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The Wallace Group Summary:

The Wallace Group, Inc. is 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 Wallace group is devised from three sub-groups as: Electronics, Chemicals and Plastics.

Harold Wallace was the original owner of the electronics company, but now has 45% of the
stock and runs the group as Chairman and President of the company.

After acquiring the plastics company and then the chemical company. But each of the three
groups is run by a Vice President.

Recently, Hal Wallace asked Rampar to conduct a series of interviews with some key Wallace
Group employees, in preparation for a possible consulting assignment for Rampar Associates.

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, microwaves, and minicomputers. Presently, these skills are devoted primarily to the
engineering and manufacture of counter measure equipment for aircraft. This includes radar
detection systems that allow an aircraft crew to know that the yare being tracked by radar units
on the ground, on ships, or on other aircraft. Further, the company manufactures displays that
provide the crew with a visual fix on where they are relative to the radar units that are
tracking them.

What Wallace asked Rampers to do?


Dont give me a laundry list of problems, Fran. Anyone can do that. I want a set of priorities I
should focus on during the next year. I want a clear action plan from you. And I want to know
how much this plan is going to cost me!
Strengths Opportunities

Diversity of business activity. Potential growth of industry.

Strong technical knowledge in the High demand for the technology provided by the company.
aircraft & military supporting
Wide market range in Military and aircraft industry.
technology.

Very strong knowledge team members.

Highly qualified technical workforce

Vertical integration

Weaknesses Threats

Morale is really poor. Damaged reputation of the group president.

The president runs this place like a one- Low response to bids could be potentially cause problems for future bids.
man operation, when it's grown too big.
Loss of credibility to potential costomer.
Hal admits he never listened to his key
people when they complained.

No communication and feedback taking


place between the corporate staff and
the groups

No alignment between corporate


strategy demands and those strategy
plans met for the groups themselves.

Wallace Group is holding back


Electronics because they are
"encouraged" to buy from Chemicals
and Plastics, which have high prices due
to manufacturing problems.

Fast growth lead incompetent members


to be in management positions without
working on providing training and
support to fill the skill & knowledge
gaps.

Develop a specific action plan to deal with these problems:


Separation between ownership & management (separation between risk peering and
management control) Establish governance and control mechanism to prevent
managerial opportunism.

Board of directors (the largest weight of the shareholders) focused on clear vision and
strategic plan and responsible for decisions and mentoring the managing directors.

Provide Auditing systems.

Financial control process ( separation of cost , profit & investment centers); clear KPIs /
cost center

Executive compensation ( use of recognition of salaries, long term incentives and


benefits )

Stet clear core values that should drive the business to growth and profit maximization;
sustainability, customer relation and leverage the technical knowledge.