The King Group of Companies

CASE STUDY 5.2

Corporate background• The King group of Companies was one of

the largest conglomerates in the Philippines. Its business ranged food manufacturing to detergents to chemicals to hotel services.

Three flagship corporations:• Alpha-King Corporation• Kings Commercial Corporation• Republic Kingdom Corporation

Cont’d…• It started in 1951. It gradually grew to

what it is now largely due to the hard work of John King. From a textile trading firm, King went into sales distributorships of such products as soy sauce, fish sauce, cooking oil, and milled corn.

• The company was into a five-star hotel, shopping complex, a chain of theaters, a department stores, and a supermarket.

Cont’d…• Republic Kingdom Corporation was into

poultry and hog raising, vegetable farming, fertilizers, chemicals, flour milling, textiles, garments, and snack foods, among others.

John KingThe King Group of Companies President

• 57 years old• B.S. Commerce Graduate at the University of

San Carlos• He was the epitome of “hands-on”

management• He always wanted to be involved key

decisions to be taken.• When he realized that he could not handle the

whole conglomerate by himself, that he started pirating so-called professional managers(handle marketing, production, sales and research and development) to run certain aspects of his businesses.

Larry DySpecial Assistant to the President

• 29 years old• MBM, Asian Institute of Management

BSME, Ateneo de Manila University• “assists the President in almost

anything”- his usual description of his job

Andy DiazBrand Division Manager

• 34 years old• BSBA, (Magna Cum Laude)

University of the EastMBA, Ateneo de Manila University

Marlon TehOne of the Vice- president, King Group of Companies

• 41 years old• AB Economics, Ateneo de Manila University• In charge of all manufacturing operations of

Alpha Foods• Former Division Manager of the Grocery

Division as well as the Moonbeams Company (in charge of both marketing and production)

• Currently the Division Manager of the Dairy Products Division as well as the Kingdom Garments Company

Summary of the Case: The King Group of Companies

Mr. John King called Larry to his office becausehe was troubled about the tension among thethree departments of the Alpha Foods Company(Sales, Brand, and Production). Larry decided toconsult each side to gather information and

viewsfrom the three departments concerned..

Sales ViewWhen Larry spoke with some of the salesmen and Rene Cruz the National Sales manager, they said that they are doing their best to sell their products. Their compensations are commission based. Because of this, they really strive hard to make substantial sales. However the problem is, they think brand department is not supporting them. They always complain that Sales are not selling other products. Of all the brands they are selling, they sell more coffee than any other line because it is the easiest to sell. Outlets are always asking about their coffee and have a budget to spend. So after buying coffee, they do not have funds to buy other products. Additionally, Rene Cruz said that Brand department is the one who’s not doing their part since the stocks are not available when they needed them. A salesman also told Larry that Mr. Cruz really sows fear among them so they do their best to meet their quota and avoid being called in his office for a sermon.

Brand’s ViewWhen Larry talked with some Brand men regarding the issue, they believed that the problem is with the sales department because all they know is to sell coffee. It is really hard for them to get the support of Rene Cruz for they don’t sell the other products. They think that Mr. Cruz is an irresponsible and an unprofessional manager because they think that he’s never been on a store check and does not know what his people are doing in the field. They also said that he used to handle the sales force of the grocery division and moonbeams but the sales force petitioned Mr. King to remove these from his control.

Production’s ViewLarry talked to Tommy Rivera and he said that Production department work on the basis of production schedules. And to come up with a month’s schedule, they cast to base these schedules on. The problem is that the Brand’s forecast is always late so instead, they use the previous month’s forecast as a temporary set of figures to use for production planning. He also added that production seldom remiss on their task of producing the right quantities of product.

Marlon TehTo get another view, Larry talked to the vice president Marlon Teh and he said that production has a very efficient and effective system of production scheduling. As to sales and brand, they are also doing their work but he sees that the problems between them is lack of coordination and each side think that they are important.

QUESTIONS

1. What are the sources of conflict between the two Divisions: Sales and Brand, and among the three: Sales, Brand and Production Division?

2. What strategies should Larry Dy recommend to Mr. John King, the corporation president?

Conflict is…- a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.

Levels of Conflict

• Intrapersonal Conflict• Interpersonal Conflict• Intergroup Conflict

Sources of Conflict• Organizational change• Different sets of values• Threats to status• Contrasting perceptions• Lack of trust• Difficult task• Personality clashes

Conflict Process

Answers:1. The sources of conflicts: a. Different viewpoints

b. Contrasting perceptionsc. Lack of trustd. Personality clashes

2. Larry Dy should recommend Mr. King Confronting Strategy to solve the conflicts.