Management and Organization Behavior Report on Decision Making, [United International University] Faculty: Prof. Md. Salim Bhuiyan

1. Management and Organization Behavior
Course ID: MGT 506
Semester: Fall 2012
MBA Program
United International University

2. Apu Ghosh
Md. Masudur Rahman
Mohammad Saifur Rahman
Gazi Tauhid Ahmmed
Shihab Khan

3. Assume that you are the top executive of an
organization. Now think of a decision which will
bring significant changes in your organization.
Justify why you want to take such a decision and
how will you implement it.

4. This topic is assigned as a term paper in the course
Management and Organizational Behavior under
School of Business of United International University.
This assignment concerns for different
management decision, decision making process and
its justification in accordance to the company
objective.
This presentation elaborates a decision making
process in Green Trading Ltd (A hypothetical
company), one of the growing trading companies of
Bangladesh, as a case.

5.  A reputed trading Company involved in joint venture
projects in Bangladesh.
 Representing as an exclusive marketing agents for
International brands products.
Head office is in Dhaka
 7 branch offices in the commercial towns. (Chittagong,
Barisal, Sylhet, Rajshahi, Khulna, Gazipur and Narshigdi ).
The distribution network is carried out in the rest of the
country through 100 appointed dealers.

6. The Company has 114 full time efficient and dedicated
employees, who believe in teamwork to materialize the objectives
set by the management.
The major range of products we handle includes :
 pharmaceutical finished products,
 animal health care products,
 feed premixes,
 pharma-active materials,
 packaging materials,
 car paints,
 protective coatings,
 industrial chemicals and several other items.

7. The objective of the Company is to provide
professional services and good quality products to the
consumers in Bangladesh through efficient team and
net work.
This objective is perused keeping in mind respect for
the customer needs and satisfaction. The Company’s
continuity is achieved through commitment to hard
work, growth and profitability .
Our aim is to remain as a leading marketing
organization by rendering efficient services to our
customers and to be a respected member of the
society.

8. In our company there are three levels of employees - Top,
Mid and Low.
 Top Level : 3 persons
Chairman ; Vice-Chairman & CEO ; Managing Director
Mid Level: (1st Tire) : 7 persons
Manager – Marketing; Manager - Sales and Distribution;
Manger – Trading; Manager – Accounts and Logistics ;
Manager – Business Development; Manager – Technical
Service; Manager – Commercial and Regulatory Affairs

9. Mid Level: (2nd Tire ) : 20 persons
Area Manager – Marketing ; Area Manager - Sales and
Distribution ; Deputy Manager – Trading; Deputy Manager –
Accounts and Logistics; Deputy Manager – Technical Service;
Deputy Manager – Business Development
Low Level: (1st Tire) : 35 persons
Executive – Marketing ; Executive - Sales and Distribution ;
Executive - Trading ; Executive – Accounts and Logistics;
Executive – Technical Service; Executive Secretary to top level
Managers
Low Level: (2nd Tire ) : 24 persons
Delivery Assistant; Peon; Driver for delivery vans

10. The annual total revenue of the company in 2011
was Tk. 400 millions i.e. 40 crore.
Our daily sales capacity is on an average Tk. 10 lac
per day with the present working speed possessed
by our low level workers especially.
But it is believed that our workers can earn more
for us. However, we are satisfied with this rate as the
profit earned for our company in the present socio
economic context is above average.

11. The expenditure for our company involves office
maintenance, staff salary, yearly tax, transportation for
carrying goods from Chittagong Port to Dhaka and to branch
offices, inventory and storage cost, product delivery costs etc.
 In 2011, our annual expenditure was Tk. 36 crores and thus
the net annual profit was Tk. 4 crores.
Our daily profit target ranges within Tk. 95,000/= to Tk.
1,00,000/=.
 The profit per day varies slightly because of multiplicity of
causes.
This profit goes to mother fund/fixed deposit account for
future project extension or as a backup for future adversities.

12. As we monitor regularly, it has been the mater of
great concern that we could not reach to our target for
last few months in 2012 and daily profit margin has
fallen to Tk. 80,000/= to 85,000/=.
We had deviation from our set target and also
deviation from past achievement.
In 2012, our low level employees seemed to be less
productive and de-motivated;
On the other hand some of our mid level employees
left the company getting good offers.

13. As the three functions of management (leading,
organizing and controlling) got disrupted in the last few
months of 2012 our profit per day decreased for Tk.
15,000/= to 20,000/= as from estimated limit because of
lower sales.
Also for this low sales rate, our inventory cost increased
and some of the agro products got damaged. As a result
our annual profit came down to Tk. 2.8 crore at the end of
year 2012.
We are afraid that if this trend continues we may lose
potential customers. The goodwill of our company is also
under threat.

14. As top level executives we should always try for the
higher productivity.
As the current problem is hampering the productivity we
need to take a decision that would bring significant change
in our profit and as well as would solve the problems
regarding our human resources.
It is said that management involves 6 M (Man, Material,
Machine, Method, Money and Market). Among these 6 M,
Man (Human Resource) creates major problems for a
manager. So, an effective decision making has significant
role in this regard.
In making our decision we have followed the due steps
of decision making process.

15. For the last few years the cost of living has gone up significantly in
Bangladesh that caused the mid-income group to fall under a threat.
Majority of our mid and low employees’ income is spent for buying
regular food items, house rents and conveyances.
As a result we have found that mid and low employees are very much
dissatisfied with their current salary structure. They are depressed with
the price hike that made their life miserable than earlier.
As fuel price has increased employees are to spend more on their
conveyances. Again hectic traffic and poor public transport facilities are
restricting them to come to work on time and to concentrate in work
properly. That has put impact on their productivity.
Our competitor companies are offering competitive remuneration
packages to our very efficient mid level managers. As a result, some of
them left the organization.

16. As some of the efficient mid-level employees left the organization
one after another, our company is now having management crisis.
Leading in departmental level, organizing and controlling had been
hampered and that has resulted into indiscipline among the low level
supervisee’s. They are not getting due direction and not paying
attention to their work.
Among Mid and Low level workers, who are mediocre and not
getting opportunities to switch to other organizations has become
frustrated and de-motivated and as a result they have lost interest in
their works. It has direct impact on our decrease of sales.
So the employees want increase of payment and who are based in
Dhaka are demanding transportation facilities to workplace.

17. We came up with two solutions after analyzing the
situation and these are:
Hiring more efficient sales and marketing executive with
attractive salary package .
•Maintain the present stuffs and empower by reviewing
the salary and incentive scheme.
•We know that our problem has alternative solutions.
Those are:
Brainstorming.
Talked to some of our mid and low level employees.
We hired a consultant to analyze and review the problem
.

18. Major Decision
We will increase the salary for all level of employees. Here we will
follow the Cost of Living Adjustment (COLA) method and would
also consider the market demand and competencies of our
employees. So, the increment will not be of same percentage at
all level.
So the increment would be as follows:
Top Level: 5%
Mid Level (1st Tire): 15%
Mid Level (2nd Tire): 10%
Low Level (1st Tire): 12%
Low Level (2nd Tire): 8%

19. Justification
Our salary package offered to mid-level and low level staff is
not competitive and do not match with the market demand.
So, turnover rate is high among our most efficient managers.
They are keen to switch organization if they get good offers
from other companies.
Among Mid and Low level workers, who are mediocre and
not getting opportunities to switch to other organizations has
become frustrated and de-motivated and as a result they have
lost interest in their works. It has direct impact on our
decrease of sales.

20. For the last few years the cost of living has gone up
significantly in Bangladesh. So our decision of increasing salary
would bring significant change in our company by motivating
the employees providing incentive to them.
As top level employees are already highly paid, their
increment is the lowest.
Our efficient mid level (1st tire and 2nd tire) employees are
keen to switch job, so incentive is the highest to retain them
based on market demand analysis.
Our low level (1st tire) employees play key role in sales and
distribution so their incentive is higher than the mid level (2nd
tire).
Our low level (2nd tire) employees are given incentive as per
market demand analysis.

21. Since every problem has got more than one solution so we will also
take some additional motivational decisions phase by phase, which
also act to satisfy our employees especially who are based in Dhaka
and having transportation problem.
We will provide transportation facilities to our Dhaka based staff.
Apart from the top level employees we have 23 employees in our
Dhaka office. We would rent microbuses on monthly basis to
provide them with the facilities.
Respective Justification
As fuel price has increased employees are to spend more on their
conveyances. Again hectic traffic and poor public transport facilities
are restricting them to come to work on time and to concentrate in
work properly. That has put impact on their productivity. Providing
transport to work would solve the problem and would maintain in-time
to work properly.

22. Action plan
First we will calculate our existing staff salary cost and increased
salary cost and transportation cost and estimate the added
expenditure required to implement our decision
Level and Tire Current Salary Cost
(per anum)
Increased Salary cost
(per anum)
Top Level : 5 persons 1,95,00,000/= 2,04,75,000/=
Mid Level (1st Tire): 7 persons 91,00,000/= 1,04,65,000/=
Mid Level (2nd Tire): 20 persons 1,56,00,000/= 1,71,60,000/=
Low Level (1st Tire): 50 persons 1,13,75000 1,27,40,000/=
Low Level (2nd Tire): 32 4,160,000/= 44,92,800/=
Total 59,735,000/= 65,332,800/=
Extra amount needed Tk. 559,7,800/=

23. We think new decision, which came out eventually with
the problems we are facing, shall not only benefit our
company but also uphold our country as well. This is
because more trading companies will become interested
to increase salary if they can strike the balance like we did
between disciplines, giving workload, ensuring facility for
the workers and rather make more profit than loss by
utilizing the capability of our workers. May be we will
need some extra money at the beginning but after setting
up we will be able to make greater profit & our
investment will be make up within a reasonable time.

24. Thank You all for your patience hearing.