CASE STUDY: Form A
Kincade Industrial Sanitary Seating (KISS) has recently acquired Occupational Fixtures and Fasteners (OFF). Kincade is the leading manufacturer of toilet seats and other peripherals, including fully assembled toilets. Occupational is the leading manufacturer of the hardware that holds on the toilet seats. This acquisition was carefully planned and executed quickly with little information leaking to either company prior to the finalization of the purchase and subsequent merger of the two companies.
Kincade has three locations—Mississippi, New York, and California—and because it is the leader in the industry, all the facilities will most likely stay in operation. It has approximately 650 employees with an extremely strong management team. Kincade’s management team is very traditional, communicates through the chain of command, and believes that the primary reason they lead their industry is the fact that they cut costs whenever and wherever possible. They provide adequate medical benefits, have a nominal vacation policy, and very strict rules and regulations for work hours and overtime pay practices.
Occupational has only two locations, both within 60 miles of Kincade’s California location. Occupational’s workforce is primarily represented by the Factory Laborers United for Sanitary Hardware (F.L.U.S.H.) union. Most of their 300 employees have been with the company since its beginning 25 years ago. Although the workforce is significantly union represented, the relationship with management is extremely good and the two parties operate like a large family: lots of self-directed work teams, flexible work hours, an excellent medical benefits package, and an extremely liberal vacation policy. In general, the working environment is much more progressive than Kincade’s, and the employees are used to participative management, with decisions made at the lowest level and a continuous flow of communication from the top. Occupational was on the verge of expanding its manufacturing capability to include toilet seats resulting from an employees’ idea of a revolutionary new design.
The new company’s president is Mr. M.Y. Whey, who was the president of Kincade. Although the new organization structure has not yet been designed, nor has the management been selected, rumors are strong that Kincade’s management will be the “selected” management team for the new company, KISS OFF; that benefits are going to be slashed for the Occupational employees; and that there is the potential for at least one Occupational plant closing, even though their manufacturing facilities could be easily and cost-effectively transitioned to accommodate toilet seat manufacturing. Despite Kincade’s superiority in the industry, KISS OFF will not be able to survive without the cooperation of at least half of the manufacturing workforce currently at Occupational.