INDUSTRIAL ORGANIZATION MANAGEMENT

Monday (7:00 am – 10:00 am)

1st Semester 2022 – 2023

GROUP ACTIVITY NO. 3

Case Application 2 (Page 200)
Case Application 2 (Page 220-221)
Case Application 1 (Page 244-245)

Submitted by:

GROUP 5 (BSIE 2-F)

Faura, Reynalyn S.
Ortiz, Melven Nick V.
Pongautan, Gia Ericka
Tribunalo, Mary Ann
Restauro, Angelica
Ardiente, Kristelene

Submitted to:

Engr. Ace Simbajon

Instructor
 CASE APPLICATION NO. 2
SUMMARY

Underwater Chaos

It was a claustrophobic worst nightmare to get trapped in an undersea 31-mile Eurotunnel

beneath the English Channel on the Eurostar train that travels between Britain and the European
mainland. More than 2,000 passengers have been stranded for over 16 hours in a series of
breakdowns experienced by London-bound trains that come from Brussels. This crisis began in
December 2009 and has forced passengers to endure severe distress and very high temperatures in
the tunnel. It is even implied that the situation compelled some parents to remove the clothes of
their children as others panicked or felt sick due to the heat.

The incident raises a few questions about: whether it is an unfortunate incident for the
passengers or it's a result poor managerial decision-making regarding the operation. The
independent review of the incident blamed Eurostar as well as the operator for not being prepared
for the severe winter weather. The report said Eurostar failed to properly maintain its high-speed
trains and insulate them against the cold to protect sensitive components from manufacturing due
to excessive snow and moisture build-up. The review further criticized the Eurostar management
for lack of good communication systems within the tunnel which could have otherwise provided
passengers with other staff in the company and the drivers. The managers could at least have done
something in making decisions that would increase their preparedness for such scenarios.

DISCUSSION QUESTIONS

1. What’s your reaction to this story? What does it illustrate about decision making?

− Impetuous and careless decisions always result in disaster. I feel uneasy, anxious,
sad, terrified, and worried about all those passengers’ experiences. Also, it is
disappointing and distressing since there is inadequate communications equipment
within the tunnel, it might have allowed its staff to have direct communication with
train drivers and other Eurostar employees. I am afraid as well that it might happen
again but with more casualties and damages since being trapped for 16 hours in the
 dark and overheated tunnel would cause a lot of panic and hopelessness to all of
the passengers, especially for children who merely understand the situation. These
scenarios enlighten us about the company's poor decision-making processes and
lack of preparedness, demonstrating managerial failure that could have been
avoided with proper planning. To make the best decision, managers should plan for
the worst-case scenario. It should be studied, tested multiple times, and guaranteed
that all types of situations and accidents are expected. Remember that simple
mistakes in managing might cause a bigger problem in the future if not planned
properly.

2. How could the decision-making process have helped in both the response to the crisis
situation and in preventing it from happening?

− The decision-making process could help prevent the situation from happening by
identifying a decision, gathering information, and assessing alternative resolutions
which could greatly help them plan what precautionary measures they might take
or change to avoid the situation. Decision-making could also lessen the impact of
the situation or could have made the resolution process faster. Eurostar's train and
track equipment may have been tested before use, taking into account the impact of
severe weather. Emergency preparations should have been set up to handle a
potential breakdown while the issue was still unfolding, and better communication
technology should have been made accessible. The breakdown of other modes of
transportation during the severe weather should have alerted Eurostar to potential
issues. It is significant to highlight that Eurostar did move appropriately to address
miscommunications and update train equipment following the event. Any
passenger will always require reliability.

3. Could procedures, policies, and rules play any role in future crisis situations like this one?
If so, how? If not, why not?

− Yes, all businesses should have emergency response plans in place. These firms
should develop contingency plans for minor and worse-case scenarios. In addition
 to distributing backup/emergency equipment around the company, employees
should get emergency response training. It could prevent the incidents from
happening. In Eurostar, the staff was unprepared for this type of occurrence, there
was no usual procedure they followed. As a result of the accidents, it is safe to say
that many other companies are following suit by devising elaborate plans to avoid
similar unfortunate events. Other companies should use this as motivation to
develop comprehensive plans to avoid such future occurrences. If Eurostar were
planning ahead of time and prepared for this kind of incident, the situation could
have been avoided.

4. What could other organizations learn from this incident?

− The incidents that occurred on the Eurostar serve as a wake-up call to other
organizations. Other organizations could implement the decision-making process.
A step-by-step decision-making process can help organizations make more careful
and considerate decisions by gathering important information and defining
alternatives. This strategy increases the chances that the company will choose the
best alternative solution to a problem. To avoid a repeat of this incident, it is
important to recognize the need for a decision, generate options, and evaluate those
options. Managers should always conduct a thorough inspection, study, and
understanding of the organization's operation to come up with great ideas in times
of crisis and perform these actions more frequently. Furthermore, the Eurostar
disaster is seen as an example of poor managerial skills and serves as a warning to
other companies to develop a comprehensive strategy to avoid the recurrence of the
past.
 CASE APPLICATION NO. 2
SUMMARY

Building a Future

Since 1976 Habitat for Humanity, an Americus, Georgia-based non-profit organization,

has helped to build over 300,000 homes to house more than 1.5 million people in more than 90
countries around the world in its mission to “eliminate poverty and homelessness”. What is unique
about it is that it isn’t a giveaway program but rather a loan program with a traditional down
payment and mortgage on the homes - which they would also volunteer to help with labor,
construction materials, and donations to assist those new homeowners. In 2009, J. Ronald
Terwilliger a former CEO of a housing development company and member of Habitat’s board of
directors made a $100 million pledge to Habitat and intended to motivate other philanthropists to
“step up their giving” at a time when the need has never been greater.

DISCUSSION QUESTIONS

1. What role do you think goals would play in planning for the wise use of this gift? List some
goals you think might be important. (Make sure these goals have the characteristics of well-
written goals.)

− When an organization plans for situations that require the coordination of resources,
goals play a significant role. Goals would outline how management choices will be
carried out. These are the outcomes a company seeks to achieve, and planning is
the mechanism through which the techniques and strategies to achieve them are
chosen. The improvement of performance, the raising of expectations, and the
motivating of all members of the organization are just a few ways that goals may
play a part in planning. In order to track progress and take appropriate action, the
controlling function may also be assisted. The goal of Habitat for Humanity should
adhere to Drucker's SMART concept in order to make the most of the $100 million
donation. The organization has received a gift of $100,000,000, thus its objectives
will be more growth-oriented. The following are the goals that might be important
to the organization:
 ▪ Purchase enough acreage to cover program demands over the long run.
▪ Build and remodel both single-family and multi-family homes using
sustainable building techniques.
▪ Implement an owner-occupied home repair program to support and aid
low-income homeowners.
▪ Create community alliances to aid in the redevelopment of certain
neighborhoods.
▪ Offer assistance to promote stable homeownership to the people in need
within the community.
▪ Increase the number of volunteer opportunities available to the
organization up to 10% in the next 2 years.
▪ Foster a culture of understanding, action, and advocacy for affordable
housing.
▪ Establish a powerful presence within the affordable housing sector by
influencing the context in which Habitat operates.
▪ Find and cultivate community leaders to lead and provide funding for
the group.
▪ Improve staff members' leadership and skill sets in line with changing
demographics in the future.

2. What types of plans would be needed in wisely using this gift? (For instance, long-term or
short-term, or both?) Explain why you think these plans would be important.

− The process of planning includes identifying the objectives of the organization,

formulating a general plan for accomplishing those objectives, and creating an
extensive collection of plans to integrate and synchronize organizational
operations. Careful planning is necessary to decide how and where the $100 million
contribution should be distributed, both in the long term and the short term. Long-
term planning that is comprehensive and directive would be developed to achieve
Habitat's goals since top management would need to play their responsibilities in
using this significant gift. Companies strive to achieve their long-term goals and
 find lasting solutions to problems. Planning for the long term responds to the
company's competitive status in its social, economic, and political environments. It
also creates methods for adjusting and influencing its position to attain long-term
objectives. It reviews significant capital investments like buying properties and
equipment and puts into place the rules and practices that mold the company's
image to fit the ideals of top management. Because middle and first-line managers
would be expected to take a part in achieving short-term goals, it would be simpler
for them to allocate or assign short-term goals, and this planning would be of a
detailed and operational character. Short-term planning examines the company's
current qualities and creates plans to enhance them, it includes the employees'
attitudes and skill sets. Other immediate worries include the state of production
equipment or issues with product quality. They implement simple solutions to
difficulties to solve these concerns. Short-term solutions include employee training
courses, equipment maintenance, and quality improvements. When short-term
planning is effective, long-term planning expands on those successes to maintain
accomplishments and guarantee ongoing improvement.

− The types of plans that would be needed in wisely using this gift in the short term
are: They should find investors or people willing to donate both financially and in
labor for their organization, find more people that are suitable for the requirement
they need to avail the program, find a suitable location for the housing program.
Important long-term plan is, investing some of the money from mortgage and down
payment to keep growing financially which would help them finance more housing
projects. Having these plans are important in order to have a concrete vision of the
future of the organization. It would also help and guide them on steps and necessary
measures they have to do in order to achieve their goals.

3. What contingency factors might affect the planning Habitat executives have to do for the
wise use of this gift? How might those contingency factors affect the planning?

− Contingency planning refers to identifying risks in any type of company, including

those posed by intense competition, political, cultural, social, and natural factors
 that may affect the business either directly or indirectly. Therefore, contingency
planning is crucial to the success of any organization since it lowers the risk
involved. The top managers of Habitat for Humanity will eventually be in charge
of managing a gift of this size. As a result, planning at the highest organizational
level will be of strategic character. Lower-level managers will be involved in
operational planning as smaller gifts are distributed around the company.
Furthermore, environmental ambiguity will influence planning in that natural
catastrophes, increased housing demand, or a variety of other unforeseen events
may prompt the executives to reconsider how the gift is utilized. Also, it's crucial
to consider how long they have to put this gift to use. Five years should be the
length of the organization's plan. All of these factors may have affected Habitat's
executives throughout ongoing operations. If the staff's ongoing training and
development are not done, the organization could receive fewer donations,
suppliers might raise the price of the items, and staff might lack skills and talents
over time. All of these criteria would enable managers to prepare backup plans for
dealing with these unforeseen circumstances. Additionally, the contingency factors
that might affect the planning are the location of the housing, the common need of
a family available in the area such as work, department stores, hospitals, etc., and
hazards and risks in the location. These contingency factors might affect the
planning because these are the factors that might tell if people will stay in the area
and will continue to help the organization. Without the people that will avail of
this program, it would be hard to attain their goals and continue their plans.

4. What planning challenges do you think Habitat executives face with getting the most use
out of this gift? How should they cope with those challenges?

− It would be difficult to execute a plan involving such a significant sum of money.

On the specifics of how the funds should be used, it is highly possible that not all
of the managers will concur. It could be challenging to come to an agreement on
how to use the gift. Additionally, after the donation is accepted, other people could
not agree with its usage, which might put Executives under investigation. Once the
goals and objectives are established, they should be able to recognize the value of
excellent communication within the company. The plan's acceptability by
stakeholders will be facilitated by gaining support from others. Furthermore, the
planning challenges that the organization might face are disasters that might destroy
their houses, mortgage delays, and a lack of motivation for other members. The
organization must have extra money or emergency money they could use in case of
these emergencies, they should also have a concrete deal with the other members
that their cooperation and responsibilities on paying are also important to help more
people that are in need.
 CASE APPLICATION NO. 1
SUMMARY

Gaga Over Gaga

Lady Gaga, now in her mid-twenties, has taken the music world by storm with her style
and business savvy. Five years ago, Lady Gaga was waitressing and singing in drab and dingy
New York clubs. She was ambitious and had bigger goals but she failed at the beginning to become
a music star. After she failed, she joined forces with a hand-picked core team of creative advisers
she called Haus of Gaga. Behind all that glitz, glamour, and unusual fashion choices, she did a
case study on what it takes to succeed in the music industry today. Gaga's impact on the music
world has been nothing short of phenomenal. She started writing her own material and she sold
more than 10 million albums. Her debut album generated four No.1 songs. After a year, she
achieved great success and had become a star. She has gained the love and loyalty of her fans, and
her name has an impact on marketing success. Millions of "Little Monsters"—Gaga’s nickname
for her fans— follow her on Twitter, Facebook, and Instagram. She opened the Grammy award
show in early 2010 with music legend Elton John. One important component of her success is her
savvy awareness of the power of digital media and her exceptional ability to exploit it. Even though
much of Gaga’s audience has got her music online legally for free, “being embedded on the Web
can pay dividends in exposure and the loyalty of fans.” Gaga keeps her Little Monsters engaged
with personal musings and real-time thank-yous. Gaga earned success in 360 deal, which means a
business relationship between an artist and a music industry company. Gaga’s persona has been a
calculated strategy. Gaga’s uniqueness keeps her audiences eager to see what her next image might
be. Gaga is determined to not be a niche artist. However, her now trendy sound won’t last forever.
Her ability to remain a music industry mainstay will depend on her ability to evolve.

DISCUSSION QUESTIONS

1. How is strategic management illustrated by this case story?

− Strategic management entails a strategic method of thinking, planning, and

continually analyzing the organization's needs to attain its objectives. In any
strategic direction, having clear goals in the course of action are crucial. In this
 case, Lady Gaga and her team of creative advisors devised a strategy that included
a distinct persona to be unique, a 360-degree deal, and the use of digital media to
achieve phenomenal success in the music industry and extreme loyalty from
millions of Little Monsters to her brand, which spans music, video, design, and
marketing. Due to this, she has taken the music world by storm; she was able to
generate four No.1 songs and topped digital sales in 2009 with 15.3 million tracks
sold.

2. How might SWOT analysis be helpful to Lady Gaga as she and her advisors manage her
career?

− SWOT analysis is used to learn about management processes and strategies,

develop skills, and rectify shortcomings. It would be helpful to Lady Gaga and to
her advisors in managing her career because it can help them identify their
advantages and disadvantages from their competitors. It would also help them
determine the areas she must improve and should be focused on to lessen the
possible downside in her career. In addition, they can assess the environmental
trends where they should take advantage and what trends to anticipate to keep apart
from their competitors.

3. What competitive advantage do you think Lady Gaga is pursuing? How is she exploiting
that competitive advantage?

− The competitive advantage that Lady Gaga is pursuing is being unique, which is
new to the eyes of the audiences and using digital media to her advantage. Due to
these competitive advantages, she was able to cut across disparate subcultures such
as gays, teens, and finicky hipsters. Her various audiences were loyal to her hence,
she exploited the advantages of their support. Due to her astute comprehension of
digital media, Lady Gaga can provide her music for free to her audience online,
allowing her to profit from online dividends. And since she was famous, she was
able to deal with companies in a 360-degree deal which became wildly successful
for Gaga.
4. Do you think Lady Gaga’s success is due to external or internal factors or both? Explain.

− Both internal and external factors contributed to Lady Gaga's success. She was
ambitious and had bigger goals which were the foundation of her success. She
perseveres and works hard to be on the top accompanied by her business savvy.
Another internal factor is her team management; she joined forces with a hand-
picked core team of creative advisers called Haus of Gaga. The external factors that
contributed to her success are the use of digital media and the extreme support from
her fans. These factors made her famous which made her music successful and
leads to making a deal with music companies in a 360-degree deal. Her uniqueness
keeps her fans waiting to see what her next image would be. The external factors
made her extra successful due to her flexibility to change and deep understanding
of these factors.

5. What strategic implications does the suggestion that her ability to remain a music industry
mainstay depends on her ability to evolve have?

− The suggestion implies that Lady Gaga will remain the music mainstay for years if
she can evolve with the constant change in the environment. Change is indeed
observable in the community, including other people’s preferences. Having the
ability to improve with environmental uncertainties would maintain her popularity
and secure her role in the music industry. It would create a dilemma for Gaga’s
management whether to stay with her signature style or adopt changes. However,
her management should incline to adopt change so she would stay where she is
today. Evolution must be applied in all businesses in line with the changes of
demand from the viewers to keep the business running.