Company Name: Lennar Corporation

Topic of the Week: A Case Study Analysis of Lennar Corporation’s Joint Venture Investments

Synopsis of the Situation

Lennar Corporation was established in 1954 as a local Miami homebuilder (Carsrud & Brännback, 2011). In 1971, Lennar Corporation completed its initial public offering. In 1972, the company’s common stock was listed on the New York stock exchange. Lennar Corporation acquired the U.S. Home Corporation in 2000, which made it expand its operation into regions such as Colorado, Virginia, Maryland and New Jersey (Carsrud & Brännback, 2011). Due to the various acquisitions made in 2002 and 2003, Lennar strengthened its position in the market and gained a competitive advantage over its rivals.

In early 2009, Lennar Corporation emerged as one of the largest homebuilders and financial provider in the country (Carsrud & Brännback, 2011). The company engages in construction activities and selling of single-family attached and detached homes. Also, Lennar Corporation provides multi-level residential buildings (Beilfuss & Kris, 2015). In 2009, the recent housing crisis in the country adversely impacted the stock price of the corporation. The concern of the company was to diversify risks and access the skills and knowledge of the joint venture partners. Although the company had been growing since 2006, in the last two years, it had suffered a sizeable reversal in revenue.

Key Issues

Based on the information from the SWOT analysis report, the following are the key issues that affect Lennar Corporation. First, the company has poor management, and this has resulted in its underperformance and below average valuation in the market. Second, the company faces the problem of multiple fraudulent activities and behaviors. The existence of fraud employees has negatively impacted the operation of the company. Third, the company faces the problem of financial weakness thus unable to finance investments.

Alternative Solutions

First, Lennar Corporation should hire managers who have the required management skills and can motivate employees to improve their performance. The company is underperforming; therefore, it would be appropriate to employee people with skills and experience to handle the management position.

Second, Lennar Corporation should make use of the joint venture partnership to access finance from financial institutions. The importance of a joint venture is that the company can access funds to finance investments off balance sheet.

Third, the company should implement internal control to help detect and prevent fraudulent activities. The internal controls will safeguard the assets of the company and ensure the integrity of the accounting records.

Selected Solution to the Problem

Since most of the problems the company is facing are due to poor management, it is appropriate for Lennar Corporation to hire new managers who have the required management skills to run the company. The new management should be able to advise the company on financial matters and prevent fraudulent activities (Schraeder, Self, Jordan & Portis, 2015). With new management in place, employees can be motivated to improve their performance since the company is currently underperforming.

Implementation

The top management can hire managers with enviable track records from other firms. Managers with good records have knowledge on marketing strategies and management of the organization. Second, the company can advertise the management positions promote employees within the organization. The company will examine the performance of the existing employees and determine whether they qualify to fill the vacant position. The human resource department can screen employees and select those who are highly qualified to run the company.

Recommendation and Conclusion

My recommendation to Lennar Corporation is that they should have good management to avoid such as fraud, financial problems, and underperformance. The success of a company depends on the effectiveness of its management team (Schraeder, Self, Jordan & Portis, 2015). With good management, the company will make right decisions on financial matters. Similarly, the company can exploit any existing opportunity. Lastly, good managers will protect Lennar Corporation from fraudulent activities and other threats.

References

Beilfuss, L., & Kris, H. (2015). Lennar top expectations, as housing market continues to improve. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/lennar-tops-expectations-as-housing-market-continues-to-improve-1442831939

Carsrud, A. L., & Brännback, M. (2011). Understanding family firms: Case studies on the management of crises, uncertainty and change. New York: Springer.

Schraeder, M., Self, D. R., Jordan, M. H., & Portis, R. (2015). The functions of management as mechanisms for fostering interpersonal trust. Advances in Business Research, 5(1), 50-62.

Appendix

Figure 1. SWOT Analysis based upon the topic of the week for the company case.

Strengths

1. Innovative
2. Intelligent resources such as financial analyst
3. Leading company

Weaknesses

1. Financial weakness
2. Poor management
3. Reduced employee morale, commitment and leadership

Opportunities

1. New markets
2. Partnership
3. Competitive strength

Threats

1. Fraudulent activities
2. Stiff competition
3. Environmental ethical issues

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