Description
A thoughtful analysis of an ineffective or poor leadership decision. You may use a well-known leadership decision such as the 2011 decision to split Netflix, which resulted in serious financial losses for the organization. Your project must include the following:
- Research a leadership decision that was ineffective or did not lead to desired results.
- Include the problem that may have precipitated the decision as well as the process the leaders involved in the decision-making process appeared to follow.
- Critique the process they implemented
- Recommend a different approach that could have been taken
- Present a strong case for how your recommendations could have altered the decision that was made and could have led to a more effective result for the organization.
- Use theory from this course to support your evaluation, critique, and recommendations.
Paper should be 10-12 pages in length
Explanation & Answer
Running head: LEADERSHIP DECISIONS
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Leadership Decisions
Name
Institution
LEADERSHIP DECISIONS
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Leadership Decisions
Introduction
Leadership is regarded as the act of leading employees in achieving the set goals. As
such, leadership in firms creates a balance between theoretical concepts and the practicality of
the real world. Ever wondered how managers play a huge role through their leadership? The
dynamic business community is becoming more complex and interconnected thereby being
challenging. The truth is that success of a company depends significantly on the type and
implementation of leadership. In the same regard, any poor performance in an organization is
due to inadequate or ineffective leadership. Time and time again, we have heard of how
companies make poor decisions that lead to significant damages. This should not be new since
leadership clearly dictates how a company is to operate and perform in the market. Until
recently, Alcoa Inc. made the biggest decision of splitting into two publicly traded companies.
The decision proved to be useful in solving past problems, but is instead bringing issues to how
shares would be divided. Just when it looked like Alcoa Inc. would have an increase in its shares
from the previous slump in earnings, the owners of the company were reminded of the enterprise
is still in serious trouble right now. For that reason, the paper will look at how the decision is
wrong for the business and provide ways that could help salvage
The Company’s Background
Alcoa, Aluminum Company of America, is a multinational corporation known for its
work in lightweight materials and advanced manufacturing techniques. The company was
established in 1886 and has been growing throughout the years to become one of the leading
aluminum producers in the world (Powell, 2015). Also considered the largest aluminum company,
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it has operational branches in thirty other countries. Its principal products are aluminum, nickel
and titanium and used worldwide in aircraft, commercial transportation, automobiles,
construction, packaging, as well as industrial applications. The primary product; aluminum, could
be in natural, fabricated or combined form as it combines all aspects of the industry.
As of 2014, the company has $37.4 billion in assets and 59,000 employees. Its
operations are made up of three business groups; Global Primary Products and Global Rolled
products, and Engineered Products and Solutions (Yahoo Finance, 2015). EPS consists of
aerospace, gas turbines, building, and construction as well as commercial and transportation
(Powell, 2015). GRP manages the commodity segment and is the largest business unit generating
31%of its revenue in 2014. EPS made up 25% while GPP accounts for 28% of the total revenue
with the rest; 14% is generated in aluminum production.
Performance
As of 2007, the company has undergone divestment from primary aluminum, focusing on
high-profit value added metal products. Alcoa has closed 1.3 million tons of its smelting
capacity, and it continues to do so. The company registered $368 million dollar revenue. It had
recorded net earnings of $44 million for the quarter ended 30th September 2015 with earnings per
share of $0.02 (Yahoo Finance, 2015). Gross margins narrowed down from 15.9% to 12.49%
compared to the same quarter in 2014. The weakening in gross margins is accompanied by cost
controls. The operating margins are now 12.52% from 16.66%. There was also a change in
operating cash flow of 68.67% in the same quarter compared to the previous year.
The company has been gathering its large capital base and its years of experience and is
considered almost a monopoly (Chandler, 1994). The company might have both advantages and
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disadvantages as it operates in economies of scale. One of its advantages is the control of mining
that is the primary source of raw materials for the industry. Also, consumer loyalty has been
established throughout the years increasing incomes through repetitive purchases. Again, acting
almost like a monopoly, it faces a few competitors in its operations.
Disadvantages arise from the known fact that the larger a company is, the more the costs
will be irrespective of whether it is e...
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