Dr. Oetker Case Questions

Case Questions: (50 marks) 1. Explain how the seven (7) external environmental forces may have affected the company Dr. Oetker? (20 marks) First and foremost, the Political & Legal external environmental force may have affected the company Dr. Oetker. The Ontario Government does offer businesses more financial assistance in the form of tax credits than the New Brunswick provincial government. Hence, this political external force may have a leading factor that influenced the company Dr. Oetker to leave New Brunswick. For example, the Eastern Ontario Development Fund and Southwestern Ontario Development Fund as mentioned in the article provides the company with better technologies, equipment or skills training for workers. In addition, There was no indication that the company was experiencing any difficulties leading to the closure in New brunswick. Thus, this can result in a lawsuit being filed against Dr. Oetker Company by the Employees. Although the employees will receive a severance package and other benefits, there are not any new companies entering the town to replace these 180 jobs. Secondly, the Economic external environmental force has affected the company Dr. Oetker. Just in a community of 5,300 people, the plant closure has had a negative economic impact. Moreover, New Brunswick already has a higher unemployment rate of 7.8% compared to the national average of 5.7%. This overall caused people to lose their jobs and affected the economy as a whole, especially in smaller communities. Thirdly, the Technological external environment force has affected the company Dr. Oetker. In the article it says that Dr. Oetker London plant is a newer facility and therefore, its technology is more productive and efficient when compared to the New Brunswick plant. Thus, the lack of technology at the New Brunswick plant led the company to spend more time and money on manufacturing leading to another factor that resulted in that plant closure. Fourthly, the Societal external environmental force has affected the company Dr. Oetker. The closure of the New Brunswick plant has raised many societal concerns regarding the unemployment/job loss of a great deal of people. Moreover, in such a small town, there are no new companies entering the town to replace these 180 jobs. Fifthly, there are no Sustainability external environmental forces that were directly mentioned that affected the company Dr, Oetker. It can be assumed that possibly the changing consumer preference in healthier food options could have resulted in the closure of the New Brunswick plant. Sixthly, the Labour external environmental force has affected the company Dr. Oetker. Increasing input costs was mentioned as one of the reasons for the plant closure. This could include rising labour costs or challenges in finding skilled/efficient labour in the area. It's possible that the company found it more cost-effective to relocate production to other locations with more favourable labour conditions. Finally, the Global external environmental force has affected the company Dr. Oetker. It is mentioned that other global food manufacturers have also shut down their manufacturing plants in Canada to look for ways to reduce costs and more efficient plants to operate in. This could have been a leading cause that affected the Company Dr,. Oetker. In addition, other global competition could have affected this company making it unable to compete, resulting in the closure of one of its plants residing in canada. 2. Which management philosophy do you think would be most suitable to the company and why? (eg. The Classical school or the Behavioural School?) (10 marks) I think the Behavioural School is the most suitable management for the Dr. Oetker company. The factory needed to be efficient • The company was very focused on cost-cutting to be competitive Globally • The company was moving its production mainly to its more efficient London, Ontario plant • The people could easily be trained, so it was easy to move production, whether or not workers stayed. (Expand upon more, Understand each management philosophy) - (This was Teacher explanation) 3. Explain whether or not Dr. Oetker exercised “good governance” here. (10 marks) In this situation, it appears that Dr. Oetker may not have exercised "good governance." Good governance involves making decisions in a transparent, fair, and responsible manner, taking into account the interests of all stakeholders, including employees and the local community. In this case, the company's decision to close the plant came as a surprise to employees, local government, and the community. There was no consultation or transparency in the decision-making process. Good governance would have involved engaging with employees, local authorities, and other stakeholders to explore options to save the plant and jobs before deciding to close it. Additionally, considering the impact on a small community, good governance would involve a more thoughtful and inclusive approach. 4. Explain with examples what business-level strategy do you think the company is likely using? (10 marks) Cost leadership • Closed the New Brunswick plant to move production to a more efficient plant in London, ON; trying to improve processes and save on operational costs. • Consumer tastes have changed. • It is one company of many frozen pizza companies; low-price is important; not likely differentiated – it is still frozen pizza; it is not fresh take-out • May be trying to take advantage of government tax credits to try to save money;