The Wallace group is devised from three sub-groups as: Electronics, Chemicals and Plastics. Harold Wallace was the original owner of the electronics company, but now has 45% of the stock and runs the group as Chairman and President after acquiring the plastics company and then the chemical company. But each of the three groups is run by a Vice President. Recently, Hal Wallace asked Rampar to conduct a series of interviews with some key Wallace Group employees, in preparation for a possible consulting assignment for Rampar Associates. (Strategic Management and Business Policy, P 2-1)SWOT AnalysisStrengths:(1) Most of the sales are for the government, large quantity and stable.
(2) High technology products are very competitive.
(3) Chain supply from the internal groupsWeakness:(1) Profits mainly depend on the products which produced for the government.
(2) HRM & employee relation(3) other products rather than tactical equipments are not professional(4) Internal communication problemsOpportunities:(1) Technological development by competency the tactical productsprojects like Navy-A and OBT-37(2) Trends of the demand of other products(3) Trying to solve the current problem by hiring an outside consultant.
Threats:(1) High return from the government brings strong competition(2) Current management will limit the company’s future developmentMost important problemsFrom Frank Campell, Vice President of Industrial Relations, the problem is as the following: “moral is really poor here, Hal runs this place like a one man operation, when it’s grown too big for that. It took a palace revolt to finally get him to see the depths of the resentment. Whether he’ll do anything about it, that’s another matter.” In his interview, he also mentioned about the lack of communication with Harold Wallace about the management level, cause of the growth, the company has been forced to promote technical people to the management positions even they do not have any managerial experience. Also the current pay scales are not meeting the best performance for Wallace. This communication problem is also related to other department such as Human Resources.
Similarly, the Director of Engineering-Ralph Kane also tells about the HR problem and communication crises with other department (Chemical), he needs more experienced employees, because some of the current EEs were transferred to Chemicals and others are retiring. These are shutting down the company’s very important projects such as Navy-A and OBT-37.
The problem from Matthew Smith, Director of Advanced System is that “Corporate brass keeps making demands on me and others that don’t relate to the job we are trying to get done.” And some of the information that the Corporate requires are useless to the Electronics Group. He used an example of Marketing department, some of the information they need, will not be collected unless passing a certain period of time. The effective marketing strategies are the priority for his group.
RecommendationsThe Wallace group needs to reformat their corporate strategy as well. The corporate strategy currently in place is one that is useless to the growth of the company. In order to maintain a good performance in any of the three groups, Electronics, Plastics, and Chemicals, The Wallace Group must begin the new management development program. Currently, Mr. Wallace is president of all three groups. If change is going to happen, Mr. Wallace needs to bring in new Vice Presidents for each of these companies. Mr. Wallace can, if he so pleases, maintain Presidency of one of the three companies. However, for growth purposes he should allow new, experienced to take the position of President of the remaining two companies to move the companies forward. Mr. Wallace may still be the Chairman/President, so he will not giving up his power and shares.
Once new presidents are found, and they possess a forward thinking attitude, the company should begin to see growth. However, the problems do not end here.
Lastly, another problem The Wallace Group needs to address is the strategic vision. If The Wallace Group wishes to lift this tiredness from the company, it needs to develop a plan that helps employees feel accomplished and important. Top Management needs to project a feeling of passion onto the members of their groups. With management motivated and eager, the employees will become the same.
If the Wallace Group is willing to put these terms into action a turnaround should begin. Mr. Wallace will be quite pleased with the company growth and employee eagerness. Once the employees are excited about changes being made in the company, a production rise should follow. New executives in place, with forward thinking attitudes, will be able to project this eagerness to the employees. Furthermore, this forward thinking attitude will provide the strategic growth prospective discussed earlier. These factors must all come together; they will not work on their own. The Wallace Group can expect to see exciting changes within the company, once these actions have been executed.
In this case study the strategic decision-making process are used as following:For Strategy Formulation, the SWOT analysis was mainly focused on analyzing the situation for the company——–identification of a corporation’s distinctive competencies (the particular capabilities and resources that a firm possesses and the superior way in which way in which they are used, also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources. (Strategic Management and Business Policy, P 138)The strategy implementation: once we found out there are some communication and HR problems in the Wallace Group, my suggestions are building new management development program and change the Vice Presidents. These above are the implementations for the company.
Wheelen, Thomas L. & Hunger, David J. Strategic Management and Business Policy (11th edition)