Abstract

WeaveTech, formerly Johnson-Ware, is a clothing company that produces

jackets, coats, overalls, coveralls, and fire-resistant clothing for the military. A
private equity firm renamed the company after it acquired Johnson-Ware several
years ago. WeaveTech now faces a changing market, and its new CEO is
planning to change its strategy. As part of this strategy, the CEO wants to cut
the number of WeaveTech managers by 20%. He asks Frank Jennings,
WeaveTeach's VP for Human Resources, to recommend how to do so. Jennings
has done his best to balance these changes with the company's long history, its
small-town culture, and its high-performance culture. The case presents
information on the implicit lifetime employment contract, a significant change in
strategic direction, and a problematic performance appraisal system. Jennings
finds the decision to reduce headcount to be challenging. Is it ethical to
discharge high-performing managers? Is the new strategy sound? How should
Jennings respond to the managerial reduction mandate, and what should he
recommend to the board?