DORSEY TRAILERS INC

Marilyn Marks has been making a number of decisions in her effort to remake the company she heads, Dorsey Trailers Inc.

Marilyn Marks was trained as an Accountant. But in 1987, at the age of 34, she and a small group of partners borrowed nearly $25 million to buy Dorsey Trailers in a leveraged buyout. At the time, there were not a whole lot of people interested in purchasing Dorsey. Although it had earned $11 million in 1984, it had lost $2.4 million in 1986. And the future did not look too promising for this manufacturer of specialised refrigerator, dump and parcel truck trailers.

Marilyn Marks saw something others did not. She figured the company could be a money-maker again if she could successfully cut costs. So, after taking over the company, that is where she began. For instance, Marilyn Marks gave the 500 workers at the company's plant in Edgerton, Wisconsin, and their union, a choice: Give her wage and work rule concessions or she would shut the plant down. The Union said No. "They thought we were just bluffing," says Marilyn Marks. She was not. Within two years, all plant's equipment had been shifted to a company operation in Alabama. In the spring of 1990, disaster hit Marilyn Marks and her company. Eighteen inches of rain had swelled Alabama's Pea River, the levee had cracked, and the company's Elba, Alabama, plant was completely washed out. And, unfortunately, Dorsey flood insurance was inadequate to get the plant running again. Combined with financial losses of $4.4 million in 1988 and $9 million in 1989, Marilyn Marks was forced to meet with lawyers to consider bankruptcy for Dorsey, at the last minute, she heard of a special relief program offered by the Small Business Administration for films that employed a large percentage of a local area's workforce. Dorsey's Elba operation met the requirements. The SBA quickly approved a $25 million loan for Dorsey, and the plant reopened four months after the flooding.

Marilyn Marks seems to have had more that her fair share of disaster since taking over Dorsey. In addition to constant labour troubles, the flood, and financial losses, she has also faced major price increases in aluminium (a principal raw material in her business) and a decline in her traditional markets. But Marilyn Marks continues to come up with aggressive strategies. She has overhauled the company's product line, eliminating several models and focusing on several speciality trailers. She also had started selling direct to big trading firms, in addition to local distributors. This move has given her price flexibility for cutting deals and has won her several big customers, such as Tyson foods and United Parcel Service.

In July 1994, Marilyn Marks decided to take Dorsey Trailers public. She sold 41 per cent of the company for $22 million. She and her partners pocketed $5 million, and the rest was used to reduce company debt. And the bottom line has been improving. In 1995, the company earned $5 million on sales of $230 million. Meanwhile, Marilyn Marks continues her quest to cut costs and improve profitability at Dorsey. In November 1995, when union workers at a small Dorsey plant in Pennsylvania had been striking for almost six months, she began a non-union factory in Georgia. She then closed down the Pennsylvania plant and transferred all the work to the new Georgia site. 

1. In your own words, define perception and describe by way of exs from the case study how two people can see the same thing and interpret it differently. (15)

2. From the case study describe how perception affects the decision making process. (15)

3. As a student of Organisational Behaviour, what would have been your advice to Marilyn Marks, with regard to how decisions should be made? (15)