CASE 14 amrod" Stockwell Charles Perrow The Benson Metal Company employs about 1,500 people, At the time of the study about 20 percent of the is listed on the stock exchange, and has been in existence cash value output was in aerospace metals for many decades. It makes a variety of metals that are The chairman, Fred Benson, had been presi- purchased by manufacturers or specialized metal firms. It dent (managing director) of the company for two is one of the five or six leading firms in the specialty steel decades before moving up to this position. He is an industry. This industry produces steels in fairly small elderly man but has a strong will and is much quantities with a variety of characteristics. Orders tend to revered in the company for having built it up to its be in terms of pounds rather than tons, although a 1,000- present size and influence. The president, Tom pound order is not unusual For some of the steels, 100 Hollis, has been in office for about four years; he was pounds is an average order formerly the sales director and has worked closely The technology for producing specialty steels with Fred Benson over many years. Hollis has three in the firm is fairly well established, but there is still or four years to go before expected retirement. His a good deal of guesswork, skill, and even some assistant, Joe Craig, had been a sales manager in one "black magic" involved. Small changes are made in of the smaller offices. It is the custom of this firm to the ingredients going into the melting process, pick promising people from middle-management often amounting to the addition of a tiny bit of and put them in the "assistant-to" position for per- expensive alloying material in order to produce haps a year to groom them for higher offices in their varieties of specialty steels. Competitors can analyze division. For some time these people had come from one another's products and generally produce the sales, and they generally went back as managers of same product without too much difficulty, although large districts, from whence they might be promoted there are some secrets. There are also important to a sales manager position in the main office. variations stemming from the type of equipment Dick Benson, the executive vice president used to melt, cog, roll, and finish the steel. (roughly, general manager), is the son of Fred In the period that we are considering, the Benson. He is generally regarded as being willing, Benson Company and some of its competitors were fairly competent, and decent; but weak and still steadily moving into more sophisticated and techni- much under his father's thumb. Traditionally, the cally more difficult steels, largely for the aerospace executive vice president became president. Dick is industry. The aerospace products were far more dif- not thought to be up to that job, but it is believed ficult to make, required more research skills and that he will get it anyway. metallurgical analysis, and required more "deli- Ramsey Stockwell, vice president of produc- cate" handling in all stages of production, even tion, had come into the organization as an experi- though the same basic equipment was involved. enced engineer about six years before. He rose Furthermore, they were marketed in a different rather rapidly to his present position. Rob Bronson, fashion. They were produced to the specifications vice president of sales, succeeded Dick Benson after of government subcontractors, and government Benson had a rather short term as vice president of inspectors were often in the plant to watch all sales. Alan Carswell, the vice president of research, stages of production. One firm might be able to has a doctorate in metallurgy and some patents in produce a particular kind of steel that another firm his name, but he is not considered an aggressive re- could not produce even though it had tried. These searcher or an aggressive in-fighter in the company. steels were considerably more expensive than the specialty steels, and failures to meet specifications resulted in more substantial losses for the company. The Problem When the research team studied Benson Metal, Charles Perrow, Yale University. Reprinted with permission. there were the usual problems of competition andprice-cutting, the difficulties with the new aero- Stockwell would not allow production people to space metals, and inadequate plant facilities for a give any but the most routine information to sales growing industry and company. However, the prob- personnel. In fact, because of the high centraliza- lem that particularly interests us here concerned tion of authority and information in production, the vice president of production, Ramsey Stockwell. production personnel often did not know them- He was regarded as a very competent production selves. "Ramrod" Stockwell knew, and the only way man. His loyalty to the company was unquestioned. to get information out of him was to go up the sales He managed to keep outdated facilities operating line to Rob Bronson. The vice president of sales and still had been able to push through the con- could get the information from the vice president struction of quite modern facilities in the finishing of production. phases of the production process. But he was in But Bronson had more troubles than just not trouble with his own staff and with other divisions wanting to waste his time by calling Stockwell about of the company, principally sales. status reports. At the weekly top-management It was widely noted that Stockwell failed to del- meeting, which involved all personnel from the egate authority to his subordinates. A steady stream vice presidential level and above, and frequently a of people came into his office asking for permission few from below that level, Bronson would continu- for this and that or bringing questions to him. ally ask Stockwell whether something or other People who took some action on their own could be could be done. Stockwell always said that he bawled out unmercifully at times. At other times thought it could be. He could not be pressed for they were left on their own because of the heavy any better estimations, and he rarely admitted that demands on Stockwell's time, given his frequent a job was, in fact, not possible. Even queries from attention to details in some matters, particularly President Tom Hollis could not evoke accurate those concerning schedules and priorities. He "con- forecasts from Stockwell. Consequently, planning tracted" the lines of authority by giving orders on the part of sales and other divisions was difficult, directly to a manager or even to a head foreman and failures on the part of production were many rather than by working through the intermediate because it always vaguely promised so much. levels. This violated the chain of command, left Stockwell was willing to try anything, and worked managers uninformed, and reduced their authority. his head off at it, but the rest of the group knew It was sometimes noted that he had good men that many of these attempts would fail. under him but did not always let them do their jobs. While the men under Stockwell resented the The key group of production men rarely met way he took over their jobs at times and the lack of in ma group unless it was to be bawled out by information available to them about other aspects Stockwell. Coordinating committees and the like of production, they were loyal to him. They existed mainly on paper. admired his ability and they knew that he fought More serious perhaps than this was the rela- - off the continual pressure of sales to slip in special tionship to sales. Rob Bronson was widely regarded orders, change schedules, or blame production for as an extremely bright, capable, likable, and up-and- rejects. "Sales gets all the glory here" said one. "At coming manager. The sales division performed like the semiannual company meeting last week, the a well-oiled machine but also had the enthusiasm chairman of the board and the managing director and flashes of brilliance that indicated considerable of the company couldn't compliment sales enough adaptability. Morale was high, and identification for their good work, but there was only the stock with the company was complete. However, sales per- "well done' for production; 'well done given the try sonnel found it quite difficult to get reliable infor- ing circumstances.' Hell, Sales is what is trying us." mation from production as to delivery dates or even ' The annual reports over the years credited sales for what stage in the process a product was in. the good years and referred to equipment failures, Through long tradition, they were able to get crowded or poor production facilities, and the like special orders thrust into the work flow when they in bad years. But it was also true that problems still wanted to, but they often could not find out what remained even after Stockwell finally managed to this was going to do to normal orders, or even how pry some new production facilities out of the board disruptive this might be. The reason was that of directors.Stockwell was also isolated socially from the then with the president and executive vice presi right group of top personnel: He tended to work dent, and said that they had to get to the bottom of later than most, had rougher manners, was less the problem. A top-level group session should be concerned with cultural activities, and rarely played held to discuss the tensions that were accumulat golf. He occasionally relaxed with the manager of ing. The friction between production and sales was aerospace sales, who, incidentally, was the only spilling over into other areas as well, and the high-level sales person who tended to defend morale of management in general was suffering. Stockwell. "Ramrod's a rough diamond; I don't They acknowledged that they put a lot of pressure know that we ought to try to polish him," he some- on production, and were probably at fault in this or times said. that matter, and thus a session would do all the But polishing was in the minds of many. directors good, not just Stockwell. The president "Great production man-amazing when he gets hesitated. Stockwell, he felt, would just ride it out out of that mill. But he doesn't know how to handle Besides, he added, the "Old Man" (chairman of the people. He won't delegate; he won't tell us when he board) was skeptical of such techniques. The exec- is in trouble with something; he builds a fence utive vice president was quite unenthusiastic. It was around his men, preventing easy exchange," said remarked later that Stockwell had never recog- the president. "Bullheaded as hell-he was good a nized his official authority, and thus young Dick few years ago, but I would never give him the job feared any open confrontation. again," said the chairman of the board. He dis- But events overtook the plan of the vice presi agreed with the president that Stockwell could dent. A first-class crisis had developed involving a change. "You can't change people's personalities, major order for their oldest and best customer, and least of all production men." "He's in a tough posi- an emergency top-management meeting was called, tion," said the vice president of sales, "and he has to which included several of their subordinates. Three be able to get his men to work with him, not against in particular were involved: Joe Craig, assistant to him, and we all have to work together in today's the president, who knows well the problems at the market. I just wish he would not be so uptight." plant in his role as troubleshooter for the managing A year or so before, the president had director; Sandy Falk, vice president of personnel, approached Stockwell about taking a couple of who is sophisticated about leadership training pro- weeks off and joining a leadership training session. grams and in a position to watch a good bit of the Stockwell would have nothing to do with it and was bickering at the middle and lower levels between. "offended. The president waited a few months, then "sales and production, Bill"Bletchford, manager of announced that he had arranged for the personnel finishing, who is loyal to Stockwell and who has the manager and each of the directors to attend succes- most modern-equipped phase of the production sive four-day T-group sessions run by a well-known process and the most to do with sales. It was in his organization. This had been agreed on at one of department that the jam had occurred, due to some the directors' meetings, though no one had taken massive scheduling changes at the rolling phase and it very seriously.. One by one, the directors. came......to the failure of key equipment.-. back with marked enthusiasm for the program. "It's In the meeting, the ground is gone over thor- almost as if they had our company in mind when oughly. With their backs to the wall, the two pro- they designed it," said one. Some started having duction men, behaving somewhat uncharacteristic evening and weekend sessions with their staff, occa- cally in an open meeting, charge sales with devious sionally using the personnel manager, who had had tactics for introducing special orders and for acting more experience with this than the others. on partial and misinterpreted information from a Stockwell was scheduled to be the last one to attend foreman. Joe Craig knows, and admits, that the spe- the four-day session, but he canceled at the last cialty A sales manager made promises to the cus- minute-there were too many crises in the plant, tomer without checking with the vice president of he said, to go off that time. In fact, several had sales, who could have checked with Stockwell. "He developed over the previous few weeks. was right," say Vice president Bronson, "I can't That did it, as far as the other vice presidents spend all my time calling Ramsey about status were concerned. They got together themselves, reports; if Harrison can't find out from productionon an official basis, he has to do the best he can." growth, is in aerospace; we all know that Without Ramsey Stockwell, after his forceful outburst about aerospace we will just stand still Maybe that's part of misleading information through devious tactics, it. But maybe Ramsey's part of it too; this crisis is over falls into a hardened silence, answering only direct specialty steel, and more of them seem to concern questions, and then briefly. The manager of finish- that than aerospace, so it can't be the product shift or ing and the specialty A sales manager start working that only. Some part of it has to be people, and you're on each other. Sandy Falk, of personnel, knows on the hot seat, Ramsey. they have been enemies for years, so he intervenes as best he can. The vice president of research, Carswell let that sink in, then went on. Carswell, a reflective man, often worried about elu- sive dimensions of company problems, then calls a Or maybe it's something more than even these. . . . It halt with the following speech: is not being pulled together at the top, or maybe, the old way of pulling it together won't work anymore. You're all wrong and you're all right. I have heard bits I'm talking about you, Torn [Hollis], as well as Fred and pieces of this fracas a hundred times over the last [Benson, the chairman of the board, who did not two or three years, and it gets worse each year. The attend these meetings] and Dick [the executive vice facts of this damn case don't matter unless all you president, and heir apparent]. I don't know what it want is to score points with your opponents. What is is, here are Ramsey and Rob at loggerheads; neither wrong is something with the whole team here. I don't of them are fools, and both of them are working know what it is, but I know that we have to radically their heads off. Maybe the problem is above their rethink our relations with one another. Three years level. ago this kind of thing rarely happened; now it is start- ing to happen all the time. And it is a time when we There is a long silence. Assume you break can't afford it. There is no more growth in our bread- the silence with your own analysis. What would and-butter line, specialty steels. The money, and the that be