Kranworth Chair Corporation

The current cost system allocates overhead costs once a year, as a function of direct labor dollars. This allocation strategy results in:

The motivation of the sales force is so low that they think that the district managers are no more that the baby sitters. No right schedule is being released by the management, there is no sales management planning in the organization. The leadership runs from the top. The employees just want to make sales without having concern about the company in that they work. Moreover, the uncertain night calls and long distance travels for the reps and frequent changes in the sales organizational structure has made problem even worse.

They should have centralized all decision making by removing power from the branch managers and return it to the corporate leadership. That leadership would then be in charge of reinventing and revitalizing the company’s product to society. They could then effectively review the most and least successful orders throughout the company as a whole. By using that data, and creating one company wide menu, it would allow for a more stable and customer friendly experience as each customer will know from store to store what is offered. There would be no questions as to what style branch they are walking into. Centralizing the decision making would help to unite each branch and establish the company to being a finally tuned chain that can withstand and adapt to every changing societal and economic challenges.

WATSON, G. and GALLAGHER, K. (2005) Managing for results. 2ND ed. London: Chartered Institute of Personnel and Development.

improved marketing and cost competitiveness. Based on the content and value of the job descriptions

Without efficient resource allocation & lack of communication between R&D and Brands, the conflict between departments generated in following steps. Even more, each steps make overall inefficient resource management.

Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all

4. Differentiation is under loose results control. Managers are given freedom for decision-making at their department, they can decide on design of the products, marketing methods, raw materials, etc. as long as they provide high quality environmental friendly products and quality customer services. However, they have the 3-5% growth limitations that prevent them from behaving “too well”. They are rewarded for the same percentage as employees if the company makes profits.

6. What lessons can we draw from this case about the challenges of pursuing a cost leadership strategy?

More fundamentally giving each division manager the responsibility of its divisions operations and not allowing it to interfere with other divisions.

The third is motivation, which supplies motivation for employees to develop and grow in the job by providing benchmarks during the year. The fourth is accountability, which creates accountability for employees and managers/supervisors. This will help all employees prioritize competing projects or initiatives for each individual or department. Managers conduct initial performance planning discussing with employees and provide direction through coaching sections. After the performance planning discussion, employee’s drafts performance plan for the manager’s review. This planning discussion is followed up by the employee finalizing his or her draft with his or her manager. Overall, managers/supervisors at each level develop specific goals that support department or team goals which in turn support the corporate and function/operational group scorecard metrics.

Chapter 2 Harvard Press Book (2006). Performance management: Measure and improve the effectiveness of your employees. (Chapter 2) Motivation: The Not-So-Secret Ingredient of High Performance. Harvard Business School Publishing. Cambridge, MA. Lynn, I., Hodge, Y. & Yemen G. (2007). Teamwork turmoil. University of Virginia Darden School Foundation. Beamish, P. & Jiang, R. & (2011). The Chinese fireworks industry. Richard Ivey School of Business Foundation. Kaplan, R.S. (2010). Leading change with strategy execution system. Harvard Business School Publishing. Cambridge, MA. Karkhardt, D. & Hanson, J. (1993). Informal networks: The company behind the charts. Harvard Business School Publishing. Cambridge, MA. Katzenbach, J. & Smith, D. (1993). The discipline of team. Harvard Business Review. President and Fellows of Harvard College. Kerr, S. (1995). On the folly of rewarding A, while hoping for B. Academy of Management Executive. 9 (1), 7-14 Download on class site Kramer, R.M. (2003). The harder they fall. Harvard Business School Publishing. Cambridge, MA. Montgomery, C.A. (2005). Newell Company: Corporate Strategy. Harvard Business School Press.

The main problem is with Woodson Chemical Company is the lack of management and communication across all divisions within the organization creating bottlenecks

Define the situation (case summary) Define the major issues, conflicts, and the network . Describe the options (alternatives) for solving these issues. Several internal and external influences serve as contributing factors in the reconsideration of the company’s current system. Changes in customer demands, domestic and global competition, and a unique decentralized management system is now forcing the Westminster Company to reevaluate their traditional supply chain practices. (Bowersox & M.B., 2014) Westminster’s domestic operations consist of three separate companies that sell and distribute products to several of the same customers. (Bowersox & M.B., 2014) At first glance consolidation of the systems can significantly improve

The company has to decide between the two locations based on their virtues, availability and higher margin of profit.