Ohio Steel produces steel products for a variety of customers. One division of the company is the Garage Door Division, created in the late 1940s. Since that time, this division's principal products have been galvanized steel components used in garage door installations. The division has been continuously profitable since 1950, and, in 2010, it generated $20 million of profits on $500 million of sales.
However, over the past 10 years, divisional growth has been slow; profitability has become stagnant, and few new products have been developed, although the garage door components market has matured. Company president Kendra Lawson has asked her senior staff to evaluate operations of the Garage Door Division and to recommend changes that would improve its operations. The staff uncovered the following facts:
• Tonya Calley, age 53, has been division president for the past 15 years. Her compensation package includes an annual salary of $375,000 plus a cash bonus based on achievement of the budgeted level of annual profit.
• Growth in sales in the residential metal products industry has averaged 12 percent annually over the past decade. Most of the growth has occurred in ornamental products used in residential privacy fencing.
• Nationally, the division's market share in the overall residential metal products industry has dropped from 12 percent to 7 percent during the past 10 years and has dropped from 40 percent to 25 percent for garage door components.
• The division maintains its own information systems, which are essentially the same systems that were in place 15 years ago; however, some of the manual systems have been computerized (e.g., payroll, accounts payable, accounting).
• The division has no customer service department. A small sales staff solicits and takes orders by phone from national distribution chains.
• The major intra-division communication tool is the annual operating budget. No formal statements have been prepared in the division regarding strategies, mission, values, goals and objectives, or identifying core competencies.
Given this information, identify the major problems in the Garage Door Division and develop recommendations to address the problems you have identified.