Take-over of the company

This faxed memorandum is to the staff of a company that is about to be taken over. In this case, it is essential to explain exactly what is hapening and what is going to happen, as employees will naturally want to know about their job security. Notice how the main points are carefully laid out, and that the memo is written almost immediately after the take-over to prevent rumours spreading. Employees are also encouraged to ask supervisors and union representatives questions. It is bad industrial relations not to advise employees immediately in this situation, as secrecy only creates suspicion, and even those with secure jobs might leave for fear they might be dismissed.

MEMO FAX Bedix Calculators Ltd.

Fax: 071 940 6668 Bedix House. Richmond, Surrey TW9 1DW

to All employees in all branches Date 21 October 20—

From. J.L. Bedix, Director Subject: Control of Bedix Calculators

by Prendall Industries

You are probably aware from reports in the press that Bedix Calculators has been taken over by Prendall Industries and is now part of the Prendall group of companies.

Details of the take-over and how it will affect employees will be sent to everyone before the end of the week. However, this memo is being circulated to reassure you of the following:

1. There will be no redundancies as a result of the take-over, although there will be some reorganization.

2. Reorganization will take place over the next year as Prendall intend to expand Bedix Calculators' production so that it will become a major electronic component supplier to their own industries.

3. Salaries and wages will not be affected.

4. Management positions will not be affected, although Organization and Management Consultants will be looking at our methods of production with a view to improving efficiency.

5. Bedix Calculators will retain its own name and identity and fulfil all contracts and obligations it was committed to prior to the take-over.

The Board of Directors, management, and Union representatives of Bedix Calculators have already met with Mr Prendall, who has given us the above undertakings both verbally and in writing. However, if you wish to ask your supervisors or Union representatives about anything regarding the new situation, please do so, and I am sure they will clear up any doubts or misgivings that you might have.

J.L. Bedix,

Director

15.3

Reports

Reports are used in every area of administration, and may announce, explain, or recommend policy. They may initiate and begin a sequence of events to start new schemes, introduce fresh approaches, or develop new methods of operations. They may also be the result of events that need investigation and explanation.

Reports can come from external agencies which have been called in by the firm to review problems, e.g. Organization and Management Consultants, or business associates, e.g. surveyors' reports or credit investigation agencies (see 8.8.6).

Reports may also come from internal sources, when management are asked to investigate the possibilities of increasing efficiency in the company.

15.3.1

Guide to contents

The length of a report depends on the complexity of the subject it deals with, but all reports follow a similar pattern, as follows:

Title

The title of the report always explains its contents. Here are three examples of titles which immediately tell you what the report is about.

'The development of small industries in Nigeria'

'The limitations of the Consumer Protection Act 1989'

'The problems of English-language teaching in London Colleges of Further Education'

Introduction

The introduction might be a summary of the report and the circumstances or conditions that initiated it. It could also lay out the objectives and limitations of the enquiry.

Background

All reports, regardless of whether they are specialized or not, must give a background to the subject of the study. This allows the reader to see how the situation arose, and how it can be corrected, improved on, or changed.

Facts

This section is essential to all reports as it explains the situation that exists and offers evidence to support the statements that the writer is making. If the reader is to be convinced that changes in a situation are necessary, well-selected and well-presented facts will influence him.

Conclusions

Conclusions are the ideas you have formed from the evidence you have looked at. Whereas facts are objective statements, conclusions draw together all aspects of the situation as you see it.

Recommendations

These follow from conclusions and are the suggestions that you are making to improve, or change, the current situation.

15.4

Specimen reports

15.4.1

This report from the Sales Director suggests that his company should enter the mail order business. Notice that this is a summary of a much larger report containing statistical data which it refers to throughout the report.

Questions

1. How long has the research into the project taken?

2. Why do they believe there is a potential market in mail order?

3. Which is the best market for the company to enter?

4. What would be the problem with other areas of mail order selling?

5. How much would the company have to invest to go into the mail order market?

6. Where will the company get the money from to invest in the project?

7. When should the board meet to discuss the project?

8. Which words in the report correspond to the following: because of; buying; breakdown of figures; garments; yearly account; money which cannot be recovered; future; information'?

MEMORANDUM

SP Wholesalers PLC

To: The Board of Directors Date: 15 October 20—

From: D. Logan, Sales Director

Introduction of Mail Order Service

I have now completed the research we began in July of this year into developing a mail order service. You will find all the statistical and graphic data attached to this report, but in summary, the research team came to the following conclusions.

Market

Over the past six years there has been a steadily expanding market both here and in the other single European market economies towards mail order buying. This has been due to three main reasons - range of selection, convenience, and the credit facilities this form of selling offers. However, the main area of development, which has expanded by 8 per cent over the period, has been in clothes purchasing, especially children's clothes in the age range of 4-15 years, see p.9 of Statistical Analysis, attached.

With regard to other sales items such as electrical appliances, household utensils, carpeting, linens, and general furnishings, we found that although there has been a 2.7 per cent increase in sales over this period, the investment in stocks would be too large to undertake in the initial period, see pp 23-27 of Analysis. We can reconsider these areas in the future.

Finance

If we concentrate on the garment area of the market supplying all age groups, we estimate an increase in investment of our annual budget of 4.8 per cent, and this includes administration, warehousing, expanding stock, producing catalogues, advertising, distribution, agents' commissions, and bad debts. This will increase our present turnover in this area by 7 per cent over a two year trial period, see pp 15-18 of Analysis.

Our finance department suggests that this increase in capital investment should come from share issues rather than loans because increasing rates of interest will cut into profits.

Conclusions

With our main competitors already considering this market, and its international potential in the European community, we suggest that on the basis of what has been said, and the data we have collected, it would be feasible to enter the mail order business by 19—. Once you have studied the details, I would suggest a meeting before the end of this financial year.

D. Logan

Sales Director

Delta Computers

Bradfield Estate. Bradfield Road, Wellingborough, Northamptonshire NN8 4HB

To: Date:31 August 20—

From: J.M. NORMAN

Declining Sales in Germany

1. I was sent out to Germany last month to find out why sales have fallen by 40% over the past two years, and while there I interviewed a number of our leading customers who were very helpful in explaining how and why German demand for our products has contracted.

2. Between 1983 and 1990 we were one of the leading exporters to Germany from this country, with an annual turnover of £2,6m from that market, with our share of the market never below 10% of their imports for our product. However, in 1991 it was evident that we were losing ground despite increased advertising and promotion. Although our customers maintained regular orders, the orders themselves were smaller, in some cases half their previous net values.

This fall in demand continued until two years ago when we found our share of the market had fallen to six per cent, and from that time has shrunk to three per cent.

3. Our market researchers have already produced two reports explaining the decrease in demand, and my trip and interviews have confirmed their findings.

Our exports have become more expensive to buyers, despite the European single market economy, and as our customers saw this as a trend, they began to look for new suppliers, which they found in the Far East.

These countries, who were keen to earn hard currencies and develop their Information Technology industries, were prepared to cut their prices, in some cases by 60%, while at the same time maintaining the quality and standard of the products. They also offered first rate after-sales service, long-term guarantees, cheap transportation, and short-term delivery dates.

It may be of little consolation, but in the face of this competition most of our rivals in the West have also experienced a decline in sales to this market.

4. The solution to the problem calls for drastic price cuts and a total reorganization of our methods of production and service. But if we are prepared to force our way back into this market, I would suggest the following:

a) Review production methods and introduce improved technology to cut costs, and enlarge production capacity to effect economies of scale, producing in mass units regardless of whether there are orders or not, so that we can supply immediately from stock.

b) Improve distribution and order processing so orders can be met quickly and delivery dates guaranteed.

c) Find new suppliers of raw materials who are prepared to allow generous trade, cash, and quantity discounts, so that we can pass the reduced prices on to the customers.

d) Offer extended guarantees on products and improve quality control to strengthen our reputation in the market.

e) Establish a service base, and agents in Germany.

f) Increase advertising and promotion so that our brand becomes identified with the product, and expand our sales force in Germany, again, possibly through agents.

5. I realize that this will mean increased capital investment, but unless we are prepared to invest in our future in this market, we will find within five years that we have no market to invest in.

J.M. Norman

Sales Manager (Europe)

15.4.2

Sales Manager's report

This internal report suggests far-reaching changes in production and marketing. A report of this sort may be even more detailed and supply figures and forecasts to help Directors make a decision on whether they wish to increase their capital investment to stay in the market.

Questions

1. How did the Sales Manager who wrote the report get his information?

2. Did customers stop ordering?

3. Have there been any previous reports on the German market?

4. Where did the German customers get their new supplies from and why were they buying from their new suppliers?

5. What recommendations does the Sales Manager make with regard to prices, distribution, agents, and advertising?

6. Which words in the report correspond to the following: discover, become smaller; obvious; fashion; maintenance (of products); fall; maintaining standards; putting money into a business?

Date: 2016-01-03; view: 986