Mid State Hauling Company

Advanced Quantitative Business Analysis

Outlines

Introduction to Mid State Hauling Co.

Company Overview

Key Events and their potential issues and concerns

Proposed 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.

3rd Generation

2nd Generation

1st Generation

(Ended in 1999)

Mike Sr. & Maureen

1953

Mike Jr.1976

Walter2002

Charles2004

Vanessa1988

Robert1987

Robert Jr.2008

Company Overview

Mid 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 Vanessa’s 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 plan

3rd Generation joining the business

The beginning of company financial struggling

President’s reaction towards the problem

Parents retirement & succession plan

In 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 concerns Assigning an equal pay for successors positions

regardless of the load of work, responsibilities and titles.

3rd Generation joining the business

In 2002 Walter had been hired and promised to be the president in future

In 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 struggling

In 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 company’s three divisions were dropping down. Vanessa and Robert’s 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.

President’s reaction towards the problem

Mike 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 Vanessa’s 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 solutions The 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 division’s performance was bellow industry average = incompetent mgt.

- If division’s performance was higher than industry average = efficient mgt.

- If division’s 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.

Cont’d The issue of Mike Jr.’s abuse of his authorities and attitude.

Company’s 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.

Cont’d The concern about Mike Jr. decision to cut Vanessa’s salary as a start

of cutting cost plan.

Vanessa’s 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.

Cont’d The 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 person’s qualification.

Result:

- Company will be able to notice the gaps between the existing employees performance and expected KPI’s

- 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.

Conclusion The mid state company healthy balance sheet can support the

company to over come the situation.

It’s 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 025

The End