Icelandic Volcano, 1; Global Commerce, 0 This volcano has a funny name —Eyjafjallajokull —but its impact was not so funny
to global businesses, both large and small.38 When it erupted on April 14, 2010, the plume of volcanic ash that spread across thousands of miles disrupted air travel and global commerce for a number of days. As thousands thousands of flights were canceled across Europe, tens of thousands thousands of air travelers couldn’t get to their destination. For example, For example, Marthin De Beer, vice president of emerging technologies at Cisco Systems, was headed to Oslo to discuss the final aspects of its acquisition of Tandberg, a Norwegian teleconferencing company. However, when his flight was canceled, he and Tandberg’s CEO, Fredrik Halvorsen, used their merged companies’ equipment to hold a virtual press conference. Other businesses weren’t as lucky, especially those wit h high-value, highly perishable products such as berries, fresh fish and flowers, and medicines and pharmaceuticals. African farmers, European European fresh-produce fresh-produce importers, importers, and flower traders from Kenya to the Netherlands found their businesses threatened by the air traffic shutdown. Even manufacturers were affected. For instance, BMW had to scale back work hours and had even prepared for possibly shutting down production at its Spartanburg, South Carolina, plant because it depended on trans-Atlantic flights to bring transmissions and other components from German factories by air. A spokesperson at another automobile company, MercedesMercedes-Benz, Benz, said, “There has been d isruption in our parts supply. We expect that there may be shortages of some parts or delays in some instances.” Questions 1. Could a company even plan for this type of situation? If yes, how? If not, why not? 2. Would goals be useful in this type of situation? What types of goals might a
manufacturing company like BMW have in such a situation? How about a global airline? How about a small flower grower in Kenya? 3. What types of plans could companies use in this type of situation? Explain why
you think these plans would be important. 4. What lessons about planning can managers learn from this crisis?
Nur Faizah Fauziah – A31115018 Answer:
1. Managers must be plan about this case before because planning involves establishing strategies for achieving their goals. In making a strategies managers must be prepare about all the change that they can face in the future. Planning reduces uncertainty by forcing managers to look ahead, anticipate change,
consider the impact of change, and develop appropriate responses. Although planning won’t eliminate uncertainty, managers plan so they can respond effectively. How managers plan for this situatiation? By make planning by analyzing the working area. with it, they can know anything that can slow down their work at any time. 2. Goals always be useful in any type of situation, because that goals make a firm think abaout what they must do now and next. The type of goals that all the three firm might have is a real goals, those goals an organization actually pursues — observe what organizational members are doing. Their act defined their priorities. And priorites in this sitiation is how they can respon changes effectively. So their firm can survive. For BMW, they should change their plans before the volcano interup. Because that’s must be a signal. So they must order the transmission and other compenents erlier. For global airlanes they should find another direction to go to the destination that doesn’t pass the vocano, if that can’t usefull, then just wait for the effect of that vocano stop. For the small flower business in Kenya, they needs to cover their garden of flower with glass, it can protect the flowers from the volcano ash, or at least the flower can be covered by use plastic. This is the cheapest and easiest way. 3. When uncertainty is high and managers must be flexible in order to respond to unexpected changes, directional plans are preferable. Directional plans are flexible plans that set out general guidelines. They provide focus but don’t lock managers into specific goals or courses of action. That provide focus and also allow direction in implementation. 4. Lessons about planning can managers learn from this crisis is they have to prepare for unexpected changes. So they can respond effectively. They have to prepare not only for the internal problem, but also the external problem.
