Case Study: A WINDOW ON LIFE

Analyze using the Harvard Business School format and answer the questions at the end of the case.

For Gilbert LaCrosse, there is nothing quite as beautiful as a handcrafted wood-framed window. LaCrosse's passion for windows goes back to his youth in Eau Claire, Wisconsin, where he learned from an elderly carpenter how to make residential windows. He learned about the characteristics of good wood, the best tools to use, and how to choose the best glass from local suppliers. LaCrosse apprenticed with the carpenter in his small workshop, and when the carpenter retired, he was given the opportunity to operate the business himself. LaCrosse hired his own apprentice as he built up business in the local area. His small operation soon expanded as the quality of windows built by LaCrosse Industries Inc. became better known. Within eight years the company employed nearly 25 people, and the business had moved to larger facilities to accommodate the increased demand from Wisconsin. In these early years LaCrosse spent most of his time in the production shop, teaching new apprentices the unique skills that he had mastered and applauding the workers for their accomplishments. He would constantly repeat the point that LaCrosse products had to be of the highest quality because they gave families a "window on life." After 15 years LaCrosse Industries employed over 200 people. A profit-sharing program was introduced to give employees a financial reward for their contribution to the organization's success. Due to the company's expansion, headquarters had to be moved to another area of the city; but the founder never lost touch with the workforce. Although new apprentices were now taught entirely by the master carpenters and other craftspeople, LaCrosse would still chat with plant and office employees several times each week. When a second work shift was added, LaCrosse would show up during the evening break with coffee and boxes of doughnuts and discuss how the business was doing and how it became so successful through quality work. Production employees enjoyed the times when he would gather them together to announce new contracts with developers from Chicago and New York. After each announcement LaCrosse would thank everyone for making the business a success. They knew that LaCrosse quality had become a standard of excellence in window manufacturing across the eastern part of the country. It seemed that almost every time he visited, LaCrosse would repeat the now well-known phrase that LaCrosse products had to be of the highest quality because they provided a window on life to so many families. Employees never grew tired of hearing this from the company founder. However, it gained extra meaning when LaCrosse began posting photos of families looking through LaCrosse windows. At first LaCrosse would personally visit developers and homeowners with a camera in hand. Later, as the "window on life" photos became known by developers and customers, people would send in photos of their own families looking through elegant front windows made by LaCrosse Industries. The company's marketing staff began using this idea, as well as LaCrosse's famous phrase, in their advertising. After one such marketing campaign, hundreds of photos were sent in by satisfied customers. Production and office employees took time after work to write personal letters of thanks to those who had submitted photos. As the company's age reached the quarter-century mark, LaCrosse, now in his mid-fifties, realized that the organization's success and survival depended on expansion to other parts of the United States. After consulting with employees, LaCrosse made the difficult decision to sell a majority share to Build-All Products Inc., a conglomerate with international marketing expertise in building products. As part of the agreement, Build-All brought in a vice president to oversee production operations while LaCrosse spent more time meeting with developers. LaCrosse would return to the plant and office at every opportunity, but often this would be only once a month. Rather than visiting the production plant, Jan Vlodoski, the new production vice president, would rarely leave his office in the company's downtown headquarters. Instead production orders were sent to supervisors by memorandum. Although product quality had been a priority throughout the company's history, less attention had been paid to inventory controls. Vlodoski introduced strict inventory guidelines and outlined procedures on using supplies for each shift. Goals were established for supervisors to meet specific inventory targets. Whereas employees previously could have tossed out several pieces of warped wood, they would now have to justify this action, usually in writing. Vlodoski also announced new procedures for purchasing production supplies. LaCrosse Industries had highly trained purchasing staff who worked 424 closely with senior craftspeople when selecting suppliers, but Vlodoski wanted to bring in Build-All's procedures. The new purchasing methods removed production leaders from the decision process and, in some cases, resulted in trade-offs that LaCrosse's employees would not have made earlier. A few employees quit during this time, saying that they did not feel comfortable about producing a window that would not stand the test of time. However, there were few jobs for carpenters, so most staff members remained with the company. After one year inventory expenses decreased by approximately 10 percent, but the number of defective windows returned by developers and wholesalers had increased markedly. Plant employees knew that the number of defective windows would increase as they used somewhat lower-quality materials to reduce inventory costs. However, they heard almost no news about the seriousness of the problem until Vlodoski sent a memo to all production staff saying that quality must be maintained. During the latter part of the first year under Vlodoski, a few employees had the opportunity to personally ask La- Crosse about the changes and express their concerns. LaCrosse apologized, saying due to his travels to new regions, he had not heard about the problems, and he would look into the matter. Exactly 18 months after Build-All had become majority shareholder of LaCrosse Industries, LaCrosse called together five of the original staff in the plant. The company founder looked pale and shaken as he said that Build-All's actions were inconsistent with his vision of the company, and for the first time in his career, he did not know what to do. Build-All was not pleased with the arrangement either. Although La- Crosse windows still enjoyed a healthy market share and were competitive for the value, the company did not quite provide the minimum 18 percent return on equity that the conglomerate expected. LaCrosse asked his long-time companions for advice.

1. Identify the symptoms indicating that problems exist at LaCrosse Industries Inc.

2. Use one or more leadership theories to analyze the underlying causes of the current problems at LaCrosse Industries. What other organizational behavior theories might also help to explain some of the problems?

3. What should Gilbert LaCrosse do in this situation?