Sigtek is a small telecommunications company located in the New England region. Sigtek was founded by three Western Electric veterans to produce circuit boards for signal handling which it sold to AT&T and other long-distance providers. Sigtek had been acquired by a large technology company for about 10 years. The company practiced a laissez faire approach in managing Sigtek. Prior to their acquisition by Telwork, the profit margin sky-rocketed to nearly $100 million with 1,000 employees only to collapse to about 800 employees and $40 million a couple years after. The rapid increase and decline in the profit margin was due to the deconsolidation of long-distance providers, mainly AT&T, and the influx of startup switch board manufacturers, due to easy entry into the market niche.
In November of the year Telwork took over operations, they began formulating a Total Quality program based on a highly acclaimed model not only to improve product quality and encourage management practices, but also to gather all of the scattered and diverse companies they owned under a single corporate umbrella. In April, they were ready to train instructors for the Total Quality program; John Smithers would be the candidate for Sigtek. Smithers was uneasy about taking on an instructor role due to the separation he had felt in the company, the differing corporate culture between his boss, Cross and Patricof. Smithers was more than adequate to assume the role, his experience with small computer start-up companies and his own work within the company were examples of his strong management abilities. There were multiple barriers along the way for the Total Quality management program. After attempting to make the program a success Smithers stated, “the writing is on the wall” he asked to stop teaching but management would not allow this to happen because he was “too valuable and had too many followers to lose.” Smithers found himself updating his résumé in December of that year, lamenting, “I got into an organization where I thought I could accomplish something, I found a good mentor, but it didn’t work.” He asks, “Could I have done something different?”
The problems that Sigtek face as a corporation, having been bought by Telwork, are largely centered on management and their approach as well as the one used to implement the quality program. With the merging of such companies, blending corporate culture and creating cohesion should be a priority, which management failed to do. The implementation of such a plan by Murphy and Smithers failed for various reasons including the lack of a unified corporate culture and cohesion from the management department as a whole. As explained in the case, management perceived problems such as the components bouncing out of the boards as insignificant and focused on apparently more important issues.
Failure to successfully implement the quality program led to a downward spiral resulting in an “untrusting environment.” Furthermore, the “cookie cutter program” was implemented to a team that had not yet been formed. Changing corporate culture and, in addition, creating a cohesive workforce in that culture is a gradual process that cannot be accomplished immediately through classes. The integration of initiatives in the quality program at Sigtek requires a cultural assessment by managers and a high degree of leadership in the organization, which Smithers and Murphy lacked. In short, the company was not ready to manage organizational change.
There is a deep organizational gulf which divides the company – specifically between the Engineering and Manufacturing operations. Furthermore, the groups are also physically divided by a long hallway between two separate buildings. Smithers feared the deep divide would make any changes very difficult. Additionally, Richard Patricof only promoted those who parroted his beliefs or rarely questioned him. It appeared that Patricof was also...
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