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The corporation developed new and effective
internal communications practices, including standardized
reporting, quarterly joint management meetings with
all subsidiaries, and formal budgeting and capital appropriations
procedures. A corporate level senior executive, for
example, now supports the subsidiaries in their continual
improvement of manufacturing processes, operating efficiencies,
and the quality of their final products. Nonetheless,
the goal of the corporate headquarters remains to coordinate,
support, and provide financing for the operations of
its subsidiaries rather than
to manage them.
Between
1995 and 1998, the new corporation faced a period of
serious internal trial in one of its three divisions.
As part of a strategy of corporate expansion that emphasized
internal growth, the Truck Accessories Group, including
the Leer division, had grown to comprise four manufacturing
companies and a sizeable group of retail stores and
wholesale distribution centers. Management undertook
a costly and complicated reorganization of the $200
million division so as to focus it more properly on
its separate retail and wholesale markets and to upgrade
its manufacturing and marketing capabilities. While
the concept of the reorganization was sound, its execution
was not, with the result that some of the components
of the Truck Accessories Group ceased to operate profitably.
Consequently, the division and the company suffered
financially between 1995 and 1998. Nearly all of management's
attention in those years was devoted to correcting the
Truck Accessories Group's shortcomings rather than building value in
the other more profitable divisions.
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