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1. (TCOs A and B)  Writing a Management Memo Your Role You are the assistant to Chris Shakra, the president of Marine Enterprises. Marine Enterprises is a large manufacturing company with corporate headquarters located in New York City. Shakra and the management team have decided to move the corporate headquarters to Houston, Texas. As Shakra's assistant, you are in charge of the massive relocation project, and it is time to announce the proposed move to the employees of Marine Enterprises. Background Marine Enterprises was founded over a century ago in New York City and located its corporate headquarters in a 15-story building in the heart of Manhattan. As Marine Enterprises grew, conditions at headquarters began to get cramped. In the 1970s, space was so limited that Marine had to rent offices elsewhere in Manhattan and in northern New Jersey and relocate some headquarters staff. The company has a firmly set identity as a New York corporation because of its longevity in New York City. Two years ago, when Chris Shakra became president, Marine Enterprises was losing market share, and the company had experienced limited growth over the past decade. Shakra believed Marine's lack of growth was due to the separation of the headquarters staff. Because they were in multiple locations, effective communication was difficult. After obtaining management support for headquarters relocation, Shakra bought a ranch outside Houston for $12 million. A prestigious Texas architectural firm was hired to draw up the preliminary plans for a headquarters facility on the ranch property. Construction is scheduled to begin next year, the first phase of the move to Houston will take place the following year, and the move will be completed in the third year. The move will cost Marine Enterprises an estimated $150 million. Current Situation After careful study, a corporate decision has been made to offer relocation to all of Marine's 1,200 headquarters employees. Shakra believes that by giving everyone the opportunity to move, Marine Enterprises can minimize the employee morale problems that are often associated with a relocation project of this magnitude. Because all employees at Marine Headquarters will be asked to relocate, however, all employees will have to make a decision about whether they want to move or not. Most of the employees at Marine headquarters are native New Yorkers who may be reluctant to move to Texas because spouses have jobs in New York with other companies and children are involved in school activities. Employees who choose to relocate will have to sell their existing homes and purchase new homes in Houston. Marine Enterprises, of course, will coordinate a massive relocation effort to help employees deal with these types of decisions. In any case, employees must be told about the move immediately, before rumors begin. Relevant Facts about the Relocation Here is a list of facts about the relocation effort that may be useful to Marine Enterprises employees as they consider the move.   You may also use your knowledge of business to develop your message. Marine Enterprises will provide:

· Relocation expenses - limit $3,000 per family

· Assistance in finding comparable housing

· Assistance in selling New York City homes

· Job listings and employment agency contacts for spouses

· Assurance of comparable or better job for Marine Enterprises employees

· Job location assistance to employees who choose to remain in New York City

Houston may be an excellent place to live for some employees because of the following factors:

· Strong real estate market

· Warmer weather and less pollution than in New York City 

· Good schools

· Lower cost of living

· Low crime rate

The move may be less desirable for some employees for the following reasons:

· Limited public transportation

· Limited access via air

· Too far from family and friends

· Move will cost too much money

· Need to adjust to a different cultural environment

YOUR ASSIGNMENT Management Memo:   Chris Shakra, president of Marine Enterprises and your immediate boss, has asked you to write a message informing him about the status of the relocation plan, including the timeline for the move, the benefits and drawbacks of the move for employees, and your plan for announcing the move to the employees and encouraging them to make the move.  Write a message in which you convey this information to him in the most reader-friendly way possible. (Points : 60)

2. (TCOs A and E) Writing an Employee Memo Your Role You are the manager of the Sales Department of The Medical Corporation (TMC), a department that employs 25 sales representatives. As a result of reduced revenues and increased expenses, TMC's Management Board has voted to implement a "right-size action" that could result in personnel reductions in your department in the next two years. As the manager of the Sales Department, you are responsible for informing the sales staff about the proposed right-size action, and its potential impact on the Sales Department, in a way that will explain the situation clearly and also maintain the good will of the employees. Background The Medical Corporation (TMC) is a worldwide marketer of medical supplies and services. Established in 1980, the company enjoyed dynamic growth during its first two decades as part of the flourishing pharmaceutical industry. TMC's revenues surpassed $1 billion in just five years, its stock rose an average of 12 percent a year during its first decade, and per share earnings consistently exceeded industry averages. However, despite revenue increases of over 10 percent each year for the past twenty years, TMC's growth appears to be slowing down, partly because the pharmaceutical industry as a whole is now being scrutinized for its excessive prices and declining service.  Last year, TMC revenue in the United States was $5 billion, an increase of only 2.0 percent over the prior year; non-U.S. operations generated $2 billion in revenues, a 3.0 percent decrease over the prior year. Gross profit margins, driven by extreme pricing pressures, have declined for the past three years. In response to this declining performance, TMC's Management Board recently voted to "right-size" its worldwide business operations. The Management Board announced three areas of emphasis in the company's right-size action:

· increase responsiveness to customers through technology

· segment markets to pursue the best opportunities

· improve internal efficiency through a workforce "right-size" action

Right-size actions will include layoffs and reductions in the company's worldwide workforce, elimination of office space, and increased use of technology and information systems to generate and manage business. These actions are not only intended to bring TMC's cost and expense structure back in line with current industry levels; they also will strengthen TMC's position as a global leader in the pharmaceutical industry. Expanded Online Presence One of the ways TMC will increase responsiveness to its customers is to expand its online sales and marketing strategies. The emphasis on an online presence will play a key role in widening the customer base and increasing sales without a significant increase in expense.  The new online presence and strategies are expected to double the number of online customers within 24 months of the plan's implementation. When TMC made this decision, the company recognized that if the new online strategies were successful, they would no longer need the same sales force. Predictions are that if the new strategy is successful, the Sales Department could be reduced from 25 to about 20 employees. Reductions in the Sales Department would not begin, however, until the Management Board is satisfied that the online sales expansion is successful, probably in the next 12 to 18 months. In the meantime, the manager of the Sales Department has been asked to identify five employees who could be terminated as a result of the right-size action. Terminated employees will receive a package that will include a $25,000 one-time cash settlement, medical and dental benefits for five years, and employment assistance from Drake's Placement Service for six months. They will also be given at least six months' notice of their termination. YOUR ASSIGNMENT Employee Memo: Write a memo to all Sales Department employees announcing TMC's right-size action. Inform your employees that the success of the online initiative could result in a reduction in the number of employees in the Sales Department and describe how you will identify the employees who might be terminated. Be explicit about how TMC will handle the proposed personnel reductions, but maintain goodwill. (Points : 60)