The Wallace Group is a company that manufactures and develops technical products and systems. It has three primary operational groups consisting of electronics, plastics, and chemicals. By far the largest asset of the Group is the electronics. This asset is approximately the size of both the plastics and chemical groups of the corporation. It also contributes the most to the net income at approximately 70%. The plastics and chemical divisions were acquired for the purpose of diversifying the income of the corporation from the original electronics group.
The Wallace Group currently faces some problems with it company in relation to improper management. To begin with, the company seems to have difficulty in the hiring process. It seems that the company is focused on cutting cost rather than looking for effective employment solutions. For example, instead of creating a management developing program to train and recruit managers, the company relies on promoting technical staff. The cost cutting approach is also impeding the hiring of qualified engineers. The company focuses on hiring employees at the least possible salary as an alternative to paying the required amount for qualified expertise. Another issue that arises is un-standardized methods of collecting data and presenting information. For example both the vice president of marketing and the director of advanced systems collect and utilize data for marketing purposes. Their problem lies in the fact that both managers are using different data and formats for essentially the same purpose, and therefore they create redundancy and higher workloads. By far, the most crucial problem facing the group is the lack of vision and direction from the president, Mr. Wallace himself. His diversification program that resulted in the acquisition of the chemical and plastics divisions lacked forward looking vision. He simply required the companies to maintain a profitable operation without any direction to improve.
In terms of priority, I would first recommend that the Wallace Group implement a corporate governance policy familiar to a business of its size. This would require that the company adopt a board of directors. A board of directors has five responsibilities:
1. Setting corporate strategy, overall direction, mission, or visio...
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... management techniques from them. This is particularly solid approach since the methods employed have already been tested and the results can be predicted. The other theory I would use to educate Mr. Wallace is the organizational learning theory. It states that “…organizations adjust defensively to a changing environment and use knowledge offensively to improve the fit between the organization and its environment.” (Wheelen, pg8) To utilize this theory the company must respond to the changes to reduce negative impacts and position itself to take action. This allows for the company to essentially learn from its environment and lead to its own innovations in strategic management.
References
Wheelen T.L., Hunger J.D., Strategic Management and Business Policy Prentice Hall, Upper Saddle River, NJ (2004)
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http://search.epnet.com/login.aspx?direct=true&db=bsh&an=17226667&loginpage=Login.asp
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Restructure the company and clearly define job responsibilities. This would result in a more efficient operation within and between departments and ensure that people know exactly who is responsible for what tasks. This would also reduce the need for Mr. Wallace to get involved in settling disputes and improve the overall moral among the managers.
Many people believe that in order to succeed in a business that is having difficulties, it is important to focus on a particular area in order to be better productive in each of them, and be able to reach the goal. Instead, Goldratt and Jonah demonstrates that is important to focus on the company as a whole, but at the same time, it shows that it is incorrectly to only focus in an specific manufacturing department, or one plant, or a department within the plant, because people should not be concerned in local optimums.
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The main problems that are affecting the company were the high level of labour turnover, below target production rates, high levels of scrap, the employees had little input in the decision making, therefore resulting in low motivation and job satisfaction, and didn't have enough feedback on there performance. Added to this was the conflict between the supervisors and employees in the production and packing areas, and the grading and payment levels wasn't satisfactory to the employees.
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