Markham Instruments

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Executive Summary ¡V Founded in 117, Markham Instruments Company manufactured mechanical measurement instruments sold through mail order. During the first decade of its life, the company was organized around the production of these instruments.

In response to increased competition and demand for its products, Markham expanded its sales organization in 14. The market also shifted from mechanical to electrical and electronic measuring devices during this time period. This shift in product attributes required increased scientific skill to engineer the product.

World War II brought an explosion in demand for Markham products. Along with the increased demand came a huge labor requirement to assemble the electronic measuring devices. This era was identified as the start of when the company began to operate in crisis mode.

Along with the explosion in demand and number of employees, came an increase in the number or disputes between Production and other departments. Mr. Roberts and Mr. Finlay feel the increased disputes between the departments are adversely affecting the company¡¦s ability to meet the demands of a changing market and technology.




They survey the key employees to get their feedback on the problem. The key to their success is in using this feedback, along with analysis of management self-concept, to gain insights into what they can do to make the group¡¦s interactions more productive

Core Issues ¡V Following are critical issues that impact the Markham Instrument Company

Change in the External Environment

During Markham¡¦s first decade of operation, the company organized around the production of the mechanical instruments. The company founder was heavily involved in the day-to-day operations of all departments.

In 14, the market shift from mechanical to electrical and electronic measuring devices resulted in the need for increased scientific skill to design the instruments. Organization of the company shifted focus to Sales and Engineering.

There was an explosion of demand and personnel during World War II. An internal management scandal led to the replacement of Production division management with outsiders. This influx of outsiders changed the company. This period is identified as the start Markham¡¦s operational crisis.

¡§Whatever its character or purpose, a group if it is successfully to operate on its environment, needs some division of labor, some system of communications, some leadership and some discipline.¡¨ More simply put, a group needs jobs (activities), communication (interaction) and motives (sentiments) to survive in its environment..

1. A job requires certain activities for successful performance, the nature of which varies according to the particular technology and job design. The jobs (required activities) at Markham had not been reorganized to reflect how each individual plays a part in the production of the more technically oriented equipment.

„� Personnel policies were obsolete.

„� Production work, in general, kept pace with the factory expansion. In Assembly and Fabricating & Finishing, specialization had taken place and jobs are fairly well defined

„h 400 assembly workers - each person responsible for completing one module.

„h 150 machinists - each person operating one type of machine working on lots of parts.

„h Production control ¡V trained on skills needed for job.

„� The design of the product in the early days allowed Production and top management to organize around, and participate heavily in the design and engineering of the mechanical instruments. The electronic product is more technical and the design skills required are more scientific yet many people outside the engineering organization continue to perform engineering activities. The required activities in Engineering & Design should be different for different people and the activities must be organized.

„h Sales / senior management perform changes in designs / methods.

„h Production management and assembly foreman conduct product engineering on a daily basis

„h Production checks Preproduction Engineering¡¦s drawings to ensure they meet production capabilities.

„h Assembly solves layout problems that should be handled by Preproduction Engineering

„h Production finds ways to get things done without informing Engineering.

„h Preproduction Engineering has minimal contact with Production because they have experience in production processes.

„h Constant coordination is needed on changes in schedules and designs to meet the requirements of each department.

„h Finlay states that ¡§Designs find difficulty in production.¡¨

„h It is often required to make changes after design was submitted to Production to meet manufacturing requirements

„h Assembly frequently contacts engineering on parts that don¡¦t function correctly

. The growth in complexity in technical process goes had in hand with an increase in the amount of interaction and the complexity of the interaction pattern.

„� Intradepartmental interactions are unpredictable and information flows are unstructured

„h Sales „Æ Engineering - Sales makes promises on equipment that has not been fully developed leading to problems in Production. Sales is unaware of where the product is in the release cycle.

„h Production „Æ Sales - Production can¡¦t rely on Sales to completely communicate sales contract details.

„h Engineering „Æ Production ¡V Preproduction Engineering has minimal contact with production because they have experience in production processes.

„h Top management, Sales and R&D jointly decide on new methods or changes in existing products to meet changing demand. Production is not included in the planning.

„� The scheme of interaction reveals frequent instances where management bypasses formal channels and goes directly to the responsible individuals. The pyramid of communication has evolved to where junior employees are receiving instruction, are being influenced from managers outside of their department. Employees have multiple masters leading to conflict in instruction

. Early sentiments required at Markham Instruments included support of a family atmosphere along and strong company loyalty. This loyalty also included a tendency for employee to avoid ¡§rocking the apple cart¡¨. Markhamites were expected to foster an environment void of arguments. ¡§For most groups a conflict free climate is not effective. Important issues are not explored and quality of group¡¦s work is sacrificed for the maintenance of friendly and smooth relations.¡¨

„� ¡§Sugar and honey¡¨ methods were expected. People are afraid to make production mad by telling them what to do. Production managers tended to avoid open conflict with each other.

„� In an effort to avoid arguments with other managers, ¡§back door¡¨ interactions with between upper management and lower level workers were not unusual. These instances illustrated by Figure 6, exhibit higher levels of downward influence. Manager points of view tended to dominate.

„h Sales dominates over production.

„h Production frequently dominates over lower levels in engineering.

„h Roberts frequently dominates over middle management in Production.

„h Fellman (Order Coordinator) interacts with Mulcahy and looses more than he wins. He doesn¡¦t think they are very cooperative

„h Bice (Engineer) keeps getting ¡§overridden from above and from Sales.¡¨

Given Sentiments & Emergent Behavior Impact Company Values

Henry Markham exemplified the values of his company ¡V skill, ingenuity, quality work and close personal ties. The early Markhamites supported his values of being friendly and warm. Markham also required that employees be loyal to the company, to put company before own self-interests.

During the 17 shift from Production to Sales and Engineering, the values of skill, ingenuity and close personal ties remained. Even with the shift from mechanical to electronic devices, Production continued informal, internally developed production methods.

The ¡§Victory workers¡¨ and Production management brought in during and after the war did not share these same values of ¡§family spirit¡¨. Trained production specialists also did not like the traditional production methods.

The given sentiments of the new Production management team, specifically the focus on process instead of people, led to behavior which was not only different from, but in actual conflict with, the behaviors expected by Finlay and Roberts. The behaviors of the Production subgroup became increasingly differentiated from the company as a whole.

1. They did not share the Markhamite emphasis on friendly, personal relationships.

„� Ed Greene ¡§went against the family¡¨ and routed out top management that had been involved in collusion and malpractice.

„� Unlike Pop Markham, Greene and his managers did not, in general, circulate with factory workers. Greene¡¦s staff spent time together planning the operations of the department. Due to the size of the department, the managers worked with their foremen who, in turn, spent time with the shop workers. Greene, Browning and Hersey spent more time in their office ¡§with their sleeves rolled up¡¨ working on planning and problems. Their direct reports got out to see the people.

. The new production team also went against the philosophy of internally developed informal methods.

„� Pat Mulcahy educated his people on basics of scheduling, spoilage controls and so on.

„� Alan Browning spent considerable time improving and simplifying workflows.

„� The team focused on systemic production methods and procedures including formalized, written procedures, product schedules, etc.

Other than not embracing the norm of a warm and friendly environment, the norms of the Production subgroup lined up very well with the Markhamite value system.

„� They continuously innovated and improved their processes.

„� They strived to make Markham a better place.

„� Production management, while not treating employees explicitly like family, was very interested in the development of their department.

„h Greene wants ideas from the people, who work with him, not generated at the top and pushed down.

„h Management was given instruction and left to perform, not to be micromanaged.

„h Training was provided.

Feedback Can Help Adjust the External System

One of the most important influences on management policy is the ¡§feedback¡¨ received from the emerging activity, productivity, satisfaction and individual development of members of the group. Feedback, if funneled properly, could continuously modify the external system (to build up the social system as a whole) into something more than the external system they started with.

Feedback, along with observation of a group¡¦s process is important because it helps the manager to understand what is taking place covertly as well as overtly in the group¡¦s behavior. It also provides insights into what a manager can do to make the groups interactions more productive.

Finlay solicits feedback from key company personnel on their perceptions as to where the issues lie. ¡§His understanding of the behavior of the people he works with is important to the quality and effectiveness of these relationships. These relationships, in turn are crucial to his effectiveness as a manager and ultimately to the success of the firm.¡¨

In many cases, the feedback illustrated improved communication between Production and Engineering. It also indicates that improved processes are the result

„h Greene ¡V on the Beta recorder, we had success working with engineering and looking at detailed drawings.

„h Adams (Design) has a lot of interaction with production. ¡§Grey area between Engineering and Production. Very bad situation.¡¨ ¡§able to sit down with Green and purchasing to consult¡K.the bars are beginning to come down.¡¨

In other cases, the feedback illustrated how the organization of the company was impeding progress.

„h Schmidt (Sales Executives) ¡V Green is put in an impossible position of constantly accommodating changes in schedules and designs. Need better recognition of the responsibility of sales towards production.

Finlay Strives for Adequacy

Finlay is a Markhamite, valuing the warmth and friendliness that existed in the early Markham days. As evidenced by Figure 5, he also feels a strong need to be involved, to influence the day-to-day operations of the department.

Finlay takes the feedback from the extensive interview process and comes to the conclusion that the values of the Production department are the issue. Filters in his self-concept prohibit him from seeing the real issues with the interaction among departments.

„h Past experiences with Greene, such as him going against the family, and Greene publicly insulting him

„h Emergent behaviors in the production do not support his idea of the company values

The value changes, emerging from the Production division have disrupted his sense of stability. ¡§The more adequate a person judges himself, the more he will be able to turn a threat into a challenge to look for and accept new ways of seeing himself in the world.¡¨ In Finlay¡¦s case, the threat is intense enough for him to want to eliminate it altogether.

Finlay¡¦s assumption is that people should ¡§get along¡¨. His perception is that the difficulties, acknowledged as broader than one department, originate from the Production department. His feeling is that Ed Greene, as manager of that department, is the responsible for the difficulties.

He cannot assimilate these new values into his personality, nor is he willing to reorganize his values. His behavior, in an effort to maintain his adequacy as a leader, is to reject the source of the ¡§badness¡¨, Ed Greene, from the company.

Conclusions ¡V

1. Redefine roles and responsibilities particularly in the Engineering & Design areas. Meet with upper management to explain how the ambiguity in job definition is impacting communication and productivity.

„� Creation of a product engineering function to create product designs matched to production capabilities

„� Defining processes and required interactions including regular meetings between engineering and production

. Intradepartmental process mapping should be conducted. Mapping of interactions and information flows between Sales, Engineering and Production will lead to further clarification on roles and will identify areas where breakdown in communication occur.

. Implementation of a formal planning process where periodic and formal meetings between all department heads are conducted to understand

„� Market trends

„� Product release cycles

„� Sales forecasts

„� Inventory levels

„� Innovation and continuous improvement best practices

4. Enhance the company values from a focus on ¡§not rocking the apple cart¡¨ to a focus on

„� Working as a team

„� Respecting, trusting, helping one another

„� Open dialogue and feedback to help improve the company.

5. Reestablish more formal channels of interaction. Let all the managers manage their people without constant influence from others. That includes Roberts backing away from micromanaging the activities in Production.

6. Since Ed Greene is out the door, move Pat Mulcahy into the Superintendent role. He has shown the ability to work with the other departments and an understanding of the interrelationships between departments.

7. ¡§Groups cannot function effectively if cohesion is low or if relationships among group members become strained.¡¨ Top management must perform maintenance functions to rebuild damage relationships and to bring harmony back to the group. Regular team building exercises including team meetings would help.



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