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Rocky Mountain Situation Analysis

Essay by   •  January 19, 2016  •  Study Guide  •  301 Words (2 Pages)  •  528 Views

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Situation Analysis

Management encourages Fitness in ROCKY Mountain Mutual Firm

On the fact that a state-of-art Fitness center is available at Rocky Mountain Mutual, it can be inferred that management encourages fitness and considers it an important employee benefit.

High operating cost of the fitness center

Company incurs a very high operating cost in maintaining the fitness center. Such costs are overhead to the firm as it lowers the overall profit margin.

Lack of motivation to use fitness center by the employees

Employees at Rocky Mountain Mutual firm lacks motivation to visit the fitness center. Only

35% of the employees use the fitness center on a regular basis. This shows that employees need to be motivated and educated on how important fitness is for an individual. Well-designed fitness programs can help to motive employees to visit the fitness center.

Fitness increases employee productivity

Fitness center can be regarded as an asset to the company as fitness increases productivity.

Employees those who visit fitness center regularly has been observed to have less medical cost and

lower absenteeism. Increase in employee productivity in turn will increase company turnover.

Utilization of Fitness Center is not to the fullest

The utilization of the fitness center has not been to the fullest as only few employees visit it.

Therefore the cost incurred to maintain is not in proportion to its utilization. It can be only fairly justified to maintain such high cost unit if there are comparable number of fitness center users.

Needs space for expansion of a new department

Since a new department is planned for expansion, it is an option for the management to shut down and utilize the space currently used as Fitness center. Business expansion is required for any firm to maximize its profit. It’s a general tendency for management to shut down any loss-making unit and use it for other profit generating purpose.

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