Wallace Case 2

There are several problems facing the Wallace Group, the most important one seems to involve a breakdown in communication. Most of the problems have arisen over responsibilities and relationships between corporate and group positions. There is a union in place that is insistent on a no-layoff clause that is delaying the equipment on order that would ultimately eliminate 20% of the assembly positions. Burt Williams, Director of Operations stated "one of the biggest problems stems from corporate policy regarding transfer pricing" (p. 2-9). Mr. Williams continues to state that they are "encouraged" to purchase plastics and chemicals from sister Wallace groups but, at the expense of an unprofitable price. Frank Campbell, Vice President of Industrial relations stated the Wallace group has been "sued by a rejected candidate for a position on the basis of discrimination...she claimed our entrance qualifications are excessive because we require shorthand" (p. 2-7). Matthew Smith, Director of Advanced Systems states that Corporate keeps making demands for"...information they need to satisfy corporate planning and operations review requirements, but they don't seem to recognize how time and effort is required to provide this information" (p. 2-9). There is a standing recruiting backlog due to the pay scales that are too low to attractive appropriate candidates, especially for the engineering positions.

There are several recommendations that could help most mainly focused around the integration of marketing planning efforts between group and corporate positions. A Groups/Marketing/Sales Function needs to be created to help with the business expansion effort. A change in supplier choices will aid in meeting volume and profit goals. Purchasing materials for competitive prices from suppliers, rather than strictly from sister Wallace groups will improve the profit margins. The hiring of new potential candidates should be done after ensuring that the entrance requirements are not too excessive and would be fair for the candidate to meet, to help prevent future lawsuits. A person will be put into place to help evaluate how critical corporate staffs planning and activities, that are making demands on the Advanced Systems group. This person will in effect help to improve the results and productivity of this group by helping to relieve heavy work loads that are running on current projects. A meeting with the union is necessary to offer a slightly higher pay for the employees in exchange for the no-layoff clause. This pay increase will be available from profits gained from higher production that will be accomplished through the use of assembly machinery and equipment, instead of human manpower. Also, a survey should be done to ensure competitive compensation for engineers that are employed by the Wallace group, which in turn will hopefully attract more potential candidates to fill the empty positions.

A Board of Directors should be created to help alleviate the employees' frustration with the President Hal Wallace. The Board will help to appoint someone with high-technology human resource management. This board can act as mediator or middleman between the President and the employees to help ensure everyone's needs and demands are being met. Wheelen and Hunger state that "interviews with 200 directors from eight countries (Canada, France, Germany,