Assignment 1: The New Years Crisis

A Report Submitted to Dr. Rohini Patel

In Partial fulfillment of the Requirement of course written Analysis and

Communication

By
MANOJ KUMAR MISHRA
Student, PGDM (IM)
Roll No-023
On
06/11/2015

Adani Institute of Infrastructure Management, Ahmedabad

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TABLE OF CONTENT

Summary

Main Report
Issues & Challenges

Objective Statement

The Option

Criteria For Evaluation

Evaluation of Option

The Recommendation

Action Plan

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Summary
On the morning of 31st Dec 2001 Mike Valenti was informed by Ted Brewer that a salmonella
contaminated batch has been delivered to some important clients. As the only major player mike
cant afford to lose his important customer who contributes about 50% of SPCs revenue. Mr.
Mike needs to handle the working culture issue of two companies and also a course of action for
salmonella contamination issue.
The main objective of Mr. Mike is to find a course of action which will solve the contamination
problem with less financial, legal and customer loss risk.
The options which Mike had are as follows

Call the clients and let them know about the contamination so that they can maintain the

necessary cooking standard.

Do not call the clients and trust the cooking standards that they have set.
Recall the product.

Criteria for evaluation are

Financial Aspects: The financial implication may be short term or long term depending

upon the money loss or customer loss respectively.

Legal Aspects: The action of FDA can do a great damage to the company so they need to

take care of that as well as all legal aspects.

The reputation of the company: The reputation of a business is essential for its survival.
Moral responsibility: Ethical and social responsibility towards the clients as well as the
final consumers.

Evaluation: The best option will be to call the clients and let them know about the contamination
so that they can maintain the cooking standard as it minimize financial, legal and reputation of
company.
Action plan:- Call the clients as quickly as possible through the distributor and make sure that all
restaurants are contacted before dinner time. And make them sure that this will be never repeated
in future at any cost.
Check for other contamination in the stock of company and if found destroy them.

CONTENT

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Issues and challenges: On the 10th Dec 2001 the owner of Michaels home-style pasta
(MHP) acquires its only competitor in market the southern pasta company (SPC) but on 31 st Dec
morning Mr. Mike was informed by Ted Brewer and Fred Jones that due to pressure of Hans
Schmidt, President of SPC they have passed a batch of salmonella contaminated pasta to their
one of the important client whos contribution to the SPCs revenue is about 50%. As the only
major player mike cant afford to lose his important customers. He needs to handle the working
culture issue of two companies and also a course of action for salmonella contamination issue.

Objective Statement: The main objective of Mike is to find a course of action which will
solve the contamination problem with less financial, legal and customer loss risk and also solve
its cultural clash problem.

Options: Mr. Mike has the following options to solve the current situation of the company.
Mr. Mike can Call the clients and let them know about the contamination so that they can
maintain the necessary cooking standard and ensure the clients that if needed he is ready to bear
the compensation or Mr. Mike do not call the clients and trust the cooking standards of them or
Mr. Mike can recall the product by asking clients to destroy them.

Criteria for evaluation: Mr. Mike should evaluate each option based on financial aspects,
legal aspects, Reputation of the company and moral responsibility and the decision should be the
option which is satisfying most of the criteria of evaluation. The financial aspect covers the short
term as well as long term losses. The short term losses are due to the loss of money in current
time and long term loss is due to the loss of customers. The legal aspect covers all the legal
requirements and the expected action of FDA. Reputation of the company is a vital issue without
which the company cant survive in market so while evaluating the option the effect of decision
on the decision must be taken care. The decision also depends on the moral ethics of mike that he
should not feel guilty after taking the decision.

Evaluation of the options:

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Call the clients and let them know about the contamination so that they can maintain the
necessary cooking standard:
If mike inform to the clients then the clients will ensure that the norms will be followed at the
time of cooking which will result
1. Financial aspect: If the clients refuse to serve the contaminated pasta and demand for
compensation then there will be short term loss and if they switch the brand then there
will be a long term loss as well.
2. Legal aspect: In this there will be less legal treat in this case.
3. Reputation of company: There will be a negative effect on reputation of the MHP and
there is a chance of leak of news in press but that will be not that effective.
4. Moral Responsibility: By doing this mike will be morally satisfied as well as will be
able to create a good image among MHP employees and also SPC employees. This will
also help in solving the cultural issue of both the companies.
Do not call the clients and trust the cooking standards of them:
Due to high rush New Year evening the clients may not serve the food as per the standard which
will result in serving of contaminated pasta.
1. Financial aspect: There will be no financial risk if everything goes well but if any
contamination found then mike will lose his liabilities as short term loss and customers
as long term loss.
2. Legal aspect: In this there will be less legal treat in this case.
3. Reputation of company: There will be a negative effect on reputation of the MHP and
there is a chance of leak of news in press which will put a huge effect on the reputation of
company.
4. Moral Responsibility: By doing this mike will be morally not satisfied as well as he will
feel guilty if anything goes wrong.
Recall of product:
The company will be unable to recall the product but they can ask the clients to destroy them.
1. Financial aspect: There will be huge financial loss in terms of compensation and
liability as well as loss of customer.
2. Legal aspect: In this there will be less legal threat in this case.

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3. Reputation of company: There will be a negative effect on reputation of the MHP but
the effect will be less.
4. Moral Responsibility: By doing this mike will be morally satisfied.
Recommendation: From the evaluation it is clear that Mr. Mike should Call the clients and let
them know about the contamination so that they can maintain the necessary cooking standard
and ensure the clients that if needed he is ready to bear the compensation.
Action plan:

Call the client as quickly as possible through the distributor and make sure that all

restaurants are contacted before dinner time.

Make the Client Realize that how important to follow the norms and how they came to

know about this issue

Make them sure that this will be never repeated in future at any cost.
Check for other contamination in the stock of company and if found destroy them.
Get the company ready for any legal inspection.

Word count(900).

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