Harold Wallace. laminitis. serves as Chairman and President of the Wallace Group. He owns 45 % of the outstanding stock. The company consists of three runing groups’ electronics. plastics and chemicals which generate gross revenues of $ 70 million. Mr. Wallace continues direct operational control over the Electronicss Group. Several old ages ago. Wallace and the Board decided on a scheme of variegation into plastics and chemicals in order to diminish the company’s dependance on defense-related concern.
The current morale within The Wallace Group has deteriorated to the point where some of the employee shareholders made an effort to coerce Mr. Wallace’s surrender. As a consequence of this crisis. Mr. Wallace has hired French republics Rampar. adviser. to carry on direction interviews to happen out the jobs confronting The Wallace Group. Rampar and Associates is tasked with developing a set of precedences for Mr. Wallace to utilize to stem the negative tide within his corporation.
Solid public presentation from the plastics and electronics divisions in the yesteryear. Bing a public corporation provides the house with flexibleness to pull equity capital vs. long or short term debt. The company is able to provide many of its ain constituent parts and natural stuffs. Diversification of Organizational Structure
Conflict and power battles among directors
Ineffective board of managers who haven’t become involved in this company issues. The acquisition has moved The Wallace Group off from its country of typical competency in electronics into countries where it does non hold typical competency. Tendency non to efficaciously use scarce proficient forces which besides contributes to miss of morale of employees. Firm does non hold a clear mission.
IV. POSSIBLE SOLUTIONS OR ALTERNATIVES
Deal with issues in corporate administration.
Review the corporations’ variegation program from an country of expertness ( electronics ) into countries ( plastics and chemicals ) where it has little core competency. The company needs an organized attack to strategic planning which would affect both the committedness of Mr. Wallace and the engagement of cardinal employees within the company.
Rectify jobs ensuing from being to a great extent dependent on defense-related contracts by utilizing the acquisitions contacts to derive private sector non defence contracts. Extinguish the Electronics Group need to utilize the Plastics Group as its major provider. which increases costs for one group doing them less competitory. Think of interrupting these companies into separate companies so they don’t usurp each other. Hire more directors.
More inadvertence by executive direction.
Implement the necessary preparation plan.