Case Study – Milton Manufacturing Company
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Milton Manufacturing Company has experienced increased net cash flows in all activities after a drop in a few months. During auditing, it is discovered that the plant manager had put the company at risk by using funds secretly. Though it had helped, company protocols need to be followed (Callanan & Corey, 2010).
Sammie Markowicz, the plant manager of Milton Manufacturing Company, who works at the plant headquarters in Long Island City, violates the company policy. Sammie Markowicz gave in to the pressure of the machines breaking down and decided to go against the company rules and policies. The company experienced the decline of cash flows and revenues in 2009, so the accounting officer of the company suggests that the company should reduce its capital expenditures to the level of capital expenditures in 2008. After analyzing the suggestion Milton accepts it. The plant manager did not agree because of the need to purchase new machines as old ones were breaking down more frequently for the last two years (Callanan & Corey, 2010).
In six months the company had profits, the production increased but the motors wore out and the vice president for operations did not give a permission to order new motors. Other plant managers complained to Markowicz, and he decided to buy the motors when he learned of 25 percent discount. Sammie Markowicz had saved the company $1.5 million. The plant had also made much more profits within the next few months (Callanan & Corey, 2010).
Sammie Markowicz had helped the company very much, because net cash flows increased, and the company received the $20 million loan. He had made the right decision buying new motors but violating the company policy, and mismatching records were risky for the company, and it was the wrong thing to do. Especially he did it alone without consulting the president (Callanan, & Corey, 2010). Sammie Markowicz’s decision largel affected the president of the company, the vice president of operations, and the plant accountant.
The plant manager violated the accounting ethics and standards by lacking honesty. He purposely altered the financial information, and lied to the vice president of operations who was accountable for such financial mistakes. Sammie Markowicz brought a conflict between the vice president of operations, the president of the company, and the plant accountant. The purchase of new motors against the set plans of the plant has altered the plant’s operations because no one knew about it, and that was a great risk for the plant (Zappe, Winston & Albright, 2010).
There are various alternatives towards solving this problem. One is that the plant manager is given an opportunity to give an explanation as to why he made such a decision. The authorities can also decide to punish him accordingly without any explanation. Terminating his job and dropping the issue is also an alternative (Zappe, Winston, & Albright, 2010). The best alternative to choose is to let the plant manager give explanations, and let him tell the authorities whether he sees whatever he did as a wrong thing or not. Then the law should be enforced appropriately and let the plant manager suffer the consequences putting into consideration that the decision he made benefitted the plant a lot (Nutt & Wilson, 2010).
The use of 10-step decision process is very helpful in solving management problems. It entails analyzing problems in a systematic order, which enables the decision maker to study the problem at large. Studying and analyzing a problem using the 10-step decision process helps the decision maker avoid making decisions that have no base. The decision maker can have all the facts put together and come up with a solution (Zappe, Winston & Albright, 2010).
Unfortunately, if one does not follow the 10-step decision proceess well, the wrong decision will be made and it will have a negative impact on the plant. The people collecting the facts should make sure that these facts are true and do not have any biasness, because decisions based on the truth are the best. The authority should not lean on anyone’s side when solving a problem so that anyone involved in the wrongdoing should be known and the appropriate measures taken. The 10-step decision process has proven to bring good results; therefore, it can be used to solve other problems, such as criminal cases and indiscipline cases in learning institutions (Nutt & Wilson, 2010).
The Bible also has stories about people who made wrong decisions and had to suffer the consequences. In the Bible, if someone did something wrong and later apologized, the authorities forgive the person and no punishment was given after that. So, according to the case study, the plant manager should have apologized to God and to the authorities. The authorities would then forgive Sammie Markowicz and the issue will be dropped after a while. In the Bible, one was suffering consequences if he did not apologize for his mistake or wrongdoing. Being sorry for a mistake was very crucial and good because it showed that one was ready to change and also it could save from a lot of troubles (Zappe, Winston & Albright, 2010).
The plant manager did what he thought was best for the company and it helped. The problem came about because he violated the company policy and also did not reconcile with the company funds. Therefore, the company risked to lose funds just in case the purchase of motors did not go well. Despite the fact that what the plant manager did was helpful, he was against the plant policies’ measures, which have to be taken (Callanan & Corey, 2010). Afterwards he can be given a second chance to work at the plant because everyone had loved his good work that enabled the company get a $20 million loan (Nutt & Wilson, 2010).
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