Riordan Manufacturing
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Problem Solution: Riordan Manufacturing
Problem Solution: Riordan Manufacturing
Riordan Manufacturing, a global plastics producer, employs approximately 550 people with projected annual earnings of $46 million. The manufacturing company is owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion.
Riordans production is divided into the following three categories: plastic beverage containers made in Albany, Georgia; custom plastic parts made in Pontiac, Michigan; and plastic fan parts made in Hangzhou, China.
With the products being produced at the different plants, Riordans major customers are automotive parts manufacturers, aircraft manufacturers, the United States Department of Defense, beverage makers and bottlers, and appliance manufacturers (University of Phoenix, 2006).
Describe the Situation
Issue and Opportunity Identification
Riordan Manufacturing, with over 500 employees has a problem with employees staying with the company. With this in mind, the overall employee morale is low; the Sales Departments performance has declined; costs of employee training and redevelopment of the reward system; and motivational strategies for the company as a whole (Table 1).
Employee morale is low throughout the company as indicated in the work performance results in 2004 (Employee Turnover Rate, 2006). By redesigning and reintroducing the reward system that allows for all employees, not just the management of the company with seniority, to obtain incentives provided in this reward system, the morale and work ethics of the employees will increase thus increasing employee retention rates, etc.
With that in mind comes the next issue – Sales Departments overall performance. With employee work performance low due to no reinforcement of any incentives at all, the Sales Department has seen a decline in revenue generated from the sales people. The management team wants to combine the efforts in that department and create sales groups so that a team could focus on an individual sale and allow for experience to teach the inexperienced – creating a mentorship.
With the Sales Department incorporating the new “sales groups,” it is certain that training and development of the newly restructured department is evident. Training and development will include motivational strategies as the company, as a whole, will work together to create revenue and profit for Riordan Manufacturing.
Stakeholder Perspectives/Ethical Dilemmas
The stakeholders in this situation are the employees as they are the “back bone” of the company. The major situation is the employees versus the company as a whole because of the compensation that is at stake with the newly formed Sales Department and the groups that are combined within that department.
The company, in turn, is against the employees because of their work morale and attitude toward their jobs and company. Dale Edgel, Chief Financial Officer, is concerned about the R&D Department because recently, he lost three (3) key people that were a major part of that particular department. They left because of the complaints about the compensation and the decrease in satisfaction which is a major indicator around the company (Unknown, 2006).
The compensation and reward systems are stakeholders as well in the company. The systems have to be able to function without major support from the management and/or the Board of Directors of Riordan Manufacturing. The employees and management have to be able to be confident with the system and allow it to be implemented throughout the company and throughout the parent company, Riordan Industries.
Frame the “Right” Problem
Riordan Manufacturing is currently in a decline with sales and revenue (profit). The company will increase in overall employee retention rate, create sales teams, and increase profits and create expansion as a result of the increase in employees.
Describe the “End-State” Vision
The end-state vision for Riordan Manufacturing is the improvement of employee incentives, the reward system, the improvement in sales and the dedication to the company based on the needs and using the suggested alternatives. With using the alternatives, the vision of Riordan will be prosperous as it will continue to grow.
By restructuring the reward system to include all employees, the management of the company will look closely on the compensation, insurance, and the fringe benefits of being an employee at Riordan Manufacturing and also Riordan Industries. Compensation is broken down into the three (3) following levels: bonuses, base salary and total compensation.
Identify the Alternatives and Benchmarking Validation
By recognize that the perspectives and requirements of sales department, the management teams, and sales persons are complementary, but distinctly different (Aberdeen, 2006). Each branch of the company is different and requires different benchmarking validation.
By moving marketing from ad hoc to formalize processes — in support of the selling process. Aberdeen was not surprised that “better” collaboration between sales and marketing resulted in higher sales effectiveness – but it was certainly notable that collaboration has its greatest impact when it is formalized, structured, and encapsulated in support systems. Such systems, which Aberdeen labels as “marketing process enablers,” deliver, clear benefits in aligning the marketing staffs efforts with the sales process (Aberdeen, 2006). These systems also foster better collaboration not just within sales departments, but across the organization.
If you put “leads” in context; yes, the process of getting them and managing them is important, but the key to gaining the acceptance and enthusiasm of the sales