Right boss wrong company case study answers

Frustrated by this seeming lethargy and beginning to doubt the much-touted Japanese efficiency, Oats got right to the point. He made an oral presentation of his proposal, waiting patiently for the translation of each sentence. Then he handed the leader of the Japanese delegation a packet containing the specifics of his proposal, got up, and left. The translator trailed behind him as if wanting to drag out the process even further. By the end of their first week, both Oats and his wife were frustrated. Oats’s office phone had not rung once, which did not make him optimistic about his meeting with another top company the following week. Carol could scarcely contain her irritation with what she had perceived of the Japanese way of life. She had been sure that a well-respected U.S. lawyer would have little trouble securing a job with a Japanese multinational corporation, but the executives she had met with seemed insulted that she was asking them for a job. And the way they treated their secretaries! After only a week in Japan, both Carol and Warren Oats were ready to go home. A month later, their perspective had changed radically, and both looked back on those first meetings with embarrassment. Within that month, they had learned a lot about the Japanese sense of protocol and attitudes toward women. Warren Oats believed he was beginning to get the knack of doing business with the Japanese in their manner: establishing a relationship slowly, almost ritualistically, waiting through a number of meetings before bringing up the real business at hand, and then doing so circumspectly. It was difficult for Oats to slow his pace, and it made him nervous to be so indirect, but he was beginning to see some value in the sometimes humbling learning process he was going through. Perhaps, he thought, he and Carol could become consultants for other executives who needed to learn the lessons he was beginning to understand. Case Questions

1- What specific errors did Warren and Carol Oats make during their first week in Japan?

2- If you were talking to a non-U.S. businessperson making a first contact with an American company, what advice would you give?

4- Group Dynamics

A Difficult Task Force José has been appointed chair of a steering task force to design the primary product line for a new joint venture between companies from Japan, the United States, and South America. The new joint venture company will make, sell, and service pet caskets (coffins) for the burial of beloved pets, mostly dogs and cats. One month earlier, each company had assigned personnel to the task force:

 From the Japanese company, Furuay Masahiko from Yokohama, assistant to the president of the Japanese company; Hamada Isao from Tokyo, director of marketing from its technology group; and Noto Takeshi from Tokyo, assistant director of its financial management department.

 From the United States company, Thomas Boone from Chicago, the top purchasing manager from its lumber and forest lands group; Richard Maret from Buffalo, the codirector of the company’s information systems group; and Billy Bob "Tex" Johnson from Arizona, the former CEO, now retired and a consultant for the company.

 From the South American company, Mariana Preus from Argentina, the head of product design for that company’s specialty animal products group; Hector Bonilla from their Mexico City division,

an expert in automated systems design for wood products; and Mauricio Gomes, in charge of design and construction for the plant, which will be located in southern Chile to take advantage of the vast forest there.

These members were chosen for their expertise in various areas and were taking valuable time away from their normal assignments to participate in the joint venture. As chair of the task force, José had scheduled an initial meeting for 10:00 A.M. José started the meeting by reviewing the history of the development of the joint venture and how the three company presidents had decided to create it. Then, José reviewed the market for the new high-end, designer pet coffins, stressing that this task force was to develop the initial design parameters for the new product to meet increasing demand around the world. He then opened the meeting for comments and suggestions. Mariana Preus spoke first: "In my opinion, the current designs that we have in production in our Argentina plant are just fine. They are topnotch designs, using the latest technology for processing. They use the best woods available and they should sell great. I don’t see why we have to design a whole new product line." Noto Takeshi agreed and urged the committee to recommend that the current designs were good enough and should be immediately incorporated into the plans for the new manufacturing plant. José interrupted the discussion: "Look, the council of presidents put this joint venture together to completely revolutionize the product and its manufacture based on solid evidence and industry data. We are to redesign the product and its manufacturing systems. That is our job, so let’s get started." José knew that the presidents had considered using existing designs but had rejected the idea because the designs were too old and not easily manufacturable at costs low enough to make a significant impact on the market. He told the group this and reminded them that the purpose of the committee was to design a new product. The members then began discussing possible new design elements, but the discussion always returned to the benefits of using the existing designs. Finally, Tex spoke up: "I think we ought to do what Mariana suggested earlier. It makes no sense to me to design new caskets when the existing designs are good enough to do the job." The others nodded their heads in agreement. José again reminded them of the task force’s purpose and said such a recommendation would not be well received by the council of presidents. Nevertheless, the group insisted that José write a memo to the council of presidents with the recommendation to use existing designs and to begin immediately to design the plant and the manufacturing system. The meeting adjourned and the members headed to the golf course at 10:45 A.M. José returned to his computer and started to write the memo, but he knew it would anger the presidents. He hoped he would not be held responsible for the actions of the task force, even though he was its chair. He wondered what had gone wrong and what he could have done to prevent it. Case Questions

1- Which characteristics of group behavior discussed in the chapter can you identify in this case?

2- How did the diverse nature of the group affect the committee’s actions?

3- If you were in Jose’s position, what would you have done differently? What would you do now?

4- Using Teams in Organization Teams at Evans RV Wholesale Supply and Distribution Company? Evans RV Wholesale Supply and Distribution Company sells parts, equipment, and supplies for recreational vehicles-motor homes, travel trailers, campers, and similar vehicles. In addition, Evans has a service department for the repair and service of RVs. The owner, Alex Evans, bought the company five years ago from its original owner, changed the name of the company, and has finally made it profitable, although it has been rough going. The organization is set up in three divisions: service, retail parts and supplies, and wholesale parts and supplies. Alex, the owner, CEO, and president, has a vice president for each operating division and a vice president of finance and operations. The organization chart shows these divisions and positions. In the warehouse there are three groups: receiving (checking orders for completeness, returning defective merchandise, stocking the shelves, filling orders), service parts, and order filling for outgoing shipments. The warehouse group is responsible for all activities related to parts and supplies receiving, storage, and shipping. The retail sales division includes all functions related to selling of parts and supplies at the two stores and in the mobile sales trailer. Personnel in the retail division include salespeople and cashiers. The retail salespeople also work in the warehouse because the warehouse also serves as the showroom for walk-in customers. In the service department the service manager supervises the service writers, one scheduler, and lead mechanics and technicians. The service department includes the collision repair group at the main store and the service department at the satellite store. The collision repair group has two service writers who have special expertise in collision repair and insurance regulations. Two drivers who move RVs around the "yard" also work in the service division. The accounting and finance groups do everything related to the money side of the business, including accounts payable and receivable, cash management, and payroll. Also in this group is the one person who handles all of the traditional personnel functions. Alex has run other small businesses and is known as a benevolent owner, always taking care of the loyal employees who work hard and are the backbone of any small business. He is also known as being real tough on anyone who loafs on the job or tries to take unfair advantage of Alex or the company. Most of the employees are either veterans of the RV industry at Evans or elsewhere, or are very young and still learning the business. Alex is working hard to develop a good work ethic among the younger employees and to keep the old-timers fully involved. Since he bought the business, Alex has instituted new, modern, employee-centered human resource policies. However, the company is still a traditional hierarchically structured organization. The company is located in a major metropolitan area that has a lot of potential customers for the RV business. The region has many outdoor recreational activities and an active retirement community that either lives in RVs (motor homes, trailers, or mobile homes) or uses them for recreation. The former owner of the business specifically chose not to be in the RV sales business, figuring that parts and service was the better end of the business. Two stores are strategically located on opposite ends of the metropolitan area, and a mobile sales office is moved around the major camping and recreational areas during the peak months of the year.

When Alex bought the company, the parts and supplies business was only retail, relying on customers to walk in the door to buy something. After buying the business, Alex applied good management, marketing, and cash-management principles to get the company out of the red and into profitability. Although his was not the only such business in town, it was the only one locally owned, and it had a good local following. About two years ago, Alex recognized that the nature of the business was changing. First, he saw the large nationwide retailers moving into town. These retailers were using discount pricing in large warehouse-type stores. These large retail stores could use volume purchasing to get lower prices from manufacturers, and they had the large stores necessary to store and shelve the large inventory. Alex, with only two stores, was unable to get such low prices from manufacturers. He also noted that retired people were notorious for shopping around for the lowest prices, but they also appreciated good, friendly customer service. People interested in recreational items also seemed to be following the national trend to shop via catalogs. So for a variety of reasons Alex began to develop a wholesale business by becoming a wholesale distributor to the many RV parts and supply businesses in the small towns located in the recreational areas around that state and in surrounding states. At the same time, he created the first catalog for RV parts and supplies, featuring all the brand-name parts and supplies by category and supplier. The catalog had a very attractive camping scene on the cover, a combination of attractively displayed items and many pages full of all the possible parts and supplies that the RV owner could think of. Of course, he made placing an order very easy, by phone, mail, or fax, and accepted many easy payment methods. He filled both distributor orders and catalog orders from his warehouse in the main store using standard mail and parcel delivery services, charging the full delivery costs to the customers. He credits the business’s survival so far to his diversification into the warehouse and catalog business through which he could directly compete with the national chains. Although it is now barely profitable, Alex is concerned about the changes in the industry and the competition and about making the monthly payments on the $5 million loan he got from the bank to buy the business in the first place. In addition, he reads about the latest management techniques and attends various professional conferences around the country. He has been hearing and reading about this team-based organization idea and thinks it might be just the thing to energize his company and take it to the next level of performance and profitability. At the annual strategic planning retreat in August, Alex announced to his top management team that starting on October 1 (the beginning of the next fiscal year), the company would be changing to a team-based arrangement. Case Questions

1- What mistakes has Alex already made in developing a team-based organization? 2- If Alex were to call you in as a consultant, what would you tell him to do?

3- Using the organization chart of Evans RV Wholesale Supply and Distribution, describe how

you would put the employees together in teams.

5- Leadership Models and Concepts

Right Boss, Wrong Company Betty Kesmer was continuously on top of things. In school, she had always been at the top of her class. When she went to work for her uncle’s shoe business, Fancy Footwear, she had been singled out as the most productive employee and the one with the best attendance. The company was so impressed with her that it sent her to get an M.B.A. to groom her for a top management position. In school again, and with three years of practical experience to draw on, Kesmer had gobbled up every idea put in front of her, relating many of them to her work at Fancy Footwear. When Kesmer graduated at the top of her class, she returned to Fancy Footwear. To no one’s surprise, when the head of the company’s largest division took advantage of the firm’s early retirement plan, Kesmer was given his position. Kesmer knew the pitfalls of being suddenly catapulted to a leadership position, and she was determined to avoid them. In business school, she had read cases about family businesses that fell apart when a young family member took over with an iron fist, barking out orders, cutting personnel, and destroying morale. Kesmer knew a lot about participative management, and she was not going to be labeled an arrogant know-it-all. Kesmer’s predecessor, Max Worthy, had run the division from an office at the top of the building, far above the factory floor. Two or three times a day, Worthy would summon a messenger or a secretary from the offices on the second floor and send a memo out to one or another group of workers. But as Kesmer saw it, Worthy was mostly an absentee autocrat, making all the decisions from above and spending most of his time at extended lunches with his friends from the Elks Club. Kesmer’s first move was to change all that. She set up her office on the second floor. From her always-open doorway she could see down onto the factory floor, and as she sat behind her desk she could spot anyone walking by in the hall. She never ate lunch herself but spent the time from 11 to 2 down on the floor, walking around, talking, and organizing groups. The workers, many of whom had twenty years of seniority at the plant, seemed surprised by this new policy and reluctant to volunteer for any groups. But in fairly short order, Kesmer established a worker productivity group, a "Suggestion of the Week" committee, an environmental group, a worker award group, and a management relations group. Each group held two meetings a week, one without and one with Kesmer. She encouraged each group to set up goals in its particular focus area and develop plans for reaching those goals. She promised any support that was within her power to give. The group work was agonizingly slow at first. But Kesmer had been well trained as a facilitator, and she soon took on that role in their meetings, writing down ideas on a big board, organizing them, and later communicating them in notices to other employees. She got everyone to call her "Betty" and set herself the task of learning all their names. By the end of the first month, Fancy Footwear was stirred up. But as it turned out, that was the last thing most employees wanted. The truthfinally hit Kesmer when the entire management relations committee resigned at the start of their fourth meeting. "I’m sorry, Ms. Kesmer," one of them said. "We’re good at making shoes, but not at this management stuff. A lot of us are heading toward retirement. We don’t want to be supervisors." Astonished, Kesmer went to talk to the workers with whom she believed she had built good relations. Yes, they reluctantly told her, all these changes did make them uneasy. They liked her, and they didn’t want to complain. But given the choice, they would rather

go back to the way Mr. Worthy had run things. They never saw Mr. Worthy much, but he never got in their hair. He did his work, whatever that was, and they did theirs. "After you’ve been in a place doing one thing for so long," one worker concluded, "the last thing you want to do is learn a new way of doing it." Case Questions

1- What factors should have alerted Kesmer to the problems that eventually came up at Fancy Footwear?

2- Could Kesmer have instituted her changes without eliciting a negative reaction from the workers? If so, how?

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6- Leadership and Influence Processes The Struggle for Power at Ramsey Electronics A vice president’s position is about to open up at Ramsey Electronics, maker of components for audio and visual equipment and computers. Whoever fills the position will be one of the four most powerful people in the company and may one day become its CEO. So the whole company has been watching the political skirmishes among the three leading candidates: Arnie Sander, Laura Prove, and Billy Evans. Arnie Sander, currently head of the research and development division, worked his way up through the engineering ranks. Of the three candidates, he alone has a Ph.D. (in electrical engineering from MIT), and he is the acknowledged genius behind the company’s most innovative products. One of the current vice presidents—Harley Learner, himself an engineer— has been pushing hard for Sander’s case. Laura Prove spent five years on the road, earning a reputation as an outstanding salesperson of Ramsey products before coming to company headquarters and working her way up through the sales division. She knows only enough about what she calls the "guts" of Ramsey’s electronic parts to get by, but she is very good at selling them and at motivating the people who work for her. Frank Barnwood, another current vice president, has been filling the Chief’s ear with praise for Prove. Of the three candidates, Billy Evans is the youngest and has the least experience at Ramsey. Like the Chief, he has an M.B.A. from Harvard Business School and a very sharp mind for finances. The Chief has credited him with turning the company’s financial situation around, although others in the company believe Sander’s products or Prove’s selling ability really deserves the credit. Evans has no particular champion among Ramsey’s top executives, but he is the only other handball player the Chief has located in the company, and the two play every Tuesday and Thursday after work. Learner and Barnwood have noticed that the company’s financial decisions often get made during the cooling-off period following a handball game. In the month preceding the Chief’s decision, the two vice presidents have been busy. Learner, head of a national engineering association, worked to have Sander win an achievement award from the association, and two weeks before the naming of the new vice president, he threw the most lavish banquet in the company’s history to announce the award. When introducing Sander, Learner made a long, impassioned speech detailing Sander’s accomplishments and heralding him as "the future of Ramsey Electronics." Frank Barnwood has moved more slowly and subtly. The Chief had asked Barnwood

years before to keep him updated on "all these gripes by women and minorities and such," and Barnwood did so by giving the Chief articles of particular interest. Recently he gave the Chief one from a psychology magazine about the cloning effect—the tendency of powerful executives to choose successors who are most like themselves. He also passed on to the Chief a Fortune article arguing that many American corporations are floundering because they are being run by financial people rather than by people who really know the company’s business. He also flooded bulletin boards and the Chief’s desk with news clippings about the value of having women and minorities at the top levels of a company. Billy Evans has seemed indifferent to the promotion. He spends his days on the phone and in front of the computer screen, reporting to the Chief every other week on the company’s latest financial successes—and never missing a handball game. Case Questions

1- Whom do you think the Chief will pick as the new vice president? Why?

2- Whom do you think should get the job? Why?

3- What role might impression management play in the decision?

7- Decision Making and Negotiation A Big Step for Peak Electronics Lynda Murray, chief executive officer of Peak Electronics, faced a difficult decision. Her company was a leader in making parts for standard cassette and reel-to-reel tape recorders. Murray had watched with some misgivings as digital technology hit the market in the form of compact disc players, and she had to decide whether to lead Peak into the digital age. Even though digital tape players were encountering legal hurdles in the American market, they were starting to take hold in Japan and Europe. Was America— and Peak—ready for them? Murray had plenty of help in making the decision. First she met with the company’s marketing division. Everyone had an opinion. Some predicted that every audio component would be digital by the turn of the century; others believed the popularity of even compact disc players was already waning. Everyone agreed that they needed time to conduct surveys, gather data, and find out what products the public really wanted and how much they would be willing to pay for them. The people in research and development had a different approach. They were tired of making small improvements in a mature and perfected product. They had been reading technical material about digital tape, and they saw it as an exciting new technology that would give an innovative company a chance to make it big. Time was of the essence, they insisted. If Peak was to become an important supplier of parts for the new decks, it had to have the components ready. Delay would be fatal to the product. A meeting of the vice presidents produced a scenario with which Murray was all too familiar. Years ago these executives had discovered that they could not outargue one another in these meetings, but they had faith in their staffs’ abilities to succeed where they had failed. Before Murray even walked into the room, she knew what their recommendation would be: to create a committee of representatives from each division and let them thoroughly investigate all aspects of the decision. Such an approach had worked before, but Murray was not sure it was right this time.

Desperate to make the decision and get it out of her mind, Murray mentioned it to her fifteen-year-old son, who, it turned out, knew everything about digital tape. In fact, he told her, one of his friend—the rich one—had been holding off on buying a new tape deck so that he would be on the cutting edge of digital recording. "It’s gotta happen, Mom," her son said. "People want it." Intellectually, Murray believed he was right. The past thirty years had shown that Americans had an insatiable appetite for electronic gadgets and marvels. Quadraphonic sound and video discs were the only exceptions she could think of to the rule that if someone invented an improved way of reproducing images or sound, someone else would want to buy it. But intuitively, Murray was not so sure. She had a bad feeling about the new technology. She believed the record companies, which had lost the battle to tape manufacturers, might get together with compact disc makers and audio equipment manufacturers to stop the digital technology from entering the American market. So far, no American company had invested substantially in the technology, so no one had an interest in funding the legal battle to remove the barriers to the new machines. Exhausted, Murray went to bed. She hoped that somehow her subconscious mind would sort out all the important factors and she would wake up knowing the right decision. Case Questions

1- What sources of information and opinion about the new technology seem most reliable? Which would you ignore?

2- If you were Murray, what would your next step be?

8- Dimensions of Organization Structure Changing the Rules at Cosmo Plastics When Alice Thornton took over as chief executive officer at Cosmo Plastics, the company was in trouble. Cosmo had started out as an innovative company, known for creating a new product just as the popularity of one of the industry’s old standbys was fading, i.e., replacing yo-yo’s with water guns. In two decades, it had become an established maker of plastics for the toy industry. Cosmo had grown from a dozen employees to four hundred, and its rules had grown haphazardly with it. Thornton’s predecessor, Willard P. Blatz, had found the company’s procedures chaotic and had instituted a uniform set of rules for all employees. Since then, both research output and manufacturing productivity had steadily declined. When the company’s board of directors hired Thornton, they emphasized the need to evaluate and revise the company’s formal procedures in an attempt to reverse the trends. First, Thornton studied the rules Blatz had implemented. She was impressed to find that the entire procedures manual was only twenty pages long. It began with the reasonable sentence "All employees of Cosmo Plastics shall be governed by the following . . ." Thornton had expected to find evidence that Blatz had been a tyrant who ran the company with an iron fist. But as she read through the manual, she found nothing to indicate this. In fact, some of the rules were rather flexible. Employees could punch in anytime between 8:00 and 10:00 a.m. and leave nine hours later, between 5:00 and 7:00 p.m. Managers were expected to keep monthly notes on the people working for them and make yearly recommendations to the human resources committee about raises, bonuses, promotions, and firings. Except for their one-hour lunch break, which they could take at any time, employees were expected to be in the building at all times.

Puzzled, Thornton went down to the lounge where the research and development people gathered. She was surprised to find a time clock on the wall. Curious, she fed a time card into it and was even more flabbergasted when the machine chattered noisily, then spit it out without registering the time. Apparently R&D was none too pleased with the time clock and had found a way to rig it. When Thornton looked up in astonishment, only two of the twelve employees who had been in the room were still there. They said the others had "punched back in" when they saw the boss coming. Thornton asked the remaining pair to tell her what was wrong with company rules, and she got an earful. The researchers, mostly chemists and engineers with advanced graduate degrees, resented punching a time clock and having their work evaluated once a month, when they could not reasonably be expected to come up with something new and worth writing about more than twice a year. Before the implementation of the new rules, they had often gotten inspiration from going down to the local dime store and picking up five dollars worth of cheap toys, but now they felt they could make such trips only on their own time. And when a researcher came up with an innovative idea, it often took months for the proposal to work its way up the company hierarchy to the attention of someone who could put it into production. In short, all these sharp minds felt shackled. Concluding that maybe she had overlooked the rigidity of the rules, Thornton walked over to the manufacturing building to talk to the production supervisors. They responded to her questions with one word: anarchy. With employees drifting in between 8:00 and 10:00 and then starting to drift out again by 11:00 for lunch, the supervisors never knew if they had enough people to run a particular operation. Employee turnover was high, but not high enough in some cases; supervisors believed the rules prevented them from firing all but the most incompetent workers before the end of the yearly evaluation period. The rules were so "humane" that discipline was impossible to enforce. By the time Alice Thornton got back to her office, she had a plan. The following week, she called in all the department managers and asked them to draft formal rules and procedures for their individual areas. She told them she did not intend to lose control of the company, but she wanted to see if they could improve productivity and morale by creating formal procedures for their individual departments. Case Questions

1- Do you think Alice Thornton’s proposal to decentralize the rules and procedures of Cosmo Plastics will work?

2- What kinds of rules and procedures do you think the department managers will come up with? Which departments will be more formalized? Why?

3- What risks will the company face if it establishes different procedures for different areas?

9- Organization Culture Surviving Plant World’s Hard Times In ten years, Plant World had grown from a one-person venture into the largest nursery and landscaping business in its area. Its founder, Myta Ong, combined a lifelong interest in plants with a botany degree to provide a unique customer service. Ong had managed the company’s growth so that even with twenty full-time employees working in six to eight crews, the organization culture was still as open, friendly, and personal as it had been when her only "employees" were friends who would volunteer to help her move a heavy tree.

To maintain that atmosphere, Ong involved herself increasingly with people and less with plants as the company grew. With hundreds of customers and scores of jobs at any one time, she could no longer say without hesitation whether she had a dozen arborvitae bushes in stock or when Mrs. Carnack’s estate would need a new load of bark mulch. But she knew when Rose had been up all night with her baby, when Gary was likely to be late because he had driven to see his sick father over the weekend, and how to deal with Ellen when she was depressed because of her boyfriend’s behavior. She kept track of the birthdays of every employee and even those of their children. She was up every morning by five-thirty arranging schedules so that John could get his son out of daycare at four o’clock and Martina could be back in town for her afternoon high school equivalency classes. Paying all this attention to employees may have led Ong to make a single bad business decision that almost destroyed the company. She provided extensive landscaping to a new mall on credit, and when the mall never opened and its owners went bankrupt, Plant World found itself in deep trouble. The company had virtually no cash and had to pay off the bills for the mall plants, most of which were not even salvageable. One Friday, Ong called a meeting with her employees and leveled with them: either they would not get paid for a month or Plant World would fold. The news hit the employees hard. Many counted on the Friday paycheck to buy groceries for the week. The local unemployment rate was low, however, and they knew they could find other jobs. But as they looked around, they wondered whether they could ever find this kind of job. Sure, the pay was not the greatest, but the tears in the eyes of some workers were not over pay or personal hardship; they were for Ong, her dream, and her difficulties. They never thought of her as the boss or called her anything but "Myta." And leaving the group would not be just a matter of saying good-bye to fellow employees. If Bernice left, the company softball team would lose its best pitcher, and the Sunday game was the height of everyone’s week. Where else would they find people who spent much of the weekend working on the best puns with which to assail one another on Monday morning? At how many offices would everyone show up twenty minutes before starting time just to catch up with friends on other crews? What other boss would really understand when you simply said, "I don’t have a doctor’s appointment, I just need the afternoon off"? Ong gave her employees the weekend to think over their decision: whether to take their pay and look for another job or to dig into their savings and go on working. Knowing it would be hard for them to quit, she told them they did not have to face her on Monday; if they did not show up, she would send them their checks. But when she arrived at seven- forty Monday morning, she found the entire group already there, ready to work even harder to pull the company through. They were even trying to top one another with puns about being "mall-contents." Case Questions

1- How would you describe the organization culture at Plant World? 2-