This is a case study of the Waterway Industries and its CEO, Cyrus Maher – the problem of increasing the benefits and salary of Lee Carter, the person in charge of the marketing department and is also the star player. This is focused on the decision he needs to make to either move his company forward or not make to keep his company how it used to be for over twenty seven years. This case study gives a typical scenario experienced by most CEOs when their companies expand and they have to either go along with the expansion or risk losing the market which tends to cause their company to spiral downwards. Like Maher, they all are confronted with employees demanding salary and/or benefit reforms or restructuring.
In this case study, one would notice the dilemma faced by Maher and the company’s bid to move to greater heights. On the one hand, the designers of the company are demanding a salary adjustments while on the other hand, the company’s star player is been offered mouth-watering opportunities to leave. This, quiet devastating on Maher, makes him ponder on which direction to take: let go of the star player and risk the market or adjust her salary and benefit. This, he has to decide and strike a balance between her and his other employees while not running himself thin or forfeiting her totally and go back to the canoe producing days. To do this would only means that he has to sit and think vividly and clearly which directions he wants his company to go (Nicoson, 1996).
The case study would look at the opportunities given to Maher as he presides over the affair of Waterways and try to postulate directions that would foster greatness for the company. This case study would be done based on assumptions of what his decision might be since it is not stated. The case study would also try to recommendation on what he did right or wrong, on which way to follow, what to do to remain on top.
This is a story about a man who has had a company for more than thirty years. The man, Maher, has been building high quality canoes for, at least, twenty seven years before venturing into kayaks. The story goes on to tell of how, in his bid to progress in kayak building, he employed a lady in her early 30s to spur up the life in the kayak business and also build a marketing department (Nicoson, 1996).
This, the lady did and even more. She went on to even move the business, as a whole, to the next level. In fact, she drew in more customers than even imagined. She was so good at her job that she could even achieve the creation of the marketing department. This means, she spent more time spurring up the kayak business than building the marketing department, which she was going to head (Nicoson, 1996).
This is a story of a man who is puzzled over a phone call he overheard his key player, the person in charge of marketing, receive. This story shows how puzzled the man was after hearing the offer been given to his key player. It also shows, to some extent, how not concern he was over his employee till he hired his key player (Nicoson, 1996).
One would not describe him as been totally bad, but been used to a routine and the stunned with the surprise of expansion, one would notice that the man was puzzled over this new trend of things. First and foremost, his two designers asking for equity benefits, then overhearing his star player had been offered more than just equity on the phone. One would say that at that moment he could feel his company folding. This is something he was trying to fight against (Nicoson, 1996).
According to Alan Johnson, the sixth commentator, the conversation overheard by Maher when carter was talking with Flinch only marked a sign of good things to come. According to him, the conversation could help catapult Waterway to the next level. He said this because it made Maher start thinking of the importance of Carter to the growth of the company. It also went a long way to point out how important all the employees of Waterway were. He also pointed that Carter was needed in Waterway, at most, if not for a long term, a short term. He ended this line of argument emphasizing that it was no debate that Maher had no other option but to give Carter a compensation package or else kiss his kayak business, in Waterway, good bye, though this would have a devastating effect on the employees (Nicoson, 1996).
The main problem here was that Waterway was a small company and was experiencing expansion for the first time and, like any other small companies experiencing expansion for the first time, has to go through the rigours of change. The first thing to change in a company is increased demands of customers. According to Robert Rayford, employees try to keep up with demands when the company begins to grow. Clients flood the company with demands from every angle and with different orders (2013).
Another theory to take into consideration is the Stacey Adams Equity Theory which states that apart from the two major factors used to measured equity – input versus output – referent is another factor to be considered. Employees seek to maintain equity not only based on their input versus output but also try to compare what people, with similar jobs, are being paid in other companies (Stacey Adams equity theory).
Looking at these theories, one would agree that the upsurge in demand coupled with comparison made could have be the factors behind the reason why the two designers demand a restructure of their benefits and salaries. These same theories could also be the reason why Flinch was giving Carter another offer. It could be that Flinch felt responsible for Carter and was finding ways to put her in a better position.
Another issue to point out is that of Carter’s. It seems all six commentators commended Carter. The big question would be who would? Not until he overheard her conversation with Flinch, he never placed value on the tremendous job she was doing. That is why the sixth commentator, Alan Johnson, said that the conversation overheard by Maher when carter was talking to Flinch only marked a sign of good things to come (Nicoson, 1996).
The first commentator, James McCann, wrote that every employee has his/her own needs so Maher would have to find ways to tap into the insight of the different needs. The fact that Carter and the two designers desire equity does not mean all the employees desire same (Nicoson, 1996).
You would not have to see a doctor if you are not sick, so also would you not have to find a way if you already know how. What the first commentator was signifying was that Maher had, in the past, been distant from the employees and did not know what they wanted. That if he added effects into understanding what they wanted he could fulfil them and this could pave way for him to easily input the benefit so desired by the three (Nicoson, 1996).
At a long run, one would agree that Maher distant himself from his employees. He felt that he had given them what he feels is fair share, but they did not see it so. Who knows, it could be that the other staff also felt the same way the desirers did but did have the balls to face Maher with their opinion (Nicoson, 1996).
Alternatives for addressing these issues
The alternative for addressing this issue are too numerous to count but herein would be stated a few. To start with, before any solutions can be done, one would have to know the desire of Maher for the company. Could it be that he wants the company to expand and include the new kayak business or does he like it the way it was before, the canoe business alone?
If I were the person in charge of Waterway, I would do what the third commentator, Myra Hart, said. I would think deeply before offering any equity to anyone. Equity, though regarded as a solution for employer allying with employee, could sometimes prove devastating to the owner of the company. And this case is no exception (Nicoson, 1996).
For the progress of the company, I would first consider the growth of the company before offering equity to anyone. Although this would upset my employees for the delay but it would be for the greater good of the company. All these I would do having it at the back of my head that I, like Maher, have not made it publicly known that I have intensions to sell the business in the public or private market. Without this fact, it would be difficult for the employees to extract equity value from the company (Nicoson, 1996).
It would not just end there by the time I would have finished drafting my salary and benefit structure, I would weight it against the financial implications it has to my business to see whether or not it would be detrimental to my business. After that, I would run my suggestion through my employees for their considerations and objectives. This is to bridge the gap between me and the employees and carry them along so that they have a sense of belonging in the decision making of the company (Nicoson, 1996).
With the outstanding performance of Carter, I would raise her to the status of a key employee. I believe this would also motivate her to build the marketing department. She spends too much time one the road, the result of which is the transformation of the company. This has made her not acclimatize to the company’s culture. Raising her status would give her a sense of belonging in the company and would also give her the position to develop others. And, like Myra Hart said, I believe that she should spend with the company every once in a while to keep her abreast with the fashion and trends of the company (Nicoson, 1996).
And should my company ever lose Carter to any other company, the sales rep would service her accounts and the company would still benefit from the wholesales drawn by her. But then, in a situation like the one above, I would walk up her and confront her, calmly, about her decisions over the new packages been offered her from other companies. I would do this not hiding the fact that I unintentionally overheard her conversation on the phone. This would help me understand her stance on this matter and help me in my decisions on which step to take on her issue (Nicoson, 1996).
Possible obstacles and difficulties that might occur when implementing these proposal
The obstacle Maher might face may be that since his company is expanding there are going to be some changes. Like the author Robert Rayford writes, expansion in business, often times, turn business owners to managers. He further writes that while some people take this step and find it hard others go with the flow. The people who find this line of action as negative are those who do not have managerial and encouragement qualities to govern their employees (2013).
Looking at this and drawing from the case study, one would agree that Maher was taking it hard the fact that he had turn from being an owner to a manager of a company. Formerly, it was just about quality canoes, this he did not face much challenge. It was more like a routine to him.
Rayford went further to advance that the option of hiring a manager for the role of overseeing operations and processes could come in handy for people who believe they cannot stand the task of management roles in their company. Better still, the person can obtain leadership books from bookstores and read about ways to improve his/her leadership skills so as to foster his/her skills in management (2013).
Here again one would ask if Maher would be able to do this. The third commentator, Myra Hart, made mention Maher thinking of retirement. He said that Maher had better start thinking about retirement. I believe that someone thinking of retirement would no longer have that zeal to struggle and press further for anything. Those who do are only few and rare. Most people who think or have a retirement plan close or approving would have lost taste of the fight and would believe that they would want to leave the stage for the younger generation or successor. I think that among other thing, retirement was on Maher’s mind. To run a company for close to or more than thirty years is no little time. Depending on the age Maher starter his company, I believe he is no small boy. He is way passed his youthful years. This coupled with other factor could pose an obstacle already.
I believe in the way forward and so would recommend, like the third commentator, to think carefully before give equity to anyone. Like him, I would also want to walk up to Carter to find out her opinion over what I heard. I believe this would help me to know and count those I can count and build on, and those who are with me or against me (Nicoson, 1996).
Nicoson R. D. (1996). HBR Case Study Growing Pains. Retrieved from: http://drhornsby.com/uop/growing%20pains%20harvard%20case%20study.pdf
Rayford R. (2013). What Common Problems Are Faced By Expanding Businesses? Retrieve from Global business website: http://globial.com/globialtalksbusiness/what-common-problems-are-faced-by-expanding-businesses/
Stacey Adams equity theory (n.d.). Retrieved from yourcoach website: http://www.yourcoach.be/en/employee-motivation-theories/stacey-adams-equity-theory.php