Topic [MBA0922] Leadership

Name; NPM Mohammad Fidi Abganis Hermawan ; 22231018

Material Reference 8a. Peter Browning and Continental White Cap A.pdf

Introduction
The company known as Continental White Cap is facing some serious problems in the near
future. Recent years have brought several changes—Price cuts of competitors and
introduction of plastic packaging—to this company forcing them to inevitably face detrimental
drop in sales and success rates if changes aren't made quickly. In order to keep the
company alive, the company as a whole must make changes in order to keep up with the
continuously changing market. The root causes of their problems are: their inability to
acknowledge the need for change within their company. In order to revamp this company
changes need to be made in managerial staffing. There also needs to be a change among
employee pay rates and even the number of people employed as a whole needs to be
lowered.
Peter Browning who was previously successful in managing Bondware Division in
Continental Group Inc from 1970-1984 (Browning took over a business that had lost $24
million in five years (1975 to 1979) and saved it.) had been entrusted with the responsibility
to revitalize & reposition Continental White Cap Division which was called the “Jewel of the
Continental Crown”.
Demonstrates his challenges & efforts, under the pressure from corporate headquarters
while facing an impending competitive crisis, to convince his staff that the crisis is real and to
make changes in the organization's culture in order to better position them to face the
onslaught of price wars & new technology.

Problems
1. Price Competition
a. 5 significant manufacturer, 70 worldwide competitors
b. Competitors begin to slash price
c. Maintaining R&D, Full service is difficult by drastic price cutting
2. High Overheads
a. Base on the ideal that employee are important, White cap sponsored lunch,
picnic, and borrowed money to employee
b. Salary and administrative costs at 13% of net sales, compared with a 3%~4%
ratio in other divisions.
3. New Substitute - Plastic
a. In 1982, FDA approved plastic food containers
b. White Cap was reluctant to allow R&D to commercialize plastic developments
c. Significant customers(Heinz, Welch) adopted Plastic containers
4. Stick to Traditional Culture
a. Keep the current family style culture and Pervasive in a culture of long-term
success and paternalism.
b. Lack of awareness of the need for change
c. Lack of a sense of impending crisis

Conclusions
 Topic [MBA0922] Leadership
Name; NPM Mohammad Fidi Abganis Hermawan ; 22231018
Material Reference 8a. Peter Browning and Continental White Cap A.pdf

● Culture Improvement
The goal being that other employees will recognize the recognition these employees are
receiving and strive to perform at their level. Although White Cap's employees initially meet
such programs with bitterness, over time a task alignment will take place. Through the
recurring change programs the employees will be part of; their altitudes will begin to follow
the actions management has set in motion. By changing the cognitive component of the
employee's functions, the affective component will soon change from one of contentment, to
one of excitement, with an encouragement to become proactive with change leading to a
change in behavior and eventually a change in attitude.
● Tight Market Competition
Browning and White Cap as a whole must also keep in mind the possibility that they have
already fallen too far behind their competition and their customers may enter into contracts
with others before White Cap can meet their needs. An option could be the acquisition of a
firm already utilizing the plastic technology. If an acquisition is financially unattainable a
merger could be feasible. White Cap has a strong brand name and a long standing tradition
of success. Smaller, lesser known yet more technologically advanced firms would find these
qualities attractive. As a contingency Continental must consider its last resort options of
merger or even a sell-off of White Cap. This type of transformational change should be
considered a last resort for Continental because of the disastrous effect this would have on
its employee