MGMT 530 Week 8 Final Exam

MGMT 530 Week 8 Final Exam

Author: Christine Farr


1. (TCOs A, B, C, D, E, F, G, and H) Hoosier Services recently celebrated its 10th anniversary as a professional services firm that handles investigations for law firms offering amenities, such as background checks, surveillance, interviewing of witnesses, crash scene investigation, and other related services.The company was founded by Lee Herbert who had extensive experience working for companies that handle investigative work. Herbert is more of a people person and is always looking for the next new client to take on. Admittedly, Herbert had no experience in running a business when he decided to go out on his own and enlisted the help of his long time friend, Bradley Simmons.Simmons has spent his career working for larger corporations in finance and had no experience in investigative services, but was looking for a change.Over the 10 years since the company's founding, Hoosier Services struggled at first but slowly grew over the last five years. The more law firms the company works with, the more cases they receive. The more cases they receive, the more hours they can bill. Hoosier currently has six investigators and two clerks in addition to Herbert and Simmons. Over the years, they have expanded and contracted based on the volume of business and the local economy.Based in Indianapolis, Indiana, Herbert is really interested in expanding the business to other major cities in the region, believing that "there are only so many law firms here in Indianapolis." He feels that if they've survived 10 years, then they should continue to focus on growing the business. Simmons, on the other hand, feels that expansion will put the company at risk as it takes time to develop a decent client base. They opened a second office several years back across town but eventually closed it when it didn't generate enough revenue to cover expenses. He's worried the expansion may bankrupt the company.Even though the two are business partners, Herbert is the president and Simmons the vice president. Herbert asked Simmons to evaluate several options to further expand the business. From Herbert's perspective, he has concluded that three objectives are important in this decision. First, is to find a city with a large number of Fortune 500 companies, a cost of living comparable to Indianapolis, and a city that is in a reasonable distance from Indianapolis as he and Simmons would be spending a lot of time in the new office at first. Because both have families with young children, Herbert feels that the distance is twice as important as the other criteria.

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