Grandville’s History and Current Problems

Grandville Engineering, Inc. (GVE) is a small manufacturing company located in the midwestern United States. It began as a bicycle shop in Grandville City over 90 years ago and grew from an operation with eight employees to a company with over 1,500 employees with annual revenues of approximately $880 million worldwide. Over the years, GVE’s operations evolved from building bicycles to producing bicycle parts to designing and producing ball bearings and bearing casings. The ball bearings and bearing casings are made for a range of machinery—large and small—including landing gear for aircraft and rolling carriages for rapid transit systems.

The GVE headquarters and main production plant are still located in Grandville, along with 1,250 employees. GVE has a high-tech R&D design center in Bonn, Germany and small sales offices in New York, Seattle, Seoul, Beijing, and Milan. GVE has an ethnically diverse workforce in the United States, with black and white members predominant among older employees and management, and Hispanics among plant floor workers.

As CEO of GVE, you’ve been worried to the point of being unable to sleep or concentrate on your normal work. For eight years, you were chief operating officer (COO) of the company. Seymour Malgram, who is now part-owner, was the chief executive officer (CEO) and your boss. You had, and still have, a great relationship. Seymour always told you, “You run the plant and give me the best bearings in the world; I’ll do the external stuff and bring in the business.” And that formula worked well through those eight years together. Business was booming; profits were good.

Then, GVE was courted by Transition Enterprise Systems (TES), a multinational company privately owned and invested in by venture capitalists. TES is known for buying out small companies, combining and merging them for more efficient operations, and sometimes moving their operations overseas to cheaper labor and materials markets.

After six months of negotiations, TES bought out Seymour and other private shareholders of GVE to obtain a controlling interest. Seymour was promoted by the TES board of directors to general manager of all TES manufacturing operations worldwide. Seymour then promoted you to his former position as CEO of GVE, a job to which you had aspired. Consistent with a trend in many businesses today, Seymour and the board decided not to hire a replacement for your old COO position, but to have that job merge with your new CEO duties.

You have a passion for GVE and have big ideas for the company, but somehow, right from the start, you as newly minted CEO have had to confront a series of crises that have consumed much energy and attention. Right after the change in leadership, GVE saw a slide in revenue, just barely breaking even. You initially attributed this change to the faltering US and global economies and fully expected to recover in a year or two.

However, in the succeeding years, GVE operated at a loss, dropping 2 percent below margin, and then 5 percent. Last week, you got the projections for this year. They are not good, forecasting continued decline in revenue and increasing costs, resulting in a possible 8 percent drop below margin.

You also obtained an industry consultant’s report that describes GVE’s production technology as aging and too labor-intensive, driving up costs. Other companies in the ball-bearing industry have moved their operations overseas to cheaper labor markets and nearer to hybrid materials supply sites in order to cut supply chain costs.

GVE has never been unionized. The company has prided itself in providing generous benefits and a profit-sharing program for employees. The company and the town have always operated as a “big extended family” in the CEO’s view. GVE is the largest employer in Grandville City and has a history of involvement in local projects and service to the community. Every year, the GVE CEO attends high school graduation ceremonies and awards full tuition scholarships to three graduating seniors who plan to major in the sciences at the state university. Your daughter is a star on the school track team, and so is the daughter of GVE’s senior machinist.

Unfortunately, the union has been at work for the past two years trying to organize GVE’s production floor workers. The timing has been abysmal. As a result of the downturn in business and the lost margin, you have had to freeze raises and suspend profit-sharing. You’ve tried to be candid with everyone about the situation, holding quarterly town hall meetings and situation briefings at the plant. As far as you can tell, the older employees understand and are remaining loyal to the company. However, you worry about the younger ones, for whom the union appears to be making inroads.

At the last executive council meeting, GVE’s vice president of human resources, Felicia Dominguez, reported that she thinks the union will legally have enough signatures to call for a vote in six months; if so, she thinks “it is 50/50 the plant will become a union shop.” Felicia also reported a disturbing rise in employee turnover from previous years, some due to planned retirements, but more due to unexpected resignations.

GVE’s plant manager, Terry Ricecloth, also reported a painful rise in assembly line stoppages as well as missed production quota over the past six months. Terry cited a report from quality control showing a three-tenths of a percent increase in defects in sampled product output. Terry blamed the change on “the presence of a few troublemakers in workforce,” and said with emphasis that “we need to terminate a few people.” This comment produced a terse exchange between Terry and Felicia over the approach the company should take if some employees are not producing. You had to intervene to cool tempers.

Two weeks ago, you received a “for-your-eyes-only” message from Seymour outlining a proposal to move production operations to Seoul, South Korea. The former CEO conducted an informal, preliminary cost-benefit analysis and wants you to consider the option. Seymour has not stated that the plant will close; he has asked for an objective analysis of his suggestion, pro and con, and of what will happen if operations stay where they are. You have this to mull over.

Then, at the company’s town meeting yesterday, a disturbing incident occurred. You had just finished briefing everyone on the shop floor on the past quarter’s operation. About 400 employees were present. One of the members who has been campaigning for the union raised his hand and asked, “What about this proposal to close down our plant and move it overseas? You didn’t say anything about that!”

You were caught off-guard and hastily answered, “There is no proposal to close down the plant. We are looking at all possible ways to stop losing money.”

Detail requirements:

• Read the case study of Granville carefully (in reading file, pg 1-4)
• you’re convinced that some of the theories you’ve studied recently do shed light on the situation at Grandville…and organizational systems or structural factors are playing a larger role than personal factor (to identify the one theoretical framework in organizational factors that will provide the most value to leadership in understanding what’s happening at Grandville).
• You choose the organizational systems or structural factors theoretical perspective you think is best. (I am assigned to work on: Organizational Learning Theory)
  • Organizational Learning Theory
  • The fifth Discipline (Senge, 1990) generative learning requires five disciplines: personal mastery, mental models, shared vision, team learning and systemic thinking.(as diagram in the TEMPLATE ATTACHED)
• You’ll need to do some conceptualization to lead you to the development of a theoretical conceptual framework in graphic form. The conceptual framework will help articulate your chosen theoretical perspective in a model that clearly explains the specific Grandville concepts and dynamics that you seek to address.

Work on the Body essay:

• See the attached TEMPLATE/GUIDELINE file to note exactly what to write

Work on Appendix 1

those aspects of the Grandville situation you believe one or more of the organizational systems or structural factors theories helps to explain. Be specific in discussing the particular components of the theory or theories that you think are helpful. (about 150 words, with 2 reference)

Work on Appendix 2

Although you created a clear graphic to show how the important concepts of the theory relate to each other, you know that Seymour and the other owners will want you to provide the information in narrative form.

For this narrative, you’re going to not only explain the graphic, but develop recommendations for alternative actions that could turn things around at Grandville. Keep in mind that the move of production to Seoul is still an option.

You embark on the development of a theoretical conceptual framework in narrative form. You follow the guidelines Seymour has sent you to explain your organizational systems or structural factors concept graphic and provide recommendations.

Narrative has to be as comprehensive and illuminating as possible, addressing all questions that could be raised by your target audience and explaining the recommended solutions.

You submit the organizational-structural concept graphic and narrative with recommendations.

1.1: Construct an argument using scholar-practitioner communication skills.

1.2: Write using APA style and format.

Support a theory lens for understanding a management practice problem in the current context.

Develop a conceptual model within a particular domain.

(about 4 pages, include 5 reference)