Corporate Responsibility

Peter Browning and Continential White Cap

BOB GALVIN AND MOTOROLA, INC CASE STUDY

MAT

OKLAHOMA WESLEYAN UNIVERSITY

Bob Galvin and Motorola, Inc. Case Study Analysis

At the age of 61 Bob Galvin, chairman and chief executive officer (CEO) of Motorola, Inc., was moved to action from the increasing complaints as he “walked the halls” and the growing threats from Japanese manufacturers. On April 24, 1983 at the biennial meeting of the top 153 officers of Motorola, Inc. themed ‘Managing Change’, Bob Galvin issued a challenge to senior managers to consider structural changes to strengthen the corporation long-term.

Motorola History

Founded in 1928 by Paul V. Galvin, Galvin Manufacturing Company the Chicago-based firm began with alternating electrical current converters and automobile radios. Soon after dubbing the car radio as the “Motorola” in 1947, Paul Galvin changed the name of the company. Paul Gavin along with his brother Joe tried to create a humane and democratic work environment. Part of this process involved the everyone including the Galvins to be addressed on a first-name basis; “the Galvins had replaced the typical time clock in the plant with an employee honor system; and by 1947, Paul Galvin established a profit-sharing program” for it now 2,000 employees. It was decision such as this that allowed Motorola to remain union free (Jick & Peiperl, 2011, p. 121).

From its modest beginnings of less than $1500 in working capital and equipment, Motorola has enjoyed 55 years of growth and success to the tune of “15 percent growth-or half a billion dollars between 1982 and 1983” (Jick & Peiperl, 2011, p. 120). Since its beginning in 1928 Motorola had expanded its product line with home radios, phonographs, televisions, transistors, and semiconductor components. Under Bob Galvin’s leadership the firm had sold many of its consumer electronic businesses and expanded into other markets with the development of new technology. Along with technological strides, the firm was now composed of five geographically dispersed sectors to include: semiconductor products, communication, Information Systems Group (ISG), Automotive and Industrial Electronics Group (AIEG) and the Government Electronics Group (GEG).

In 1944, Bob Galvin, Paul Galvin’s son joined the firm as a stock clerk and after working a variety of positions became executive vice president in 1948. After becoming president in 1956, Bob was appointed chairman/CEO in 1964. During his tenure Bob’s leadership style made him an equitable and accessible leader with values deeply influenced by the lessons he learned from his father Paul. “After taking over the helm of the company, Galvin continued to espouse his father’s philosophy: don’t fear failure, and recognize the signs of problems early” (Leadership, n.d.). Bob said, “I am fortunate to carry some of his reputation, in addition to what I’ve earned myself” (Jick & Peiperl, 2011, p. 121).

Motorola Problems and Causes

Although Motorola was experiencing success in comparison to its competitors, that success was not without its share of problems. The infamous speech given by Bob Galvin on April 24, 1983 to his senior executives was his response to grumblings within the organization from employees and the threat of Japanese competition. It was Bob Galvin’s belief “that the firm’s current inability to respond quickly and flexibly to the changing needs of the customer could prove fatal in the coming global competitive crisis” (Jick & Peiperl, 2011, p. 120). “This would be all the more difficult because many of his managers did not recognize the problems he saw” (Jick & Peiperl, 2011). To avert the firm from future disaster Bob wanted to decrease the many layers of management and to bring management closer to the product and market” While Bob Galvin’s speech revealed great vision to address the issues faced by the firm it also created fear and anxiety.

The problems within the organizational structure were in direct response to the multiple layers of management and its centralized structure. The organizational structure of Motorola consisted of nine to twelve layers between the first line managers and the executive level. Within these layers each prospective manger was only responsible for five or fewer people, and 30 percent of managers led three people or less. As for the executive level or the ‘triparitite structure’, this was comprised of Bob Galvin, CEO/Chairman, William Weisz, Vice Chairman, and John Mitchell, President (Jick & Peiperl, 2011).