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June 7, 2013

Leadership and Management of Business Organizations

Question 1
While making the approval, the manager got influenced by the Company’s internal environment. The internal environment presents the strengths and weakness that motivated Marisa into the acquisition of Tumblr. One of the major internal factors put into consideration was the company’s Resources in terms of the capital or financial resources, including physical resources such as the equipments, raw materials and information. Firstly, financial resources presented a weakness to the company due to the failure to launch new products. While other competitor companies such as Google continuously launch new products e.g. Chrome OS, Yahoo continued to lag behind due to its weak financial capacity. Further, the company operating cost continued to decline posing a higher advantage to the competitors. The operating margin that had been decreasing in the long bull market resulted into financial issues in periods of recession. The decreasing operating margin had a capacity to affect the company ability to reinvest in its business in the marketplace in the downturn; this would translate into a weak expanding capacity for the business. It has a negative long term impact on the business since it subtracts from the business values. Another weakness presented by the declining financial capacity of Yahoo is the reduced cost to invest in the data centers. Data centers operation costs are high due to the high cost of energy. Failure to launch new products affects profit and ties up financial resources that would support the business.Question 2
In the process of approval for the purchase of Tumblr, Marissa Meyer also considered the external environment through which the company operated its business. One of the principal external factors affecting her decision to acquire Tumblr was the technological factor. Advances in technology translate into advanced techniques for production, new products in the market as well as improved communication and management channels. As a result, as technology evolves, it presents new threats and opportunities for the company in the form of competition, new markets and industries. In this regard, one opportunity presented to the company by technological advances was the constant increase in the internet use. Further, technological advances presented an opportunity in terms of mobile broadband; it increased the margin and revenue for the company. One of the opportunities presented by advance in technology is the ability to engage in social media interconnectivity. On the other hand, technological advances present a threat to the company in terms of competition from companies such as Google e.g. Gmail is a threat to Yahoo mail. Other threats arise from online security in the rise of technological advances, social media marketing posing a threat to Yahoo advertising as well as the increase in internet bandwidth. On the other hand, demographic trends present opportunities in terms of increased population. Another external factor put to consideration was the competitive environment i.e. substitutes such as Gmail and social media advertising which pose a threat. Constant Law suits can pose an external threat to Yahoo.

Question 3
In order to arrive art the decision to enter into an acquisition of Tamblr, Marissa Meyer decision making process got influenced by factors of lack of structure, Risk factors, conflict factors and uncertainty factors. In regard to lack of structure, she evaluated both the programmed and un-programmed decisions in regard to the acquisition. The programmed decisions gave objective and correct answers since they are references to previous decisions; they provide solutions through numerical computations, simple rules and policies. The second factor, uncertainty, guided her decision to enter into the merger since the uncertainty presented a state of insufficiency. On the other hand, risk factors are the conditions in existence when loses are likely to occur and the chances of success are below 100 percent. Certainty factors present comprehensive and accurate information through which to evaluate the effectiveness of a decision making process. The decision making process began with the procedure of diagnosing and identifying the problem that can get solved by the acquisition of Tumblr. The second step was the generation of alternative solutions to the problem faced by the company. Thirdly, Marissa engaged in a process of evaluating the possible solution so as to cite the most effective solution in the different alternatives. In the step to settle for a choice among the alternatives, she engaged in a process of optimizing and satisfying. In the process of satisfying, she made a choice because of its acceptability even if it would not the perfect or best alternative in the list of alternatives. While optimizing, she tried to achieve a balance that was most effective in a range of diverse goals. Marissa then made a choice from the alternative solution and chose the option of acquiring Tumblr. Subsequently, she engaged in the process of implementing the decision. Here, she first determined the outlook after the acquisition of Tumblr; she then ordered the steps to attain the acquisition, determined the activities and resources as well as the time needed. Lastly, she assigned responsibility in regard to the implementation process. These processes were very effective while testing and validating the effectiveness of the decision.

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