CASE STUDY

Three Executives of a well-known multi-national company decided to form a new company, named New Star Company Limited in 1974. These three executives were becoming close to their retirement age. Pifco-Zen Chen Company Limited, the company that they worked for had been in business for the last 80 years. It was their previous employers policy to retire the executives with a golden hand-shake worth approximately US120,000 each. The three executives occupied the following position with Pifco-Zen Chen Company Limited, (1) Finance Manager Mr. Zu Chang, (2) Sales Marketing Manager, Mr. Lim Lam, and (3) Risk Management Manager, Mr. Shu Ching. In their previous position with Pifco-Zen Chen Company Limited, they were regarded as the most respected executives because the company made significant progress in terms of organic growth and diversification. The Chairman of the Board of Directors, Dr. Wing Wan used to call them the three wise men. Pifco-Zen Chen Company Limited main business activities were the manufacturing of twisties and acted as wholesale distributor of a special drink called Wysalt. The drink is full of calcium and protein and it is very popular in the South East Asia. Each years Annual General Meeting of Pifco-Zen Chen Company Limiteds gross income and net profit before taxation increased by 10, while its main competitors performance was declining at an alarming rate. Chairman Wan always wanted to find out what is the main reason driving its companys operational success. In a nutshell, Chairman Wan always believed that the financial result was too good to be true because whenever he has a chance to play golf with one of the Chairman of his competitor company, he was told that life as the head of a corporate is becoming unbearable due to competition and increased in the cost of living. Still, Mr. Wan kept quiet while congratulating his three wise men for a fantastic job each year. Even the external Auditors could not believe the significant progress, which