Reference no: EM131745928

NO MISTAKES AT LITTLEBY

When the Littleby Chemical Company was bought out by GBI Chemical, everyone was pleased. The Littleby Chemical Company had been family owned and operated for forty-five years. It was one of the leading small manufacturers of industrial acids in the United States. Recently, however, Milt Littleby, the founder, realized that the company and the family would be better off if Littleby were purchased by a larger chemical company.

GBI’s offer was fair, and the company had a reputation for being the best-managed and most forward-thinking company in the industry. Milt retired but, as part of the deal, many of the top managers at Littleby were asked to stay.

Once the purchase was made, there were problems Littleby and GBI hadn’t considered. Littleby had always been a paternalistic, family company. The managers made all the decisions, and the employees followed instructions. As Milt used to say, “We’re in the acid business. We can’t afford to make a mistake.”

GBI Chemical, on the other hand, approached things differently. GBI had fewer managers and pushed decision making down to the lowest levels. Various divisions and departments, divided by product lines, operated as semiautonomous units. Littleby Company was purchased to flesh out the industrial acid product line.

Littleby’s managers, under the terms of the agreement, joined the management of GBI’s acid division and completely merged the division’s current efforts with Littleby’s. The GBI division even moved to Littleby’s plant. The result was chaos.

GBI supervisors and technicians rebelled against the increased restrictions placed on them by Littleby managers, and Littleby employees were expected to make decisions that they had never been asked to make before. GBI tried to change the attitudes of Littleby’s supervisors through training, but the response was “I can’t delegate responsibility downward. My manager expects me to know everything that’s going on in my department at all times.”

Discussion Questions

1. What factors weren’t considered by top management at Littleby and GBI that helped create the problem?

2. What can GBI do, short of firing all of Littleby’s old managers, to help correct the problems?

3. Was Milt’s perspective on not making a mistake a good reason for having strong controls at the top? Why or why not?