Management 10th Edition by Richard Daft

Exercise 1

Draper Manufacturing
"You see what I'm up against?" asked Ralph Draper wearily as he escorted Ted Hanrahan, a diversity consultant, into his modest office on a rainy October day. Ralph was the new CEO of Draper Manufacturing, a small mattress manufacturer. He'd recently moved back to Portland, Oregon, his hometown, to rake over the reins of the family-owned company from his ailing father. Ralph and Ted had just come from a contentious meeting of Draper's top managers that vividly illustrated the festering racial tensions Ralph wanted Ted to help alleviate.
It hadn't taken long for sales manager Brent Myers to con-front shipping and receiving department head Adam Fox, an African American and the only non-white manager. "Why can't your boys get orders shipped out on time?" Brent demanded. "Isn't there some way you can get them to pay a little less attention to their bling and a little more to their responsibilities?
Adam Fox shot back angrily, "If you tightwads actually hired enough people to get the job done, there wouldn't be any problem." The other managers sat by silently, looking acutely uncomfortable, until the quality control head worked in a joke about his wife. Most laughed loudly, and Ralph took the opportunity to steer the conversation to other agenda topics.
The main challenge Draper faces is the price of oil, which had passed $100 per barrel mark that summer. In addition to powering its operations and shipping, petroleum is an essential raw material for many mattress components, from polyester and thread to foam. In addition, the Gulf hurricanes caused severe shortages of TDI, the chemical used to make polyurethane foam, a key component. So far, the company had passed its cost increases on to the consumer, but with increased competition from low-priced Asian imports, no one knew how long that strategy would work. To survive in mattress manufacturing, Draper needs to find ways to lower costs and increase productivity. Ralph completely understands why Brent is pressuring Adam to ship orders out more quickly.
The current workforce reflects Draper's determination to keep labor costs low. It employs 90 people full-time, the majority of whom are Asian and Hispanic immigrants and African Americans. Although women make up 75 percent of the workforce, nearly all of the shipping department employees are young African American men. Instead of adding to its permanent workforce, the company hires part-time workers from time to time, mostly Hispanic females. It tends to engage Asians as mechanics and machine operators because human resources head Teresa Burns believes they have superior technical skills. The result is a diverse but polarized workforce."This is a time everyone needs to pull together" said Ralph. "But what's happening is that each minority group sticks to itself. The African Americans and Asians rarely mix, and most of the Mexicans stay to themselves and speak only in Spanish."
When two of the older white shipping employees retired last year, Ralph didn't replace them, hoping to improve efficiency by cutting salary costs. "It seems to me that some of our workers are just downright lazy sometimes," said Ralph. "I myself have talked to Adam about pushing his kids to develop a work ethic. But he insists on blaming the company for the department's problems. You can see why we want your help."
If you were the shipping and receiving or human resources manager, how do you think you would feel about working at Draper? What are some of the challenges you might face at this company?