Atchinson Corp

Turn-in:        Draw diagrams Atchison’s current organizational structure, and propose a new organizational structure that will enhance the aggressiveness and effectiveness of the Atchison Corporation, and better align its structure with its strategy.

This is the biggest challenge that all family owned enterprises face. What the reward structure should be? They consider the employees to be part of their family and want to take care of them as family members.This is fine except that in today’s competetive environment compensation should be tied to performance and not to seniority. Staying with the company for long shouldn’t be a guarantee for not getting laid off.

With little to no performance based compensation plan, employees have been offered no drive to work better or harder. They just do enough work not to get fired. Combine these factors with the idea of lifetime career and you have a perfect receipe for disaster.

Steps for improvement -

1. A sweeping change in overall company policy, including compensation plans and mandatory retirement, as well as management and employee reviews. Compensation should be tied to performance. The company needs to move away from fixed salary and expense reimbursement. It should have fixed base salary and year end bonuses/commission for number of sales made. The same should be implemented at VP level, where stock options should be given to encourage them and make them feel part of the company. Skin in the game is very important and company needs to implement that policy at the employee if they want to succeed in this competetive world. A real good look needs to be taken at retirement age. Experience in most cases is very beneficial, but Managers in their mid 70’s are only holding the company back with older ideas, that often times are highly conservative. Management review should be done on a quarterly or semi-annual basis. No longer can managers think that just increasing sales is going to keep their jobs. Company needs to make profits to survive. Increasing sales, by losing money is not going to help anyone.

1. Another important point is Corporate headquarters shouldnot be telling regional sales offices to hire employees. The company needs to move away from the quota system. The way it should work is you tell regional office sales it has to make and budget it has for the fiscal year. Rest it is regional offices decision how to make that happen.

1. Atchison Corp. also needs to gain a firmer grasp on the numbers, through outsourcing of some accounting functions. We live in the world of advanced business analytics and accounting. They should be able to have a  clear insights on where the money is going and where they can improve. With only one central accounting office working for all divisions, the numbers obtained do not necessarily show what is happening in a particular division.  The idea that these numbers are only obtained once a quarter is also not helpful. The company should think about outsourcing their accounting and saving money by doing that. By getting specilist firm they will allowing better reporting of the trends that are happening in each division, and allowing the central accounting office to coordinate only company wide numbers.  The same would be true for manufacturing numbers.  Outsource each plants accounting, and have better numbers obtained.  Having currently only one check, and the being a very rough number, does the company no good in determining what shifts in procurement procedure need to take place, or where expenses need to be cut. I would also make it a bi-weekly or monthly affair, rather than just checking numbers for a quarter. By staying on top of financial affairs, company can find additional funds to improve its marketing. Additional money can poured into it and by taking help from specialist marketing agencies, lost ground can be captured back.

While I would recommend doing all the above mentioned things, I would also like to keep current education scholarships and grants. The most important thing is to keep your employees happy and a Leader shouldn’t lose focus from that.