Ellicott-Dredges Case Analysis

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Ellicott Dredges LLC- Sri Lanka Story

Due: March 9, 2014

Problem Statements

One major problem in this case is the problem of faulty corporate governance within Ellicott. Specifically, this case exemplifies what will occur upon failures in communication betwixt business entities. Another problem, which stems from the initial failure, deals with the inefficiency of the transfer of important documents; such as commitment letters.

Problem Analysis

Initially, the steps taken in order to begin the process of the dredge bid seemed to be rushed. Sheer hope replaced decisive action on the part of Ellicott Dredges. The time allocated to the success of the transaction between Sri Lanka and Ellicott was not sufficient, as minor problems with communication ended up delaying the project. The case states, “It was not until October 2007 that Ellicott learned that the 370HP dredge was favored for the procurement.” This shows that the manufacturer may not have been given proper time to fulfill its end of the deal. This is a million dollar project, yet Ellicott Dredges was contacted that same year for a dredge needed a.s.a.p. The first Letter of Commitment was issued in December of 2011, expiring on the 31st of the same month. On top of this issue, there was the problem of obtaining the proper legal instruments needed to proceed with the dredge. With such a small window of opportunity, the project would have to be lengthened. “It is Ellicott policy to not allocate a dredge from inventory until we have received a down payment or acceptable confirmed L/C. At that time, Ellicott did not have a finished dredge in inventory and it would have been very difficult to finish the dredge in the two weeks provided after the L/C was open.” Proper attention should have been paid to the physical and financial aspects of this deal in order to maximize efficiency and work quality. There was a major fail in the communication between all parties that would have prevented the...