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Strategic Audit for the Wallace Group

Essay by   •  February 27, 2017  •  Case Study  •  1,403 Words (6 Pages)  •  2,510 Views

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Strategic Audit for The Wallace Group

I. Current Situation

a. Current Performance

i. The Wallace Group’s annual sales as of last week were $70 million which was a minimal improvement from two years ago, with much of the sales related to governmental contracts and automotive markets.

ii. The Wallace Group showed a profit of $3,521,000 before taxes last year.

iii. The Electronics Group performed well last year and engaged in two major programs under the Defense Department contracts. These contracts allow for on-going sales after the final product has been released with an estimated total of $56 million over the next five years.

iv. Plastics also performed well and continue to be a major supplier for Chrysler, Martin Tool, Foster Electric, and of course the Electronics group.

v. The Chemicals group underperformed last year but did turn a small profit.

vi. Despite increasing net sales from two years prior and still being able to pay out dividends, the company morale is low with most of the grievances pointing to Harold Wallace and his decision making, as well as the corporate structure and policies. Many managers feel each of the three groups work independently as opposed to working synergistically.

b. Strategic Posture

i. Mission

1. The mission statement seems to be missed by many of the Vice President’s and Directors. The only one that seems to know what the vision is is Harold Wallace.

ii. Objectives

1. The organization is in the process of creating a strong management team to meet future challenges.

iii. Strategies

1. The organization has chosen to reach out into new markets wherever possible and to institute the controls necessary to move forward in a planned and orderly fashion.

iv. Policies

1. Groups are encouraged to purchase plastics and chemicals from their sister companies as part of the transfer pricing corporate strategy.

2. There is a hiring policy to hire new people below the salary grade midpoint.

II. Strategic Managers

a. Board of Directors

i. The Board of Directors is headed by the President, Harold Wallace.

b. Top Management

i. Harold Wallace is President and Chairman of The Wallace Group.

ii. The Electronics group had been run by LeRoy Tuscher but he has recently resigned his position. Jason Matthews has joined The Wallace Group as Electronics Vice President a week ago.

iii. The Chemicals group is led by Vice President, Jerome Luskics who assumed duties after his chemicals company merged with The Wallace Group.

iv. The Plastics group is led by newly hired Vice President, Martin Hempton.

v. There are also new positions to the organization that report directly to Harold Wallace. Those positions are; Vice President of Finance, Vice President of Secretarial/Legal, Vice President of Marketing, and Vice President of Industrial Relations

III. External Environment

a. The market seems to remain strong for the Electronics group. They performed well last year and have secured two major contracts that will set them up quite well financially over the next five years.

b. The Plastics group also has a bright outlook with their products being utilized in the electronics and automotive industries. Both industries remain a constant fixture in our society but the group must expand to other markets in order to show significant growth.

IV. Internal Environment

a. The overall satisfaction of the organization is poor at best. Starting from the top of the chart, Harold Wallace has not defined a clear vision of the organization for the three groups to follow. This hinders progress for all three and causes uncertainty when making proper decisions. There is also frustration expressed by the Vice President of Industrial Relations concerning the development of managers. The organization promotes from within but leaves them without proper management training.

V. Analysis of Strategic Factors

a. Situational Analysis (SWOT)

i. Strengths

1. The Chemicals group produces the chemicals used in the Plastics group which makes distribution seamless un

2. The organization promotes from within which gives the employees a career path to work towards.

ii. Weaknesses

1. The company lacks a strong forward-thinking vision.

2. Decision making is not done in a timely manner which leads to lost bids.

3. After speaking various Vice President’s and Director’s, the

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