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DRW Technologies Case Solution
Ed Claiborne had been appointed as the new Corporate Vice President of Procurement at DRW Technologies, a defense and aerospace corporation with 21 centers in the United States that supplies electronic equipment for US military and manufactures commercial aircraft. He faced doubts from DRW’s CEO Charles Suh about his flexibility to adapt to DRW's culture despite the fact that he was previously a procurement executive for a profitable national defense subcontractor with a rigid hierarchy and a chain of commands. CEO Dagmar Hilgard stuck to her decision to hire Claiborne with the aim of reducing costs. When Claiborne was assigned with his first task of introducing a cost-effective policy to the procurement managers, he considered using email as a medium, and he ignored Debby Lopez's proposal of meeting with some of them in person. Claiborne decided to send the message via email, but it was met with surprising consequences, and it appeared that he was not given the attention he expected. He wanted to understand why procurement managers resisted the new policy, and why contracts weren't being submitted, even though he previously received reply emails stating he will be presented with them.
Following questions are answered in this case study solution
Explain the fact that no contracts have been submitted to Claiborne.
Assuming that the procurement managers are deliberately not following the policy, why would they ignore it?
Are there flaws in the policy leading to failure?
Is there anyone else at DRW who might bear some responsibility for the apparent failure of the policy?
What should Claiborne do now?
How might this situation have been avoided?
What solutions do you propose to this scenario?
Case Analysis for DRW Technologies
1. Explain the fact that no contracts have been submitted to Claiborne
To begin with, Mr. Claiborne's policy was implemented at an inopportune time, I.e., the peak-purchasing season, as evidenced by the case study all plants were overworked and many had added extra shifts at that time. This indicates that they might be concentrating on their current aim of fulfilling production demand and that contract submission to Claiborne is not their top priority. Furthermore, they had previously negotiated an agreement with the vendors to supply similar materials to all of the plants, and they believed they were already doing a decent job of managing the problem, so they were concerned that adopting the new policy would slow down their work process and compromise the quality of their end product. Another reason could be that they did not take Mr. Claiborne's strategy seriously because it was not established keeping their budget constraints in mind, so they instead prioritized the cost-effective approach they devised themselves. Furthermore, lack of trust could be a major factor in not submitting the contracts; Mr. Claiborne was new to the organization, and no one knew who he was. When he made his first ever decision regarding the cost-cutting policy, he informed the procurement managers via email instead of meeting them himself, making the managers even more hesitant to follow his orders. Moreover, DRW allowed its plants a great amount of autonomy with plant procurement managers able to make plant related decisions themselves. Claiborne’s attempt to alter the supply chain involved by reducing the number of suppliers might have been perceived as an invasion of their authority, which is why they overlooked the suggestions made within the email. Plus, Claiborne’s email did not explain how the proposed change will reduce costs by 50% in the next 5 years, and plant procurement managers therefore thought it was mere speculation.
2. Assuming that the procurement managers are deliberately not following the policy, why would they ignore it?
The major reason could be the managers were aware of their own budgets and they already had started working on a cost cutting plan by signing a deal with the vendors to supply the common materials to the plants. Furthermore, the policy introduced by Mr. Claiborne was not communicated to the procurement managers the right way neither they were consulted for a feedback. Employees would expect to be involved in the decision-making process relevant to their department in a well-renowned company such as DRW, but this time it seemed more like the policy was being forced upon them. Moreover, the employees did not understand how applying this policy is going to help the organization. The email Mr. Claiborne sent had incomplete information and unspecified goals. When Mr. Claiborne introduced the policy, it was like springing surprise on the organization these surprises create a hustle bustle in the organization and damage the change exertion, in addition Mr. Claiborne did not realize that the most critical tool of change management is two-way communication. And he just told the employees his decision rather than listening to them which created a sense of inferiority among the managers and hence they did not take the new policy responsibly. Lastly Employees were already in their comfort zone working with the administrators they are familiar with, changing the authoritative structure disturbed their trust and they felt under pressure working for a new vice president that they barely know because they dreaded that if they fail, they might not be getting emotional support from him. So instead, they opted for a safe option that is not following the policy.
3. Are there flaws in the policy leading to failure?
The major flaws were in the communication strategy of the policy that resulted in procurement managers’ resistance to adapt to it. One reason was Mr. Claiborne decided to introduce the new centralized purchasing system during a challenging period i.e., the peak purchasing season, change should be conveyed when there are no other major events going on within the organization.
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