Adams Corporation Case
Significant changes are in the works at the Adams Corporation. For more than 100 years, the corporation has been run as a family business, even in recent years when the family has had little real control over the company. Jerome Adams’ departure gave the company the opportunity to either part ways with the past, or continue as a family organization. With the introduction of a complete outside to the organization (Price Millman), the company has chosen to leave its family company roots.
Today’s Adams Corporation has a traditional hierarchical structure which is built on central planning. The central office makes the sales projections for each of the sales regions, and even determines what salaries are paid in these regions. Such centralized planning does not take into account regional differences (although some latitude is given local offices in terms of pricing), and the company may well be missing opportunities to expand its sales base. In addition, the company’s various plants manufacture all of the company’s main items, so that little economies of scale are realized, although some items which may sell better in one region than another might be given longer production runs at a local plant.
The company’s salary structure also puts the company below the industry average as a whole; until this point in time, this has not been a source of significant turnover because the company recognizes the value of retaining employees and provides other benefits designed to accomplish this. However, this also means that Adams may be carrying employees whose productivity is less than acceptable, and may be lacking an infusion of new perspectives that somewhat higher turnover would provide.
With the arrival of Millman and the control of the company shifting even farther away from the family, many aspects of the company are going to change, beginning with the company’s own competitive stance. Millman’s own preliminary announcements h…