Hammermil Case

Purpose: The purpose of this memo is to explore the issues facing Hammermill Paper Company as the company seeks to communicate a new planning process to its five, relatively autonomous, operating divisions.

Summary of Changes In an effort to improve the flow of planning information between Hammermill Paper's corporate division and the operational divisions, a new planning procedure has been designed. This new procedure is to be a flexible, two-way process. The hope for the new planning and communication system is to erase the limitations associated with the isolation of functional areas of our conglomeration from one another and, in-turn, to leverage corporate synergies.

In years past, planning has been done year to year with budgeting authority in the hands of corporate personnel. Yet these same individuals are only minimally involved in the planning process. To improve this scenario, some changes need to be made. Most important of which are: * New formalized 10 step process for planning the budget * Moving to at least a 3-year fiscal plan * Issue definition and goal setting by corporate personnel, including individualized goals for ROA, growth and cash flows * Requiring department heads to report to a Vice President or "responsible officer" from corporate Successfully communicating this message will require management to overcome barriers inherent to change.

The message will be met with resistance because it requires employees to abandon habits and to fit new activities into their schedules. Furthermore, these efforts must not be required of them without sufficient reward and without the necessary resources and support to follow through with the changeover.

Key Communicators and Audiences The President and CEO of Hammermill Paper Company is the primary source for communication as well as the spokesperson for the upcoming changes. There are several reasons for choosing the CEO as the main communicator of change within a company.