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Cecilia is the CEO of Practical Design, a company that might be able to get by without replacing a few of the manufactures and
Cecilia is the CEO of Practical Design, a company that might be able to get by without replacing a few of the manufactures and sells low-priced furniture for the office employees who will quit or retire in the next year or so. and home. The company employees 98 employees, and Having fewer employees translates into more revenue has annual revenues of $16 million. Last week, Cecilia sent a message on a shared website expressing her con- cern about the relatively modest revenue per employee if we are focusing too much on revenue per employee. It of $163, 265. She wanted her top-management team to prepare for a Tuesday morning meeting to discuss how to enhance the revenue per employee at Practical Design. industry." Cecilia began the meeting by stating, "I am pleased with our company's financials in general, but it seems our revenue per employee is on the low side. I under- stand we are in a labor intensive industry, so we can't have revenue per employees similar to an investment dig up information on the revenue per employee of our bank or a software company. Any ideas, folks?" Dion, the manufacturing head offered this com- ment: "I see room for automating a few of our man- ufacturing processes, but that would take quite a big to you within 10 days." investment in new machines." per employee." Lia, the head of information systems, said, "I wonder is somewhat of an arbitrary metric that detracts from the success of Practical Design in a highly competitive Roman, the head of finance, offered this idea: "Before we make a decision, I am going to review the company records for 10 years, and determine the pattern of our revenue per employee. I am also going to try to competitors." Cecilia concluded, "All your ideas have merit. I am going to carefully review your suggestion, and get back Stacey, the head of sales and marketing said, "I think Case Questions we could improve our commission structure for our best sales representatives. If the sales representatives generate more revenue, our revenue per employee would increase automatically." Mason, the head of office administration and human resources suggested, "We might be able to reduce our headcount a little. We could consolidate a few jobs, and dismiss a few of our worst performers. Also, we 1. Explain which suggestion you think Cecilia should implement. 2. What other suggestions might you offer Practical Design for boosting its revenue per employee? 3. What do you think of Lia's suggestion to not worry about revenue per employee?
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