Crown Point

Cabinetry
(The Management
Control Process)
Case Study on Crown Point Cabinetry :-

MMS,Finance
Presented by :-

Neha Kaushik,32
Virali Rathod,76
Rohit Tiwari,106
Management Compensation :-

Main role is to motivate organizational members to attain the set

goals.
Here the main focus is on incentive mechanisms and compensation
systems and their function in influencing the behaviour od
employees.
In this case study the Company has tried various ways to motivate
the employees and increase the sales.
INTRODUCTION :-
Norm Stowell founded the business in 1979.
Produced first cabinets in his garage.
By 1992 the business grew with 100 employees. ( including
all his seven children)
Brian Stowell took over in 1993 with everyone's consent.
CEO of Crown Point Cabinetry- Brian Stowell.
 Located in Claremont, New Hampshire.
Supplied High-end custom kitchen cabinets.
Had a base of 85 employees, being a large manufacturer.
Competitor in the high-end of the cabinet-making market.
Strategy of Crown Point Cabinetry :-

The main strategy which Crown point Cabinetry has adopted

is that it basically focuses on its employees.
Over the years the have introduced various measures to keep
the employees satisfied.
They used the extensive dealer network to sell its cabinets but
later realised that instead of going with this strategy they could
go for direct sales.
Because of which they could cut down that cost and put it in
advertising and could be used to fund the inhouse design/sales
team.
What is responsible for companys turnaround?
Rather than using the 30% margin spent on dealers that money
was used on the in-house design/sales team and advertising.
More and more people came to know about the company
because of which the sales increased.
Also the customers directly contacted the design team about
there preferences and needs of the cabinets.
Because of which the sales grew up to 95% in 2001 from 25%
in 1994.(Tripled)
The team of design also grew from 1 to 13.
Gross Margin as a % of sales increased 6 percent and is over
15 percent better than the U.S. average for cabinet work
plants.
This also led to very less wastage of the cabinets as the total
control was in companies hands.
Is the Experience Transferable ?

Yes the experience is transferable.

Car Manufacturers can go in for direct sales cutting down the
middle-men.
Too much money is at times given to the dealers.
The car manufacturing companies can have direct
communication with the employees and solve their grievances.
Recent Example- Ford. (decision made by Elon musk)
 GIST OF THE CASE STUDY:-
Crown Point is a family-owned company founded by Norm Stowell in
1979 located in rural Claremont, New Hampshire, USA.
Crown Point Cabinetry company is a company that supplies and
manufactures kitchen cabinets that have a quality or high quality made to
order.
Crown Point is not able to generate healthy financial performance even
after the increased sales, dedicated management group and satisfied dealer
network.
Relationship between employees and management is very strained and very
bad employee attendance.
Besides the management response in the face of this problem is with a
heavy hand or by relying on power and authority.
Annual worker turnover was 300 percent and absenteeism was a major
problem. Employee/management relations were described as horrible.
 The greatest problem at this time was poor in-process quality
control. Some cabinets were built three or four times before they got
out of the shop.
Brian wanted people to say that they loved to work at Crown Point
which was not a desirable place to work at the time. He encouraged
his skeptical workers to trust him.
From 1994 to 2002, Brian Stowell and his wife Becky, introduced
many changes to Crown Point Cabinetry.
First he reduced payroll from 76 to 53 people. This increased unit
and dollar sales.
The management system was then revamped. The management
layer was removed and replaced by a team-based management
approach.
ANALYSIS :-
Problems at Crown Point is located on the Company's performance
of its employees.
1. Lack of communication and relationships amongst management and
employees
2. Brian realized that before reaching a good quality, the company
requires three to four times before a cabinet workmanship delivered.
3. Strategy adopted by Crown Point Cabinetry is called profit sharing
program.
4. Implementation of reward and punishment system
5. Introduction of employee safety program and increase in incentives
6. Restructuring the corporate culture of the company
 COMPARISON OF PAST AND PRESENT
SCENARIO :-
Past Scenario :-
Company Crown Point Cabinetry various components of the value
chain were performing far below the recommended levels.
The most neglected value chain is the internal production linkages.
The costs of operations were escalating on daily basis through
pilferages; unnecessary inefficiency and delays at the inventory levels
were inevitable.
Increase in cost of operations
Deficit in resources
Increase in vendor management costs
 Present Scenario :-
Introduction of multiple level strategy
Employee base of 51-200 employees
Average lead time taken is 12-14 weeks
Huge production line
Tie ups with high end clients and good customer base
After sale services
Enhancing project profitability
Effective training and development programs
Increase in employee morale and level of motivation
Introduction of retirement benefit plan
CONCLUSION :-

Crown Point has addressed the issues that it was facing in 1993
when Brian Stowell became lead executive and has become a more
profitable company.
Strategies used by Crown Point Cabinetry can be used by other
companies within the same or different segment to adjust to the
culture of business.
Leaders who have the commitment and discipline to implement this
strategy can modify as per the situation and make it work optimally.
RECOMMENDATIONS :-

For the future, Crown Point Cabinetry should continue the programs
it has started.
If Crown Point notices an unacceptable decline in these figures, new
programs should be examined and implemented to correct these
drops.
If Crown Point continues to treat its employees well and reward
them for making a quality product they would continue to be a
successful company.