LEAD 4093 Module 3 Capstone Strategic and Ethical Options Analysis Example

Cut, Shift, Sell or Broker: Weighing Four Strategic and Ethical Options for a High-Turnover Trucking Carrier

Student Name

American College of Education

LEAD4093: Capstone in Administration and Leadership

Module 3 Assignment

Instructor Name

April 19, 2027

Introduction

Modules 1 and 2 of this capstone defined the problem at Cedar Valley Freight, the composite regional carrier in Cedar Rapids where I supervise dispatch, and traced the forces behind it. Driver turnover runs 74 percent a year, concentrated among new drivers on one-way routes, and the operating ratio has reached 98 percent in a weak freight market. Drivers on the company's dedicated contracts, home most nights with a weekly pay guarantee, leave at a third of the overall rate. This paper sets criteria for judging options, describes four realistic strategies, compares them on evidence and weighs the ethical questions each raises before identifying the option Module 4 will develop.

Criteria

Six criteria, agreed with the company's president and chief financial officer, will be used. The first two are the capstone's targets: the expected effect on driver turnover and the expected effect on the operating ratio. The third is the capital required, since the family owners do not want outside investors. The fourth is risk, including dependence on a few customers. The fifth is fit with the company's stated values of safety, fairness to drivers and service to its customers. The sixth is the effect on employees and on the community, since the company is one of the larger private employers in its part of Cedar Rapids. Every option gets a high, medium or low mark against all six, and each mark is explained.

Why Home Time and Fit Matter

Turnover research suggests what any option must change. Hom et al. (2017), summarizing a century of turnover research, noted the field's shift from asking only whether people are dissatisfied toward understanding the forces that keep them, including their attachments to the job and the community and the shocks that prompt a decision to leave. Mitchell et al. (2001) captured part of that idea as job embeddedness, the links, fit and sacrifices that tie a person to a job and a place, and found that it predicted voluntary turnover beyond job satisfaction. A driver who is home most nights can coach a child's team and keep friendships, which builds exactly those ties. A driver on the road five nights a week has few ties to lose by leaving.

Option A: Cut Costs Within the Current Model

The first option keeps the current freight mix and attacks costs: deferring tractor replacement, trimming the orientation program and cutting the per-mile rate for new hires. It requires no new capital and could lower the operating ratio by a point or two in the first year. But it would likely worsen turnover, since it touches pay and equipment, the factors drivers notice first, and older tractors raise repair costs and breakdowns later. It also conflicts with the company's commitment to safety if maintenance is delayed. Rating: turnover low, margin medium in the short term and low later, capital high (little needed), risk medium, values low and community medium.

Option B: Shift Toward Dedicated and Home-Daily Work

The second option changes the freight mix. Over three years, the company would grow dedicated contracts from about 30 percent of the fleet to about 60 percent, starting with the two existing food customers' requested expansions and the two shippers that have inquired. Remaining regional freight would be rebuilt into lanes that bring drivers back to Cedar Rapids or Des Moines most nights, using relays where needed. Drivers would move from pure mileage pay to a weekly guarantee plus activity pay. The fleet would shrink by about 20 tractors through attrition as the company drops the lowest-margin spot loads. Company cost data show dedicated work running at an operating ratio near 91 percent. Rating: turnover high, margin high, capital medium, risk medium, values high, community high.

Option C: Sell to a Larger Carrier

The third option is a sale. Two national carriers have expressed interest, and a sale would give the family owners a clear exit and transfer the turnover problem to a buyer with lower costs. Yet a buyer would most likely fold Cedar Valley's terminal into its own network, close the local office and move drivers onto its long-haul system, where turnover is often higher still. The office staff of about 40 would be at risk. The decision belongs to the owners, and a sale is not wrong in itself, but it does not solve the capstone problem; it moves it. Rating: turnover low, margin not applicable, capital high (none needed), risk low for owners, values low and community low.

Option D: Shrink Into Brokerage

The fourth option reduces the fleet sharply and grows the brokerage desk, which arranges freight on other carriers' trucks for a commission. Brokerage needs little capital and avoids driver turnover by needing fewer drivers. But brokerage margins have been thin in the downturn, the company's desk is small and inexperienced, and the strategy would mean laying off many drivers rather than retaining them. It would also give up the service control that the dedicated customers value. In short, it trades a hard problem for a weaker business. Rating: turnover not applicable, margin low to medium, capital high (little needed), risk high, values low and community low.

Ethical Questions in the Leading Option

Option B scores best, but it raises ethical questions that must be faced. First, the pay change: some high-mileage drivers now earn more than a weekly guarantee would pay, so the company should guarantee that no current driver's pay falls in the first year and let drivers choose their route type. Second, dedicated customers often require inward-facing cameras. Ball (2010), reviewing workplace surveillance, noted that monitoring raises questions of privacy, autonomy and trust and can change how workers experience their jobs. The company should use forward-facing cameras only, unless a customer contract requires otherwise, and should write clear rules on who may view footage and why. Third, reducing the fleet by 20 tractors must happen through attrition, with no layoffs.

Risks of the Leading Option

The largest business risk in Option B is customer concentration. If 60 percent of the fleet serves four customers, the loss of one would idle many trucks. The analysis therefore sets a limit of no more than 25 percent of revenue from any one customer, and dedicated contracts should run at least three years with notice periods long enough to redeploy trucks. A second risk is execution: dispatch must learn to plan relays and home-daily lanes, which is new work. A third is timing, since a freight recovery could tempt the company back toward spot loads; the plan must hold to the strategy when the market improves.

Comparison and Choice

Laid side by side, the ratings favor Option B. It is the only option that rates high on both capstone targets, turnover and margins, and it fits the company's values and community role. Option A trades short-term savings for worse turnover. Option C ends the owners' problem but not the drivers', and Option D gives up the company's strengths. Option B requires some capital, mainly for refrigerated trailers and dispatch software, and carries concentration risk that can be managed. The next paper turns this choice into a dated, budgeted plan with targets leadership can track.

Conclusion

Four options were weighed against six criteria. Turnover research and the company's own route data point to home time and attachment as the levers that matter, and the option that builds them, a shift toward dedicated and home-daily work, also promises the best margins. Its ethical issues, pay changes, cameras and fleet reduction, have workable answers that protect drivers. The capstone will proceed with that option.

References

Ball, K. (2010). Workplace surveillance: An overview. Labor History, 51(1), 87-106. https://doi.org/10.1080/00236561003654776

Hom, P. W., Lee, T. W., Shaw, J. D., & Hausknecht, J. P. (2017). One hundred years of employee turnover theory and research. Journal of Applied Psychology, 102(3), 530-545. https://doi.org/10.1037/apl0000103

Mitchell, T. R., Holtom, B. C., Lee, T. W., Sablynski, C. J., & Erez, M. (2001). Why people stay: Using job embeddedness to predict voluntary turnover. Academy of Management Journal, 44(6), 1102-1121. https://doi.org/10.2307/3069391