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Grayson Chemical

In: Business and Management

Submitted By valkyrie87
Words 1202
Pages 5
Case Study:

Grayson Chemical Company
Presented by: Allan Bermudez Marlon Abito Zarny Zaragoza

CASE STUDY: Grayson Chemical Co.
Executive Summary:
Grayson Chemical Co, a 40-year old company manufactures industrial chemicals sold to other industrial companies. It has been run by a stable management in which there had only been two presidents. However, within the past few years, the company is suffering from declining earnings and sales. This has brought pressure from the board of directors, investment bankers, and stockholder groups to name a new president. The company had become stagnant – (although at Grayson, they refer to this as conservative) and had steadily lost market standing and profitability. Finally, the board decided to hire a new CEO and was able to hire a dynamic manager from another major corporation.

CASE STUDY: Grayson Chemical Co.
Tom Baker, 47 and an MBA, has helped his former company into a leadership position. He has chosen to join Grayson after another executive was chosen for the top job in his former company. Baker knows what he needs to do and that is to develop a topnotch management team that could provide leadership to turn the company around. Unfortunately, the situation at Grayson is not very favorable. Decisions are made by the book or taken to the next higher level. Things were done because “they have always been done this way,” and incompetent managers were often promoted to higher level jobs. Baker met with three members of the board. Each of them had a different advice to offer to tom.

CASE STUDY: Grayson Chemical Co.
Robert Temple said: “You can’t just get rid of the old organization if you want to maintain any semblance of morale. Your existing people are all fairly competent technically, but it’s up to you to develop performance goals and motivate them to achieve these standards. Make it clear that achievement will be rewarded and that those who can’t hack it will have to go.” James Allen noted: “You need to bring in a new management team. Probably only six or so, but people who know what top management means, people who are using innovative methods of managing and, above all, people you trust. You cannot retread the old people, and you don’t have time to develop young MBA’s, so you need to bring your own team even though it might upset some old timers.”

CASE STUDY: Grayson Chemical Co.
Hartley Ashford said: “Sure, you’re going to have to bring in a new team from the outside, but rather than bring in people you’ve worked with before, bring in only managers with proven track records. People who have proven their ability to lead, motivate, and perform from different industries. This way you’ll get a synergistic effect from a number of successful organizations. And the old people will see that favoritism is not the way to get ahead. So get a top performance team, and if you lose a few old-timers, so much the better.”

CASE STUDY: Grayson Chemical Co.
I. Time Context: Present II. Viewpoint: Tom Baker, CEO Grayson Chemical Co. and OD consultant III. Central Problem: Grayson Chemical Co. has steadily lost profitability. Symptoms: 1. Company became stagnant. 2. It has steadily lost market share. Causes: 1. Company is very resistant to change. 2. Incompetent managers.

CASE STUDY: Grayson Chemical Co.
IV. Objectives: Must: 1. To develop a new “set of culture” in order for the company to be more adaptive to change. 2. To create a “new system” so that the company will be more competitive and sustain profitability. Wants: 1. To improve operating profit by 50% by end of the year. 2. To strengthen the competency of its people starting with the top management team and key managers.

CASE STUDY: Grayson Chemical Co.
V. Areas of Consideration: I. STRENGTHS
1. Company has been around for sometime. 2. The organization has a stable management. 3. Presence of fairly competent technical people. 4. Young and competent CEO.

II. WEAKNESSES:
1. Organization system is reluctant to change. 2. Company has not been proactive with its environment. 3. Decision making process is not clearly defined. 4. Incompetent managers promoted to high level jobs.

CASE STUDY: Grayson Chemical Co.
V. Areas of Consideration: III. OPPORTUNITIES
1. Continuous demand on industrial chemicals. 2. Future expansion. 3. Growing number of competent managers from other chemical industries.

IV. THREATS:
1. Diverse culture of Top management team 2. Competition from other companies.

CASE STUDY: Grayson Chemical Co.
VI. Alternative Courses of Action: 1. Maintain the top management team and develop new performance targets to address profitability.
Advantages: 1. High employee morale. 2. Avoid conflicts/confrontation 3. Performance targets will increase employee participation and accountability. Disadvantages: 1. Complacency among the management team. 2. Objective may not be achieved since root cause is not addressed. 3. Achieving targets will take sometime.

CASE STUDY: Grayson Chemical Co.
VI. Alternative Courses of Action: 2. Create a new management team that is a mix of old timers and outsiders and develop a new corporate culture.
Advantages: 1. Culture change will address inefficiency problems. 2. Collaboration between different people will make the system more robust/effective. 3. Incompetent managers will be weed out. 4. May improve employee morale. Disadvantages: 1. Possible conflicts of interests. 2. “Old timers” may be uncooperative. 3. Developing new set of culture will take some time.

CASE STUDY: Grayson Chemical Co.
VI. Alternative Courses of Action: 3. Create a new management team compose of people from the outside and develop a new corporate culture.
Advantages: 1. Culture change will address inefficiency problems. 2. Different people with different experience will give a more rational assessment of facts and solution to the problem. 3. Incompetent managers will be weed out. Disadvantages: 1. “Old timers” may be uncooperative. 2. Low employee morale. 3. Developing new set of culture will take some time. 4. Conflict and confrontations may arise.

CASE STUDY: Grayson Chemical Co.
VII. Recommendation Adopt ACA #2 VIII.Detailed Course of Action
Person Responsible Tom Baker and Board of Directors Tom Baker and HR Manager Tom Baker and HR Manager Activities Call for a meeting to discuss plans for corporate culture change. Also discuss the hiring of OD consultant. Hiring of OD Consultant Evaluate current set of management team and select persons to be included on the new management team. “Removal” of some of the top management people Time Frame 1 day

1 week 1 week

Tom Baker and HR Manager

1-2 weeks

VI. Detailed Course of Action:
Person Responsible Tom Baker and HR Manager Activities Hiring of external people to fill in new positions on the new management team. Discussion on developing and implementing a new corporate culture. Develop a new system. Implementation of the new system on critical business units Review of system and make changes if necessary Full implementation of the new system Periodic review to continually improve the system Time Frame 1-2 months

Tom Baker, OD consultant and Top management team Tom Baker, OD consultant and Top management team Tom Baker, OD consultant and Top management team Tom Baker, OD consultant and Top management team Top management team Top management team

2-3 days

2-4 weeks 1 month 1-2 weeks Continuous Every quarter

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