CASE STUDY: MIDTERM

Identify a recent business decision in your organization/any organization and consider

1 whether it operates in simple, complicated, or complex (or perhaps even chaotic) operative
context. Discuss why.
A company X is in consumer goods business. It is having less than 6% market share. The
company is surviving profit of less than 0.1% last year because of major crisis in the country. The
company has three thousand (3,000) employees working for them in three (3) plants and one (1)
headquarter, all placed in the center of the city. Due to that circumstance, the company is planning
to minimize operational cost in order to gain more profit to survive next year.
The above scenario illustrates a complicated operative context. Usually, when events do
not follow an expected course due to crisis, opportunity or unseen events; decisions must be made
in the absence of desired facts. When conditions change and business decisions have to be
adjusted for new circumstances, the operative context threatens to become complicated.
Since, the company may use more than one solution for the same input, aside from
minimizing the company’s operational cost, the context is deemed to be complicated.

Given the Operative context, what level of the BDMM would you rank it? Discuss why.
2
Based on the operative context, the level of Business Decision Maturity Model of the
above scenario would most likely be in Level 4. It is somewhat predictive since the company
may be able to predict short-term futures, assess the impact of change on the future, and it is
possible for the company to develop business decisions in response to the anticipated or
hypothesized business condition.
The result of the company’s decision that is, to minimize operational cost in order to gain
more profit to survive next year is actually predictive. In times of crisis, cost minimization is one
of the best solutions. Identifying and utilizing operating costs reduction opportunities is
imperative. That is the time to consider aspects of the company’s operations where it can reduce
expenses, as it works through crisis management and to mitigate strain on finances. With the proper
resources in place, building a robust cost reduction program to focus on immediate opportunities allows
the company to address operational priorities. Thus, the company’s decision to minimize operational cost
may possibly result to a higher profit.
 If you were to run the organization, what kind of initiative will you propose? And how will you
3 do it?
Looking at the scenario, the company needs an immediate solution so that it will not lead
to any loss. Aside from minimizing operational cost, the company must think of every product
that it sells as it were a separate business in order for the company to know if each one can
contribute to its profitability. Every company’s product is certainly not producing profit. In this
case, the company must get rid of these products and keep those which generate money. This
will help eliminate costs in favor of profitability. The company will see the profits increase
significantly once they eliminate these weak performing products. Moreover, it is a must to
reduce inventory to the smallest amount possible while still meeting customer demands since
inventory that is sitting around for months and not being sold is costing the company a
maintenance fee. Through these initiatives, the company will most likely gain more profit to
survive next year.