Running Head: ECONOMICS
Sunflower Incorporated
Southern New Hampshire University
ECONOMICS
2
Sunflower Incorporated
Sunflower Incorporated is a distribution company that deals with snack foods and liquor
Some of the foods are chips, cheese curls, peanuts and tortilla chips. A variety of national and
local liquor is available. Each brand's distribution depends on the tastes and preferences of the
locality. There are over 5000 employees working with the company over the 22 regions it has
established in the USA and Canada. Every region is autonomous having separate salespeople,
central warehouse, purchasing department and finance department. It has had an outstanding
performance during its operations, apparently from the amount of $700 million sales in 1991. In
addition, the direct diversification the company has had over various edible products indicates it
has been determined to satisfy its customers (Brainmass 2012)
In an effort to enhance efficiency and transparency, a different financial reporting was
adopted in 1989. It analysed sales, costs and profits in all regions. There was established a large
margin in the profit made by these regions. A standardisation mechanism needed to be devised in
order to have some common aspects in the regions. The management believed there could be low
quality products being produced by the regions that made high profits. Consequently, they
speculated this would tarnish the reputation Sunflower Incorporated had over the entire region.
Some other regions require strategising upon counteracting stiff competition offered by Bordens,
Standard Brands, Frito-lay among other companies offering similar products (Brainmass 2012)
The company's president later decided on creating a new position to implement this
standardisation under the title director of pricing and purchasing. The position holder was
answerable to the vice president. Ms. Agnes Albanese was the first to hold this position. She was
bestowed with powers to establish any rules that she deemed appropriate. She was to gather
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ECONOMICS
information from each region in order to help her make informed decisions. She decided on
standardised price of products across all regions. She requested the regional financial executives
to notify her on the local price changes over 3%. Moreover, she decided to have all new contracts
of purchases exceeding $5000 cleared through her office. She felt the need to have the
implementations done promptly before the peak season would approach. The vice president tried
to induce her into taking her time and visit the regions herself and take her time, but she
disagreed suggesting that visiting would take long and was expensive too. Although the financia
executives in the regions agreed with the order, they did not heed to it despite normal activities
going on in the regions (Brainmass 2012).
Director of pricing and purchasing is a senior position that requires complete coverage of
the company's operations. The sensitivity of decisions made and the implication of the same
could result into extreme outcomes to Sunflower Incorporated. There are several mistakes
observable in the actions taken by Ms. Albanese. To start with, she does not take time t