The case study explains the challenges Automation Consulting Services (ACS) have been facing for management controls which are faced by the organization due to their geographic expansion and business intensification. The founding partners of the company firm are facing challenging and difficult situations and questions which are based on the stress between local office powers, strategic directions for the company and entrepreneurship. On the other hand, problems like rising cost structure, optimum capacity exploitation and business development were also erupting where there is a dire need to restructure the responsibilities of Executive Committee and strategic use of system with company’s growth. The case explains that San Jose office is the only office which was not built by the company on its own; but was acquired. As a matter of fact, the founding partners were happy with the operations and business with the acquired staff but there is a malpractice and misconduct done by San Jose’s partner Douglas Crowley with a new order which was rejected by Angela; one of the founding partners. The situation gives unrest to the founding partners and they have realized that to prevent such problems to be happened in the future, adequate steps in the form of rules and regulations are to be imposed and a proper business strategy is to be formulated. As a matter of fact, the partners do not want to kill the aggressiveness for the business development also does not want to be authoritative which could destroy the business relationship. The problem seems complex in nature and has risks associated which are to be aversed by having a profound business strategy. A similar crisis situation was also present in Detroit office where more than fifty percent of the current work is projected to be completed in next two months. This is a real concern for maintaining profitability base of the office and an emergency plan is devised for the office including a marketing plan, transferring a partner from Boston to Detroit for boosting sales due to his excellent business development skills; and assigning the employees and partners from Detroit office to other offices to utilize human resources at its optimum level also to avoid diminishing returns. But the Detroit partners refused the ideas as the partnership signed were decentralized in nature and an opposition is visible on such detailed monitoring and resource shifting ideas. The situation seems intricate and complex where risks are augmenting with intervention of the founding partners.
The Boston office also gets a matter of the problem for company’s overall viability; where it has accepted an order related to a university’s library. The founding members have a concern of relevant skills and expertise; since Automation consulting services has never served to any non manufacturing industry. The project was costing more than its routine and was consistently getting behind schedule due to in expertise in such industry. It was believed by the founding members that the experimentation could lead to defamation of the company. As a matter of fact, the company might have to hire a subcontracted firm to help them fulfilling the requirements spelled by the university library.
Philadelphia office is also explaining similar problems where the expenses are swelling day by day and Jack Leland, managing partner of Philadelphia explains that there are no problem expense budgets allocated and miscellaneous expenses are puffing up day by day. The managing partners were concerned about such a situation and wanted that such a situation does not expand to other offices. It was decided that each office was to be declared as a profit center so that each managing partner can have a closer look at the revenues and expenses structure. But there were potential limitations attached to the idea. Implementation part of such idea is complex where negotiating profit sharing and allocating to such decentralized offices would be a time taking and hectic process. Also, there is a strong chance of having conflicts in such negotiations which directly poses a threat the company’s viability and revenue base. Also, allocating the office individually to deal in such a way that it maintains profits and the same will be evaluated as a performance measure does not seem to be a viable option; since it put the company’s reputation at stake. Such problems are posing threats to company’s practicability and going concern where the founding partners are trying to establish a unified strategy and a positive company image so that the company continues its expansion and profitability the way it has been achieving. Also, evaluating and monitoring performance is the basic result of the meetings since it will help the company to focus on its strategic weaknesses and allow solving them in a noble way.
A unified business strategy is imminent in the company to maintain its expansion and success. Simons (1995) explains such business strategy formulation using four levers of controlling (figure 1.0) such problems as in the case of Automation Consulting Services.
Renew Strategy with four levers of control
Adapted from: Simons (1995), Control in an age of empowerment
Figure 1.0 explains that such business strategies to renew the processes are to be based on:
1- Core values of the business
2- Risks to be avoided
3- Strategic uncertainties
4- Critical Performance variables
In case we see that renewal of business strategy is to e done based on the risks involved regarding the company’s image, profitability, expansion and business relationships with other offices. On the other hand, we also see that the founding partners are no matter trying to solve problems raised in other geographical offices but they are afraid of giving an expression being an authoritative. The founding partners are trying to establish unified set of rules and regulations under core values of the company which will lead toward the establishment of belief system. In the example of San Jose’s where a decision was taken despite the fact it was rejected by one of the founding partner clearly indicates that the company lacks in its core values and ethics of abiding by rules and regulations. Critical Performance variables are also looked by the founding partners as in the Philadelphia office there are problems related to expenses and the overall profitability gets at stake. Therefore, proper performance variables are to be worked out and developed in such a manner that it end up with a win-win strategy; both for the decentralized offices and the core office of Automation Consulting Services. In this case, ACS is trying to transform officers into profit centers which seems a noble option to be followed since it will motivate the employees and managing partners to work hard for their own profitability. A profit partnership from the center can also be the key to lock in case, the managing partners do not get agreed the concept of profit centers. Strategic uncertainties are also to be eliminated for the system. Mutual understanding is the requirement of the time being so that an effective business strategy can be formulated. Hence, such a structure would automatically lead to a robust system in the form of belief system; interactive control system in the form of mutual understanding and participating to avoid problems; boundary system in order to avoid risks; and diagnostic system which will help in carrying out such business processes which would be profitable for the viability of the company.