Mr. Wallace, I have concluded my interviews with your team and have a list of recommendations based on priorities. The recommendations are unbiased and not intended to be personal attacks on the current management; they are based on the sound management principles and intended to maximize your company’s potential. a. Realign the corporate structure. Begin by recruiting a new board of directors using outside directors, “executives of other firms but are not employees of the board’s corporation”1, in addition to a limited number of management directors from inside the company.
This combination of three companies working as independent entities is not working, they must be integrated and a different management organizational structure must be implemented. This group will be able to accomplish the next recommendation. b. Develop a mission statement and goals. The company must embark upon strategic management planning. This will include: •Clearer sense of strategic vision for the firm •Sharper focus on what is strategically important Improved understanding of a rapidly changing environment1 The Wallace group lacks vision and goals for its divisions and this leads to a lack of direction for the management team. A mission statement “defines the fundamental, unique purpose that sets a company apart from other firms of its type and identifies the scope of the company’s operations in terms of products offered and markets served”1. This business must develop a corporate wide strategic management plan to set a direction for the company and its shareholders.
A part of this management planning would consist of SWOT analysis, strategy formulation, implementation and evaluation. This process is often referred to as Plan – Do – Act – Check or PDAC and is a continuous process. Making a profit today is not enough; there has to be an evaluation of where the company is now, where will it be in 2, 5, & 10 years and how the company will attain those goals. c. Change the organizational chart: There needs to be an in-depth evaluation of the personnel currently in place.
The current chart is one of vertical structure and should be revamped to be more horizontal. This accomplishes the goals of empowerment and coordination between the divisions. A glaring problem is the VP of the chemical division, J. Luskics, as he was the former owner that guided the company into foreclosure and appears to not be running the division efficiently now. The chemical division is not even internally competitive for the plastics or electronics divisions. Mr.
Luskics should either be bought out of the company or reassigned to a position that he might be successful. There also is a redundancy among positions in the company, for example there are three directors of industrial relations, these positions should either be combined or incentivized to cooperate in the best interest of the company. d. Personnel development. There is no apparent leadership development in place and the company has relied on promoting technical staff to management positions which many are not equipped to handle.
There needs to be a leadership development series initiated, leadership retreats to communicate and encourage relations amongst the teams, and perhaps some Management Assessment of Proficiency (MAP) testing to asses the current management team. Management development and succession planning must be implemented to ensure long term success. Job responsibilities need to be developed and implemented for all positions but specifically for the management team; including specific goals, budgeting, forecasting (long range planning), training, and staff satisfaction. . Communication. The lack of clear strategies, long term plans, goals and objectives has led to the recent revolt at the stockholders meeting. This is a clear indication of the frustration felt from the staff level up and the new direction of the company must be clearly communicated to all staff. Enthusiasm is contagious and the presentation of a new course for the company will be very exciting for staff. Employee surveys, suggestion boxes and an engaging of the front line staff will do much to improve morale and spark improvements.
I would like to commend you sir for creating a successful company but I do believe there are concrete steps that you can take to improve the future of this company. Mr. Wallace I believe the development of a vision will produce great results, with this vision you will attract personnel that want to be a part of a great company and profits for all involved will naturally follow. Remember “Visionary companies make some of their best moves by experimentation, trial and error, opportunism, and – quite literally – accident”2.
I estimate that this plan of action will initially cost $1. 5 million but there will be cost savings realized in personnel reassignments, recruitment and retention, productivity, and a renewed sense of commitment that will be reflected in profits far surpassing the costs.