Group discussion from all team member’s(The yellow is the part y.docx

Group discussion from all team member’s
(The yellow is the part you completed)
McDonald is among the leading fast food companies
internationally. It acknowledges the significance of sourcing
best people to offer excellent customer service (Anderson &
Adams, 2015). Its hiring policy however, is bringing in first-
time employees.
First-time employees may be those who are young but lack the
work experience, perhaps fresh high school graduates. They
may also be old people who may have language barrier.
Language barrier may affect the ability to communicate with
others (Anderson & Adams, 2015). The variation in experience
or background creates barriers among employees. If there is no
common ground, the employees may have difficulties
understanding what other employees are talking about. The
cultural variations may further pose problems in non-verbal
communication, leading to mixed messages.
As the employees are new, they may not understand the
company’s jargon. It is easy to get used to communicating with
all the people as if they are knowledgeable about the company’s
verbal and non-verbal cues. The listeners lack the understanding
and may stop listening when this occurs. Negative attitudes also
exist among new employees in that they are not used to fellow
colleagues. When a message is passed, such an employee may
not digest that message because of that negativity toward the
speaker. Therefore, new employees might have lack the ability
to communicate with others and work in a team setup.
The new employees may also not be aware about the company’s
communication lines as well as information flow which may
contribute to distorted information, not reading the message on
time or not reading it at all for, example if the message was
conveyed via email and not read the consequence may be failing

to attend a meeting. The employee may thus, have
inexperienced work habits.
The employees must be followed through after a discussion. For
instance, the attendees might want to complete the tasks focused
on the discussion. Works which are not finished are likely to be
seen if the communication does not equip the employees with a
sense about how to follow through with the actions. Some
employees also have the tendency of carrying personal affairs
into the work environment. Personal communications drift away
from professionalism, which at times results in grapevine,
reducing morale.
First-time employees may have customer service skills which
later may not be favorable because they clash with the company
policies and procedures. In other scenarios, an employee may
start showing questionable behavior. For example, a new
employee at Pac Company was offered time-off after getting
involved in a car accident. After recovering, the employee
started reporting to work late, going without permission for
mid-day breaks, and leaving early. The employee was finally
fired when the problems became unmanageable (Anderson &
Adams, 2015). Poor attendance is a sign of issues. As soon as it
is identified, it is important to discuss with the employee to
figure out and solve the problem before it gets out of hand.
The employee may qualify the hiring process but after some
time, starts ignoring company policies and procedures such as
reporting to work while drank. Some may also talk ill about the
leadership and the company at large to the customers and
employees. Negative employees may affect work morale. Illegal
activities may also become evident. At Tarpon Springs, an
employee exhibited a negative perception and appeared distant
in daily dealings with the manager (Moran, 2011). It emerged
that the employee had imitated the database of the company and
was attempting to assist a friend introduce a competing firm.
The other behavioral problems which must be taken note of are
conflict, withdrawal, non-participation, monopolizing, and
scapegoating. Conflicts begin as personal suggestions which

change into disagreements in groups. Another problem is team
members who do not participate. Motivating the employees that
their feedback and suggestions are valued could stop them from
withdrawal. Monopolizing is regarded as a communication
problem which could lead to resentment. This occurs when a
team member dominates a discussion. The other members begin
to feel that they are ignored and stop offering feedback.
Scapegoating is blaming others and can destroy credibility. For
instance, a scapegoat is a person who is rejected by the group
which in turn, opens room for being recipient of frustrations,
ridicule, and anger. The recipient can feel bullied which can
affect self-esteem (Skills You Need, 2019). The leaders should
restructure the groups into sub-groups to minimize
scapegoating.
The communication and group behavioral issues that may arise
in an organization that hires employees for their first job. The
issues that may occur when hiring new employees are lack of
open flowing communication or using the wrong organizational
structure (William, Pirraglias 2019). When new hires are hired
on a job some employees that have been on the job longer feel
they can boss the new employees around, because they don’t
really know the organization and are just starting the job. I have
had this happened to me on a job when I worked at McDonalds.
I was hired for the job as a Drive-Thru Cashier. I was trained
for the job maybe for a day which I learned a lot in one day
with the Shift Manager. But the next day of my training I was
on my own. I was treated like I should already know the
position well and should move first like every other employee.
One day on my shift a customer asked me to fix a mocha frappe.
I didn’t really know how to fix the beverage, so I asked the shift
manager and she started fussing at me in front of everyone. I
didn’t really understand why she had got mad at me and I’m a
new employee still learning my position and the company.
When new hires are put in certain situations it makes them feel
uncomfortable taking to management and would rather confine
in another employee who they feel would understand them

better. New hires sometimes feel if any supervisor or manager
asks them to do a certain task then they must do it, because
there are being told by someone in a higher position if they’re
not told so in orientation. I feel some managers like to take
advantage of new hires and make them help them with a certain
task and know they have their own task they must do for their
department. By the new hire helping the manager or supervisor
out makes them lack their job task that they were hired for and
now must deal with their department manager or assistant
manager. Which sometimes would lead with the manager getting
angry at the new hire and start fussing at them. Everyone can’t
handle pressure, which sometimes would lead with the new hire
quitting the job or going over the manager head to a higher
manager.
An issue for a new hire on a job is the job there hired for could
be their first job and job experience. And management would
have to do more training with the employee one on one, because
this is their first job. First job employees wouldn’t have the
proper crew member skills like everyone in the company. Which
means they would have to work even harder than others and
deal with more criticism. All the new employee really knows is
they want a job, gain skills, and earn money.
McDonald’s company sees the employees as an opportunity. The
employees that works for McDonald’s are usually over worked,
paid minimum wage, unhappy and mistreated. I believe that’s
why the customer service is terrible at the fast food restaurant.
The McDonald’s corporation puts out a show as they care for
their employees faithfully, which is one of the reasons the job
doesn’t mind hiring new employees without experience in order
to help them develop strong team member skills that would help
the employees in their near future while working for their
company. The employers love to hire all types of demographics
to work for their company to make a dollar. The company didn’t
want to just receive feedback on their employees or business but
having to share the publicity with team members wouldn’t be
easy (Anderson, Robert 1991).

There will always be several problems with the group and
separation if everyone doesn’t have the same understanding in
the company about working together as a team whether a new
hire or experience employee. There must be an agreement
between the employees that everyone has the same goal to be
successful and keep their jobs. New hires shouldn’t be treated
any different from the rest of the team. Everyone should be
treated equal. The issues often stem from organizational or
management connection breakdowns that confuse team and
personal goals (William, Pirraglia 2019). Its up to the leader to
help bring the entire group as a whole and make sure no one
gets separated due to their status.
Reference:
Anderson, R. J., & Adams, W. A. (2019). Mastering Leadership.
Retrieved
from https://phoenix.vitalsource.com/#/books/9781119147206/c
fi/93!/4/[email protected]:0.00
Pirraglia, William. "Organizational Problems in the
Workplace." Small Business - Chron.com,
http://smallbusiness.chron.com/organizational-problems-
workplace-12570.html. 11 March 2019.
Your post is spot on and an enjoyable read. I also gather some
informative information from (Pirraglia, 2019). Diversity in the
workplace is on the rise in organizational structures. The world
has truly become smaller, due to global trading. The problems
that stand out in organizations is communication or the
organizational structure is not relevant or cohesive for positive
organizational growth. Individual employee issues can be on the
top of that new employee’s, why. According to Pirraglia (2019),
personality conflicts, supervisor issues, personal trauma, or
company structure can lead to negative behaviors with new
employees. Most of these issues can be cleared up through
clarity in communication. Teams must be dedicated to the
process and work toward the common goal. This is also a

communication issue but normally stems from higher up in the
organization. When a problem is identified in the team
corrective action should be taken immediately. Organizational
wide problems can be resolved through a leaders management
skills. A leader will learn the cause of the problem prior to
address the issue. Once a cause is determined then the leader
can decide if the issues need further attention. If need be a
leader can follow company disciplinary procedures. Which most
are progressive to most issues except for work place violence or
violating civil rights.
During my time when supervised seventy plus staff, I found
progress disciplinary encouraged better behavior. Most issue
can be resolved through this procedure because there is a
written time line of employee behavior. It would problem be
suitable if the process is a three step process.
Verbal/written, written, formal with reduction in pay or unpaid
time off, or termination. When I had new hires come to my
shift, I would pair them with someone who had at least five
years on the job. Most times this lead to that senior employee
having more than one person who was shadowing. I stipulated
in no uncertain terms should this senior employee show the
employee any short cuts. I informed the new employee they
should write down what they did not understand and present the
questions to me and their mentor. When I implemented those
procedures, my employee call in rate went down and employee
retention went up. There was more to the process but those are
the ones that stood out for most of the new employees. They
would always tell me the horror story's they heard about the
organization. But by me having an open door, open mind, and
an intense team spirit the new employees wanted to make the
organization a part of their long term future.
In regard to our discussion we were tasked to use Global Shared
Services, to find out what behavior issues a group might have
when the organization hires new employees, which McDonald's
is their first job. I identified several positives but could not
clearly determine any negative outcomes. In my opinion and

experience if this was another organization that do not have
GSS in place the initially interaction with that employee may be
a slight bit negative. McDonald’s culture has always been one
that attract people who are seeking their first job. This
organization embrace first time employees, for their potential.
McDonald’s feel these employees are grow-able, coach-able,
and have long term potential. Through GSS, McDonald’s takes
the time to mold employees, by giving them advancement
opportunity and one of the highest pay scales in their industry.
All of those benefits lead to higher employee retention and
dedication. Employee performance is an indicator of an
organization’s efficiency and productivity (Colquitt et al.
2011). McDonald’s through GSS implemented the leadership
circle. It brought new meaning to leadership team. This shifted
the culture so that the organization would embrace openness,
support trust, and high performance. The tea now focuses on
individual and collective effectiveness. According to Adams,
(2016) team members are empowered to mentor each other, talk
openly about their opportunities, and gain support using
common language. Implemented things through GSS does not
allow issues to be ignored that could hinder progress, the team
talks through problems.
According to Adams, (2016) McDonald’s recognizes
the importance of having good people in place in order to
deliver an exceptional customer experience. Founder Ray Kroc,
once said, “As long as you’re green, you’re grown.” In my
opinion wise words for any organization to adhere too. If
McDonald’s stick to and enhance their leadership model the
future looks bright. The only behavioral issues I identified is, if
you those new employees who have short term goals for their
stay in the organization. When you have employees whether it is
their first job or fifty-first job, just looking for a paycheck, they
are less likely to embrace the culture. That type of employee
makes it difficult for the team to groom them. If the leaders
continue to use GSS leadership standards the only behavioral
issues they should encounters is trying to communication with

the different generations. As long as the team focuses on
identifying potential and not personality, they can be confident
minimal negative behaviors will be identified
References:
Adams, R. J. (2016). Mastering Leadership; An Integrated
Framework for Breakthrough Performance and Extraordinary
Business Results. Hoboken, New Jersey, United States of
America : Wiley & Son.
Khahan Na-Nan, Kanokporn Chaiprasit, Peerapong
Pukkeeree, (2018) "Factor analysis-validated comprehensive
employee job performance scale", International Journal of
Quality & Reliability Management,Vol. 35Issue: 10, pp.2436-
2449, https://doi.org/10.1108/IJQRM-06-2017-0117
Here is my opinion on behavioral issues for first time hires:
A group behavioral issue that might arise in an organization
with a new hire for their first job could be a person not
participating with group efforts. When a person is new to an
organization, most of the time, though not all, they tend to stay
to their selves due to not knowing anybody. For some this
creates the reactive mindset discussed in chapter 9. Being
reactive with a group can cause a person to be a controlling type
which can introduce problems when conjuring together for
group projects or they can lean more towards the complying
type which can cause for them to agree with everything that is
said with no voice in any decisions. “Controlling types feel safe
and worthwhile because they are in control and on top, and the
Complying types feel safe because they do not have to risk
being controversial and taking responsibility.” (Anderson &
Adams, 2019, Chapter 9). Some of the percentage of first time
hires also take their job for granted by not showing up on time
or they lack a sense of urgency. Not all people experience this
type of mentality but for a percentage of people who are first
introduced into the working market, resentment and rebellious
behavior usually sets in. Questioning hierarchy also comes into
factor as a behavioral issue for first time hires. Not
understanding how the business market operates for first time

hires can be a frustrating time of their life. They experienced
being rushed, yelled at, belittled, and customer dissatisfaction
all in one setting so it can be understood why they would
question everything that they are doing. Socializing with the
bad apples of the organization is an issue that could arise with a
new hire. All organizations, regardless of what rules are
applied, have their group of individuals who are never satisfied
and are trying to bring the mood of their co-workers down. New
hires are sometimes dragged into these groups of unhappy
people which can give them a wrong impression of an
organization. If they allow the group to guide their decision of
an organization, they too start causing work related problems
which creates a domino effect.
Anderson, R. J., & Adams, W. A. (2019). Mastering Leadership.
Retrieved
from https://phoenix.vitalsource.com/#/books/9781119147206/c
fi/93!/4/[email protected]:0.00
I totally agree with you about new hires wanting to stay to their
self, because they don’t know anyone on the job. That’s how
I’m sometimes when I start a new job, because I want to first
get familiar with the company and then get closer to the
employees. But I don’t think all new hires have behavioral
issues. Yes, it’s always best to be careful who you socialize
with as a new hire, because everyone isn’t for you.
One thing that may be missed with new hires, specially in an
organization that values growth, opportunities and
communication is that social difference. This can be seen in
every decade. The norms of those who are now leaders, and the
(I assume kids) new hires, may speak a completely different
language. Stereo typing may also come into play due to
assumptions or misunderstandings. It would be beneficial to
continuously engage those new hires so that they become more
comfortable with the staff.
For these differences, clear communication should be
established. If McDonalds is indeed creating a growing thriving
leadership circle, then the leaders should have a creative mind

and work on a way to create an effective communication chain.
For lack of participation, it would be beneficial to clearly
explain the group processes of how they talk about their
weakness, struggles, or problems. While current team members
have already learn to trust their team members, depending on
how the new hires are raised (their ingrained beliefs) their
reactive self will engage because that is what it knows. By
constantly engaging the new members, they will learn to trust
their new team. They will see how each of them participates in
the team and slowly learn that it is about growth, opportunity,
and creating positive relationships and skills that they can carry
on to the next opportunity.
If there are those with behavioral issues, then they should be
addressed and the source found. If it can proactively be
corrected then there is progress. If it becomes a continuing
problem then McDonald's probably is not the place for them.
This corrective action communicates to new hires that this a
team effort and that everyone needs to respect each other and
maintain the team goals.
Reinforcing the goals of the team and that of the company will
help create clear communication. There should be active
listening when any and all concerns are brought up. And for
new team members who are scared to ask questions, give them
the opportunity to ask. They may not want to speak, but the
more positive communication that comes from the group, the
more willing the new hire will be to offer their idea or concerns.
www.hbr.org
H B R CA S E S T U D Y

Growing for Broke
by Paul Hemp
•
Should Paragon Tool
further its growth
ambitions by tr ying
to acquire
MonitoRobotics?
Reprint R0209X
http://www.hbr.org
http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name
=itemdetail&referral=4320&id=R0209X
H B R C A S E S T U D Y
Growing for Broke
by Paul Hemp
harvard business review • september 2002 page 1
HBR’s cases, which are fictional, present common managerial
dilemmas
and offer concrete solutions from experts.
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Paragon Tool is pouring money into growth initiatives. How
long can
it afford to wait for profits to bounce back?
Look, you’ve got to grow. It’s what our econ-
omy is all about. Hey, it’s what our country is
all about! Certainly, it’s what drives me. My fa-
ther, Constantine Anaptyxi, came to America
from Greece because he saw big opportunities
here. He worked hard, took a few risks, and re-

alized his dreams. I came to this company as
CEO five years ago—giving up a senior VP po-
sition at a Fortune 500 manufacturer—because
I saw big potential for Paragon Tool, then a
small maker of machine tools. I didn’t make
the move so that I could oversee the company’s
downsizing! I didn’t intend to create value—for
our customers, for our employees, for our
shareholders—by thinking small!! I didn’t intend
to shrink to greatness, for God’s sake!!!
Okay, so I’m getting a little worked up over
this. Maybe I’m just trying to overcome my
own second thoughts about our company’s
growth plans. I know it isn’t just about growth;
it’s about profitable growth, as my CFO, Will-
iam Littlefield, is always happy to remind me.
“Nicky,” he’ll say, “people always talk about
getting to the top when they should be focusing
on the bottom...line, that is.” Quite a comedian,
that Littlefield. But lame as the quip is, it tells
you a lot about Littlefield and what, in my opin-
ion, is his limited view of business. Sometimes
you’ve got to sacrifice profits up front to make
real profits down the line.
To me, acquiring MonitoRobotics holds
just that kind of promise. The company uses
sensor technology and communications soft-
ware to monitor and report real-time informa-
tion on the functioning of robotics equipment.
By adapting this technology for use on our
machine tools, we could offer customers a
rapid-response troubleshooting service—what
consultants these days like to call a “solu-

tions” business. Over time, I’d hope we could
apply the technology and software to other
kinds of machine tools and even to other
Growing for Broke•••HBR CASE ST UD Y
kinds of manufacturing equipment. That
would make us less dependent on our slow-
growing and cyclical machine-tool manufac-
turing operation and hopefully give us a
strong position in a technology market with
terrific growth potential. It would also nearly
double our current annual revenue of around
$400 million—and force Wall Street to pay
some attention to us.
What does Littlefield say to this? Oh, he
gives a thumbs-down to the acquisition, of
course—too risky. But get this: He also thinks
we should sell off our existing services division—
a “drag on profits,” he says. With the help of
some outside consultants, the senior manage-
ment team has spent the last few months ana-
lyzing both our services business and the pros
and cons of a MonitoRobotics acquisition. To-
morrow, I need to tell Littlefield whether we
should go ahead and put together a presenta-
tion on the proposed acquisition for next
week’s board meeting. If we do move forward
on this, I have a hunch a certain CFO might
start returning those head-hunter calls. And I’d
hate to lose him. Whatever our differences,

there’s no denying that he’s capable and
smart—in fact, a lot smarter than I am in some
areas. On this issue, though, I just don’t think
he gets it.
Mom and Apple Pie
In 1946, when my father was 21, he left the
Greek island of Tinos and came to New York
City with his new bride. He worked at a
cousin’s dry-cleaning store in Astoria, Queens,
then started his own on the other side of town.
When I was seven, he took his savings and
bought a commercial laundry in Brooklyn.
Over the next several years, he scooped up one
laundry after another, usually borrowing from
the bank, sometimes taking another mortgage
on the three-family home in Bensonhurst
where we had moved. By the time I was a teen-
ager, he was sitting on a million-dollar busi-
ness that did the linens for all kinds of hotels
and hospitals around greater New York. “Ni-
kolas, growth is as American as Mom and
apple pie,” my father would say to me—he
loved using all-American expressions like that.
“You gotta get bigger to get better.”
My mom was somewhat less expansive in
her outlook. She kept my father’s accounts,
having studied bookkeeping in night school as
soon as her English was good enough. And she
had her own saying, one that deftly, if inad-
vertently, bolted together two other platitudes
of American slang. “Keep your shirt on,” she
would say to my father when, arms waving, he
would enthusiastically describe some new ex-

pansion plan for his business. “Or else you
might lose it.” My father was the genius be-
hind his company’s growth, but I have no
doubt that my mother was the one responsible
for its profits.
When I was 15, we moved to a nice suburb in
Jersey. I never quite fit in: too small for sports, a
little too ethnic for the social set, only a mid-
dling student. I worked hard, though, and went
to Rutgers, where I majored in economics and
then stayed on to get an MBA. Something
clicked in business school. I seemed to have a
knack for solving the real-world problems of the
case studies. And I flourished in an environ-
ment where the emphasis was on figuring out
what you can do instead of what you can’t, on
envisioning how things could go right instead of
trying to anticipate how they could go wrong.
(Thank God I didn’t follow my uncle’s advice
and become a corporate lawyer!)
When I graduated, I got a job at WRT, the
Cleveland-based industrial conglomerate where
I’d interned the summer before. Over the next 15
years or so, I moved up through the ranks,
mainly because of my ability to spot new market
opportunities. And by the time I was 45, I was
heading up the machine-tool division, a $2.3 bil-
lion business. Both revenues and profits surged in
the three years I was there, it’s true. But I still
found my job frustrating. Every proposed acquisi-
tion or new initiative of any substance had to be
approved by people at headquarters who were
far removed from our business. And whenever
corporate profits flagged, the response was mind-

less across-the-board cost cutting that took lit-
tle account of individual divisions’ performance.
So when I was offered the opportunity to
head up a small but profitable machine-tool
maker in southern Ohio, I jumped at the
chance.
Sunflower Tableau
I still remember driving to work my first day at
Paragon Tool five years ago. Winding through
the Ohio countryside, I saw a stand of sunf low-
ers growing in a rocky patch of soil next to a
barn. “Now there’s a symbol for us,” I thought,
“a commonplace but hardy plant that quickly
grows above its neighbors, often in fairly
tough conditions.” I was confident that
Paragon—a solid, unexceptional business op-
erating in an extremely difficult industry and
economic environment—had the potential to
grow with similarly glorious results.
For one thing, Paragon was relatively
healthy. The company was built around a line
of high-end machines—used by manufacturers
of aerospace engines, among others—that con-
tinued to enjoy fairly good margins, despite
the battering that the machine-tool industry as
a whole had taken over the previous decade

and a half. Still, the market for our product
was essentially stagnant. Foreign competition
was beginning to take its toll. And we continued
to face brutal cyclical economic swings.
I quickly launched a number of initiatives
designed to spur revenue growth. With some
aggressive pricing, we increased sales and
gained share in our core market, driving out a
number of our new foreign rivals. We ex-
panded our product line and our customer
base by modifying our flagship product for use
in a number of other industries. We also made
a string of acquisitions in the industrial sig-
nage and electronic-labeling field, aiming to le-
verage the relationships we had with our
machine-tool customers. No question, these
moves put real pressure on our margins. Along
with the price cuts and the debt we took on to
make the acquisitions, we had to invest in new
manufacturing equipment and a larger sales
force. But we were laying the foundation for
what I hoped would be a highly profitable fu-
ture. The board and the senior management
team, including Littlefield, seemed to share my
view.
Indeed, the CFO and I had developed a
rapport, despite our differing business
instincts. Early on in our working relationship,
this sixth-generation Yankee started in with the
kidding about my alma mater. “Is that how
they taught you to think about it at Rutgers?”
he’d say if I was brainstorming and came up
with some crazy idea. “Because at Wharton,
they taught us...” I’d just laugh and then tell

whoever else was in the room how proud we
were that Littlefield had been a cheerleader
for the Penn football team—like that was his
biggest scholarly accomplishment. One time
he “let it slip” that in fact he was Phi Beta
Kappa, and we all just groaned. I said, “Give it
up, Littlefield. You may have been Phi Beta
Kappa, but, despite those letters on your gold
pin, you’ll never out-Greek me.” To tell the
truth, our skills are complementary, and
between us we manage to do a pretty good job
for the company.
As Paragon grew, so did the sense of excite-
ment and urgency among our managers—
indeed, among the entire workforce. People
who once had been merely content to work at
Paragon now couldn’t wait to tackle the next
challenge. And that excitement spread through-
out the small Ohio town where we are based.
When I’d go with my wife to a party or speak
at the local Rotary Club or even stop to buy
gas, people would show a genuine interest in
the company and our latest doings—it helped
that we always mentioned the job-creation im-
pact when announcing new initiatives. There’s
no doubt it stoked my ego to be one of the big-
ger fish in the local pond. But even more
important for me was the sense that this was
business at its best, providing people with a
justified sense of well-being about the present
and confidence in the future.
Anyway, my point here is that we’ve grown
fast since I arrived, but we still have a long

way to go. I’ve come to think that the real key
to our future is in the company’s services divi-
sion. We currently offer our customers the op-
tion to buy a standard service contract, under
which we provide periodic machine mainte-
nance and respond to service calls. But we’ve
been developing technology and software,
similar to MonitoRobotics’, that would allow
us to respond immediately if a machine at a
customer’s site goes down. The division cur-
rently accounts for less than 10% of our reve-
nue and, because of the cost of developing the
new technology, it’s struggling to turn a profit.
But I can see in the services division the
seeds of a business that will ultimately trans-
form us from a manufacturing company into a
high-tech company. Such a transformation, re-
quiring an overhaul of our culture and capabil-
ities, won’t be easy. And it will surely require
significant additional investments. But the po-
tential upside is huge, with the promise of
sales and profit growth that could make our
current single-digit gains seem trivial by com-
parison. Besides, what choice do we have? A
number of our competitors have already spot-
ted these opportunities and have begun mov-
ing ahead with them. If we don’t ramp up
quickly, we might well miss out on the action
altogether.
“Keep your shirt on,” my
mother would say to my
father. “Or else you might
lose it.”

Paul Hemp is a senior editor at HBR.
A Company in Play
Just over a month ago, I was sitting at my desk
preparing a presentation for the handful of an-
alysts who cover our company. Until recently,
most of them have had only good things to say
about all our growth moves. But last quarter,
when we again reported a year-on-year drop
in earnings, a few of them started asking
pointed questions about our investments and
when they could be expected to bear fruit. As
I was giving some thought to how I’d answer
their questions in the upcoming meeting, the
phone rang. It was our investment banker, Jed
Nixon.
“Nicky, I think we should talk,” he said. I
could tell from the sound of his voice he was
on to something big, and then he told me what
it was: “MonitoRobotics is in play.”
We both did some calendar juggling and
managed to get together for lunch the very
next day at Jed’s office in Cincinnati. The
rumor was that one of our direct competitors,
Bellows & Samson, was about to launch a hos-
tile takeover bid for MonitoRobotics. As it hap-
pened, we had just started a conversation with
MonitoRobotics’ management a few months

before, about collaborating on remote servic-
ing technology for machine tools. But Jed’s call
had had its intended effect, changing my
thinking about the company: Why not acquire
it ourselves?
Although MonitoRobotics’ technology
was designed to detect and report operating
failures in robotics equipment, managers
there had told us when we met that adapting
it for use on other industrial machinery was
feasible. Indeed, MonitoRobotics had re-
cently licensed the technology to a company
that planned to modify it for use on complex
assembly lines that experienced frequent
breakdowns. Our engineers had confirmed
that a version could be developed for our
machines—though in their initial assessment
they hadn’t been exactly sure how long this
would take.
Still, the potential benefits of acquiring
MonitoRobotics seemed numerous. It would
give us a powerful presence in a fast-growing
business while preempting a competitor from
staking a claim there. Whatever the time lag in
adapting MonitoRobotics’ technology for use
with our products, we would almost certainly
be able to offer our customers this valuable
troubleshooting service more quickly than if
we continued to develop the technology our-
selves. And though our products were differ-
ent, MonitoRobotics and Paragon potentially
served many of the same manufacturing cus-
tomers. “Think of the cross-selling opportuni-

ties,” Jed said, as he took a bite of his sandwich.
The greatest opportunity, though, lay in the
possibility that MonitoRobotics’ software tech-
nology would become the standard means for
machine tools—and ultimately a variety of in-
dustrial machines—to communicate their ser-
vice needs to the people who serviced them
and to other machines that might be affected
by their shutdown.
This was a fairly speculative train of
thought. But a MonitoRobotics acquisition had
for me the earmarks of a breakthrough oppor-
tunity for Paragon. And our earlier conver-
sations with its management team had been
cordial, suggesting the company might wel-
come a friendly offer from us to counter Bel-
lows & Samson’s hostile bid. Of course, even if
we were able to get MonitoRobotics at a fair
price, an acquisition of this size would further
delay our return to the margins and profit
growth we had known in the past. And that, I
knew, wouldn’t sit well with everyone.
Management Dissension
The day after my meeting with Jed, I called to-
gether members of our senior management
team. There was a barely suppressed gasp
when I mentioned the potential acquisition,
particularly given its size. “Boy, that would be
a lot to digest with everything we’ve got on
our plate right now,” said Joe McCollum, our
senior VP of marketing. “It also might repre-
sent the chance of a lifetime,” countered Rose-
mary Witkowski, head of the services division.
Then Littlefield spoke up. His skepticism

wasn’t surprising.
“I was just running a few simple numbers
on what the MonitoRobotics acquisition might
mean to our bottom line,” he said. “Besides the
costs associated with the acquisition itself,
we’d be looking at some significant expenses in
the near term, including accelerated software
research, hiring and training, and even brand
development.” He pointed out that these
costs would put further pressure on our
earnings, just as our profits were struggling
to recover from earlier growth-related
investments.
Littlefield did concede that a bold acquisi-
As Paragon grew, so did
the sense of excitement
and urgency among our
managers—indeed,
among the entire
workforce.
tion like this might be just the sort of
growth move that would appeal to some of
our analysts—and might even prompt a few
more securities firms to cover us. But he in-
sisted that if our earnings didn’t start bouncing
back soon, Wall Street was going to pillory us.

Then he dropped his bombshell: “I frankly
think this is an opportunity to consider getting
out of the services business altogether. Elimi-
nating the continued losses that we’ve been
experiencing there would allow us to begin re-
alizing the profit growth that we can expect
from the investments we’ve made in our still-
healthy machine-tool business.”
Littlefield argued that, whether we acquired
MonitoRobotics or not, it wasn’t clear we’d be
able to dominate the machine-tool services
market because a number of our competitors
were already flocking there. Furthermore, the
market might not be worth fighting over:
Many of our customers were struggling with
profitability themselves and might not be will-
ing or able to buy our add-on services. “Last
one in, turn out the lights” was the phrase Lit-
tlefield used to describe the rush to dominate a
profitless market.
As soon as she had a chance, Rosemary
shot back in defense of her operation. “This is
the one area we’re in that has significant
growth potential,” she said. “And we’ve al-
ready sunk an incredible amount of money
into developing this software. I can’t believe
you’d throw all of that investment out the
window.” But a number of heads nodded
when Littlefield argued that we’d recoup
much of that investment if we sold the
money-losing business.
Several days later, I polled the members of
the senior management team and found them

split on the issue of the acquisition. And, to be
honest, I was beginning to doubt myself on
this. I respected Littlefield’s financial savvy.
And no one had yet raised the issue of whether
Paragon, a traditional manufacturing com-
pany, had the management capabilities to run
what was essentially a software start-up. We
decided to hire two highly regarded consulting
firms to do quick analyses of the proposed
MonitoRobotics acquisition.
The Sunflowers’ Successor
Today, the consultants came back to us with
conflicting reports. One highlighted the market
potential of MonitoRobotics’ technology, not-
ing that we might be too far behind to develop
similar technology on our own. The other fo-
cused on the difficulties both of integrating the
company’s technology with ours and of adapt-
ing it to equipment beyond the robotics field.
So as I drove home tonight, the dilemma
seemed no closer to being resolved. In many
ways, I am persuaded by the cautionary mes-
sage of Littlefield’s number crunching. At the
same time, I firmly believe the pros and cons of
such a complex decision can’t be precisely
quantified; sometimes you just have to go with
your instincts—which in my case favor growth.
As I turned the issue over in my head, I looked
out the car window, half-consciously seeking
inspired insight. Sure enough, there was the
barn where the sunflowers had been growing
five years before. But the bright yellow blos-
soms, highlighted by the red timbers of the
barn, were gone. Instead, a carpet of green

kudzu was growing up the side of the increas-
ingly dilapidated building. This fast-growing
vine, which already had ravaged much of the
South, was now spreading, uncontrolled and
unproductive, into southern Ohio.
My mind started to drift and the image of
kudzu—a more sinister symbol of growth than
the sunflower—began to merge with thoughts
of my father, who had died of lung cancer two
years before, and my mother, who these days
spends most of her time managing her invest-
ments. Suddenly, my parents’ favorite phrases
came to mind. It occurred to me that kudzu was
now becoming as American as Mom and apple
pie. Even so, its dense foliage certainly seemed
like a place where, if you weren’t careful, you
could easily misplace your shirt.
Should Paragon Tool fur ther it s growt h
ambitions by tr ying to acquire
MonitoRobotics?
Reprint R0209X
To order, call 800-988-0886
0r 617-783-7500 or go to www.hbr.org
http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name
=itemdetail&referral=4320&id=R0209X
http://www.hbr.org

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