The Atchison Corporation free essay sample

The Atchison Corporation (A) Price Millman’s comments in his informal meeting with divisional vice presidents were honest and forward, the types of comments that people at Atchison could both respect and fear. While the company was built on ethics and honesty, Millman’s comments, while honest, give the impression of a shift in the way Atchison does business. His philosophy is very much different, with a â€Å"fight until you die† mentality, very confrontational. This is very much the case in his closing comments, stating that he’s thinking of a new format for the company, and laying it on the line by stating that each month will must be better the last. This is very confrontation stance, and in most cases I would strongly disagree with taking it. But with a new format coming, he can take this type of approach, to see if in fact his vice presidents will try very hard to increase sales. We will write a custom essay sample on The Atchison Corporation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Millman is already fighting an uphill battle. Employees tend to resent change. But he has one thing going for him in that respect. He can offer a change that will increase employee wealth, by offering those things that Atchison did not. While Jerome Atchison may have prided himself with â€Å"taking case of family† he in reality was not helping his family at all. With little to no compensation plan, employees have been offered no drive to work better or harder. Instead, they simply do enough work not to get fired. When you look at management, you see that his policy was further counter productive, because no manager could be fired, unless with a review from the top, and basically had to be on dishonesty or some other ethic reason. These, coupled with the idea of lifetime careers no longer stand clear today, and Millman fighting spirit will likely do away with this old-style thinking. The first thing to implement is a policy change. Broad sweeping compensation plans from top to bottom. You have to give employees something to work for. Second, you set forth a policy to have those over 55 retire. Managers in there mid 70’s are only holding the company back with older ideas, that often times are highly conservative. Also, management reviews on a quarterly or semi-annual basis. No longer can managers think that just increasing sales is going to keep their jobs. We need profit. Besides, if you increase sales, but lose money, what good is it? If sales stay the same, but you decrease your budget, and cut your costs, and you end up making a profit, I think that tends to be better. Another policy that would have to change is the idea that only the president and CEO can fire managers. This policy, whether written or was simply the unspoken standard, has got to go. You have to allow people below the top make decisions. Also, the idea that you can only fire some one because they are dishonest is just plain foolish. If an honest man costs you 100 million in sales, what should you do? Continue to allow him to work for you? No, you fire him, and that is what Millman has to do. The second thing would be to gain a firmer grasp on the numbers, through outsourcing of some accounting functions. With only one central accounting office working for all divisions, the numbers obtained do not necessarily show what is happening in a particular division. The idea that these numbers are only obtained once a quarter is also not helpful. With only one report a quarter, these divisions are not able to make the appropriate changes that are needed in the market place at the time. I would have each division outsource their accounting, therefore cutting costs, allowing better reporting of the trends that are happening in each division, and allowing the central accounting office to coordinate only company wide numbers. The same would be true for manufacturing numbers. Outsource each plants accounting, and have better numbers obtained. Having currently only one check, and the being a very rough number, does the company no good in determining what shifts in procurement procedure need to take place, or where expenses need to be cut. With outsourced accounting taking place across the board, you can now move away from quarterly reports only to bi-weekly to monthly reports on the divisions levels, allowing for a better flow of information, and allowing faster reaction time to changes in the market. By now, old management is going, new management is coming in, and the numbers are really starting to tell you something. Now, you outsource your marketing, and invest a significant sum of money into making sure that the Atchison brand name shines. From updated packaging to an advertising campaign showing casing Atchison as a â€Å"best value† with this consumer group, you have to make sure that consumers know Atchison is working for the them, finding ways to make cheaper, better products. You implement divisional marketing as well, allowing market research to take place. This will allow each division to see what there core selling products are, what the people want. Once you have a better understanding of that, then marketing campaigns can be tailored for those regions, allowing for increased sales. Now, you work on the sales divisions. You get rid of the quota of people they can hire. If division A has too many people and is not making money, fire them. If division B needs more people to meet demand, you allow them to hire. The idea that the corporate level has the insight to see every local sales office as needing only X amount of sales people is absurd. You must allow management to set these types of things themselves; otherwise, you’re always a step behind. You still give them a price list, but you make sure that they have power to change it, as needed. You shift the focus of the sales divisions away from trying to reach sales highs without respect to budgets and costs. Budgets must be met, or sales highs mean nothing, because no profit is made. Based on numbers received from the new accounting firms for each plant, you probably can see that procurement is costing way too much with so many suppliers. The idea of vertical integration probably comes to mind. By creating a subsidy and making its job raw materials, you can allow partnerships with main raw material providers, and have a better supply chain management. This could cut procurement and raw material costs significantly, allowing for overall cheaper products, and allowing the profit margin on each product to rise slightly, while passing some savings onto the consumer. Since manufacturing is the companies one strong point, it can continue to function as it is, but must meet the same standard accounting an review sessions as the other divisions. During all of these changes, the thing that must be kept in mind is keeping current employees and new employees happy. As change occurs, some of the former polices that were once in place often will no longer be available. With the Atchison families’ decreased role in the company, the trust fund to help employees is most likely lost. A new fund must be set up. Scholarships and grants to further employee education must continue to be in place. The more knowledgeable our workers, the better off we can be. At the same time, we must make sure to keep our turnover low on or core knowledge workers. Without this core, there will be additional down time in profits once all changes are made to the way the company functions. From training new employees, to moving existing employees to higher positions, this change must be minimized as much as possible. We must decrease fear and uncertainty. These changes as outlined here would greatly move forward Millman’s ideas of a fight to win company. It would greatly increase future profits, and again make the company a darling in the eyes of present and future stockholders, as well as stakeholders. By simply hitting these main areas: †¢Policy Changes, including compensation plans and mandatory retirement, as well as management and employee reviews †¢Outsourcing of accounting in regions divisions †¢Outsourcing of marketing, both at the corporate level and regional divisions level †¢Change in hiring practices †¢Keeping current education scholarships and grants These main items would work greatly in pushing forward Millman’s plan to again reach each month better then the last. At the same time, at some point, this will begin to diminish, until a globalization plan occurs, at which point it will then level out after several growth years.