Pinnacle: Decision Making

I. STATEMENT/RECOGNITION OF DECISION REQUIREMENT/PROBLEM Facts of the Case Pinnacle is a small, publicly held Indiana-based machine tool company which is currently losing market shares due to aggressive pricing which have an impact on its profit margin. Don Anglos, Pinnacle’s CEO, heard a credible rumor that a chief competitor of Pinnacle is planning a hostile takeover of Hoilman, Inc. Don Anglos has to decide whether Pinnacle should attempt to acquire Hoilman, Inc., a company known for its cutting-edge sensor technology and communications software developed to monitor robotics equipment. Don Anglos knew Hoilman well due to the exploratory talks he conducted on a failed plan of a joint venture. By acquiring Hoilman, Pinnacle would be able to transform into a high-tech service company that provides top-notch service far more sophisticated than its standard maintenance and service contracts by developing software that could transmit real-time information to its customers’ equipment. Don was a problem-solver and a proven track record of successfully spotting new market opportunities. He believes that acquiring Hoilman would be a good place to start. This option will be gone if Hoilman will be sold to another firm. Jennifer Banks, services division head, was enthusiastic about the acquisition and the new strategy describing it as “chance of a lifetime.” Sam Lodge, CFO, disagrees on Don’s plan stating that “getting into service business is a mistake” and Pinnacle’s recent profit drop had not escaped Wall Street’s attention and further negative impact might scare investors. There’s uncertainty that going to a service business would make the company on top considering the number of competitors.

II. DIAGNOSIS AND ANALYSIS OF CAUSES

Key Problems/Issues

Should Pinnacle acquire Hoilman Inc. by trusting Don Anglo’s instincts or

consider Sam Lodge’s factual concerns and position?

Key Objectives

1) To evaluate the decision steps