Case Study 1: Dimensions of Organisational Structure
Changing the Rules at Bosco Plastics
When Jill Thompson took over as chief executive officer at Bosco Plastics, the company was in trouble. Bosco 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. Bosco had grown from a dozen employees to four hundred, and its rules had grown haphazardly with it. Thompson’s predecessor, Wilhelm K. 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 Thompson, they emphasized the need to evaluate and revise the company’s formal procedures in an attempt to reverse the trends.
First, Thompson 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 Bosco Plastics shall be governed by the following . . .” Thompson 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, Thompson 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 Thompson 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.
Thompson 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, Thompson 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 Jill Thompson 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 (AO 1.1, 1.2 & 1.3):
• Do you think Jill Thompson’s proposal to decentralise the rules and procedures of Bosco Plastics will work? If so, why and how? Give reasons. What, in your opinion, are the requirements to make decentralisation effective?
• What kinds of rules and procedures do you think the department managers will come up with? Which departments will be more formalised? Why?
• What risks will the company face if it establishes different procedures for different areas? Explain your reasons by analysing the merits and demerits of ‘organic’ and ‘mechanistic’ structures with regard to changes proposed by Jill Thompson.
Case Study 2: Organizational Structure and Culture
Surviving Greenscape’s Hard Times
In ten years, Greenscape had grown from a one-person venture into the largest nursery and landscaping business in its area. Its founder, Lita 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. McCormack’s estate would need a new load of bark mulch. But she knew when Martina had been up all night with her baby, when Adrian was likely to be late because he had driven to see his sick father over the weekend, and how to deal with Emily when she was depressed because of her boyfriend’s behaviour. 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 Johnson could get his son out of daycare at four o’clock and Doris 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, Greenscape 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 levelled with them: either they would not get paid for a month or Greenscape 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 “Lita.” 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 (AO 2.1, 2.2 & 2.3):
• How would you describe the organization culture at Greenscape? Under the different types of culture, what type of culture, do you think, operating in Greenscape? Justify your views with evidence.
• How large can such a company get before it needs to change its culture and structure? And why it is important to change culture and structure? Discuss briefly the benefits and difficulties that Greenscape have to cope with changing its culture and structure as the company gears for its growth.
Case Study 3: Leadership Models and Concepts
Right Boss, Wrong Company
Brenda Hogan 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, Hogan had gobbled up every idea put in front of her, relating many of them to her work at Fancy Footwear. When Hogan 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, Hogan was given his position.
Hogan 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. Hogan knew a lot about participative management, and she was not going to be labelled an arrogant know-it-all.
Hogan’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 Hogan 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 Rotary Club.
Hogan’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, Hogan 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 Hogan. 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 Hogan 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 truth finally hit Hogan when the entire management relations committee resigned at the start of their fourth meeting. “I’m sorry, Ms. Hogan,” 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, Hogan 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 (AO 3.1, 3.2 & 3.3):
• What factors should have alerted Hogan to the problems that eventually came up at Fancy Footwear?
• Could Hogan have instituted her changes without eliciting a negative reaction from the workers? If so, how?
Case Study 4: Need-Based Perspectives on Motivation
More Than a Pay Cheque
Samuel Gibson was a trainer for Britannia Home Manufacturers, a large builder of prefabricated homes. Britannia Home had hired Gibson fresh from graduate school with a master’s degree in English. At first, the company put him to work writing and revising company brochures and helping with the most important correspondence at the senior level. But soon, both Gibson and senior management officials began to notice how well he worked with executives on their writing, how he made them feel more confident about it, and how, after working with an executive on a report, the executive often was much more eager to take on the next writing task.
So Britannia Home moved Gibson into its prestigious training department. The company’s trainers worked with thousands of supervisors, managers, and executives, helping them learn everything from new computer languages to time management skills to how to get the most out of the workers on the plant floor, many of whom were unmotivated high school dropouts. Soon Gibson was spending all his time giving short seminars on executive writing as well as coaching his students to perfect their memos and letters.
Gibson’s move into training meant a big increase in salary, and when he started working exclusively with the company’s top brass, it seemed as though he got a bonus every month. Gibson’s supervisor, Mirella Carta, knew he was making more than many executives who had been with the company three times as long, and probably twice as much as any of his graduate school classmates who concentrated in English. Yet in her biweekly meetings with him, she could tell that Gibson wasn’t happy.
When Carta asked him about it, Gibson replied that he was in a bit of a rut. He had to keep saying the same things over and over in his seminars, and business memos weren’t as interesting as the literature he had been trained on. But then, after trailing off for a moment, he blurted out, “They don’t need me!” Since the memos filtering down through the company were now flawlessly polished, and the annual report was 20 percent shorter but said everything it needed to, Gibson’s desire to be needed was not fulfilled.
The next week, Gibson came to Carta with a proposal: What if he started holding classes for some of the floor workers, many of whom had no future within or outside the company because many could write nothing but their own names? Carta took the idea to her superiors. They told her that they wouldn’t oppose it, but Gibson couldn’t possibly keep drawing such a high salary if he worked with people whose contribution to the company was compensated at minimum wage.
Gibson agreed to a reduced salary and began offering English classes on the factory floor, which were billed by management (who hoped to avoid a wage hike that year) as an added benefit of the job. At first only two or three workers showed up—and they, Gibson believed, only wanted an excuse to get away from the nailing guns for a while. But gradually word got around that Gibson was serious about what he was doing and didn’t treat the workers like kids in a remedial class.
At the end of the year, Gibson got a bonus from a new source: the vice president in charge of production. Although Gibson’s course took workers off the job for a couple of hours a week, productivity had actually improved since his course began, employee turnover had dropped, and for the first time in over a year, some of the floor workers had begun to apply for supervisory positions. Gibson was pleased with the bonus, but when Carta saw him grinning as he walked around the building, she knew he wasn’t thinking about his bank account.