The Wallace Group

Adnan Ahmed
Ahmad Atif Abdullah
Aamir Ansari
Prashant Ramdas
Rachit Verma
Dhruv Bhasin
Maneck Debara
Case Overview
• The Wallace group is devised from three sub-groups as: Electronics,
Chemicals and Plastics.

• Harold Wallace was the original owner of the electronics company,

but now has 45% of the stock and runs the group as Chairman and
President of the company.

• After acquiring the plastics company and then the chemical

company. But each of the three groups is run by a Vice President.

• Recently, Hal Wallace asked Rampar to conduct a series of

interviews with some key Wallace Group employees, in preparation
for a possible consulting assignment for Rampar Associates.
 SWOT
Strength
• Vertical integration
• Diverse technical competence
• Running projects in electronics
and plastics business units,
with guaranted sales
Weakness
• Corporate vision, mision, and business strategy
are not clear
• BU operates like separated island
• Boundaries between the roles of corporate stuff
and BU staff are not well defined
• All BU are not growing
• Group revenues depend mainly on defense
• No R&D function in any BU
• Work force problem
 SWOT

Opportunities Threats
• Creating more vertical integration • Reputation damage due to slow
synergies respone to bid requests

• Growing markets of electronics and • Failure to deliver on

plastics currentproject

• Diversification to other markets or • Bad financial performance,

business especially in chemicals
Problems
• Calling for resignation of the President: Based on Frances Rampar
interview with Harold Wallace, he stated that one of his managers
called for resignation of the President which is Harold himself. Even
though the vote was defeated, it was clear that people who voted
are upset with the way things are going.

• Heavy dependence on government contracts could put the

corporation in financial difficulty if further sales diversification
cannot be found

• Unprofitable chemical division needs new management.

Shared Value
• Unclear vision and mission (corporate strategy)
• Mostly based on shareholder value (one perspective), which is supposed
to be base on corporate value

Strategy:
• Consolidation when there was a good opportunity, but lack of support
from the internal as they have weak capacity
• Structure: Need to restructure when doing acquisition

System:
• No appropriate Human Resource Management System
• No integrated marketing information system between business unit and
corporate level.
Style:
• Leadership style based on one man power, did not match with the
organization size. Considering the organization size, the appropriate
leadership style is no longer telling, but would be better if Wallace use
participating or delegating leadership style.

Skill:
• Not enough skill to do their jobs (management skill for technical people
and vice versa)

Staff
• Overlap jobs
• Lack of technical people as most of them recruited as management
Other
• Low earning power (reflected in the inability of company’s debt
structure to afford acquisition by themself)
• Failed to conduct transference pricing system as the material’s price
higher than outsider supplier
• No good corporate governance

PROBLEM ROOTS
• Unsuitable Wallace’s leadership style (considering the size of the
company)
• Unclear corporate strategy
The Strategic Analysis Triangle

WANT
Management Preference Individual

CAN
NEED
Resource Capabilities and
Environment Industry
Organization Firm
 ALTERNATIVE SOLUTIONS
The recommended strategy for Mr. Wallace to achieve this goal is listed
below in order of priority:

• Examine his personal management style, priorities, direction for the

company, and future goals for growth and development.

• Restructure the departments based upon the needs of the new

organizational structure and the company goals.

• Utilize Rampar Associates to evaluate the strengths and weaknesses of the

existing operation. The outsiders will have fewer reasons to pull punches
than staff members that can be promoted or fired. Valuable criticism may
come from specialized consultants, owners or board members other than
the president or CEO, and even customers.

• Change and develop the personnel services department into a fully

operational a HR department.
Recommendations
• Develop new organization chart and clearly define job responsibilities.
• Establish a mission statement, goals and objectives with input put from
the VPs and Directors.
• Change management of chemical division or sell off based on cost/benefit
analysis to corporation.
• Conduct meetings at each level to get feedback regarding the concerns of
the employees, their ideas, strengths and weaknesses and any other
issues. This should begin with the VPs, then the Directors, and so forth for
each department.
• Encourage a continuous flow for the exchange of information.
• Involve the entire staff in every stage of the evaluation project.
• Make sure that all managers understand that it is a team effort. The
overall profitability of the corporation is what is important. This policy
needs to be weighed in terms of overall profitability to corporation and
not individual departments
CONCLUSION

• Competing effectively which requires investment —

commitment to capabilities, assets, people and customers.

• To understand and formulate the wants of customers ,

governments and what its competitors will do how the
organization’s own people will perform.

• Prepare itself for future by planning strategic flexibility which

requires the companies to anticipate multiple scenarios;
formulate strategies for each; acquire the capabilities to
execute those strategies; execute the “most likely” strategy;
and be prepared to rapidly adopt one of the alternatives if
market forces dictate.