Workshop Two-Team Project
Amy Gearing, Cristi Pittman, Matt Ruele, Jeff Collingsworth
Dell's Do-Over
1) Programmed Decision Making is routine, virtually automatic decision making that follows established
rules or guidelines. Non-Programmed Decision Making in non-routine decision making that occurs in
response to unusual, unpredictable opportunities and threats.
Michael Dell’s decisions were non- programmed in 2007 when he stepped back into his old job. The
decisions he had to make were not every day routine decisions. He was trying to stop the bleeding of Dell
and needed to focus on the future of where Dell was headed. Dell’s income had fallen and it was time to
make major changes if the company was going to be profitable. There was cost cutting to be made as
well as changes in top management. Michael knew he had his work cut out and he would have to take the
reins for a very long time. The Consumer Business side became a priority and restructure changes sent a
clear signal to the Dell employees. Michael today is still working for more improvements and wants the
company to be what it was years ago.
2) Risk is the degree of probability that the possible outcomes of a particular course of action will occur.
Uncertainty is unpredictability.
Michael Dell had to react when returning to his old position; and the outcomes of his decisions could have
been positive or negative to the company. I believe many of his decisions were more at risk than
uncertain. Examples include his hiring of many new top management associates. The hiring process of
each associate had a certain thought process. Example Garriques and Boyd focused on Consumer
Business and made changes from selling directly to customers to selling products at Wal-Mart. This was
called the first step to retail. Next Dell focused on four consumer corporations. These were small and
midsize businesses, governments and educational buyers. This plan was also a risk. It was planned and
studied before making any moves or changes.
This week in our management meeting risk and uncertainty were the topic. We have had a lower than
usual sales month and to counter that and be effective we had to CC (company convenience) our
employees, which means they go home without pay. As we look to the next two months of 2012 we are
reviewing options to reduce manpower and not hire until the work flow picks up. This usually occurs for
Workshop Two-Team Project
Amy Gearing, Cristi Pittman, Matt Ruele, Jeff Collingsworth
the first few weeks of November then we get a surge of product to finish out the year. This is based on
the past few years that we have studied.
3) For Michael Dell, the initial stimuli that caused him to make a decision to ask for his job as CEO of Dell
back was the center of the tech industry had shifted from the PC to the Internet and Dell, the company,
was struggling mightily to find its place. While HP, IBM and other rivals transformed themselves in recent
years by acquiring new companies and capabilities, Dell long stuck with its old playbook of cranking out
PCs as efficiently as possible. In 2005 Dell was valued at over $100 billion and today it is worth only 30
billion. A decision had to be made to keep the company competitive or let it go under. In addition the fact
that the company was losing shares in the PC market it was also struggling with an investigation into its
accounting practices. For these reasons the directors agreed and made the decision to replace the
current CEO Kevin B. Rollins, who was handpicked by Michael Dells to succeed him as the CEO would
now be replaced by Michael Dell himself. The first decision that was made was Michael Dell took the helm
as CEO of Dell again. One at the helm, as CEO, he made it clear that he was determined to change
almost everything about the company due to what he call a ginormous shift in the computer business over
the last several years. Once Michael Dell installed almost a completely new management team there
were managers that had to make decision. The stimuli that caused M. Dell to hire Ronald G Garriques, as
head of Dell’s consumer division, was M. Dell had to stop the bleeding of the consumer business.
Garriques recognized the need to make a decision to stop this bleeding and achieve the goal that was set
before him by Michael Dell and that was to create a profitable consumer business with designs that rival
Apple’s and HP’s. One of Garriques’ decision was to hire Ed Boyd, not to redesign the computers
functions, but instead to make design matter at Dell, so that stimuli that propelled Boyd to make a
decision was the fact that people wanted to convey a sense of personal style with their products. Next M.
Dell wanted to change the companies’ management culture, so he hired Brian Gladden, a 20 year
veteran of GE, to be the chief financial officer overseeing day-to-day operations. The stimuli that drove
Gladden to recognize the need to make a decision was Dell’s processes, the tools, the culture didn’t
support a $60 billion business, so he dove into figuring out how to change that.
Workshop Two-Team Project
Amy Gearing, Cristi Pittman, Matt Ruele, Jeff Collingsworth
I felt they learned from the feedback back. Over all what M. Dell wanted to happen happened as a result
of his making decisions. The proof is in their increase in stock prices doubling from a low in February to
$16. Below are some specific examples where management’s decision allowed them to meet their
expectations. Dell’s recent feedback while in an interview in his conference room he acknowledged he
stuck with the one innovated idea of selling computers to long, but any talk of that now is nonsense. The
right decisions are being made to move the company forward. The proof is in their increase in their stock
shares too. Garriques’ feedback from the consumers is also positive. Dell is making its mark on the tech
world with high tech and innovative Adamo XPS and others new product on the horizon. Boyd’s initial
feedback from Dell’s manufacturing team wasn’t good, they bulked at the changes, but Boyd appealed
directly to M. Dell, who gave the green light to move ahead, which has lead to a positive outlook for Dell
as they broke for good with its tradition of selling only directly to the customer. They announced plans to
sell it machines at Walmart in what the CEO called a “first step” in using retail stores to reach customers.
Gladden saw his executive team quickly take to the new management approach, which was modeled
after GE, so the feedback has been good.
4) M. Dell handpicked his new team based on their past performance and success as a manager, so I
would say Michaels initial decision to change his management staff didn’t involve any satisfice elements
at all. Once his team was built I think there was a certain amount of satisficing going on, for example
when Dell would email Garriques and say, “Hey Ron, I was o this Web site, and wouldn’t it be cool if our
products does this or does that? M. Dell knew what he wanted and actively searched out the candidates
that fit the bill to a tee! I think many of the decisions had to be made with a certain amount of satisficing,
because there technology was moving forward at a break neck speed and for Dell to stay in the game
they had to rapidly deal with the risk and uncertainty. The fact of the matter is they were forging a new
frontier in the PC and other high tech worlds and the managers had to search for and choose acceptable
or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal
decision. It is working for them.
How I related Question 3 and 4 to my work place: I work for DoD AF and in that industry many of our
decision are programmed until you hold a position that is at the strategic level. The strategic level is about
Workshop Two-Team Project
Amy Gearing, Cristi Pittman, Matt Ruele, Jeff Collingsworth
broad, long-term goals, then there is the tactical level which covers the big projects or activities that move
us toward achieving the goals established at the strategic level and then there is the level I am at, the
operational level. This is the level the day to day process ensure we can achieve the established tactical
objective. I recognize a decision needs to be made when I am not able to achieve the tactical objectives
set out for me. My line of work is manpower and with the huge budget cuts we are facing across the DoD,
there will be some decisions to be made that are a direct result of what was decided at the strategic and
tactical levels. Because I will not be pressed for time, I feel I will be able to make solid decision and
therefore will not have to rely heavily on satisficing.
How Procter & Gamble Plans to Clean Up
1) Procter and Gamble is pursuing the Differentiation Strategy. The CEO of Procter and Gamble, A.G.
Lafley, talks about how the operating margin has increased but they are still spending money on
Research and Development to keep its competitive edge. Consumers, in the last few years, have traded
down to private, off-name brands instead of name brands such as Procter and Gamble's Pampers and
Tide.
I feel in my workplace that the Differentiation Strategy is at work. Now we do not spend nearly the amount
of money that Procter and Gamble or Pepsi-Cola spends but we do put some money into pamphlets,
cards, and booklets. We feel that these are helpful tools that will help the costumer to understand our
products. Most costumers feel better about a product if they have information in their hand that they can
read more information on it. As far as advertising my organization does very little of that. All of my
advertising comes directly out of my pocket. Now this helps cut operating cost to the costumer and also
helps to put more money back into the custumer’s pocket.
2) A.G. Lafley talked about creativity and invention being a good thing but until you can connect with the
customer, product or service wise, you do not have the innovation. Innovation is the key. The money that
Procter and Gamble saves on advertising can be used for Research and Development. With the
innovation of new products it brings new costumers into the stores and with successful innovation can
come new categories. A.G. Lafley discussed failure. If a product line looks like it might fail, cancel it. Yes
you’re going to lose money but it’s better to lose some money early then lose a lot latter. Procter and
Workshop Two-Team Project
Amy Gearing, Cristi Pittman, Matt Ruele, Jeff Collingsworth
Gamble are always looking for acquisitions and back in the year 2000 they also set a goal to have
partners for half of the new products which would save them a lot of money. In 2007 -2008, Procter and
Gamble made that goal. Procter and Gamble is in the Global Market as it reaches more than 3 million
consumers in the world’s marketplace.
The insurance organization, Woodmen of the World Life Insurance Society, I work with has been around
for 120 years, which means they have definitely been doing something right. With all that has happened
over the last 120 years (at least five wars and/or conflicts, the great depression, to name a few), they
have always found a way to survive. Now that to me is innovation. Even if we did do big time advertising
and hand out millions of pamphlets, cards, and booklets, what it comes down to is personnel service. The
most pride that we take is in how we serve our clients and the community.
3) P&G use several different corporate strategies to build a competitive advantage over its competitors.
Vertical integration, related diversification, and international expansion with wholly owned foreign
subsidiaries are all methods of corporate strategy for P&G. Vertical integration is demonstrated because
P&G owns every stage in the vertical value chain: making the chemicals used in cleaning compounds,
labels for the product containers and delivering the product to vendors. Related diversification strategy is
established because P&G owns several consumer products divisions. These divisions work together to
improve efficiency. For example, the disposable diaper and paper towel divisions share research and
development information to improve both products. International expansion by wholly owned foreign
subsidiaries is evident because P&G owns production plants in several countries: such as Brazil and
India. P&G finds a need in a growing market and then forms a business partnership with that local
company. They invest a major stake in this company and build a modern factory, in that county, to
produce products for the local market.
Proctor and Gamble and my employer, the Army National Guard, have the same primary business
strategy of differentiation. Both companies spend millions of dollars each year on advertising to create a
unique image for its product. These companies advertise on television, radio, newspapers and even
NASCAR to persuade consumers their products are unique and the best value for your investment.