Worthington's Management System example essay topic

Founded in 1955 by John H. McConnell, Worthington Industries has evolved into an established market leader in value-added steel processing and general metal related businesses. Of recent, Worthington has consistently outperformed its competitors and continues to maintain its dominant position in the steel manufacturing industry. Worthington operates under a long-standing corporate philosophy based on the corporations "Golden Rule". Worthington's' "Golden Rule" philosophy to treat its employees, customers, suppliers, and shareholders in a manner such like it would like to be treated is the foundation to its corporate success. Furthermore, Worthington encourages its employees to join in the corporate philosophy by helping out in the communities where they live and work. Much of Worthington's success can be traced to its management systems, moreover, its enforcement of the "Golden Rule" which results in the corporation's ability to consistently outperform its competitors.

The "Golden Rule" philosophy is not only the corner-stone for the company; rather, it simultaneously serves as the company's foundation. By breaking down the categories within the philosophy of the "Golden Rule", a more detailed analysis will result. More importantly, though, it is critical to acknowledge that the simple consideration of the "Golden Rule" philosophy will not suffice towards corporate objectives, rather, a strict implementation of what the "Golden Rule" stands for must be carried forth by management to ensure the results that the "Golden Rule" seeks to accomplish. The primary corporate goal for Worthington is to earn money for its shareholders, while, at the same time working to increase the value of their investments. The corporate belief is that the best measurement of the accomplishment of its goal is consistent growth in earnings per share. Exhibit 1 indicates that over the past five years, net sales have been exposed to marginal, yet, constant growth.

Concurrently, the exhibit indicates that gross margin and operating income have also risen substantially. The corporation financial performance is a clear indicator that Worthington is fulfilling their obligation and commitment to earning money for its shareholder. Money magazine named Worthington Industries as one of the 30 best performing stocks of the past 30 years. The study ranks the stocks based on annual returns on investment and earnings per share.

The annual returns on investment are now around 18%, ranking the company 20th in the United States alongside some of the nation's top businesses. Persistence and dedication to ensuring optimal returns on investment for its stakeholders fuels the corporate locomotive anchored by management teams using the "Golden Rule" as a premise for its management system. Much of the success that Worthington's management system encounters is based on the relationship the management has built over time with its people. The corporate motto or frame of mind is that people are its most important asset.

Management believes that people respond to recognition, opportunity for individual growth, and fair compensation. Worthington prides itself on the accomplishments that its employees and management teams have conquered while working together. Needless to say, such accomplishments should be and are openly applauded and acknowledged as the company, its facilities and its people are often honored for the services they provide. In 1997, 1998, and 2002, Worthington Industries was named one of the "100 Best Companies to work for in America", according to Fortune magazine.

Furthermore, for decades Worthington has believed that compensation should and must be directly related to job performance offering incentives and bonuses to those whom posses extraordinary performance on the job. However, in return, Worthington expects its employees to be genuinely concerned and accountable for their actions on the job and provide above average work for an above average pay. The corporation shows genuine commitment to its employees while maintaining that if jobs open up in other divisions within the company, the primary candidates for those vacated positions will be existing personnel. This is a restatement of management's dedication to its people providing internal opportunity to grow. The value of this aspect of the management system is invaluable.

By prioritizing the needs and wants of its staff and personnel, management conveys to its people the message that "we care about your well-being". As long as "people" buy into this corporate philosophy, as apparent they do, can the management system operate successfully. Worthington's philosophy speculates that without the customer and their need for its products and services, it would in essence have nothing. Any business, per se, acknowledges the importance of its customers; however, the steel industry is that much more in need of maintaining its customers for unlike other smaller industries, customers are limited in scope making them that much more valuable. Management's mission is to exert every effort to see that the customer's quality and service requirements are met. Once a commitment is made, Worthington's management makes every effort to fulfill its obligations.

The Jacobson & Associates Survey ranks the major steel suppliers in the industry based on customer satisfaction while Worthington Industries's teel Division consistently ranks at the top of the survey. The corporation ranks first for overall quality while collectively ranking second for overall satisfaction, a byproduct of Worthington's extraordinary management systems. Suppliers, though an important facet of the "Golden Rule" philosophy, play a much smaller role in the corporation's mission. Worthington's primary request of its suppliers is to deliver the supplies on time and to treat them as they do any other company.

The corporation can not operate profitably without its suppliers supplying quality raw materials at a competitive market price. Managements firm and understanding relationship with its suppliers is critical to Worthington's overall success. The main ingredient to the management system is the organization itself. Worthington considers its organization structure to be flat while its profit sharing plan recognizes the major players on only four basic levels: production, administration, professional, and executive. Plant managers enjoy autonomy while operating their facilities as individual profit centers. Worthington organizational structure is such that all segments are divided while responsibility for performance rests on the head of each operation manager.

All managers are given the operating latitude to accomplish their responsibilities within corporate goals. Worthington's management system enables individual mangers to make recommendations that are needed for reaching optimal working environment conditions and departmental growth. Departmental segmentation and granted autonomy to management contributes greatly to Worthington's superiority over other competing company's. Organizational structure is critical when addressing issues pertaining to growth and development, needless to say, Worthington's organizational structure is more than adequate and growth and development are astonishing.

The final attributing factor to the successes of Worthington is related to management's ability to communicate within the organization as well at a communal level. Worthington communicates through every possible channel with their customers, employees, shareholders, and community. Worthington practices good citizenship at every level setting them vastly apart from all of its competitors and establishing benchmarking conditions for others to try and mimic. Furthermore, Worthington's professional demeanor and ethical business practices give them a leg up over other competing company's within the industry.

Worthington encourages all of its personnel to participate in community affairs as well as other worthwhile community causes. In 2001, Worthington was awarded China's Marco Polo Award for their significant role in China's economic development and humanitarian commitment to improving Chinese society by sponsoring experts for humanitarian assignments. Based on the information provided by the case, it seems that Worthington's management system in doing a great job motivating its constituents in performing at high levels while taking much accountability in how the work is done and how well the corporation is doing financially. Management's philosophy, though very admirable, would not be effective and prosperous if the constituents had not bought in to the idea in the first place.

Worthington's philosophy illustrates that for the management system to be successful, it would require that all participants of the philosophy work in unison to achieve a common objective or corporate goal. It is apparent that the management system has worked wonders at Worthington for the past five decades and baring any structural changes to the management system, there is no apparent reason why Worthington can not maintain their competitive edge over its competitors as the industry leader in metal related businesses.