Mid State Hauling Co

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Mid State CASE

Text of Mid State Hauling Co

Mid State Hauling Company

Mid State Hauling CompanyAdvanced Quantitative Business AnalysisOutlinesIntroduction to Mid State Hauling Co.Company OverviewKey Events and their potential issues and concernsProposed Solutions Conclusion

Introduction to Mid State Hauling Co.The Mid State Hauling Co. is a family owned business that went through 3 generations for over 55 years.Company OverviewMid State Hauling Co. was found in 1953 by Mike Coasts Sr.The business was firstly specialized in trucking and started with only one dumping truck then expanded further.In 1980 Mid State Hauling acquired a dumper & waste-removal services.In 1988 the business had expanded to include real estate rental, delivery services, and moving & storage services by Maureen and Vanessas efforts.In 1992 the company name had changed to mid state trucking & storage.In 2008 the company had faced financial struggle for the first time in 55 years.

Key Events Parents retirement & succession plan3rd Generation joining the businessThe beginning of company financial strugglingPresidents reaction towards the problemParents retirement & succession planIn 1999, the founder Mike Sr. and his wife Maureen decided to retire.Succession plan was formed to divide the company into 3 equal shares for each of the second generation.Succession plan was formed to secure equal pay for second generation members regardless of positions.Potential issues and concernsAssigning an equal pay for successors positions regardless of the load of work, responsibilities and titles.

3rd Generation joining the businessIn 2002 Walter had been hired and promised to be the president in futureIn 2004 Charles had joined the company and promised to be senior vice president.In 2005 Robert Jr. Joined the business in an entry level position.

Potential issues and concerns

Decisions in regard to hiring 3rd generation family members seem to be favorable and driven by Mike Jr.s authority rather than qualifications and board agreement.Potential concern that other partners Vanessa and Robert are feeling depressed because of Mike Jr. authority abuse in hiring his sons at high status positions.Potential concern that Mike Jr. delegation to descent skilled sons is a factor affecting the hauling division business performance and contributed to sales drop.The beginning of company financial strugglingIn 2008, Vanessa met the accountant and discussed newly raised financial concerns with him and asked him to present the issue to Mike Jr.Sales of the companys three divisions were dropping down. Vanessa and Roberts divisions were still profitable while Mike Jr.s division experienced severe drop to an extent that made it unprofitable.Potential issues and concerns

Economic turndown can be a reason contributed to sales drop and it affected divisions differently based on their nature.Divisions management incompetency might be a reason that assisted the economic turndown in affecting sales.

Presidents reaction towards the problemMike Jr. blamed Vanessa for not being at top of the financials while the problem was drop in sales.Mike Jr. explained cutting cost plan proposed by the accountant incase sales continue dropping as a payback move from Vanessa and acted accordingly.Mike Jr. proposed a quick decision of cutting Vanessas salary without investigating the situation.

Potential issues and concerns

Financial position of the company is still healthy and sales drop should be investigated further for its cause and effect.Mike Jr. attitude and un-solid accusations based on no evidence may lead to more complex situations if Vanessa decided to leave.Proposed solutionsThe issue of dropping sales:An immediate investigation should take place to evaluate the causes behind dropping sales in each division by comparing each division drop with industry average drop: - If divisions performance was bellow industry average = incompetent mgt. - If divisions performance was higher than industry average = efficient mgt. - If divisions performance was equal to industry average = competent mgt.Result: Company will have clear vision where to cut cost, replace management or perhaps seek professional consultancy to enhance performance.

ContdThe issue of Mike Jr.s abuse of his authorities and attitude.Companys policies and procedures manual should be fairly written and strictly followed by the company to limit misconduct in hiring or other practices which might affect businesses or equal chances.Major managerial decisions should be approved from all board members as Mike Jr. proved to use his power for personal desire or gain and that might affect the business.Results:Company will be following professional conduct in all processes specially in hiring which will attract qualified calibers to the company.Mike Jr. level f authority will be tamed which will reduce the level of tension between board members and insure fair treatment.ContdThe concern about Mike Jr. decision to cut Vanessas salary as a start of cutting cost plan.Vanessas salary should not be affected before the sales drop analysis report is provided and outcomes justify that action.Result:- Vanessa will continue in working and supporting the company during the financial struggle.ContdThe issue of possible incompetent management which can be the reason behind sales drop.The company should hire a third party consultant to make an assessment report that analyze the needed qualifications for each position verses the responsible current persons qualification.Result:Company will be able to notice the gaps between the existing employees performance and expected KPIs Company will be able to take actions either to train, change position, or terminate an employee contract.Company will assure fair payments for each position based on qualifications and productivity.ConclusionThe mid state company healthy balance sheet can support the company to over come the situation.Its the right time for owners to act responsibly as the situation demands that, and they all should put their personal disagreements aside and focus on the company.The case study addressed many conducts that happened in the past and proposed solutions which can resolve more than one issue at once.If the company applied proposed solutions, business will allocate current employee where will be fully utilized and be paid accordingly.Proposed solutions will insure maximum efficiency and profitability. Proposed solutions will mitigate management conflicts also tame absolute authority of the president.

Discussion Area

The lecture was presented to you by,Hattan Bahebri NBM 064Muhannad Alhumaid NAM 034Wael Kabli NBM 065Ameer Beyari NAM 067Nabel Ahmad OBM 025The End