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Home / Questions / THE FRANKLIN COMPANY BACKGROUND The Franklin Company, a medium-sized company with about 1,800...

THE FRANKLIN COMPANY BACKGROUND The Franklin Company, a medium-sized company with about 1,800...

THE FRANKLIN COMPANY BACKGROUND The Franklin Company, a medium-sized company with about 1,800 employees, manufactures radar units for use in small aircraft and police cars.The company is more than 90 years old and initially manufactured wind vanes and lightning rods, but since World War II it has manufactured only radar units. Growth in stales has been stable over the past four years, and profits have decreased slightly, as contrasted to the previous 20 years of steady growth in sales and profits. Industry sales continue to show a steady growth, but new competitors have entered the field with new products and features, cutting into the firm’s market share. Franklin has 12 distinct products with an average of three different models per product. New products have been brought online but usually several years after the younger competitors. To make matters worse, several Franklin key managers, researchers, and salespeople have joined the competition. The current abbreviated organization chart is shown in Figure 8.4. All of the company’s operations are conducted from the one site. Salespeople are also


physically based at the plant, but they make calls throughout the United States. The president has called in an OD practitioner team to diagnose and propose solutions to the current problems. ROLE DESCRIPTIONS (READ ONLY YOUR ROLE) President. You have been the president of Franklin for the past 14 years, and in large part its growth and success have been due to your ability to select and motivate others.You are a college graduate and have attended many executive seminars. You have tried to apply these concepts to Franklin. You still maintain close contact with day-to-day operations because you believe in hands-on management. Over the past few years, growth has slowed, sales and earnings have declined, and turnover problems have emerged.You feel the rapid early growth may be the cause of current problems. You are convinced that the lack of coordination between the four operating groups is the major problem and that a more decentralized operation will help resolve this.You feel that a newer computerized management information system (MIS) may improve coordination and communication.You would also like to know whether doing business on the Internet would improve Franklin’s bottom line. You have asked the vice president of finance to look into MIS. You believe that the organization needs better morale and improved bottom-line results. Your vice president of human resources has suggested that you try something new: an organization development program. The vice president has invited a team of consultants to meet with your executive committee. You believe in modern techniques, so perhaps these practitioners can get the various members to find an agreeable compromise to solve the problem. Vice President of Human Resources. You have an M.B.A. and were brought in five years ago to serve in your current position. You see the key problem as poor structure, a lack of coordination among departments, weak managerial competence, and poor training at all levels. All of the other vice presidents worked their way up to their present positions, and you consider their professional managerial training somewhat remiss, with the exception of the vice president of marketing, who has attended many of your management-development training sessions.This is even more of a problem in the mid- and lower-level managerial ranks. You feel that the answer to the problem is a decentralized operation with increased integration and coordination between departments and a participative team style. You have read about OD and have talked to a colleague at another company who had high praise for its OD program. You have discussed implementing an OD program with the vice president of manufacturing, but there was little response. You feel a need to get conflicts out into the open where they can be resolved rather than each unit seeking its own best interest. A unified team effort is needed. You have attempted to initiate several training and leadership development programs. Managers, including some of the vice presidents, have undercut these programs.You got word that one VP was openly attacking the programs, even though the president has been strongly supportive. You suggested bringing in some OD practitioners in hopes of initiating some badly needed changes. Even though this might add to costs in the short run, you are sure that long-term effectiveness will be improved. Vice President of Manufacturing. You have been with the company for 22 years and have worked your way up through the ranks. You have a degree in engineering and feel that you are competent and run a tight ship, and that your department is the main rea son for the company’s past success. You believe that most problems are due to rapid growth that has resulted in loose structure, lack of coordination, and lack of control. You feel that the company has too many meddling staff managers (particularly in marketing and human resources) who do not contribute to profits and only cause problems for your managers. Several times the vice president of human resources has tried to discuss with you management practices such as leadership and some new kind of OD program. You listened politely enough, but you got several good laughs out of it at your department meetings. The management-training programs offered through the human resources division have been a waste of time, and you have told your people you prefer they stay on the job instead of going to more meetings. The vice president of marketing continually wants product modifications or comes up with some goofball idea for a new product. You have made it clear that you run manufacturing, and that includes R&D.You can’t run a smooth operation and keep costs down if you are constantly making special modifications. You believe you manufacture enough models to allow customers to find suitable products; if not, the customer can easily make some minor modifications.You have heard about just-in-time inventory being used in some companies but are against it at Franklin. Even though just-in-time inventory attempts to reduce rawmaterial inventory by having as little as possible of Franklin’s cash tied up in inventory, you are concerned that production lines will run out of critical items and cause downtime in manufacturing. You feel the solution is to move into a more highly centralized structure and appoint an executive vice president to centralize cost control (like yourself, for example) and lay off some of the deadwood. You’ve heard that the president has invited some OD practitioners in, against your advice. You do not know much about OD, but it sounds like pouring money down a rat hole to you. Besides, this OD business is a bunch of “touchy-feely” nonsense anyway, which is the last thing you need. Vice President of Marketing.You have been with the company for 10 years. You are a college graduate with a major in psychology, but you have gained your knowledge of marketing from experience.You feel that marketing is the major factor in the company’s growth, and if your product managers were given greater authority, they could turn the profit picture around. You see the major problem as the lack of communication among departments and the failure to utilize talented managers. You have tried to get the manufacturing division to make some special modifications in radar units, but they have been willing to comply only on very large orders, and then it generally took them so long that you almost lost several of the orders from your customers. Several of your product managers have met with representatives of manufacturing to discuss new product ideas, but nothing ever comes of the meetings until your competitors start marketing a similar product. Then it takes manufacturing a couple of years to design the unit. Your people are bringing back word from the field that the excellent reputation once enjoyed by Franklin is beginning to fade. It has been discouraging for you and your people to fight an uphill battle with the manufacturing division for new products, and the real kicker is learning that the competition comes out with your product idea. Sales have also been hindered, you believe, by a lack of an Internet presence. You know about companies that have Internet capabilities that tie in with ordering inventory automatically from suppliers, allowing customers to track the progress of their orders with expected delivery dates, and permitting salespeople in the field to see current inventory levels with projected delivery times. All of Franklin’s top competitors have well-developed Web sites. Despite the problems with the manufacturing division, you find that if you treat your people well,they will perform well for you.You have attended most of the management-training sessions offered by the human resources department and have encouraged, though not mandated, your managers to attend.Your department meetings even have follow-up discussions of the training sessions. Even though marketing has been accused of being run like a “country club,” you feel your department performs well.The answer, you believe, is to decentralize the firm into major independent groups and utilize more of the “whiz kids,” the young M.B.A. types, in product management by giving them more authority over product operations.You would like to see yourself as executive vice president over the product managers. You understand that some OD practitioners are coming in, and you see this as a great opportunity to implement your ideas. Vice President of Finance. You have an M.B.A. from a major school. This and prior banking experience led to your successful 17 years at Franklin. You instituted all the financial systems and made it a smooth operation. You feel that the problems are the result of too many changes in too short a time. The company has too many bright young kids and too many wasteful practices. You suggest going back to the basics by instituting a tighter, centralized system of financial control and cutting about 10 percent of the deadwood. With yourself as an executive vice president (with other vice presidents reporting to you), this job could be done.You would set up some basic company rules, then force the department heads to enforce them. You would like to see people be required to follow the chain of command.You have heard too many stories about people at lower levels cutting across the formal structure and meeting with employees in another division. This may sound good on the surface, but it usually screws up the operation later on. You would like to see all communications go up through their appropriate vice president and then back down the chain of command. This type of centralized control is necessary to coordinate everything.You believe there are too many committees throughout the company, and you find it amazing that anything gets accomplished. Further, with all these committees making decisions, it’s hard to figure out who to blame when something goes wrong. As far as you are concerned, a camel is a horse designed by a committee. Recently you have been reading in the finance journals about just-in-time inventory. Last week you talked to a colleague at another company who had nothing but praise for the just-in-time inventory at her company. The program works closely with suppliers of raw materials to ensure that inventory is delivered in time for the production line but not so far in advance that Franklin will have money needlessly tied up in inventory.The downside is that making the system tie in closely with suppliers could require a new management information system (MIS) with Internet capabilities. Franklin has a commercial line of credit to finance the inventory, but, of course, the lower the inventory levels, the lower the interest. Interest savings can boost the bottom line and help fund other needed projects. You realize that you are not as up-to-date on modern computerized systems as you might be. The president has asked you to look into a new MIS system and the Internet, but you have serious reservations about the technology.A new MIS system would call for a new computer, and you have heard horror stories about Internet-based systems and believe your current system to be excellent. As for the Internet, you don’t believe anyone would buy a radar off the Internet. You would like to avoid changes and keep things pretty much the way they are.You hear that some OD practitioners are coming, and your reaction is: “Why do we need them?” They represent just the kind of wasteful practice you oppose. OD Practitioner Guidelines. You hope to accomplish several things at this meeting:

1. To develop a practitioner-client relationship with all of the committee members.

2. To make a preliminary diagnosis of possible problems.

3. To gain support for a possible OD project and convince committee members of the advantages.

4. To introduce committee members to some of the goals of OD, by doing some process consultation during the meeting.

Jul 22 2020 View more View Less

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