TerraCog

Organizational Decision Making Decision To Proceed with Aerial made by the president (Fiero) based on pressure by the vicepresident of sales (Pryor). Initial decision to proceed with satellite imagery was rejected giving competition a head start. Ariel more of a match of technology with competitor rather than innovation. Production costs is considerably higher than expected due to expensive components. CFOs profit margin makes it impossible to match competitors price point.

 Decision To Be Made At End of Case

Launch Ariel at full price to maintain standard margin Launch at competition price $425 at zero profit while working on redesign while working to reduce cost Delay Ariel while working on lower costs redesign Abandon Ariel

 Conflict Based Individual Goals

Pryor (Sales), concerned with compensation change and not disappoint sales team Barren (Director of Production), Recent production problem which he was held responsible for. Job insecurity and maybe resentment for being blamed may lead to him being very conservative. Roth (Design and Development), team not excited about projectother projects more exciting interested in being promoted to be VP of design and development.

 Wu (software designer)at meeting defends design not understand why costs are so high since he only tweaked the firmware Whistler (VP of design and development) no longer fully involved in the company. Retirement soon. Richardson (Executive VP)-difficult position, recently promoted, middle of a problem did not create. Needs to reach a solution but not hurt her relationship with other managers.

 Factors that contributed to the problem

Design and development had little involvement into the decision to move forward again with Ariel Sales not asked to make recommendations with respect to reduction of cost. Problem of cost discovered late.

 Group Factors
Team not united on common goal Not clear what the meeting is about is it meeting to set a price point on Ariel-to set a overall marketing plan for the product-to set an overall strategic direction for new products. Group needs time to digest the information about the price problem.

 Possible ActionsThings To Consider

Try to get areas of agreementlaunch product at zero profit margin Deal with concerns of individuals-compensation for salesconservative estimate and risks of underestimating costssuccession in leadership Roth and Whistler What is the next meeting about or should there be a next meeting of the group? What individuals should be involved in the next meeting? What type of decision needs to be made?