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Background:
Miniscribe was founded in the 1980s when the personal computer was on the rise. It had great potential during this period and large growth capacity. During the first years the company grew fast and furious. By 1983 it has outgrown its ability to remain private and needed the public investment to continue to grow its operations and gain greater equity. In 1983 the company went public for $11.50 a share. As soon as it went public, new entrants into the market and the decline in consumer demand for personal computers had caused the market to decline. Miniscribe was on the verge of going down with many other companies that could not make it through the economic slump. During 1985 an investment banker, Hambrecht and Quist, invested 20 million into the company helping turn the company’s fortunes around. The new chairman, Mr. Q.T. Wiles, brought in his own team and placed them in key positions to install new policies and procedures to get the company under his control. Mr. Wiles basically restructured the procedures of the company.
Management:
Mr. Wiles wanted to restructure the management of the company and how it handled financial reporting. He believed by breaking down the company into smaller more manageable segments it would increase the employees’ abilities to run their departments to meet goals he set. This is a reasonable assumption as long as the goals are attainable.
He gave incentives to meet goals by offering bonuses that could equal up to the employee’s salary. Incentives can be a great way to get employees motivated but it can also lead to employees altering financial informati ...