In the case study, Specialty Medical Chemicals, there are some significant systemic problems. There were three main areas of problems that were occurring in the case. The three areas were: the management approach taken by CEO Carl Burke, the response of the existing vice presidents, and the system as a whole.
Specialty Medical Chemicals
When Carl Burke became the CEO, he was an outsider to the company. He first took the approach of, “I am just going to ride the wave for a little while and see where it takes me before I make any drastic changes.” As he did this, he found that the company wasn’t performing as he felt it should. Because he had spent his entire career with a single company, his overall outlook was very narrow-minded. He felt that all companies should operate the same way that he was used to operating at Merck. Although it was important for him to come in with his own ideas, it was equally as important that he come in with a little more flexibility.
He had a tendency to think that the people were the problem, when it was actually more of a system problem. He did, however, begin to think more in terms of the system with the arrival of Laura Wells. He began to think of ways to change the system while getting rid of individuals in the process. A more effective approach would have been to utilize the existing people’s strengths.
In the system that existed when Carl Burke arrived, there was a set of executives that were very set in their ways. Each of the vice presidents had their specific way of doing things. In addition, they were each too focused on the betterment of their own department, which caused them to lose sight of the goals of the company as a whole. Each of the VPs was trying to build an empire out of their own department. Each of the vice presidents had the mentality of everyone else vs. me. With that mentality, they were not willing to work together.
Overall, the system/environment of the company as a whole was broken. Some key indicators that the system was broken were that the VPs weren’t freely communicating with each other, Carl Burke didn’t receive much cooperation from the management team, and the VPs were all building there own empires.
Carl was taking a step in the right direction by reorganizing the system within the company. It was a good idea to try to change some of the duties of the vice presidents giving them more responsibility and more flexibility. Part of his plan was to get rid of some of his management team, which could be very detrimental to his company. Rather than get rid of them, he should fix the system and put them into a position that best utilizes their talent and experience. By taking that approach, he will not hurt the morale or create fear within the employees.