Stone Finch, Inc.: Young Division, Old Division Harvard Case Solution & Analysis

Introduction

Stone Finch initiated its business in the market by acquiring the Goldfinch Biochemical Waste Management Water Company and combing itself with Stone Water Products, thus, named as Stone finch.Stone initiallyoffered water products to the automotive industry, chemical processing, microelectronics and mining.In the later period, the companyacquired Gold Finch that had been offeringbiochemical technologies to manage the wasteproduct and management in different industries.

Since the idea to acquire has been to tap the innovation and market opportunity, Jim billing has been hired as the CEO of solution division,upon his hiringas CEO, he hired new talent in the organization anddevelopedtheculture of performance metrics to reward and incentivize theemployees.Such disgruntled the senior employees since they took such initiative as discrimination, leading to demotivation and thus high employee flight ratio, lowperformanceand eventually low profit.

In such a situation, Jim Billing developed the JAM portal tounderstandthe issues that have been hindering the performanceof the employees in themarket, leading to high switching ratio and losingof potential employees in the organization.

Stone Finch, Inc. Young Division, Old Division Harvard Case Solution & Analysis

Problem Statement

Since Jim pursuedthe acquisition, such led to employee demotivation due to ineffective human resource management, includingincentives and rewards, along with low employee motivationand disgruntled-ness due to unbalancedsalary scale and other perks.

Analysis

Part: 1

 

  • How can he build the capabilities necessary to support continued growth, either organic or by acquisition?

In order to build the capabilities so as to attain the maximum growth, Jim Billing needs to first develop the organizational culture that could offer the company a strong staketowardsthe market opportunity.Such is important due to thefactthat, without defining a definite culture in the organization, it may fail to harness the power of the organization to capitalize the market opportunity. Since biochemicaltechnologies may offer thecompanystronggrowth in the market and for that, the new talent will be required, however, in order to sustain in the market, asupervisor of senior employeeswill also be required. In such asituation, Jim Billing must create a common platform to align the senior and new employees so to eradicate the resistance to changeand thenharness the combinedskillsand power to capitalize the market opportunity.

In addition to this, in order to build the potentialcapabilities, the companyrequires to pursue the acquisition strategy. It is due to the fact that, since thesize oftheorganization is smalland funds are limited, developing the capabilities internally will cost high to thecompany with no definiteresults. Onthe other hand, acquiring thecapabilities through acquisitionis a smarttechnique as it will (1) expedite the process of launching (2) offer the pre-developed setup and (3) skilled employee set todrivethe innovation in the organization.

However,such is not easy as acquisition leads to putting together two different teams to work collaboratively on the same mission, leading to resistance and thus, low performance, moreover it also creates an internal competitionbetween the two teams, leading to informational silos and ultimately,failure in the market.Perhaps, such a strategy is better for the companyto develop the capabilities................

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