THE MERIT CORPORATION 1
THE MERIT CORPORATION
Family-owned and -operated for three generations, the Merit Corporation manufactured and sold children’s furniture. John Kirschner, Merit’s CEO and grandson of the company’s founder, was actively involved with every aspect of the firm’s operations. Now, as he was considering early retirement in the next few years, he began to think about his legacy for the future.
Merit’s headquarters and the biggest of its three manufacturing plants were located in an industrial park 10 miles outside of Boston. Merit shared the large six-story building with several small firms, having its corporate offices on the second and third floors. Employees began work promptly at 8:30 a.m. and most left before 6:00 p.m. A devout family man, Kirschner firmly believed that coming in early or leaving late were signs of ineffectiveness. He set the standard himself, just as his father and grandfather had before him, pulling into the parking lot precisely at 8:30, and, with rare exception, pulling out before 6.
An advocate of “managing by committee,” Kirschner also emphasized development from- within and continuous technical and managerial education. Over the years, for example, he had sent a number of his top people to Harvard’s Advanced Management Program. Merit took pride in and was renowned for its generous employee benefits; indeed, many companies in the area used Merit to benchmark their health and pension plans.
Turnover was generally low, and employee morale was high. In a departure from the company’s philosophy and traditional practice, however, Kirschner had in recent years brought in carefully selected middle managers from outside the firm and the industry. Some even had MBAs.
Although Merit held a dominant position in the upscale juvenile furniture market, the primary driver of its profits, Kirschner believed the company was increasingly vulnerable in one area: new product design. Traditionally, temporary task forces had handled such work, with line managers
Family-owned and -operated for three generations, the Merit Corporation manufactured and sold children’s furniture. John Kirschner, Merit’s CEO and grandson of the company’s founder, was actively involved with every aspect of the firm’s operations. Now, as he was considering early retirement in the next few years, he began to think about his legacy for the future.
Merit’s headquarters and the biggest of its three manufacturing plants were located in an industrial park 10 miles outside of Boston. Merit shared the large six-story building with several small firms, having its corporate offices on the second and third floors. Employees began work promptly at 8:30 a.m. and most left before 6:00 p.m. A devout family man, Kirschner firmly believed that coming in early or leaving late were signs of ineffectiveness. He set the standard himself, just as his father and grandfather had before him, pulling into the parking lot precisely at 8:30, and, with rare exception, pulling out before 6.
An advocate of “managing by committee,” Kirschner also emphasized development from- within and continuous technical and managerial education. Over the years, for example, he had sent a number of his top people to Harvard’s Advanced Management Program. Merit took pride in and was renowned for its generous employee benefits; indeed, many companies in the area used Merit to benchmark their health and pension plans.
Turnover was generally low, and employee morale was high. In a departure from the company’s philosophy and traditional practice, however, Kirschner had in recent years brought in carefully selected middle managers from outside the firm and the industry. Some even had MBAs.
Although Merit held a dominant position in the upscale juvenile furniture market, the primary driver of its profits, Kirschner believed the company was increasingly vulnerable in one area: new product design. Traditionally, temporary task forces had handled such work, with line managers