After conducting research on the contractor as described in subsections 4B01 through 4B10 and receiving the results, COs must sort and analyze the material. Particular emphasis should be given to areas that could be relevant to the evaluation. For example, a recent acquisition or merger could have significant impact on feeder pools for management positions. While reviewing and sorting the data, COs should place the information into one of three categories:
- Corporate Organization;
- Corporate History and Trends; or
- Backgrounds of Top Corporate Officials.
The scope and purpose of each of these categories are described below.
a. Corporate Organization. This category includes information related to the organization of the entire corporation, rather than just the corporate headquarters facility. If a contractor uses an Organizational Display, as described at 41 CFR 60-2.11(b), as part of its AAP, COs should be able to compare the Organizational Display to the current corporate organizational chart. Industry directories and handbooks can provide an overview of this information, with detail often provided in the corporation’s Annual Report and portions of its “10-K” filed with the SEC. Information and data related to the below questions will normally be in this category.
- What are the corporation’s major components or businesses, groups and divisions; and its subsidiaries, both domestic and foreign?
- What are the components’ major functions and/or products?
- Where are the corporation’s major components located?
- What percentage of total corporate personnel does each component employ (e.g., the ADC Products Group accounts for about 40% of total corporate personnel)?
This information will be helpful in identifying such factors as potential feeder pools for rotational assignments and headquarters management jobs. Also, information on the corporate organization will help OFCCP determine the degree to which willingness to relocate may impact advancement.
After receiving the contractor’s desk audit submission, COs will compare the corporate structure, as shown in this information, with that shown in any published corporate organization charts.
b. Corporate History and Recent Trends. There are several sources for this information, including industry directories and handbooks, particularly Hoover’s Directories, at www.hoovers.com; specialized publications such as the “International Directory of Company Histories;” annual corporate reports and SEC submissions; newspapers and periodicals; and the corporation’s website. COs should review these and other appropriate resources to gather information that answers these and other relevant questions.
- When was the corporation founded?
- What was its initial primary business? How has this changed over time?
- Has the corporation undergone a recent merger or acquisition?
- What are its most and least profitable components over the last several years?
- Has the corporation recently undergone, or is it projecting, substantial growth or cutbacks in particular areas of its business? If so, what are they?
- Has the corporation recently been awarded or lost major contracts? What business area(s) did the award or loss affect and how?
- What are its long-range projections for areas of business growth?
This information is relevant to a preliminary understanding of the business and economic context within which the corporation operates, and also will assist in evaluating particular corporate management issues. For example, recent mergers or major acquisitions may have caused a substantial change in the overall business mix of the corporation and in top management. Such changes may correspondingly impact corporate culture, and the skills mix that the corporation seeks in middle and senior-level management staff.
Sources of current profitability usually influence allocation of bonus pools among different business components and often indicate where growth in management opportunities is likely to occur.
c. Background of Top Officials. The corporation’s website, annual report, Form 10-K or other sources, such as the “Reference Book of Corporate Managements,” may provide information on the backgrounds of top corporate officials. This information usually includes education, background, time with the corporation and the positions held.
Such information can help verify past corporate practices like the degree to which the contractor traditionally filled top positions internally versus externally. It also may help identify shifts in the type of background that top management may value like differences in the backgrounds, experiences, educational fields and/or levels of more recent entries to top management versus others.
The CO should summarize the information in the appropriate section in the SCER.