Wallace Group Case Study

What is the most important problem facing the Wallace group?

Mr. Wallace has all the control over policy and operations and he is only concerned with profit. He is not looking at planning for the future development or staff. The staff he has doesn't have the back ground to operate in management positions.

Because Mr. Wallace is the chairman and president of the Wallace group. He continues to make the decisions for the companies of the individual's employed by him. It is like one person is dictating and running all three companies with no input from anyone else.

Mr. Wallace is so concerned with profit that he isn't concerned with hiring the best employees for any open positions.

What recommendations would you make to Mr. Wallace and in what order of priorities?

The first order of business for Mr. Wallace is to reorganize and obtain new members of the board of directors. Mr. Wallace needs a board of directors that is made up of outside and inside directors. These boards of directors should have the education and experience to hold these positions.

The typical large US Fortune 1000 corporation has an average of 11 directors, 2 of whom are insiders. Event though outsiders account for slightly over 80% of the board members in these large US corporations, they account for only about 42% of board membership in small US companies. (Wheelen & Hunger, 2006) It has been stated that outside directors are less biased and more likely to evaluate management's performance objectively than are inside directors. Even research reveals that the likelihood of a firm engaging in illegal behavior or being sued declines with the addition of outsiders on the board. (Wheelen & Hunger, 2006)

Then Mr. Wallace needs to make sure that everyone on the board understands their roles and responsibilities as they apply to strategic management. The roles are as follows:

1. Monitor- Through committees the board will stay abreast of developments inside and outside the corporation and bringing to management's attention developments they might have overlooked.

2. Evaluate & Influence- A board will examine management's proposals, decisions and actions and they can agree or disagree with them. They can give advice, offer suggestions, and outline alternatives.

3. Initiate & Determine - A board can delineate a corporation's mission and specify strategic options to its management. (Wheelen & Hunger, 2006)

Mr. Wallace should demand that all board members are to be very involved in this process at all times.

The next order of business is to have a board meeting and at the meeting they are to develop a good strong mission statement. The mission statement should be combined as the vision and mission statement. It should describe what the organization is now and what the organization would like to become. This is important because the mission statement promotes a sense of shared expectations in employees and communicates a public image to important stakeholder groups in the company's task environment. (Wheelen & Hunger, 2006)

The last order of business is that Mr. Wallace needs to implement is to begin the strategic management process. In doing this, Mr. Wallace may need to hire a consultant who specializes in strategic management. This will help them adapt the correct way to start the process and continue to stay on tract with the new process.

Strategic Management is that