RED SPOT MARKETS COMPANY

ASE 4-1 RED SPOT MARKETS COMPANY

1) How should Fosdick respond to the immediate situation?

Fosdick had faced the pilferage fact at the workplace. He was the witness as clerks were walking with opened cases of sweeties, mustards, cheese, soft drinks, bread and etc. His reaction to the pilferage fact should definitely be clear and hard. He should express his surprise to these circumstances and show the disapproval of the fact by refusing the sandwich. Otherwise his decision to accept the sandwich would make him the participant of the pilferage

2) What controls, of the types discussed in this chapter, might have been used by Red Spot Markets to reduce or eliminate the problems discussed in the case?

Closer controls on worker productivity and on pilferage would have helped.

3) What longer-range steps should Fosdick take to control the operations of the Providence distribution center?

He should implement a management style whereby he, rather than Bigelow, determines the pace of the warehouse work. However, this is much easier said than done, particularly because of Bigelow’s almost overpowering influence.

4) What longer-range steps should Fosdick take to improve the Providence distribution center’s productivity?

Fosdick should first consult with Easter to determine whether the company is going to keep or dump Bigelow. Bigelow appears to hold the key to the warehouse workforce’s productivity and few schemes to increase output will succeed without his blessings. Fosdick and Easter might also attempt to incorporate productivity measures into the distribution center’s next labor contract.

5) What longer-range steps can Fosdick take to reduce the distribution center’s high rate of shrinkage?

Again, after consulting with Easter, a decision must be reached as to how quickly and how forcefully the company is going to end the “free” lunch program, because that appears to be a main cause of the shrinkage. Fosdick and Easter might also incorpor

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ate a shrinkage target into the next labor contract and perhaps link performance bonuses to this target.

6) Assume that Fosdick decides that the practice of free lunches from the open cases of goods must be stopped. Develop and present arguments he should give in a meeting with a union shop steward.

He might say that the practice is a form of stealing and clearly unacceptable to the company. If there are behavior clauses in the union contract, Fosdick might invoke them. He could emphasize that the pilferage has

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