Issues and Discussion Questions 1.Critically evaluate George Browns management style. What does he do well or poorly?

Discuss his personal attitudes and behaviors that appear to be somewhat negative: 1. By his own admission, he doesnt work long hours. 2. Coming from a wealthy background, he lacks ambition and drive. 3. He is not willing to exert effort and energy to help the company grow faster than 20 percent per year. 4. His family comes first. 5. 5.He took a 10-month vacation from his company a few years ago. Consider his managerial policies:1.There are no formal job descriptions.2.He has very conservative financial policies and avoids all debt.3.There are no specific performance standards for employees; salespeople have no specific salesquotas, but are paid a percentage of sales.4.There is no formal planning process.5.There are no profit goals.6.The size of the workforce and facilities is too large for the volume of business, thus increasing costs.7.There are very weak training programs; employees train themselves.It is clear the company is not doing well, and that Brown is a lazy, spoiled millionaire. 2.How well is UPI doing? From a financial standpoint UPI is very successful. Sales have doubled in the last four years. In 1973sales were up 22 percent, profits rose 40 percent above 1972, and net worth increased by $123,500. Fromthe stakeholders' viewpoint, employees earned above-average wages; sales suggest customer satisfaction.Brown goes out of his way to create a good working atmosphere, and has a personal relationship withemployees and high ethical standards. It seems that the organization is satisfying stakeholders. 3.What explains UPIs level of performance; for example, is it Brown, luck and chance, or the strategy pursued by the company over time? The question arises as to why UPI is doing so well. There will be many reasons offered for the success of the company. Write them on the board before coming to any conclusions.Some students will attribute UPIs success to Browns personal actions; play this down and focus onother factors. Maybe it is chance and luck, the highly motivated sales force, or the strategy developed byBrowns father. Consider the companys strategy. UPIs product lines are broader than its competitors; it carries over 3,500 items in eightmajor product categories. This means its customers may need to deal only with UPI.Limiting contact with many suppliers gives UPI a competitive edge. None of its rivals offer such a wide range of products. UPI offers a very high level of service, is responsive to customer needs, maintains largeinventory stocks to shorten delivery times, and offers good repair services. UPI continually adds new product lines and adds additional salespeople to meet customer needs. To provide the high level of quality service and maintain expensive inventory, UPIcharges a price above the level of its competitors. Its prices are 10 percent higher thancompetitorsthe premium customers pay for good-quality service.

UPI is doing a good job of managing its environment and meeting stakeholder needs. UPI is pursuing a differentiation strategy and is offering a product and service that customers perceive to be unique and worth a premium price. Because the company operates only in the Northeast, its strategy could be called focused differentiation strategy as opposed to a strategy pursued at the national or global level. Itsstrategy could be the chief reason for its success, but the question arises as to who devised its strategy. 4.Who was responsible for orchestrating UPIs strategy? Brown, because he decided: When to add product lines To add new salespeople On the differentiation, high-service/high-price strategy On UPIs structure to match strategySo, has Brown been a good leader? Students must reassess Browns role, and his apparent laziness has to be balanced against his successful strategy. Perhaps he doesnt work 12 hours a day because he has doneeverything right, particularly in designing the structure to let people work independently. 5.How has the way Brown designed his structure helped UPI? How does UPIs structure help explain his personal and managerial style? UPIs structure can be analyzed, and it becomes obvious that Brown has designed UPIs structure to allow his employees to perform roles effectively. Being a small company, UPI has a functional structure, like the B.A.R. and Grille. But unlike many entrepreneurs who are afraid to delegate responsibility and make all decisions themselves, Brown had recruited a general manager, Hank Stevens, and has decentralized operating responsibility to him. Brown retains responsibility for strategic decision-making and makes decisions for the future, but Stevens controls daily business, freeing up Brown to plan and think ahead. Brown created the new level of manager in the hierarchy and had all the functional managers report to Stevens. Stevens is also the sales manager and performs a dual role. UPI employs 34 people and has four levels in the hierarchy. In terms of the design challenges discussed in Chapter 2:1.UPI is a simple company. It has a low degree of differentiation and needs only a low level of integration.2.Brown has decentralized all day-to-day decision-making and centralized all strategic long-termdecision-making.3.Brown makes limited use of formalization and encourages the use of mutual adjustment, meeting with his managers regularly where issues get thrashed out. 6.Because it is a small company, the informal organization and organizational culture play very important roles in coordinating and motivating employees. Brown has designed a relatively organic structure in which his employees have freedom and autonomy to respond to customers needs and to search out new accounts. They are rewarded with a generous commission system. The structure allows UPI to perform well and meet its goals. It gives Brown the freedom to plan for the future. He may be taking European vacations, but UPIs strategy is clearly on his mind. 7.What problems might Brown and his managers confront in the future in operating UPIs structure as the company grows?

Browns company is growing, and he has sought out other companies for mergers to become the dominant regional competitor. As his company grows, he needs to separate the general manager role from the sales manager role and employ a sales and marketing specialist for training. He may need to adopt a divisional form of organization, probably a product division structure, and divide up the 3,500 products UPI sells into three or four main product categories. Thus he may need to increase UPIs level of differentiation, which will require increased integration and formalization and standardization