Leading Financial Conditions

1. The new CEO, Jim Willis is highly concerned about the fifteen-year-old software Consulting firm, Blue Sky. The earlier CEO and the founder, Max Blue has developed the company with three divisions Machine Tool Software, HR software and Health Payment software. Max Blue being a software developer has known the technical aspects of the software developed by the company. However, his autocratic style of leadership has made most of the top management to rely on him for the decision making process. Max Blue has preferred autocratic style of leadership as he had control over most of the decisions like expansion, recruitment, development plans and structure of the company. However, the new CEO Willis prefers the collaborative work and democratic style of leadership. He believes that the sharing of responsibilities and delegation of duties to the employees provides the management a better view of the company and development through the creative thinking. Thus, as a responsible consultant I need to assist Willis in identifying and anticipating the possible problems and finding a suitable solution for the success of the organization. Eventually, Willis has observed during the executive meetings that the VPs never arrived at a consensus decision and relied on the CEO for the decision making. Michael James, also the co-founder of the company is being with the company for past fifteen years, is now the Vice President of the division Machine Tool software which sells software to the auto industry is experiencing severe decline in the market. James feels that the decline is because of the outsourcing of business to India. But, the new management student, Susy Hubres who has taken the charge as the director of planning recently, feels that company is inefficient in acquiring the new clients for the expansion.

2. The Karl Counts has been the CFO of the company for the past 10 years and knows the total financial status of the organization. The stagnancy and the autocratic leadership have lead to the long term problems in the company. Firstly, the CEO is concerned about the Machine Tools software, which is declining each year and shows only 1% gross growth from the past years, and he knows that if this continues for three more years, then the Machine Tools Software will not remain profitable any longer. Secondly, for the HR software, there is only one client the Best dollar chain and because of them recent mistake at the regional center, the whole business is at toss. Thirdly, with less revenue the budget and the cost incurred in the expenses was much higher and has been increasing year by year. So, being a consultant I should think of the better strategic plan to minimize the overheads and maximize the profits. Firstly, we would consider the 7-S frame work being developed by the McKinsey Company which would help the company to analyze the problems and work out for the improvement. The model describes the seven variables which are very vital in the developmental process of the company. These variables are highly interdependent and change in one aspect affects the others. The 7 s are skills, strategy, style, system, structure, staff, shared values (Peters and Waterman, 1982). Now, when we relate this model to the Blue sky consulting firm the autocratic style of Max Blue led to the over dependent staff. James being in the company for past fifteen years has never thought of expanding and always obliged to the Max and was never a part of decision making process. Thus, the autocratic style of leadership is always associated with the disadvantages like the random decisions focusing only on the short

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