During the evaluation of the Wallace Group, it has come to my attention that several key factors are obstructing the growth of the company. The main issue in determining how these factors can be changed is by remolding the company outlook. It is imperative that The Wallace Group change their business perspective to a strategic choice perspective. This perspective utilizes an outlook such that the organization adapts to the changing world around them and maintains the outlook that they, themselves, hold the power to make that change possible.
The Wallace Group has maintained, for quite some time, Mr. Wallace as president of each of the company’s entities. This, however, is leading to some problems. With Mr. Wallace in charge of all operations he lost sight of problems and resolutions. It is necessary to bring into play a strategic management plan. With a strategic management plan the company will employ the “…input and commitment of lower level management… (Wheelen et al, 2004).” The top management will be responsible for forming groups of teams that will provide necessary plans to the company such as financial planning, and forecast-based financial planning. Furthermore these teams can implement and evaluate issues. Lastly, these teams can continually work on different scenarios throughout the year and problem solve as needs arise, contrasted to the out-dated five year plan.
The 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 foothold in any of the three industries, electronics, plastics, and chemicals, The Wallace Group must begin by re-designating presidents and vise-presidents of the individual entities using a hierarchy strategy. Currently, Mr. Wallace is president of all three entities. If change is going to occur, Mr. Wallace needs to bring in new 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, young blood to take the position of President of the remaining two companies to move the companies forward. Mr. Wallace may maintain a title of Chairman, thereby not giving up any power or forfeiting any of his 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. Another issue facing The Wallace Group is their need to evaluate current performance results. According to a letter to the shareholders, the dividends are less than the year prior, which were less than the year prior to that. It is uncertain what the dividends were this year, but the dividends were .15 last year and .25 two years ago, which means that the dividends are on a decline. The Wallace Group needs to begin generating more profits by, as previously stated, evaluating their performance results. Questions such as: ‘what can we do to cut back costs?’ and ‘how can we reorganize our corporate staff in all three entities?’ will help the company begin forward growth.
Lastly, another problem The Wallace Group needs to address is the strategic vision. “Presently, there is a mood of lethargy and drift within The Wallace Group (Wheelen et al, 2004).” 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 turn around 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.
Wheelen, T., & Hunger, J. (2004). Strategic Management and Business Policy. 9th ed. Upper Saddle River, NJ: Prentice Hall.