Critical Thinking Assignment
Woody Ltd. is a mid-sized toy manufacturer in Toronto. It has 3 divisions - wooden toys, robots and metal cars. The owner is a toy conglomerate with assets held globally. They are doing a review of all their holdings given stakeholder demands for improved profits. They believed that their wooden toy and metal car divisions were doing OK, but they thought that the robot division was causing them the most problems as they'd heard about the chip shortage. As the owner wanted to sell in a couple of years, they were concerned about what could be done to turn things around. The owner authorized an audit of the company and they are now reading the report. They didn't realize things had gotten so bad or that they really hadn't had a good handle on the company's performance.
A. Worker's Compensation premiums for the company have increased 25% due to the number of accidents that had occurred when summer employees were not properly trained to work on the production lines. This created poor relations with employees as those summer employees were related to many of them. Management shouldn't have thought that parents would train their children on the line.
B. Sales of robots and metal cars are decreasing (by 35% and 25% respectively this year) and have been so for the past 2 years.
C. Due to the increased numbers of wooden toy sales, the production staff have been overwhelmed with orders which they are having a hard time fulfilling.
D. The factory building houses the 3 production lines, one for each division. Each product line has similar production machinery and so it's not unusual for employees from one product line to work on other lines, especially during vacation periods.
E. The Customer Service team is constantly dealing with clients whose orders are wrong or were never received due to poor paperwork by the sales force. They would rather be spending their time establishing relationships with the customers as they were promised a small bonus for retention targets.
F. The HR department has seen an increase in mental health claims, particularly stress related ones from all areas of the company.
G. Although the intent of management was to have the Customer Service team deal with all renewals and have an opportunity to earn a small bonus, the sales team keeps stealing those renewal sales from them (and getting paid for them - at full commission). As a result, there is a lot of hard feelings between sales and Customer Service.
H. Rumors are flying around the company of a potential sale soon (everyone saw strangers touring the factory) and employees are afraid that the company will be sold or shut down.
I. No one wants to work overtime in the wooden toy division, even though there is a lot of overtime available.
J. Production employees are mostly young to middle aged women.
K. There's been an increase in the number of maternity leaves being taken, especially among the sales and production staff.
L. The robot division recently won "Best 2022 Children's Toy" designation from Toy Manufacturers Quarterly.
M. Product Line Managers recently insisted that all employees be appraised under a newly released Forced Distribution appraisal system. Most employees have been rated "needs improvement" guaranteeing that they won't receive any merit increase and may even be terminated in the future. Employees raised some concerns on the method being used -but HR did nothing.
N. The wooden toy production line supervisor was recently reprimanded for the poisonous atmosphere he allowed to occur by not dealing with ongoing sexual harassment issues. Most employees feel that this is too little too late and the "accused" is still working on the line. The manager has just turned a blind eye.
O. The Product Line Managers, whose appraisals are based on quantitative measures, were rated superior by the owner's HR department based on the total company sales. Though this is true technically, the managers didn't disclose that other line sales decreased significantly, and it was due to wooden toy sales that company sales increased overall. Product Line Managers are also rated well if they come in below budget on compensation.
P. The Sales Team supervisor reports to the three Product Line Managers.
Q. The sales force has a base salary of $35,000 and an unlimited variable incentive commission.
R. The current variable plans are quite simple:
a. Wooden Toys sales plan: 8% of all sales made, payable monthly.
b. Metal cars sales plan: 2% of all sales made, payable monthly.
c. Robots sales plan: 2.5% of all sales made, payable monthly
The owner is shocked and dismayed on reading the report. They believe that they can't trust their own staff to put things right (if they can be) and so have come to your team for concrete suggestions and plans to get them out of this mess. They have no additional funds to provide.
Task:
The owner wants to be able to sell Woody Ltd. or at least have it turn a profit and for that they need you to put things right. `
After discussion - detail the major issues you see and what changes/actions you will recommend to put things right. You must explain your changes/actions - what are you targeting and why?