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Leadership - Remington Engineering Technologies Case Study Analysis - Report Writing Assignment Help
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Case: Remington Engineering Technologies was a highly successful British-American Enterprise headed by Richard Harris. Harris was both the Company President and Chairman of the Board. He had graduated from Yale in 1978, and from M.I.T. in 1980 with a degree in engineering, majoring in aviation. In 1983, he received his MBA from London Business School and immediately went about raising venture capital to start his own company. By 1990 Harris presided over a profitable single-product enterprise - Remington Engineering Technologies. His company’s uniquely designed Jet Fighter engines had made him independently wealthy. Harris grew up in a privileged environment. His mother came from one of the wealthiest families in Virginia and served on several company boards. His father was a Colonel who had fought in the Korean and Vietnam wars, and who later made a very successful transition to the world of merchant banking. The Harris family often entertained congressmen and senior military officials at their colonial estate. Richard attended some of the best educational establishments during his formative years. A star running back in college, he made friends easily. In the late 1970s, he turned down offers to join the major league as a professional footballer, following his parents’ advice to concentrate on his college education and on building a network of executive business connections on both sides of the Atlantic. In August 1992, just a few years after establishing Remington Engineering Technologies, Harris was contacted by Chris Palmer, a fellow engineer from his college days at MIT. Palmer was an aerospace scientist at the University of Hawaii, who had recently developed a highly efficient engine after years of research, which he called the Turbo Drive Prototype. The Turbo Drive was effectively engineered to incorporate a high-bypass turbo fan optimized for sub-sonic thrust. It had incredible fuel efficiency unlike anything the industry had ever seen before, but performed poorly at supersonic speeds. At the same time, Remington Technologies’ own research division had produced viable engineering design plans for a new product which was referred to simply as the Gyro-Copter; a light-weight military rotor-powered airborne pursuit vehicle with jump-lift capabilities. After some discussion, both Harris and Palmer realized that the Turbo Drive’s design specifications made it immediately viable as an important feature that could be incorporated into the Gyro-Copter. At the beginning of 1993, Harris initiated an important corporate restructuring at Remington Engineering Technologies to accommodate the development of the newly designed Gyro-Copter. He created two separate divisions which he designated as profit-centers. Division A was wholly responsible for the engineering, manufacturing, assembly and quality-control of the company’s established Jet Fighter engine range. Division B was to be wholly responsible for the new Gyro-Copter. Each division had five separate departments; Engineering, Manufacturing and Assembly, Marketing, Finance and Accounting, and General Administration. The Finance and Accounting department had a dual reporting relationship. It reported directly to the Vice-President of the division, as well as to a centrally located Financial Control and Budgeting Centre. Harris had envisaged a third organizational unit, headed initially by Palmer, to be designated as a cost-center, producing the Turbo Drive Engine (TDE) for the exclusive use of Division B. Palmer however, argued that it would be in Harris’s best interests to make him the inaugural Vice President of a new semi-autonomous division (Division C) designated as a profit-center. Palmer explained that international patent law prevented any other company from manufacturing the TDE and that it would be in great demand on the external market, in addition to being required by Division B. The technology transfer and manufacturing rights of the TDE were effectively used as a bargaining chip by Palmer to persuade Harris to accommodate his wishes. Harris understood this and decided to accept his friend’s proposal, realizing that there was something far greater at stake – the securing of ownership and exclusive manufacturing rights to what was effectively a world-first in propulsion technology. The Central Services Division It was expected that by mid-1993 all three divisions would be fully operational. Harris envisaged that a new, more powerful, Central Services Division would provide the cohesive link between each of the three manufacturing divisions and thereby prevent inter-divisional disputes. To this end, Harris personally recruited a highly astute senior executive by the name of David Silverman to head Central Services. Silverman immediately established three separate departments within the Central Services division; the Marketing and Sales department, the Human Resources and Administration department, and the Financial Control and Budgeting department. With the new staff in place, Silverman then moved rapidly to establish a series of formalized accounting procedures applicable to all three production divisions. To gain consensus in this, he called a series of meetings which he asked Diana Sinclair to chair. Sinclair was the manager of the Finance and Accounting department within Division B. Silverman and Sinclair shared the same alma mater, Stanford, and were also close colleagues from their time as consultants working in the oil industry in Dubai. Both individuals conveyed the impression throughout the company that they were ambitious professionals with a wealth of experience in corporate finance and organisational restructuring. Sinclair moved effortlessly into the role of unofficial head of the Financial Control and Budgeting department within the Central Services Division, although this position was formally held by the senior accountant of the corporation, Edward Grainger, a good friend of the Harris family. Many of the managers at Remington Engineering Technologies saw Grainger as unambitious, lethargic and unconcerned by the pace of change within the organization. Grainger was often out of his office, frequently choosing to accompanying Harris on business trips to New York and Washington. Both Silverman and Sinclair also shared strong ties with Malcolm Zacchary, the Vice President of Division A, also a former oil industry executive, and a man who had the trust and respect of Harris himself. Zacchary’s executive style was different to Harris’s in that it was more abrasive. Both Zacchary and Harris shared one thing though, a confidence in David Silverman’s ability to help them take the company forward. Several senior executives who had been with the company since its inception, shared Zacchary’s confidence in David Silverman, viewing Silverman as being extremely effective in carrying out the desires and intentions of Harris in an incredibly tight time-frame, whilst carefully minimizing serious potential resistance. Others, however, such as Walter Carmichael, the Vice President of Marketing, felt that Harris had begun to lose interest in the operational concerns of his company, and that he was blind to the ruthless ambitions of both Silverman and Sinclair. Hayley Johnson, VP of HR shared these concerns, and saw the ties between Zacchary, Silverman and Sinclair as obstructing open debate and discussion on important organizational matters. By mid-1994, just one year after the initial establishment of the new divisions, Harris began to seriously question the efficacy of retaining Palmer in the position of Vice-President heading the Turbo Drive Engine Division. Both Silverman and Sinclair had repeatedly emphasized the mediocre performance of Chris Palmer’s division, at company meetings, to the point where it was widely accepted throughout the organization that there were some fundamental management problems within that division. Malcolm Zacchary had supported this viewpoint and was quite open in his comments about the burden that a non-performing division was placing on the entire corporation. Harris himself felt that in such a tight global economic climate, the time had come to rationalize the corporate structure of his company. In February 1995, Chris Palmer received the following memorandum from Harris himself: "I enclose a copy of last year's audited accounts for the Turbo Drive Engine Division, together with our projection of the results for the remainder of this year. As you can see, these results are extremely disappointing. They should leave you in no doubt as to the precarious state of your division's current financial position. To enable us to protect the long-term career prospects of employees in other divisions, as well as the very viability of our company, I propose to restructure the corporation and close down your division. This however is merely a necessary structural reconfiguration. The Turbo Drive Engine project will not be jeopardized. You will be made Director of Engineering and Design for Division B and will of course retain your Vice-Presidential salary package. I do hope for your support in this painful process. The economic downturn in our unique industry has necessitated dramatic action." Chris Palmer was stunned. He knew very well who was behind this. So Silverman and Sinclair had eventually got to Harris, and not without a little help from Malcolm Zacchary, he thought to himself. Palmer had never understood the complexities of corporate financial management and was thus unsure of how he might demonstrate to Harris that the figures enclosed with the memorandum did not really give an accurate reflection of the performance of his division. After a few moments of anxious reflection, he summoned Alison Jones, head of the accounting department within his division. Alison was the youngest departmental head within the corporation. At just 26 years of age she lacked experience in organizational politics, but her training as an accountant and financial analyst at Princeton provided her with the well-developed ability to interpret even the most convoluted accounting data. "Here are last year's audited accounts for our division." Palmer said as he handed them to Alison. " I would like you to analyse them thoroughly this afternoon. The matter is crucial! Are there any glaring inadequacies amongst these figures? Do they tell the full story with respect to the profitability of our division?" Alison sighed and delved into the reports. Profits were indeed well below earlier projections, and the division’s overall profit figures were largely determined by a transfer pricing formula that had now been in place for some time. Alison realized that this particular accounting method had been sanctioned by the Central Services Division over a year ago at a meeting where Sinclair had been a key player. This led her to reflect on her professional relationship with Diana Sinclair. Sinclair was highly articulate, immaculately dressed, and had acquired an awesome reputation as a person not to be crossed. Sinclair also appeared to be extremely well connected with both Silverman and Zacchary, and was tipped to be the next departmental finance and accounting manager to be formally promoted to the Financial Control and Budgeting department within the Central Services Division at Head Office. Alison remembered that just over a year ago when a specialist task force was chosen by David Silverman, in order to decide upon an equitable formula for the setting of transfer pricing between divisions, Sinclair had been particularly tenacious in advocating the importance of her own division's profitability. Her argument was certainly quite convincing. She emphasized the tremendous medium-term market potential of the Gyro-Copter and stressed that the whole project could be placed in serious jeopardy if considerable "slack" were not built into the transfer price formula between divisions B and C. This position was strongly supported by Malcolm Zacchary who was also very vocal at these meetings. Alison herself was not initially a member of this task force. It was only after Palmer had approached Richard Harris to ask if a representative from his Division could be included, that Alison was belatedly invited - in a memo from Silverman - to “attend” the final series of meetings. Alison felt rather uneasy in this climate. It appeared to her that the other task-force members had already decided upon the importance of favouring the immediate profitability of Division B at the expense of Division C. At one of these meetings, Alison was drawn into a protracted and rather tense discussion with Sinclair, who dismissed Alison’s arguments as the well-meaning utterances of a strategically naïve young lady who was quite simply out of her depth. Malcolm Zacchary’s follow-up remarks were less kind, carrying a warning to Alison that he was not about to sit by and have his own precious time wasted by irrelevant questions from a late-comer to these important meetings. This exchange had made Alison extremely wary of Sinclair and Zacchary, and it was an experience she relayed informally to Hayley Johnson, VP of HR. Memories of this experience came flooding back to Alison. Sinclair's formidable reputation as a high performer in the company acted as a suit of armour. Any attempt by Alison to now call into question the rationality of Sinclair’s financial vision would run the risk of being perceived as sour grapes. Sinclair and Zacchary had made it common knowledge throughout the company that "the young pup from Princeton" had attempted unsuccessfully to "discredit their collective financial wisdom and expertise". Resolutely, Alison Jones returned to the executive office suite of Chris Palmer, intent on making it clear to her immediate superior that the poor performance of their division was directly related to a highly inequitable and unmistakably artificial transfer pricing formula. After some pointed discussion, Alison saw the realization creep across Palmer’s face. Chris Palmer asked Alison a series of further questions which again took her back to the task force discussions over a year ago. Was it not apparent back then that this transfer pricing formula would seriously jeopardize their division? Why hadn’t Alison raised this issue earlier? Alison remained silent, unsure how to respond to such questions without insulting her immediate superior, although privately she thought to herself – you’re the Vice President of this Division, you should have read my quarterly reports more carefully, since this issue was actually highlighted and anticipated in no less than three of those reports. However, her time at Remington Engineering Technologies had taught her to keep such critical sentiments very much to herself. Palmer frowned and gave a deep sigh as he contemplated the severity of the situation that he now found himself in. He looked at Alison, and then reached across his mahogany desk picking up the phone to call Harris on his cell. Richard Harris was in Washington at a meeting with several military aides and government officials. Palmer knew that Harris would be back at corporate headquarters early the next morning, and so he asked to schedule a high-priority meeting with him. When Palmer put down the phone, he looked relieved and smiled at Alison. “We’re meeting with him for breakfast at 7.30 tomorrow morning, just the three of us” he said to her. “This is our chance to put our case to Harris once and for all. We’ve got just one shot at this – we’d better make it count.” Late that evening, shortly after his plane landed on the tarmac at the local airport, Harris eased into his Ferrari and revved the engine ready for the short drive home to his estate. The night was dark and a low fog hung over the winding road that weaved its way around the rural landscape. Rounding one of the bends too quickly, the car slid out of control, skidding treacherously across a slither of sheet-ice before careering helplessly off the road and down a rocky embankment. Richard Harris’s car rolled twice before slamming headlong into a massive boulder and bursting into flames. The next morning, shortly after the news of the accident hit corporate headquarters, David Silverman telephoned the Deputy Chairman of the Board, offering himself as the most logical successor to Harris as President of Remington Engineering Technologies. Later that day, both Zacchary and Sinclair sent independent memos to the board in support of Silverman, indicating him to be the natural successor to Harris as the new corporate head. CASE QUESTIONS:- Provide an assessment of the respective strengths in the leadership capabilities of Harris, Silverman, Sinclair, and Zacchary.
- How would you characterise the leadership styles of Harris, Silverman, Sinclair and Zacchary? What are their respective weaknesses as leaders?
- Explain the significance of power, charisma, reputation and motivation in developing an understanding the leadership approaches of each of the aforementioned protagonists in this case.
- Explain the role of organisational climate in terms of its relationship to leadership influence strategies throughout this case.
- Content: Ability to identify and clearly articulate relevant leadership issues
- Analysis: Ability to critically evaluate important leadership issues, to display an awareness of their contextual relevance, and to utilize and apply relevant theories and paradigms to reveal a high-level understanding of the case.
- Presentation: Appropriate use of report-writing and formatting techniques including spelling, grammar, punctuation, pagination, paragraphing, use of headings and sub-headings, incorporation of relevant diagrams and figures, and appropriate referencing.
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