Question

Part II Case analysis (50 points) Icelandic Volcano, 1; Global Commerce, 0 This volcano has a funny name-Eyjafjallajokull-but its impact was not so funny to global business, both large and small. When it erupted on April 14, 2010, the plume of volcanic ash that spread across thousands of miles disrupted air travel and global commerce for a number of days. As thousands of flights were canceled across Europe, tens of thousands of air travelers couldn't get to their destination. For example, Martin De Beer, vice president of emerging technologies at Cisco Systems, was headed to Oslo to discuss the final aspects of its acquisition of Tandberg, a Norwegian teleconferencing company. However, when his flight was canceled, he and Tandberg's CEO, Fredrik Halvosen, used their merged companies' equipment to hold a virtual press conference. Other businesses weren't as lucky, especially those with high-value, highly perishable products such as berries, fresh fish and flowers, and medicines and pharmaceuticals. African farmers, European fresh-produce importers, and flower traders from Kenya to the Netherlands found their businesses threatened by the air traffic shut down. Even manufacturers were affected. For instance, BMW had to scale back. work hours and had even prepared for possibly shutting down production at its Spartanberg, South Carolina plant because it depended on trans-Atlantic flights to bring transmissions and other components from German factories by air. A spokesperson at another automobile company, Mercedes-Benz, said, "There has been disruption in our parts supply. We expect that there may be shortages of some parts or delays in some instances. Questions 1. Would goals be useful in this type of situation? What types of goals might a manufacturing company like BMW have in such a situation? How about a small flower grower in Kenya? 2. What types of plans could companies use in this type of situation? Explain why you think these plans would be important? 3. What lessons about planning can managers learn from this case?

Answer 1

In this situation, goals and plans would be useful for both a manufacturing company and a small flower grower. Managers can learn about contingency planning from this case.

Step-by-step explanation:

In this type of situation, setting goals would be useful for both a manufacturing company like BMW and a small flower grower in Kenya.

1. For BMW, some goals they might have in such a situation could include:

• Minimizing disruption to production by finding alternative suppliers or transportation methods.
• Mitigating financial losses by exploring cost-cutting measures or alternative revenue streams.
• Maintaining customer satisfaction by ensuring timely delivery of products or providing alternative solutions.

For a small flower grower in Kenya, some goals they might have could include:

• Preserving the quality and freshness of their flowers by finding alternative transportation methods or storage solutions.
• Minimizing financial losses by exploring alternative markets or delaying shipments until air travel resumes.
• Maintaining customer relationships by providing updates on the situation and offering alternative options.

In this type of situation, companies could use contingency plans and crisis management plans to mitigate the impact of disruptions caused by events like the volcanic eruption. Contingency plans involve identifying potential risks and developing strategies to address them, while crisis management plans outline the specific actions to be taken during a crisis.

Managers can learn several lessons about planning from this case:

• The importance of having contingency plans in place to address unforeseen events.
• The need for effective communication and flexibility in adapting to changing circumstances.
• The value of diversifying supply chains and exploring alternative options to mitigate disruptions.