The case study shows the managerial issues RLK is facing. RLK's case discusses mostly on the outsourcing decisions of the organization and the effect of the actions from the various departments. The following is a summary of the firm's overall occurrences.
RLK changed the functionality of its external environment, affecting the internal structures. This action has increased competition between the organization and its business rivals. A more significant percentage of the managerial team suggest that outsourcing RLK's products are best for the company. On the other hand, the rest of the team suggests that adding members to the team increases the productivity of the firm. The financial department recorded a drop in the profit margin of the organization. Moreover, sales and competition rise by the minute. The company has great designs for its brand but it is not satisfactory enough for clients to finalize the purchases. The Chairman is disturbed by the decrease in sales while the CEO is certain that innovation is what will save the company.
RLK has received great support from various companies that outsource its products. Outsourcing is vital since the organizations share operational and fixed costs. Lars, the company's CEO is not completely satisfied by the efficiency of outsourcing. However, he is forced to accept the idea to save funds and time. The company's survival greatly depends on the sales of its product. The problem is that RLK is not equipped with skills that could develop the product. The company should mainly focus on its organizational behavior and its marketing skills. RLK has little room for mistakes since it is in a critical condition. The leaders in different managerial positions differ in most issues making the company vulnerable to communication gaps and having different goals. The organization does not motivate its employees on reaching a common goal. Moreover, RLK does not focus on growing talent and skills.
RLK does not seem to manage the profits earned from the existing products efficiently. The company depends on the CEO's business strategy on improving the production, sales, innovation, and internal environment. The external occurrences greatly influence the internal climate of RLK. The competition in the same industry keeps increasing. The discussion below shows the strategic problems presented in the case.
RLK should invest more in the R & D department. However, the CEO should not invest too much into the department since it is a risky action. Most clients are sure that the company is spending creating highly innovative products. RLK's competitors are outsourcing the company's products and benefit from the cost benefits. The company would risk bankruptcy if it wishes to invest more money in Research and Development.
RLK will save a great fortune if they agree to work with Inova for the production of the iVid if they do it in the U.S.A. Ray has not been a great supporter of outsourcing ideas. He may decline to work with Inova since the company is an external source. RLK and Inova have different organizational cultures. The timezone of both organizations also is a hindrance in cooperating the companies' cooperation.
RLK discovers the need to invest in marketing by building the company's brand image. Keith suggests that investing in marketing would make the company aware of the customers' needs even though it would not fully resolve the main problem. The organization is known for its innovative ideas and therefore an issue is raised as to whether the brand value should be exploited. However, the company should not rely on investing in innovation as the only solution.
Lars Inman, CEO of the RLK Company, believes that innovation is a way of recovering the business. The chairman believes that the solution to the consumer's needs can be solved. Both the CEO and the Chairman are right in their context. In the end, the system of Lars must have the capacity to join what's the need of the time with what's conceivable in the time. Certainly, the brand value ought to be misused by the organization as a trailblazer and trendsetter. What's more, the abilities, is controlled, to enhance ought to be used. Be that as it may, the thing is Lars should surrender, totally, the idea that what is conceivable in the time can be conveyed by the researcher Ray, regardless of whether they re-appropriate or not.
For a firm like RLK, going out in this example may seem like a difficult request, yet it must be perceived how it functioned for P&G. The vast majority of the Western officials confront numerous dangers when they gauge seaward redistributing decisions and Lars perils, plunging into such device (Noriah et al). For the most part, they don't consider extensively redistributing a strategy to do cost investment funds and other such working outcomes. In its place, they should ascertain this decision from a vital perspective: Lars must assess this thing that in the case of re-appropriating R&D will help the organization to accelerate the working of its novel skills. What's more, it ought to be dictated by him whether commonly both the gatherings will prevail with regards to mounting further capacities, on the off chance that the affiliation completes once this venture is finished, they would have had they chosen different partners or not in the least cooperated. A motivation is made by the inclination of incredible joint advantage to proceed with a relationship. What's more, this choice on shared advantage additionally decreases leave costs.
So it's the time Lars ought to choose where there will be a focused edge for RLK later on and he should make a redistributing association given every one of these things. For picking up the upper hand in item development, concentrating on the item plan and looking for high-class capacities in a product designing structure outside, can be one choice. Building up a remarkable capacity in programming configuration can be another alternative in which Lars at long last would need to present the ability of programming designing. In both of these alternatives, there are numerous valid justifications for re-appropriating to a product firm. Like the firm, for example, Inova for the undertaking of iVid.
A re-appropriated connection will help RLK from various perspectives. It will give RLK a comprehension about various programming capacities required. RLK will likewise include in aggregate learning by redistributing. It's anything but a smooth procedure; however, it has a huge potential and profitability. A watchful and legitimate administration is expected to change a damaging grinding into a power that in the end offers ascend to advancement. A few qualities are shared when distinctive all around overseen groups cooperating with an abnormal state of imaginative contact. Qualities like a typical and clear objective, forceful execution. Moves are made to determine the contradictions. At the point when groups cooperate, there is a typical reason for critical thinking and correspondence. There is a pertinent, legitimate, satisfactory and proportional range of abilities. Furthermore, shared regard among individuals emerges.
In the organization among Inova and RLK, numerous segments for the innovative erosion appear to be set up. The groups will be helped by the iVid model in structure transactions and building. With the due date for propelling the item there is a clear objective, and furthermore, the suggested activity focuses are clear. Both the groups have the vital abilities and an equivalent dimension of skill- however, the CEO of RLK will need to accomplish more due to mindfulness identified with the capacities of Inova, as he'll require to be extremely persuading in pitching them to his very own Research and Development group. Regardless of whether the shared regard needed for the beneficial rubbing can be accumulated by these different groups, is questionable. The Inova group calls this relationship as a give and take a connection, and this thing is empowering. Be that as it may, on the off chance that a similar methodology is received by RLK, even, they will get profitable rubbing.
However, the two groups are having ranges of abilities that are world-class, yet the idea of aptitudes is extraordinary. Additionally, the national societies, work styles, and the condition is exceptional. What's more, they are situated at a wide geographic separation. The geographic separation can be limited by most recent advancements, however, whatever is left of the issues remain as they seem to be. A shared belief and trust are required for proceeding with this association and Lars should ensure that both the groups get to know one another to construct the trust. Indeed, even the timetable is by all accounts forceful; both the groups need to stay moderate at the start. Also, this will enable them to go a lot quicker in the coming future.
The administration needs to change the execution measurements, such as remunerating individuals not for being inventive but rather to give a win to RLK items in the market. For the manageability of Research and development of RLK, simply redistributing won't be useful. However, the attitude of the workers will likewise add to it. Same is the situation with long-haul techniques; they require the commitment of center supervisors (Khan, Qadeem and Shahbaz). This isn't just a connection of vital collusion, yet additionally, RLK will confront changes in activities and structures. Furthermore, for this, the workers should be more liberal. Thus, the choice to allot ought to be considered relevant in giving the organization and the chiefs another bearing. It must not be simply considered as a cost sparing here and now procedure (Ramanathan). To make redistributing effective, the central administration has a crucial job. In the worldwide business organization like this, the center administration goes about like magic that binds the organizations. In the organizations that are making such connection, the center directors are critical because they are the person who is in charge of managing the providers and clients remotely, and with the senior administrators inside.
There are six positive qualities that RLK's center directors must have with the end goal to demonstrate great outcomes in re-appropriating its R&D. These properties are:
- Watching and Shielding: To deal with the dangers and understandings exhaustively.
- Disentanglement and Problem Solving: To ensure that things are occurring appropriately and to rearrange the obstacles.
- Forming by Planning Procedures: To keep up the correct records, to review the preliminaries. Bond Development: To give regard, encourage the relational connection and fabricate trust.
- Business enterprise: To be imaginative, to discover better methods for completing things and affecting long-haul potential.
- Investigating: To be very much associated.
Khan, Qadeem, and Shahbaz Ghayyur. "Software Risks and Mitigation in Global Software Development." Journal of Theoretical & Applied Information Technology 22.1 (2010).
Nohria, Nitin, et al. "Feed R&D-or farm it out." Harvard Business Review 83.7 (2005): 17-25.
Ramanathan, T. R. The role of organisational change management in offshore outsourcing of information technology services: Qualitative case studies from a multinational pharmaceutical company.Universal-Publishers, 2009.
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