The New Rational Manager by Charles H. Kepner

Author:Charles H. Kepner
Language: eng
Format: epub
Publisher: BookBaby
Published: 2013-05-15T16:00:00+00:00

THE ROUTINE DECISION

When Decision Analysis is practiced continually and successfully within an organization, its use invariably becomes required for certain decisions and habitual in choice making at all levels. The Decision Analysis habit is very clear in the following example from a large chemical company.

CASE HISTORY: MARKETING SCRAP FIBRE

The company, which produces synthetic fibers, had a standard procedure for dealing with a substandard product. The rejected fiber went into a warehouse, where it stayed until a large quantity had been amassed. The plant manager then would phone the head office and request permission to dump a few tons of scrap. This gave the head office an idea of the amount of substandard material being produced. Permission was automatically granted, the plant manager cleared out the warehouse, and the rejected fiber went to the county dump.

But one day, in the middle of such a phone call, the manager at the head office suddenly asked, “What are my objectives? We’re supposed to be making money, and dumping tons of fiber like this is crazy!” Permission was denied and the plant manager was told to find a non-conflicting market for the fiber that would return some of the revenue to the organization.

The plant manager was shocked. Marketing wasn’t a plant manager’s job. This seemed an impossible, unreasonable assignment. But the head office didn’t yield. So some inquiries were made and five days later a new market for the synthetic scrap fiber was found: It was to be cut into short lengths as pile stuffing for sleeping bags. The entire lot was sold for $50,000.

This market for scrap fiber now contributes significantly to the overall revenue of the company. The scrap fiber is used as synthetic pile in ski jackets, coat liners, sleeping bags, and in a hundred other items. Imagine how much potential revenue had been trucked to the city dump in the years before one person asked “What are my objectives?” and decided that there must be a better way.

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