Case study abstract and introduction with APA formatting

¶ … Superior Manufacturing Company explains the importance of decision making on the basis of future costs rather than the historical projections. The description of the case has distinguished the different types of costs that are involved in taking decisions including variable costs, fixed costs, avoidable cost and unavoidable cots. The case has contrasted the difference between accounting methods based on process costing and job order costing. The case also highlights the importance of a proper succession plan as Superior Manufacturing Company had to face a great deal of difficulties because of not having a proper succession plan.

The Superior Manufacturing case study has covered the various aspects of management and accounting. Paul Harvey lacked the required expertise and leadership skills to manage the company of such a large scale hence the performance of the company suffered which was reflected by their financial statements. The financial records held the key to learn from the mistakes of the past and move ahead to attain better results.

Introduction:

The timeline of the case starts with the appointment of Herbert Waters. He was appointed in the year 2005, as general manager of Superior Manufacturing Company. Waters appointment was made by the President Paul Harvey himself. Waters had the required expertise to perform this job effectively and efficiently. He had experience in the management and manufacturing of the products that Superior Manufacturing Company was operating in. Waters was 56 years old and was at a stage of his career where he had many opportunities to choose from, he chose Superior Manufacturing Company because for him this would be a challenging task and an opportunity to excel even further and mark the end of his career with a solid performance.

Prior to the appointment of Walters there was a number of problems that the management of the Superior Manufacturing Company were facing. The management had collapsed after the death of the founder Richard Harvey who had handled the company quite efficiently. His death meant that Paul Harvey was then in charge of the company. Paul Harvey had a very little experience of working in the company. Four-year experience was not sufficient enough to handle operations at such a large scale. Paul Harvey was only 34 years old and did not have the required maturity and respect to manage such a large organization with an entirely different industrial demand and nature. Paul Harvey was supposed to be the successor of his father Richard Harvey, who had planned to train his son for ten years and then hand the company over to him, but the untimely death of Richard meant that Paul was thrown into the battle ground without a proper succession plan.

Paul Harvey had a clear idea that he was not able to manage the company and there were a number of mistakes that he had made in the year 2004. The poor decision making of Paul Harvey had resulted in a clear drop in the morale of the organization and the whole team was facing a lack of confidence problem. The financial statements of the year 2004 reflected the same poor performance of the organization. The income statement showed a loss of $688,000 despite the fact that the industry and the economy overall was doing really good and the industry average showed a rise in the average profits. Water was appointed to turnaround this company by Paul Harvey.

Waters was working for one of the nearest competitors of Superior Manufacturing Company so they had to pay a large amount of money to attract Waters for this heavy responsibility. Walters wanted a financial competence when he retires, the deal was agreed upon. Waters was given full authority to manage the operations at the Superior Manufacturing Company. He was assigned full responsibility and authority to complete the turnaround and he was allowed to make any changes that he wanted to make related to the operations of the company or the changes in the personnel. All in all he was the one who had to make all the decisions and provide the company what it really needed.

Waters had to initially face a lot of difficulties because for almost a year the company was in an absolute mess and there was a clear lack of plan and vision which had spoiled the performance of the company. Waters initially explained Paul Harvey the mistakes that he committed in the past year and his plan to overcome those mistakes and how would he go about things to turn the company around and get the performance back on track.

Waters also took the responsibility of training Paul Harvey with all the things happening around him. This was planned to cater to the long-term vision of the company that Paul Harvey would take over the responsibility from Waters after his retirement. This decision shows the future orientation of the company and Waters himself. This shows that Waters was highly committed to the job and was not just there for his own personal good.