Discussion – MBA

Capital Expenditure Decisions

Mergers and acquisitions are capital budgeting techniques. This technique is a managerial expansion decision to increase assets drawing a cash benefit. Research a most recent merger or acquisition and discuss the firm (merger – stable firm / acquisition – purchasing firm) expected cash benefit. Pretend you are the owner; would you make the same decision? Why or Why Not?

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Answer the questions at the end of the case study within the paper (Challenges at 3M).

Read the Case Study (Case study 467 Six Sigma at 3M, Inc.) submitted and prepare a rough draft.

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Six Sigma at 3M: Case Study

The History of 3M:

3M is a company that was founded in 1902 in Two Harbors, Minnesota. The goal of the business was to mine a mine deposit for grinding-wheel abrasives (p. 467). Quickly the company uprooted and went to focus on sandpaper products in Duluth. In 1910, eight years later, the company was located in St. Paul. Six years after the move to St. Paul, the company paid its first dividends of six cents per share. (p. 467) From this point on, the company went to expand its production by inventing masking tape in 1925, and eventually even diverted to defense materials. The diversion to defense materials just continued to make the company branch out and continue to expand the products that they offered.

The Six Sigma Project:

While it may seem that all of this movement and diversity in production results in a successful company, that was not the case for 3M. The financial performance of 3M was not thriving, and was actually quite bland, resulting in less success for the business. By introducing the Six Sigma, the company could potentially increase their cash savings, reduce unnecessary costs, strengthen the business as a whole, elevate production and efficiency, and aid the company in operations and obtaining a supply chain.

The Approach for Six Sigma:

The Six Sigma approach for 3M will contain two different models. If there is an existing process in place, the five-step DMAIC model will be implemented. For new products being developed, design for Six Sigma will be used. The implementation of Six Sigma at 3M will focus on linking processes to the business plan, proper management of funds, and improved management processes.

Benefits of Six Sigma at 3M:

The benefits of the Six Sigma approach at 3M is that this common approach can help the company meet goals. The approach will also help teach employees transferrable skills, which make them an asset for the company. The approach will be the most successful way for this company to increase value, savings, and performance in all departments.

Limitations of Six Sigma at 3M:

The limitations of Six Sigma may not outweigh the benefits, but they must still be recognized. Six Sigma is a process that requires training of employees and familiarizing them with this new approach. This can sometimes be too costly for a company. Some companies may not completely understand the Six Sigma approach or think that it is too complex for where their company is currently at. For companies that produce intangible items or service, Six Sigma may not always be the way to go in terms of improving efficiency. Lastly, many companies may view Six Sigma as a fad. When a company gives the Six Sigma approach a chance, they may change their minds. However, it is hard to get businesses on board at times because of their hesitancy.