THE PRACTICE CASE
INSTRUCTIONS: The practice case enables you to sharpen the ideas and methods you have studied by applying them to a realistic business problem. The answers you provide to the questions are not submitted to Course Service for grading. Rather, as its name implies, the practice case gives you the chance to practice for the examination case by having you put your newfound knowledge to work through analyzing and solving problems in a realistic setting.
After reading each section of the case, summarize and analyze the situation as it has been presented. Ask yourself” What is really going on herd “Then, read and answer the review questions. Remember that the actions taken in the case are not necessarily the only possible or justifiable ones. (They may not even be recommended courses of action.) Very rarely does any business problem have just one correct answer.
FRAMING MANUFACTURING, INC.
Expectant faces turned toward Jennifer Miller when, on the dot of one o’clock, she walked into the conference room. Every manager was waiting. “Too many chiefs,” she had said the first time she had seen the company’s organizational chart (Exhibit PC–1). Now all the chiefs were gathered for the powwow she called.
Framing Manufacturing, Inc., a metal forms company employing 853 people, was in deep trouble when D &W Enterprises took over. Ten years of mismanagement by a strong-headed, strong-willed CEO had turned a potentially profitable company into a bankruptcy court nightmare, losing a quarter of a million dollars annually for the last three years. Despite the weak state of the construction industry, the company’s niche market products showed great promise, and D & W sent in Miller to deliver on it.
Having been on the acquisition team, Jennifer knew Framing from the inside out. Months of study—reading management control reports, talking with the managers and the production workers, and looking over the physical plant and equipment—gave her a good feel for the company, which she knew she could turn around. Still, she refused the position of president of Framing unless D &W’s management guaranteed they would give her complete control for two years and would continue to leave her alone for another two if Framing showed any basic signs of progress after the first two years were up.
EXHIBIT PC-1 MANAGEMENT STRUCTURE OF FRAMING MANUFACTURING, INC.
THE MANAGEMENT MEETING
“I don’t have to tell you,” Jennifer said after greeting everyone and inquiring into how things were going. “We’re faced with some grim challenges here. Now, I need us all to do some clear-headed and tough-minded thinking as to how we’re going to turn our company around.” Everyone stared vacantly at Jennifer’s face, waiting for her to go on. The blank stares turned to puzzlement when she asked, “Who owns this company?”
When no one answered, she turned to the corporate secretary on her left. “Fred? Do you own stock?” Fred nodded. “Alicia?” Alicia nodded. “Bill? Charlie? All the rest of you? Own stock?” When they all nodded, she leaned forward on the table. “Then since you own the company, how will you manage it? Take a look at the organizational chart. How can we streamline it? Look at the losses: sales flat, costs rising. What can we do to reverse those figures? Customers demand late delivery penalties and vendors demand cash; obviously customer and supplier confidence has eroded. How do we regain their trust? What can we do to increase productivity, reduce waste, and improve employee morale—before some union gets a good notion to organize our workers?
“Ladies and gentlemen, Framing is our company. It belongs to you, to me, and the people out there making the construction forms we sell to builders and contractors. Whether we live or die depends on all of us working together. So let’s work together to live, to grow, and to prosper.
“We have one simple goal to achieve in the next two years. Increase profitability. Show black ink in each of the two years. Can you give us 30 percent by year’s end? Forty-five percent in the next year? If not, why not? If so, how? What rate of growth will that much gain require? How much productivity gain will we need? Sales growth? How can we cut our enormously out-of-proportion costs? How do we improve our return on assets?”
Jennifer relaxed as she made the staffs assignments. “A week from today, at one o’clock, I want us back here to discuss ways to attack the challenges our company faces. Each of you has a packet of management reports and assignments to take back to your areas. Bring back plans for how your area can contribute to Framing’s turnaround. From there we can put together a two-year business plan.
“Don’t try going it alone. Call your people together—management and non-management alike—even if you have to shut down for a couple of hours each day for problem identification. Talk among yourselves. See how your perceptions line up with each other. Tap all your resources.
“That’s what I want, ladies and gentlemen. I want to see Framing turn around. I want to see you and your employees turn it around. I’m available to you to consult and to answer questions. You’re all qualified for your jobs, so do them and do them well.”
REVIEW QUESTIONS
1. Referring to the Introduction and to Chapter 6, explain transformational leadership and whether or not Jennifer Miller’s behavior reflects this management style.
2. If you think she succeeded in assuming a transformational leadership role, how did she do it? If not, what do you recommend she do differently?
3. On which of the team’s dynamics—task or process—do you think Jennifer concentrated? What behaviors did she use for achieving the team’s goals? Which did she use for getting the team to work together more effectively and build relationships?
4. If you think Jennifer blocked the team’s task and process dynamics in some way, identify the behaviors that could have erected barriers.
STOPPAGE
During the week that followed, productivity dropped by over 40 percent, but Jennifer was prepared for that. What she had not anticipated, however, was that no one came to see her, whole departments seemed to shut down both their production and their communication, and meetings turned into shouting matches. Framing Manufacturing, Inc., was grinding to a halt.
Jennifer knew Charlie Mason, the VP of manufacturing, best among the management team. They were close neighbors; their children even attended the same schools. It had been Charlie, in fact, who led the effort to get D & W to take control of Framing.
Given that outside relationship, Jennifer felt comfortable walking into Charlie’s office late Thursday afternoon and asking, “Got any ideas as to what’s going on here?”
Sitting back in his chair, Charlie momentarily considered shrugging, but thought better of it. “You’ve asked the natives for too much too soon. They don’t know how to do what you want.” When he saw that Jennifer was waiting to hear more, he went on. “Wollen didn’t manage, he ruled. Communication, when we had any, was top down, domineering. You’re asking us to do things in reverse. I can’t remember the last time I talked with a machinist. In my first meeting with my foremen, the reaction was, ‘Hey! You can’t blame us for what’s happening here.’”
“That’s what they thought?”
“That’s what they thought. And worse. When I asked for suggestions as to what to do to turn things around, I got, ‘Miller ought to fire the whole bunch of you and start over.’ They don’t see what’s in it for them to improve our profits, and I don’t think their bosses do, either. There’s no motivation to change here.”
REVIEW QUESTIONS
1. What do you think Jennifer could have done first, before sending the management team out to the floor “to meet Framing’s challenges”?
2. If the foremen do not trust the managers, what can Jennifer do to create trust?
3. If Wollen, the company’s former CEO, used a domineering style of communication, what kind of style do you think Jennifer is trying to use and what do you recommend she do differently to get better results?
REGROUPING
“I’m trying to build a sense of teamwork here,” Jennifer responded. “Only then can we build real teams. Anyone should be able to see that it won’t take much to turn each work unit into a production team instead of a bunch of independent workers; the nature of the work itself lends itself to that approach.” Jennifer saw the look of skepticism on Charlie’s face; it said, you’re evading the issues. “Okay. I guess we need some outside help, but, Charlie, I know we can do it.”
REVIEW QUESTIONS
1. Thinking back over the course, what company comes to mind when you read, “[It] won’t take much to turn each work unit into a production team instead of a bunch of independent workers; the nature of the work itself lends itself to that approach?” What do you recall of that real-life case with respect to what they did to turn things around?
2. What steps do you think Jennifer should take to help the line managers and non-management personnel understand what she is asking them to do?
3. Considering some of the objective tools available to team managers—such as Gantt charts or PERT charts—how can Jennifer use goal-setting and problem-solving techniques to help her managers accomplish the company’s objectives?
4. What do you think of Jennifer’s decision to call in outside help (such as a consultant)? Why or why not?