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Assignment - Horizontal Integration v Vertical Integration Discussion Questions

Question A - What strategy would you recommend for a small-sized company entering a highly segmented market, each segment with a complex set of needs and spending power?

Question B - Imagine that you are the manager of a housekeeping service. Specifically describe how you would use the concepts of (1) scope of the firm, (2) horizontal integration, and (3) vertical integration to build and achieve a competitive advantage over rival housekeeping services.

Please read Case #53 "The Mentoring Problem at Walnut Insurance" on page 161 of the textbook and discuss how you would address the VP's concerns. Also, what are some of the potential problems with companies who use mentoring as a means for developing employee skills and abilities? What alternatives do you suggest? 150 words

Tom Morrison, president of Walnut Insurance, was sitting at his desk reading a letter he had just received and thinking about a recent meeting with his vice presidents. He knew he had to make a decision regarding whether to implement a new mentoring program, but he did not know what that decision should be at the moment.

Walnut Insurance has been selling liability insurance to firms in one particular industry for over 50 years. Its specialized niche in the insurance industry has made it highly successful. It employs about 2,400 individuals who work in 12 regional offices throughout the United States and at its Midwestern headquarters.

Walnut Insurance has six senior male vice presidents who report directly to Morrison. Over the years, these individuals have traveled between the various regional offices, working primarily with the insurance sales representatives. The VPs perform numerous functions when visiting the regional offices. They go out on overnight sales trips with the representatives to learn about customer problems, assist agents with policy questions, and provide training; they evaluate agents to determine who has the potential to be promoted; they pass on the firm's values and culture, which places heavy emphasis on honesty and satisfying customer needs; they assist agents in interpreting company policies; and they determine what new policies need to be developed.

Over the years, these VPs have performed one other valuable service to newemployees-they have informally mentored some of them. Typically, each VP would pick out five or six promising agents and take them under his wing. He would get to know the agents well, point out strengths and weaknesses, and help them develop plans for achieving management positions. Over the years, this approach has worked quite well.

However, in the last two years the firm hired over 50 new agents and almost two-thirds of them were women. These individuals were college graduates who majored in a variety of disciplines. They were hired based on their sales skills, initiative, self-confidence, assertiveness, and physical appearance. Previously, almost all of the new hires were men. Morrison believed that the present informal mentoring system might result in women being excluded, so he thought that a formal system should be considered.

Thus, at one of the firm's regular retreats, Morrison broached the subject with his VPs. He commended them for their willingness to mentor agents voluntarily in the past, noted that many of the regional managers were a product of this mentoring, explained his concerns regarding the need for female agents to receive equal mentoring treatment, and asked them if they thought the process should be formalized by assigning specific agents to specific VPs.

Morrison's suggestion went over like a lead balloon-not a single person liked the idea in the least. In fact, they strongly opposed it and told Morrison as tactfully as they could. One VP explained that he was an elder in the church and had strong religious convictions. He did not want to travel with female employees on overnight sales calls because it might tarnish his image among his evangelical friends. He had no problem working with female employees in regional offices and had done so for many years. But, he did not want to travel with them.

Three other VPs were opposed to the idea because they were fearful of sexual harassment suits being filed against them. They knew that Title VII of the Civil Rights Act states that it is unlawful to harass a person because of that person's sex and that sexual harassment is defined as unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. The also knew that the law states that harassment is illegal when it is so frequent that it creates a hostile or offensive work environment or results in an adverse employment decision. They noted that a recent insurance trade publication article described numerous cases in which managers in several other insurance firms had been charged with harassment. The article explained that the law is unclear in many ways and how even if one is innocent of a charge, one's career can be ruined. The VPs demanded to know how and whether the firm would stand behind them if charged with sexual harassment.

One other VP objected to the idea because he wanted free choice in selecting employees to mentor. He argued that only the best agents are deserving of mentoring and that it would be a waste of time to mentor everyone. He asked, "Why should we mentor someone who does not have the potential to become a manager?" Another VP objected because he knew that his wife would not approve of any plan that would require that he work closely with young female agents, particularly at night in faraway locations.

After hearing all of these objections, Morrison asked the VPs to give further thought to the issue. He restated that mentoring was critical to the firm's success and that it was important that women not be left out of the process.

In the week that followed, Tom had not heard anything more regarding the issue from any VP. However, he had received a letter from one wife (see Exhibit 3.1) and it was clear what she thought of the idea. Nonetheless, the final decision was his to make.