PART 2: TROUBLED WATERS
Board Meeting at Crealite, Inc.
"LOOK GENTLEMEN, I DON'T KNOW WHO WAS SUPPOSED TO BE KEEPING TRACT OF THESE DEVELOPMENTS, BUT IT SEEMS THAT MANY OF OUR KEY PEOPLE HAVE BEEN FALLING DOWN ON THE JOB! NOW WE ARE IN A BIG JAM!"
Phillip Logan fumes at the other board members as he studies each one for a reaction to the recent news that Crealite would report a loss in its 4th quarter. It would be one of the largest drops in stock price for the company since the original Logan Thoroughbreds, Inc. had almost failed after the depression. This stock devaluation would prove detrimental to corporations who depend on Crealite to ship their goods throughout the European countries. Phillip Logan had not inherited the business savvy of his father William, who had come to the family's rescue in 1936 at the age of 24. At the time the family business was in breeding thoroughbreds that were sold as prized racehorses or as prize winning show horses. William decided that horse breeding was a dying business with the increasing onslaught of automobiles. After listening to the suggestions of his grandmother Marita, he determined that the Logan family should be involved in the shipping business, especially since many countries were still rebuilding after the war and needed American supplies to accomplish this. William sold off all assets under Logan Thoroughbreds and formed Crealite, Inc. which became a sudden success with shipping contracts worth millions of dollars pouring in. Before long, Crealite was one of the largest shipping companies in the U.S., but now, as the current board members sat at the conference table, Phillip saw that his company was waning, and if statistics continued declining in the following quarters, they would be out of business within 5 years. This would end what Phillip had always thought of as the Logan Legacy, having plenty of money to pass on to the next generation, which would ensure a place in history for the Logan family name.
"I have taken the bull by the horn to stop this downward shift. Sean, as our new President has suggested that we undergo a rapid business redevelopment. This process will uncover who or what departments are causing our margins to close in on us and determine what direction we can take for the future. Last month I put out a request for proposal to procure a CPA firm to do this for us." Phillip picks up the stack of responses to the RFP from the conference table and dispenses four copies to each board member. "These are the firms that answered our request and we need to review each company to determine who will be best for the job. We will meet tomorrow afternoon at 1:30 to discuss the possibilities. Any questions gentlemen?" Phillip asked after a long pause he continued. "Well, I guess that's all until tomorrow."
The board members and executives began their exit. Some looked intently at the packets as they left. Others remained behind to obtain more information from Phillip. Even though Sean was now President, many of the directors were not comfortable with him, feeling that he was too young to take on such a big responsibility, so they continued to look to Phillip on weighty matters such as these. Eventually, everyone cleared out of the boardroom except Sean and Phillip.
Sean sat limply at the head of the conference table looking at one of the packets. Phillip studied his son and hoped that he would be able to combat the trials that lay ahead with the company. He had every confidence in Sean because his son had exhibited an uncanny sense of business even when he was a young boy. He had graduated at the top of his class in Harvard with an MBA and as far as Phillip was concerned Sean could have taken over at that time, but instead he was placed in an Executive Vice President position to learn about company politics and how things were run. After suffering a heart attack, resulting in triple bypass surgery, earlier that year, Phillip, at 53, felt it was time that his son took over, and he remained CEO. Noticing the developing signs of stress on his son's face, Phillip walked over to him and placing his hand on Sean's shoulder said...
"Hey, son, if anybody can turn this thing around you can. Don't get too worried about it now, you will have plenty of time for that. You need to keep your mind clear so that we can crawl out of this rut we're in, and I know you will be able to do that for us son, because your grandfather said that you are so much like your great, great grandfather, Sean, who always knew how to solve situations that seemed to be problematic. We named you after him because granddad said you looked so much like him, so it would not be hard to think that you also inherited a lot of his knack for business and if that is the case, I know I can count on you."
"Thanks, dad. I wish great, great grandfather was here now to help us out of this, but I do have a few ideas that I'll share tomorrow at the meeting. I'm going to formulate them this evening."
"Well, make sure to look over these companies, son to make a recommendation for the CPA firm." Phillip reminded him.
"I think I'll let the board members select the company. I want them to know that I trust their judgement and that I don't intend to be a President who always has the last word."
Phillip turns around and picks up his paperwork then heads toward the door. "Well, you do have the last word son. Don't forget that. " Phillip departs from the boardroom leaving Sean to himself.
Board Meeting at Crealite, Inc.
"LOOK GENTLEMEN, I DON'T KNOW WHO WAS SUPPOSED TO BE KEEPING TRACT OF THESE DEVELOPMENTS, BUT IT SEEMS THAT MANY OF OUR KEY PEOPLE HAVE BEEN FALLING DOWN ON THE JOB! NOW WE ARE IN A BIG JAM!"
Phillip Logan fumes at the other board members as he studies each one for a reaction to the recent news that Crealite would report a loss in its 4th quarter. It would be one of the largest drops in stock price for the company since the original Logan Thoroughbreds, Inc. had almost failed after the depression. This stock devaluation would prove detrimental to corporations who depend on Crealite to ship their goods throughout the European countries. Phillip Logan had not inherited the business savvy of his father William, who had come to the family's rescue in 1936 at the age of 24. At the time the family business was in breeding thoroughbreds that were sold as prized racehorses or as prize winning show horses. William decided that horse breeding was a dying business with the increasing onslaught of automobiles. After listening to the suggestions of his grandmother Marita, he determined that the Logan family should be involved in the shipping business, especially since many countries were still rebuilding after the war and needed American supplies to accomplish this. William sold off all assets under Logan Thoroughbreds and formed Crealite, Inc. which became a sudden success with shipping contracts worth millions of dollars pouring in. Before long, Crealite was one of the largest shipping companies in the U.S., but now, as the current board members sat at the conference table, Phillip saw that his company was waning, and if statistics continued declining in the following quarters, they would be out of business within 5 years. This would end what Phillip had always thought of as the Logan Legacy, having plenty of money to pass on to the next generation, which would ensure a place in history for the Logan family name.
"I have taken the bull by the horn to stop this downward shift. Sean, as our new President has suggested that we undergo a rapid business redevelopment. This process will uncover who or what departments are causing our margins to close in on us and determine what direction we can take for the future. Last month I put out a request for proposal to procure a CPA firm to do this for us." Phillip picks up the stack of responses to the RFP from the conference table and dispenses four copies to each board member. "These are the firms that answered our request and we need to review each company to determine who will be best for the job. We will meet tomorrow afternoon at 1:30 to discuss the possibilities. Any questions gentlemen?" Phillip asked after a long pause he continued. "Well, I guess that's all until tomorrow."
The board members and executives began their exit. Some looked intently at the packets as they left. Others remained behind to obtain more information from Phillip. Even though Sean was now President, many of the directors were not comfortable with him, feeling that he was too young to take on such a big responsibility, so they continued to look to Phillip on weighty matters such as these. Eventually, everyone cleared out of the boardroom except Sean and Phillip.
Sean sat limply at the head of the conference table looking at one of the packets. Phillip studied his son and hoped that he would be able to combat the trials that lay ahead with the company. He had every confidence in Sean because his son had exhibited an uncanny sense of business even when he was a young boy. He had graduated at the top of his class in Harvard with an MBA and as far as Phillip was concerned Sean could have taken over at that time, but instead he was placed in an Executive Vice President position to learn about company politics and how things were run. After suffering a heart attack, resulting in triple bypass surgery, earlier that year, Phillip, at 53, felt it was time that his son took over, and he remained CEO. Noticing the developing signs of stress on his son's face, Phillip walked over to him and placing his hand on Sean's shoulder said...
"Hey, son, if anybody can turn this thing around you can. Don't get too worried about it now, you will have plenty of time for that. You need to keep your mind clear so that we can crawl out of this rut we're in, and I know you will be able to do that for us son, because your grandfather said that you are so much like your great, great grandfather, Sean, who always knew how to solve situations that seemed to be problematic. We named you after him because granddad said you looked so much like him, so it would not be hard to think that you also inherited a lot of his knack for business and if that is the case, I know I can count on you."
"Thanks, dad. I wish great, great grandfather was here now to help us out of this, but I do have a few ideas that I'll share tomorrow at the meeting. I'm going to formulate them this evening."
"Well, make sure to look over these companies, son to make a recommendation for the CPA firm." Phillip reminded him.
"I think I'll let the board members select the company. I want them to know that I trust their judgement and that I don't intend to be a President who always has the last word."
Phillip turns around and picks up his paperwork then heads toward the door. "Well, you do have the last word son. Don't forget that. " Phillip departs from the boardroom leaving Sean to himself.