SIX GENERATIONS HAVE FINE TUNED THIS GUITAR MAKER Chris Martin, CEO, C.F. Martin & Company, founded in 1833: "Our business in America started in Manhattan. The family moved to Nazareth (Pennsylvania] in 1839. They had come from a small town in southern Germany, and they didn't feel comfortable in a big metropolitan area. My great great-great-grandfather was able to more consistently make perfect guitars than anyone from that era People still say C.F. Martin set the standard for quality for American guitars. I was going to become a marine biologist and worked here summers. People were saying, Aren't you going to join the family business?'t remember I went to a trade show with my father when I was 14 or 15 My dad said that someone from CBS wanted to talk to us about selling the business and asked me what I thought. said, 1 would like to think about joining the business I can't guarantee that I will And we went over and met this gentleman at the show, sitting at a big desk. and my dad said. This is my son, and he may want to join the business someday, so we're not for sale. I have a 3-year-old daughter named Claire Frances, so if she ever wants to be C.F. haartin, she can. She comes to work with me every once in a while, and we go out to the plant night now we're watching a ukulele being made "When I took over in 1986, the business was barely breaking even. We'd ridden the folk boom and then the folk-rock boom through the '60s and early 70s, and then business started to trail off with disco Production peaked in the late 70s at around 20,000 units, by 1983, we were down to making and selling 3,000 guitars a year. "The guitar started regaining popularity thanks to things like MTV Unplugged. We've got about 600 employees here in Nazareth and about 250 in Mexico, where we make our strings, our backpacker guitar, and our Little Martin travel guitar. Last year, we made 85,000 guitars. "My father made a bunch of acquisitions. Aside from buying a string company, which was an astute move, none of these panned out. And when they didn't work out, he would take the people who were really smart here and send them to try to fix the acquisitions. As a result, the core business suffered. The people making the guitars were like, 'Hey, what about us?' And they'd hear, Oh, we've got to go fix the drum company! We've got to fix the banjo company!' It was really a distraction. "I also found a very hierarchical situation: top down, traditional, the boss tells the worker and the worker does it and goes home. As much as I knew there was a better way, forever and ever the old way was what everyone knew. I went on an Outward Bound course for a week, and I really learned the value of teamwork. I came back, and I was all fi red up: If the Martin Company was Soing to move ahead, we needed to involve the workers more. We went through a lot of formal training, all the way down to the hourly level, about employee involvement. And since I came in. we've given out about $15 million to the emplos in profit sharing. "We hired a gentleman from Bethlehem Steel to formalize our quality assurance program a couple of years ago. One day he came in and said, 'Chris, people work really hard here, and I keep telling them, "Hey, we're not trying to make the perfect guitar!" And said, Vince, we are trying to make the perfect guitar."" Is Chris Martin a theory X or a theory Y manager? Explain.

SIX GENERATIONS HAVE FINE TUNED THIS GUITAR MAKER Chris Martin, CEO, C.F. Martin & Company, founded in 1833: "Our business in America started in Manhattan. The family moved to Nazareth (Pennsylvania] in 1839. They had come from a small town in southern Germany, and they didn't feel comfortable in a big metropolitan area. My great great-great-grandfather was able to more consistently make perfect guitars than anyone from that era People still say C.F. Martin set the standard for quality for American guitars. I was going to become a marine biologist and worked here summers. People were saying, Aren't you going to join the family business?'t remember I went to a trade show with my father when I was 14 or 15 My dad said that someone from CBS wanted to talk to us about selling the business and asked me what I thought. said, 1 would like to think about joining the business I can't guarantee that I will And we went over and met this gentleman at the show, sitting at a big desk. and my dad said. This is my son, and he may want to join the business someday, so we're not for sale. I have a 3-year-old daughter named Claire Frances, so if she ever wants to be C.F. haartin, she can. She comes to work with me every once in a while, and we go out to the plant night now we're watching a ukulele being made "When I took over in 1986, the business was barely breaking even. We'd ridden the folk boom and then the folk-rock boom through the '60s and early 70s, and then business started to trail off with disco Production peaked in the late 70s at around 20,000 units, by 1983, we were down to making and selling 3,000 guitars a year. "The guitar started regaining popularity thanks to things like MTV Unplugged. We've got about 600 employees here in Nazareth and about 250 in Mexico, where we make our strings, our backpacker guitar, and our Little Martin travel guitar. Last year, we made 85,000 guitars. "My father made a bunch of acquisitions. Aside from buying a string company, which was an astute move, none of these panned out. And when they didn't work out, he would take the people who were really smart here and send them to try to fix the acquisitions. As a result, the core business suffered. The people making the guitars were like, 'Hey, what about us?' And they'd hear, Oh, we've got to go fix the drum company! We've got to fix the banjo company!' It was really a distraction. "I also found a very hierarchical situation: top down, traditional, the boss tells the worker and the worker does it and goes home. As much as I knew there was a better way, forever and ever the old way was what everyone knew. I went on an Outward Bound course for a week, and I really learned the value of teamwork. I came back, and I was all fi red up: If the Martin Company was Soing to move ahead, we needed to involve the workers more. We went through a lot of formal training, all the way down to the hourly level, about employee involvement. And since I came in. we've given out about $15 million to the emplos in profit sharing. "We hired a gentleman from Bethlehem Steel to formalize our quality assurance program a couple of years ago. One day he came in and said, 'Chris, people work really hard here, and I keep telling them, "Hey, we're not trying to make the perfect guitar!" And said, Vince, we are trying to make the perfect guitar."" Is Chris Martin a theory X or a theory Y manager? Explain.