RST CASE STUDY 1
RST Carports and Metal
Roofing
BMAL 501: Strategic Leadership and Management
(B04) Liberty University
Introduction
In 1980 RST started as a small profitable Midwest business with expertise in carports.
The company would later grow and become a leading metal roofing producer, all within the
same facility. There was consistent cash flow and sustainable growth from 1980 to 2017.
Two decades after seeing continued growth and strong margins, the company's founder sold
RST to WXY Corporation, which was already an established competitor. The multimillion-
dollar deal was highly beneficial to RST founder and president Jerry Jones. Implementing
quality from the management team down to the employees made RST successful. For 37
years, there was a display of strength throughout the company. The success of RST consisted
of; the president, the management team, the expertise of employees, and the work
environment. All of the executives employed with RST before the buyout was certified by
the American Society for Quality, which made them Six Sigma black belts.
Once the company's acquisition was completed immediately, WXY Corporation
instituted significant changes. Jerry Jones was not utilized to help with the transition of
ownership and management. Jerry was gone within a week of selling the company, and a
new Divisional Manager was brought in from the corporate offices. The first task that Art
Anderson instituted was to bring in a SWOT team from the corporate office and provide an
assessment. Once the analysis was completed, the company was immediately transformed by
consolidating the management structure, changing compensation, changing the purchasing
policy, and making significant cuts to the quality control process. The changes brought about
established leaders that led with proven results under Jerry Jones to opt for early retirement
or quit their positions. Employees were also significantly impacted as the company became
short-handed with quality and skilled workers; there became a revolving door.
A consistent employee foundation of those who understood the company's history and success.
Several changes took place immediately, but the most notable change was the excessive work
hours for employees and managers. The overall company shifted drastically where no one was
compensated for their efforts of working overtime and also underskilled with the new employees
coming in to take the place of those who chose to quit or retire. The accidents increased, the
quality of the goods and services diminished, and the reputation of RST deteriorated quickly
amongst its client base. The impact took time to see the effect on the company's overall
profitability. Recent studies show that the action of executing strategy and change is sometimes
more important than the strategy itself. (Radomska & Kozyra, 2020) However, after three years
of continued inefficiencies, the company lost annual income by the 3rd year. Anderson's
leadership style and implementation decisions took a very successful company and turned it into
an unbearable and unproductive work environment.
Experience Levels of Employees
The hidden asset in every company that is often overlooked is that of the employees.
Employees are the front line and back end of the company. Although employees are seen, there
are times that they are not heard or considered by the company. Human capital is best described
as the internally generated intangible assets that can pose challenges to a company's overall
structure and success. If the human capital is addressed and considered, it can yield desirable
results in production and profitability. (Milinkovic et al. 2020) The executives at RST showed a
built-in loyalty to the company by being there for 20 and 30 years. The longevity with the
company was encompassed by several years of service, expertise, and connection to success
and profitability. Critical roles such as the CFO, HR, Senior Purchasing Manager, Operations,
and Engineering all retired or quit, which left gapping wholes for Anderson to be successful in
Incorporating the SWOT analysis. The new paradigm that replaced the previous management
needed to have the company's historical data and brought a corporate approach to a company that
thrived from interpersonal commitment to the previous owner's mission, vision, and goals. The
new management had cooperated expertise which did not make their team less qualified.
However, there needed to be a better understanding of the new process to advance the company
forward compared to how it gained its previous success.
How Leadership Styles Could Have Affected the Change at RST
The previous leadership styles under the ownership of Jerry Jones possessed a variation
of Servant, Transformational, and Transactional leadership, with Transformational being the
dominant style among the leadership team. Transformational leaders are known to be more
charismatic in their approach to leadership. This type of style leads to several variations when
analyzing a team's success. Although all of the success cannot hinge on the leadership style, it
indeed led to the success of comparing the difference between the former team to the team le un
Anderson. Anderson reduced the leadership team by ½. Jones had 14 leaders in management,
and Anderson only had 7. Although from a corporate perspective, the downsizing of the
leadership team does not necessarily lead to reduced productivity or overall success, it can cause
the leadership team to be thinner. Anderson had a team whose leadership style was prominently
Transactional. The leaders did not have the same longevity in their employment with RST. As
the IT Manager, Charles Chan was the longest-serving employee under Anderson's leadership.
The change in style caused conflict between managers and employees.
How Management Decision Styles Could Have Affected the Change at RST
The management decision style of the previous leadership was 100% Democratic. A
Democratic leader includes their employees and staff in the decision process. This creates more
ownership for all the stakeholders in the company's success. There is a sense of ownership in
knowing the contribution the employees and management gives is seen on the same playing
field. The new management style was dominantly autocratic but not by 100% margins like the
previous team. However, the autocratic leadership style is to make decisions without consulting
other stakeholders or considering their feedback. RST, a new acquisition, could strain the
company's morale and productivity. The new team also had Laissez-Faire and one Democratic
style leader, but unfortunately, based on the third-year report, that type of leadership mix did not
fit well with the culture of RST. The new friction created among the leadership and the
employees is quite evident based on the management styles because forcing decisions and not
listening to people with more historical knowledge does not create a collaborative work
environment. The definition of leadership proposed by Nanjundeswaraswamy said this, "A
process that involves outlining organization vision, selling the vision to members, furnishing the
members with knowledge, skills, and knowledge to actualize the vision."
(Nanjundeswaraswamy, 2021) The new leaders should have defined their leadership in this
regard which led to discord and inconsistencies in the quality of products and employees.
How Types of Power Could Have Affected the Change at RST
A reward-based power can be highly responsive by employees if implemented correctly.
The new management team for RST had two managers who are power style was rewarded. The
pay was reduced by 10%, and increased hours with no compensation created unhealthy work.
Environment. There were no longer incentives to produce and align with the new mission and
vision. The treatment of job and income insecurity needs to make quality employees. The
reduced pay and the increase in hours also impacted the management team. Anderson's
unwillingness to compensate employees and managers correctly created a dominant coercive
power management style. When too much power is demonstrated, it can cause
Disenfranchisement among the employees and management. Employees that continued to work
at RST under the new leadership did so because of the displaced coercive power, through which
they obeyed the new direction of management. However, it was only because of threats to
provide for their family. (Satterlee, 2018) A relationship with an employer based on fear does not
lead to a healthy outcome. The legitimate power displayed by Jones and his team has the
established trust that their authority would make the best decision for the best result for RST.
However, the team obeyed the position of having the Democratic style and Legitimate power
balance the desired outcomes.
A Pareto Analysis
A Pareto Analysis of RST is provided based on the leadership of Anderson as President.
The most significant factors impacting profits are the correlations between accidents, employees
and management over time, and the rejected product that had malfunctioned. The chart reflects
one year of assumed data based on the information obtained. The data shows that burnout would
be inevitable and untrained staff would ultimately lead to a decline in profits and productivity.
Recommendations
The implementation of a division could increase profits. However, the changes Anderson
immediately adopted may cause some risks and challenges for this approach and may yield the
best path forward for the company's survival. Two options could be the desired outcome and
would be presented accordingly to WXY.
1. Liquidation of the company and its assets. Although there has only been a three-
year time span of all the changes implemented by Anderson, the damage done to
employee morale, brand recognition, and profits, the company should have enough built-
in equity to salvage the mismanagement of the acquisition. The business model used
before Anderson's tenure was a model that could have been better and could have gained
momentum from Anderson's initial approach of a SWOT analysis. However, there needed
to be more data gathered or consulted to maintain the former president's popularity.
2. Anderson would have to be removed as the visionary leader. A potential
consultation or equitable shares was shared with the previous owner to revive the
company's formal structure but clearly understand the need for systemic change in
production, not culture and value. However, WXY may see this as something other than a
successful pathway forward in reintroducing leadership that sold the company; therefore,
removing Anderson and finding a suitable replacement may yield a once again viable
company. The production, cash flow, quality control, customers, and overall employees
will not survive under his management and leadership style. The ideal next step is to fire
Anderson and bring in someone else that can work with the previous culture and
structure of the organization while establishing the new infrastructure. Although when the
impact
of change can be jarring and difficult to integrate. Although the company should feel some
extreme measures of change, there should have been an indication that the changes
implemented would bring about a more remarkable outcome and tangible deliverables. A
company that was not broken at the purchase is now fragmented.
Biblical Integration
The relationship between Jesus and his disciples, Noah, Moses, and countless other
matriarchs in the Bible. However, the consistent theme narrated within the Bible is how to lead
people properly. In the old and new, testament the punishment of a lousy leader is outlined while
the reward is obtained through following the Lord's blueprint for a good leader. As stated in 1
Timothy 3:1-5 (English Standard Version), if anyone desires to be the overseer, they have asked
for a noble task. (Bible Society Australia, 2019) However, that overseer must be above reproach.
Management of their household before the management of others is the priority. Although Jones
is not presented as the perfect leader, his ability to carry his company for 37 years to great
success speaks to his overall character. Anderson derailed the work that he was able to
accomplish in a matter of three years. Hebrew 13:17 says, "Obey your leaders and submit to
them, for they are keeping watch over your souls, as those who will have to give an account. Let
them do this with joy and not with groaning." (Bible Society Australia 2019) There is some
legitimacy power that is established in the role of a leader in the Bible. Jesus told his disciples
that he did not come to condemn the law but to fulfill the law.
Conclusion
The purchase of RST was a pivotal moment for WXY to eliminate their competition
and expand their territory to do more extraordinary things with a well-established company.
The management style that Anderson utilized to take over RST was a corporate model that
could have worked better for the once small and efficient company. His analysis through the
SWOT process could have been beneficial, but with the proper management foundation
based on those already in place. The desire to produce more with less than half of the original
staffing needed to be more sustainable. The reputation and quality of RST were now on the
line and could ultimately create the end of a successful business. Nothing says a new
company purchasing a business has to follow the previous model for success. However,
history has shown that doing a radical change to something that is not broken does not
produce results; instead, it creates brokenness. The recommendations of W2 Solutions would
have to define the path to move forward, and both, once again, would be radical changes.
However, if the company continues to thrive and WXY retains profitability. One of the
following actions is recommended and implemented immediately; either liquidation or firing
of Anderson with a new team put into place or the contracting of Jones to instill back into
RST, which built it firm. The vital skills adopted through organizational change management
allow a business to survive, cope, and stay competitive in a fast-changing world without
compromising the integrity of those experiencing the most significant impact of that change.
(Maali et al., 2022)
RST CASE STUDY 11
References
Bible Society Australia. (2019). Holy Bible: English standard version. Bible Society Australia.
Maali, O., Kepple, N., & Lines, B. (2022). Strategies to Achieve High Adoption of
Organizational Change Initiatives within the AEC Industry. Journal of Management in
Engineering, 38(4). https://doi.org/10.1061/(ASCE)me.1943-5479.0001051
Milinkovic, D., Hurley, J., Sweetman, A., Feeny, D., Tarride, J.-É., Longo, C. J., &
McCracken, S. (2020). Unrecognized assets created by public-sector investments in
health and social services. Journal of Public Budgeting, Accounting & Financial
Management, 33(4), 409–426. https://doi.org/10.1108/jpbafm-04-2020- 0044
Nanjundeswaraswamy, T. S. (2021). The mediating role of job satisfaction in the
relationship between leadership styles and employee commitment. Journal of
Economic and Administrative Sciences, ahead-of-print(ahead-of-print).
https://doi.org/10.1108/jeas-02- 2021-0029
Radomska, J., & Kozyra, C. (2020). Awareness of strategy execution barriers in decision
making process: moderated mediation analysis. DECISION, 47(1), 61–78.
https://link.springer.com/article/10.1007/s40622-020-00234-w
Satterlee, A. (2018). Principles of Management and Leadership: A Christian Perspective.
McGraw Hill.
