Case Study
The Business Enterprise Trust
DO
MOTOROLA (A)
T
he vote was eleven to one and Robert Galvin stood alone. It was
1979 and Galvin, the CEO and President of electronics giant
Motorola, had just proposed to his Board of Directors that the firm make an extraordinary commitment to training its workers — from executives to shop floor employees. He recommended establishing a department devoted to educating employees with one major goal: improving product quality. Galvin had made the proposal in response to the rapid change and increasing competitiveness that engulfed the electronics industry in the late 1970s. The rate of innovation was staggering; most technical knowledge became obsolete within five years. International firms, most notably from Japan, were emerging as formidable competitors to U.S. companies such as Motorola.
But the Motorola Board, concerned with the time and financial resources such training would require, was not swayed by Galvin’s arguments. With Motorola still competitive in the industry and budgets tight, the other eleven Directors all voted against the expansion in training. As Chairman, Galvin knew he had the power to overturn the
Board’s decision. Training was something he felt strongly about, but was this a battle worth fighting?
T
NO
This case was researched by
Stephanie Weiss and written by Matt Kelemen, under the supervision of
Kathleen A. Meyer, executive director of The
Business Enterprise Trust.
9-996-051
CO
PY
Motorola
In 1979, Motorola was one of the world’s leading manufacturers of electronic equipment and components with $2.7 billion in sales (Exhibit 1:
1979 Earnings Statement). The company designed, manufactured and sold products ranging from semiconductors to stereo tape players.
Copyright © 1997 by The Business Enterprise Trust. The Business Enterprise Trust is a national non-profit organization that honors exemplary acts of courage, integrity and social vision in
DO
MOTOROLA (A)
T
he vote was eleven to one and Robert Galvin stood alone. It was
1979 and Galvin, the CEO and President of electronics giant
Motorola, had just proposed to his Board of Directors that the firm make an extraordinary commitment to training its workers — from executives to shop floor employees. He recommended establishing a department devoted to educating employees with one major goal: improving product quality. Galvin had made the proposal in response to the rapid change and increasing competitiveness that engulfed the electronics industry in the late 1970s. The rate of innovation was staggering; most technical knowledge became obsolete within five years. International firms, most notably from Japan, were emerging as formidable competitors to U.S. companies such as Motorola.
But the Motorola Board, concerned with the time and financial resources such training would require, was not swayed by Galvin’s arguments. With Motorola still competitive in the industry and budgets tight, the other eleven Directors all voted against the expansion in training. As Chairman, Galvin knew he had the power to overturn the
Board’s decision. Training was something he felt strongly about, but was this a battle worth fighting?
T
NO
This case was researched by
Stephanie Weiss and written by Matt Kelemen, under the supervision of
Kathleen A. Meyer, executive director of The
Business Enterprise Trust.
9-996-051
CO
PY
Motorola
In 1979, Motorola was one of the world’s leading manufacturers of electronic equipment and components with $2.7 billion in sales (Exhibit 1:
1979 Earnings Statement). The company designed, manufactured and sold products ranging from semiconductors to stereo tape players.
Copyright © 1997 by The Business Enterprise Trust. The Business Enterprise Trust is a national non-profit organization that honors exemplary acts of courage, integrity and social vision in