critical thinking

Pear, Inc. is a large global company that produces computer equipment. The company is headquartered in the U.S. and does design, engineering, and some final assembly in the U.S. The component parts are manufactured in company-operated factories across the world. Profitability is very important to the company, but the company also intends to operate ethically with respect to its customers, employees, and the environment. The company’s approach to managing its locations is to appoint a seniormanagement person to be responsible for all aspects of the operations of the location to which she/he is assigned. The senior managers are given authority for all decision making related to their location, and they are evaluated based on their results. The evaluation is based on meeting their operating and financial budget numbers. If a manager achieves her/his targets and goals, they are given a bonus equal to three times their annual salary, but if they do not achieve their targets and goals, they are demoted or terminated.

Critical Thinking Case-performance-metrics

The company has based their operating targets and goals on the manager’s ability to keep costs under budget and avoid fines or lawsuits related to product, employee, or environmental issues. However, the company has been the target of consumer complaints concerning labor and human rights violations and environmental pollution at some of their locations. While the company has not been sued or fined, the corporate leadership team is concerned that managers at some of its locations have not followed the company’s code of conduct related to ethical workplace practices.

To investigate these concerns, the U.S. headquarters audit team conducted several employee focus group sessions at multiple locations and found out that the managers at the company locations are very aggressive and will do “almost anything” to make their numbers and avoid litigation so that they can earn their bonus. The focus group participants revealed instances where employees were forced to clock out but to keep working to keep labor costs down, factory managers harassed workers to get more production out of factories and to meet production deadlines, payment of bribes to local officials to overlook labor and environmental violations, and the use of substandard materials to reduce the cost of products manufactured.

As part of the corporate leadership team, you will join a task force to address this situation and provide recommendations for ways to correct the problems that the company is facing. Again, profitability and cost control are critical, but the company also wants to operate ethically with respect to its customers, employees, and the environment. Reputation is important. The company’s leadership understands that it is an important part of the community and that outcomes should contribute to the Common Good. They also understand that they have an opportunity and a responsibility to create meaningful work/jobs for their workers as well as to pay a living wage. (See Principles of Catholic Social Teaching at https://www.usccb.org/beliefs-and-teachings/what-we-believe/catholic-social-teaching/seven-themes- of-catholic-social-teaching for information.)

You will write a document to submit to this task force that explains and summarizes your ideas and your work. Follow the requirements below in your document.

Requirements.

1. Identify the problem that the leadership team is trying to solve and the stakeholders who are affected by the approach to solve this problem. Be sure to address the challenges of controlling operations in a decentralized company structure and how a company can use metrics or KPIs to manage a large decentralized organization. The specific metrics that are chosen will affect managers’ decisions and guide their performance. Keep this concept in mind when setting performance expectations and metrics. Remember that stakeholders are not the same as stockholders – stockholders are the owners of the company and represent one of the stakeholder groups. If you are not clear about who might be a stakeholder, take a look at Caux Round Table Principles at

Principles

for identification of Key Stakeholders.

2. Identify and analyze the options that the company has to solve their problem. There are always multiple options, and the practice that the company is following at the present time may be the best option. Address the pros and cons of the options that you have identified. When you are identifying options, be sure to consider the material from the course about decentralized operations, the material on the Balanced Scorecard model, and the material that was covered in class and Discussions related to corporate responsibility reporting.

Critical Thinking Case-performance-metrics

3. Write a conclusion to communicate your findings and recommendations. You will be recommending one solution in your conclusion. Explain your proposed solution and support your recommendation by explaining why it is the best approach.

This case is intended to guide you in developing an approach to think critically about the problem at hand. It is not focused on computing a correct answer, but on the problem-solving approach that was used and your application of concepts that were developed in this course. Read through the criteria in the grading rubric to see the expectations for this case.