Making:

R. E. CONSTRUCTION: It’s Now or Never

When Engineer Romeo Estabillo finished his Civil Engineering course at Mapua Institute of
Technology, he took the board examination and passed it in 1981. Wanting to start independently, he
went back to his hometown (Santiago City) to organize his own construction firm. In his first few years of
operation, he accepted contracts for the construction of residential houses. As he gained experience, his
clients grew in number, and even the most prominent persons in the province of Isabela availed of his
services.

At the start, he hired two assistants to help him in his daily routine as a contractor. One of the
two assistants, Mr. Silvino Santiago, was a third year civil engineering student who had stopped
schooling due to financial difficulties. His main task was a draftsman. His duty was to produce all
documents relating to the physical requirements of the various contracts entered into by his boss.
Among, these documents are the building plan, specifications, bill of materials, building permit, etc. his
additional duty was to assist Engineer Estabillo in supervising the foremen and workers at the various
construction sites.

The second assistant, Mr. Romulo Mamaril, was assigned to coordinate purchasing bookkeeping,
and other related administrative activities.

At the third year of operations, Engineer Estabillo was already directing operations in his newly
constructed office inside his residential compound. By this time, two more female employees were hired
to assist in the various tasks performed in the office.

By 1994, Engineer Estabillo reviewed his company’s payroll. It indicated that he has in his
employ six full time civil engineers, two draftsmen, ten administrative personnel, one messenger and
one security guard. The foremen and laborers working at the various projects were contractual.

By June 1996, Engineer Estabillo felt that business was continuously growing, so he will have to
secure the services of four civil engineers on a full-time basis. As he was directly supervising all
operations, he now feels that he may not be able to perform his functions effectively if he will push
through with the plan. He wants to make a decision, but he is apprehensive. He thinks operations are
now more complex that decision-making must be a little scientific. With this thought, he pondered on
how he will go about solving the problem.
 MOTORBUS COMPANY: Que Sera Sera

Engineering Hermogenes Ancheta has just received his appointment paper from his new
immediate superior, the Vice President for Operations. He has been promoted from Assistant Manager
of the Maintenance Department. After congratulating him, his boss gave him a verbal directive that he
should put some order in his department and make it the most effective and efficient manner possible.

Engineer Ancheta has just passed the board examination for Mechanical Engineering when he
joined Motorbus Company in 1993. By June 1995, he informed his former classmates at the University of
Santo Tomas that he was promoted as Assistant Manager for Maintenance.

The former manager of the department, Engineer Guadencio Inductivo, joined the company
since it started operations in 1989. A total of ten buses began playing the Manila-Isabela route. A
maintenance unit was put up at the Manila terminal in Sampaloc. Another unit services the Ilagan,
Isabela terminal. Each unit has a full-time mechanical and one assistant.

When a company bus comes in for repair, the mechanics diagnoses the carious automotive
system in the bus and later produce a list of part needing replacement. The mechanic sends the list to
Engineer Inductivo, who, in turn, forwards the same to the company accountant for approval of the
request. Oftentimes, Engineer Inductivo performs the actual purchasing himself. Later, he sends the
purchased item to the mechanics that made the request.

The maintenance unit were operating normally unit 40 new buses were procured by the
company in 1993. Since then, every maintenance personnel were so busy that they threatened to quit
their jobs unless additional mechanics and assistant were recruited. By the end of 1993, each unit has a
personnel complement of 5 mechanics and 5 assistants.

Even with current developments, the old method of purchasing was no improved. Purchase
request started to pile up. Mechanics and drivers began complaining to the VP for Operations about
delays in the delivery of needed parts.

The VP for Operations immediately sent a note to Engineer Inductivo ordering that problem
should be resolved immediately. Engineer Inductivo was hard presses and he could not offer an
immediate solution. The next day, Engineer Inductivo informed the VP for Operation that he is
requesting for the approval of his application for retirement as he is already 62 years old.

The VP forwarded the request to the President with an endorsement justifying the request. On
the same day, the request for retirement was approved. The next day, Engineer Ancheta received his
appointment papers promoting him to Manager.

One day the first things Engineer Abcheta did was to inspect the storage room for parts. He
found out that the room was full of an uneven supply of parts. Some parts were of excessive quantities,
while some important ones were inadequately stocked. A corner of the rooms contains a big volume of
absolute parts.

At the end of the day, Engineer Ancheta was informed by the VP that the company will be
fielding an additional 50 new buses within 30 days. This will mean that by the next month, about 100
buses will be servicing the various routes assigned to Motorbus Company.

Engineer Ancheta is now mulling over how he will make the operation of his department as
efficient and effective as possible.
 Case 4: BITS AND PIECS INTERNATIONAL CORPORATION:

Little Things Mean a Lot

The Bits and Pieces International Corporation (BPIC) is one company that appears to be
succeeding and growth has become a part of its agenda for the next few years. This is quite unusual for
a company whose certificate of incorporation has only been approved by the Securities and Exchange
Commission four years ago.

BPIC is maintaining an office at Makati Avenue in Makati and a plant at Sta. Rosa, Laguna. The
company is producing various injection molded plastic products classified as consumer and industrial.

The key officers of the company are as follows:

President and Chairman of the Board: Engineer Rodrigo Reyes

Vice President and General Manager: Engineer Jesus Ualat

Corporate Secretary: Mrs. Mildred Salazar

Treasurer: Ms. Purita Toquilar

Auditor: Ms. Elsa Marzo

Engineer Manager: Engineer Silvino Santiago

Production Manager: Engineer Severo Lagayan

The organizational chart of BPIC is shown in Exhibit:

1.

The company, classified as a manufacturing corporation, operates on two activities:

1. Production of stocks to be sold to the local market

2. Production as a subcontractor

BPIC does not maintain a sales force. The general manager acts as marketing executive and
directly transacts business with customers.
 The company’s average sales per month are as follows:

Product Average Sales per Month

Ball Pen Tips ₱ 340.000

Sputum Cups ₱ 900.000

Grease Cups ₱100.000

Bottle Caps ₱100.000

PVC Fittings ₱200.000

Total ₱1640.000

At current output levels, the company was declared profitable.

The following financial data were provided:

1. Profit margin (net income/sales) = 32%

2. Return on the total assets (net income/ total assets) = 72%
3. Annual turnover = 1.1
4. Acid test ratio = 1.05

An analysis of the company’s market potential convinced the top management to consider expansion.
It was also decided that a new product, the tissue holder, must be added to its existing line of products.

The target sales for the next three years are as follows:

Product Year 1 Year2 Year3

Ball Pen Tips ₱6M ₱ 7M ₱ 8M

Sputum Cups ₱ 12 M ₱22 M ₱ 33 M

Grease Cups ₱ 12 M ₱ 13 M ₱ 14 M

Bottle Caps ₱ 24 M ₱ 36 M ₱ 54 M

PVC Fittings ₱ 48 M ₱ 58 M ₱ 70 M

Tissue Holder ₱ 48 M ₱ 58 M ₱ 70 M

Total ₱ 154 M ₱ 194 M ₱ 249 M

 The company made provisions for improving its facilities including land, building, machinery and
equipment. The hiring of additional manpower was also proposed.

The following constitute the positions proposed:

Position Quantity

Finance Manager 1

Quality Control and Research

And Development Manager 1

Senior Machinist 1

Junior Machinist 2

Helpers 2

The president ordered the general manger to prepare an organization chart for the new set up. The
key officers of the company were directed to review the proposed set-up and present their comments
on an executive meeting scheduled next week. The proposed organizational chart is shown in exhibit 2.

Engineer Lagayan is now contemplating on what credible points he is going to raise in the meeting.
 KUNDIMAN COMMUNICATION CORPORATION:

Mr. Lonely
The Kundiman Communications Corporation (KCC) is a local company with more than 2000 persons in
its payroll. The company’s top management is composed of the President for Administration.

A member of the staff, Engineer Lorenzo de Guzman, an electronics engineering graduate, has just
received an order from his immediate superior, the VP for operations, to head the newly built
telecommunication facility in Antipolo, Rizal. So far, he is the only company personnel identified with
the new facility. He was gicen three months to make the facility operational.

Engineer de Guzman appraised that for Antipolo unit to operate, it will require the services of a
number of persons skilled in the various activities that will be undertaken.

As he has been working with KCC for ten years (five years in the field and five years in the head office),
Engineer de Guzman is familiar with many aspects of the firms’ operation. Some of the supervisors and
three of the key officers are his friends.

Engineer de Guzman felt that the various training KCC provided him had really prepared him well for
the technical aspects of his new job. His exposure to the different units at the head office will also be
useful in some ways to the administrative aspects of his position. However, his trainings and experiences
have not provided him with the expertise to recruit qualified persons to occupy the various positions
that will be created. To begin with, he does not even have information on the number and nature of the
positions to be created.

As he was inspecting the building in Antipolo where he will hold office, Engineer de Guzman wondered
if he could convince top management to transfer some of his acquaintances in the head office to his
new assignment.

Engineer de Guzman knows that his next promotion will depend much in the success of the new
faculty under his direction. He thought that if he could only get right persons, his job would not be too
difficult. With this in mind, he pondered on what his first move must be.
Case 6. NORTHERN CONTAINER CORPORATION:

Time to Cry
Engineer Godofredo Monsod, Jr., general manager of Northern Container Corporation (NCC), was
taken aback by a letter-replay from a prospective new customer (see Exhibit 1). His company has been
operating for only five years and is in need of new customers with potentials of doing business with
them in a long-term basis.

NCC is engaged in the manufacture of general and sanitary tin cans, cooking oil filling facilities, and
molds and dies fabrication. Its factory and administrative office is located at Valenzuela, Metro Manila.

Since, its first year of operation. Engineer Monsod worked hard to make NCC’s operation at full
capacity. The company’s various departments are manned by a personnel complement of 323, growing
by 5 percent annually.

The increasing number of employees is a result of the growing patronage of the company’s products
by customers. Engineer Monsod felt, however, that the company needs one more good customer and
their operations will be at full capacity. It was in October 1996 that Engineer Monsod came in contact
with the general manager of a newly established company, Mr. Godofredo Tapiador. Engineer Monsod
was able to convince Mr. Tapiador to order his tin can requirements from NCC.

In January 10, 1997, NCC’s production manager informed Engineer Monsod that unless new
production orders are received by his department, he will be forced to recommend the lay-off 12
workers in the factory. Five days later, 12 workers were indeed lands off.

It was in January 25 that Engineer Monsod through of making a follow-up of the agreement between
him and Mr. Tapiador. A letter was sent to Mr. Tapiador on the same da. On January 28, Engineer
Monsod read the reply of Mr. Tapiador.

After a while, Engineer Monsod composed himself and prepared to think hard about what happened
and what possible remedies could be worked out.
Exhibit 1

RED RIBBON MANUFACTURING CORPORATION

1201 Putting Bato
Taytay, Rizal

27 January 1997

THE GENERAL MANAGER

Northern Container Corporation
1526 Amihan St.
Bakod Pare, Valenzuela
Metro Manila

Dear Sir:

This is in reply to your letter dated January 25, 1997 inquiring about whether we still consider ordering
tin cans from your company.

Please be informed that since we have placed our order with your marketing department as early as
December 1, 1996 and no reply was sent to us, we deemed it wise to deal with another company as late
as January 15, 1997.

Thank you for your interest and we hope to do business with you under other circumstances.

Yours truly,

GODOFREDO TAPIADOR
General Manager
Case 7. BATANGAS POLYTECHNIC COLLEGE:

The Morning after

Engineer Felicidad Lazaro, a mechanical engineering graduate of Adamson University, has been
operating in the past five years an auto parts supply in Kumintang Ilaya, Batangas City. It is a lucrative
business she inherited from her father.

Four years ago, she started became a full-time faculty teaching on a part-time basis at the Batangas
Polytechnic College. After a year, she became a full-time faculty member of the college of engineering.
She attended to her auto parts business after her official hours at the school.

Miss Lazaro’s dedication to her duties earned her the chairmanship of the Mechanical Engineering
Department. When her boss, the dean, was offered a good paying job abroad, he resigned. Miss Lazaro
was named the new dean of the college of engineering.

Miss Lazaro feels that even if she is offered a job anywhere, she cannot accept it because of her
concern for her business. This matter her also think that she must take her new job as dean seriously.

Miss Lazaro’s first concern is to recruit well-qualified engineer to fill up the slots left by five faculty
members who resigned. An advertisement for the vacancies was made. After a few weeks of waiting,
only ten applications were forwarded to her. Nine of the applicants were new graduates and have no
job experience of any kind. The tenth applicant is a newly retired government employee with no
teaching experience.

Miss Lazaro slowly realizes that there are good engineers in the area but they are not attracted by the
prospect of teaching engineering subjects. Miss Lazaro is also aware that even those that are currently
employed by the school are only waiting for a good job offer other institutions.

Miss Lazaro was mildly shocked when her assistant showed her the enrollment statistics of the
College of Engineering. In the past five years, a steady 10% increase in the number of students was
noted. Last year, there was a 16% increase.

Just yesterday, Engineer Lazaro was approached by two engineering professors, one a department
chairman, and the other, a senior faculty member. They were requesting for a year’s leave of absence.
Because nobody at the moment could take their place, Engineer Lazaro disapproved their request.
Engineer Lazaro was given the information that the two will take jobs in another company on a one-year
trial basis. If prospects are good, they will resign from the school.
 After having been informed of the disapproval of their request for leave, the two professors filed their
irrevocable resignation the next morning.

1. Formulating an immediate solutions to the shortage of teachers in her area of concerns; and

2. Keeping the incumbent ones satisfied with their jobs.

Engineer Lazaro is now contemplating how she will survive this crisis.