CASE FOR ANALYSIS Millier Machine Parts & Services 90 Larisa Harrison grimaced as she tossed her company's latest prevalent. It remained to be seen how much of a dent they quarterly earnings onto the desk. When sales at Virginia would make in the demand for boxes and paperboard based Millier Machine Parts & Services surged past the Even more worrying, consolidation in the industry had $10 million mark some time back, Larisa was certain the wiped out hundreds of the smaller U.S. plants that Millier company was well positioned for steady growth. Today once scrved, with many of the survivors either opening Millier , which provides precision machine parts and service overseas facilities or entering into joint ventures abroad. to the domestic corrugated box and paperboard industry. On the bright side, the emergence of Internet retail sales still enjoys a dominant market share, but sales and profits at Amazon and Walmart was increasing demand for card. are showing clear signs of stagnation board boxes among the survivors. The surviving manu More than two decades ago, Larisa's grandfather facturers were investing in higher quality machines from loaned her the money to start the business and then handed Germany that broke down less frequently, thus requiring over the barn on what had been the family's Shenandoah fewer of Millier's parts. Valley farm to serve as her first factory, He had been a pro- Millier was clearly at a crossroads, and its managers gressive thinker compared to many of his contemporaries were arguing about which direction the company should who scoffed at the idea of a woman running a machine take. If Millier wanted to grow, business as usual wasn't parts plant, and he saw no reason why a smart, ambitious going to work. But no one could seem to agree on the 27-year-old woman couldn't run anything she wanted to best way to achieve growth. The marketing manager was His old-fashioned friends no longer scoffed when Larisa pushing for moving into new products and services, per became one of the major employers in the local area. Today, haps even serving other industries, while the director of Millicr operates from a 50,000 square foot factory located finance believed the plant needed to become more efficient, near I-81 just a few miles from that old family barn. The even lay off employees, and offer customers the lowest business allowed Larisa to realize what had once seemed cost. Larisa cringed as she heard that statement because an almost impossible goalShe was making a good living her focus was always on what was best for her employees. without having to leave her close-knit extended family and The finance director added that efficiency and profitabil rural roots. She also felt a sense of satisfaction at employ- ity should be the key criteria by which Millic measured ing about 150 people, many of them neighbors. They were its performance, whereas the marketing manager vehe- among the most hard-working, loyal workers you'd find mently argued that the company would be effective only anywhere. However, many of her original employees were if it focused on new customers and customer satisfaction now nearing retirement. Replacing those skilled workers in the changing industry environment, which would mean was going to be difficult, she realized from experience. The taking some financial risks. "We've already moved beyond area's brightest and best young people were much more corrugating machines to servicing other types of paper likely to move away in scarch of employment than their board-making equipment. Why not become the all-round parents had been. Those who remained behind just did not provider, serving any manufacturer that makes containers seem to have the work ethic Larisa had come to expect in and packing materials, whether it's paper, plastic, or what her employees ever?" It was truly an ambitious idea, but he was so fired Other problems were looming as well. Millier's mar up about it that he had investigated possible acquisitions ket share, once at a formidable 70 percent, was slipping and partnership opportunities. The finance director was fast, brought about not only by the emergence of new livid. "If anyone is looking into mergers and acquisitions, it direct competitors but also by changes in the industry. The should be me, not the marketing manager," she had shouted box and paperboard industry had never been particularly at the most recent managers' meeting. Meanwhile, the vice recession resistant, with demand fluctuating with manu- president of manufacturing presented a plan for expanding facturing output. The rocky economy had hurt the whole market share by exporting parts globally, which set both industry, including Millier's largest customers. Added to the marketing manager and the finance director off. "Why that, alternative shipping products, such as flexible plastic haven't we even heard about this before now?" the market- films and reusable plastic containers, were becoming more ing manager asked. I'm not saying I disagree with it, but 57 Chapter 2: Strategy. Organization Design and Effectiveness . . . . . communication in this place is atrocious. I never even got The Millic culture emphasized production etficiency a copy of the last finance report." The director of finance The Millier culture was not intendly focused on devel quickly shot back with a charge that the marketing man oping new customers ager didn't seem to care about profit and loss anyway Each department did its job well, but collaboration why should he need a copy of the report: across departments wat rated low to medium As Larisa considered the chaos into which the most Price competition would probably intensity as the cus recent meeting had degenerated, she thought back to her tomer base grew smaller days in graduate school and realized that organisation The industry would continue to change toward fewer design was part of the problem. Millier had succeeded paperboard machines and toward higher quality im- for two decades with a loose, even haphazard structure, ported machines because everyone seemed focused on building the business Larisa scribbled a few notes on a padi People simply did what needed to be done. However, the How should we decide what strategy to pursue company had never been under threat before. "Perhaps we who should have awthority and responsibility for just aren't as well organized as we need to be to handle the what challenges Millier is facing." she thought. As she watched How do we prour commentications the last shift workers walk to their cars, Larisa pulled out What criteria sbould be wse to mere performance report that a consultant friend had developed for her a few and nice accountability months ago. The report emphasised Larisa knew that as soon as she or het team could Millier rated very high on employee morale. determine some answers, she would sleep at least a little Millier was rated low on innovation and change better Questions 1. The managers seem to agree on the overall goal of growth. Which of their strategies would you recom mend Millier take as the most likely way to achieve growth? Explain 2. Using Exhibit 2.9. Four Approaches to Effectiveness, which emphasis would you say each manager is expressing 3. How do you think the managers should go about resolving their difference with regard to their strategies ENDNOTES 1 Josh Costine, Instagram Hits 1 Million Monthly User Up from 800M in September, TechCrunch, June 20, 2018 httechcrunch.com/2018/06/20/instagram-billioner accessed March 26, 2019), Chris Moms, Queen Elizabeth Join Instagram." Forte, March 7, 2019, http fortune com/2019/03/07/queeneliabeth joins-instagram acceed March 26, 2019), and Deepa Seetharaman,stagram Pinda Focus Under Efficiency Guru, The Wall Street Journal April 13, 2017. https://www.wsj.com/articles/instagram finde focus-under-eficiencygo-1492075801 (accessed March 26, 20191 Jack Nichs, "What Is Yahoo Riddle Plagund CEOs for Two Decades, "The Wall Streetwal, July 25, 2016 and Jack Nicat At Google, Steady Hands Prevail." The Wall Street Journal, July 26, 2016, 3 Amitai Erioni, Modern Organisations (Englewood Cliffs, N: Prentice Hall, 1964.6 4 John P. Kortet, "What Effective General Managers Really Do." Harard Business Re, November December 1982, 156-167, Henry Mintzberg, The Nature of Managerial Work (New Yorke Harper & Row, 1973), and Henry Mintberg. Maupin (San Francisco Herre Kohler Publishers, 2009) 5 tason Dalava, "SWOT Analysis. The Kroger Company." Value Line, January 12, 2017, httpulyauline.com/Stock Hichlicht/SWOT Analysis _The Kroger Company XJoWizyk (accessed March 26, 2019 Keith Nunes, "Kroger in Transition Food Business Neus, September 14, 2015, http www.foodbusinessnews.net/articles/2SOK krorin transition (accessed April 2019: Clark Howard Stalt."Kroger 2018 Comeback Strator.com httpsiclark.com shopping cetak roger-chang- accessed April 9, 2019 and Heather Haddon, "Kroger Now Approach to Stocking Shelves Is Boosting Harnings. The Wall Street Journal, June 21, 2018 6 This son is based on a Ram, Steve Church Alejandra Palermo, and Jonas Hoffmann, San Planning to Relape Sra. MIT SOM R58, no. 4 Summer 2017), 31Steven Schuss and Paschalinamo. The cas of Scenario Wing Blue Horom July August 20011, 25-5: Pre Comes Alexander Van de Pome, and Mama Romani, "Three Decades of San Mig ShellGalima Man Review 48,00 1Fall 2005.92-109, and Stephen M. Millet,Four Decades of lines on What Can Exponence Tech Strategy Ladership 41,00 1 2013,231 7 Ramix et al. "Uung San Mame to Rape Sce 8 Reported in Claire CharchandTales of the Unexpected." Trople Management Fery 2013 9 Sarah Kent, "Shell Prepares for Lower Forever' OP The Wall Street fonal July 27-2017 10 Based on A. G. Latey and Roger Martin, Instituting Company Wide Strategic Convert a Procter & Gamble Strategy ole 41, no. 4 2013 111 754 1. Identification of Issues: 2. Problem Identification Statement: 3. Development of Alternatives to Address the Problem Statement: 4. Evaluation of Alternatives, and Recommend One: 5. Implementation Plan of Chosen Alternative: 6. Evaluation of Chosen Alternative For Effectiveness