Markham Instrument Company

Section 1

1a. Executive Summary

This case study focused on the Markham Instrument Company and the current state of the company as it stood in 1959. With the impending forced "retirement" of Plant Superintendent Ed Greene, the company and its management executives were faced with the daunting task of not only replacing Ed Greene but also addressing numerous issues between the Production Division and the other divisions within the company that were negatively affecting profitability.

1b. Business Issue

The most pressing business issue present in this case is that scheduling of production was too complex and varied for the different divisions within the company. These complexities and differences between the divisions were further complicated by management's desire to keep inventory low because of space limitations for storing the inventory. Forecasting was also impacted by a rapid increase in the number of products and by the uncertainties about the future demand for new products. These numerous forecasting problems ultimately prevented the company from achieving maximum profitability and growth.

1c. Behavioral Issue

The main behavioral issue present in this case is the personality conflicts that existed between Ed Greene and the executives of the other divisions, most notably the Sales and Engineering Divisions. The Production Division had created a tight-knit cliquish environment where established norms and roles prohibited them from being able to work effectively with members in the other divisions. Further complicating things was the fact that the Production Division felt that top management didn't appreciate their contributions in saving the company during the postwar period. This caused them to have ill sentiments towards the company and upper management.

1d. Operational Issue

An operational issue is also present in this case study. The Markham Instrument Company needs to look at the design of the factory. There is a possibility that the divisions that are having the most problems in the case study, Production and Engineering and Sales, are set up too far from each other. Bringing these divisions closer could potentially eliminate some of the design and forecasting problems that are causing so much conflict.

Section 2

2. Casual Chain Analysis

This case study was broken down in to 4 main sections which included:

1. Introduction: Why is Ed Greene being "forced" to retire

2. Production Department and Markham History

3. Production Division in 1959

4. Relationship Between Production and Other Divisions

1. Introduction: Why is Ed Greene being "forced" to retire

a. Roger Finlay, President and Frank Roberts, Executive Vice President of Markham are looking to find a replacement for Ed Greene, Factory Superintendent, whom they asked to retire at the end of the summer

b. Finlay & Rogers believed increasing problems between Production and Engineering and Production and Sales were a result of Greene's personality & inability to work with executives in other divisions

c. The engineers felt they would welcome Ed's participation during the design stage but he wouldn't do it

2. Production Department and Markham History

a. Markham founder Henry Markham was directly involved in the production process

b. Markham treated employees more like family than as employees

c. While Markham grew during its first decade, the Production Division maintained preeminence

d. In 1924 Markham continued to grown and they expanded Sales and Engineering which caused Production to begin to lose its dominant position to Sales and Engineering

e. WWII caused the company to grow to meet demand and this growth and tremendous demand for output created crises which verged on chaos

f. Ed Greene was hired in 1945 and he discovered that several executives were involved in malpractice and collusion which almost closed the company

g. Greene alerted Finlay to the situation and it caused a reorganization of the top and middle management of the Production and Controller Division

h. Greene was made Plant Superintendent and he created his Production "team"

i. The new Production team didn't share the Markhamite emphasis on friendly personal relationships

j. Between 1947 and 1959 the Production Division grew from 100 to 600 employees

k. Productivity remained high, but Finlay & Roberts received an increasing number of reports of disputes between Production personnel, especially Greene, and executives in Sales and Engineering

3. Production Division in 1959

a. Markham had a reputation for high employee moral, which was borne out of the low turnover among production workers

b. Prior to joining Markham, Ed Greene had worked in production and methods departments of two large manufacturing companies for over twenty years

c. Ed Greene described his job as "honest-to-God planning." But most, if not all, of the planning was done internally within the Production Division

d. Each time a different instrument was introduced or reintroduced into the production flow it was necessary to make some rearrangement of the work assignments and to orient the workers

e. The Assembly Department was a pleasant area to work in - clean, brightly colored decorative panels, music playing softly, two coffee breaks each day

f. The parts completed in Fabricating and Finishing did not go immediately to the Assembly Department, but instead were returned to the stock room to be reissued to Assembly at the request of Production Scheduling, often two to four months later

g. There was considerable social distance between the Fabricating and Finishing Department supervisors and the other