In 1996 Vershire Company was a diversified packaging company with several
major divisions, including the Aluminum Can division-one of the largest manufacturers
of aluminum beverage cans in the United States. Exhibit 1 shows
the organization chart for the Aluminum Can division. Reporting to the divisional
general manager were two line managers, vice presidents in charge of
manufacturing and marketing. These vice presidents headed all of the division's
activities in their respective functional areas.
The Aluminum Can division's growth in sales slightly outpaced sales growth
in the industry at large. The division had plants scattered throughout the
United States. Each plant served customers in its own geographic region, often
producing several different sizes of cans for a range of customers that included
Loth large and small breweries and soft drink bottlers.. Most of these customers
had between two and four suppliers and spread purchases among them. If the
division failed to meet the customer's cost and quality specifications or its standards
for delivery and customer service, the customer would turn to another
supplier. AII aluminum can producers employed essentially the same technology and
the division's product quality was equal to that of its competitors.