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I. Facts of The Case: Central Laboratories, Inc

The document discusses Centralab, a small medical laboratory established in 1973 by doctors to provide more affordable diagnostic tests. Over the years, the company rotated presidents among founding doctors, who maintained private practices. Dr. Gregorio joined the board and suggested improvements, but felt ignored. He believes better management could increase profitability and growth. The document outlines objectives and alternatives, recommending hiring a consultant for expertise first. It also recommends the president listen to shareholders and allowing Dr. Gregorio to take over management if needed.

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Jessuel Larn-eps
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192 views

I. Facts of The Case: Central Laboratories, Inc

The document discusses Centralab, a small medical laboratory established in 1973 by doctors to provide more affordable diagnostic tests. Over the years, the company rotated presidents among founding doctors, who maintained private practices. Dr. Gregorio joined the board and suggested improvements, but felt ignored. He believes better management could increase profitability and growth. The document outlines objectives and alternatives, recommending hiring a consultant for expertise first. It also recommends the president listen to shareholders and allowing Dr. Gregorio to take over management if needed.

Uploaded by

Jessuel Larn-eps
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CENTRAL LABORATORIES, INC

I. FACTS OF THE CASE

Centralab was a small medical laboratory and was established in 1973 by a group of
young medical practitioners who believed that there was a need for a less expensive
alternative to the medical laboratory tests and services being conducted in the major
private hospitals in Manila. It was well known among medical practitioners that the cost
of medical diagnostic tests represented a substantial component of the cost of outpatient
medical care.

Centralab was capitalized at P500, 000 of which P95, 000 was initially subscribed to
by a small group of doctors. The company occupied rented premises in a downtown
metropolitan location two blocks away from a major private hospital. Over the years, the
presidency of Centralab rotated among the group of founding doctors. None of the
officers were full time in the company as they were largely occupied by their private
medical practice. Only the Pathologist and the Radiologist made regular visits to the
laboratory to certify test results and were paid a fixed rate by the company for each test
result which they certified.

Since becoming a member of the Board of Directors, Dr. Gregorio gave various
suggestions for improving the income of Centralab whenever the Board met. However,
he felt that most of his suggestions were not taken seriously or acted upon by the
company president. This convinced Dr. Gregorio to try to take over control of the
management of the company. He believed that the company could achieve greater
profitability and growth through better management.

II. STATEMENT OF THE PROBLEM

How will Centralab achieved greater profitability and growth with a better management?

III. OBJECTIVES

1) To increase profitability and growth through better management.


2) To optimize productivity of the company.
3) To plan possible strategies for a better management.
4) To ensure that all ideas and opinions of the shareholders will be heard.
IV. ALTERNATIVE COURSES OF ACTION

HIRE A CONSULTANT FOR THE RIGHT EXPERTISE OF THE COMPANY

ADVANTAGES

 A consultant will always be unbiased and objective, considering that they do not have a
personal connect within the organization. A business consultant always has a clear
strategy planned that helps keep the plan on the track without internal/external
distractions.
 The first and biggest advantage of a right business consultant; they usually operate in
narrow areas and bring in a detailed and in-depth expertise required for your
organization.

DISADVANTAGE

 A business consultant is always expensive and this will add to the expense of the
company.

MAKE THE SHAREHOLDER’S VOICE BE HEARD

ADVANTAGES

 A shareholder is also a part owner in the company and they have the right to have their
voice be heard when it comes to the company’s direction, and their vote matters.
 Give shareholders the chance to speak out about their suggestions, ideas and opinion.
 The more ideas that are produced, the better chance there is for producing an effective
solution for the company.

DISADVANTAGE

 The president will still ignore all the suggestions or ideas of the shareholders.
DR. GREGORIO SHOULD TAKE OVER CONTROL OF THE

MANAGEMENT OF THE COMPANY

ADVANTAGES

 This would result a better management and will achieve a greater profitability and growth
of the company.
 There is a restructuring of the company for a better management.
 The present shareholders will now receive return on their investment in the company
since Dr. Gregorio will now take over the company.

DISADVANTAGE

 There is an undeniable and unavoidable conflict between the new president and the old
president.
 There is a greater risk that the takeover of the company will be failed.

RECOMMENDATION:

I recommend hiring a consultant first. They will help provide a significant amount
of value for a company. They can help to develop strategies for growth or manage
projects. Since consultants are not committed to a single firm, they bring experience from
a variety of companies and industries, which allows them to offer creative solutions and
enables “out of the box” thinking. They can provide an objective viewpoint, which allows
for more diverse ideas than could be provided solely by employees within the
organization. A consultant may have a higher level of business expertise than the average
employee and can provide unique solutions for businesses. Companies may want to
consider the advantages of the level of expertise that can be brought by a consultant, as
well as how they could benefit from having an established strategic plan. 
Second, the president should listen to the shareholder’s suggestions, opinions and
ideas because shareholder is also a part owner in the company and they have the right to
have their voice be heard when it comes to the company’s direction, and their vote
matters.
Lastly, Dr. Gregorio should take over control of the management of the company.
If the president still not taking seriously all the suggestions of his shareholders then it
would be better if Dr. Gregorio will take over the company for a better management and a
greater profitability and growth of the company.
CONCLUSION:

Developing a good management team is a critical component of running a


successful organization. A leader is not only to supervise employees but must make
important decisions that directly affect the company. Good leader should take time to
listen to their employees. Effective leader understand the importance of listening to its
employees. One reason is that it causes employees to feel as if their opinion is valued.
Another reason is that management can consider employee suggestions, concerns and
complaints when making decisions. The decisions made within an organization should
benefit the company and its employees.

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