Case Study: RST Carports and Metal Roofing 1
Case Study: RST Carports and Metal Roofing
Benjamin Kim
Liberty University
MGMT 501 – Executive Leadership and Management
Case Study: RST Carports and Metal Roofing 2
Introduction
After the sale of RST company to WXY, the company’s performance and profitability
declined greatly to the point of operating at a loss by the third year after acquisition. With the
takeover, there were drastic reductions made in the workforce throughout the company – in both
management as well as non-management ranks. Executive management was reduced over 50%,
middle and lower management reduced by 40%, and non-management employees performing the
manufacturing and installation work reduced by 30%. The reductions, likely a part of a plan to
improve profitability, had quite the opposite effect – sending the company from a $10.9 million
profit in 2017 to a $2.3 million loss in 2020. Along with loss of profitability, the company also
resulted in loss of quality, increase in accidents, and an increase in the overtime required of both
management and non-management employees.
However, likely more important than the workforce reductions was the complete
overhaul in executive management that occurred as a result of the sale of the company. In
addition to the overhaul in the personnel of executive management, even the roles were
overhauled, consolidating certain roles into one, such as the CFO and HR manager, Engineering
Manager and Maintenance Manager, Purchasing Manager and Materials Manager. This overhaul
in personnel and structure of the executive management resulted in changes to the leadership
styles, management decision styles, and the types of power exercised within the company over
the middle and lower-level managers and the non-management employees. These changes to
executive management likely caused the company to eventually become unprofitable.
