Case #6
WORTHINGTON INDUSTRIES

Case summary

The Worthington steel company founded 1955, essentially invented the steel processing industry as it exist today. The company, head quartered in Columbus, Ohio, operated 53 plants in 11 country and boasted 7.500 employees. John H. McConnell founded the company in 1955. An established leader with more than 1.000 customers. Worthington steel served a broad range of markets, including automotive, lawn and garden, construction, hard were, furniture, and office equipment, electric control, leisure and recreation, appliances and farm implement. The company offered the widest range of services in the industry, from slitting and blanking to hydrogen annealing, hot dipped galvanizing and nickel plating.

The founder developed a the company's values through Worthington industries' Philosophy as follows:
Earnings
Our golden rule
People
Customer
Supplier
Organization
Communication
Citizenship

At the core ofof these values is the golden rule : treat others the way one wanted to be treated.

The Administrative systems of Worthington company are considered under the following sections : values, organization structure, human resources polities and reward systems.

Question
Evaluate the management system at Worthington industries from the standpoint of how they help the company to outperform its competitors.

ANALYSIS
The Worthington steel company have four key success factors and have Worthington industries' Philosophy to help to outperform from they competitor, as follows :

1.Value
The company have developed the company' values and as result the Worthington was very customers-centric. Workers produced high-quality products and gave attentive services to their customers. It resulted in the company's sales force having a better understanding of their customers need and exceeded the customers' expectation and requirement.

The values stated that the first priority was to shareholders(where employees are also encourage to become shareholders through the profit sharing plan), it implied an underlying culture in which customer, suppliers and employees are treasured assets. The values are reinforced through the company philosophy which spells out the position and expectation of the management.

Worthington expected the employees to work hard in helping it to succeed by treating them well as one of the core believe is people would be fair and honest if they are treated similarly. Employees are encourage to develop their skills, practice open communication and resulted in high level of trust between workers and management.

By having strong company values which promotes mutual respect was translated into quality service and better product offerings and service to their customers, Worthington Industries has created a strong corporate culture of serving their customers. The company also have the profit sharing plan which acted as an added incentive for the employees to help the company to succeed.

These high customer focus is an added advantage which resulted in good reputation among the customers, foster strong customer relationship, built trust, contribute to brand equity and most importantly, result in loyalty amongst the customer. In the long run such strong customer relationship and trust in itself supported by strategic marketing initiatives, will become a competitive advantage for Worthington Industries over their competitors.

The same value is also used in creating strong working relationship with their suppliers which help them to execute their plan and be competitive in the market.

Organizations Structure
The company considered its organization structure to be flat for profit-sharing plan with four basic levels: production, administrative, professional and executive. Plan managers enjoyed considerable autonomy, operating their facilities as individual profit center.
Accept for several functions which are standardize throughout the organization or more economical to be centralize, Worthington essentially was decentralized.

"We believe in a divisionalized organizational structure with responsibility for performance resting with the head of each operation. All managers are given the operating latitude and authority to accomplish their responsibilities sighing our corporate goals and objectives. If procedures are necessary within a particular company operation, that manager creates them. We believe in a small corporate staff and support group to service the need of our shareholders and operating units as requested".

With high level of mutual trust and relatively less hierarchal structure, Worthington is able to be effective and efficient through empowering the decision making process. The structure enables the employee and managers to have free flow of information faster - ideas, feedback, instruction will be transferred faster and accurately. In other words, this also enables for problems be rectified and resolve at site . This helps in decision making in term of speed and it's quality(accuracy) which is and important control mechanism and can further serve as a critical competitive advantage in the market place.

Human resources policies
At Worthington industries, employees are involved in making key managerial decisions via the employee councils. managers weren't the only key decision makers. The councils were created in most plants and meet regularly to talk about critical issues such as safety, recruitment, promotion etc. Relationships between councils and managers were cordial. The managers appreciate the perspective provided by the workers and enjoyed working with them as team members. Employee in turn, responded with trust and openness.

The involvement of employees through the council in key decision making process especially in human resource, reflect the openess on the management and inculcate strong motivativation for the employees. It also provide effective feedback mechanism from the plant floor on the operation and supply valuable perspective for managers to decide on key issues. It also promotes sense of belonging and comradeship among the employees as their views and opinion are 'listened' by the management. Strong teamwork and participative management are among the ingredient in establishing a motivated workforce - which will strive to ensure the company success.

Reward Systems
Employee were rewarded for good performance through competitive salaries and Worthington's profit-sharing plan. Salaries paid to their workers were in the top quartile for comparable jobs in each plant location and added by generous profit sharing which were distributed quarterly( 20-25% of of production workers total compensation).The size of pool they shared with administrators and professionals hinged on both the company's performance and that of individual plants. Employees recognized that the direct correlation between the compay's performance and their compensation benefit.

In Worthington industries, has been successful in instilling the incentive mechanism and compensation system in influencing the behavior and productivity of the employees. Backed by the company philosophy which gave them direction for implementation of strategies. , it reinforce the company focus with their goals congruence.

Conclusion

Named as ‘100 best places to work' by Fortune magazine, Worthington Industries, founded in 1955, grew from humble beginnings to a multi-billion dollar metal processing company. The company’s success is credited to its customer-centered philosophy, based on the Golden Rule. This philosophy, in addition to an unwavering commitment to the customer, and one of the strongest employee/employer partnerships serve as the company’s foundation in their continued success. There are clear contribution of several key success factor as a result of strong commitment by both manager and employees in realizing the company's objective.