Strategy Management in Global Environment
GM599
Case Study: Herman Miller Inc
Professor Denis Juren
JeanMary Hermann Colas
October 10, 2011

Herman Miller Inc started back in 1905, as a furniture company. The Star Furniture Company was a manufacturer of traditional-style bedroom suites in Zeeland, Michigan. It changed its name to Michigan Star Furniture Company, in 1909. Dirk Jan De Pree was hired as a clerk during that transition. D.J. De Pree became the president of the company 10 years later. He then renamed the company Herman Miller in honor of his father –in-law in recognition of his support for purchasing majority of share to save the company from failing (Shipper, Manz, Adams, Manz, 2010). Herman Miller Inc. became a leader in "modern" furniture in the 1930s and 1940s; developed lasting ties through the 1950s with legendary industrial designers who led us in new directions; transformed the office furniture industry with the first panel system in the 1960s; invented and refined ergonomic work seating in the 1970s, 1980s, and 1990s; reinvented the geometry of systems furniture in 2000, and is today the second largest office furniture company with customers and locations around the world (Dowdell,2008). Herman Miller Inc. is a global company with operations, sales offices, dealers, and licensees in more than 40 countries in North America, Asia/Pacific, Europe, Middle East, Africa, and Latin America. They serve customers virtually anywhere in the world. Their headquarters is in Zeeland, Michigan and have numerous manufacturing facilities located in the U.S., China, Italy, and the United Kingdom. They sell their products and services through substantial global dealer network of independent and company-owned businesses (www.hermanmiller.com, 2011).

Types of Paramount action for building an organization capable of good strategy execution are: staffing organization, building and strengthening core competencies and competitive capabilities, structuring the organization and work effort. I will elaborate on the organization Herman Miller utilizing those strategies. Staffing the organization is considered as assembling talented management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital (Thompson, Peteraf, Gamble & Strickland III, 2012, p333). De Pree recognized the need to appreciate its employees after visiting a widow of a deceased employee; at this point on, he felt that Herman Miller’s corporate culture was to respect all employees and fueled the quest to tap the diversity of gifts and skills held by all (Shipper, Manz, Adams, Manz, 2010). He made it aware of the corporate culture and it is still valued today. One aspect of staffing organization is putting together a strong management team and recruiting and retaining talented employees. Herman Miller Inc. was place in the Fortune 100 for best company to work for; it was all because of their organization good strategy execution. Hermann Miller promotes people within their organization. Their education and training was the key to prepare employees to take on new responsibilities. From the top executive to management staff the chain remained within. When D.J De Pree took position as a chairman of the board after serving more than 40 years as the president; his son Hugh De Pree became president and chief executive officer. After 18 years as president and CEO, Hugh De Pree stepped down and was succeeded by his younger brother Max De Pree as chairman and chief executives in 1980. Other opportunity came for lower management as well like Rudy Bartels an environmental specialist and other vice presidents whom started their careers at Herman Miller’s production floor (Shipper, Manz, Adams, Manz, 2010). Building and strengthening core competencies and competitive capabilities: developing set of resources and capabilities suited to the current strategy, updating and revising resources and capabilities as external conditions and strategy change, training and retraining company personnel to maintain knowledge based and skills based capabilities (Thompson, Peteraf, Gamble & Strickland III, 2012).
Herman Miller was positioned globally in terms of manufacturing operations; they used a system of lean manufacturing techniques collectively referred to as the Herman Miller Production System (HMPS). The HMPS prove to maintain efficiencies and cost savings by minimizing the amount of inventory on hand through a just-in-time process. A key element of Herman Miller strategy manufacturing strategy was to limit fixed production cost by outsourcing component parts from strategic suppliers. This allow them to increase the variable nature of its cost structure while retaining proprietary control over those production processes that it believed to provide a competitive advantage; implementing this strategy manufacturing operations were largely assembly based. Herman Miller had a strategic partnership with Hilton Garden Inn. They were engaged in a cooperative advertising strategic partner; Herman Miller equipped some rooms of the hotel chain with its fine designed Mirra chairs. On the desk in the room was a card that provided instruction how to adjust the chair for comfort and listed a Hilton Garden Inn website where the chair could be purchased (Shipper, Manz, Adams, Manz, 2010). Herman Miller introduced to its employees the Scanlon Plan in 1950, a productivity incentive program created by labor expert Joseph Scanlon. The Scanlon plan was the principles of equity and justice for everyone in the company; it included two major functions the use of committee for sharing ideas on improvements and a structure for sharing increased profitability (Shipper, Manz, Adams, Manz, 2010). The plan remained useful for many years, which it created one of their staffing strategies of the coalition of team and department. The department was not solely one main function, as team from any department was use to perform any task needed so it was shared work. Herman Miller was innovative with its designs; thus they were also prepared to accommodate its staff and customers during hard times for the company. They strategically reviewed their financial capabilities, their staffing needs and marketing aspect during their profitable moments and even in downturns that kept them being exceptional as a company. Structuring the organization and work effort is regarded as instituting organizational arrangements that facilitate good strategy execution and deciding how much decision making authority to delegate and managing external relationships (Thompson, Peteraf, Gamble & Strickland III, 2012). Herman miller had codified its long practiced organizational values and published them on its website in 2005 with a titled “What We Believe.” Those beliefs were intended as basis for uniting all employees, building relationships, and contributing to communities. Herman Miller follows a decentralized form of organizational strategy. One way in which leadership is shared at Herman Miller was through the concept of “talking up and down the ladder”. Workers at all levels were encouraged to put forth new ideas. Herman Miller had departments the most frequently referenced work unit the team. Teams were often cross-functional. Membership on the team was based on the employee’s ability to contribute to that team (Shipper, Manz, Adams, Manz, 2010). The case of Herman Miller for empowering down-the-line managers and employees situation, to make decisions regarding daily operations and strategy execution was based on the belief that a company that draws on the combined intellectual capital of all its employees can outperform a command-and-control (Thompson, Peteraf, Gamble & Strickland III, 2012). Herman Miller truly believes in motivating its employees from the beginning of its existence. The incentives and motivational practices that facilitate good strategy execution from Herman Miller was the capability of offering numerous benefits:
Provide attractive perks and fringe benefits. One of Herman Miller ways of compensation other than their monetary benefits were on-site services in their facility including massage therapy, cafeterias, banking, health services, fitness centers, fitness classes, and personal trainers. The offer wellness benefits, fitness facilities or subsidized gym memberships, the company offered $100 rebate on bike purchase which is part of your world around you campaign. The provide all the resource to make their employees satisfy, 100 percent tuition reimbursement, flexible schedules, including job- sharing compressed workweek, and telecommuting options. Three other benefits were unique to Herman Miller; first every family that gave birth to or adopted a child received a Hermann Miller rocking chair. Second every employee who retired after 25 years with the company and was 55 or older received an Eames lounge chair. Third Herman Miller had no executive retreat, but it did have an employee retreat, the Marigold lodge on Lake Michigan. This retreat was available to employees for corporate related events such as retirement parties, and other celebrations
Give awards and other forms of public recognition to big performance and celebrate the achievement of organizational goals. The company beliefs were also reinforced through the Employee Gifts Committee and the Environmental Quality Action Team.
Rely on promotion from within whenever possible. Hermann Miller promotes people within their organization. D.J De Pree took position as a chairman of the board after serving more than 40 years as the president; his son Hugh De Pree became president and chief executive officer. After 18 years as president and CEO, Hugh De Pree stepped down and was succeeded by his younger brother Max De Pree as chairman and chief executives in 1980. Herman Miller fifth president and Executive was their first hired person from the outside; which he resigned three years later. Mike Volkema was promoted to CEO after working under Herman Miller management for 12 years. Other opportunity came for lower management and other vice presidents whom started their careers at Herman Miller’s production floor.
Invite and act on ideas and suggestion from employees. Herman Miller adopted a vision and a strategy of reducing and eliminating environmental impacts throughout the entire company, the goal was to identify problem area and incorporate environmental friendly materials and manufacturing process into new design products. Employees were rewarded when they produced better quality products with reduced environmental impacts.
Create a work atmosphere in which there is genuine caring and mutual respect among workers and between management and employees since Herman Miller workers felt empowered, a new manager could run into some startling behavior. One of the managers Paul Murray recalled an incident where he removed his safety glasses off while on the production floor and was apprehend by his staff; he felt impress that the staff safety concern works with everyone not just managers.
State the strategic vision in inspirational terms so that employees feel they are a part of something very worthwhile in a larger social sense During the ongoing economic downturn Herman miller cut its workforce by more than 15 percent reduced pay of the remaining staff by at least 10 percent and suspended 401 k contribution. The CEO and four other top executives also took a 10 percent cut on their salary. Herman Miller shared the gains as well as the pains with its employees in regard to compensation.
Share information with employees about financial performance, strategy, operational measures, market conditions and competitor’s actions. One of their difficult moment where when the president Mike Volkema and Brian Walker of the North America branch made an announcement with all the workers of what was going on with the company and what will happen, the changes that would be implemented and how it will affect and change their corporate culture. The organization was often challenged from being profitable in different occasions during its existence. They were hit from the 21st century recession in two different occasions, which plunged their profits relatively low. However, they manage to bounce back from cutting executive pay, lay off a percentage of their workforce but gave them options for future employment and closed an entire plant in Atlanta, Georgia.
Maintain attractive office space and facilities. Herman Miller’s organizational values were incorporated into the environmental friendly design the Greenhouse; their main production facility in Michigan. The Green house took advantage of natural light and landscaping to grow native plants without the use of fertilizers, pesticides or irrigation. In conclusion, Herman Miller is a leading organization on structural management, operation and finance. With many adversities they tend to shift gear and find the solution within the team efforts, decentralized method work for them as the top executive need its team to excel bottom up. With proper planning their finances may have been in danger, however, they take the sacrifice as team throughout the organization. The core value and belief gives them the strength to continue as an organization and channel their adversities from structural method and a concrete strategy that worked for many years

References
Dowdell, J. (2008, December 8). Herman miller's auto-biography, from worldwide web, Retrieved, from http://www.marketingshift.com/people/entrepreneurs/herman-miller.cfm,
Herman Miller, Inc.; American Furniture Company known for innovations in design and in organizational management (2011). In Encyclopedia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/1085390/Herman-Miller-Inc,
Shipper, F., Manz, K., Adams, S., & Manz, C. (2010). Herman Miller Inc: the reinvention and renewal of an iconic manufacturer of office furniture. (18th ed.) McGraw Hill
Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland III, A. J. (2012). Crafting & executing strategy: the quest for competitive advantage: concept and cases.(18ed.) McGraw Hill,
What we believe 2011 Herman Miller, Inc. (2011). www.hermanmiller.com; Retrieved from http://www.hermanmiller.com/About-Us/What-We-Believe