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Case Analysis: Contents

Best Engineering Consultancy outsourced some engineering functions which led to diminished staff from 30 to 5. Customers complained of low quality, high cost work that was delayed. The chief engineer resigned in disappointment. Miscalculations in costs occurred between the firms. The CEO is concerned as the contract ends next year, with a $100k penalty for early termination. They must determine a new strategy.

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Nicaa Nilo
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436 views2 pages

Case Analysis: Contents

Best Engineering Consultancy outsourced some engineering functions which led to diminished staff from 30 to 5. Customers complained of low quality, high cost work that was delayed. The chief engineer resigned in disappointment. Miscalculations in costs occurred between the firms. The CEO is concerned as the contract ends next year, with a $100k penalty for early termination. They must determine a new strategy.

Uploaded by

Nicaa Nilo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: NILO, SHAINA JIE B.

BSEM- 2A

CASE ANALYSIS
Contents:

📌 Given case

📌 Summary

📌 Statement of the Problem

📌 Alternative Courses of Action

📌 Recommendations

1. Given Case
An engineering firm , Best Engineering Consultancy Inc., made a partnership with a
consulting firm, through an outsourcing arrangement. Best would outsource some of its
engineering functions. Within a span of two years, the number of engineers directly employed
with best diminished from 20 to 5. Moreover, the customers felt that engineering work was of
low quality, at a high value and beyond schedule. The chief engineer was so disappointed that
he resigned. At the time of partnership, the said firm has 30 personnel whereas the said
outsourcing firm had 30 also. As mentioned, because or resignations and terminations only 5
employee remained at Best. More so, Best’s billing reflected the consultants overhead costs and
profits. The consultant also charge the owner overhead cost to accommodate the employee that
were move to the new partnership office. Supposedly, the budget for a project should be
determined by negotiations between the sponsor and the project engineer. It should stay within
the boundaries allowed for a particular project. Partnering arrangements like Best did with
other consultancy firm made it easy for the two to firms to trade their secrets. Of course, there
is a belief that outsourcing will substantially lessen fixed costs, despite exchanging some trade
secrets. However, the fixed costs are not properly charge to the project’s budgets. Therefore,
there are misconceptions and misappropriations of costs. The Chief Executive Office of Best of
Engineering is very much bothered with what was happening. The contract between the firm
and the outsourcing company ends next year. To preterminate the contact will mean a penalty
of Php. 100,000.00 . It would also take awhile to think for another strategy after the partnership.

2. Summary
Best Engineering Consultancy, INC. is an engineering firm who made a partnership
with a consulting firm through an outsourcing arrangement to outsource some of its engineering
functions. Suddenly, the company’s employees have been diminished from 30-5. Also, for the
customers, the engineering work was of low quality but with a high value and beyond schedule.
So, the chief engineer got disappointed that he resigned. Because of resignations and
terminations only 5 remained at Best, whereas originally the both firm had 30 personel at the
time of partnership. And it has been reflected in Best’s billing the consultant’s overhead costs
and profits. The consultant charge the owner overhead costs to accommodate the employees
that where move to the new partnership office. Apparently, the budget should be determined
and should stay within the boundaries allowed for the particular project. But the fixed cost of
the project are not properly charge to the project’s budgets. As a result, miscomputations and
misappropriations of costs occur.
Because of the situations, the CEO of the Best got so bothered and worried. The
contract within two companies will end this subsequent year and if the Best will preterminate
the contract, there will be a Php. 100,000.00 penalty. So the company needs to think for
another strategy to resolve the problem.

3. Statement of the Problem


1. The number of engineers directly employed with Best, diminished from 30-5.
2. Customers felt that engineering works was low quality at a high value and beyond
schedule.
3. The chief engineer was resigned.
4. Miscomputations and misappropriations of costs occur.
5. There is a need for another strategy of Best company upon finishing contract partnership
to the outsourcing firm.

4. Alternative Courses and Action


✅ Company board meeting
✅ Work redesign and people management
✅ Pay structure & benefits
✅ Conducting trainings & seminars
✅ Customer & financial perspective
✅ Increase, promotion & recognition

5. Recommendations
1. Implementing a strategic choice perspective
-facing the environmental pressures head on

2. Contingency plan, corporate strategy


-improving the operational & competitive strategies

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