JENSEN INDUSTRIES: A CASE STUDY 1

Jensen Industries: A Case Study
J. Francis Madamba
Missouri Baptist University

JENSEN INDUSTRIES: A CASE STUDY 2
Jensen Industries: A Case Study Jensen Industries is a company that was started by Bill Jensen 25 years ago. Bill Jensen started this company after 20 years of employment for another manufacturing firm in the same industry. He had several patents on manufacturing techniques and wanted to pursue new manufacturing processes and products with his employer. When his employer was not willing to try the new processes and products, he started his own company in a building owned by his father. He furbished it with used equipment. He felt his new manufacturing process could differentiate their product in the market. For the first 20 years, his sales had grown from $250,000 in the first year to $15,000,000. During this time, he put together a management team that was responsible for the operations. Bill Jensen eventually sold his company to an outside investor. This investor believed in the management team and felt they could continue the same growth the company had in the past. However after five years, the investor was not happy with sales. They felt that growth was stagnant and a change was needed. They felt that there was complacency from past success. They decided to appoint Richard Haberer as President of Jensen Industries. The investor has charged Richard Haberer with creating a new business model and culture that would increase growth and profitability. An issue that Richard Haberer needs to change is the organizational structure. It has not changed in over ten years and it has been the same leadership during that timeframe. This includes the past five years where sales have been stagnant. The outgoing President, Terry Hartung, had been with Jensen Industries for 15 years. While he was President, he was still managing sales relationships with the larger customers and making all pricing decisions. He was
JENSEN INDUSTRIES: A CASE STUDY 3 taking on additional responsibilities that he should not have. He should have delegated the sales to another person. Richard Haberer should appoint a Vice President of Sales. This person would be responsible for the sales department, including all sales representatives and customer service personnel. The Vice President of Sales would be part of the management team. Speaking of the sales department, we should look into Jensen Industries’ customer base. Jensen Industries has a customer base that falls into three main categories: End Users, Distributors, and Consolidators. Each is different from each others. End Users are large companies that demand a large degree of customization of the manufactured product. Distributors are a national network of resellers that include Jensen Industries’ products as part of a large product line. They require little product customization. Consolidators are a small number of firms who bring together a complete set of manufactured materials for large companies with whom they have an exclusive relationship. Since each customer base is different, there should be a dedicated sales representative or team for each customer base. There also should be a dedicated customer service representative or team for each customer base. This would be a division of labor or work specialization (Robbins and Judge, 2015, p. 432). With the work specialization, there would be increases in efficacy and productivity (Robbins and Judge, 2015, p. 432). Another change is needed in the organizational structure of Jensen Industries. The current Vice President of Operations, Keith Jordan, has been with the firm from the very beginning. He has an extensive background in manufacturing. However, he is a brash and coarse person who may deter or upset some people. Also by being with the company since the beginning, he may be complacent with how