The Hershey Company Business Case - Essay Example

2 Page Additions The business environment is often unpredictable and thus requires firms to be strategic in discharging their operations. Hershey Company has faced a number of challenges in its operations, all of which are likely to affect its operations in one way or another. In particular, Hershey Company faces financial challenges that pose serious problems to the company’s prospects. Key among these challenges and subsequent problems is the pension-driven loss caused by lump sum withdrawals.

Pension settlement is a key practice in the company. When such settlements fall due, the company cannot, by any chance, ignore its duty and responsibility in this regard. This only means that the company has to meet its obligations to all pension beneficiaries. Whilst there is no problem with this organizational practice, the manner in which these pension settlements are handled poses serious problems to the financial position of the company. Loses of up to $19.7 million are critical and adverse to the short term and long term performance of the company.

This pension-based loss is a critical problem that calls for immediate formulation and implementation of a functional pension settlement strategy. Given that incurring losses is the last thing any firm would want to realize, Hershey Company is in dire need for a pension-driven change. In the light of the identified problem, the target variable is the lump sum withdrawal of pension benefits. Redesigning, restructuring, and aligning pension settlement with the company’s short term and long term goals and objectives will reverse the observed problem.

This is because there is an underlying mismatch between the applied pension practice and the realized results. In other words, the negative implications of Hershey Company’s pension settlement activities mean that the current process is ineffective and inefficient. In this respect, there is need for pension settlement scheme that is fully consistent with the company business prospects. The idea of a scheme-based pension settlement is designed to streamline pension settlement by the company.

In other words, the pension benefits will still be discharged but the lump sum withdrawal factor ought to be reversed. The objective is to reverse lump sum withdrawals, thus allowing the company to capitalize on its pension scheme portfolio. In order to do this, Hershey has to actively involve all key stakeholders in the pension undertakings. A provision for windfall pension subject to Hershey’s improved performance will highly likely lure pension beneficiaries towards the company’s strategic move. The $19.7 million loss is a critical negation to the company future expectations.

While averting this loss will ultimately require an actual form of investment by the company, the course is worth future results. Reversing the situation will strengthen Hershey’s bid and persistence for future success. On the same note, the company will integrate pension beneficiaries in its strategic operations both currently and in future. The outcome will be an enhanced collaboration that is mutually beneficial to both the company and pension beneficiaries. Notably, the implementation of this strategy will cost the company much less than the losses being currently incurred.

Moreover, the firm will strengthen its pension scheme base and subsequently enhance its financial position. Finances for this strategy will be mobilized from the pensioners, meaning that the costs incurred by the company to implement this strategy will be the additional interests or pension windfalls granted to responders of Hershey’s call.