CASE STUDY FOR CONTEMPORARY

Sweet Music

BAHCESEHIR UNIVERSITY 2009

Melih CELIK Mesut YILMAZYILDIRIM

SWEET MUSIC
For well over a century and a half, the C. F. Martin Guitar Company (established in 1833) of Nazareth, Pennsylvania, has been producing acoustic instruments considered to be among the finest in the world. Like a Steinway grand piano, a Rolls Royce automobile, a Buffet clarinet, or a Baccarat crystal vase, a Martin guitarwhich can cost more than $10,000is among the best that money can buy. This family business has managed to defy the odds and survive through six generations. Current CEO Christian Frederick Martin IVbetter known as Chriscontinues to be committed to the guitar maker's craft. He even travels to Martin dealerships around the world to hold instructional clinics. Few companies have had the staying power of Martin Guitar. Why? What are the keys to the company's success? A primary one has to be the managerial guidance and skills of a talented leader who has kept organizational members focused on important issues such as quality. From the very beginning, quality has played an important role in everything that C. F. Martin Guitar Company does. Even through dramatic changes in product design, distribution systems, and manufacturing methods, the company has remained committed to making quality products. The company's steadfast adherence to high standards of musical excellence and providing a product to meet the needs of a demanding customer base permeates everything that happens in the organization, top to bottom and in all work areas. Part of that quality approach encompasses a long-standing ecological policy. Since the company depends on natural wood products to manufacture its guitars, it has embraced the judicious and responsible use of traditional natural materials and encouraged the introduction of sustainable-yield alternative wood species. Based on thorough customer research, Martin introduced guitars that utilized structurally sound woods with natural cosmetic defects that were once considered unacceptable. In addition, Martin follows the directives of CITES, the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

C. F. Martin Guitar Company is an interesting blend of old and new. Although the equipment and tools may have changed over the years, employees remain true to the principle of high standards of musical excellence. Building a guitar to meet these standards requires considerable attention and patience. Family member Frank Henry Martin explained to potential customers in the preface to a 1904 catalog, "How to build a guitar to give this tone is not a secret. It takes care and patience. Care in selecting the materials, laying out the proportions, and attending to the details which add to the player's comfort. Patience in giving the necessary time to finish every part. A good guitar cannot be built for the price of a poor one, but who regrets the extra cost for a good guitar?" Almost one hundred years later, this statement is still an accurate expression of the company's philosophy. Although the company is firmly rooted in its past, Chris is not reluctant to take the company in new directions. For instance, in the late 1990s, he made the bold decision to start selling guitars in the under-$800 market segment. This segment accounts for 65 percent of the acoustic guitar industry's sales. The company's DXM model was introduced in 1998. Although it doesn't look, smell, or feel like the company's pricier models, customers claim it has a better sound than most other instruments in that price range. Chris justified his decision by saying that "If Martin just worships its past without trying anything new, there won't be a Martin left to worship." The company is doing well under Chris's management. Revenues have continued to increase and in 2000 were close to $60 million. The manufacturing facility in Nazareth was expanded and new guitar models continue to be introduced. Employees describe his management style as friendly and personal, yet firm and direct. Although C. F. Martin Guitar Company continues to spread its wings in new directions, it hasn't lost sight of the commitment to making the absolute finest products it can. And under Chris's management, it won't.

QUESTIONS 1) Which management skillconceptual, human, or technicaldo you think would be most important to Chris Martin? Explain your choice. Since Chris Martin acts as a top manager, conceptual skill are the most important for him. Because to move C. F. Martin Guitar Company forward in the industry, the directional planning and visualizing is needed , must come for the top of the organization. For instance Chris Martin However, in order to communicate this vision and directional plan to the organizations lower managers and labor, Chris Martin must also have a certain amount of human skills, so they will all support the plan and bring about organizational success. Technical skills are the least needed one for Chris Martin. He should be able to hire employees who have the necessary technical skills to make the outstanding Martin guitars. However, hiring a person to see and develop organizational plans and mission would be difficult, and therefore, this leadership must come from Chris Martin. 2) Check out the CITES Web site. What information could a manager find there? How might an organization's commitment to social responsibility affect the way managers perform the managerial functions? Manager can find a lot of information concerning the current laws and regulations and international trade restrictions concerning wildlife, natural environment and flora. Because Martin guitars are made from wood the current international trade restrictions and limitations of importing and exporting natural products are quite relevant to daily business dealings at Martin Guitars. An organizations commitment to social responsibility has an immediate impact on the planning managerial function. If the company takes a particularly strong position of using all natural products, with no artificial components, the procurement of supplies is quite different. A company such as Martin Guitars would use a large quantity of natural

wood, which could cause some tree preservation groups to watch the organizations practices quite closely. However, many customers could be influenced positively to buy a natural product, particularly from a company that practices a nature-friendly style of production. However, this socially responsible behavior has a lot of good effects on the planning managerial function. 3) What management roles would Chris be playing as he (a) visits Martin dealerships around the world, (b) assesses the feasibility of new guitar models, and (c) keeps employees focused on the company's long-standing principles? Explain your choices. (a) When Chris visits Martin dealerships around the world he is acting as a figurehead, a leader and a monitor. When he simply represents the company around the world, he is being a figurehead. When he visits the dealerships and provides them with a solid, he is being a leader and visible person to follow. He is also acting as a disseminator. It means, Chris could be taking information from corporate headquarters out to the individual dealerships and providing those dealerships with up-to-date company information. And, Chris is being a monitor when he visits the dealerships, because he is gathering information from the dealerships that can be taken back to headquarters and utilized for product and service improvements. (b) He is acting as an entrepreneur and a disturbance handler, when Chris assesses the feasibility of new guitar models. However as an entrepreneur he is on the cutting edge of technology, moving the company to a new level. Chris could be a disturbance handler when assessing the feasibility of a new guitar model if he is choosing between multiple designs or if he is making a final decision on whether or not to go with a new model. (c) When Chris is keeping employees focused on the companys longstand principles he is being a negotiator, a leader and a resource allocator. The longstand principles of Martin Guitars have been a key factor in guiding the organization

historically, currently, and probably in the future. As he focuses employees on these goals Chris would be a leader. Chris might also be using these principles as a negotiator and resource allocator to end disputes. 4) Chris made the statement that "If Martin just worships its past without trying anything new, there won't be a Martin left to worship." What are the implications for managers throughout the company as they plan, organize, lead, and control? Chris is making a very clear statement that Martin Guitars must be progressive and move forward with the future. It means; if Martin Guitars managers assume that customer demands and competitors would remain status q, Martin Guitars would decline and even cease to exist. Therefore, his message is to be innovative and creative in service, product, and process. This definite directive for innovation and change should tell managers to be innovative and creative in all managerial functions including planning, organizing, leading, and controlling. 5) Chris's management style was described by employees as friendly and personal, yet firm and direct. What do you think this means as far as the way he plans, organizes, leads, and controls? Do you think this style would work in other organizations or does this style work only because it's a family business and Chris is the sixth generation of the family to run the business? Explain. Chris plans, organizes, leads, and controls in a friendly manner; but can really get quite serious and aggressive when the occasion demands. This type of management style would probably be described as very people-oriented, but also process-oriented. Yes, this style of management is quite effective in other organizations. For example, Bill Gates would probably be described in this same manner. He is the manager of lots of employees. Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts. During Microsoft's early years, all employees had broad

responsibility for the company's business. Gates oversaw the business details, but continued to write code as well. In the first five years, he personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit. As long as business is going well, Bill and Chris are pretty friendly and personal, but during a difficult time, both gentlemen would probably choose to be less friendly and more decisive and serious. Perhaps Chris must be a bit more friendly and personal because this is a family business. Many employees could possibly be multigenerational employee families, also. Many employees may have worked for Chris older relatives, which would also tend to require him to be more personal and friendly.