480 company strategy is to be the most up-to-dat€ and advanced suppiier or and techniques.
Although Susan has given a
lot
of thought to her business, one ti:::: really given much thought really to is horv to compensate her employees. Sit'tc= ,:-,: knolv much about compensation, she teuds to feel that the safest thir:: to just do rvhat her competitors are doing.
HENBTHSON
PRINTruG
Henderson Printing is a snrall- to mediun-r-sized manufacturer of account books, lecigt:..
and various t1,pes ofrecord books used in business. Located in Ha]ifhx, the company has annual sales of abou t $12 million, mostly in the Atlantic provinces.
The orvner, George Henderson, is a {irm believer in nraking a high-quality product that rvill stand up to many years of use. He uses oniy high-grade paper, cover stock, and binding materials. Of course, this has led to high production costs and higir prices. He also believes in a high level of customer serice and is rvilling to make the products to customers' specifications rvhenever they so request. Horveter, resetting the equipment fbr relatively short production runs
of
customized products takes considerable extra time and, of course, also drives up costs.
The firm employs about 80 people , most of rvl.rom rvork in production. Tl-re firm has a ferv supervisors to ovelsee production, but their responsibilities are not clearly spelled out, so the supervisors often contradict one another. There is no system for scheduling production;
in
f-act, there are ferv systems
of
any kind. Whenever there is a problem, everyone knorvs that you have to go to George if you expect a definite answer.
The company also has several salespeople
*,ho
travel throughout the Atlantic region; rnost of them are relatives of George or his rvife. Tl.re company has one bookkeeper to keep records and issue the paycheques, and several office employees to handle routine administrative chores. The
firm
has
no
specialists in accounting, marketing, human resources, or production; George handles these areas himseli although he has no real training and little interest in any of them except production. He focuses most of l-ris attention on ensuring prodr"rct quality and on dealing rvith the countless problems that everyone brings to hirn every day. He has often been heard to exclaim, in his usual good-natured rvay, ''Wh1, am I the only one rvho can make decisions around this place?" as he deals s.ith each of these problems.
When George rvas growing up, both l.ris parents (his father rvas a printer and his lrother was a seamstress in a garment factory) had to rvork hard in order to scratch out a living for their farnily. In those days, employers who shorved little consideration fbr their e mployees rvere the norm, and George resolved that things rvould be different
i[he
ever became an employer. Toda1,, George tries hard to be a benevolent employer. Although he feels the organization cannot alfbrd any formal employee benefits, he often keeps sick ivorkers on payroll for a considerable time, especially
if
he knorvs the rvorker has a family to support. George is rvell liked by n-rost employees, who have shorvn little interest in unionization during the feiv approaches made by union organizers.
George has no fbrmal system for pay and tends to make ali pay decisions on the spur of the moment, so almost everybody has a different pay rate. He has never
Botten around to giving annual raises, so any employee rvho rvants a raise has to approach him.
He gives raises to rnost people ivho approach him, but the amount depends on his mood at the time and on horv rvell he knorvs the employee. For example,
if
the firm has just lost a major customer, raises are lorver, and if the firm has just booked a large order, they
APPENDlX
NEL
a
*
$
B s are higher. They are also higher
if
he knows the **plcr-ee has a ria:ily to support, or if the employee's spouse has been laid ofi or
it
the ernptrayee ha,. added a new member to the family.
George believes that a good emplo-ver should recognize rl're conmibutions made by employees during the
,vear.
So every Christmas,
it
protrts allorr. he gives merit bonuses to employees, which he says are based on their c*nrdbudon: to the tirm. One day in early December, he sits down with his emplor.ee
lisr
i* aiphab<acsl order, and pencils in an amount next to each name.
Everybody gets something, but the amounts rarr gr*atl-v.
If
he can associate a face with the name (which is difficult sometimes, because aex'emplol-ees seem to rum over a lot), he tends to give larger bonuses. And if he can rerriernber something such as a cheerful atutude, the bonuses are higher still. But if he remer"iti:ers eri-;-oll€ coruplaining about that employee for some reason or another (he usualIv can't recaii the exact reasons), the employee gets a smaller bonus. Not suqprisingl-v. long;er-term ernptroy"ees tend to receive much higher bonuses than new employees. He has nodced this tendenry, but assumes that
if
an employee has been with the firm longe4 that penon nnust be more productive, so this is fair. He personally distributes the ba*us chequ:s +* rhe last working day before Christmas.
and
Since he has just tumd
50, George is planning {o retire rB th€ next year or two turn the business over to his daughter, Georgene Hendenon. who is just finishing her commerce degree at Dalhousie University. Ironicallr. it t'as on the day of his 60th birthday that his bookkeeper informed him that there q'asnot rl:augh a'!one,v in the bank account to meet payroll.
MULTI.PHODUCTS
COHPORATION it is early Februarl,. Late last ),ear, the firrn you rvork tc:.
-1,i,,-l:r-l:c.:ui:; Corporation, acquired the rights
to
a new type
of
golf club,
inrenttc
i::'
-:
:::ii=ci machinist wlto had been a lifelong golfer until his untimely demise
(it rur:ri c,-:: ri':;t goliing during a lightning storm is not such a great idea). The machinist lirc:,-.ju::ri onh'a feu'sets of the clubs, but their super-iority over existing clubs u'as So eri]r.-'-:]t'.d th"rt u'ord of his invention had spread far and rvide. Fortunately fbr him troi
1:r.
:':;:r. actualll'), he had patented the design of these clubs, so nobod.v could copv rrer:r.
Mr,rlti-Products Corporation has numerous divisions. eaci: oroducing different products in the sportir-rg goods field. Tire compan)r hirs ner-er prociuced goliequiprnent of any kind, ar-rd plans to set up a separate division to produc: .rrd clistribute the new clubs. You found out yesterday that
1,su have been selected to ireari the nerv division.
Corporate management rvill pror.ide you the division going and ivith ali the financiai re sources 1'ou need to get will also help you staff the division s-itl: experienced managers from the parent corporation. Because of tlieir confidence in
1'ou. nranagemellt has given you complete freedom to organize and operate the division irs \-ou see fit. as long as you attain the {lnancial goals that have been set for the division,
Your first task is to design the organization structure. But r-ou recognize that before doing so, you need to understand some key aspects about the organization and its context. Market research suggests that the demand for your product rvill be strong and stable. This demand rvill not be very price-sensitive, since golf-ers rvho rvant your product rvill generally be rvilling to pa1, 1v|121 it takes to get it. Therefore, it rvill be relatively easy for you to secure distributors. In fact, one distributor is rvilling to agree to a four-year sales contract for your equipment, ivith a fixed volume and a fixed price. This distributor
APPENDIX
NEL
481
