Mr. James Pierce had recently received word of his appointment as general manager of the Jackson Plant, one of the older established units of The Rose Company. As such, Mr. Pierce was to be responsible for the management and administration at the Jackson Plant of all functions and personnel except sales.Both top management and Mr. Pierce realized that there were several unique features about his new assignment. Mr. Pierce decided to assess his new situation and relationships before undertaking his assignment. He was personally acquainted with the home office executives, but had met few of the Jackson personnel. This case contains some of his reflections regarding the new assignment.
The Rose Company conducted marketing activities throughout the United States and in certain foreign countries. These activities were directed form the home office by a vice president in charge of sales.
Manufacturing operations and certain other departments were under the supervision and control of a senior vice president. These are shown in Exhibit A. For many years the company had operated a highly centralized-functional type of manufacturing organization. There was no general manager at any plant; each of the departments in a plant reported on a line basis to its functional counterpart at the home office. For instance, the industrial relations manager of a particular plant reported to the vice president in charge of industrial relations at the home office, and the plant controller to the vice president-controller, and so on.
Mr. Pierce stated that in the opinion of the top management the record of the Jackson Plant had not been satisfactory for several years. The Rose board had recently approved the erection of a new plant in a different part of the city and the use of new methods of production. Lower costs of processing and a reduced manpower requirement at the new plant were expected. Reduction of costs and improved quality of products were needed to maintain competitive leadership and gain some slight product advantage. The proposed combination of methods of manufacturing and mixing materials had not been tried elsewhere in the company. Some features would be entirely new to employees.
According to Mr. Pierce the top management of The Rose Company was beginning to question the advisability of the central control of manufacturing operations. The officers decided to test the value of a decentralized operation in connection with the Jackson Plant. They apparently believed that a general management representative at Jackson was needed if the new experiment in manufacturing methods and the required rebuilding of the organization were to succeed.
Prior to the new assignment, Mr. Pierce had been an accounting executive in the controller's department of the company. From independent sources the case writer learned that Mr. Pierce had demonstrated analytical ability and general administrative capacity. He was generally liked by people. From top management's point of view he had an essential toughness described as an ability to see anything important through. By some he was regarded as the company's efficiency expert. Others thought he was a perfectionist and aggressive in reaching the goals that had been set. Mr. Pierce was aware of these opinions about his personal behavior.
Mr. Pierce summarized his problem in part as follows: "I am going into a situation involving a large number of changes. I will have a new plant; new methods and processes, but most of all I will be dealing with a set of changed relationships. Heretofore all the heads of departments in the plant reported to their functional counterparts in the home office. Now they will report to me; I am a complete stranger and in addition this is my first assignment in a major 'line' job. The men will know this.
"When I was called into the senior vice president's office to be informed of my new assignment he asked me to talk with each of the functional members of his staff. The vice presidents in charge of production planning, manufacturing, and industrial relations said they were going to issue all headquarters instructions to me as plant manager and they were going to cut off their connections with their counterparts in my plant. The other home office executives admitted their functional counterparts would report to me in line capacity. They should obey my orders and I would be responsible for their pay and promotion. But these executives proposed to follow the common practice of many companies of maintaining a dotted line or functional relationship with these men. I realize that these two different patterns of home office plant relationships will create real administrative problems for me."
Exhibit B shows the organizational relationships as defined in these conferences.