NAME: Chris Brady I. Problems A. Macro 1. The Dim Lighting Co. has to decide whether or not to invest in a major R&D project for new technology. The reason for looking into pursing this is due to the fact of declining profits and not meeting the companies operating capacity targets. The margins and operating targets dropped by 15 percent last year. Jim West has to look into all of the pros and cons of the project that Robert Spinks has presented at the staff meeting. 2. One issue is the company has been underperforming the last two years. It would be an easier decision to invest the $1.2 million for the next two years and $500,000 for the third year. The Mr. West knows that his career at the company depends on the next year profit margin. Without a strong performance he could be no longer employed at Dim Lighting Co. The other idea brought up by Bills Boswell is to purchase newer equipment for the production line which he feels would create an immediate impact on the financial profits for the company, instead of investing in a project that could fail completely. Mr. Sparks stated that it only as a 70% chance of success. B. Micro 1. The last two years had declining profits and operating targets were not met for the last couple years. Mr. West knows that he has to make this trend end and start to make the company profits increase. If the performance doesn’t change he feels that it could lead to himself being released from his services from the company and end any chance for career growth and advancement in Dim Lighting Co. Pete Newell states that improvements are needed and can be accomplished by purchasing new equipment and this will lead to profits being increased in the future and stay ahead of the technology from other companies. The issue is that the project being financed will take a minimum of two years to be finished and during that time no profits would be seen until the third year. Mr. West has to decide which action will be the best decision for the company and his career. 2. Another worry for Mr. West is that if he doesn’t sign up for the R&D project that Mr. Spinks could leave the company. He has left a competitor in the past because of their not being able to be creative and finance the innovation for a research and development department. He has also expressed that he is impatient if his projects are not approved. Mr. Sparks could leave the company if this project is rejected and would weaken the whole R&D department. II. Causes 1. Profits and targets have dropped by 15% last year and the second poor year. 2. The company’s staff members are split on whether to finance the R&D department project. Half want to fix current profit margin and the other half want to look to the future longevity of the company through the new technology. 3. Mr. West is concerned that if project is rejected Mr. Sparks will leave the company because he has done so in the past when his previous employer failed to invest in new innovations. III. Systems affected 1. R&D department. Rejection could lead the department to not bring new innovations or ideas to the managers and directors 2. Financial. Either decision could lead to profit growth, one in the current year and the other in the future. 3. Teamwork. Since the managers are split on what way to go for the next year, that choosing either side Mr. West could alienate other departments from working together or feel intimidated by a certain individual whose side was chosen. IV. Alternatives 1. Mr. West should conduct more research on micro-miniaturization lighting to better understand the process and what is truly needed for the project. This could help better decide on agreeing to the project or seeing that the technology is not near ready. If he found more information shining a positive light on the technology he could bring that back to a future budget meeting with his findings and more managers might change the side they have chosen. 2. Follow Bill Boswell’s idea of purchasing new machinery for the current production lines and would have a direct and have an impact on profits now and not in the future. 3. Mr. West could also decide to split the budget between the R&D project and buying new equipment for the current lines. The R&D project could take more time, but with the purchasing of new equipment the company could increase production and improve profits now and not in three years. V. Recommendations
I believe that after reading and analyzing the information provided that with the current state of the business it wouldn’t be in the best interest of the company to invest $2.9 million for the next three years before the sight of $1 million annual sales. I also think that investing $1 million for new equipment for the same technology would not create longevity for the company and would only increase profits in the short term. This could also ruin the future of the company. I would suggest that the company work towards a new plan where the financing could be split between both ideas. I would suggest for Mr. Sparks to find a way to lower the costs per year by seeking out other materials and equipment that could be used. Mr. Sparks should also put a 4 or 5 year plan together. I would then have Carol Preston look for reconditioned equipment or have ours updated to increase the capacity and be able to reach operating targets for the next 3 to 4 years while the R&D is working on their project. In the end this would give Mr. West a chance to raise current profits and still build the company’s interest in future technology before current lighting becomes obsolete. This outcome would also please both sides of the group and they should be able to work together to strengthen the company for many years.

Reference
Brown, D. R. (2011). An Experiential Approach to Organization Development. Upper Saddle River: Prentice Hall.