Research Project

Organizational Development and Behavior (MGMT5325ess Management)

ACME Industries, Inc. did some major organizational restructuring during 2016 and 2017. In September of 2019, ACME decided to replace its President/CEO, Yusef "Yosemite" Sam. Mr. Sam had been in charge of ACME for over 50 years, and literally ran the organization with an "iron fist." During his tenure, the organization has been financially sound, but over the course of the last ten years, many ethical and legal issues have come to the forefront regarding Mr. Sam and his unorthodox management style, mostly in ACME's effort to adhere to the Sarbanes-Oxley Act of 2002. His termination was effective as of September 1, 2019, after he was charged with two counts of negligent homicide in the deaths of two ACME employees in a suspicious warehouse fire in Louisiana.

On November 1, 2019, it was announced that a new CEO had been hired by the Board of Directors, Mr. Phillip "Plucky" Duck. Mr. Duck has been part of ACME's Sales team for five years. He holds a Bachelor of Science degree in Information Technology and got his MBA from Harvard Business School in 2010. Mr. Duck is young (he was born in 1984), ambitious, hard-charging, and has plans to take ACME in new and innovative directions. The majority of ACME's current employees (including upper management) have been part of the organization for a minimum of 25 years. Many have been with ACME since its inception in 1949.

Since Mr. Sam became CEO, ACME's organizational culture was based on fear and to some extent cruelty. Mr. Sam was known to not only to fire people from their jobs, but fire at them with guns, flame throwers, cannons, or whatever other ACME weapon he had on hand. He never spoke without shouting, and never had kind words to say about anyone. While business was good, ACME's employees suffered in silence, and accepted their lot. Mr. Sam did reward loyalty monetarily, and ACME employees who stayed were well paid. When Mr. Duck came on board, he sought to change this toxic culture.

At first, Mr. Duck was not well-accepted. Many employees were distrustful of his different management style and were put off by the fact that he was so young. Some see him as a "slacker," due in part to his choice to wear casual attire. The entire Financial Department gave notice (with the exception of the CFO, Percival "Porky" pig) and left the organization, along with several other key employees, and the sales department was completely reorganized, including the replacement of several long-term members of its staff. Upper management remained primarily intact, but the stress of the change in leadership and philosophy took a physical and mental toll on those at all levels that stayed with the organization.

In June of 2021, after a year of inactivity due to the pandemic, sales and revenue slowly began to recover. Mr. Duck had begun implementing many new employee well-being programs, including an on-sight gym, several stress-reduction programs, and new safety programs, all in an effort to rebuild and restructure ACME's organizational culture. Unfortunately, some of this restructuring also meant a reduction in the sometimes exorbitant bonuses that Mr. Sam was known to hand out. This too was not well received, but the large array of non-monetary benefits seemed to satisfy the employees. Absenteeism began to drop, and performance and productivity began to rise. The stock price rose from a low of $9.78 per share in December of 2015, to a respectable $19.54 per share prior to the July 4,^,2023 weekend. ACME looked as though it was on the road to recovery, until mid-May of 2023, when a startling announcement came from the other side of the world.

ACME's largest and most enduring customer, Coyote Exterminations, Inc., announced that it had partnered with a Chinese manufacturing company called Shngo Industries, Inc., who for lack of a better explanation, produces cheap knock-offs of ACME's products (an example is Shngo's "High Flying Slippers," a copy of ACME's Spring Loaded sandals, which retail for $15.99, versus ACME's $50 price tag). Coyote Exterminations stated that they would begin using the Chinese products exclusively beginning in January 2025 and would terminate their relationship with ACME. Coyote Exterminations' purchases of ACME's products constitute close to 50% of ACME's annual sales, so this will be a major blow to ACME's revenue. The loss of this customer and revenue stream will mean that ACME employees will once again have to endure major change in the workplace. While Mr. Duck has been working with the revamped sales department and with the marketing department to attract new customers, with only a short time frame before this deal goes into effect, it is not likely that ACME can do enough to fill such a large sales gap.

ACME is also not used to such large and direct competition, particularly from overseas. Mr. Duck is concerned that Shngo may take away even more of ACME's business mainly on the basis of their significantly lower pricing. Shngo's product quality has been called into question on several occasions and is facing several complaints and lawsuits including but not limited to personal injury and product failure. While Mr. Duck's preference is to not resort to lay-offs or downsizing, another big cultural change could be devastating to the employees. Some difficult decisions will need to be made, and as ACME's crack OD consultant, they need your help.

You will form a "proposal" for the Vice President of ACME Industries (your instructor) that includes your suggestions for what options ACME has organizationally to weather this latest storm and implement any necessary change without causing the employees to riot or jump out of windows in despair. This is a research paper, so it is a proposal in name only - you will not produce this in formal proposal format. Your focus is also not on the financial aspects of this scenario, although you are free to make recommendations. Your focus is on the health of the organization and the well-being of the employees.