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The Wallace Group: most important problem, recommendation, priorities, education

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1. What is the most important problem facing the Wallace Group?

2. What recommendation(s) would you make to Mr. Wallace, and in what order of priorities?

3. How do you educate a manager to manage an organization as it evolves over time from an entrepreneurial structure to a more sophisticated and complex organizational structure?

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WALLACE GROUP, formerly John L. Wallace & Associates, has restructured to better encompass our diverse and expanded services. We have built on our strong foundation in Civil Engineering, Surveying and Planning by adding full professional services in Construction Management, Landscape Architecture, Mechanical Engineering, Public Works Administration, GIS Solutions, and Water Resources. In 2002, THE WALLACE GROUP acquired the Swanson AIPS technology, which augments its alternatives for wastewater treatment. Doing business as Wallace Swanson International provides continuity to Swanson International's thirty years of service to both domestic and international clients.

For 20 years, John Wallace has been the chief executive officer of the Wallace Group, a San Luis Obispo engineering and planning firm.

Wallace founded the company in 1984 after working for six years as an office engineer for the San Luis Obispo County Engineering Department. For more than a decade, he worked with the Los Angeles County Flood Control District.

It was Wallace's first job as an engineer after graduating from the University of Florida.

Today, Wallace manages more than 100 employees who specialize in landscape architecture, civil engineering and water resources. Wallace also oversees a separate corporation in San Luis Obispo that provides water and wastewater systems construction and a branch office in Martinez.

Past contracts include the Bradley Ranch project in Santa Margarita, BlackLake Golf Course in Nipomo and Varian Ranch in Arroyo Grande. The company also does municipal projects and recently expanded to do international work, including a current project in Baja California in Mexico.

"I enjoy the challenges that the projects bring, but at the same time I enjoy encouraging and guiding people to develop their potential," Wallace said. "One of our keystones as a company is to be a service to our clients. We enjoy making them successful."

The Wallace Group, a San Luis Obispo engineering design and construction firm, has created three new positions of vice president to support several employees in their tenure and success with the company.

Craig Campbell, Brad Brechwald and Rob Miller have been made vice presidents of the company. Don Oldt, chief financial officer, will hold the company's title of treasurer. Brechwald and Campbell have been Wallace Group employees for more than 15 years.

As principal engineers, they provide design services to public and private clients. Miller's role at Wallace Group is as director of water resources -- overseeing the planning, design and construction management services throughout California and overseas. He joined the company in 1994 and is also a principal engineer.

Oldt joined Wallace Group in 2004 as chief financial officer.
Wallace is the principal of the Wallace Group, a public relations and marketing communications firm. Wolter is a special assistant to the governor's health care cabinet and Pawlenty's former communications director.

Yearly Financials
SALES $ 1,000,000 - $ 2,499,999

During one astonishing week in January 1993, three of America's largest corporations fired their CEOs: John Akers of IBM, James Robinson of American Express, and Paul Lego of Westinghouse were all pushed aside. But they were not the only CEOs of major corporations to lose their jobs recently. In fact, between 1991 and 1994, thirteen other CEOs of Fortune 500-sized corporations were also fired.

American ExpressAmes Department StoresAppleCompaqCyprus MineralsDigitalGMGoodyearHartmarxImcera GroupIBMKodakR.H. MacySunbeam/OsterTennecoWestinghouse James Robinson IIIStephen L. PistnerJohn SculleyRod CanionChester B. StoneKenneth OlsenRobert StempelTom Barrett Harvey A. WeinbergM. Blakeman IngleJohn Akers Kay WhitmorEdward S. FinkelsteinePaul B. KazarianJames B. Ketelson Paul Lego January, 1993December, 1992July, 1993October, 1991February, 1992October, 1992October, 1992June, 1991July, 1992December, 1992January, 1993October, 1993April, 1992January, 1993May, 1992January, 1993

This upheaval calls attention to unprecedented change in the global economy, and its powerful echoes still thunder through the marketplace. Something fundamental is happening of which these firings are only symptoms, for although these men were well educated and carefully selected for top jobs in American enterprises, their corporations did not perform up to expectations. What went wrong?

The premise of this argument is that these CEOs were removed precisely because they were not prepared for the changes that are occurring throughout the economy, and they did not understand the patterns underlying the changes. They may not have even recognized them.

In failing to understand they certainly were not alone, for as we approach the dawn of a new century and a new millennium, we are a global society immersed in a process of change the likes of which has been seen only a few times in the entirety of human history. Suddenly, within the span of a single generation, the structure and character of the economy is fundamentally different - with stunning and often devastating consequences.

Just as the Renaissance once dawned across Europe, and industrialism exploded throughout the Northern Hemisphere, a new era is upon us. Small businesses, large corporations and entire industries struggle to adapt to these unfamiliar conditions, and in so doing they are forced to reconsider their identities, their strategies, and all aspects of their operations.


Mr. Wallace cannot take all the decisions that relate to the corporation's existence, but by far the majority of the decisions that are made in the process of creating one are a matter of choice. Thus, a corporation is something which is designed, with all of the opportunities and risks inherent in this uniquely human process.

For the last one hundred years, however, it has been widely assumed that the design of a corporation must be based on the model of the command and control hierarchy. Designing this organization has simply been a matter of naming the required departments and arranging boxes in a pyramid. This hardly qualifies as a process of design at all, any more than drawing a mustache on a copy of the Mona Lisa constitutes making a new work of art. Yet just this practice has passed as organization design for many decades, and a standard hierarchical model has been taught to and implemented by generations of executives.


Mr. Wallace needs to change the structure of the company to suit its new needs. The corporate pyramid is described as an organizational structure, and one of the most important attributes of this structure, as with all structures, is its durability. It is valued for its strength and rigidity, its ability to resist change and to stand ...

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