Case study assignment essay instructions on Stockmall Industries

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Stockmall Industries

John, I feel like resigning, Paul DeMarco said, even if I have been here only three months and just moved my family to this town.

John Wilson, who had been the President of Stockmall Industries for eighteen months, replied, Surely there is some way you and Churchill can work this problem out. I doubt it, said DeMarco as he left Wilsons office.

Mr.DeMarco, who had received his Registered Industrial Accountant (RIA) professional designation five years ago, and an MBA degree last year, had recently been hired by Mr. Wilson for the position of Controller. Mr. De Marco, aged 30, had previously worked for Mr. Wilson at another firm. Both were now employed by Stockmall Industries, a light manufacturing and assembly subsidiary of a British company in London, England. Stockmall Industries was located in a small town of about 10,000 people in a Maritime province.

Mr. Alec Churchill, the financial director, was 66 years old, and had emigrated to Canada from England thirty-five years ago. After working for a bank for a few years he joined one of the banks customers Stockmall Industries as the financial manager. His younger brother, Sir Arthur Churchill, had become a well known industrialist in England. Seventeen years ago, at Alecs recommendation, Sir Arthur’s mini-conglomerate purchased controlling interest of Stockmall Industries. The original founder, Jonas Stockmall, remained as president until Mr. Wilson joined the company. Mr. Stockmall and both Churchill brothers agreed on Mr. Wilsons selection. Alec Churchill did not want the job, as he was getting on in years and wanted to cut back on his workload, though he had no immediate plans for retirement.

Although now retired, Mr. Stockmall remained on the Canadian Board of Directors, and he and Mr. Churchill had become the best of friends. In addition to Mr. Stockmall, Mr. Wilson, and Mr. Alec Churchill, the Board consisted of the following:

Mrs. Helen Irving sister of Mr. Stockmall and current city councilwoman.
Mr. Patrick Miller a young business attorney, appointed by Mr. Wilson.

At the time Mr. Wilson become president, Canada was in a recession, and all efforts were spent trying to maintain sales and keep costs under control. Stockmall Industries weathered the recession well, and Sir Arthur was most pleased with Mr. Wilsons performance. As the recession eased, Mr. Wilson made plans for the establishment of a proper cost control and reporting system, and hired Mr. DeMarco as controller. Although no formal job descriptions were in existence, the plan was to have Mr. Alec Churchill continue with duties of the treasurer: cash management, bank relations, credit and collections, etc. Mr. DeMarco was to handle the control functions: reports, financial statement preparation, etc.

Mr. Churchill had hired three assistants in the past, but none lasted more than a couple of months. Five clerks worked in the finance and accounting department. Formally, the Controller (Mr. DeMarco) would report to the finance director (Mr. Churchill), but Mr. Wilson had been clear about the fact that he wanted Mr. DeMarco to report to him on the cost control systems being developed. Although there would certainly be areas where Messrs. Churchill and DeMarco’s functions would overlap, it was clear that Mr. DeMarco was not to be Mr. Churchill’s assistant. If required, however, each would fill in for the other in the other’s absence.
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Mr. DeMarco had moved his wife and two young children about 500 miles (800 kilometers) to join Stockmall Industries. The DeMarcos were young, energetic, and personable. They were immediately welcomed and accepted into the community, joining some civic clubs and attending many social functions. They enjoyed their new home and hoped to stay for some time.

At the office, Mr. DeMarco’s friendly style made him a hit with the financial staff and with other executives (i.e., sales and production). The sales director informed Mr. Wilson that he had overheard one finance clerk tell another the it sure is nice having someone who actually explains things to you, instead of being impatient like Churchill.

Mr. DeMarco felt that he and Mr. Churchill were not getting along especially well. Mr. DeMarco believed that Mr. Churchill was forever looking over my shoulder. In addition, Mr. Churchill continually asked him for advice regarding treasury duties. He didn’t think Mr. Churchill was that competent and had only risen to his current position because of his brother and Mr. Stockmall,s friendship.

Mr. Wilson was somewhat perplexed. He knew and liked Mr. DeMarco, and believed he was extremely competent. The new cost control system was coming along much faster than even Mr. Wilson had expected. Mr. DeMarco had brought some of the latest management techniques to Stockmall and in the future Mr. Wilson could see a number of challenging problems to which Mr. DeMarco could be assigned.

Messrs. Churchill and DeMarco had recently had a couple of heated disagreements, and Mr. Wilson had decided to call the two men together t o try to resolve the situation. At the meeting, Mr. Churchill said that he did not like Mr. DeMarco’s cocky attitude and he believed this kid is trying to undermine my position. DeMarco denied the accusation, but stated that he could easily handle both jobs. Both men left the meeting upset, with no resolution of the problem in sight.

Word of the conflict between the two had been brought to Mr. Stockmall’s and Mrs. Irving’s attention by Mr. Churchill. It also leaked into the community as Mr. DeMarco was asked about it at a civic meeting by Stockmall’s local bank manager.

Shortly before the meeting, Mr. Wilson and Mr. Churchill had traveled on business to London, England. No mention of the situation was made to Sir Arthur during any company discussions. Mr. Churchill stayed in London for an additional two weeks to visit his family, and returned to find the office working well, and up to date on all financial and accounting matters. Neither man spoke to the other, except to say hello. Mr. Churchill could see, however, that things had gone well in his absence.

Within a week, the two men had clashed again, this time over the reporting of cost data to be used in the projected financial statements for the next year. These statements were prepared by DeMarco, and were to be presented to the bank manager by Churchill as part of an application for an increase in the companyâ€™s line of credit. With the two men still at odds with each other, and the presentation scheduled for the next day, Mr. Wilson wondered what to do to resolve the situation.

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