UNIVERSITY OF THE EAST

Caloocan

CASE STUDY ANALYSIS

Franco, Rose Ann M.

BMG 114 - 2M
3:00-4:00
Title of the Case

The Johnsonville Sausage Co. (A)

Time Context

1986

Summary/Abstract

Johnsonville Sausage Co, a sausage manufacturer and wholesaler in Johnsonville, Wisconsin. As the

company grew over time, the president of Johnsonville Sausage Co., Ralph Stayer, faced many big

problems in his organization. After Stayer listened to a lecture about how managers could change their

philosophy and style of management from Dr. Lee Thayer, a professor at the University of Wisconsin,

Stayer thought about his organization and found out that the problems in his organization were the

result of the way he managed his employees. As a result, Stayer decided to change his management

style which led to a big organizational transition.

Vision/Mission

To create and maintain an environment that requires each member to fully develop their God-given

talents.

Corporate Social Responsibility (CSR)

Johnsonville, is committed to the well-being of our animals. It is our moral and ethical obligation to

ensure our animals are treated humanely at all times. As we have always done, we continue to improve

equipment and facilities, educate our employees in ethical treatment practices and actively pursue new

technology to further enhance our handling practices.

I. Statement of the Objectives

To come up with a decision that needs to be made regarding Palmer's offer and to formulate the best

procedure for making this decision.

II. Statement of the Central Problem

Ralph Stayer of Johnsonville Sausage received an offer from Palmer Sausage’s to produce sausages

which would amount to a 25% profit increase. However, the commitment would require another

production shift added to the workforce. How should he react to this offer?

III. Areas of Consideration (SWOT Analysis)

Strength

 Diverse Product Portfolio

 Strong relationship with existing suppliers

 Intellectual Property Rights

 Superior product and services quality

 High Margins

 Strong Balance Sheet and Financial Statement

Weakness

 Inventory Management

 Customer Dissatisfaction

 Project Management is too focused on internal delivery rather than considering all the interests

of external stakeholders
  Lack of critical talent

Opportunities

 Increase in Consumer Disposable Income

 Growing Market Size and Evolving Preferences of Consumers

 Access to International Talent in Global Market.

 E-Commerce and Social Media Oriented Business Models

 Developments in Artificial Intelligence

 Increasing Standardization

Threats

 Culture of sticky prices in the industry

 Increasing costs component for working in developed market because of environmental

regulations

 Threats of New Entrants because of Reducing Costs and Increasing Efficiencies

IV. Alternative Courses of Action

1. He should ask first the employees if they can and want to handle extra responsibilities

Advantages

 Can help them feel empowered

 Encourages employees to generate ideas and new ways of doing things

 It will provide them opportunities for self-development and growth

Disadvantages

 Might demand for a salary increase/bonus

 Too much work can create burdens and stress that might affect routine performance
2. He should agree to the offer and hire more people who can develop their leadership skills

Advantages

 Increased in the size of their orders

 Huge increased in profit

 Opportunity to train new people and enhance the skills of the current employees

Disadvantages

 The group as a whole was too large to work together effectively

 Can lead to disagreement between the old and new employees

 The risk if Palmer canceled -- which it could do on 30-days notice

3. He should not do it.

Advantages

 The company's time will be focused on its own goals

 Minimal risk or damage

Disadvantages

 Opportunity cost

V. Recommendation

I therefore conclude that the best solution to the problem is alternative course of action #1, He should

ask first the employees if they can and want to handle extra responsibilities, because the only way they

could do Palmer's successfully was if everyone at Johnsonville was committed to making it work, so

everyone had to decide.

VI. Plan of Action

1. Set clear sets of new objectives

2. Collect good information and control systems so that individuals and activities can be measured.

3. Create a new schedule specially if night shift would be needed

4. Great clarity in procedures.

 5. Give congruent incentives to the employees

6. Re-evaluate each workers performance to assign them to a task that match their skills

7. Trust in the leader

VII. Potential Problem

1. What if the employees is not yet ready to take a bigger responsibility?

2. What if Palmer's expectations are not met?

3. What if the service is not satisfying the customer's needs?

VIII. Contingency Plan

 If the employees performance does not improve even after undergoing a seminars and training,

the company should hire new employees

 Generate a product characteristic plan based on the specific situation and possibility assessment

 Maintain the communication between the company and consumers by hiring someone to

address the complaints and needs of the consumers, that way they will know what to improve.