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Last June, readers of the business magazine Investor International were given фте information about the Cornerstone Group
COMPANY PROFILE
Company: Cornerstone Group
Workforce: 35,000
Turnover: $4.1bn
Located: Dallas, US
Net profit: 11% of turnover (approx.)
Main activities
Providing services and products for the oil industry.
Recent developments
Cornerstone has recently bought the French company, Metrot. Metrot produces a wide range of household goods. Their head office is in Paris, and they have two factories in northern France.
Reasons for Cornerstone's acquisition
1. Cornerstone will expand sales of Metrot products in Europe.
2. It will use Metrot as a base for launching its own products in Europe.
3. Metrot's biggest asset is its valuable land. Cornerstone could use this to grow the company or may sell off some of the land to finance the acquisition.
| Acquiring Metrot |
Comment
| Jean Metrot |
Metrot is an excellent acquisition for the Cornerstone Group. However, there may be some problems when a different style of management is introduced into the French company. Metrot has always been a family-owned company and its Chief Executive, Jean Metrot, has always taken a personal interest in all his employees' welfare. The new Chief Executive will be Hugh Whitman. He is in his early 30s and was educated at Harvard University. Whitman used to be Executive Vice President of the Cornerstone Group. Jean Metrot will remain on the board as an adviser.
Hugh Whitman
S i 4.4 Hugh Whitman, the new Chief Executive, gave a television interview for European Business News. He was asked about Cornerstone's plans for Metrot. Listen and note what he says.
| 4 Change |
Problems
It i9>|gpw nine months later. The change of ownership and new management styl&at Metrot have caused many problems. The e-mail below illustrates some oMhe difficulties.
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Dan Johnson, Personnel Director
Jacques Lafont, Union Organiser
| Subject |
| Staff morale |
Date: March 18
Staff are very unhappy with the present changes. Productivity has fallen and staff turnover is high. These are some of the reasons for the staff's low morale.
1. Factory inspections
The new managers are always checking up on us and taking notes. No one knows why they are doing this.
2. Redundancies
Since June, about 60 employees from the R & D Department have lost their jobs. They were given no reasons. Everyone thinks this is very unprofessional.
3. Further changes
Many members of staff are looking for new jobs. They want to move before they are made redundant. People are afraid that the new management will relocate the factories.
4. Management style
Staff complain about the changes the new management are making. I enclose a list of comments made by staff.
• They're trying to do everything too fast - a new computer system, making us learn English, selling in new European markets and bringing out new products.'
• There was a family atmosphere before. The management really cared about us. Everything was more informal.'
• 'We don't know where the company is going. We've no idea what our strategy is.'
• 'We get e-mail messages from Head Office telling us what to do. Surely they can trust the management over here to make the policies and decisions?'
A meeting of senior managers is called to resolve the problems. There are two groups at the meeting.
Group A: new managers led by Hugh Whitman.
Group B: senior executives of Metrot who have kept their jobs since the takeover. Each group prepares separately for the meeting. Then hold the meeting as one group. The agenda is as follows:
1 Background: Why are staff resisting the changes?
2 Practical suggestions for improving the situation.
3 What can be learned from this experience to manage change more effectively in the future?