Case Analysis: Dashman Company

Summary
Dashman was a large company supplying equipments to the US Armed
forces. It had over 20 plants located at various place and their purchase procedure
had been disintegrated. This created difficulty in securing some essential raw
material for the company as a whole. A new VP for Purchases had been appointed to
fix this problem. The case goes around the initiatives taken by the VP and its impact
on the purchase procedure.

Problem diagnosis

The direction to clear all the purchases above $10000 with the head office
was not followed by the respective units

Probable causes
Psychological aspect: Prior to the appointment of new VP at the Head
office, all the purchase related decisions were likely to have taken by the
respective heads of plants. It is not easy to give up the power they had been
enjoying for a long period. This could be a reason for not complying with the
directions of the new VP
Decision on New VP: The decision to create a new post of VP in charge of
purchase was not taken after deliberations with the units Head. Things would
have been different if they had taken decision collectively. Here the decision
power was fully vested with the Head office
Peak buying season ahead: The company made this change when the
peak season about to begin. When they take such move strategically, they
should have taken into account the timing. Units heads might not had
sufficient time to comply with it
Mode of Communication: Mr. Post hadnt meet majority of the purchase
executives of the plants for passing the directions. If he had done this, he
would have been able to convince them the probable benefits of the new
policy. Instead he sent letters to the Unit executives, which didnt work as
intended by the Head office
No penalty for non-compliance: Nowhere it is mentioned the
consequences of not adopting the directions of the new VP. As there was no
fear of penalty, the unit head would have taken it with little seriousness.

Solutions

It is essential to bring all the stakeholders under a roof while deciding upon
some moves, which would affect their way of functioning. This would also
help to convince the stakeholders on the probable benefits
Chose the most feasible communication channel considering the urgency of
the decision

Head office should have given a clause on what if not complying

VP is expected to do a follow up of the letter he had sent to the units
Clarity should have been given to the units on the requirement of new
purchasing policy