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WCM 610 Final Project Case Study One

Phone Systems Inc., an international company that manufactures telephone accessories , has four l ocations in the United

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States: Syracuse, New York; Minneapolis, Minnesota; San Antonio, Texas; and Tampa, Florida. It also has facilities in

Great Britain, Germany, and Mexico. Phone Systems Inc. valu es diversity in its workforce, i nnovation in its processes ,

and prof itability in its products. The p resident of the board has been overheard saying , “You can’t please all of the

people all of the time. Sometimes profits come before personnel.” Phone Systems Inc. is contemplating opening a new

facility in India and has initiated the formation of a virtual team to evaluate this decision. An outcome of thi s proj ect, as

directed by the company’ s board of directors , is one of the facilities in the United States would be closed to fund the

creation of the new facility in India.

Below is a summary of the four sites.

Location Year Established Number of Employ ees

Syracuse, NY 1955 450

Minneapolis, MN 1968 250

San Antonio, TX 1995 650

Tampa, FL 2001 500

Syracuse, NY : This site is also the company’s global headquarters —the site where the company started. It recently

celebrated 60 years of service in the United States, and received a p residential citation from President Obama for its

dedication to keeping jobs in the United States . This site has an average years of service of 25 years, and the average

employee age is 50.5 years old . While this site has th e longest history and tradition, it also scores lowest in internal

employee satisfaction surveys.

Minneapolis, MN : This site has undergone three downsizings in the past decade, reducing from 775 employees i n 2005

to 600 employees in 2008 and 500 employee s in 2010. It most recently underwent a considerable restructuring in 2013

to its current head count of 250 employees. The jobs were tr ansferred to the San Antonio, Texas, site and Tampa,

Florida, site due to lower labor cost s and higher levels of efficien cy at both of these sites. The site pursued a grant

through the State of Minnesota for skills retraining, and was awarded a state grant of $300,000 to fund retraining its

incumbent workfor ce from 2015 through 2020. The c ompany would be required to repay th e State if any employees

were laid off from this site prior to 2020.

San Antonio, TX : This site is the “cash cow” of the company, as it has the highe st level of efficiency, is the company’s

lowest -cost facility, and has the best overall record of performance. Its cost of operations is the lowest of all sites in the

United States. However, the site is currently the target o f a union -organizing drive by the Communication Workers of

America. Employees pushed for an increase in wages, which was denied by management as the result of an analysis of

wages in the area for employees in similar industries. This prompted some emp loyees to pursue joining a u nion. Any

attempt to curtail operations at the site , such as a union -busting move by the company, could c reat e a potential legal

challenge with the international union .

Tampa, FL : This is the company’s newest site, and is second to the San Antonio site in cost and efficiency. It has a very

low level of attrition, and has the highest scores in the employee s atisfaction survey. The site has received awards for its

solid performance in minority hiring, and has also been positively recognized as a leader in the local area for its excellent

diversity hiring practices.

A cross -function team comprised of three senior managers —plant manager, plant controller, and plant human resources

manager —from each of the four sites in the United States has formed to develop the strategy for the creation of the

new facility in India. One outcome that is non -negotiable by the co mpany’s board of directors is one of the four sites in

the United States would have to close to fund the asset -reconfiguration project.

The group has met twice but cannot reach consensus on their objective. However, they have discussed a shift in the

project objective, and requested that the board of directors instead close the facility in Mexico. The site leaders agree a

site needs to be closed, but all are adamant that their respective site s should not be closed due to economic, political,

technical, and loyalty issues. Conflict among the team members involves the following issues:

 Representatives from the Syracuse, New York, site are adamant that the site cannot close, as it is the world

headquarters site and each member of the board of directors live s in the Syracuse area.

 Several members of the committee appear to be ethnocentric , vocally disagreeing with the c ompany’s dec ision

to open a site in India predicated on closing a site in the United States.

 A fair degree of finger -pointing has occurred on the committee, with members focused on finding weaknesses at

each site other than their own , rather than focusing on the obje ctives the committee was challenged to resolve.

The facility in Mexico was established in 2008 and has a very low labor cost; its employees are very energetic and excited

to be part of Phone Systems Inc. Its leadership team is comprised of 90% Mexican na tionals, and its plant manager

describes the environment at the site as “Change Disneyland .” Employees welcome change, and are highly passionate

about their company.

The board of directors was not pleased by the proposal from the project team to close th e site in Mexico, and has

brought you in to take ov er leadership of the team. The b oard has requested you develop a strategy to bring this project

to a successful conclusion, with the following objectives:

 Lead the team to the desired conclusion with the majority of the team reaching consensus on which of the four

existing sit es in the United States would close .

 Summarize the key challenges in moving forward with the recommendation.

 Present the process by which you will lead the team to a successful outcome.

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