Case 3: Dick Spencer –

Case 3: Dick Spencer
Order Description
Case 3: Dick Spencer (100 Points)—Due November 24th by 1:00 PM
Read the Dick Spencer case. Identify the main factors contributing to: (1) Spencer’s success as a salesperson and (2) his tribulations as a manager. Explain how each of these factors led to either his success as a salesman or his failure as a manager. The factors you address and your explanations need to be supported with references. The more references you use, the better. In a separate section entitled “Recommendations”, I would also like you to address the siding department incident specifically. What decisions could Dick have made and what actions could he have taken to avoid this incident and effectively deal with the problems that resulted from this incident (i.e., recommendations)? Use plenty of references for support for this section. Include the full citations for all of your references on your Reference page at the end of your analysis, following the APA Guidelines that I provided you in Doc Sharing. You will be evaluated in accordance with the grading rubric provided at the end of this document. Submit this assignment to the Case 3 Assignment dropbox. Don’t forget to submit your case to (without the reference page/pages) prior to submitting the complete case (with the reference page/pages) to the dropbox.
Integrative Case 6.0 Dick Spencer*
*Via the Internet (I “Googled” it).
Dick Spencer 569
Integrative Case 6.0 6.0
Dick Spencer*
After the usual banter when old friends meet for cocktails,
the conversation between a couple of university professors
and Dick Spencer, who was now a successful businessman,
turned to Dick’s life as a vice president of a large manufacturing
“I’ve made a lot of mistakes, most of which I could
live with, but this one series of incidents was so frustrating
that I could have cried at the time,” Dick said in response
to a question. “I really have to laugh at how ridiculous it
is now, but at the time I blew my cork.”
Spencer was plant manager of Modrow Company, a
Canadian branch of the Tri-American Corporation. Tri-
American was a major producer of primary aluminum with
integrated operations ranging from the mining of bauxite
through the processing to fabrication of aluminum into a
variety of products. The company had also made and sold
refractories and industrial chemicals. The parent company
had wholly-owned subsidiaries in five separate United
States locations and had foreign affiliates in fifteen different
Tri-American mined bauxite in the Jamaican West
Indies and shipped the raw material by commercial vessels
to two plants in Louisiana where it was processed into alumina.
The alumina was then shipped to reduction plants in
one of three locations for conversion into primary aluminum.
Most of the primary aluminum was then moved to
the companies’ fabricating plants for further processing.
Fabricated aluminum items included sheet, flat, coil, and
corrugated products; siding; and roofing.
Tri-American employed approximately 22,000 employees
in the total organization. The company was governed
by a board of directors, which included the chairman, vice
chairman, president, and twelve vice presidents. However,
each of the subsidiaries and branches functioned as independent
units. The board set general policy, which was then
interpreted and applied by the various plant managers. In
a sense, the various plants competed with one another as
though they were independent companies. This decentralization
in organizational structure increased the freedom
and authority of the plant managers, but increased the
pressure for profitability.
The Modrow branch was located in a border town
in Canada. The total work force in Modrow was 1,000.
This Canadian subsidiary was primarily a fabricating unit.
Its main products were foil and building products such as
roofing and siding. Aluminum products were gaining in
importance in architectural plans, and increased sales were
predicted for this branch. Its location and its stable work
force were the most important advantages it possessed.
In anticipation of estimated increases in building product
sales, Modrow had recently completed a modernization
and expansion project. At the same time, their research and
art departments combined talents in developing a series of
twelve new patterns of siding which were being introduced
to the market. Modernization and pattern development
had been costly undertakings, but the expected return on
investment made the project feasible. However, the plant
manager, who was a Tri-American vice president, had
instituted a campaign to cut expenses wherever possible.
In this introductory notice of the campaign, he emphasized
that cost reduction would be the personal aim of every
employee at Modrow.
The plant manager of Modrow, Dick Spencer, was an
American who had been transferred to this Canadian
branch two years previously, after the start of the modernization
plan. Dick had been with the Tri-American
Company for fourteen years, and his progress within the
organization was considered spectacular by those who
knew him well. Dick had received a master’s degree in
Business Administration from a well-known university at
the age of twenty-two. Upon graduation he had accepted a
job as salesman for Tri-American. During his first year as
a salesman, he succeeded in landing a single, large contract,
which put him near the top of the sales-volume leaders. In
discussing this phenomenal rise in the sales volume, several
of his fellow salesmen concluded that his looks, charm,
and ability on the golf course contributed as much to his
success as his knowledge of the business or his ability to
sell the products.
The second year of his sales career, he continued to
set a fast pace. Although his record set difficult goals for
the other salesmen, he was considered a “regular guy” by
them, and both he and they seemed to enjoy the few occasions
when they socialized. However, by the end of the
second year of constant traveling and selling, Dick began
to experience some doubt about his future.
*This case was developed and prepared by Professor Margaret E. Fenn,
Graduate School of Business Administration, University of Washington.
Reprinted by permission.
570 Integrative Case 6.0
His constant involvement in business
affairs disrupted his marital life, and his wife
divorced him during the second year with
Tri-American. Dick resented her action at
first, but gradually seemed to recognize that
his career at present depended on his freedom
to travel unencumbered. During that second
year, he ranged far and wide in his sales territory,
and successfully closed several large contracts. None
of them was as large as his first year’s major sale, but in
total volume he again was well up near the top of salesmen
for the year. Dick’s name became well known in the
corporate headquarters, and he was spoken of as “the boy
to watch.”
Dick had met the president of Tri-American during
his first year as a salesman at a company conference.
After three days of golfing and socializing they developed
a relaxed camaraderie considered unusual by those who
observed the developing friendship. Although their contacts
were infrequent after the conference, their easy relationship
seemed to blossom the few times they did meet.
Dick’s friends kidded him about his ability to make use of
his new friendship to promote himself in the company, but
Dick brushed aside their jibes and insisted that he’d make
it on his own abilities, not someone’s coattails.
By the time he was twenty-five, Dick began to suspect
that he did not look forward to a life as a salesman for
the rest of his career. He talked about his unrest with his
friends, and they suggested that he groom himself for sales
manager. “You won’t make the kind of money you’re making
from commissions,” he was told, “but you will have a
foot in the door from an administrative standpoint, and
you won’t have to travel quite as much as you do now.”
Dick took their suggestions lightly, and continued to sell
the product, but was aware that he felt dissatisfied and did
not seem to get the satisfaction out of his job that he had
once enjoyed.
By the end of his third year with the company Dick
was convinced that he wanted a change in direction. As
usual, he and the president spent quite a bit of time on the
golf course during the annual company sales conference.
After their match one day, the president kidded Dick about
his game. The conversation drifted back to business, and
the president, who seemed to be in a jovial mood, started
to kid Dick about his sales ability. In a joking way, he
implied that anyone could sell a product as good as Tri-
American’s, but that it took real “guts and know-how”
to make the products. The conversation drifted to other
things, but the remark stuck with Dick.
Sometime later, Dick approached the president formally
with a request for a transfer out of the sales division.
The president was surprised and hesitant about this change
in career direction for Dick. He recognized the superior
sales ability that Dick seemed to possess, but was unsure
that Dick was willing or able to assume responsibilities
in any other division of the organization. Dick sensed
the hesitancy, but continued to push his request. He later
remarked that it seemed that the initial hesitancy of the
president convinced Dick that he needed an opportunity to
prove himself in a field other than sales.
Dick was finally transferred back to the home office of the
organization and indoctrinated into production and administrative
roles in the company as a special assistant to the
senior vice president of production. As a special assistant,
Dick was assigned several troubleshooting jobs. He acquitted
himself well in this role, but in the process succeeded
in gaining a reputation as a ruthless headhunter among the
branches where he had performed a series of amputations.
His reputation as an amiable, genial, easygoing guy from
the sales department was the antithesis of the reputation
of a cold, calculating headhunter which he earned in his
troubleshooting role. The vice president, who was Dick’s
boss, was aware of the reputation which Dick had earned
but was pleased with the results that were obtained. The
faltering departments that Dick had worked in seemed to
bloom with new life and energy after Dick’s recommended
amputations. As a result, the vice president began to sing
Dick’s praises, and the president began to accept Dick in
his new role in the company.
Management Responsibility
About three years after Dick’s switch from sales, he was
given an assignment as assistant plant manager of an
English branch of the company. Dick, who had remarried,
moved his wife and family to London, and they attempted
to adapt to their new routine. The plant manager was
English, as were most of the other employees. Dick and
his family were accepted with reservations into the community
life as well as into the plant life. The difference
between British and American philosophy and performance
within the plant was marked for Dick, who was imbued
with modern managerial concepts and methods. Dick’s
directives from headquarters were to update and upgrade
performance in this branch. However, his power and
authority were less than those of his superiors, so he constantly
found himself in the position of having to soft pedal
or withhold suggestions that he would have liked to make,
or innovations that he would have liked to introduce. After
a frustrating year and a half, Dick was suddenly made
plant manager of an old British company which had just
been purchased by Tri-American. He left his first English
assignment with mixed feelings and moved from London
to Birmingham.
As the new plant manager, Dick operated much as he
had in his troubleshooting job for the first couple of years
of his change from sales to administration. Training and
Dick Spencer 571
reeducation programs were instituted for all supervisors
and managers who survived the initial purge. Methods
were studied and simplified or redesigned whenever possible,
and new attention was directed toward production
which better met the needs of the sales organization. A
strong controller helped to straighten out the profit picture
through stringent cost control; and by the end of the
third year, the company showed a small profit for the first
time in many years. Because he felt that this battle was
won, Dick requested transfer back to the United States.
The request was partially granted when nine months later
he was awarded a junior vice president title, and was made
manager of a subsidiary Canadian plant, Modrow.
Modrow Manager
Prior to Dick’s appointment as plant manager at Modrow,
extensive plans for plant expansion and improvement had
been approved and started. Although he had not been
in on the original discussions and plans, he inherited all
the problems that accompany large-scale changes in any
organization. Construction was slower in completion than
originally planned, equipment arrived before the building
was finished, employees were upset about the extent of
change expected in their work routines with the installation
of additional machinery, and, in general, morale was
at a low ebb.
Various versions of Dick’s former activities had preceded
him, and on his arrival he was viewed with dubious
eyes. The first few months after his arrival were spent in a
frenzy of catching up. This entailed constant conferences
and meetings, volumes of reading of past reports, becoming
acquainted with the civic leaders of the area, and a
plethora of dispatches to and from the home office. Costs
continued to climb unabated.
By the end of his first year at Modrow, the building
program had been completed, although behind schedule,
the new equipment had been installed, and some revamping
of cost procedures had been incorporated. The financial
picture at this time showed a substantial loss, but since
it had been budgeted as a loss, this was not surprising. All
managers of the various divisions had worked closely with
their supervisors and accountants in planning the budget
for the following year, and Dick began to emphasize his
personal interest in cost reduction.
As he worked through his first year as plant manager,
Dick developed the habit of strolling around the organization.
He was apt to leave his office and appear anywhere
on the plant floor, in the design offices, at the desk of
a purchasing agent or accountant, in the plant cafeteria
rather than the executive dining room, or wherever there
was activity concerned with Modrow. During his strolls he
looked, listened, and became acquainted. If he observed
activities which he wanted to talk about, or heard remarks
that gave him clues to future action, he did not reveal these
at the time. Rather he had a nod, a wave, a
smile, for the people near him, but a mental
note to talk to his supervisors, managers, and
foremen in the future. At first his presence disturbed
those who noted him coming and going,
but after several exposures to him without any
noticeable effect, the workers came to accept
his presence and continue their usual activities.
Supervisors, managers, and foremen, however, did not
feel as comfortable when they saw him in the area.
Their feelings were aptly expressed by the manager of
the siding department one day when he was talking to one
of his foremen: “I wish to hell he’d stay up in the front
office where he belongs. Whoever heard of a plant manager
who has time to wander around the plant all the time?
Why doesn’t he tend to his paper work and let us tend to
our business?”
“Don’t let him get you down,” joked the foreman.
“Nothing ever comes of his visits. Maybe he’s just lonesome
and looking for a friend. You know how these
Americans are.”
“Well, you may feel that nothing ever comes of his visits,
but I don’t. I’ve been called into his office three separate
times within the last two months. The heat must really be
on from the head office. You know these conferences we
have every month where he reviews our financial progress,
our building progress, our design progress, etc.? Well,
we’re not really progressing as fast as we should be. If you
ask me we’re in for continuing trouble.”
In recalling his first year at Modrow, Dick had felt
constantly pressured and badgered. He always sensed that
the Canadians he worked with resented his presence since
he was brought in over the heads of the operating staff.
At the same time he felt this subtle resistance from his
Canadian work force, he believed that the president and
his friends in the home office were constantly on the alert,
waiting for Dick to prove himself or fall flat on his face.
Because of the constant pressures and demands of the
work, he had literally dumped his family into a new community
and had withdrawn into the plant. In the process,
he built up a wall of resistance toward the demands of
his wife and children who, in turn, felt as though he was
abandoning them.
During the course of the conversation with his university
friends, he began to recall a series of incidents that
probably had resulted from the conflicting pressures. When
describing some of these incidents, he continued to emphasize
the fact that his attempt to be relaxed and casual had
backfired. Laughingly, Dick said, “As you know, both
human relations and accounting were my weakest subjects
during the master’s program, and yet they are two
fields I felt I needed the most at Modrow at this time.” He
described some of the cost procedures that he would have
liked to incorporate. However, without the support and
572 Integrative Case 6.0
knowledge furnished by his former controller,
he busied himself with details that were
unnecessary. One day, as he describes it, he
overheard a conversation between two of
the accounting staff members with whom he
had been working very closely. One of them
commented to the other, “For a guy who’s
a vice president, he sure spends a lot of time
breathing down our necks. Why doesn’t he simply tell us
the kind of systems he would like to try, and let us do
the experimenting and work out the budget?” Without
commenting on the conversation he overheard, Dick then
described himself as attempting to spend less time and be
less directive in the accounting department.
Another incident he described, which apparently had
real meaning for him, was one in which he had called a staff
conference with his top-level managers. They had been going
“hammer and tongs” for better than an hour in his private
office, and in the process of heated conversation had loosened
ties, taken off coats, and really rolled up their sleeves.
Dick himself had slipped out of his shoes. In the midst of this,
his secretary reminded him of an appointment with public
officials. Dick had rapidly finished up his conference with
his managers, straightened his tie, donned his coat, and had
wandered out into the main office in his stocking feet.
Dick fully described several incidents when he had disappointed,
frustrated, or confused his wife and family by
forgetting birthdays, appointments, dinner engagements,
etc. He seemed to be describing a pattern of behavior
which resulted from continuing pressure and frustration.
He was setting the scene to describe his baffling and humiliating
position in the siding department. In looking back
and recalling his activities during this first year, Dick commented
on the fact that his frequent wanderings throughout
the plant had resulted in a nodding acquaintance with
the workers, but probably had also resulted in foremen and
supervisors spending more time getting ready for his visits
and reading meaning into them afterwards than attending
to their specific duties. His attempts to know in detail the
accounting procedures being used required long hours of
concentration and detailed conversations with the accounting
staff, which were time consuming and very frustrating
for him, as well as for them. His lack of attention to his
family life resulted in continued pressure from both wife
and family.
The Siding Department Incident
Siding was the product which had been budgeted as a large
profit item of Modrow. Aluminum siding was gaining in
popularity among both architects and builders, because of
its possibilities in both decorative and practical uses. Panel
sheets of siding were shipped in standard sizes to order;
large sheets of the coated siding were cut to specifications
in the trim department, packed, and shipped. The trim
shop was located near the loading platforms, and Dick
often cut through the trim shop on his wanderings through
the plant. On one of his frequent trips through the area,
he suddenly became aware of the fact that several workers
responsible for the disposal function were spending countless
hours at high-speed saws cutting scraps into specified
lengths to fit into scrap barrels. The narrow bands of scrap
which resulted from the trim process varied in length from
seven to twenty-seven feet and had to be reduced in size to
fit into disposal barrels. Dick, in his concentration on cost
reduction, picked up one of the thin strips, bent it several
times and fitted it into the barrel. He tried this with another
piece, and it bent very easily. After assuring himself that
bending was possible, he walked over to a worker at the
saw and asked why he was using the saw when material
could easily be bent and fitted into the barrels, resulting in
saving time and equipment. The worker’s response was,
“We’ve never done it that way, sir. We’ve always cut it.”
Following his plan of not commenting or discussing
matters on the floor, but distressed by the reply, Dick
returned to his office and asked the manager of the siding
department if he could speak to the foreman in the scrap
division. The manager said, “Of course, I’ll send him up to
you in just a minute.”
After a short time, the foreman, very agitated at being
called to the plant manager’s office, appeared. Dick began
questioning him about the scrap disposal process and
received the standard answer: “We’ve always done it that
way.” Dick then proceeded to review cost-cutting objectives.
He talked about the pliability of the strips of scrap.
He called for a few pieces of scrap to demonstrate the ease
with which it could be bent, and ended what he thought
was a satisfactory conversation by requesting the foreman
to order heavy-duty gloves for his workers and use the
bending process for a trial period of two weeks to check
the cost savings possible.
The foreman listened throughout most of this hour’s
conference, offered several reasons why it wouldn’t work,
raised some questions about the record-keeping process
for cost purposes, and finally left the office with the forced
agreement to try the suggested new method of bending,
rather than cutting, for disposal. Although he was
immersed in many other problems, his request was forcibly
brought home one day as he cut through the scrap
area. The workers were using power saws to cut scraps. He
called the manager of the siding department and questioned
him about the process. The manager explained that each
foreman was responsible for his own processes, and since
Dick had already talked to the foreman, perhaps he had
better talk to him again. When the foreman arrived, Dick
began to question him. He received a series of excuses,
and some explanations of the kinds of problems they were
meeting by attempting to bend the scrap material. “I don’t
care what the problems are,” Dick nearly shouted, “when
Dick Spencer 573
I request a cost-reduction program instituted, I want to see
it carried through.”
Dick was furious. When the foreman left, Dick phoned
the maintenance department and ordered the removal of
the power saws from the scrap area immediately. A short
time later the foreman of the scrap department knocked
on Dick’s door reporting his astonishment at having maintenance
men step into his area and physically remove the
saws. Dick reminded the foreman of his request for a trial
at cost reduction to no avail, and ended the conversation
by saying that the power saws were gone and
would not be returned, and the foreman had
damned well better learn to get along without
them. After a stormy exit by the foreman, Dick
congratulated himself on having solved a problem
and turned his attention to other matters.
A few days later Dick cut through the trim
department and literally stopped to stare. As he
described it, he was completely nonplussed to discover gloved
workmen using hand shears to cut each strip of scrap.