Assignment 1: The New Year’s Crisis A Report Submitted to Dr. Rohini Patel

In Partial fulfillment of the Requirement of course written Analysis and Communication

ByMANOJ KUMAR MISHRA

Student, PGDM (IM)Roll No-023

On06/11/2015

Adani Institute of Infrastructure Management, Ahmedabad

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TABLE OF CONTENT

Summary 3

Main Report

Issues & Challenges 4

Objective Statement 4

The Option 4

Criteria For Evaluation 4

Evaluation of Option 5

The Recommendation 5

Action Plan 6

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SummaryOn the morning of 31st Dec 2001 Mike Valenti was informed by Ted Brewer that a salmonella

contaminated batch has been delivered to some important clients. As the only major player mike

can’t afford to lose his important customer who contributes about 50% of SPC’s revenue. Mr.

Mike needs to handle the working culture issue of two companies and also a course of action for

salmonella contamination issue.

The main objective of Mr. Mike is to find a course of action which will solve the contamination

problem with less financial, legal and customer loss risk.

The options which Mike had are as follows

Call the clients and let them know about the contamination so that they can maintain the

necessary cooking standard.

Do not call the clients and trust the cooking standards that they have set.

Recall the product.

Criteria for evaluation are

Financial Aspects: The financial implication may be short term or long term depending

upon the money loss or customer loss respectively.

Legal Aspects: The action of FDA can do a great damage to the company so they need to

take care of that as well as all legal aspects.

The reputation of the company: The reputation of a business is essential for its survival.

Moral responsibility: Ethical and social responsibility towards the clients as well as the

final consumers.

Evaluation: The best option will be to call the clients and let them know about the contamination

so that they can maintain the cooking standard as it minimize financial, legal and reputation of

company.

Action plan:- Call the clients as quickly as possible through the distributor and make sure that all restaurants are contacted before dinner time. And make them sure that this will be never repeated in future at any cost.

Check for other contamination in the stock of company and if found destroy them.

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CONTENT

Issues and challenges: On the 10th Dec 2001 the owner of Michael’s home-style pasta

(MHP) acquires it’s only competitor in market the southern pasta company (SPC) but on 31st Dec

morning Mr. Mike was informed by Ted Brewer and Fred Jones that due to pressure of Hans

Schmidt, President of SPC they have passed a batch of salmonella contaminated pasta to their

one of the important client who’s contribution to the SPC’s revenue is about 50%. As the only

major player mike can’t afford to lose his important customers. He needs to handle the working

culture issue of two companies and also a course of action for salmonella contamination issue.

Objective Statement: The main objective of Mike is to find a course of action which will

solve the contamination problem with less financial, legal and customer loss risk and also solve

its cultural clash problem.

Options: Mr. Mike has the following options to solve the current situation of the company.

Mr. Mike can Call the clients and let them know about the contamination so that they can

maintain the necessary cooking standard and ensure the clients that if needed he is ready to bear

the compensation or Mr. Mike do not call the clients and trust the cooking standards of them or

Mr. Mike can recall the product by asking clients to destroy them.

Criteria for evaluation: Mr. Mike should evaluate each option based on financial aspects,

legal aspects, Reputation of the company and moral responsibility and the decision should be the

option which is satisfying most of the criteria of evaluation. The financial aspect covers the short

term as well as long term losses. The short term losses are due to the loss of money in current

time and long term loss is due to the loss of customers. The legal aspect covers all the legal

requirements and the expected action of FDA. Reputation of the company is a vital issue without

which the company can’t survive in market so while evaluating the option the effect of decision

on the decision must be taken care. The decision also depends on the moral ethics of mike that he

should not feel guilty after taking the decision.

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Evaluation of the options:Call the clients and let them know about the contamination so that they can maintain the necessary cooking standard:If mike inform to the clients then the clients will ensure that the norms will be followed at the

time of cooking which will result

1. Financial aspect: If the clients refuse to serve the contaminated pasta and demand for

compensation then there will be short term loss and if they switch the brand then there

will be a long term loss as well.

2. Legal aspect: In this there will be less legal treat in this case.

3. Reputation of company: There will be a negative effect on reputation of the MHP and

there is a chance of leak of news in press but that will be not that effective.

4. Moral Responsibility: By doing this mike will be morally satisfied as well as will be

able to create a good image among MHP employee’s and also SPC employee’s. This will

also help in solving the cultural issue of both the companies.

Do not call the clients and trust the cooking standards of them:

Due to high rush New Year evening the clients may not serve the food as per the standard which

will result in serving of contaminated pasta.

1. Financial aspect: There will be no financial risk if everything goes well but if any

contamination found then mike will lose his liabilities as short term loss and customers

as long term loss.

2. Legal aspect: In this there will be less legal treat in this case.

3. Reputation of company: There will be a negative effect on reputation of the MHP and

there is a chance of leak of news in press which will put a huge effect on the reputation of

company.

4. Moral Responsibility: By doing this mike will be morally not satisfied as well as he will

feel guilty if anything goes wrong.

Recall of product:

The company will be unable to recall the product but they can ask the clients to destroy them.

1. Financial aspect: There will be huge financial loss in terms of compensation and

liability as well as loss of customer.

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2. Legal aspect: In this there will be less legal threat in this case.

3. Reputation of company: There will be a negative effect on reputation of the MHP but

the effect will be less.

4. Moral Responsibility: By doing this mike will be morally satisfied.

Recommendation: From the evaluation it is clear that Mr. Mike should Call the clients and let

them know about the contamination so that they can maintain the necessary cooking standard

and ensure the clients that if needed he is ready to bear the compensation.

Action plan: Call the client as quickly as possible through the distributor and make sure that all

restaurants are contacted before dinner time.

Make the Client Realize that how important to follow the norms and how they came to

know about this issue

Make them sure that this will be never repeated in future at any cost.

Check for other contamination in the stock of company and if found destroy them.

Get the company ready for any legal inspection.

Word count(900).

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