Clayton Industries - Case Study

Case # 1

Clayton Industries

Peter Arnell, Country Manager for Italy

1. How would you grade Peter Arnell’s first two months as subsidiary general manager in Clayton SpA?

Ans: Peter Arnell arrived at Brescia as the Subsidiary General Manager with great responsibility and challenge. His mission was to implement Simonne Buis’s “10/10/10” plan – cutting both receivables and inventories by 10 days and reduce headcounts by 10%, as well as “top four in four” plan – achieving top four in market share in four years.

As his arrival he recognizes the problems that were causing a decline in recent years. He took sweep actions for a short time solution while preparing for a long time solutions. He met with his management team and requested them to postpone their vacations. Those who did not comply, he replaced them with new personnel. Then he met with the union (FILM) representatives and negotiated shortened shifts. He also met with the bank to renegotiate company’s credit term.

These actions shows strong leadership and innovative characteristic of Peter Arnell, however the major challenge is yet to be faced. He still need to submit his assessment regarding 10/10/10 and top four in four initiative to Simonne Buis and Dan Brigg.

2. Which plan of action should Arnell recommend to Dan Briggs and Simonne Buis when they visit Brescia next week?

Ans: Peter Arnell left with three options to choose from for the long term future of the company.

Option 1 – Suggested by the Italian Managers.

Clayton SpA should focus on restoring Brescia’s profitability and ensuring its long term viability, create programs to boost plant efficency, product development initiatives to revitalize the compression chiller line, and a sales and marketing plan to expand market share.

Option 2 – Suggested by Carlos Sanchez, Head of Spanish company.

Clayton SpA should invest and develop absorption technology although it has high risk and high reward....