Claire McCloud Case Study

Comprehend the Case Situation                                                 

Mr. W.H. Walton, better knowns as the “Colonel” for his participation in the Korean War, was the Chairman and Founder of Walton International. Claire McCloud (30) had a B.A. in Economics and a MBA and was his assistant for 2 years until Walton offered her to take a key role within the company: “Executive VP of Fiber Optics”. Walton said to her: “We need an executive at the fiber optics division who can solve the present operating problem and at the same time get it established firmly in the fiber optics market”.

Walton International had acquired Optical Wavelength Specialists (OWS) in 1975. OWS was a small technology company dedicated mainly to produce fiber optic cables and instruments. It had annual revenues of $30 million, however after the acquisition; the company was not performing as expected even though the fiber optics industry was rapidly expanding.  

Claire McCloud had gained experience and sufficient knowhow of the fiber optics industry after working 2 year directly under Walton. She helped to restructure the Component and Instruments divisions and also had help with some changes to the pension administration policies within the company. Claire was familiar with the “aggressive and highly technical top management group”. Her most significant contribution to the company was the projects that evaluated for marketing and finance. After Walton’s offer, Claire was not sure about accepting the offer or not, mainly because she felt insecure about her not knowing enough technical aspects of the fiber optics industry to become an effective manager.

By 1987 the fiber optics market was estimated to be $500 mill, of which $350 mill corresponded to commercial telecommunications, $100 mill to the military, and $75 mill to computer applications.  A typical fiber optics system required a modulator, a light source, a fiber optics cable, a demodulator, and an amplifier. Walton International produced a type of fiber optics cable that was good for continuous production; however this type of cable was harder to produce with consistent quality.  The fiber optics division was facing some manufacturing issues and not many components for fiber optics instruments were made by Walton’s, generating a high dependency on external producers.

Key Players

        Claire McCloud was a 30 year-old lady who received a B.A. in economics magna cum laude from Stanford, worked four years as an economist and spent two years at a well-known business school for M.B.A. She worked as Mr. Walton’s assistant for the past two years where she gained experience in working with people and dealing with problems from top. Through her involvement in the organization, she had become familiar with the top management group of Walton International.

        W.H. Walton was the CEO of Walton International. He was honorably discharged from the U.S. Air Force to supply specialized electronic devices to the U.S. military. He was known to be a technological leader in many of the company’s markets. He established R&D lab and claimed that his focus on R&D was one of the reasons behind the company’s success.