0 Communicating in groups ensures that each person present there is hearing the00 same information at the same time. Group communication also allows people to41. interact with each other about the changes and can help people develop a sense of42. team, particularly that in a climate of adversity. Communicating in groups also has43. some disadvantages. In many organizations where there will be people who will44. not feel comfortable in talking in a group context. The more "personal" the45. effects of the change, and the more likely people will withdraw from the group46. process. A second danger of group communication is that for one or two47. particularly vocal and negative people can set the tone for the group, and then foster48. unproductive negative discussion out. While expressions of concerns about change49. are healthy, the "doom-sayer" can cause this process to become destructive. So for50. this reason, group communication needs to be managed with skill and expertise.51. Sometimes an external facilitator person is necessary. Finally, there are some issues52. that cannot be discussed within a group. For example, when in downsizing situations, it is inappropriate to announce to a group that John and Mary are losing their jobs. When changes are likely to create a high degree of upset to individuals, they must be dealt with in private. 52()
In an uncertain economic environment, top management will be interested in asset management and flow management. H . They can represent over 50 percent of manufactures’ total asset, and more than 80 percent of wholesalers and retailers’ total assets.When top management mandates a reduction in accounts receivable and/or inventories, its objective is to improve cash flow and reduce the company’s investment in assets. (9) . But reduction in the terms of sale, or even enforcement of the stated terms of sale, in effect changes tile price component of the firm’s marketing mix. (10) .The arbitrary reduction of accounts receivable and/or inventories in the absence of technological change or changes in the logistics system can have a devastating impact on corporate profit performance. (11) . First, the change alters the manufacturer’s price and therefore the competitive position of its products, which may lead to decreased sales. Second, it further complicates the cash flow problems of the manufacturer’s customers. Forcing faster payment of invoices causes channel members to improve their cash flow by reducing their inventories of the manufacturer’s products. (12) . This situation may also result in stock-out of the manufacturer’s products as the wholesale or retail level of the channel, further reducing sales volume.Similarly, a manufacturer’s policy of arbitrarily reducing inventory level to increase inventory sums, in the absence of a system change, may escalate transportation costs and/or production setup costs as the logistics system scrambles to achieve the specified customer service levels with lower inventories (assuming the company was efficiently and effectively distributing products prior to the policy change). (13) In this case, customer service levels would be eroded, and a decrease in market share might result. (14) .A. However, if management concentrates on system changes that improve logistics efficiency and/or effectiveness, it may be able to satisfy all of the firm’s objectives.B. Usually, management assumes that revenues and other costs will remain the same.C. They do so by placing smaller, more frequent orders, which may increase total logistics cost for both the manufacturer and its customers.D. In either set of circumstances, the increased cost of transportation and/or production or the lost sales contribution could far exceed the savings in inventory carrying cost.E. If a manufacturer changes its terms of sale, for example, the effect on wholesalers and retailers will be twofold.F. In addition, simply reducing the level of inventory can significantly increase the cost of logistics if current inventories have been set at a level that allows the firm to achieve least total cost logistics for a desired level of customer service.G. Alternatively, pressure to reduce expenses may preclude the use of premium transportation or increased production setups to achieve the desired customer service levels with smaller inventory.H. The two most common strategies used to improve cash flow and return on assets are= (1)reducing accounts receivable and(2)reducing the investment in inventory, as inventories and accounts receivable are a major portion of corporate assets. 14()