Hill enterprises case study

Case Study – Hill Enterprises

When Hill Enterprises was founded ten years ago, its total assets consisted of one automatic lathe, one contract worth $2,200, and one employee. The employee was Robert Hill, proprietor and sole owner, then 29 years old. He had one objective in forming Hill Enterprises – that of retiring with at least 10 million dollars in his personal bank account at the age of forty.

According to Robert Hill, the reasons Hill Enterprises was able to survive the first difficult years were his considerable abilities as a machinist, which he had developed during the nine years he was employed in the machine shop of a large manufacturing company, his willingness to work long and hard hours, and his knack for raising money for working capital. During his early years he would customarily spend his evenings working at the plant and his days visiting banks, insurance companies, and personal friends in an attempt to acquire sufficient funds to continue operations. For the most part he was successful, and though he often had the feeling that he was a bit overextended financially, his business continued to grow and to show profits.

Mr. Hill felt that another reason for his success was his ability to inspire the workforce to work toward his personal goal of $10 million dollars. His typical comment in interviewing a prospective employee was: “If you work for me you will have to work hard, for I intend to retire with $10 million dollars by the time I am forty. This means overtime, long hard hours, and unswerving loyalty to Hill Enterprises. If you are willing to do this, I’ll make sure that you will get your share of the profits.”

Potential employees who were willing to accept these conditions found that Mr. Hill meant what he said. Loyalty to the common cause was based on the number of hours of overtime that a person put in. This high amount of overtime had two effects. First, Hill Enterprises was able to give its employees approximately double the take-home pay they could receive from other companies, thus reinforcing the promises Mr. Hill had made concerning financial rewards to individual employees. Second, even though the company was constantly growing and the workforce was increasing in size, the large amount of overtime kept the number of employees to a minimum so that Mr. Hill had continuing face-to-face contact with them and could maintain a personal relationship with each of the workers.

As Hill Enterprises grew and progressed, Robert Hill continued his earlier pattern of operations. He set a grueling pace, continuing to work long hours late into the night and spending a large share of his time during the day attempting to raise additional working capital and financial support. He often held important conferences at 5pm in order that supervisory personnel would be free to handle their regular work during the ‘normal’ working hours. Mr. Hill seemed to enjoy the pace and pressure and seemed specially to like his frequent contact with the employees. His office consisted of a single desk in one corner of the production area.

Thus, he was immediately available to all to help with any problem, whether a production or a personal one. Many employees availed themselves of his accessibility and while he was in the plant he seemed to be constantly talking with one employee or another, either in his ‘office’ or on the production floor. Often, he would report on the progress of his financial affairs to the men, a practice which they enjoyed tremendously, as Mr. Hill would recount very vividly his financial manipulations.

The employees of Hill Enterprises responded to the situation by working long hours in poor environmental surroundings and under constant pressure of schedules and production deadlines. Hill Enterprises had at this stage set up operations in an old store building, and physical working conditions were considerably less attractive than those of competing organizations.

Under the constant pressure to meet schedules, tempers were often short. The accepted way to reduce individual tension was to ‘fly off the handle’. It was the privilege of Robert Hill, as well as of any employee, and it was a privilege that was often used. Robert Hill had the reputation of being able to deliver the best ‘dressing down’ of anyone in the organization, and it was not unusual for an employee to comment on the skill with which Mr. Hill had ‘chewed him out’. This situation was not all one-sided and employees, regardless of their position, felt free to talk back to Mr. Hill or the other supervisors and often did. Because this was the accepted way to release tension and to achieve action, the incident over which an outburst occurred was immediately put in the past once a resolution had been achieved. The employees seemed to enjoy their existence with Hill Enterprises, and underneath the tension and pressure each employee felt that he/she was capable, and that he/she was contributing to the goals of the company.

However, some nine years after the start of Hill Enterprises, as Robert Hill had often feared, his intricate financial dealings caught up with him. His considerably expanded enterprises were without adequate working capital and he was forced to bring in a new business partner, Donald Robbins, who was willing to invest sufficient funds to keep the company going.

One faction of the workforce thought that the arrival of Robbins was just another of Mr. Hill’s seemingly endless manipulations for capital. The other faction believed that his arrival was the harbinger of the end of Hill Enterprises as they had known it. They sensed that it would only be a matter of time before Mr. Hill would lose control of the internal workings of his organization and that the high wages and overtime pay would be slashed.

The immediate effect of the arrival of Robbins upon the operations of Hill Enterprises was negligible. Operations continued at the same hectic pace, and Mr. Hill’s personal activities did not appear to be appreciably different. He maintained his old ‘office’ and was still available to help out on any particular problems which arose. However, as time passed, it became more and more obvious to the employees that Robbins demanded a great deal of Mr. Hill’s time.

Although he retained his desk in the corner of the production floor for a while, Mr. Hill soon set up new headquarters in the more comfortable surroundings of a new building that had been constructed adjacent to the production facilities to house the sales and office activities of Hill Enterprises. Because of his new location and the demands made upon him by his new partner, Mr. Hill was unable to spend as much time with the men in the production area as before. In addition, Robbins’ apparent aloofness to the workings and problems of the production shop and its employees created resentment.

The employees noticed that shortly after Mr. Hill had moved his office, the time-honored method of blowing off steam as a prelude to constructive effort on a problem became more and more ineffectual. Mr. Hill was no longer around to arbitrate really serious disagreements, and his customary “okay, now that we’ve got that out of our systems, let’s get back to work” was missing. While blowing off steam was still an accepted practice, an element of bitterness seemed to now be apparent in such outbursts.