Management and Leadership Assessment at Blue Sky

Solution Preview

GUIDANCE ON BLUE SKY CASE
Introduction
Blue Sky is a software company founded by Max Blue, a talented software engineer who developed a business based on his competence in developing different types of software. He developed three different types of software - one focused on Automobile industry, another software was HR software developed for Best Dollar Retail Chain and a third type of software was Medicaid for health payment systems. Based on this software, the company has three major divisions with a customer-oriented organization structure as the three divisions were focused on the clients - Machine Tools software, HR Management software and Health payment systems software. The company's two divisions - HR Management Software and Health Payment software are decentralized with most functions operated through regional offices and only Machine Tools division is having centralized functions through operations only from Cleveland. The case is focused on a company which has been facing problems given high operating expenses, losing business to the low priced competitors located in India, stagnant culture due to autocratic leadership, decline of automobile industry in America, organization conflicts and politics within the organization and a company which is performing well but there are warning signals for future profitability. The company has appointed a Director of Strategic Planning and Marketing - Susy Hubres who has identified the responsibility of long term planning for the organization to make it sustainable as planning did not existed at all at Blue Sky due to founder's visualization of planning as a useless activity and focus more on implementation. The case analysis is aimed at finding solutions for long-term sustainability of the organization and fixes the major organizational issues.

Situation/Issue
Blue Sky's CEO Jim Willis is concerned about the following issues that need to be addressed for long-term sustainability of the organization:
- There is a decline in the American automobile business due to problems in the economic environment that can lead to loss of business of machine tools software.
- The company is facing a threat of losing its business to Indian companies who provide the labour at one fifth of the cost of Blue Sky and therefore, the clients are cutting on contract in favour of outsourcing to India.
- Another issue that has been identified is a structural issue wherein the company has hired high cost employees due to which the expenses have been increasing. The company has been in dilemma to downsize the organization by firing employees or not as the Vice President of Machine Tools, division is of the opposite views, as he believes that relationship management is important at the organization.
- The company also needs some innovations and needs to adjust to the new technologies.
- There is a passive culture within the organization due to autocratic leadership of Max Blue and therefore, there is a need to change the employee mindset as the employees are having a high resistance to change.
- There is a need of restructuring of the management as the Regional Directors are technically not well equipped.
Susy Hubres, Director of Planning and Marketing believes that there is a need of long term planning at the organization where there is a need for formal ten years long term strategic plan within the organization. The company does not have any such formal strategic plan and no plan was formulated under the leadership of founder Max Blue. But since Jim Willis has taken over as the new CEO, he agrees with Susy Hubris to develop a strategic plan. To find out new clients, Jim Willis is now working with Michael James and Susy Hubris to hire a management consultant who would help the organization in finding new clients for the existing products.

External Environment
Politico-Legal Environment
The company is facing a threat of lawsuits because of errors in coding in software and the allegations of offering of bribe to the Governor for getting state contracts. Stronger regulations are in place for use of software on different platforms such as iOS and consumer needs to be protected and therefore, the company needs to have patents for the originally developed software (Schmid, 2014: June 10).
Economic Environment
There have been problems in economic environment relating to recessionary pressures. In 2009, General Motors and Chrysler had to go into bankruptcy and the government was in the process of investing $80 billion into the industry but the situation has improved now and the car ...