Case Study Acm Corporation

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ACM CORPORATION
ACM CORPORATION
OB/HRM
Submitted to: Prof Fareedy
Submitted by:
* Hira Khalid
* Khawar Nafees
* Nida Rasheed
* Sehrish Atta

OB/HRM
Submitted to: Prof Fareedy
Submitted by:
* Hira Khalid
* Khawar Nafees
* Nida Rasheed
* Sehrish Atta

Lahore School of Economics
Lahore School of Economics

ACM CORPORATION
INTRODUCTION
An overview of the organization
ACM was a highly diversified firm with operations extending across the broad areas of defense, producer durables, and consumer durables. Initially it was a small medium sized one-product firm , diversification resulted to multidivisional organization of 17 major operating units , which were acquired during the period ranging from (1957-1968), that was roughly estimated as 1 acquisition per year. These included Indiana Frame, Prichard Engineering , Bay City Controls , Hartwell-Farmer , LJW Aero , LJW Division , Michigan Metal Products , Wing field products , Bradford Fibers , Wallace Engineering , Construction Supply ,American Casting , Industrial Casting, Industrial Castings, T.N.X, Western Foundry, Under shaft & Short, Commercial Castings. In 1968, about 32% of ACM’s total sales went to automotive industry, 31% in capital, 11% in rail road equipment, 12% in construction supplies, 7% consumer goods and 7% in aerospace and defense. Early in 1969, Mr. Harold S. Briggs was elected as the president. He recognized that maximum divisional autonomy was what characterized the management and perceived that better divisional planning and more effective communication between divisions and corporate office might have helped to avoid operating problems that were currently faced by the firm. Later, diversification presented the top management with the problem of guiding a diverse set of divisions, the markets and technologies of which were by and large unrelated to one another. All corporate and group level managers had their own offices which were located in 14 different cities across the country. ACM operated 30 plants in 23 cities From the inception of its diversification program ACM’s corporate office had followed a management concept aimed at considerable decentralization and divisional autonomy with the power vested with general manager for insuring that their plans and results were consistent with overall corporate goals and funds requirements. Several organizational devices were implemented to ensure corporate divisional corporation which included organizational structure, formal planning and control devices, and the performance evaluation system. Mr. Briggs job entailed selecting, motivating, and evaluating eight division’s general managers- and not on the basis of day to day contact. To maintain control over earnings and fund flows, corporate management had set up three major reporting requirements for the divisions- the annual budget, the five year plan and the project approval system. The budgeting process was notable both for its informality and for the limited contact required between headquarters and divisional personnel. The primary purpose of the five year plan was to induce the divisions to consider longer term issues of strategy and forecasting rather than to provide firm objectives against which performance would be measured. There was a pattern of decision typical for projects at different organizational levels with reference to expense and capital project. Performance appraisal system was also developed and divisions were evaluated on their ability to achieve annual and long term improvements in their sales, profits, and return on investment. Nine measures of historical performance were employed. Bonus payments rarely extended more than one organizational level below the divisional general manager. Management inventory system intended to serve 2 purposes; provided the headquarters with information for negotiating interdivisional transfers of personnel and to induce the divisions to approach the issues...
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