In: Accounting
Tough-Built Corporation produces specialized truck body
components, specializing in hydraulic lifts for dump trucks.
Founded 35 years ago by George Halloway, the firm now employs 150
workers and has annual sales of over $10 million. George operates
the firm in a highly centralized way, and retains control over all
changes in operations. He is a regular visitor to the production
area, which helps him "keep his finger on the pulse of the
firm."
Although George Halloway is now 67 years old, he has no apparent
management successor, and has always hand-picked his department
heads and staff personnel. He has been generous to those who worked
for him, paying substantial bonuses each year to the employees
based on his personal evaluation of each worker. Just six weeks
ago, a heart attack convinced George to consider retirement, and he
decided to sell the firm to his employees. You are assigned the
task of recommending a set of strategic performance measures for
the firm, assuming that the new worker management wants to operate
as a decentralized firm.
Required:
What major management problems do you foresee in the transition
from sole owner to employee ownership?