Factors To Be Considered When Transforming A Company Into A Team-based Management


Teams at Evans RV Wholesale Supply and Distribution
Evans RV Wholesale Supply and Distribution Company sells parts, equipment, and
supplies for recreational vehicles-motor homes, travel trailers, campers, and similar
vehicles. In addition, Evans has a service department for the repair and service of RVs.
The owner, Alex Evans, bought the company five years ago from its original owner,
changed the name of the company, and has finally made it profitable, although it has
been rough going. The organization is set up in three divisions: service, retail parts and
supplies, and wholesale parts and supplies. Alex, the owner, CEO, and president, has a
vice president for each operating division and a vice president of finance and
operations. The organization chart shows these divisions and positions.
In the warehouse there are three groups: receiving (checking orders for completeness,
returning defective merchandise, stocking the shelves, filling orders), service parts, and
order filling for outgoing shipments. The warehouse group is responsible for all activities
related to parts and supplies receiving, storage, and shipping.
The retail sales division includes all functions related to selling of parts and supplies at
the two stores and in the mobile sales trailer. Personnel in the retail division include
salespeople and cashiers. The retail salespeople also work in the warehouse because
the warehouse also serves as the showroom for walk-in customers.
In the service department the service manager supervises the service writers, one
scheduler, and lead mechanics and technicians. The service department includes the
collision repair group at the main store and the service department at the satellite store.
The collision repair group has two service writers who have special expertise in collision
repair and insurance regulations. Two drivers who move RVs around the “yard” also
work in the service division.
The accounting and finance groups do everything related to the money side of the
business, including accounts payable and receivable, cash management, and payroll.
Also in this group is the one person who handles all of the traditional personnel
Alex has run other small businesses and is known as a benevolent owner, always
taking care of the loyal employees who work hard and are the backbone of any small
business. He is also known as being real tough on anyone who loafs on the job or tries
to take unfair advantage of Alex or the company. Most of the employees are either
veterans of the RV industry at Evans or elsewhere, or are very young and still learning
the business. Alex is working hard to develop a good work ethic among the younger
employees and to keep the old-timers fully involved. Since he bought the business, Alex
has instituted new, modern, employee-centered human resource policies. However, the
company is still a traditional hierarchically structured organization.

2The company is located in a major metropolitan area that has a lot of potential
customers for the RV business. The region has many outdoor recreational activities and
an active retirement community that either lives in RVs (motor homes, trailers, or mobile
homes) or uses them for recreation. The former owner of the business specifically
chose not to be in the RV sales business, figuring that parts and service was the better
end of the business. Two stores are strategically located on opposite ends of the
metropolitan area, and a mobile sales office is moved around the major camping and
recreational areas during the peak months of the year.
When Alex bought the company, the parts and supplies business was only retail, relying
on customers to walk in the door to buy something. After buying the business, Alex
applied good management, marketing, and cash-management principles to get the
company out of the red and into profitability. Although this was not the only such
business in town, it was the only one locally owned, and it had a good local following.
About two years ago, Alex recognized that the nature of the business was changing.
First, he saw the large nationwide retailers moving into town. These retailers were using
discount pricing in large warehouse-type stores. These large retail stores could use
volume purchasing to get lower prices from manufacturers, and they had the large
stores necessary to store and shelve the large inventory. Alex, with only two stores, was
unable to get such low prices from manufacturers. He also noted that retired people
were notorious for shopping around for the lowest prices, but they also appreciated
good, friendly customer service. People interested in recreational items also seemed to
be following the national trend to shop via catalogs.
So for a variety of reasons Alex began to develop a wholesale business by becoming a
wholesale distributor to the many RV parts and supply businesses in the small towns
located in the recreational areas around that state and in surrounding states. At the
same time, he created the first catalog for RV parts and supplies, featuring all the
brand-name parts and supplies by category and supplier. The catalog had a very
attractive camping scene on the cover, a combination of attractively displayed items and
many pages full of all the possible parts and supplies that the RV owner could think of.
Of course, he made placing an order very easy, by phone, mail, or fax, and accepted
many easy payment methods. He filled both distributor orders and catalog orders from
his warehouse in the main store using standard mail and parcel delivery services,
charging the full delivery costs to the customers. He credits the business’s survival so
far to his diversification into the warehouse and catalog business through which he
could directly compete with the national chains.
Although it is now barely profitable, Alex is concerned about the changes in the industry
and the competition and about making the monthly payments on the $5 million loan he
got from the bank to buy the business in the first place. In addition, he reads about the
latest management techniques and attends various professional conferences around
the country. He has been hearing and reading about this team-based organization idea
and thinks it might be just the thing to energize his company and take it to the next level
of performance and profitability. At the annual strategic planning retreat in August, Alex

announced to his top management team that starting on October 1 (the beginning of the
next fiscal year), the company would be changing to a team-based arrangement.
Case Questions.Answer the three questions. Apply all relevant theories to back up                                                             and identify and analyze problems in the case.
a) Alex has announced changing the company into a team-based management.
What factors should be consider to transform the company into a team-based
management? Explain your answer by applying the Team Effectiveness Model
(Context, Composition, Work Redesign, and Process).
(15 Marks)
b) What mistakes has Alex already made in developing a team-based organization?
(15 Marks)
c) If Alex were to call you in as a consultant, what would you tell him to do? As part
of your answer justify what type of team(s) would be most suitable to the
(20 Marks)

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