INTRODUCTION
At first glance, the mantra: “employees first, vendors second, and customers third” seems to be very counter – intuitive when many contemporary companies and books tout the value of putting the customers first. Yet this mantra is the corner stone of a philosophy of the company we chose to study. This local company in Orange County, CA has embodied this philosophy in its corporate culture.
We wanted to analyze and understand the relationship between this philosophy and its ultimate impact on the company’s competitiveness and its long term financial success. We wanted to understand whether the employees were aware of the philosophy, and if so, how it was communicated across the company. We were interested in how the philosophy and the culture were related. We also wanted to know what kind of effect this philosophy and the culture have on the overall performance of the company? Is the philosophy and culture dependent on the founders? And what would happen if they left?
BACKGROUND
The company is in the DRAM & Flash memory, commodity segment of the semiconductor business. Driven by the cyclicality of the market supply demand dynamics and the ease of finding substitute solutions, the memory business is a very fast-paced and highly competitive industry. Given the relative low barriers for entry, the industry is made up of many players both here in the U.S. and abroad.
Since its founding in 1987, the company has maintained a continuous profitability record during its 18 year history while growing sales rapidly. This is significant as many companies endured large losses and some even exited the business altogether, as the technology sector experienced multiple down turns during the period, worst of which was in 2001. As a private company, it is the dominant global market share leader in the DRAM memory business and has rapidly expanded its share in the Flash memory business since its entry in 2003. Its 2004 Sales exceeded $2.45 Billion while 2005 is projected to be another record setting one. In addition, the company has zero debt, has appeared on the Fortune’s 100-Best-Companies-to-Work-For list 5 times and has been selected as among the fastest growing private companies by Inc. Magazine numerous times, including the #1 spot.
With a global workforce of over 2400, the company is a global company with presence in 90+ countries and manufacturing facilities in 4 countries. This company seems to have enjoyed a history of high growth, profitability, and employee satisfaction. We wanted to find out more. What is the relationship between “employees first, vendors second, and customers third” and the success this company has had in this highly competitive global industry?
STUDY METHODS
In order to gain information on the company’s philosophy, culture and success, the team developed a series of questions and interviewed select employees. The questions were developed with the intention of determining the following:
• If the philosophy was communicated company-wide
• If the philosophy and resulting culture runs across the entire company or just for certain levels and departments
• If the philosophy and resulting culture gives [the company] a competitive advantage
• What would the affect be on the firm if one or both of the founders retired
The study group selected a group of interview candidates representing a wide variety of positions (entry-level to owner), divisions within the company (sales, manufacturing, operations, human resources, purchasing, and finance), and duration with the company (one to eighteen years).
The following is a list of interview candidates.
Name Position Department Yrs. Of Service
Mike S. Sr. VP Marketing 14 yrs
Keyla Prod. Mgr. Flash Product Mgmt. 1 yr
Mike K. Sr. Prod. Mgr. Flash Product Mgmt. 11 yrs.
Bryan Acct. Mgr. U.S. Sales 10 yrs
Nate Finance Mgr. Finance 1.5 yrs
Lorri OEM Mgr. OEM Services Dept. 13 yrs
Denise HR Mgr. HR 4 yrs
Stephanie Pricing Supervisor Sales Admin. 4 yrs
“Sam” Co-owner Operations/U.S. Sales 18 yrs
Al VP of Service Div. OEM & Purchasing 9 yrs
George Buyer Mgr. Flash Purchasing 12 yrs.