growth was largely the result of an economic upswing and increased demand from defense and aerospace industries during the mid- and late 1980s. Woodward Governor's sales leapt 13 percent in 1987 to $275 million as net earnings rose 37 percent to $24 million. By the end of the decade, moreover, the company was generating more than $300 million in revenues annually. Although Woodward Governor was helped by strong markets during much of the 1980s, its success was also attributed to its proven management style, which was getting increased attention within American industry as a result of the company's ability to compete with Japan and other countries. As it turned out, Woodward Governor had long been practicing management techniques (such as employee empowerment and performance-based incentives) that were emerging as major trends in the 1980s. For example, the company's president received only $247,000 in total salary and bonuses in 1986, in keeping with the company rule of not making more than ten times the amount of the lowest job category. Likewise, new Woodward Governor employees were brought into the company by way of a solemn ceremony; other employees attended, and even joined in prayer, as the new employees were inducted into the Woodward "family." Finally, while Woodward Governor's workers received only about 80 to 90 percent of the salary of their U.S. industrial counterparts, their bonuses consistently placed them well above the national average in compensation. Early 1990s Setback
Woodward Governor entered the 1990s with record sales and profits; revenues hit $362 million in 1991. Unfortunately, waning defense and aerospace markets were beginning to take their toll on the company's bottom line. Woodward Governor had been trying to reduce its dependence on the aircraft market since the mid-1980s, when over 60 percent of sales were attributable to that sector. But by the early 1990s the company was still getting more than 50 percent of its revenues from the...
Please join StudyMode to read the full document