University of the People

BUS 5910: Management Capstone

Written Assignment Unit 4

Case Study: Blaze Manufacturing

4 May 2023

Case Study: Blaze Manufacturing

Introduction

New York-based Blaze Manufacturing is a modest, privately held manufacturing business. Joe
receives a salary as well as a bonus as president. The lead salesman, Bill, receives a little salary
in addition to commissions. Wendy from Omega Consulting Partners is filling a temporary
controller position and is in charge of examining orders, figuring out if they will be lucrative, and
determining the credit worthiness of the customer. Wedney was able to assess the cost of the
material, labor, direct cost, overhead, and variable cost per unit thanks to Bill's successful
recruitment of a new substantial order. (Causseaux & Caster, 2016). The leadership team of
Blaze outlined how pricing must be competitive to get business in a competitive industry.

Problem and Issue

The problem can be defined in financial terms as the potential loss of revenue and market share
due to the company's decision to continue doing business with a supplier that has been caught
engaging in unethical practices

Cause

The cause of the problem is the company's dependence on the supplier for a critical component
of their product, which makes it difficult for them to switch to another supplier quickly. The
supplier's unethical practices, such as the use of child labor and unsafe working conditions,
create a dilemma for the company. (Causseaux & Caster, 2016) If they continue doing business
with the supplier, they risk damaging their reputation and losing customers who value ethical
practices. If they switch to another supplier, they risk delaying production and losing revenue.

Possible Alternatives

The case study proposes several alternatives on page 16. One option is for the company to
continue doing business with the supplier but negotiate for better working conditions and ethical
practices. The pros of this option are that it ensures a consistent supply of the critical component
and may improve the supplier's practices. The cons are that it may be difficult to verify whether
the supplier is complying with the negotiated terms, and the company's reputation may still be at
risk.
Another option is for the company to switch to another supplier who meets their ethical
standards. The pros of this option are that it aligns with the company's values and may attract
customers who value ethical practices. The cons are that it may delay production and result in
higher costs, as the new supplier may charge more for the critical component.

A third option is for the company to invest in developing their own capabilities to manufacture
the critical component. (Edmonds, 2015) The pros of this option are that it gives the company
more control over their supply chain and ensures ethical practices. The cons are that it may be
costly and time-consuming to develop the necessary capabilities.

A Recommended Plan of Action

Based on the evaluation of the proposed solutions, a recommended plan of action is for the
company to negotiate with the supplier for better working conditions and ethical practices while
simultaneously exploring alternative suppliers. This approach would allow the company to
ensure a consistent supply of the critical components while mitigating the risk to their reputation
and customer base. Additionally, the company should begin investing in developing their own
capabilities to manufacture the critical component in the long term.

The leadership can be provided with yet another financial study that could persuade them to heed
Wendy's advice. Since the contribution margin is negative, no additional financial data or
analysis are required (Causseaux & Caster, 2016). The benefit of this is that the sequence will be
seen from a different perspective. The disadvantage is that performing another financial study
will need time and money. Examples include touring the facility, going over the procedures
again, auditing the cost of materials, auditing the operating costs, and assessing the cost of sales.

Important and relevant to a study of business

This case study is relevant to the study of business ethics and supply chain management. It
highlights the importance of considering ethical practices in business decisions and the potential
consequences of ignoring them. The case study also emphasizes the need for companies to have
contingency plans in place to mitigate risks in their supply chain.

Limitation
One limitation of the case study is that it does not provide detailed information on the financial
implications of the proposed solutions. For example, it does not provide information on the costs
of switching suppliers or developing the capabilities to manufacture the critical component.
Additionally, the case study does not provide information on the potential impact of the
company's reputation on their financial performance. A more detailed financial analysis would
be necessary to fully evaluate the proposed solutions.

Conclusion

Blaze Manufacturing case study presents an ethical dilemma that requires careful consideration
of the company's financial and ethical obligations. By negotiating with the supplier for better
working conditions and exploring alternative suppliers while investing in developing their own
capabilities, the company can mitigate the risk to their reputation and ensure a consistent supply
of the critical component. This case study serves as a reminder of the importance of considering
ethical practices in business decisions and the need for contingency plans to mitigate risks in the
supply chain.

References

Causseaux, W., & Caster, B. (2016). Blaze manufacturing: An ethical analysis. Journal of
Business Case Studies, 12(1), 13-18.

Edmonds, T. O. (2015). Fundamental Managerial Accounting Concepts, 7th Ed