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DRW Technologies: Executive Summary

Mr. Edward Claiborne, the new Vice President of Procurement at DRW Technologies, introduced a new procurement policy via email that required managers to get approval for contracts over $250,000. However, the managers did not implement the policy because Mr. Claiborne failed to properly communicate the changes in person and understand the company culture, as suggested by his assistant Debby Lopez. Personal visits or video conferences would have been more effective than an authoritarian email.

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Gokul Mepprethu
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74 views3 pages

DRW Technologies: Executive Summary

Mr. Edward Claiborne, the new Vice President of Procurement at DRW Technologies, introduced a new procurement policy via email that required managers to get approval for contracts over $250,000. However, the managers did not implement the policy because Mr. Claiborne failed to properly communicate the changes in person and understand the company culture, as suggested by his assistant Debby Lopez. Personal visits or video conferences would have been more effective than an authoritarian email.

Uploaded by

Gokul Mepprethu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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DRW TECHNOLOGIES

EXECUTIVE SUMMARY:

DRW Technologies’ turnover was heading down due to fixed-price contracts and a US
defence budget decline. To meet this decline, Ms Dagmar Hilgard, CEO, DRW Tech.
Appointed Mr Edward Claiborne as Vice President, Procurement X`to focus on cost-cutting
in procurement. She also appointed Debby Lopez, who had experience of 14 years in the
company, to assist him.

Mr Edward introduced a new policy where the plant managers have to confirm before placing
a procurement order worth 250000 USD or more. Ms Debby suggested he personally
communicate this to the plant managers. However, Mr Edward, coming from a solid
hierarchical structure with a strict chain of commands, did not take Debby’s suggestions and
sent the policy by e-mail. Although the managers responded to the e-mail, they did not take
any step to implement it. This is a result of poor communication by Mr Edward. He could
have persuaded the managers by visiting them personally or through a video conference
rather than an authoritarian e-mail.

DECISION STATEMENT:

The procurement managers in various plants of DRW did not follow the new procurement
policy introduced by Edward Claiborne.

SITUATION ANALYSIS:

DRW Technologies, a defence and aerospace company comprising 21 manufacturing


plants, supplies advanced electronic systems for the US military. These plants operated with a
high degree of autonomy. The company was highly profitable and known for its innovation.
As a result of fixed-price contracts and a decline in the US defence budget, DRW’s turnover
was heading down. DRW is known for its customer relation and retention, which is observed
by the fact that they produced custom orders of US special operations of command, even
though they were not profitable but to maintain strong relationships with their loyal
customers.

In order to meet this situation, the CEO, Ms Dagmar Hilgard, decided to focus on
cost-cutting in procurement. For this purpose, she hired Mr Edward Claiborne as the Vice
President, Procurement. He had work experience with a company following a high
hierarchical structure with a strict chain of command. In order to help him in the new firm,
Debby Lopez, with experience of 14 years within the firm, was appointed as his assistant.

After analyzing the past year financial record of 10 companies, Mr Claiborne, came
up with an intervention policy, according to which he should have the final say in any
contract above $250000. To convey this new policy to the procurement managers of the
plants, Mr Claiborne decided to mail it, to which Mr Debby Lopez suggested that the better
mode of communicating would be a personal visit to each plant and interaction with the
managers. Claiborne disregarded her advice completely and went ahead with the mail;
although he got a positive reply from most managers within a week, the plan did not seem to
work as Mr Claiborne received no contracts.

CAUSES OF THE PROBLEM:

The e-mail sent by Mr Edward lacks feedback, emotional sharing and a complete exchange of
information. The e-mail appears to be very authoritative, and he even did not give space for
immediate doubt clearance on the new policy. He did not give a chance for the managers to
discuss the implications of the new policy. The written form of communication has a chance
for misinterpretation.

Since he was new to the firm and did not have any prior interactions with the managers,
communicating via e-mail may not persuade the receiver. Mr Edward also did not take any
effort in understanding the culture in the firm and presumed his actions will be effective at
DRW too.

SOLUTIONS, ALTERNATIVES AND IMPLEMENTATION:

The best way to persuade the plant managers is to personally visit them and interact with
them about the new policy. Even though this may incur some cost, this can be compensated
when the new policy is rightly implemented.

Personal visits to all the plants will take time. Since the plants are running on a busy
schedule, personal visits to all plants may lag the complete implementation of the policy
quickly. Video conferencing or at least a conversation through phone call will better convince
the managers than by e-mail. Video conferencing provide space for immediate doubt
clearance, is more convincing and cost compelling.

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