Case 12-2.

Crown Point Cabinetry Case Overview Crown Point Cabinetry company is a company that supplies and manufactures kitchen cabinets that have a quality or high quality made to order. The company's location in rural Claremont, New Hampshire, USA and Crown Point is a family-owned company founded Stowell in 1979. Crown Point sales increased, dedicated management group, and its dealer network are satisfied, but it is not generating healthy financial performance. Relationship between employees and management is very strained, very bad employee attendance. Besides the management response in the face of this problem is with a heavy hand or by relying on power and authority. Annual worker turnover was 300 percent and absenteeism was a major problem. Employee/management relations were described as horrible. The greatest problem at this time was poor in-process quality control. Some cabinets were built three or four times before they got out of the shop. Brian decided to take a different approach. Brian called a company meeting and announced that he would be making changes. Brian wanted people to say that they loved to work at Crown Point (which was not a desirable place to work at the time). He encouraged his skeptical workers to trust him. From 1994 to 2002, Brian Stowell and his wife Becky, introduced many changes to Crown Point Cabinetry. First he reduced payroll from 76 to 53 people. This increased unit and dollar sales. The management system was then revamped. The management layer was removed and replaced by a team-based management approach. Analysis and Discussion Problems at Crown Point is located on the Company's performance of its employees. Communication and relationships between employees and management is very bad. This leads to the lack of openness among employees and management with such openness actually can improve the performance and productivity of the company. CEO of the company that Brian realized that before reaching a good quality, the company requires three to four times before a cabinet workmanship delivered. And he realized that during this time many companies waste a lot of money to rework and wastage of raw materials. Brian thinks that money is better spent on wasteful it is used to provide incentives to its employees to work efficiently to produce a quality product.

Strategy adopted by Crown Point Cabinetry is called profit sharing program. The steps in this system is as follows (based on a Becky Brian): Multiplication sales figures for each month by something fundamental is presented on a reasonable estimate of what the company can afford to pay labor. This number is used to determine the maximum bonus. From this number, the actual labor cost during regular hours, overtime labor costs, and a day off or a vacation budget is reduced. The remaining funds are distributed evenly each month as a percentage of the employee on the basis of wages earned. Each month a new start regardless of the performance of the previous month. Crown Point implement policies to motivate their employees with reward and punishment system in the employee getting the system if there is no back order for a week. Other approaches adopted by the company is to increase wages and make their employee safety program. Another strategy adopted by the company is restructuring its corporate culture by providing a better incentive compensation to employees to motivate them. Conclusion Crown Point has addressed the issues that it was facing in 1993 when Brian Stowell became lead executive and has become a more profitable company. This is due mainly to a much happier workforce that is involved in the management process. Line employees now have a stake in reducing labor cost, reducing backorders and reducing absenteeism. Employee management teams are also responsible for safety and the hiring and termination of employees. This has made Crown Point Cabinetry a more profitable company with a more stable workforce. Clearly Brain Stowell has addressed the problems Crown Point had with its workforce and it is now a model for what a company can do when it addresses employee issues. The strategy used by the Crown Point Carbinetry can be applied in other companies in other business settings, as long as other companies who want to adopt a strategy should be able to adjust to the culture of their business or systems within the company. Also required leaders who have the commitment and discipline to implement this strategy and if necessary, other companies can also modify strategy according to the situation and company needs so this strategy can also work optimally.

Recommendation For the future, Crown Point Cabinetry should continue the programs it has started. They must continue to monitor the companys financial results and employee attendance and turnaround records. If Crown Point notices an unacceptable decline in these figures, new programs should be examined and implemented to correct these drops. If Crown Point continues to treat its employees well and reward them for making a quality product they should continue to be a successful company.