Grand Jean Company
Founded in the 19th century, the Grand Jean Company survived the large economy crises in 1929. It became one of the largest clothing companies in the world around 1989. Its main products are pants for men and boys. But also women pants are produced there. With the “wash-and-wear”, bell-bottom and flare leans and modern casual pants, the company was market leading.
The company owns 25 plants for manufacturing with an output capacity of 20.000 pants per week. However, this production is not enough to satisfy the demand on the market. As a result of that, the company decided to employ independent manufacturers. Last year, these contractors produced one third of the total sales.
Grand Jean is a functional organization. The
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For example, a marketing division (for instance basic Jeans department) want to satisfy a customer's need for a certain quantity of product even if it causes problems for a plant (changeover costs, overworking). The functional organization could create « silos » for each function without real coordination.1 We could also see a competition between the marketing departments: Indeed, marketing department are organized by categories of jeans (basic...) and the sellers reward depends on their global sales on a territory so they could prefer sell higher quality jeans which are more expensive. The plants are considered as expense centers so the optimum dollar amount of input required to produce one jean is determined by standards and these standards are the same for all the plants. But the standards are not relevant because the plants have not the same equipment and yet there is no difference between the standard hours determined in the newer plants and the older ones. The older have yet more difficulties to reach the quotas due to machines break down and more maintenance. Then, the initial rate at which total production time per pair reaches standard is outdated. The management control system favor more efficiency than effectiveness: a plant is more efficient than another one if it uses fewer resources but produces the same amount of pants. In fact, there is no real measure to control the quality of the management and the goal is principally producing the quota no matter how