Case Study ReportFiggie InternationalExecutive summaryFiggie international, created by Harry Figgie grew through a series of acquisition where more than a dozen companies were acquired from the beginning of 1963. By the year 1989, Figgie international had 36 divisions with several unrelated products from sporting equipment to fire fighting equipments. The stretch of activities raised the reputation of Figgie international to number 286 on the fortune 500 magazine. It was during this period that company’s earnings reached $1.31 billion out of which $63 million were profits to be distributed to 10887 shareholders and 17,000 employees.
On the contrary, these earnings blindfolded the management from foreseeing modernization problems affecting Figgie’s divisions. In the housing insurance division, its bad acquisition led to a string of losses amounting to $13.5 million. Harry knew also that manufacturing plant needed modernization but the problem was how to source such a huge investment which was required to fulfil re-engineering or overhaul task. In order to reduce operation cost and produce quality products, it was necessary for Figgie international to take advantage of modern technology and equipment which would raise the company to world class level.
For Harry, modernization was a difficult mission and he had no idea on how to achieve it. Consequently, he sought assistance of old management consultants hoping that the objective would be realised. The CEO failed to consider recruiting internally expert personnel or even seeking advice from strategic managers. Table of contentIntroductioniv1)Identificationiv2.1 HR issuesv2.2 management issuesvi2.3 legal issuesvii2.4 financial issuesviii2)Diagnosisix3.1 Leadershipix3.2 Culturex3.3 Structurex3.4 Managementxi3)Recommendationsxii4)Lessonsxiii5)ConclusionxivIntroductionThis report provides an analysis of major events that led to poor operation of Figgie international Inc. Issues to be identified will cover on: human resource, management, legal, financial among other essential areas of the company.
As equipments in the company were aging, while labour became competitive, it was imperative for the company to take stern action which would enhance survival in the competitive environment. At the same time, federal government crippled the economy through incessant deficit budgets. Studies indicate that six different consultants were on the ground trying to workout 10 different projects on the same plant which needed modernization. Some of the consultants worked on plant consolidation while another evaluated just in time delivery.
Too many consultants working on the project led to conflict of goals. Subsequently, plant managers lacked enough time to work on their own. IdentificationIn the month of October 1988, the story about the misfortunes crumpling down Figgie appeared on the infamous Forbes magazine (O’shea, 2007). The narrative focused on a stock buyback manoeuvre initiated by Hurry. That step diluted power of average shareholder by seeping power of average shareholder through a process of replacing one class of Figgie stock with another class which carried less voting power (O’shea, 2007).
This strengthened Figgie’s control over the company but was at the expense of shareholders. After publication of the magazine, Figgie reacted with a modernization plan and instantly created a new hierarchy of a chairman and ran to grasp services of consultants. An alternative and appropriate step for the company was to empower employees and purchase right assets for the company. Any person at the management level knows that change out to be continuous and done over a span of time. Even though expenditure on capital goods is costly to a company, they can realise substantial profits if utilised appropriately.
Moreover, Figgie should have formulated strategic business management instead of hiring series of consultants pursuing the same goal.