Wallace Group, Inc. Case

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(Case Study-The Wallace Group, Inc.)

ronald s. leabres


Masters in Business Administration
College of Business Administration and Accountancy
Central Luzon State University
Science City of Muñoz

February 23, 2011

The Wallace Group is devised of three operational groups which include Electronics, Plastics and Chemicals. Harold Wallace was the original owner of the electronics company, but now has 45% of the group after acquiring the plastics company and then the chemical company. He also serves as the Chairman and President of the Wallace Group, but each group is run by a Vice President. Recently, Hal Wallace hired Rampar Associates to put together an effective sales presentation. Included in the presentation would be set of priorities to focus on over the next year, a clear plan and the expense.

Frank Campbell, the Vice President of Industrial Relations, sums up the Wallace Group problem in a simple statement. He said, "Morale is really poor here. Hal runs this place like a one man operation, when it's grown too big for that." Frank also mentions that it took a the entire company revolting against him to finally make the President take action. Therefore, the most important problem facing the Wallace Group, is Harold Wallace himself. However, the problems do not stop there. In his interview, Hal mentions two key factors also contributing to his bad business etiquette.

First, Hal admits he never listened to his key people when they complained. This means there has been no communication and feedback taking place between the corporate staff and the groups. As such, there is a tug of war happening over corporate strategy demands and those strategy plans met for the groups themselves.

Another result of the communication collapse has been a rivalry between group departments. Phil Jones, Director, Administration and Planning says that he feels talks of expansion aren't serious. Not only are opportunities being passed up due to a lack of communication, but Jones's reputation was "damaged" due to lack of response to a bid. This could potentially cause problems for future bids.

Similarly, Burt Williams, Director of Operations feels that the Wallace Group is holding back Electronics because they are "encouraged" to buy from Chemicals and Plastics, which have high prices due to manufacturing problems. This is causing both a loss of profits and hindering expansion plans "...into non- defense areas." Thus, the company has made little progress and the groups continue to miss out the opportunity grow within themselves.

The second problem Harold recognizes is their problem with personnel. The Wallace group has grown so fast, that there has been no time to organize. As stated on The Wallace Group Case, most positions held by the corporate staff are "recent additions, many of the job accountabilities are still being defined." The same type of problem is apparent in the groups. In Frank Campbell's interview he states that the rapid growth of the company forced technical people into management positions that they aren't qualified or experienced to uphold.

Furthermore, Mr. Wallace is, in the words of Brad Lowell " ...tight-fisted..." and "won't let us hire the people we need!" Mr. Campbell backed this statement in his interview by saying that "management development programs" should be implemented, due to the lack of experience among the current managers. However, Mr. Wallace "vetoed" the idea because he said it was too expensive.

The last area of personnel problems is pay scales and job specs. Mr. Wallace expects experienced, well qualified candidates to be hired, but cannot afford to pay them competitive wages. On top of that, the job specs laid out for the positions are so demanding that one candidate is now suing the company. In fact, Ralph Kane is expected to hire new EE's below the salary grade midpoint. When in reality, most new EE's...
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