Case Study

BUSINESS MANAGEMENT ESSENTIALS

BUS 1210 - Summer 2016 –Assignment # 3 – Groups of 4

INSTRUCTIONS

1. Read the case below and answer the questions posed at the end of the case.

2. Put your answers in concise memo format.

3. Provide your Class and Section, Student Names

4. Keep your memo to 2 – 3 pages of writing.

5. Use whatever style of writing promotes clarity of your ideas.

6. Use headings, paragraph frequently and use point form where appropriate.

DECISION CASE – THE FIRE

The Setting

Your group is working as KPMG consultants. Your firm has been hired by The Smith Group to help them make a critical decision which will affect their future significantly. You need to prepare a report for the Owner and CEO of the Smith Group, Graham Smith, to advise him on what to do. You have all just emerged from a meeting with senior company officials where you witnessed many errors of judgment during the decision making process taking place in that meeting. You have been given 1 week to prepare your report for the Owner, Graham Smith. He has indicated to you that he agrees with the conclusions of the senior management team, but he is holding back on a final decision pending reading your report.

The History

Kellogg Steel Foundry is one operating subsidiary in the Smith Group of Companies. While it is located in Saskatchewan, the remaining operations of the Group are all located in British Columbia. The owner, Graham Smith, who is a very successful businessman in Vancouver, was convinced to buy Kellogg Foundry by his father who is 5 years from retirement but has been in the foundry business all his life. Your review of historical financial statements reveals that the foundry has never made any money. Its losses are growing every year and have averaged $150K per year over the last 7 years.

In private discussions with Graham Smith he has admitted regretting making his investment in the foundry as it has drained his other...