Sigtek Case Analysis

...

Financial Analysis

- Sigtek’s sale had shot up to more than $60 million since its foundation.

- Prediction for the company was good, workforce topped 1,000 and many predicted that Sigtek would be a $100 million company within five years.

- Sales artificially depressed, due to early stockpiling of competitor. Customers demand for better price and short delivery time. The company tried to incorporate a new software into current computer system for signal handling but as a result Sigtek sales had tumbled to about $40 million, and it had trimmed its workforce to 800 employees.

- Sigtek had been bought by Telwork, a $500 million European telecommunications company, turning Sigtek into a subsidiary of Telwork

- 1985 Sigtek’s performance at peek this was due to other telecommunication Company’s breakup.

- 1988 the company’s performance suffered major loss.

Implementation of Total Quality at Sigtek

Some of the major issues that happen during the implementation of the Total Quality change while John Smithers at Sigtek began in April with his assignment and when he was paired with enemy Murphy. During the May thru June time frame Smithers and Murphy get three weeks of quality training. Then in July Senior managers attend a two-day program. Smithers and Murphy meet with site Quality Improvement Team. They ask Patricof for one week teaching delay but Patricof was also suffering the pain of pressure from his peers and he decided not to extend the deadline. In September of the same year training of 25 employees offered by Smithers and Murphy, but frustration kicks in making the situation almost and when asked for the accounting for charging back it was refused to them. Training continues during the October time frame, but in November Murphy and Smithers request a temporary break to regroup; which it was denied and to their surprise Mr. Patricof got promoted. In December of 1988 with great disillusionment Smithers ask to go back to regular post. (Exhibit TN-2).

Critical Issues

- Total Quality Program fell apart some believe to John Smithers fault.

- Steady and inexorable deterioration of a Total Quality Program put in place by John Smithers.

- Forces and behaviors that can contribute to a change program’s eventual failure.

- Blame John Smithers took when he try to implement the Total Quality program.

- John Smithers, Peers, Management Team, and Corporate Leaders at Telwork whose actions made them directly responsible for Sigtek crooked process.

- The 8 important Steps (during an eight month lapse) for the Implementation of Total Quality at Sigtek and its relentless progression of communication breakdowns and other disappointments that occurred from April 1988 through December of 1988.

- Clashed of Culture-X and Culture-Y.

- Smither’s lack of tact -his lack of regard for Patricof’s feelings is particularly imprudent considering Patricof’s growing organizational power, and his almost complete control over the Total Quality program.

- Failure of Smithers to charge a meeting in operations to his own group on the engineering side flaunts normal organizational procedure, and does nothing to advance his cause.

- Patricof’s taking control of the company, pushes the same beliefs and behaviors that the operations side of the business has embraced for years.

- Disappointment and frustration – happened as a result to the battle between Theory X and Theory Y and because to what Telwork’s and/or Sigtek’s management actually expected for it.

Recommendation

In order for Telwork to become a market leader in the telecommunication industry, the CEO must make sure to implement key Total Quality goals efficiently. Just like Smithers recommended to Patricof the following six goals could be only way of bringing the company back on its feet: 1) Provide product and service quality better than all competitors; 2) be the lowest-cost quality producer; 3) relentlessly pursue quality improvement; 4) manage through leadership; 5) personally involve all employees through participative activity; and 6) comprised of employees who approach the job fearlessly. Personally any manager could bring any company to succeed if they can make contact with its employees. The key to success to any one’s company would for managers to be able to speak the same language as its employees, and for managers to become more involved in the management of the company. Managers must show concern for their employees, and in return gratitude is what is going to come out of all of their employees thus bringing to the company higher earnings.

Conclusion

Smithers concluded that his teaching might offer false hopes and expectations to employees. Despite Smithers fear to continue teaching, Patricof, the new general manager asked him to keep teaching. Patricof believe that Smithers was a valuable asset to the organization and could not lose his followers that believe in him. Patricof at some point believe that he had Smithers in a position he didn’t want to be in because to some people Patricof was more credible than he was. Although, to others, Patricof’s request might have seemed like an endorsement, to Smithers, it appeared that the end was in sight. Towards the end of the year, around Christmas time, Smithers started doing his resume. Smithers was filled with a sense of profound regret and he remember thinking “Could I have done something different? That’s still a hard question for him to answer.”