The Wallace Group
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The Wallace Group case study truly undermines the process of transformation necessary to go from a small company to a larger more complex entity. The case brings to the surface several challenges facing the Wallace Group. In reviewing the case study it seems that there is an overall lack of clarity and focus for the entire organization. Additionally, teamwork and cross-functional synergies are almost non-existent. While there seems to be an organizational chart, it lacks total accountability to the department vice-presidents. Having a corporate finance and marketing but no departmental representation has caused true rifts in the organization.
While there seem to be a large number of areas of opportunity for the Wallace Group, the single most important has to be teamwork. Each vice-president seems only focused on their specific department with no regard as to who they may create a more collaborative environment to create additional synergies that can raise the value of the entire company. While they are responsible for the success of their departments, if they took the time to get together on a regular basis with a stated goal of streamlining process, working together, and changing the culture they would find that they have some similar challenges and possibly resolutions that could work for all of them. An example of this would be plastics and chemicals selling materials to electronics as stated by Director of Operations, Burt Williams. While it is a good idea to continue the transfer pricing process, perhaps a cross-functional team could be assembled to look at the internal pricing structure in an effort to reduce internal prices. Perhaps each group selling at cost to the other would increase corporate profit margins. While they would not make a profit
on the sell it allows the other departments to increase their profit. This is a cycle that can replicate itself time and time again.
To counteract the “island management style”, Mr. Wallace could change the group vice-presidents compensation packages. By tying a portion of the performance bonuses to corporate goals he would be motivating them to work closer together for the good of the entire company instead of working for only their own group. Another recommendation would be to being to develop cross-functional teams to tackle some of