The Wallace Group Case Study

3710 WordsMar 26, 201115 Pages
Read "The Wallace Group," Case below and answer the following questions. 1. What is the most important problem facing the Wallace Group? 2. What recommendation(s) would you make to Mr. Wallace, and in what order of priorities? 3. How do you educate a manager to manage an organization as it evolves over time from an entrepreneurial structure to a more sophisticated and complex organizational structure? The Wallace Group By: Laurence J Stybel Frances Rampar, President of Rampar Associates, drummed her fingers on the desk. Scattered before her were notes. She had to put the pieces together in order to make an effective sales presentation to Harold Wallace. Hal Wallace was the President of the Wallace Group. He had…show more content…
The first major opportunity that seemed to satisfy his various requirements was the acquisition of a former supplier, a plastics company whose primary market was not defense-related. The company’s owner desired to sell his operation and retire. At the time, Wallace’s debt structure was such that he could not manage the acquisition and so he had to attract equity capital. He was able to gather a relatively small group of investors and form a closed corporation. The group established a Board of Directors with Wallace as Chairman and President of the new corporate entity. With respect to operations, little changed; Wallace continued direct operational control over the Electronics Group. As holder of 60% of the stock, he maintained effective control over policy and operations. However, because of his personal interests, the Plastics Group, now under the direction of a newly hired VP, Martin Hempton, was left mainly to its own devices except for yearly progress reviews by the President. All Wallace asked at the time was that the Plastics Group continue its profitable operation, which it did. Several years ago, Wallace and the Board decided to diversify further because two-thirds of their business was still defense-dependent. They learned that one of the major suppliers of the Plastics Group, a chemical
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