You are on page 1of 5


This case is about ACM Corporation and putting light on different issues faced by new president of ACM, Mr. Briggs in diversification process. There are many major and minor issues faced by the organization when they diversified from Automobile sector to different sectors such as Capital Goods, Castings, and Consumable Goods. MINOR ISSUES Following are the minor issues faced by the organization

In Organization structure, there is the deficiency of Vice President in the division of Automobile and Aerospace parts division because it is the core division of business of the organization and is reporting directly to president. Divisional Personnel below General Manager Divisions are not clear about bonus policy and they are dissatisfied about bonuses according to their efforts and performance. There is lack of HR Personnel Planning at Corporate headquarters.

MAJOR ISSUES Following are the major issues faced by the organization

There is lack of effective divisional planning and communication between corporate offices and divisions in different areas such as HR personnel planning and HR development and HR inventory management system for future growth. Organization has given autonomy to divisions in HR development but they are unable to fulfill requirements as it has been mentioned in the case that when one corporate officer visited a company for picking a management person for another company he found that the company was deficient in this area although it was performing well. Top Management such as president is not following proper chain of command and span of control in getting information about different decisions such as Project approval. He is using informal ways to gather information and taking decisions in Budgeting and Project approval and it has been mentioned in the case that he took wrong decision due to this informal channel i.e. he took project with lower ROI of less than 15% by getting wrong information through informal channel.

• • • • • . The bonus policy must be clear to the divisional employees of the ACM and these must be objective based according to sales target. .P and General Managers of each division. Development of Personnel in each division for future growth must be directly under the control of corporate division although there must be full coordination with the divisions but final responsibility must be at the end of corporate staff. To solve core problem Mr.CORE ISSUE By applying McKensye 7s frame work Following is the core issue faced by the organization. Sales growth data shows that Railroad and Capital Goods business are in negative growth section since last two years so they will have to focus more on these sections and company will have to be extremely careful in making investment in these divisions and will have to consolidate position in these divisions. Also culture of the organization is derived from the top and he is the key person who is basically the key person who would define the culture so if he will be informal in procedures than whole of the organization would follow informal procedures. Briggs must also focus on participative management rather than getting information through informal channel and making Beurucratic decisions and there must be involvement of V.. Wentworth. • Core Problem lies with in the Style (Culture) of the organization in which organization has very open way of getting information and Previous President. was used to gather information through informal channels and making key decisions on the basis of this information. To Solve core problem Mr. Mr. Briggs will have to bring change in the style (culture) of the organization and he will have to follow proper chain of command and must get key information for decision making from Vice presidents of each division because it is not the presidents job to get involved into day to day operations and to get information through informal channel for decision making rather he must focus on strategic issues. RECOMMENDATIONS • In organization structure of ACM the deficiency of group vice president at Automobile and Aerospace division is required to be fulfilled because of growth and diversification and also because of positive growth in this area this area need more focus in future because it is the old and core business of ACM.

It. From 1957 to 1964.82. however. results in results in more Capital Gains and Dividend Yields for Shareholders.37. after the start of the Railroad Business EPS first time increased beyond 2. the EPS ranged between 1. which shows improving financial performance.COMMENTS ON EXHIBITS Exhibit 2 It is evident from the graph that EPS started with 1.73 in 1957 and in the current state it is $2. .

6 million USD. . The second biggest sector is Capital Goods whose sales started with a humble 30 million USD to 99.Automotive sector has been the biggest of all others in terms of Sales. The sales figure is gradually growing from 1957’s 76.7 million USD.4 million USD to 1968’s 103.

The Net Income Margin over the period reduced from 5.13% to 4.36%. .