Organizational Behaviour 5100 Section B

EXECUTIVE SUMMARY

Since its inception, Eden McCallum contracted independent consultants on a per‐project basis and managed to attract a growing number of clients by offering low costs and flexible arrangements. This particular business model attracted a diverse range of corporate clients and resulted in a steady growth for the firm over the years. In January 2009, the global economic downturn severely impacted the firm. As a result, the two founding partners must determine whether they want to continue growing and risk financial loss or cut costs and risk losing talented and hard‐earned partners. The core issue for Eden McCallum is that it has failed to restructure its business model in a weakening global environment. Furthermore, the root cause of the problems identified in this case is that the short‐term goals of the advisory board are not aligned with the long‐term goals of the founding partners, who are looking to expand.
In order to tackle these problems, three alternatives have been identified and evaluated against a decision criteria. First, we considered having the partners forgo their own profit share compensation and apportion it out to the central staff members to show a sign of confidence in the sustainability of the firm. The second alternative entails cutting costs by laying off central staff members. Finally, the third alternative involves investing more resources into the company to promote growth and offset the slowdown caused by the recession.
Conclusively, after thoroughly analyzing the aforementioned alternatives, we recommend that Eden McCallum expand further. This recommendation revolves around the firm’s past performance, relative strength, and unique business model. The firm’s business model was designed to survive in poor economic conditions and it was