The Rose Company has selected James Pierce to become the General Manager for the Jackson Plant, a position newly developed in order to assess the effectiveness of decentralizing operations. In the new model for the plant, rather than managing departments and reporting through different function channels, Jackson’s internal operations will report to Pierce. The Rose Company is currently building a new plant in the region with the expectation that it will reduce production cost with new methods, while also reducing manpower. Pierce is tasked with improving manufacturing inefficiencies at the Jackson plant. In order to do so, Pierce must develop a strategy to transform the plant into one that can be run effectively and independently.
Pierce must improve operational performance using a decentralized model to make the Jackson plant successful which has never been tested by the company. Historically, Rose is run through function channels that will no longer be responsible for performance. As the General Manager, Pierce must determine how he will manage and control operations. Pierce is entering unfamiliar territory under an untried system that will require the development of new processes and management savvy if the decentralization project at the Jackson plant will be successful.
The most conservative of approaches for Pierce would be to continue to utilize established channels and allow them to continue to work independently, while focusing on improving financials and manufacturing efficiency at the ground level. While this would cause the least amount of friction at the Jackson plant, it would also require significant aspects of the operation to continue to remain centralized and the plant would not be fully independent. Pierce could retain existing operational channels where necessary and compartmentalize those essential to the sustainment of independent operations at Jackson plant.
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A more drastic approach would be a fast transition from the centralized system to the decentralized one. Pierce could terminate previous reporting channels and immediately make the Jackson plant independent, while concentrating on developing the plant’s independent processes. The decentralization project was launched to test the efficiency of an independent plant. The expectation for Pierce is that he will decentralize and make the plant independent. A rapid transition, however, may create disruptions that will be difficult to simultaneously manage. In addition, the Rose Company is not in a state of crisis and does not require an immediate implementation of a decentralized system. Due to the lack of urgency, this option may not be necessary.
Pierce may also consider a slow progressive transition with functional chains and establishing a hierarchy through Jackson as an independent plant, utilizing informal networks established through prior channels to effect change by understanding and changing management channels at ground level, and improving them through collaboration of managers in different departments. Existing channels present an invaluable asset to the plant and to the company and are essential to the success of the plant. Ground level operational improvement is essential to get the plant back on track. Collaboration through existing networks, and informal networks would be essential to isolating the Jackson plant, while still making it efficient. However, retaining existing functional departments, and systematically terminating them may create friction between the V.P.’s of the departments and the Jackson plant, which may impede progression for independence.
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Decentralize each functional department of Jackson Plant. Identify existing channels for functional success for the plant. Begin at rectifying operational, floor level ineffectiveness. Become embedded in middle management activities on a daily basis.
Understand and exploit informal networks within the company and within informal networks that spread through prior functional reporting. Empower middle management, offer incentives. Set short term achievable goals in each departments and bonuses for long term achievements. Frequently travel to the sites of former functional managers to understand their roles in management and apply lessons learned to the Jackson Plant while building relationships to assist operations.