FLAIR
ENGINEERING Ltd.
Learning Objectives
 Understand how real life organizations
develop and implement strategy
 Show how staff can be motivated or
demotivated by different approaches to
strategic change
 Appreciate the managers can exercise
considerable choice in terms of their
organizations strategy.
Backgrounds
 Flair is UK company which supply of automotive
components to car plants.
 It began life in the 1940s as a manufacturer of
pressed steel products
 In the 1950s it ceased to be an independent
company and joined a small, family owned
conglomerate.
 In late 1970s, declined and was operating as
‘seller of capacity” to whoever was prepared to
buy.
 In 1980 began to change with the promotion of
Managing Director.
 The Managing Director concluded that
the company lacked :
1. Product differentiation
2. Distinct competitive strengths
3. A low cost base
4. Modern equipment and manufacturing
methods.
A Strategy Emerges
 Managing Director believed that the company did
have prosperous future, but only if it could be
transformed into a modern, competitive
manufacturing.
 This required it to face up to 4 major challenges :
1. To develop a distinctive product and industry focus
2. To reduce its cost base
3. To improve quality
4. To invest in people and equipment
The first step to achieving these challenges were as
follows :
1. To undertake a market survey in order to
identify potential and desired customers and
products
2. To establish how best to organize the company
in order to become a credible force in its
chosen field.
Having established where they wanted to go, the
company needed to win orders from its target
market and establish a long term relationship
with customers, which are Rover and Ford.
In 1983, company began delivering parts to Ford
and Rovers.
The Pace of Change
 Despite the success with the Ford and Rover, the
Managing Director still felt the company’s
performance was below what it should be.
 He, have full review and have following
conclusions :
1. Senior manager were still operating in a reactive
rather than proactive mode
2. Key operational problems were being ‘worked round’
rather than analyzed and solved
3. Cost has grown faster than turnover
4. Quality was poor and they were still relying on
inspection to detect and correct this.
To tackle the serious issues identified above, the
management team set 6 objectives :
1. Reduce costs
2. Reduce stocks and work in progress
3. Acquire new customers in order to gain full
utilization of capital equipment
4. Reorganize sales and purchasing into one
operation
5. Move to just in time manufacturing
6. Adopt the Deming/Juran approach to quality,
beginning with the introduction of statistical
process control (SPC).
These objectives began to transform company into a
world class performer.
In 1985/86 The company has profits of
500.000 Pound.
And it had been chosen as a supplier to the
new car factory, Nissan.
In 1986, crucial initiative in gaining
employee participation with the
introduction of cellular manufacture and
the move to team working at all levels.
In retrospect, the cellular approach turned out
to be a key move in terms of achieving a
step change in performance.
1991/92 : A turning point
Three key events occurred in 1991/92 which have a
significant impact on the company strategy and
performance :
1. Was the appointment of a new operations
director to help managing director
2. Nissan, asked them to take part in a strategy
development programme for senior managers.
This took 6 moths and allowed them :
to undertake a rigorous review of their plans for the
company future
b) to set clear targets, based partly on the Operations
Director’s benchmarking exercise
c) To focus on achieving world class status
a)
3. The Directors, with a great deal of reluctance,
decided to sell the company.
Flair was sold to a German conglomerate. The
sale did not materially alter Flair’s strategy or
approach. What it do was to remove the
financial uncertainty and allow managers to
concentrate on building world class
organizations
By 1996, the company had been totally transformed
from it was in 1980. Turnover was 80 million
Pound.
The new Operation Directors identified the new
differentiators as cost focus, design capability
and flexibility.
The Outcomes
There are 5 areas which seems important :
Constancy of purpose
A sense of urgency
Redefining managerial roles
Delegations and empowerment
Managerial stability
There are 3 points to note with this case :
1. The transformations of Flair took place over 20
years period.
2. Though major organization and technical changes,
the key changes have been in the behaviour and
attitudes of staff at all level in the company
3. Flair adopted a Japanese approaches to strategy. It
identified a long term, ambitious vision for itself.
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