Brown and Gordon Auto parts (B&G) is the third largest auto parts manufacturer in the world. It is an autonomously run division of a large conglomerate, RST, Inc. Their head quarters and principal manufacturing facilities are in Cleveland, Ohio, but they operate plant in East Chicago, Illinois, Indianapolis, Indiana, Columbus and Cincinnati, Ohio, and South Bend, Indiana. Total annual revenues are close to $2 billion, but profits were reduced dramatically in 1989 and 1990 because of the recession and particularly because of the decline in automobile sales. Plant capacity has dropped to 60%, with a slight pickup in the fourth quarter of this year. (RST, Inc. has turned in record profits in the same two years, with all divisions save B&G performing beyond plan)
Most of B&G’s management teams are on-line managers who have proven themselves in operational jobs and have worked their way up in hierarchy. They don’t believe in frills or fancy procedures; rather it is to get the job done as quickly and simple as possible. It’s a tough, no-nonsense management style. Because of the highly competitive nature of the business, accentuated by the recent business downturn, management has adopted a cost-cutting mode. Almost all investments or expenditures must be justified by tangible cost savings, and this usually means people savings. This is particularly true within IS, where expenditures are not approved until the number of job eliminations is verified.
The IS division is headed by R.L. Buck Steubens, MIS vice President, who reports to W.W. Johnson, V.P. of Finance, who reports to the president of B&G, T.J. Baker. It is generally accepted that Johnson delegates the IS responsibility totally to Steubens and is not himself a factor in decision-making on IS matters. The two key IS directors are Tom Mansfield and Harry Crowley. Mansfield is in charge of the application development for these plants but report to Mansfield. Operations reports to Harry Crowley. The outlying plants have their own operators, who report to local line management. IS operations are highly centralized, however, such that processing is done not locally, but via a telecommunications network to Cleveland’s central systems. Buck Steubens was concerned about the way his IS group was organized and was reviewing the following report, which was sent to him by a consulting firm he had asked to look into the matter.
Consultant review of Brown and Gordon Information systems Function
B&G has a rather unique organization with two directors managing the entire information systems function. Missing is a third or coordinating element found in most organizations. The third element is responsible for integrating services that span the IS division-services such as standards, planning, education, project management, and often data base administration. While where is nothing that says the B&G organization cannot work, interviews suggest that major application developments have been implemented without complete awareness of their fit with existing or future subsystems. Also there is a lack of emphasis on planning and education, two functions that are vital to future progress.
To make this dual directorship concept work, standards and protocols must be better established to facilitate proper communications and integration at the working levels. It is conceivable that the CFO can be the integrating force, but this is too high a level in the organization, particularly in light of the expanding duties of the office. The integration must occur at lower levels.
The stated management organizational style at B&G is heavily people oriented. Thus, the primary criterion for assigning a job is the track record of the individual in getting jobs accomplished rather than as assessment of where the function best fits into the organization or where there is the necessary expertise. The design of complex integrated applications is a difficult task, and while the ability to get a job done is probably the number one attribute, it is not the only one.
Another expressed organizational style is adversary management; the theory being that pitting two competent managers against each other will result in a competitive drive to get the work accomplished. The question raised here is does this approach work in a functional area of the business that needs integration and communication so desperately?
1. Comment on the company culture at B&G. Explain the pros and cons of this culture and whether the existing information system is suitable for such kind of culture?
2. Do you think the cost cutting mode is a given for IS? Is it wise to justify IS expenditures on the number of job eliminations?
3. “Organization structure and controlling has a very big impact on the success or failure of MIS in any organization” Explain the organization structure and comment on the controlling implemented in the organization for information system.
4. Explain whether in B&G there are group decision making enviornment of the individual decision making and the role of CIO(Chief Information Officer) in the success of Information system in B&G.