Memo to the President: Invest in Electric Vehicle Service Readiness at the Chevrolet Store Now, Take the Minimum Step at Ford and Set Triggers for the Rest
[Student Name]
University of Phoenix
MGT/526: Managing in a Changing Environment
Week 5 Assignment
[Instructor Name]
[Date]
The dealership group, employees and figures are a composite written for a model memo.
To: President, dealership group
From: Director of fixed operations
Subject: Electric vehicle service readiness at the Chevrolet and Ford stores
Recommendation
Approve $340,000 now: full electric vehicle service certification at the Chevrolet store, about $220,000, and the manufacturer's entry-level service certification at the Ford store, about $120,000. Defer full Ford certification until one of two triggers is met: electric vehicles reach 8% of the Ford store's new sales for two consecutive quarters, or the manufacturer ties vehicle allocation to full certification. This lets us serve the electric vehicles we are already selling without betting the service department on a pace of adoption no one can predict.
Background
Electric vehicles made up about 4% of new vehicles sold at our Chevrolet and Ford stores last year, about 136 units, well below national rates and below both manufacturers' plans. Customers who buy them must be able to get warranty and repair service from us; today, the Chevrolet store sends high-voltage battery work to a dealer 60 miles away, and two customers have complained to the manufacturer.
Electric vehicles need less routine maintenance than gasoline vehicles because they have no engine oil, fewer moving parts and regenerative braking that reduces brake wear (Rapson & Muehlegger, 2023). Over time, that will reduce the oil changes and engine work that produce much of our service gross profit. But electric vehicles still need tires, suspension, software updates, collision repair and battery and high-voltage system work that requires trained technicians and specialized equipment.
Options
Option A: Full certification at both stores now, about $570,000
Includes a direct-current fast charger and battery lift at each store, high-voltage tools, a dedicated service bay and training for six technicians, plus about $40,000 a year for ongoing training. Projected electric vehicle service gross profit by year three: about $260,000 a year at Chevrolet and $180,000 at Ford, if local adoption grows as the manufacturers project.
Option B: Full at Chevrolet, entry level at Ford, about $340,000
Chevrolet gets the full package. Ford gets chargers, basic high-voltage tools and training for two technicians, enough for routine electric vehicle work and warranty diagnosis, with complex battery repairs sent to a certified Ford dealer. Projected year-three gross profit: about $260,000 at Chevrolet and $90,000 at Ford.
Option C: Defer both
No cost now, but we would continue to send work away, frustrate our electric vehicle customers and risk manufacturer penalties or reduced allocation.
Reasoning
Option B captures most of the projected return at 60% of Option A's cost. At the projected year-three run rates, Option A's $570,000 would be recovered in about a year and a half after ongoing training costs, and Option B's $340,000 in a little over a year. But those run rates depend on adoption growing as the manufacturers expect; if local adoption stays near today's level, Option A's Ford investment would take many years to recover, while Option B's smaller Ford commitment would still be modest. Chevrolet sells more electric vehicles than Ford at our stores and its manufacturer has signaled stronger allocation requirements, so full certification there is justified now. At Ford, the entry-level package lets us keep customers and warranty work, while the triggers tell us when the full investment is justified.
Option C carries a risk the group has seen before in other industries. Tripsas and Gavetti (2000), studying Polaroid's response to digital imaging, found that the company developed strong digital technical capabilities but failed commercially because managers' beliefs about how the business made money, built on the old model, shaped their decisions. The lesson for us is that our service department's profits come from gasoline vehicles, and that history makes it easy to underestimate the need to change. Tying further investment to measurable triggers protects us from both overinvesting and waiting too long.
The investment also supports the technician shortage identified in Week 1. Electric vehicle training is attractive to younger technicians, and offering it may help us fill the eight open technician positions.
Risks
Adoption could be slower than expected, especially after federal consumer tax credits ended in 2025, leaving certified equipment underused; Option B limits that risk. Manufacturer requirements could change quickly; the Ford trigger addresses that. And technicians we train may be recruited by competitors; we will pair training with a retention bonus paid over two years.
Change Management
As with one-price selling, the people affected need to understand why the change matters. Cawsey et al. (2020) stress that people need to see why a change matters to them before they will support it, and that the case for change must be made in terms of each group's own work. Service advisers and technicians will hear directly from me and from the service managers, with a clear explanation of how electric vehicles will change their work over time and a commitment that training will be offered to every technician who wants it.
Next Steps
With your approval, we will order equipment and schedule manufacturer training within 30 days, complete Chevrolet certification within four months and Ford entry-level certification within three months, and report electric vehicle sales share, service revenue and customer satisfaction for electric vehicle owners quarterly against the triggers. If the triggers for Ford are reached earlier than expected, I will return with a request for the remaining $230,000 rather than waiting for the annual budget. I would welcome 20 minutes to discuss any questions before the next leadership meeting.
References
Cawsey, T. F., Deszca, G., & Ingols, C. (2020). Organizational change: An action-oriented toolkit (4th ed.). SAGE.
Rapson, D. S., & Muehlegger, E. (2023). The economics of electric vehicles. Review of Environmental Economics and Policy, 17(2), 274-294. https://doi.org/10.1086/725484
Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic Management Journal, 21(10-11), 1147-1161. https://doi.org/10.1002/1097-0266(200010/11)21:10/11<1147::AID-SMJ128>3.0.CO;2-R
How this MGT 526 Week 5 example is structured
The MGT/526 shelf page describes Week 5 as closing with one document written for a decision maker. The memo puts the recommendation in its first paragraph, then gives only what the president needs to decide: the situation, the options with numbers, the reasoning, the risks and the next steps. It applies the course's change concepts to a change whose timing is uncertain, where the danger is acting too late as much as too early. Students search this week as MGT 526 Week 5, MGT526 Wk 5 or MGT/526 Wk 5; all three are the same assignment.
MGT/526 Week 5 questions, answered
What does MGT/526 Week 5 usually ask for?
The MGT/526 shelf describes Week 5 as closing with one document written for a decision maker. Many sections ask for a memo, briefing or executive summary that recommends a course of action for the chosen organization's change, supported by analysis.
How should a decision memo be organized?
Lead with the recommendation, then give the background the reader needs, the options considered with their costs and benefits, the reasoning for the choice, the main risks and the next steps. Keep it short enough for a busy executive to read in one sitting.
Why do established companies often adapt too slowly to new technology?
Research on incumbents suggests that managers' beliefs about how the business makes money can hold a firm back even when it has the technical ability to change. Firms that tie decisions to measurable signals from the market are better able to act in time.
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