Samual Ingram Week 9 MSM 630 MSM-630 Case Study

Purpose To educate senior management on the demise of Resources Unlimited. We will cover Base line profits 1986-1988 Number of accounts in 1990 Determination for salaries for entry level management Number of gas accounts that have transferred to attempt bankruptcy Appropriate actions to avoid current suit Pertinent Legal Information

Including as well Corporate management style Accounting practices Lines of communication Pertinent Legal Information

Base line profits 1986-1988 Year ’86 Q1 ‘86 Q2 ‘86 Q3 ‘86 Q4 ’87 Q1 Profits (millions) 342 267 321 157 33 349 132 289

Number of accounts in 1990 As of 1988 As of 1990 32 Gas and 64 Oil accounts As of 1990 86 oil accounts This is about an increase of 33% growth over the past two years. Towards the end of the firm, there was at one point, senior management believed there to be 500 Gas accounts. Pertinent Legal Information

Determination for salaries for entry level management Salaries are typically determined using benchmarks. These benchmarks are similar jobs across the market that then gives the HR manager a tarting point to address how other jobs compare to this benchmark jobs. Some factors that re used in this determination is; Experience required Education required The availability of the workforce Pertinent Legal Information

Number of gas accounts that have transferred to attempt bankruptcy Up to 500. Pertinent Legal Information

Appropriate actions to avoid current suit Fair compensation for those within the organization In order to do this, the organization needs to be aware of the potential legal hazards that come from HR policies not aligned with federal laws. By keeping an inventory of statistics like this, organizations are able to recognize their own short comings and address these issues before they get to court. One way to help this issue is to educate management on how to identify acts of discrimination and how the organization would like these issues to be settled. This is often referred to as a human resources inventory. Another correction of immediate concern is to increase the females salaries to the same as those with similar job demands. This would be around $17,000 Expectations of management

Corporate management style The biggest failures in the management style were as follows, Lack of education into legal vulnerabilities of the organization This is not based on the evidence presented but could definitely help prevent incidents where the company is held liable Lack of communication Without management getting feedback from the workers, they may have no idea that they are creating such a disproportionate level of compensation. Expectations of management

Lines of communication Employee surveys Using this important feedback loop, organizations can be come aware of issues before they turn toxic. Disrupt crystallization of communication lines Often, with solid structured lines of communication, it becomes difficult to get relevant information out of certain parts of the organizations (all that information stays within a certain group) Expectations of management

Summary The failure of the company had less to do with accounting and more to do with communication within the organization. The organization failed to translate the importance of HR Legal issues to their managers, creating the lawsuit. There was a miscommunication between departments that led to the accounting troubles. By opening more lines of communication, the different parts of the organization will be that much more able to address developing situations and could have prevented bankruptcy. Expectations of management