Case Analysis: The Wallace Group

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The Wallace Group is a diversified company runs by the President, Harold Wallace, which excels at production and development of electronic products and systems. Further, the company operates in a vertical integration and consists of 3 different operational departments which are Electronics, Plastics and Chemicals. Each department is ran by its own department Vice President and Mr. Wallace keeps the sole control over these 3 departments.
Key issues
Currently, The Wallace Group is facing a series of important internal problems. More importantly, the President of The Wallace Group runs the organization with poor leadership skills and shows a lack of response toward internal issues such as absence of management development programs, recruitment
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Wallace is suggested to create a strategic vision for The Wallace Group by establishing a mission statement and goal for the company, so that employees see meanings behind their work which in turn encourage them to work harder to achieve a set goal with the organization. According to an interview with Vice President of Industrial Relations, Frank Campbell, the morale in this organization is really poor. For example, employees in this organization earlier called for the resignation of the President, Mr. Wallace. Furthermore, Campbell expresses that the revolt toward Mr. Wallace shows the “depths of resentment” from his employees. On this matter, Mr. Wallace should communicate and listen to his employees by improving their performances through motivations. For instance, Mr. Wallace can create executive compensation such as long term incentives and benefits to motivate his employees. Mr. Wallace is recommended to show more trust to his employees and empower them by increasing their beliefs in their own …show more content…
However, this acquisition has locked the Electronics Group into using plastic products from the plastic company at a relatively higher cost since other suppliers offer plastic products in lower prices. With regard to this problem, The Wallace Group should separate the 3 operational departments and manage them as 3 individual financial centers. In this way, the 3 departments can operate in their maximum efficiency and avoid incurring higher cost in material supply. In fact, the company should examine its pricing policy on every product to remain competitive in the market. On the other hand, The Wallace group is suggested to conduct a cost-benefit analysis on the plastic company and act accordingly upon the result of the analysis. Actions such as change in management or trading on the plastic company can be taken based on the cost-benefit

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