SUBJECT: ENGINEERING MANAGEMENT

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CASE 1 Introduction Republic Insurance Company is a regional, all-purpose firm with offices in a three-state area. The central headquarters office houses the staff that plans and controls the field-office operations. Because the company is in such a competi- tive industry, sales play a very important role in Republic's efforts. The group responsible for planning and controlling the sales effort of Re- public's three-state field force is the Strategic Management Division. There are two main components of the Strategic Management Division: 1. The Accounting Department pays the bills and keeps track of the in- come. 2. The Plans Department does the marketing, product and price studies, profit, budget planning, and similar duties. The organizational chart of this Strategic Management Division is shown below. It depicts the structure of the division and the leadership roles within that struc- ture which have a bearing on this case. It also includes the names of the indi- viduals who filled those leadership roles in June, 1987, the time at which the events in this case begin. STRATEGIC MANAGEMENT DIVISION Division Head: Sam Benson Plans Accounting Manager: Peter Gilmore Pricing Unit Budgets Unit Supervisor: Sandi Bates Vacant CASE ANALYSES The manager of the Plans Department is responsible for two units: Budgets and Pricing. Each unit has a supervisor who is responsible for the projects and tasks assigned to the unit. The Budgets Unit does long-term planning and evalu- ation of the profit and cost centers of Republic, and coordinates the overall budget planning for the entire company. The Pricing Unit is responsible for keeping track of the competition's prices on insurance policies, company-wide profit-forecasting, and other special studies about company products or costs. The Pricing Unit regularly provides these studies to other units and divisions within the company. These studies supply essential information to the managers of these other departments so that they can make their own business and budget- ing plans. In June of 1987, the Strategic Management Division was headed by Sam Benson. Peter Gilmore, who had been with Republic for 10 years, managed the Plans Department's two units. The Budgets Unit was supervised by Sandi Bates, and the Pricing Unit's supervisory position was vacant. In that same month, Peter Gilmore received a referral from Personnel for the open supervisor's position in the Pricing Unit. The job candidate's name was David Randle. Randle had a resume that looked good (see the copy of the re- sume on the following page), and Gilmore managed to squeeze him in for a 20-minute interview between business meetings. The manager talked in general about the job and asked Randle about his resum. He found Randle personable and easy to get along with, liked the candidate's background, and decided to of- fer him the job. He told Personnel to hire him and take care of the details. Randle began work a week later, on July 1, 1987, as supervisor of the Pric- ing Unit. He had two cost analysts and a secretary reporting to him. CASE QUESTIONS 1. Evaluate David Randle's resum. 2. Evaluate the selection procedure used by Peter Gilmore. 3. Anticipate any effects of the selection procedure used by Peter Gilmore on David Randle's future per- formance. CASE ANALYSES DAVID RANDLE 5634 Watercrest Street City, State 12345 EDUCATION State University The Evening College Program B.S. in Business 3.75 GPA, 3.8 in major 1978-1984 PERSONAL Born: October 9, 1957 Married Fluent in four languages: Spanish, French, Italian, Portugese WORK HISTORY Smith Stores January 1987-date Cost Accountant: supervises Cost Unit, profit- planning, budget coordination for the stores Johnson Adhesives Manufacturing February 1986 - July 1986 Price Analyst: developed and supervised computer records, inventory controls, payrolls Safety Media Films January 1983 - February 1986 Price Analyst: budget planning, international finance, financial planning Bander Food Chains November 1981 - January 1983 Senior Bookkeeper: price studies, computer records, supervision Ger Smart Book Publishers February 1981-- November 1981 Junior Bookkeeper: payroll accounts, accounts receivable, payable, general ledger, audits