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Engineering Management in its finest, Assignments of Engineering management

University of the Philippines Visayas (UPV)Engineering management

GMA Network, Inc's assets are P625,000, and its total debt outstanding is P185,000. The new CFO wants to establish a debt ratio of 55%. The size of the firm does not change. How much debt must the company add to achieve the target debt ratio?

Typology: Assignments

2020/2021

Uploaded on 06/04/2021

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FIEL, BERNARD P. JR BSCE-
2B
Managerial Decision Making:
When values take over rational economical thought
Case summary:
This case describes a challenging strategic decision about downsizing
in Southwest Airlines. On the one hand, the company must reduce costs
(after all, it is a low cost airline) and is presented an opportunity to do so as a
result of the success of its e‐commerce initiatives whilst on the other hand,
the company is committed to provide its employees with a stable work
environment and has a culture of job security and treating employees well.
Learning objectives:
Apply the rational model of decision making and contrast it with other
models. Identify and classify types of organizational decision. Explain how
decision maker characteristics impact upon decision making within
organizations.
Case problem:
Decisions about whether, when and how to downsize (restructure).
Company:
Southwest Airlines Co. ("Southwest") is a major domestic airline that
provides primarily short haul, high‐frequency, point‐to‐point, low‐fare service.
Founded in 1971 and headquartered in the US, Southwest is a large low‐cost
airline. Airlines rely on key inputs such as aircraft, fuel and labor in order to
operate. Like any airline it is sensitive to jet fuel prices and other operating
costs. FORTUNE has listed Southwest Airlines among America’s Top Ten most
admired corporations and previously ranked Southwest Airlines in the top
five of the “Best Companies to Work For” in America. Today Southwest
operates over 500 Boeing 737 aircraft in 66 cities. Southwest has among the
lowest cost structures in the domestic airline industry and consistently offers
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FIEL, BERNARD P. JR BSCE-

2B

Managerial Decision Making: When values take over rational economical thought Case summary: This case describes a challenging strategic decision about downsizing in Southwest Airlines. On the one hand, the company must reduce costs (after all, it is a low cost airline) and is presented an opportunity to do so as a result of the success of its e‐commerce initiatives whilst on the other hand, the company is committed to provide its employees with a stable work environment and has a culture of job security and treating employees well. Learning objectives: Apply the rational model of decision making and contrast it with other models. Identify and classify types of organizational decision. Explain how decision maker characteristics impact upon decision making within organizations. Case problem: Decisions about whether, when and how to downsize (restructure). Company: Southwest Airlines Co. ("Southwest") is a major domestic airline that provides primarily short haul, high‐frequency, point‐to‐point, low‐fare service. Founded in 1971 and headquartered in the US, Southwest is a large low‐cost airline. Airlines rely on key inputs such as aircraft, fuel and labor in order to operate. Like any airline it is sensitive to jet fuel prices and other operating costs. FORTUNE has listed Southwest Airlines among America’s Top Ten most admired corporations and previously ranked Southwest Airlines in the top five of the “Best Companies to Work For” in America. Today Southwest operates over 500 Boeing 737 aircraft in 66 cities. Southwest has among the lowest cost structures in the domestic airline industry and consistently offers

the lowest and simplest fares. Southwest also has one of the best overall Customer Service records. The company is committed to provide its employees with a stable work environment with equal opportunity for learning and personal growth; there are more than 35,000 employees throughout the Southwest system. The airline is unionized (heavily unionized when compared with other US airlines). In 1995, Southwest became one of the first airlines to have a web site. In 2006, 70 percent of flight bookings and 73 percent of revenue was generated from bookings on southwest.com. Ex‐Southwest CEO, Parker on downsizing. After providing customers with the opportunity to book tickets online, Southwest Airlines found it then had too many call center agents. Former CEO James Parker, discusses how he decided to downsize. Rational economic arguments for change are considered alongside value-based arguments to continue the status quo.

1. Decision making Decision making is the process of making choices from amongst several options. Decisions are made at all organizational levels – from strategic to operational. Decisions may be classified or categorized in many ways such as by the organizational level and the degree of structure to the decision i.e. repetitive, routine, and require judgments. Some decisions are semi structured – in such cases, only part of the problem has a clear-cut answer, provided by an accepted procedure. Decisions (selecting the right action from a series of choices) can be structured (decision rules are known) or unstructured (not known – highly uncertain/ ambiguous situations) and may be made/ taken at a variety of levels (operational/ tactical/ strategic) within the organization. In the case of structured decision making the organization may formulate decision/ business rules specifying what action is required in a given situation. OPERATIONAL DECISIONS tend to be structured, frequent with more certainty, often relying on data/ information from within the organization. STRATEGIC DECISIONS on the other hand are unstructured, made less frequently and may use more information sourced from outside

turbulent environments there is greater uncertainty and a lack of information available for decision-making. Consequently, rational decision-making may be seen as more appropriate in a stable environment whereas intuitive and subjective decision-making may dominate in turbulent environments. A similar issue concerns the programmability of decisions. Routine decisions are made according to established procedures and rules whereas adaptive decisions require human judgement.

3. Decision making process within this case study Discuss the decision making process in this case study: was it rational, bounded rational, intuitive, subjective/value based? Some combination of all – rational consideration of costs, balanced with a value-based need not to deviate from custom (culture of job security). 4. The decision Cost argument: Online bookings effectively disintermediate the call center and reduce the need for HR; excess HR are an unnecessary cost Strategy Argument: Southwest is a large low-cost airline. Airlines rely on key inputs such as aircraft, fuel and labor in order to operate. Like any airline it is sensitive to jet fuel prices and other operating costs. Culture argument: An established practice of job security Students may also consider the choices - Do nothing - Forced redundancies and closure of X call centers/ forced relocations - Voluntary (incentivized but potentially costly) or no redundancy and natural attrition and/or voluntary relocation Source: https://silo.tips/download/managerial-decision-making-when-values- take-over-rational-economical-thought SYNTHESIS

Based on what I read about the case study, it’s about the downsizing of the Southwest Airlines wherein they face a problem about reducing costs and at the same time not losing its commitment to their employees about giving them stable work environment and security. The airlines ranked as the “Best Companies to Work For” in America and are dubbed as one of the best overall Customer Service records. In the decision making, I observed that they used some combination of rational and value-based since they needed to cut some cost so as a low-cost airline, they got rid of the excess and unnecessary costs. Also, at the same time they stick to their values of giving their employees the sense of stability and security. The characteristics shown here are the determination to stick to there values and solve the cost-cutting issue also. Although there are attachments to their employees because of the values they are trying to uphold and keep, they still found a way over it.