A case study on

Cool Initiative
Ultimo Efficacy, Inc

By

Group 1

Cool Initiative:
Initiative means taking the first step in any

venture. It determines success or failure of the whole venture. This case discusses about a company and its employee in the backdrop of recession. Recession, is one of the 4 phases of business cycles, caused due to problems arising out of increased operations during prosperity.

Facts about the organization:

Ultimo Efficacy is a wonderful organization,

doing very well even during recession times. Adept at converting threats into opportunities. Had valid excuse of recession to cut down on the expenses. Even the normal expenses. Suddenly it decides to impose cost control measures. The top management issues a circular to all the employees.

Steps taken by the company to reduce cost:

All the employees were requested to

concentrate on cost reduction. Plans to slow down the salary rise and promotions Avoid travel i.e. use the cheapest modes of travel only if it is absolutely essential. Start using both sides of paper for writing. Pencils should be used rather than pens so that u can save paper and the cost provided to purchase pens

Facts about the case:

One Mr. Simple Simpson, a junior officer in

purchase department decides to contribute his best to the companys efforts. It was summer time and every year the company used to replace worn out water coolers with the new ones. Simple got a brainwave of substituting water coolers with the earthen pots. The price of a water cooler was approximately around $350- $400 and price of a pot was mere $1, which showed huge potential of cost reduction.

Continued
Simple then sent out enquiries for different

suppliers and finally selected one particular supplier. The supplier declined to lower his price but was ready to give 20 more pots for the same value. Simple became a hero momentarily. A young auditor who finds irregularities in the procedures, sends a report on the same which places him under enquiry.

Reports from the auditor:

As per the budget provided, water coolers

should be provided and not earthen pots. Discrepancy was found in number of pots that physically exist and that quoted in the requisition slip. Mr. Simple Simpson who was in charge of processing requisition said that he took all these actions as per management directive of cost reduction.

A brief look on what had happened

Simpsons intentions
Idea of substituting

water coolers with earthen pots. Ordering for the pots. Negotiating with the supplier, so that he could bring down the costs.

What was supposed to be done Consulting his superior and seeking approval from the top. Written permission from the boss. Notify his boss. And tell the suppliers offer to him.

Irregularities on the part of the Mgmt

Plan Slowing down the salary raises. Saving money on unnecessary travel. Seeking co-operation of the employees in the process of cost control. Have clean record of everything.

Result Unrealistic payments made to CEO & others. Top executives continued their extravagancy on travel. No ideas collected from the employees. Ordered an enquiry against a loyal employee.

Opinions:
Not a very successful plan.

Lack of proper guidance.

No proper delegation of authority and

responsibility. Incomplete auditing. Poor implementation. No scope for employee contribution.

Conclusion:
So initiative should not be single and it should

be merged with successful plan, proper guidance, proper delegation of authority and responsibility Management workers co-operation is absolute essential.

Thank you

Queries..?