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Managerial process skills2


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milton hershey

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Managerial process skills2

  1. 1. Milton Snavely Hershey Milton Snavely Hershey was born on a central Pennsylvania farm inDerry Township, on September 13, 1857, to Henry H. Hershey and FannieB. Snavely. Hershey inherited the entrepreneurial spirit from his fatherwho moved the family often, attempting a variety of business ventures,including farming and cough drop manufacturing. Because of all themoves, Hersheys early schooling was haphazard, ending after the fourthgrade. His apprenticeship with Joseph H. Royer, a confectioner inLancaster, Pennsylvania from 1872 to 1876, Hershey helped Royer with hiscandy-making business and ice cream parlour, learning skills that wouldlater help him build his own candy empire. Tried and Tried Again At the age of 19, Hershey parted company with Royer and started hisown candy business in Philadelphia. He hoped to find an eager buyingpublic in the thousands of people visiting the city for the Great CentennialExposition celebrating the 100th anniversary of the Declaration ofIndependence. With money he borrowed from his uncle and the help ofhis mother and aunt, Hershey began making taffy and caramels, whichwere sold from a pushcart. The business scraped by for six years. In 1882,Hershey collapsed from the strain of working all day (selling the candy)and all night (manufacturing it). Forced to admit failure, Hershey closedup shop.
  2. 2. Hershey decided to seek his fortune in Denver, Colorado, along with hisfather, who had also moved west. He worked for a candy company inDenver, where he learned how to improve the quality of his chocolate byadding fresh milk. With his father, he moved to Chicago, and opened yetanother candy business. Like the others, it also failed. Moving to New York City in the spring of 1883, Hershey worked fora candy business called Huyler and Company, and started manufacturingHersheys Fine Candies. Unfortunately, sugar prices increased andHershey lost his candy-making machinery. In 1885, he returned toLancaster, Pennsylvania. After so many failures, his aunt and uncle refused to loan Hersheyany more money. He became partners with William Henry Lebkicher, aman he had hired in Philadelphia. The two men scraped together enoughmoney to start the Lancaster Caramel Company, where Hershey devised aformula using fresh milk to make "Hersheys Crystal A" caramels. Finally,he found success. An English importer ordered $2,500 worth of caramelsto ship to England. The proceeds allowed Hershey to expand his business. Borrowing $250,000 from the Importers and Traders Bank of NewYork City, Hershey expanded once again. The Jim Cracks, Roly Polies,Melbas, Empires, Icelets, and Cocoanut Ices sold very well. By 1893, theLancaster Caramel Company had opened candy-making plants in MMount Joy, Pennsylvania, Chicago, and Geneva, Illinois, employing 1,400people. Established Hershey Chocolate Company Hershey used the Worlds Columbian Exposition in Chicago-celebrating the 400th anniversary of Christopher Columbuss arrival in theNew World-as an opportunity to study chocolate making as it waspracticed in Europe. He examined chocolate-rolling machinery from theJ.M. Lehmann Company of Dresden, Germany, finally deciding to buy itfor his own company. At that time, milk chocolate was regarded as aluxury imported item, made by hand in a secret Swiss process. Hersheywas confident that he could mass-produce enough chocolate to satisfy the
  3. 3. demand of the American public. In 1894, he opened the HersheyChocolate Company, producing breakfast cocoa, baking chocolate, andsweet chocolate coatings for the caramels. After perfecting his recipe, Hershey expanded the business toproduce 114 kinds of chocolates, including novelty items like chocolatecigars and chocolate bicycles. In order to focus all his attention on thechocolate business, Hershey sold the Lancaster Caramel Company in 1900for one million dollars to his competitor, the American CaramelCompany. He kept exclusive rights to supply dipping chocolate to thecompany, however, and used the money from the sale to build a newchocolate factory. In 1897, Hershey purchased the Derry Church homestead where hehad been born, intending to give the farm to his parents. Instead, hedecided to use the rural Dauphin County land to build his chocolateplant, since it was ideally situated in an area full of dairies, and had plentyof fresh water necessary for cooling the factorys output. He bought 1,500acres of adjacent property and, in 1903, began construction on thechocolate plant. Hershey knew his workers would need a place to live andraise their families. In conjunction with the new factory he planned andbuilt an entire utopian community, complete with houses, a post office,churches, shops, schools, and even a trolley car for transportation. Hershey planned that his new factory would mass-produce only oneproduct, making it affordable for everyone. Working with his recipemakers, he developed a formula for milk chocolate that allowed for massproduction. In February 1900, he introduced the milk chocolate HersheyBar, which sold for pennies and brought affordable chocolate to themasses. The bars were so popular that Hershey found he did not need toadvertise. Although the company continued its no advertising policy until1968, Hershey was fond of the occasional self-promotion. One of the firstautomobiles in Pennsylvania bore the Hershey name painted on its side,drawing attention and orders for the Hershey salesmen who zoomedaround at the cars top speed of nine miles per hour. Despite its cost of$2,000, a huge sum at that time, the electric car generated crowds andheadlines wherever it went.
  4. 4. The company and the town prospered. In 1908, the HersheyChocolate Company incorporated. By 1915, the plant had expanded tocover 35 acres, with sales growing just as quickly. Within 20 years, saleshad increased to $20 million. The community, with its chocolate-relatedstreet names, offered housing, sewerage, electricity, schools, stores, ahospital, and fire department, a park and zoo, as well as a trolley line tobring in workers from neighbouring towns. In the years following the collapse of the stock market in 1929,nearly one third of United States workers lost their jobs. Anxious to helphis own employees-plus take advantage of the Depressions lowconstruction costs-Hershey embarked on a building project in 1930 thatincluded a hotel, a high school, community building, sports arena, and anew air-conditioned office building. The Hotel Hershey incorporated hisfavorite details from hotels worldwide. Hershey would later note proudlythat none of his workers were ever laid off during the Depression; in fact,he hired 600 additional laborers. The company diversified and branchedout, making different kinds of candy, including the foil-wrappedHersheys Kisses (introduced in 1907), Mr. Goodbar, the Krackel Bar, andHersheys Miniatures. After losing money on a sugar deal, Hershey boughtland in Cuba, where he began growing and processing his own sugar cane. Despite efforts to anticipate his workers every need, someemployees attempted to form a union in 1937, to protest workingconditions that included a 60-hour work week. The Congress of IndustrialOrganizations (CIO) shut down the factory with a strike that only endedwhen local dairy farmers, whose livelihoods depended on selling milk tothe company, physically attacked the workers. By 1940, the AmericanFederation of Labor (AFL) had organized a union at the plant, creating anassociation to promote and protect the rights of the workers.
  5. 5. Hersheys Living Legacy In 1898, Milton Hershey married Catherine Elizabeth "Kitty"Sweeney, an Irish-Catholic from Jamestown, New York. Anxious to usetheir wealth to help those less fortunate than themselves, the Hersheysfounded a school for orphaned boys in 1909. Originally called the HersheyIndustrial School, it was designed to train boys in farming and industrialtrades so they would become able to support themselves. After KittyHershey died in 1915, Hershey donated his entire fortune-$60 million-in atrust to the school. It was renamed the Milton Hershey School andexpanded to serve children of both sexes from disrupted homes fromkindergarten through high school. The 10,000-acre school, through itstrust, owns 40 percent of the stock of Hershey Foods, and controls 75percent of the corporations voting shares. "I dont think Id be alive todaywithout that place," Hershey School graduate Randy Zerr told Eric Riesof Techniques. "If theres anything I can do for the school, I will." Zerr tookadvantage of the schools horticultural program and works as agroundskeeper at Franklin and Marshall College in Lancaster,Pennsylvania. Many Hershey graduates go on to college. Some have evengraduated to executive positions within the Hershey Chocolate Company. The Hershey Chocolate Company continued to create new products.During World War II, they developed an unmeltable, four-ounce bar withextra calories and vitamins, which could be used as emergency provisionsfor soldiers and sailors. The company made more than a billion of the"Field Ration D" bars. In 1942, the U.S. government gave Hershey theArmy/Navy E award for his civilian contribution to the war effort. In 1995,he was honored once again by being pictured on a postage stampcommemorating him as part of the U.S. Postal Services Great Americansseries. Hershey died in Hershey, Pennsylvania on October 13, 1945, oneyear after his retirement as chairman of the board. He was 88 years old. Bythe end of his life Hershey had donated most of his money to his townand the school he built. After his death, the sale of Hersheys personalpossessions raised less than $20,000. The chocolate factory he built in
  6. 6. Hershey, Pennsylvania, remains the largest in the world. In 1963, theHershey Chocolate Corporation donated $50 million to build the Milton S.Hershey Medical Center of Pennsylvania State University, which houses ahospital, medical school, clinics, and research facilities. The town of Hershey, Pennsylvania is still home to about 12,000people and draws more than 30 million visitors each year. They come tosee Hershey Park, which boasts a roller coaster, Ferris wheel, other rides,and a visitors center. The center, built in 1973 to accommodate themassive crowds packing the factory tours, draws more visitors annuallythan the White House. Guests can take a tour through a mock chocolatefactory that includes a ride through a simulated roasting oven, andculminates with samples of Hershey chocolate. After enduring years of failure, Milton Hershey (1857-1945) built abusiness empire as the worlds first mass producer of chocolate bars.Through generous donations, he used his entire fortune to help those lessfortunate than himself.