The Wallace Group; Laurence J. Stybel Essays

1357 Words 6 Pages
Case 2
The Wallace Group, Inc.


Harold Wallace, founder, serves as Chairman and President of the Wallace Group. He owns 45 percent of the outstanding stock. The company consists of three operating groups—Electronics, Plastics, and Chemicals, which generate sales of $70 million. Mr. Wallace continues direct operational control over the Electronics Group. Several years ago, Wallace and the Board embarked on a strategy of diversification into plastics and chemicals in order to decrease the company's dependence on defense-related business.

Presently, the morale within The Wallace Group has deteriorated to the point where some of the employee stockholders made an attempt to force Wallace's resignation. As a
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This analysis is based on an examination of the organization chart.

D. Problems resulting from being heavily dependent on defense-related contracts have not been solved.

Mr. Wallace was once heard to have remarked, "We'll get organized tomorrow. But we've got to deal with today's needs today." This all too common approach to management must be challenged by the students. This company desperately needs an organized approach to strategic planning which involves both the commitment of Mr. Wallace and the involvement of key employees within the company.

Designing such a process would not be easy. But the case does seem to indicate that this is the most pressing need faced by The Wallace Group.

2. We have used it as a written paper. The students find the case somewhat difficult to handle because of Mr. Wallace's direct involvement in the company's problems.


1. What is (are) the most important problem(s) facing The Wallace Group?

2. What recommendation(s) would you (as a consultant) make to Mr. Wallace, and in what order of priorities?

3. How do you educate a Stage I manager (entrepreneur) to become a Stage II or III professional manager? What impact does this problem have on this case?

4. How do you handle the transfer pricing problems involved in the backward integration? The acquisition of the plastic company has locked the Electronics Group into using its plastic products at a higher

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