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The Business Enterprise Trust

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MOTOROLA (A)

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he vote was eleven to one and Robert Galvin stood alone. It was 1979 and Galvin, the CEO and President of electronics giant
Motorola, had just proposed to his Board of Directors that the firm make an extraordinary commitment to training its workers — from executives to shop floor employees. He recommended establishing a department devoted to educating employees with one major goal: improving product quality.

Galvin had made the proposal in response to the rapid change and increasing competitiveness that engulfed the electronics industry in the late 1970s. The rate of innovation was staggering; most technical knowledge became obsolete within five years. International firms, most notably from Japan, were emerging as formidable competitors to U.S. companies such as Motorola.

But the Motorola Board, concerned with the time and financial resources such training would require, was not swayed by Galvin’s arguments. With Motorola still competitive in the industry and budgets tight, the other eleven Directors all voted against the expansion in training. As Chairman, Galvin knew he had the power to overturn the Board’s decision. Training was something he felt strongly about, but was this a battle worth fighting?

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This case was researched by
Stephanie Weiss and written
by Matt Kelemen, under
the supervision of
Kathleen A. Meyer,
executive director of The
Business Enterprise Trust.

9-996-051

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Motorola
In 1979, Motorola was one of the world’s leading manufacturers of electronic equipment and components with $2.7 billion in sales (Exhibit 1: 1979 Earnings Statement). The company designed, manufactured and sold products ranging from semiconductors to stereo tape players. Copyright © 1997 by The Business Enterprise Trust. The Business Enterprise Trust is a national non-profit organization that honors exemplary acts of courage, integrity and social vision in business. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, recording, or otherwise – without the permission of The Business Enterprise Trust. Please call (415) 321-5100 or write The Business Enterprise Trust, 204 Junipero Serra Blvd., Stanford, CA 94305. Harvard Business School Publishing is the exclusive distributor of this publication. To order copies or to request permission to photocopy, please call (800) 545-7685 or write Harvard Business School Publishing, Customer Service Dept., 60 Harvard Way, Boston, MA 02163.

Motorola (A)

9-996-051

immortal words of Neil Armstrong — “That’s one
small step for man, one giant leap for mankind.”
The younger Galvin’s approach to Motorola’s
growth mirrored that of his father. Always trying
to anticipate change in the industry, Robert Galvin
believed that the company’s employees were its
biggest asset. Well before the Japanese concept of
“teaming” was in vogue in other American
companies, Galvin put teams of employees in
charge of their own work, requiring them to monitor
productivity, service and costs, and then rewarding
them for improvements.
Motorola was one of the first large U.S.
manufacturing companies to give employees
significant leadership responsibility. In so doing, it
abandoned the classic, hierarchical factory
organization. Managers encouraged openness and
participation on the shop floor. Motorola invested
heavily in research and development and gave
workers the responsibility to fix problems as they
arose. As Motorolan Orhan Karaali, Senior Staff
Engineer, explained:

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Employer to over 75,000 “Motorolans,” the
company operated 27 major facilities around the
globe.
The multinational powerhouse had been created
a half-century earlier as Galvin Manufacturing, a
start-up battery business that Paul Galvin and his
brother Joseph launched in Schaumburg, Illinois in
1928. By 1930, the team had made their...
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