Running Head: CASE STUDY

MONTANA PLASTIC INC.: THE SHELBY DIVISION IN 2014 (Case Study)

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 Case Study 1

MONTANA PLASTIC INC.: THE SHELBY DIVISION IN 2014 (Case Study)

Question 1.

Answer.

Shelby a division of Montana Plastic Inc. has been in the business of extruded plastic sheets and

plastic gas tanks from late 1900s. It is the market leader of plastic gas tank industry and has an

average growth rate of 20 percent in the early 2000s (Mark 2015). The strength and weakness of

Shelby can be determined by using SWOT analysis. SWOT analysis will also give us an insight

of the opportunities that lies in the market as well as the threats that Shelby is likely to face

(Pickton and Wright 1998).

SWOT ANALYSIS:

1. Internal Environment:

a) Strengths:

The key strength of Shelby is its intellectual property i.e. the technology and engineering behind

the production of plastic gas tanks. The multilayer of HDPE makes the gasoline tank tougher

than the traditional steel gas tank and thus prevents it from being exploding in case of accident.

Further, the fluorine-based barrier technology used in the thermoforming of the plastic gas tanks
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make it much easier for the automobiles companies to meet the high standards of United States

gas emission without incurring a significant additional cost.

Further, the plastic gas tanks can be produced at a significantly low price. Therefore, given

Shelby enough leverage to encourage the auto manufactures to use plastic gas tanks.

Finally, the flat organization structure makes it easy for frontline workers to collaborate with top

manager. Frontline workers can directly make the general manager aware of the problems that

they are facing in the production process (Bon and Mustafa 2013).

b) Weaknesses:

The main problem with Shelby is its wide process definition. Process definition is very important

in reducing the waste rate i.e. difference between the raw material purchased and product

shipped out. Plus, it also helps in avoiding issues related to start-up and calibration. The same

issue that forces Northstrong (a division of Montana Plastic) to purchase the product from a

Chinese supplier (Mark 2015).

In addition, the high turnover rate of employees in Shelby further adds to the problem of high

waste rate. New employees need time to learn the operations of the company but due to the high

sales growth and increasing demand they didn’t have proper time to get train. As a result, they

have difficulty in calibrating the machine, handling the material and scheduling.

External Environment:

a) Opportunities:
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There are 3 different business aspects of which Shelby can take advantage of. First, is with

General Motors, Ford and Kia as the sales volume of this business sector is likely to increase

between 3% to 10% on average each year (Mark 2015).

Secondly, the market of constructions cranes and specialized trucks in which Shelby has recently

stepped into has a potential of 15% or more growth per year. Thus, presenting itself as an

attractive market to invest in.

Finally, the last opportunity that lies in the external environment for Shelby is the potential to

encourage the non-automotive companies to shift from traditional steel gas tank to plastic gas

tank. In this Shelby can target a wide range of companies (like lawn-mover manufacturer) and

can explore different options (like encouraging companies to use plastic tank for keeping their

reserve oil).

b) Threats:

First and the most important threat faced by Shelby is the emergence of Asia-based plastic gas

tank companies. Asian companies have an advantage related to cost of production over United

States companies because of low prices of factors of production. In addition, the automobiles

companies are moving their production to oversee to Asian countries to take advantage of low

production cost and thus increasing the proximity of Asia based plastic gas tank companies to the

auto manufacturers.

With the Asian companies luring to capture the market share another problem that further

complicates the matter for Shelby is the dissatisfied customers. The problems with process

definition and employee turnover have affected the quality of gas tank and this has made Shelby
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top management worried. As they are concerned that the dissatisfied customers may switch and

go in business with their competitors.

Question 2.

Answer.

The organizational culture and the behaviour its employees is greatly influenced by the attitude

and perspective of top management. The believes and values of top management related to the

role of organization in the society and towards their employees act as a guideline. They can

either create a strong and healthy working environment or can present themselves as a challenge

in the long run (Helms and Nixon 2010). The impact of Shelby’s practices on its culture and the

behaviour of its employees has presented with some challenges that are separately discussed

below

IMPACT ON THE CURRENT BEHAVIOR:

The morale of employees at Shelby is at an all-time low because of poor HR policies of the

company. The HR department of the company does not focus on creating a healthy working

environment to gain greater job ownership and commitment from its employees. Instead it has

been used as a principal office and this has resulted in high employee turnover (Mark 2015).

Dissatisfaction of employees at Shelby is also attributed to lack of training. When the workers

are not properly trained related to the task that they have to performed, they are unable to
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perform those tasks efficiently and effectively. And thus, get discourage and discontent from

their job and show lack of commitment and ownership towards the job.

Finally, the financial gain is an important incentive for the employees but it’s not the most

important. Employees are more satisfied with their job when they feel that they are an integral

part of an organization and are contributing towards the success of the organization. They often

won’t their supervisors to take their input and want to be a part of decision making related to

their department or task.

So, the poor HR policies, lack of training and lack of involvement has contributed to the low

morale of employee at Shelby.

IMPACT ON THE CURRENT CULTURE:

The overriding philosophy of keep the machines running no matter what so that the company can

keep up with the rapid growth has develop a production driven culture. Employees believe that

their managers will be happy and satisfied if they meet the production quota. That’s why less

importance has been given to the quality of the product and more to the quota requirement,

which results in the complaints from customers (Babnik, Breznik, Dermol, and Trunk Širca,

2014).

This culture is also promoted by the acquisition approach of Montana Plastic Inc. Whenever

Shelby wants a new technology to meet the standards or a new plant to fulfil the demand

Montana acquires a company. This approach of the company sends the message to its employees

that the firm main goal is to meet the demand so that it can take advantage of the market growth.
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Moreover, the shortcomings of HR in relation to assigning workers to the appropriate department

based on their skills and not being able to hire new employees to fill the vacant positions has

further contributed to the chaotic culture of the organization (Jourdan, Durand, and Thornton

2017).

Question 3.

Answer.

The model that has been used to demonstrate the impact of Stewart A. Belton as a leader on the

employees is Lewin model.

LEWIN MODEL
Particulars Unfreezing Change Freezing
Human Belton needs to make Using his knowledge Finally, Belton has to

HR personnel realize from business school ensure that the HR

Resource
that their policies are not he should assist HR in personnel do not
Department
affective and should designing policies that revert back to the old
Policies
highlight the drawbacks encourages healthy practices.

of HR policies. And working environment.

communicate it to them He can arrange

that how their better seminars and

handling of employees workshops in order to

can benefit the educate HR personnel.

organization in the long

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run.
High Employee Using his experience as Employees should have Belton should make

a director of sales, made feel that they are sure that the
Turnover
Belton should talk to the an important part of an employees are

employees and try to organization. satisfied and that they

build an understanding. are not thinking about

He must communicate it leaving the firm.

to employees that

leaving the firm are not

the solution and that it’s

not beneficial for them

or the firm.
Production Belton must Providing education to Finally, Belton has to

communicate it to all the employees about the ensure that its

Driven
employees that new process is very employees has
Organization
providing quality important in this stage. understood new
Culture
product and services to Employees are struggle process and are

customers is the prime in this stage and as a comfortable with it.

focus of the organization result they afraid

rather than meeting the related to their job

demand requirement. security. Belton task is

Using logical to support its

illustrations, he must employees throughout

make everyone this transition stage and

 Case Study 8

understand that how keep reminding them

focusing on quality of the benefits that the

product and providing change will bring

superior services can (Burns 2004).

help the company in

long run (O'Neill,

Beauvais, and Scholl,

2016).
Flat Belton needs to make its Educate the employees Belton must make

employees aware of the related to how the flow certain that all the
Organization
drawbacks of flat of information takes employees understand
Structure
organization structure place in vertical the new management

and must communicate structure and how structure and how the

the benefits of a vertical decisions are made. He flow of information

organization structure. must ensure that takes place, so that

employees do not get they do not revert to

confused from new the old structure.

level of managers.
Enterprise Old employees are often Belton must make sure Belton must make

reluctant towards new that the proper training certain that the
Resource
technology. Belton as a has been provided to employees do not
Planning
leader has to the employees and that revert to pen and
(REASON)
communicate it to the they have understood paper and that they

employees that the function of the have adopted and

 Case Study 9

enterprise resource system. Employees accepted the change.

planning system is for often get frustrated

their own good and that when they are unable

it will increase their to perform a certain

productivity on job task. Belton must keep

(Chiu, Claybaugh, Lea, reminding the

and Yu 2014). employees how

enterprise resource

planning will help the

company in the long

run.

Question 4.

Answer.

RECOMMENDATION 1:

Stewart A. Belton as an in charge of operations should opt participative decision-making

strategy. This will benefit the company as it will increase the morale of the employees which will

result in greater job ownership and commitment. Herzberg’s Two factor theory clearly states that

removing the dissatisfaction factors from the workplace does not result in employee satisfaction,

the company also has to introduce the hygiene factor i.e. factors that cause job satisfaction.

Therefore, only improving HR policies will not result in satisfaction among Shelby’s employees.
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Belton also has to improve the organization culture and has to take certain actions like allowing

workers to be the part of decision making. So that they feel that they are an important part of an

organization and that their contribution & input has been valued by the top management.

Further, participative decision-making strategy can also help the company in solving its

production related problem i.e. quality issues and high waste rate. Frontline workers can make

valuable suggestions on how to reduce the loss of plastic resin in the production process and how

the quality standards of the customers can be fulfilled.

RECOMMENDATION 2:

Secondly Belton should opt TQM (total quality management) for the operations of Shelby

Company. It will solve the over-all problems of the organization i.e. quality issues, need to

compete with new rising competitors, not properly define process definition etc.

TQM ensures that the firm is customer oriented and that all its activities are designed and

performed in a way that will satisfy the customer need (Fu, Chou, Chen, and Wang 2015). For

this Shelby has to trained its employees so that they can act as an effective customer touch point.

Thus, by better fulfilling the customers’ need Shelby can keep itself a head of its competitors.

Because Shelby is already the market leader in the plastic gas tank industry and it only needs to

retain its customers while trying to attract the prospect. Thus, providing superior quality and

services is the best way to go.

Further in TQM all the process of the organization is integrated and centralized that endures the

better follow of information and effective decision making. It also helps the organization in

making timely decision. All the departments are in coordination with each other and thus

purchase of raw material can be aligned with the production schedule and this will save cost.
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Also, the production department is in linked with the marketing and sales department. So, sales

personnel can set their sales quota and monthly targets in according to the production capacity of

the plants and marketing department can promote the product in a better way.

In addition, total quality management focuses on continuous improvement. All the processes are

continuously checked that whether they can be improved or not. The aim to satisfy the customer

in the best possible way by continuously improving the organization process so that it can

provide more value to the customer. Therefore, it can come up with better ideas and innovative

products to satisfy the customer needs and demands. And that’s what customers want in this

current era i.e. their supplier not only just provide them the product but also provide them the

solution to their problem and help them achieve efficiency in their business. So, buy selling

solution for their problems Shelby can great loyalty among its customers which will help in the

long run. As it can create different strategic alliance with its customers in order to grow. For

example, Shelby is already thinking moving production to Asian countries but in concern about

the cost and exposure. So, it can create an alliance with its auto mobile customers so that they

will ease Shelby entry in the Asian market.

In conclusion, the decision making in total quality management is based on facts. Historic and

present data analyzed to make the future decisions. This ensures that the decisions that are make

are likely to achieve their objectives. Thus, Shelby can learn from its mistakes in the past and

improve its decision making over the period of time. Also, it can predict trends and make

projections about the future, by this it can take advantage of the opportunities that may arise in

the future solely due to the fact that it has made a projection and has prepared itself for it. While

the other firms are trying to adjust themselves to the change Shelby can established a strong

foothold in the plastic gasoline tank industry.

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References
 Case Study 13

Babnik, K., Breznik, K., Dermol, V. and Trunk Širca, N., 2014. The mission statement:

organisational culture perspective. Industrial Management & Data Systems, 114(4),

pp.612-627.

Bon, A.T. and Mustafa, E.M., 2013. Impact of total quality management on innovation in service

organizations: Literature review and new conceptual framework. Procedia

Engineering, 53, pp.516-529.

Burnes, B., 2004. Kurt Lewin and the planned approach to change: a re‐appraisal. Journal of

Management studies, 41(6), pp.977-1002.

Chiu, Y.H., Claybaugh, C.C., Lea, B.R. and Yu, W.B., 2014. Enterprise resource planning.

Fu, S.L., Chou, S.Y., Chen, C.K. and Wang, C.W., 2015. Assessment and cultivation of total

quality management organisational culture–an empirical investigation. Total Quality

Management & Business Excellence, 26(1-2), pp.123-139.

Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of

academic research from the last decade. Journal of strategy and management, 3(3),

pp.215-251.

Jourdan, J., Durand, R. and Thornton, P.H., 2017. The Price of Admission: Organizational

Deference as Strategic Behaviour. American Journal of Sociology, 123(1), pp.232-275.

Ken Mark. Montana Plastic Inc.: The Shelby Division in 2014 Case Study. Richard Harvey

School of Business Foundation, 2015.

O'Neill, J.W., Beauvais, L.L. and Scholl, R.W., 2016. The use of organizational culture and

structure to guide strategic behaviour: An information processing perspective. Journal of

Behavioral and Applied Management, 2(2).

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Pickton, D.W. and Wright, S., 1998. What's swot in strategic analysis? Strategic change, 7(2),

pp.101-109.