Important information about The Wallace Group

Background of The Wallace Group:

The Wallace Group, Inc., is a diversified company dealing in the manufacture and development of technical products and systems. The company currently consists of three operational groups and a corporate staff. The three groups include Electronics, Plastics, and Chemicals, each operating under the direction of a Group Vice President. The company generates $70 million in sales as a manufacturer of plastics, chemical products, and electronic components and systems. Principal sales are to large contractors in governmental and automotive markets. With respect to sales volume, Plastics and Chemicals are approximately equal in size, and both of them together equal the size of the Electronics Group.

Electronics offers competence in the areas of microelectronics, electromagnetic sensors, antennas, microwave, and minicomputers. Presently, these skills are devoted primarily to the engineering and manufacture of countermeasure equipment for aircraft. This includes radar detection systems that allow an aircraft crew to know that they are being tracked by radar units on the ground, on ships or on other aircraft. Further, the company manufactures display s that provide the crew with a visual "fix" on where they are relative to the radar units that re tracking them.

In addition to manufacturing tested and proven systems developed in the past, The Wallace Group is currently involved in two major and two minor programs, all involving display systems. The Navy-A Program calls for the development of a display system for a tactical fighter plane; Air Force - B is another such system for an observation plane.

The Problem with The Wallace Group:

Presently, there is a mood of lethargy and drift within The Wallace Group. Most managers feel that each of the three groups functions as an independent company. And, with respect to group performance, not much change or progress has been made in recent years. Electronics and Plastics are still stable and profitable, but both lack growth in markets and profits. The infusion of capital breathed new life and hope into the Chemicals operation but did not solve most of the old problems and failings that had caused its initial decline. For all these reasons Wallace decided that strong action was necessary. His greatest disappointment was with the Electronics Group, in which he had placed high hopes for future development. This he acted by requesting and getting the Electronics Group Vice President's resignation. Hired from a computer company to replace LeRoy Tuscher, Jason Matthews joined The Wallace Group a week ago.

problemS:

1. What is the most important problem facing the Wallace Group?

2. What recommendation(s) would you make to Mr. Wallace, and in what order of priorities?

3. How do you educate a manager to manage an organization as it evolves over time from an entrepreneurial structure to a more sophisticated and complex organizational structure?