MGMT 102 - Group 3
TerraCog Case Study
TerraCog is a private company that specializes in Global Positioning Systems (GPS) and sonar equipment. They are currently competing with Posthaste, an up-and-coming company that has released the first satellite imagery GPS device. TerraCog’s reply is to be Project Aerial, an improved version of their already exceptional GPS product. The development of this project is left to Emma Richardson, Executive Vice President of TerraCog. As production of Project Aerial commences, Richardson and her team begin to experience conflict regarding a differing opinion on the product’s price.
Emma Richardson’s main problem is that her team working on Project Aerial cannot come to a solid agreement – their cooperation is flawed. This problem is due in part to several factors of communication and teamwork. Of most importance is the group size and objective; there is a huge amount of work being put into Project Aerial by multiple teams and each team has differing goals. The Production team wants to get this project out of the way so that they can continue working on other projects they feel are more exciting. Also, they feel Aerial is on too short a deadline therefore they cannot properly redesign the product. The Sales team cannot come to terms with the price point set by the Production team even though Aerial’s design includes all the specifications that sales has asked for.
Another problem Richardson faces is the pressuring attitude of Ed Pryor, vice president of Sales. Pryor does not allow others to suggest alternatives to the price that he deems is best (as set forth by his market clients). This is noticed in the first pre-launch meeting. Alice Gorga, manager of hardware design, expresses that the pricing cannot be changed and that the position of the product should instead be addressed. To this, Pryor interrupts abruptly with “Fiero and I already figured out how we’ll position the product, so let’s just get the pricing straightened out.” He is unwavering in his decision to keep the price as they previously determined and does not allow room for constructive discussion. Pryor even goes as far as to say “I can’t sell it. I won’t try” when addressing the price set forth by Production. At this point, Richardson has bought into Pryor’s pressure – she does not even begin to discuss any alternatives. All Richardson wants is for “Tony and the Design team [to] look for opportunities to cut these costs.” She doesn’t even approach the production team to see what they feel might be a better solution. This whole situation is an example of a process conflict; everyone has a differing opinion as to where resources should be allocated. That is, they cannot decide if pricing or product position should be the factor to be changed.
The goals of each team member show themselves as entirely personal – each member is trying to protect their own reputation. Pryor is unwilling to accept a higher price because he has already advertised it to his clients at a set price. Tony Barren and the Production team are unwilling to cut costs because they must save face from a previous fiasco regarding a mishap on TerraCog’s sonar project. Cory Wu, the software and firmware manager, is focused on how his team “tweaked the firmware without overhauling it” which would keep the product price very similar. He feels that the rest of the Production team is not truly working to cut costs. Allen Roth, director of design & development, is completely opposing Pryor. He states that the product has everything that Sales requested from Project Aerial and that there can be no more price cuts (past the initial 8%). His goal is promotion and thus he is not willing to release a product that is sub-par for fear that it will solidify his position as director instead of bringing him up to VP.
The second meeting progresses almost exactly as the first. Members of the team are quarreling because none of them see