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Business Case Study - CLEM GRANT




Question;CLEM GRANT*Clem Grant was Manager of the Ottawa branch of the Milcroft Concrete Forms Corporation (MilcroftCorp.). Milcroft Corp. was established in 1932 and based in St. Anthony, Newfoundland, with branchoffices in several major cities across Canada. The Ottawa branch was their most successful, having beena consistent moneymaker until last January, when Clem Grant was brought in as Manager of the Ottawabranch. Clem came from the Vancouver branch office of a competing Canadian concrete firm,CementWorks Inc. (Cl).Up until his retirement in January, the Ottawa branch was managed by Bartholemew (Bart) Stallone.Stallone was born and raised in Ottawa and was a graduate of the University of Ottawa's School ofManagement (then known as the Faculty of Administration). He had worked for Milcroft Corp. first as astudent during his time at university, and after graduation, signed on full-time, working his way up tobecome manager of the most successful branch of the company. It was, in fact under Stallone'sleadership that the Ottawa branch eventually became the most successful branch of Milcroft Corp.During Stallone's thirty years as manager of the Ottawa branch, the'branch had never fired or laid off asingle employee, and staff turnover was well below industry standards.Stallone was a very confident and likeable person, and believed strongly in developing an environmentin which his employees would become self-motivated. He encouraged everyone to have a voice andstrongly preached that if employees worked hard, the company would take care of them. He wascharismatic and believed in, and demonstrated delegation and empowerment. He was regarded as acautiously optimistic risk-taker who earned employees respect and loyalty by sharing his knowledge andshowing them how to do things.Clem Grant was the second-in-command at the Vancouver branch of Cl. As with the Ottawa Branch ofMilcroft Corp., the Vancouver branch of Cl was also very successful - the branch had experienced tenconsecutive years of growth and profitability, and was regarded as the most successful branch of Cl.As second-in-command in Vancouver, Clem was responsible for managing all the construction workersemployed at the branch. He was task-oriented, actively assertive and was accustomed to exercisingcontrol and influence. He was also strongly motivated to "make the numbers" given to him by theVancouver branch manager in terms of revenues, expenses and people. While staff turnover at theVancouver branch of Cl was considerably higher than the industry standard, for the past 10 years he"made the numbers" ? often with margin to spare.Clem had worked "in concrete" for over fifteen years and like Bart Stallone, had worked his way up inthe same company since graduating from a Canadian west coast university in civil engineering.One of the reasons frequently cited for Milcroft Ottawa's success was the shrewdness of Bart Stallone inrecruiting division chiefs of different cultures, given Ottawa-Gatineau's multicultural environment. Itwas this management team that Clem inherited when he accepted the job as Manager of MilcroftOttawa. This management team was made up ofYoshi Mundansha, Chief of Engineering, SusanComfort, Chief of Sales and Marketing, Wilhem Thiele, Chief of Finance and Administration, and Jacques(Le-grand) Fromage, Chief of Quality Control. Clem also had an Executive Assistant, Martin Campbell,whom he recruited from his old office in Vancouver.Yoshi Mundansha was born and raised in Japan where he earned his undergraduate degree in civilengineering from the University of Tokyo. He subsequently completed a master degree in architecturefrom Carleton University in Ottawa, Canada, and was recruited by Stallone five years ago to head up theengineering division of Milcroft Ottawa. With forty persons reporting to him, Yoshi was responsible forengineering, construction and transport.Susan Comfort was born and raised in New York City and held earned degrees in business administrationand marketing management from the State University of New York. After working for ten years as amarketing manager for a major American construction and development company, she married aCanadian from Ottawa and moved north. Her first job application in Canada was successful-Stallonehired her, impressed with her credentials and successful work record-and instructed the Milcroftattorneys to 'take care of the citizenship thing post-haste'. That was seven years ago. Comfort had astaff of twenty employees, ten of whom were salespersons paid on commission.Wilhelm Thiele was born, raised and educated in Munich, Germany. He held an undergraduate degreein Accounting Science and a Master degree in Finance from the University of Munich, and had workedfor 10 years as an Accounting Manager for a major public accounting firm in Munich. Three years agowhile on vacation in Canada and driving a rental car from Slick Rick's Rentals, Wilhelm had car trouble onhighway 417 in Ottawa and the good Samaritan that stopped to help was none other than Bart Stallone,who was driving a cement mixer at the time. Stallone needed an experienced finance andadministrative manager to replace the current manager who was retiring in three months, and given thecredentials and experience of Wilhelm as well as his cultural background that Stallone thought wouldenrich his current management team, Stallone hired him. Wilhelm's staff consisted of a senior assistant,four accounting clerks and a secretary.Jacques Fromage was an internationally recognized expert in quality control. Born and raised in Lyon,France, Fromage held the French equivalent of an undergraduate and master degree in qualityengineering from the Universities of Paris and Marseilles. He had worked for 10 years for two majorquality assurance consultancy firms in France. Stallone met Jacques at a conference in Nice-Jacqueswas looking for a change of scenery and Bart was looking for expertise in quality control and assessmentfor his management team. Jacques joined Bart six years ago and now headed a team often inspectors.Clem's policy was to have a management meeting every Monday morning at 7:OOAM. This morning'smeeting was extremely important because Wilhelm had recently tabled his financial reports, showingthat for the first time in years, the Ottawa Branch of Milcroft was losing money. Also, in the past sixweeks, six persons had resigned. Further, Sales and Marketing reported earlier in the week that severallong-term Milcroft commercial contracts worth $500,000 had been lost to the newly established Ottawabranch of CementWorks Inc., apparently due to "less than competitive pricing.Clem was deeply concerned about these recent developments and, at the staff meeting, brought theseissues forward in his usual forceful manner."People, you have put me in the very awkward position of having to explain to St. Anthony why, after allthese years, this branch is costing them money. Now I want to get to the bottom of this, and I amprepared to sit here all day if necessary. Thiele here, has provided his financial report which clearlyshows a quarterly operating loss of $125,000. I assume the figures are correct, but I'll have Martin checkthe arithmetic just to be certain. And I hope there are no errors, Thiele! As for the rest of you, do youhave any suggestions, comments or care to shed some thoughts on these financial problems?"Susan Comfort spoke first. "Mr. Grant, the impact of losing the commercial contracts has undoubtedlycaused this operating loss. As I indicated in my report, the loss of these contracts was simply because anew entrant into the Ottawa-Gatineau market is willing to suffer a short-term loss, performing thesejobs at less than cost, in order to break into the market. It is very difficult to compete against this typeof predatory marketing, and...""Look Susan," interrupted Clem, "I really don't give a hoot about all your fancy marketing explanations.The bottom line is that you're paid as a sales and marketing professional to figure out how to combatany type of marketing tactic. I want solutions that will work, not a pile of theoretical gobbly-gook. Iwant you to fix the situation NOW, and don't allow this company to lose any more contracts. Dowhatever is necessary." Clem stared hard at Susan, shook his head and gazed toward the ceiling liftinghis arms over his head and said, "Look, you wanted a man's job, you somehow broke through the glassceiling-good for you, congratulations! Now deliver!!"Yoshi couldn't resist a wide smile. "You know, Mr. Grant," began Yoshi, "these are difficult economictimes. Perhaps it would be in the best interests of the company and this management team to take alower margin on certain contracts and at least generate some revenues, as opposed to maintaining ourregular prices and losing additional contracts. We have to think about what is best for us, for ourteam...""So now, in addition to being an engineer, you are also an expert on pricing, sales and accounting!"Clem leaned across the table within about six inches of Yoshi's face and said, "Look, Mundansha, I payyou to worry about transporting concrete and building structures so they don't fall down. We'll letThiele over there worry about the bean-counting, and sweet Sue can worry about the sales andcontracts. You just make sure my structures don't fall down!"Yoshi folded his hands on the documents in front of him and looked down and away from Clem, withoutsaying anything.Monsieur Grant, I would like to raise a concern I have regarding the number of recent resignations," saidJacques Fromage as Clem leaned back in his chair."Look, Fromage, I really don't think this is an appropriate time to discuss this issue. We are facingserious financial problems, un catastrophe as you would say in your country! The fact that a few peoplehave resigned might actually save us enough money to offset this operating loss!""But Monsieur Grant!" continued Jacques undaunted, but with a somewhat raised voice, "these werelong-time staff members who knew the company and whose daily contributions cannot be replacedmerely by reassigning tasks! And as far as replacing them, you will know there is a considerable learningcurve...""LOOK!" roared Clem Grant, "I am not interested in hearing any more bleeding heart stories ordimestore psychobabble. Everyone is replaceable, including you Fromage, and every other member ofthis country club so-called management team. Now the bottom line is this-before the end of the day, Iwant each of you to prepare a report on how you will operate your respective sections after I impose a20 percent staff reduction. I want written suggestions on what I should tell head office. I want all of youto understand-your careers are on the line and you're betting your pay cheque on your suggestions! Iam not happy with the performance of this team. From what I see around this table I don't know howthey manage even to get water flowing down hill in Germany, Japan and France, but I do know that THISis how I manage in Canada, and if I have to change this team and replace everyone with Canadianmanagers, I will!""Now look people, we have work to do. We're all in this together. If you need any further direction,come and see me. My door is always open....


Paper#53383 | Written in 18-Jul-2015

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