DRw Technologies, a defense and aer

DRw Technologies, a defense and aerospace company with 21 manufacturing plants in the US. Southeast, Midwest, and West Coast, made advanced electronic systems for the US. military and commercial aircraft manufacturers. The company had a reputation for innovation and was consistently profitable. an anticipated decline US. defense budget and increasing use of industry were forcing defense industry contractors to try to lower costs. In addition, some analysts were predicting a drop in demand in the commercial aviation market.

The corporate headquarters of DRw Technologies was responsible for strategy, human resources, finance and accounting, marketing and sales, shareholder relations, legal services, and government and public relations. The operated with a high degree of autonomy: they had their own human resources and finance and accounting departments along with product development procurement, and manufacturing in addition to production contracted through corporate marketing and sales, the DRW plants produced rush or custom orders for high-priority customers such as the US. military's Special Operations Command. These orders, which represented approximately 10% of annual sales and had been trending upward, typically were not profitable, but plant management regarded them as a way to maintain strong relationships with loyal customers. In DRW Technologies' decentralized organization, each plant prepared an annual budget that was approved by corporate and included a target for contribution to the firm's profits. In the previous three years, several of the plants had missed their targets, in part because of costs company had to absorb under the feeling the plant was that temporary circumstances, predominantly external, had caused the shortfalls.