Name: Hazen Yu

Section:

I. Title of the Case: City Hospital Supplies, Inc. (4) STAFFING

II. Summary of the Case ( 3 pages)

The principal incorporators of City Hospital supplies are Messrs. Jaime, Pineda, and Nasol
(CHS). They devised a strategy for the company's initial operations. The Sneider Company's
Regional Marketing Director for Asia, based in West Germany, has awarded it the exclusive
distributorship for the Sneider line of hospital supplies in the Philippines. The Sneider line
included three product categories: surgical sutures (nearly a hundred items), general and
specialty catheters, and disposable needles and syringes.

Months of negotiations with the Sneider regional official ensued, during which CHS submitted a
feasibility study containing marketing and financial projections, among other things. The
agreement called for the promotion and distribution of the three product lines in the Philippines,
with an initial emphasis on the Metro Manila area, which accounted for more than 60% of the
total market for such products in the country. The contract was for five years and could be
extended for another five years with the parties' mutual agreement.

The surgical sutures line (the largest of the three product lines) was dominated by two
well-known American brands in the Philippine market. CHS and Sneider Co. officials, on the
other hand, believed that the Sneider suture line, as well as the two other product lines, would
capture a larger share of the local market for the following reasons: product quality that was
thought to be equal to or better than the leading competitor brands; a pricing strategy that would
position the Sneider lines about 15-20% lower than the competition; and an undisclosed
promotional program directed at key hospital medical personnel

The distributorship contract required CHS to assist in the development of the Sneider product
lines in the Philippine market. This can be accomplished, first and foremost, by working with the
Sneider regional office to introduce its products to public and private hospitals in the Philippines.
Second, by meeting existing Sneider product demand from Philippine hospitals, it was originally
agreed that CHS would field at least four (4) full-time field personnel to call on and service the
estimated over 150 hospital accounts in the Metro Manila area. Third, adequate inventories of
Sneider products must be kept on hand at all times. The contract required CHS to import the
three product lines from Germany via air freight and import letters of credit, as well as provide
user feedback on Sneider products and other information requested by the Sneider regional
office. In exchange, CHS would be granted exclusive distribution rights to all Sneider products in
the Philippines, with a maximum mark-up of 35% of the landed cost of such products.

The awards of distributorship were decided upon:

1.) The three incorporators will put up one million pesos, with Mr. Jaime paying half and the
other two splitting the rest.
2.) Mr. Jaime will serve as CHS's General Manager and will supervise at least once per week.
3.) A senior marketing professional will be hired.
4.) CHS will practice selling with credit terms of 30 days. Without a purchase order, no hospitals
will be served.
5.) A 70-square-meter office in Makati will be used, and a stockroom of at least 15 square
meters will be maintained.
6.) Purchasing utility vehicles, transportation equipment, and furniture is prohibited unless
absolutely necessary.
7.) Four more friends of the incorporators will make token investments, bringing the total number
of directors to seven.
8.) The total number of employees, including the general manager, should not exceed ten.
9.) Within one month, CHS will place an initial order of 600,000, primarily for suture lines, and
the venture is expected to begin operations within another month.
10.) Mr. Jaime was to propose an organizational and staffing plan for CHS that the group would
approve.

II. Problems Encountered:

1. Propose a table of organization for CHS detailing every position in the company.
2. What are the job descriptions for each role?
3. What is the approximate salary for each role?

IV. Solution(s) for every problem.

1.
2. The General Manager is in charge of overseeing business operations. The senior
marketing manager supervises the company's marketing department staff in the sales
and marketing department, and the junior marketing representative is involved in
creating and running marketing campaigns. The Senior Sales Representative will direct
and oversee the sales policies, objectives, and initiatives of the organization. The
Inventory Manager is in charge of all operations involving actual distributions. The
production manager oversees the manufacturing process and coordinates all activities to
ensure adequate resources are available. The accounting manager is in charge of
monitoring and analyzing accounting data, as well as producing financial reports or
statements.
3. The monthly salary for the General Manager is P70,000. The senior marketing manager
should expect a monthly salary of P45,000, while the junior marketing representative
should expect a monthly salary of P28,000. A monthly salary of P30,000 is expected for
the Senior Sales Representative. The Inventory Manager and Production Manager can
expect a monthly salary of P20,000. The monthly salary for the Accounting Manager will
be P50,000.