Lucas Stuart Milne

Quiz Fomat SA.

1.
If I was Eusebi Martinez, I would recommend doing the executive training
program with Format.
To reach this decision, I took the following facts into consideration. First of all,
we should take into consideration that this is a specialized program designed
specifically (with all the costs, time and man power that this means) for Invest
& Rights executives, so if the price is a bit higher it could be justified by this
personalized research, and it does not seem that much higher than other
programs (about 15% 25%).
In second place, what the HR department is missing is what Invest & Right is
gaining from this program. Not only a good personalized course for their
employees, but as a company owned 100% by Invest Group, the profits will
stay within the company, but if the course is ordered to the University or the
Executive Training Network, those margins would leave the group and have a
more negative impact on the results of the GROUP.
Not only will Formats profits stay in the group, but doing this program with
Format, will open new doors for selling this program to other companies in the
future, ensuring possible profits for Invest & Right Group. If this training has
good results and executives are happy, word might spread out and this could
mean good business for Format.
The price could be reduced a bit as to not impact so negatively on Invest and
Banks training department, taking into consideration that at the end a smaller
margin for Format and less cost for Invest & Bank would have a very similar
result for the company as a whole.
Finally, I would explain to the head of HR training, that the Company has
already incurred in costs for the design of this program, so any decision that he
makes, he should take into consideration that the group as a whole has already
spend a considerable amount of money in this program, and if another
Company is hired for the training, this costs will mean a loss for all of us.

2.
First of all, the first thing i would recommend to Joan Bonet is to try to put a
bigger effort to work things out with Tarda before calling the CEO. An email
exchange isnt enough to try and solve a problem; he should always try to

Lucas Stuart Milne

understand the reasoning of the counterpart. I would suggest having a
personal meeting with Tarda, and if its necessary, lowering the price a bit to
find a middle ground.
Being decentralized does not mean that Format is totally independent from
Invest & Young, decisions are independent, but what I would recommend
strongly to Joan is to try and see the big picture, they all are part of the same
group and every decision that Formats or the Banks managers make has an
impact on Invest & Bank GROUP, although in this case a high price would mean
a good business for Format but a high cost for the bank, what in the end should
be analyzed is what is the best for the group as a hole?
So, taking this into consideration, I would recommend Joan to be a bit more
flexible, and try to reach a middle point in the discussion, thinking strategically
that if this project is indeed completed, Format could have a new program to
offer and to profit from in the future, so, although the margins can be short on
this first time, these could be bigger if in the future they sell this already
designed course to other companies.

3.
If I was a director at Invest & Right, I would see this incident as a serious
problem. I would ask Martinez to have a chat with all heads of departments, of
all the companies of Invest and Right GROUP, or maybe a workshop, to explain
that they MUST always think whats best for the group before any of its
companies. Although we try to decentralize every company so they can make
independent decisions so every company is profitable, this does not mean that
in the end they are all part of the same, so being decentralized does not mean
when making decisions they must ignore the fact that they are owned by the
same people. In this case, HR are ignoring that the group as a whole has
already spent money in this course, and not hiring would probably mean a
bigger loss for the company that the money that is saved by hiring another
company for the training.