Star Distributors

In 1983 Belmont Beverages was faced with a major problem: public outcry with minorities not being employed in upper management was on the move. The racial integration movement among top officials was led by Jessie Jackson and Operation PUSH. The goal of PUSH (People United to Serve Humanity) was to secure jobs for blacks and to support the growth of black-owned businesses. PUSH did this by threatening to boycott companies who didn’t hire blacks and minorities. Belmont Beverages was a distribution company that sold beverages to local vendors. Although Belmont Beverages turned a profit, they were pointed out because of the lack of minorities they employed and the limited information they had at the local market. Belmont was accused of marketing their items at a national level instead of a local level along with many other stated problems. With pressure from the public and African-American communities Belmont decided to form a subsidiary, Star Distributors, Inc. Paul Logan, an African American, and John Heyman, a Caucasian were chosen to run the company. The diversified backgrounds of these two people were chosen to ease public opinion that PUSH had created. In the first years of operation the business owners became good friends and even better business partners. However, with time, problems began to surface and the company began to unravel.

One of the major factors that hindered the success and future of Star Distributors, Inc. was communication among the whole organization, specifically Paul and John. In the first years of operation Paul and John communicated effectively as reflected in market share growth. They communicated and expressed the different aspects of the business. However, as Star entered its sixth year, communication between the owners had deteriorated markedly; they spoke to each other only when necessary and in scheduled meetings. And while in meetings they stood at opposite ends of the room and would argue issues in front of employees. We have learned that managers who limit their interactions to orderly focused meetings actually shut themselves out from company operations and can blind them from what’s actually happening within the business. Studies have also shown that to be an effective manager, communication and networking are key factors.

Poor communication wasn’t the only factor that hindered the company’s growth. Differences in Paul and John’s managerial style created tensions within the organization.

Paul Logan was a manger that led by example. He would not ask an employee to take on a task that he himself would not do! On the other hand John Heyman’s style differed greatly. He was a very analytical manager who expected employees to conform to his style of management. An employee stated, “Paul Logan is easy to get along with.” Some Star employees, however, regarded Heyman as somewhat”lacking in interpersonal skills.” Accordingly to Mintzberg’s managerial roles Paul was more of an entrepreneur focused on building a legacy for his kids. John on the other hand was more of a liaison maintaining a close relationship with headquarters. Paul possessed the ability to work with, understand, and motivate other people, both individually and in groups.