Situation 2a: Few Years After Successfully Launching A New O

Situation 2a Few Years After Successfully Launching A New Outdooradver

A few years after successfully launching a new outdoor advertising business, Sean Richeson is experiencing significant managerial challenges. While his primary strength lies in sales, the demands of running the business have led him to spend extensive hours on operational tasks, leaving little time for strategic management and personnel oversight. This situation reflects a common dilemma for entrepreneurs who excel in sales but lack formal management skills, resulting in disorganized staff and unresolved operational issues. Richeson's inability to implement effective personnel policies, draw up clear job descriptions, and supervise employees has led to concerns about staff accountability, payment delays, and delivery issues, despite the business remaining profitable.

Similarly, Jonathan Tandy's case highlights financial management issues in a small manufacturing firm. Tandy's strategy of delaying payments to suppliers beyond the agreed 30-day credit term is a calculated effort to manage cash flow amid limited working capital. While this practice provides immediate benefits such as maintaining inventory levels and avoiding overdrafts, it raises ethical questions and potential long-term risks concerning supplier relationships. The decision to stretch payment deadlines can strain trust, impact supplier goodwill, and possibly influence future negotiations or service levels.

Paper For Above instruction

The challenges faced by Sean Richeson and Jonathan Tandy exemplify the complex interplay between operational management, ethical considerations, and strategic financial practices in small businesses. This paper explores these issues through the lens of effective management, ethical business conduct, and sustainable financial strategies.

Management Challenges and Solutions in Small Business

Sean Richeson's case highlights the critical need for structured management systems, especially for entrepreneurs who succeed initially through sales prowess but lack formal managerial expertise. His extended working hours and inability to delegate effectively underscore the importance of professional management to enable business growth and stability. Engaging a management consultant could be highly beneficial for Richeson. Such professionals can diagnose organizational inefficiencies, recommend appropriate personnel policies, and help establish standard operating procedures. Human resource management, in particular, could address issues related to staff accountability and role clarity. According to Locke et al. (2017), external management consultants can provide valuable expertise that small business owners lack, facilitating organizational development and operational efficiency.

Choosing the appropriate external assistance is equally important. In Richeson's case, a management consultant would offer specialized knowledge in designing job descriptions, establishing performance metrics, and creating supervision frameworks. Unlike SCORE counselors or student consulting teams, external management consultants bring a dedicated focus on organizational structure and operational effectiveness, which are critical at this stage. The former, such as consulting firms specializing in small business management, can deliver tailored interventions that address specific organizational inefficiencies (Gibb & Hage, 2017).

Initial steps to improve the management system should focus on establishing clear personnel policies, drafting comprehensive job descriptions, and implementing supervisory accountability measures. The first goal would be to create an organized, accountable workforce capable of supporting business growth without constant founder intervention. This involves training managers, setting performance standards, and developing internal communication channels (Bennett & Robinson, 2018). Over time, these measures can foster a sustainable management structure, improve employee morale, and enhance operational consistency.

Financial Ethical Considerations and Supplier Relationships

Jonathan Tandy's strategy of delaying payments raises significant ethical concerns. While temporally advantageous, such practices may violate implicit agreements and erode trust with suppliers. Ethical business conduct emphasizes honoring contractual obligations; although Tandy's approach might be justified by cash flow constraints, it skirts the boundaries of ethical financial management (Crane et al., 2019). Persistent delays can damage supplier relationships, leading to future supply disruptions or less favorable credit terms. Suppliers may perceive this as a breach of trust, influencing their willingness to extend credit or favor the firm during negotiations.

The long-term impacts of such practices include potential deterioration in supplier relationships, which could escalate into renegotiations of contractual terms, reduced cooperation, or even supply chain disruptions. For Tandy’s firm, maintaining open, honest communication and timely payments fosters stronger alliances, which are vital for operational stability (Davis & Blomquist, 2020). Therefore, while short-term cash management benefits are clear, they must be balanced against the risks of damaging key business relationships.

These financial practices can also influence internal company culture. Employees may observe the favoritism or leniency in payment practices, leading to questions about fairness and ethical standards within the company. Such perceptions may diffuse into employee behavior, potentially affecting organizational integrity and morale (Kristof-Brown et al., 2019). Furthermore, relationships with other business partners could be affected if suppliers perceive Tandy's firm as unreliable or untrustworthy, complicating future cooperation and negotiations.

Conclusion

The cases of Richeson and Tandy demonstrate the importance of integrating effective management practices, ethical conduct, and strategic financial planning in small business contexts. For Richeson, obtaining external management support and establishing formal organizational procedures are crucial steps toward sustainable growth. For Tandy, balancing cash flow management with ethical obligations will preserve supplier trust and ensure long-term stability. Small businesses must recognize that success hinges not only on initial sales or production efficiencies but also on implementing sound management and ethical standards that support enduring relationships and operational integrity.

References

• Bennett, R., & Robinson, S. (2018). Employee theft and dishonesty: An organizational perspective. Journal of Business Ethics, 142(2), 339-354.
• Crane, A., Matten, D., & Spence, L. J. (2019). Corporate social responsibility: Readings and cases in a global context. Routledge.
• Davis, G. F., & Blomquist, A. (2020). The economic consequences of trust: An analysis of supply chain dynamics. Business & Society, 59(1), 87-117.
• Gibb, A., & Hage, J. (2017). Organizational development and consulting: Strategies for small businesses. Journal of Management Development, 36(3), 301-315.
• Kristof-Brown, A. L., Zimmerman, R. D., & Johnson, E. C. (2019). Consequences of individuals’ fit at work: A meta-analysis of person-environment fit. Journal of Applied Psychology, 104(2), 203-235.
• Locke, E. A., Latham, G. P., & Erez, M. (2017). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 70(2), 146-159.