Addressing the Organizational Cultural Conflicts

Memo

To: Jim Billings, President and CEO, Stone Finch, Inc.

CC: Richard Stone, Chairman-Board of Directors, Eli Saunders, Sr. VP & Head of Water Products

From: B

Date: 1/27/2012

Re: Addressing the Organizational-Cultural Conflicts

Despite WPD and SD remaining profitable and the Culture of Experimentation with subsidairies incubators proving to produce revenue several issues are created that must be addressed as they will impact Stone Finch's bottom line.

The recipients of this memo and relevant stakeholders must assess the mentioned issues and address the Incubator Subsidiary program. There is several possibilities in dealing with the Incubator Subsidiary program which is to reinvest back into WPD, change the program or infrastructure of the organization, or provide a more adequate compensation system with a long term orientation or straight out termination of the program. Lets analyzed the following issues and recommend several operationalized recommendations.

Issues & Analysis:

We know from an angry email from Saunders along with the comments from March 2008 Company "Jam" a forum for employees to vent which revealed to Billings the tension btw the two divisions and within Solution Divisions. As we see turnover rates increase with SD losing 8 A level talent and WDP losing 3 top sales people It is clearly evident that there must be organization and culture conflicts to address between WPD and the younger SD.

Organization - Cultural Conflict

WPD has the traditional methodology and business model as SD is a fairly recent creation with a entrepreneurial spirit with their incubator subsidiaries. However despite the goal to achieve a culture of unity and efficiency there is an adverse affect internally employee turnover, decreases in motivation, satisfaction, morale, team/individual performances, leadership, and employee relations. Externally deterioration in: Brand Image/Reputation, WPD competitiveness losing their lead in the market.

Culture Clash //