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Oshawa Industries
Instructors’ Notes
By Rosemary A. McGowan and Tupper F. Cawsey
Case Objectives and Use
The case describes the challenges facing the new, young plant manager at Oshawa Industries’
electroplating plant as he tried to introduce change in order to reverse the plant’s deteriorating
competitive position and declining profitability. The case provides information on the
organization’s culture, human resources, operations, and financial statements.
The case was developed through field research and would be appropriate for courses in
organizational behaviour (e.g., Organizational Change) at the senior undergraduate or MBA
levels.
Case Synopsis
Oshawa Industries was a wholly-owned electroplating division of Oshawa Holdings Limited (a
successful, diversified organization with plants in over three continents). The parent company
identified product quality, employee relations and gain-sharing, and joint venturing with major
clients as its guiding principles. The situation at Oshawa Holdings, however, was one of
declining product quality, aging equipment, demotivated employees, brittle management/union
Discussion Questions
1. Present an analysis of the internal and external factors driving the need for change at
Oshawa Industries.
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Analysis
1. Present an analysis of the internal and external factors driving the need for change at Oshawa
Industries.
External factors include:
• A change in key success factors necessary to acquire and maintain customer contracts. The
increasing importance of cost and service, particularly a JIT approach.
• Increased competition from aggressive new entrants offering new, more cost effective
technologies and applications.
Internal factors driving change include:
• A need to bring the operations of Oshawa Industries in line with the guiding principles of Ol’s
successful parent organization, Oshawa Holdings Limited. This is particularly true in the
areas of quality control, employee involvement, empowerment and gain-sharing.
• Poor labour management relations that were creating a culture of worker resistance and
apathy which are affecting the firm’s ability to meet its key success factors.
• A summary of the firm’s financial situation suggests areas of the operation that need
improvement:
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Current Ratio: Is consistently low compared to the industry standard, suggestive of high
short-term liabilities; this is confirmed by the Quick Ratio.
Quick Ratio: Is low initially, but showed some improvement in 1987, in part due to reduced
inventory.
Sales to Inventory: This has been poor, but improvement was noted in 1986 due to lower
inventory levels and improved sales
Average Collection Period: The general increase in the Average Collection Period indicates
that the company is less effective in obtaining payment of its credit sales; this trend will lead
to an increase in current assets, and affect some of the above ratios, suggesting false
improvements.
A summary of the internal and external forces for change are presented in Appendix A. The
principal sources of pressure for change include the external competitive environment, the
company‘s profitability, the Vice-President and the recently promoted Plant Manager. The
organization’s employees, organizational structure and culture will likely present Talbot with the
greatest sources of resistance to change.
2. Identify Talbot’s power base and the roles that key individuals play in his success or failure.
It is imperative that Talbot recognize his limited power base. Given his background in chemistry
and limited management experience he has little expert power in the electroplating industry. His
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On the brighter side, Talbot’s style in his initial job interviews impressed Carter and Wainwright
and Talbot’s promotion is strongly advocated by Sutherland. Developing referent power with
these individuals would certainly strengthen Talbot’s position. Talbot’s survival and success
hinge on developing a strong working relationship with Sutherland. Ideally, Talbot should
develop a protege-mentor relationship with Sutherland.
3. Should Talbot accept the promotion to Plant Manager? If so, develop a change strategy for
Talbot and present an analysis of the impact of the proposed plan of action.
There are a number of factors that would drive Talbot to accept the promotion. Talbot is
aggressive and has a strong need for achievement in his professional life. He demonstrated this
during his interviews with Wainwright, Sutherland and Carter. It is highly unlikely, given his
If Talbot accepts the promotion, he faces the challenge of bringing change to an organization
with a strong, although ineffective culture. The key success factors to bringing change to this
organization include:
• Developing credibility with the Wainwright, Sutherland, Carter and the workers
• Developing a solid working relationship with Sutherland, who already supports and favours
his promotion
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2) Begin tracking service and quality levels in order to justify his efforts to bring change. Also,
Talbot should start to formally document the plating process. This would decrease his reliance on
Wainwright’s expertise, and allow him to empower the plant floor employees with the skills and
technology behind the “art” of plating.
4) Talbot should continue to show the initiative and drive demonstrated in his job interview. He
could consider sending a memo to Carter, Wainwright and Sutherland. Framed in Carter’s vision
of 01, Talbot can being to act as a solution giver, “suggesting” some specific actions.
Acknowledging Wainwright’s “expert” position in OI, Talbot should suggest that the two of them
work together on the following projects:
a) Renovate the lunch area and improve the working conditions with the hopes of
improving staff relations
b) Develop a customer/service focus that meets the needs (delivery time, service) of the
customer rather than accommodating the shop floor
C) Investigate replacing old, money-draining equipment through a cost-benefit analysis
These actions while they might lead to more expense are relatively inexpensive to implement,
would signal the beginning of change to the plant and would demonstrate initiative on Talbot’s
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Epilogue
Talbot accepted the promotion to Plant Manager of Oshawa Industries. Now (1992) some five
years after his promotion, Talbot is still with Oshawa industries and is still managing the change
process. Sutherland and Carter are also still with the organization in their original capacities. The
major issue that Talbot is still struggling with is the creation of a new culture which is quality
and service-oriented.
References