Johnsonville Sausage Co.

Case Study

MOR 470 - Global Leadership

The Johnsonville Sausage Co. (A)

Los Angeles, October 4th, 2013

1) Ralph Stayer pursues a very unique strategy for his sausage business because he does not only focus on the product but also on people, viz. his employees. He recog-nized the very importance of human capital and the possible competitive advantage which can be gained if the company fosters the development of employee's skills and traits. One of the greatest key competencies of The Johnsonville Sausage Co. is definitely Ralph Stayer as pathfinder and creative director of change within the company. He wants to improve the product by "making people better". Moreover, he delegates re-sponsibilities to his workforce which leads to a quick response time to problems. As far as the manufacturing process is concerned the company managed to stay flexible due to additional part-time and seasonal workers. They emphasize freshness and try to keep inventory at a minimum.

Before the transition of the company, all major and day-to-day decisions were made by Ralph himself. The company's structure was based on just one man. After the change in the company's philosophy Ralph emphasized allocating responsibilities properly. By delegating many of the responsibilities to line managers he flattened the company's hierarchy, reduced his own workload and additionally increased decision making quality.

As far as the management processes are concerned, Ralph fostered the independence and general problem-solving skills of his employees. He saw himself as a developer of people and as a coach and emphasized "self-control". He believed that job enlargement and trust are great opportunities to increase the meaning of a job and therefore increase the intrinsic motivation of his staff. The design of the company's flow of information should push problems back to those individuals who are best-suited to deal with them effectively.

Johnsonville's reward system has a good balance of extrinsic and intrinsic factors. Wage increases are given for an increase in responsibilities and employees receive a company performance share. In addition, the company provides many opportunities for people to grow. They can improve skills and even acquire new abilities. Thus, improving a job's meaning which is an intrinsic reward for many individuals.

With Bob Salwedel, Russ Wiverstad, Mike Roller and Donna Schwefel Ralph found reliable cornerstones for his company. With an unusual hiring process they try to employ people who are willing to take responsibility and contribute to the company's