Travelers Import Cars Case

Facts

• Traveler Import Cars owners Randy and Beryl Traveler both have extensive industry experience. Randy was a partner in Capitol Imports, a prosperous foreign car dealership, and Beryl was a consult holding an MBA who specialized in automobile dealerships.

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• They decided to go into business for themselves and their successful import car dealership has been in operation for over 5 years.
• Several of Traveler’s employees once worked for Capital Imports but were enticed by Randy and Beryl to leave and work for them. None of Traveler’s employees are unionized (but get equivalent benefits) and the staff feels like they are family.
• The company started with 1 small dealership, but has expanded and now operates two dealerships, a leasing company, and a wholesale parts store.
• Beryl had been in charge of the dealership’s daily operations but with the company’s fast growth she felt overworked and hired two experienced managers to help relieve some of her work load.
• Although the new managers had good ideas, Beryl was now working harder than ever as the dealership was continuing to expand rapidly. Despite regular meetings Beryl had with managers, her ideas weren’t implemented and important deadlines were missed with increasing frequency. Additionally, employee absenteeism and tardiness was becoming a regular occurrence.
• At her wits end, Beryl hired experienced consultant J. P. Muzak to straighten out Traveler’s Import Cars’ quality circle.
• Muzak conducted a needs analysis and met with Travelers management team to discuss his findings.
• Muzak also conducted an assessment of the company’s managers and discussed the results with Beryl privately.
• He concluded that most managers could be trained, but that a few were simply incapable of holding management positions.

Assumptions

• Muzak’s evaluation of Traveler Import Cars was thorough and his findings are accurate.
• Beryl and Randy trust Muzak’s and our advice and will implement our suggestions.
• The company can be restructured and remain successful even after Beryl steps back and is less involved in the daily operations of the business.

Problems

• Company has grown rapidly without an increase in management capability and efficiency. Lack of equal reporting structure and operational control between Randy and Beryl.
• Poor management structure and inefficiency causes high workload for Beryl.
• Unqualified and ineffective general manager.
• Ineffective employees Jeff Amos and Tom Tucker.
• Management decisions are not implemented or maintained.
• Company goals and objectives are not clearly defined or communicated.
• The organizational structure is complicated, ineffective, and confusing.
• Lack of communication between offices;
• Supervisors don’t inform subordinates.
• Poor selection process for managerial positions results in untrained and inexperienced managers and supervisors.
• No periodic formal performance appraisal;
• No performance-based reward system.
• Undisciplined or unsupervised employees with increasing absenteeism.
• Problematic operational control system in lower levels in organization.

Problems found by Muzak

• Quality circle needs restructuring.
• Shorten decision time.
• Organization does not implement management decisions.
• Lack of follow-up causes serious problems.
• Policies and procedures not fixed.
• Managers do not delegate sufficiently.
• New car salesmen do not always transfer sold customers to F&I office resulting in lost revenue.
• Service desk employees not retained impacting revenues.

Recommendations by Quarter

• Determine the vision and mission of the organization and communicate to personnel.
• Develop a comprehensive communication plan for all positions.
• Write and distribute job descriptions for all positions in the organization.
• Implement a low-tolerance policy for absenteeism/tardiness. Have employees sign written warnings, with three offences equaling automatic termination. Clarify the reporting structure. See the suggested organization chart on page four.
• Place Randy as President, Leasing Company, and President, Travelers Motor Cars.
• Place Beryl as President, New Dealership.
• Ben Schyler reports to Beryl; Stuart Graham reports to Randy.
• Promote John Beam to General Manager, Leasing Company, reporting to Randy. Hire a replacement New/Used car salesperson.
• Release Stuart Graham from the company with a generous severance package.
• Promote Sam Carney to General Manager. Hire a consultant to assist with the transition and provide training to Sam.
• Promote Charles Spikes to Fixed Operations Manager, replacing Sam.
• Reevaluate the selection process for new managers and supervisors to ensure only qualified candidates are appointed to those positions.
• Develop a formal training program aligned with the company’s goals for the managers and supervisors.
• Release Jeff Amos from the company. Replace with new hire.
• Move Tom Tucker or a new hire to Service Manager.
• Hire a New/Used Sales Manager.
• Hire a Parts Manager and another New/Used car salesperson.
• Collaboratively create yearly goals for all managers and supervisors and track performance.
• Conduct regular performance appraisals of managers and supervisors.
• Create a compensation system that rewards employees for achieving measurable targets and for positive appraisals.
• Monitor morale in an ongoing program.

The HR activities used in the evaluation of this case include testing and selecting employees, training and developing employees, performance management and appraisals, compensating employees, and managing labor relations.

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