Reference no: EM133629270

Assignment: Management

Case: Production manager Rick Boothe stood at the boatyard gate and watched his 200 colleagues, some tearful, leave behind the work that had sustained many of their families for generations. On that day, in November 2000, Gellerup Boat's absentee owner had faxed a message to the staff: the yard would close. Twenty minutes later, at the shift's end, the yard was shut down. Gellerup's owner had stopped paying employees' health insurance premiums and had run up $12 million in debt. Still, Boothe's coworkers "went out like gentlemen," he says. "there was no foul language, no threats. That's just the way people are here." Or maybe they just knew they'd be back.

Luddington's boatyards were famous for building first-class schooners and for constructing submarines and other military vessels. Gellerup Boat, founded in 1869 and family run until 1996, had constructed boats for three wars when, in the early 1960s, the company re-positioned itself as a builder of luxury aluminum motor yachts. The yachts quickly became known for quality craftsmanship.

By 1970, though, all the other shipbuilders in Luddington had moved or shut down, and Gellerup had been sold to its second out-of-towner, an ailing ship-building company based in Tacoma, Washington, that used Gellerup as a cash cow. When the yard closed, says Mayor Kevin Crawford, "everyone felt a ripple go through the community."

Luckily for Gellerup and Luddington, the ripple was felt as far away as Chicago, where Daniel Rossington, an entrepreneur who had sold his $55 million commercial-photo-labs company in 1999, heard of Gellerup's plight. Rossington had always admired Gellerup boats - coveted them, even. Now there appeared to be an opportunity to buy the company itself.

As Rossington gathered information about Gellerup , what impressed him even more than the boats were the people who made them. Shortly after the yard closed, 18 Gellerup employees crawled through a hole in the fence to get the tools and materials they needed to finish a boat they'd been working on. Later a customer with an unfinished boat in the yard would help Rick Boothe and 70 other employees set up a shell corporation to try to revive the company. There was not only boat-building to be done but also a retirement plan to rescue, and employee stock ownership plan to develop, and a blatant violation of state plant-closing laws to redress.

Gellerup's yard had been filled with men whose fathers and grandfathers had practiced the same craftsmanship before them, who had fashioned gracefully curved bows from sheets of aluminum. The instinct to preserve that tradition was overpowering. "When I met Rick Boothe, I determined that this company was zero without the people who made it famous," says Rossington. For more than a year, Gellerup's employees had struggled unsuccessfully to save the company.

Rossington, along with his partner, offered the wary craftspeople a second chance. "They weren't ready to put their trust in just anyone," Rossington recalls. "I told them I was going to move here and that I could offer them something they didn't have - a hands-on owner who could speak directly to clients, who could bring strong advertising, marketing, and sales skills."

Rossington flew Boothe to Chicago to speak with employees of Rossington's former company and to examine its financial statements. "We didn't want another silver spoon coming into the yard," says Boothe. Rossington, he discovered, was genuinely respected by his old employees. By 2002, Gellerup's former workers decided to throw their lot in with Rossington. Most, like Gellerup designer Dan Fogler, had landed good jobs elsewhere. But, says Fogler, "I wanted to finish off my working years at the company where I had spent my life. I wanted to build boats."

In January 2003, after more than a year of negotiations, a dramatic appearance before a U.S. Bankruptcy Court judge, and more than $250,000 in legal fees, Rossington and his partner were permitted to buy Gellerup. They promised to keep the company in Luddington for at least 20 years. "We never would have done the deal if Daniel were staying in Chicago," says Boothe. But Rossington never had any intention of staying there. What he saw at Gellerup - a company bonded to its community, and workers impassioned by the craft - had drawn him in.

Today Gellerup has a three-year backlog of orders, steady revenue growth, and four years of profits on the books. Half of the company's 200 employees are people who returned to Gellerup when the gates reopened in 2003. Rossington keeps them and the company focused around their skills and passions. "In May we launched hull number 491, and it's an 85-foot flush-deck motor-yacht cruiser," says Rossington. "In 1901 we launched our first motor yacht, and do you know what it was? It was an 85-foot flush-deck motor-yacht cruiser."

The launch of hull number 491 - like most of Gellerup's launches - was a public event. Twelve hundred admirers crowded the yard to watch the maiden voyage. "It's just a beautiful ceremony," says Boothe. "This company was started when Lincoln was president, and today we're building boats on the same shoreline. I know a lot of people here who take great pride in that."

Task

Question I. Visit the Henri Fayol 14 principle of management on andrewmckay yolasite website. And determine which of Fayol's 14 universal principles of management are evident in this case? Explain your reasoning for each principle selected.

Question II. Which of the different management perspectives (the Classical, or the Humanistic), do you feel Daniel Rossington most followed. and Why?

Question III. Is Daniel Rossington a Theory X or a Theory Y manager? Why do you feel that way?