It’s an international manufacturing low-cost high-quality rubber component. Organizationally it maintained the same structure for more than 15 years and its top management was highly conservative and used a marketing approach to find new markets rather than exploring new products. For any product request, Corwin Corporation considered it if it provided the same profit margins and total profitability in terms of follow-on contract.
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From 1980 to 1983 Corwin received a specialty product assignment from Peters Company which was profitable leading to the development of a good business relationship. In 1982 Peters Company requested for development of a specialty product with Corwin. In the beginning, Gene was reluctant to accept the offer but after a long discussion, he gave in and this was followed by a proposal to be presented to Peter’s Company. Dan West was selected to be the project leader after which their proposal was accepted. This was then followed by a letter from Delia authorizing Corwin to begin working on the project immediately.
The proposal was prepared in the absence of other majors like Reddy who was on vacation. He also did not support the position given to West as the team leader. As the researches started things were not going as planned with Ray, a representative from Peters Company was ruining everything by imposing his non-performing directions. West was even forced to spend 12000 more on materials. Ray ordered the sacking of potential members from the research laboratory claiming incompetency in their works. Due to these challenges, Reddy came in to bail West out which led to the formulation of new laws unfriendly to Ray. A new test matrix for the research was prepared and this made Ray angry and went on to spoil their reputation at Peters Company which led to the immediate termination of the research development.
Some of the major mistakes done by Corwin were the assigning of Dan West as the project leader who was an expert in the internal projects rather than external ones of which he lacked the experience and exposure. Secondly, preparation of a project proposal which was usually executed by the three vices and the president was done in the absence of some of them which did not appear professional. Lastly, the fact that more experienced personnel, like the R&D director (Reddy), was not informed.
Companies should never risk bidding on projects based on rough draft specifications as this can lead to unqualified undertakings which may turn out negative to the whole idea as in the case of Corwin which leads to eventual losses. The proposal preparation should have been given more time and patience with the active involvement of the four principles. This should have given more final and well-allocated responsibilities to more experienced personnel which could have efficiently overcome the failure to deliver. It is very important to inform line managers of proposal activities as this can avoid obvious mistakes like going into contracts with the wrong opponents as one can advise earlier either against or for it.
Immediate procurement of all materials is a mistake as this can lead to unforeseen losses as in the case of West who was forced to purchase more materials outside the budget with Ray’s project redirections. In such a case he could have reduced the losses by ordering lesser materials. Corwin should have catered for the extra costs by undertaking all the matrix tests till when promising results were found rather than redirecting the project just after few tests. As we can see, redirecting the project led to their total misplacement which was never cost-effective.