Strategic Management: The Wallace Group

Essay by mblair5University, Bachelor'sA+, November 2006

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The Wallace Group is a $70 million company that deals in the development and manufacturing of electronic, plastic and chemical products. (Wheelen & Hunger, 2006). Harold Wallace, the President and Chairman of The Wallace Group, held 60% of the company's stock when it was dealing solely in the electronics industry. Since the acquisition of the plastics and chemical companies, his holdings slightly decreased to 45% (Wheelen & Hunger, 2006). However, he continues to serve as the organization's President and Chairman while each group is individually run by a Vice President (Wheelen & Hunger, 2006). Harold Wallace enlisted the help of Frances Rampar, President of Rampar Associates, to perform an organizational analysis and provide a prioritized list of strategic recommendations to guide the direction of the company over the next year (Wheelen & Hunger, 2006).


A careful review of The Wallace Group's history nd current situation identified a number of internal issues that must be addressed in order for the company to succeed in its goal of diversification and also remain competitive in a global business environment.

The most prominent matter facing The Wallace Group is the disproportionate allocation of authority as it applies to corporate governance. "The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation" (Cadbury, 2002, p. 15). In the case of The Wallace Group, Harold Wallace acts as both the President and Chairman of the board of directors, which gives him an enormous amount of control over the direction of the company. While this entrepreneurial mode of management may have worked in an up-and-coming electronics company, the acquisition of the two new companies has rendered this style impractical. (Wheelan & Hunger, 2006). Since Harold Wallace's interests are being divided amongst the three operational divisions, none of...