Executive Summary

The report talks about the dilemma faced by All Sports, a sports equipment manufacturing company, as it is unable to decide whether or not to set up its operations in Washington. Cullen, a recent graduate provides the company with four alternatives after studying the situation. The first option is to hire an on-the-scene law firm, the second is to setup a full scale office in Washington, the third is to work out a combination arrangement and the last is to not take any action now. The pros and cons of each alternative are presented and it is suggested that the company adopt the combination approach.

Word Count: 105

Situation Analysis

All Sports, a firm in the Sports’ goods industry, manufactures and imports diverse range of products in the athletic field. It caters to domestic demands from individual sportsmen, recreational institutions, athletic sports teams and various others. Currently, it has four plants in two states with a workforce of 1200 and is headquartered in Chicago.

The firm has plans of expansion through acquisition as it expects demand to increase in the future. This would help cut down operating costs and would be less time consuming. It also plans to devise a full scale national advertising and direct-mail campaign so as to increase its market share and customer base. It wants to enter the international market by setting up its own manufacturing plant in Japan to cut down costs of importing.

Matthew Cullen is a business school graduate who had been serving in the All India Sports training program for a year. Thomas W. Cloy, the VP of Public Relations for All Sports Manufacturing Company of Chicago, tells Matthew that it was the company’s decision to make him their government contact representative in Washington to facilitate their expansion plans. Matthew has to survey the scene in Washington and make contacts with people who might be of importance to the company and ensure that the government understood their problems. Cullen feels that he was chosen because he had completed his course in business-government relations at business school, majored in political science in college and had done some precinct work in suburbia. Cullen is given ambiguous instructions about his new task and therefore he is unsure as to what his new role is.

When Cullen goes to Washington, he meets Henry Fraser, a former Congressman from Iowa who is now Government Relations Director of the trade association in which All Sports is a member firm. Fraser informs Cullen that they have a broad industry policy to consider at all times due to the large number of members in the association. Therefore, being a member might lead to a clash between individual interests and industry interests.

Cullen mainly approaches him to seek guidance regarding what is to be done to develop and maintain relationships with the government. Fraser suggests that Cullen should register as a lobbyist, which is a legitimate role, to start making worthwhile connections and to avoid violation of the law right at the start. He assures Cullen that he will guide Cullen in starting off and talking to the right people once Cullen is done looking at government programs that might affect the company. He also suggests that the firm should maintain relationships with Congressmen, Senators and administrative assistants as it may prove to be beneficial. This would be of interest to them if they see that this arrangement is mutually beneficial to both parties. However, Fraser cautions Cullen that this is a sensitive area and once he enters into the arena, he needs to keep them in the loop at all times. In case of good news they should be given the opportunity to express it in the media and in case of bad news, they should get the time to prepare themselves to talk about the issue in the media.

Maintaining relationships also requires rendering of personal favours which may at times fall under the ‘gray area’. Fraser helps out by mentioning his thumb rule of analysing how it would look if the act was published and whether or not it will be justifiable in public. The meeting ends with Fraser advising Cullen to be honest and straightforward in all his dealings as it will be difficult to get back in their good books once he loses credibility.
Cullen returns to Chicago to discuss his findings with the company heads.

Problem Statement
The major problem that the company currently faces is whether or not to go ahead with its Washington expansion plans and what course of action to pursue.

Objectives 1) To influence the government decisions in favour of the company’s interests 2) To increase market share and visibility. 3) To reduce the cost of imports

4) To reduce lead time

Alternatives 1) Hire an on-the-scene law firm. 2) Setup a full scale company office in Washington 3) Setup a combination to retain local lawyers and start a small office operation. 4) Take no action regarding expansion in Washington.

Evaluating Alternatives

1) Hire an on-the-scene law firm.

This option is the quickest and least expensive. On the plus side, many excellent firms which specialize in providing representation for individual companies and industry group are mostly staffed by competent people with extensive government knowledge. It would give expert representation relatively quickly for a reasonable expenditure. However, it would also take time and effort to get acquainted with the law firm. Also, it will not be possible to establish any in-house capacity or personal relationships with the government community and even the lawyers will have to divide their time, energy and allegiances among all their clients.

2) Setup a full scale office in Washington

This option would require a heavy initial capital investment which might prove to be unnecessary. Also, there is the long lead time of about 5 years involved because it takes time to build contacts, obligations and knowledge about programs and agencies. However, this option would help the firm establish itself and train its own people. The company would also have to ensure high salary payments to the top employees to keep up its status image.

3) Combination approach
This option would include the most desirable elements of the above choices. This is also an expensive approach. It would include hiring a law firm and setting up a small office of its own. Then, over a 5 year period, they could gradually phase out the arrangement with the lawyers while building up its own staff requirement to optimal level. Disadvantage is that the company’s own office would be of little value in terms of meaningful government relationships and also the lawyers could be preoccupied with other clients.

4) Take no action
The company could do nothing for now and wait until some trouble approaches so they could go on a crash program and hire a ‘rainmaker’ a big name in the Washington to get out of trouble by arranging a compromise.

Decision
The company should choose the combination approach as it seems most feasible in these uncertain conditions. This will help the firm increase its visibility and market share and also set up its roots in Washington so that it can expand at a full scale when it desires and at a gradual rate. Over time it will also inculcate the required skills in the company’s employees.

Action Plan
The company should hire some local lawyers in Washington and simultaneously setup a small office there. With time as the company gains experience and expertise, the representation can be phased out and the company can have its own representation.

Contingency Plan
Incase this option does not materialise, the company should go for the first option of hiring an on-the-scene law firm. This will be the next most suitable option as it is less time consuming and least expensive.