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Week 3 Assignment
Mudge Paper Company Case
The Mudge Paper Company case represents an instance where those in the top management seemingly could not agree. One of the members is in a tight spot and pushed to decide without involving the team.
Initially, Lauren was not completely happy with the contract they were to sign with Bart’s because of the extension in the credit limit. The main reason behind her lack of contentment with the contract was the extension of the credit limit. Mudge was left unprotected from any cash flow damages. She also felt a huge lack of contentment with the line of credit that was increased to limits she felt were unreasonable. However, when Bart’s made a new offer that would raise the sales to $2.5 million dollars, Lauren felt that the extra sales volume would help the corporation by offsetting the interest for late invoices. She thought that the offer was worth the risk as it meant that the corporation abandoned temporary gratification for greater gain in the long term.
Like Lauren, the CEO was not completely happy with the contract they signed with Bart’s because of the extension done in the credit limit. This was because of the extension in the credit limit that left Mudge unprotected from any cash flow damages that would have occurred in the event of Bart’s failure to make the payments on time. Similarly, Lauren noted that the CEO would not be happy with the decision to accept Bart’s new offer. The company was now obligated to greater cash flow commitments. Though, to some extent, the CEO would see sense in accepting the offer because the increased sales would benefit the corporation by offsetting the interest for the late invoices.
The CEO always emphasized group decision-making and discouraged individual decision-making for various reasons. One of the major reasons for the emphasis is the understanding that group decision-making invites different perspectives of the team members before a decision is made, which ensures that the corporation undertakes the decision that benefits the organization the most (Kanai, 2010). Unlike individual decision-making, the organization is limited only to the decision-maker’s perspective. Also, group decision-making provides an avenue for the corporation to explore possible solutions and assess which one would benefit the company the most. This is different from individual decision-making where the only solutions available are those presented by the decision-maker, which limits the scope of the decision-making process. Group decision-making provides a path for assessing all the risks involved with every solution and how they can be mitigated. Few eyes are looking into the solutions, thus making it difficult to identify all risks (Larson, 2017). However, group decision-making is more time-consuming than individual decision-making because several proposals have to be considered before making the final decision.
From the analysis of both Lauren’s and the CEO’s perspectives, there are identified instances of bias from the decisions that both the CEO and Lauren made regarding the offer made by Bart. Lauren seemed to have made the decision driven by her interest to outdo Griffith. She had a strong desire to prove to the CEO and other board members that she would perform better, deciding to go for the option with the highest returns regardless of the risks involved. On the other hand, the CEO seems to have favored the decision made by Lauren simply because he, too, was after the decision with the highest gain. The CEO seems fixed on realizing the highest sales regardless of whether or not the risk involved is one that the corporation can comfortably take.
Like any other corporation, Mudge Paper Company has an established management board with varied skillsets from different fields. This means that it would have been best if all the management team members had been involved in the decision-making process. Different views would have been aired that would have helped steer the company forward by deciding on the best available alternative (Adams, 2015). If all the management team members had been involved, all risks would likely have been identified, and the solution chosen would accept risks that the corporation could manage.
References
Adams, A. (2015, October 16). How Group Dynamics Affect Decisions. Retrieved from Stanford: https://www.gsb.stanford.edu/faculty-research/faculty/lindred-leura-greer
Kanai, R. (2010, August 31). Are Two Heads Better Than One? It Depends. Mind & Brain, pp. 1-3.
Larson, E. (2017, March 23). 3 Best Practices for High-Performance Decision Making teams. Leadership Strategy, pp. 1-5.