Tutor's Note

This simple case study is useful for introducing the five "glues" or coordinating processes that Henry Mintzberg suggests (The Structuring of Organisations) are evident in large organisations. The "glues" are:

Salleramics

Sally made pottery in the garage Her tasks were wedging clay, mixing, turning, finishing when semi-dry, first firing, glazing then final firing She did all these herself.

Ambitious - her pots sold well to neighbours and at fetes then an introduction to a buyer from the National Trust led to orders exceeding her capacity to produce. Though married with an infant, her 'partner' gave encouragement to progress and so she 'hired' Tim a friend from pottery classes. Tim was keen on learning more about the craft and was unemployed. His pay would depend on the number of pots sold.

Now Sally had to divide up the work. The craft shops and outlets wanted 'Made by Sally' pots. The brand name seemed to work. Tim now wedged the clay and prepared the glazes. Sally mainly did the rest. Co-ordination was not a big problem as in the workshop any concerns that arose were communicated informally, Sally's husband helped her keep the books and an accountant was contracted

Business boomed. More orders led to more co-worker/assistants including a Job Training Scheme trainee.

Foreseeing the day when she would not be able to give so much time to co-ordinating design, getting involved in production finishing, sorting out quality problems etc., Sally hired a pottery school graduate and two others who had a little experience. All blended in well together. Tim's pay and that of the others was made more orderly and the accountant recommended formal contracts of employment (not withstanding that Sally was keen that everyone shared in the profits). Even with 6 people co-ordination presented few headaches but everyone chipped in

Two more assistants joined. One day Tim tripped over a bucket of old clay and wrecked an order. Sally, having arranged to free herself from the office, opened Kiln 3 to find the teapots had all been clear-glazed by mistake (160 of these). She realised that 7/8 people in a small studio workshop could not co-ordinate all their work through simple informal communications. Worse still Sally, now titled Managing Director of Salleramics Ltd, spent more time with customers and the accountant and less time in the studio up to her elbows in clay. Tim was spending a lot of time dealing with orders, and sorting out priorities. She was becoming absorbed looking round for new premises. So Sally decided that Tim's studio co-ordinator's role should be formally acknowledged. Tim would from now on have little time to do manual work himself

Sally's accountant advised her to raise loans for larger premises and modernisation of equipment. Further financial benefits were available by way of small firms' grants from the government.

Growth continued; more staff and new premises, kilns, a delivery van, new products and customers. Several major company's were interested in the Salleramics designs.

Tim was re-titled Studio Director. A sales administrator was hired. Much more time was being taken up by Tim and Sally planning, stock control, accounts and a mini-computer was purchased. It lay around the office for months before it could be brought into use. The computer and software cost £17,000 more than was originally planned for, but when it was commissioned the computer system coped well with the paperwork of the office.

Tim introduced changes whereby each worker did only one task, clay preparation, turning mugs or concentrated their skills on a given product range. Skills of decoration were at a premium but few staff were skilled enough to do it. Production evolved to include 4 work stations plus firing, decorating and design areas. Both potter had to work to standard instructions worked out in advance to ensure co-ordination. Salleramics now sold to West End stores and orders came in by the gross. Orders valued at more than £100,000 were common-place

Sally was advised to employ a Finance Manager due to the size of the sales order book, stock levels, transport charges, delays in receiving payments from major customers and the wage bill. Employee involvement in company decision making became a major policy area for management to consider in relation to the effect of staff morale on the business The pay system was in a mess.

Sally's ambition was limitless. She diversified the company into ceramics, tiles, outdoor terracotta, and special commissions for major building projects or promotional functions e.g. enamelling medallions for the London Marathon. The firm became divisionalised with 3 divisions; consumer products, contract products and designer products - each with a Divisional Contract Manager. Her first graduate potter had become Director of Design.

From her new offices, Sally co-ordinated the activities of divisions by quarterly reviews of their performance, personally intervening when production, sales, quality, expenditure and other performance figures dipped below budget and estimate. She was worried about how staff now felt about the company particularly as the economic recession was apparently going to limit growth this year and the expected volume of Christmas orders was slightly less than anticipated. Tim had already given the go-ahead to make for stock rather than purely to order. Nevertheless, Sally's banker was starting to talk about a stock exchange involvement in the company.

Written © by Chris Jarvis for the BOLA Project.