An analysis on leaderships’ effect on culture Essay
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ConnectCo is an outbound call center in Toronto, Ontario and is the Canadian Subsidiary of a U.S. marketing and sales consulting practice. The parent company has provided services to Fortune 500 companies over its five years of operations and employs approximately 75 people. ConnectCo has annual revenues of $29.4 million, with Symbol Office Solution as their biggest account at $20 million annually, for a contract length of three years. This contract awarded ConnectCo net profits as high as 35% of sales. What ConnectCo offers to clients is the convenience and cost savings of removing a costly field sales force and replaces them with a more cost efficient outbound call center.
These call centers help customers with technical problems, provide new equipment updates, and disseminates knowledge about new technologies or equipment. The Symbol account, as previously mentioned, provides a significant sum of ConnectCo`s total revenue and was first negotiated by Charlie Gallagher, the vice-president of Canadian operations, and is managed by Chad Macdonald.
Joe Davis is a passionate and experienced consultant that has worked closely with clients to identify and implement solutions to very specific problems.
He joined ConnectCo hoping to learn from the pool of experience that he saw within the organization, with the majority of them being former Xerox employees with considerable knowledge in increasing sales. His role in the organization was to ensure that the level of service that ConnectCo provided met or surpassed the needs of clients. As per his position within the company he was the first to notice the discrepancy within the Symbol account. The contract that was signed between ConnectCo and Symbol required that there be a certain number of Inside Account Executives (IAE) that be trained at all times and at a phone making calls in the client`s interests.
The recent decline in the IAE pool has left several seats open, with no calls being placed on behalf of Symbol, however they were still billing the customer as if the seats where all operating at full capacity while they should only be billing them for filled operators. The amount of the discrepancy totals $81000. The terms of the contract have been modified several times over its effective term with the first being an extension of the contract and the notice of intent to develop mutually agreed to service levels. Service level targets were never established.
The four factoring symptoms are communication, trust, accountability, responsibility and integrity. These symptoms are the leading cause for Connectco’s inability to run operations smoothly and effectively. The lack of communication within Connectco is causing headaches for Davis as information continues to be blocked by “noise” within the company. The communication is next to nonexistent from the top of the hierarchy to the department managers within the company. The lack of trust throughout the company is not helping their cause when trying to create an effective and demanded product for fortune 500 companies.
There is little trust betwee the top managers and employees that they will complete their respected jobs at hand with the level of trust level between employees and managers decaying over time and as the situation worsens. Accountability is near nonexistent within the organization. Davis is not able to hold his manager accountable because of his past record in doing so. Accountability is crucial in order for Connectco to run smoothly in the future. Conflict frequently causes employees to look to offload their work onto others to not be responsible for failure, as in the case of Chad Macdonald passing the role of dealing with the Symbol account off to Joe Davis. Finally, there is little integrity.
Dealing with the account neither Chad nor Charlie believe that the best solution would be to deal with the problem and would both prefer to make a decision that would go against the main values of the corporation that includes trustworthiness. There is a valid case of values incongruence within ConnectCo. These four main symptoms are major attributes to the problems faced within Connectco and are the four elements that may be the solutions to solving Connectco’s organizational problems in the near future.
ConnectCo`s current situation is the direct result of the poor corporate culture as evidenced by the symptoms that are present. This culture stems from the leadership`s poor ethics and lack of values and has cascaded to the rest of the organization. Joe Davis, the new manager of the Planning and Reporting department for ConnectCo, began his new job about a month ago finds himself in the uncomfortable situation of questioning the morals of his coworkers that has led to the jeopardized relationship between ConnectCo and their largest client: Symbol Office Solutions. Joe must decide how to approach this conflicting situation as a new member of the company without compromising his own morals and values.
In evaluating the relevant models to address the problem statement there is one model in particular that effectively incorporates several of the models needed to perform an analysis of the corporate culture at ConnectCo; Edgar H. Schein’s Model of Organizational Culture. Schein’s model is the most relevant to identify the reason for the symptoms and problems currently facing ConnectCo. The incorporation of the many different aspects to identify the culture of an organization including atifacts, shared values, and shared assumptions enables a thorough review of the culture present at ConnectCo. The following analysis will break down Schein’s model and evaluate each section with the following relevant analysis to get a better understanding of the situation. It will be presented in the following order; artifacts, shared values, shared assumptions.
Communication within the ConnectCo organization does not represent the ideal scenario for a well-run organization. This lack of proper communication and clarity is unfortunately spilling over into its business dealings with clients. Both represent one of the most evident aspects of the artifacts of the company, the cultural norms that are evident to others and neither is impressive. To begin, this analysis will focus on internal communication and then shift focus to the external communication with other organizations.
“Davis opened up a new message and types a simple e-mail, in case Gallagher picked it up with his Blackberry”. This is but one example of the many e-mail conversations that take place within the ConnectCo organization. The situation that ConnectCo finds themselves in is extremely complicated, owing a client a credit for $81000, yet the medium with which Joe Davis chose to use to relay his message was e-mail. A quick analysis of the media richness hierarchy model shows that in this particular situation, which can be easily identified as non-routine and ambiguous, this medium carries too little data-carrying capacity.
If ConnectCo is going to come up with a solution they are going to need to switch to a much richer medium such as face-to-face to get a better understanding of the issue and come up with better outcomes. A second occasion that warrants investigation is the initial email from Joe Davis to Charlie Gallagher. In this initial email he again used to wrong medium to convey the breadth of the issue that is ambiguous and non-routine. Charlie chose to respond in an email as well, with nine words. This will play a factor again in the analysis of the shared values, more specifically the espoused values that leadership (Gallagher) conveys.
Communication between the organizations is also very weak, speaking to the weak cultural artifacts of the ConnectCo organization, and possibly Symbol. It has been acknowledged that they do indeed have face to face communications with their customers, Gallagher does meet with Puhl for golfing events face to face, this does not represent an ideal time, however, as the venue is much to informal to discuss business matters as public meetings contain significant noise, literally and figuratively, that may lead to the message being decoded incorrectly.
The rest of the communication between the two parties, even between the account relationship manager Chad MacDonald and Steve Puhl was done either by telephone or by email. Another aspect of the artifacts of communication that deserves attention is the construction of the contract. Again, the communication process model is most relevant and one of the simplest ways to word the breakdown is that the contract contained too much noise and was not properly decoded by ConnectCo. The ambiguity of the contract comes from many revisions, some of which were not even available to the relevant employees such as Joe Davis and using words such as “notwithstanding” which was interpreted differently by Joe Davis, Chad MacDonald, and Charlie Gallagher. This occurred because the contract was not descriptive enough.
Another aspect to the artifacts portion of the model of organizational culture is the ceremonies that take place within the organization. These ceremonies are used by certain employees and management to get the attention of an audience. In this particular situation the most evident are the golfing trips that Gallagher takes with clients to cement his position as the most important contact to the clients. And finally, the organizational structure, which has a great effect on culture. ConnectCo currently has a client structure, as negotiated within the contract agreement, the organization will maintain a set number of staff specifically to service that account.
“Our values reflect what is important to us. They are a shorthand way of describing our individual and collective motivations. Together with beliefs, they are the causal factors that drive our decision-making.” (http://www.valuescentre.com/values/?sec=values_overview) The above quote reflects what should be the core of any business, the values shared by all of the different employees congruent to the plan laid out by management for the success of the organization. In Schein`s model shared or espoused values represent the second of the 3 components and the first of the invisible dynamics, as in they cannot be easily observed by others. Richard Barrett, author of Building a Values-Driven Organisation: A Whole System Approach to Cultural Transformation believes that values can be either positive or negative and each can have an equal and opposite effect on the corporations culture.
The espoused values must begin as an individual value through some authority figure, such as a founder, senior management, or even an individual with significant power within an organization. These individuals` culture then influences their immediate coworkers, the teams with which they operate, then the organization as a whole. These individuals can therefore set the values for the whole organization regardless of what the dominant culture of the organization through countercultures. “ The culture of an organisation, or any group of individuals that share a common identity, is a reflection of the values and beliefs of the leaders“. (http://www.valuescentre.com/leadership/?sec=leadership__culture) With limited information on the dominant culture of ConnectCo as established by its American head company, which include integrity and trustworthiness, it can only be assumed that the culture that prevails at Connectco is a subculture of the organization as a whole.
The following analysis suggests that the counterculture present in ConnectCo is the direct result of the actions of Charlie Gallagher. As the leader in the organization Charlie has had a profound effect on the values and ethics present within the organization. His handling of the Symbol account clearly demonstrates his values and ethics. His position as leader and culture setter warrants investigation based on several components. First, the competency of his leadership will be analyzed incorporating an analysis of his personal values and the source of his power. To begin, Charlie possesses several characteristics of an effective leader. He has significant self-concept, his personality skills are high, he has the motivation to be a leader, and significant knowledge of the business. These competencies push those that work for him to have the same skills as demonstrated in Chad MacDonald; however, his low integrity has also been transmitted to other co-workers. By encouraging Davis to play with the numbers and do things that were out of the contract he shows his low integrity.
This has led to a lack of trust that is evident from Joe Davis and several other members of the ConnectCo staff throughout the handling of the symbol account. This is not the only negative quality that has displayed. Gallagher also exhibits limited cognitive and practical intelligence. His recommendation to simply `go with the lowest cost` shows a lack of understanding of the situation (and going back to communication) the ambiguity of the situation , this has pervaded to his employees where Chad was more than willing to agree to a band aid solution going against ethical business practices. Neither fully understands the situation and Chad was more than happy to hand off the problem to Joe Davis even though he was the relationship manager on the account and dealing with clients is outside of the scope of work for Joe Davis. The reason for Gallagher`s lack of integrity can be easily explained through the Swartz values circumplex.
Clearly, Gallagher is more focused on self-enhancement, his need for achievement is evidenced through the fact that everyone must know that he is the one that negotiated the Symbol account and demonstrated through his golf business trips, as well as his refusal to accept responsibility for poorly negotiating a contract and failing to adhere and communicate the contents of the contracts that he signed. He is also a leader that craves power and prefers significant power distance, as proven by his screening of his employees’ calls and not showing up to the meeting with Joe Davis and Chad MacDonald to clarify the contract for them. Both of these values compromise his integrity and unfortunately those values are only two that his leadership has caused the rest of the organization to adopt, the need for security security being another. Gallagher`s aforementioned need for power is also affecting the culture of the organization.
His handling of the Symbol account and the contract shows that he uses a wheel formation of information control to maintain power within the organization. By him going golfing with the big shots at Symbol rather than relationship manager Chad, shows that he needs to maintain that control of information which in turn gives him control over Chad and the account. This is combined with Joe Davis` perception of an upward appeal within the organization that made him rethink his ability to go to the higher ups with the information because he believes that the management will take the side of Gallagher given that they are both MBA graduates. Fear is an influence tactic that Gallagher has wielded to maintain order and obedience from his employees through his connection with the president.
The effect on culture is that because employees cannot contact upper management the values that he imposes on the organization will be the ones that dictate how operations are carried out. Indirectly, this is what has causes the problem with ConnectCo and Symbol. Gallagher controlling the information has prevented Chad from acting in the best interest of the company to ensure the contract is followed and that there are no issues. It also means that now since the contract has not been followed the persons involves will use the cultural aspects of poor integrity and dodging that he has used with his employees as Chad demonstrated by dodging Steve Puhl and pushing the problem onto Joe Davis.
Shared Assumptions and Values
Analysing the shared assumptions of ConnectCo with the Schwartz’s Values Circumplex, we notice that the company talks about wanting to keep their most important client Symbol satisfied by valuing self-transcendence and conservation however their actions and dealing of the contract with Symbol do not reflect those values. The appropriate way to describe the values that ConnectCo tend to go by is self-enhancing. They are working for the client to provide them with everything listed in the contract, in this case a sufficient amount of IAEs, but are hiding information from Symbol to protect their own well-being. This seems to be enforced by Charlie Gallagher as he is telling Joe Davis that they should not have to pay any penalty fees to Symbol for empty seats at the IAE position if there are current individuals in training for that position. Now we will look at the ethical values and behaviour the moral intensity of ConnectCo, more specifically Charlie Gallagher’s ethical sensitivity to the issue. The degree to which they should be applying ethical principles should be is high because Symbol is their biggest client and has trusted ConnectCo for a few years.
However, the intensity being put forth is minimal as they are trying to get out of paying money to Symbol for not having staffed enough IAE’s and they are forcing Joe Davis to go against his values and follow suit. This shows how little Charlie Gallagher cares about ethically conducting operations with clients and co-workers, as Joe Davis is being pressured into complying with Charlie’s demand because he does not want to risk losing his job even though what Charlie is telling him to do is illegal. Taking a look at the conflict process model we find our sources of conflict between, Gallagher, Davis and Steve Puhl from Symbol. The most obvious source is the communication between Gallagher and Puhl. First of all the contract between the two is too vague and open for interpretation as the service level targets have not been defined for almost two years.
Charlie is also not communicating the issue of his understanding of the contract, as he is just assuming that they should not have to pay Symbol credit for not having the specified amount of IAE’s because he is claiming that during those times they had individuals in training to fill those positions. Another issue is that even if what Gallagher interpreted was true, he does not have any data to prove that he had employees in training because he failed to communicate to Chad MacDonald, Joe Davis and to Carole Lam the exact details of the contract. This puts Joe in a uncomfortable situation when he receives a call from Steve Puhl and is unsure what the contract requirements. Another source of conflict is the incompatible goals and differentiation between Charlie and Joe. Joe is simply trying to do the right thing because he is new to the company and wants to make a good impression by doing things ethically however Charlie is trying to make it seem like he is fulfilling the terms of the contract by making assumptions of the contract to get away with not having to pay Symbol their deserved credit.
Another source of conflict is the scarcity of important resources. As mentioned previously Carole Lam the analyst was never told to keep data on the amount of days and which days that employees were in training. Joe needed this data to complete his work but obviously was unable to retrieve complete and accurate data on employee training. The way that Charlie seems to be handling this conflict is by avoiding communication with clients and co-workers. He is notorious for screening calls, he failed to show up to a meeting with Chad MacDonald and Joe Davis, and when asked how to calculate the credit owed to Symbol he simply tells Davis to use the lowest cost to save ConnectCo money and make himself look good. He also does not seem to be of much help to Joe Davis as Gallagher is the one who began this lack of communication which has led to faulty handling of Symbol’s credit account, and seems to be avoiding Joe Davis. This is causing the rest of the employees to obey his ideas because they have no idea what the contract actually calls for and even if they did know, would likely be unwilling to challenge his decisions because he is higher up in the company.
Alternative #1: Bring these numbers and issues to the President and CEO Pros| Cons|
* Issues dealing with the Symbol account get addressed * Issues with the culture of the organization get addressed * Issues are addressed to an authority that can fix these problems and remove the negative counterculture * Keeps the organization from committing accounting fraud like other companies (Enron) * Brings to light all the ethical issues surrounding Charlie Gallagher and Chad MacDonald * Addresses turnover issues that have become routine in the company| * This act could cause tension between Joe and his direct superior (Gallagher) * There is a risk that the President sees this act as disloyal * Working with Gallagher and MacDonald after bringing their issues to light will be difficult moving forward * President/CEO may share the same dysfunctional attitude towards the culture in the organization| This alternative should include him making an appointment with the President/CEO and bringing analyst Carole Lam to help support his findings.
She is well aware with the financial numbers and how Gallagher is letting ConnectCo take money from their top client. This meeting needs to be face-to-face in order to bring about the severity of the conflicting situation. The meeting needs to include all facets of the organizations current lack of corporate ethical values and which individuals must be held accountable. Joe must conclude that if there are immediate corporate culture changes, he would still like to keep working with Gallagher and MacDonald and build a trusting and functional working relationship with both. This will help ease the tension between himself and his immediate superior as well as showing the President that he is capable of handling mismanagement. This alternative is highly recommended and addresses all the facets of this situation.
Alternative #2: Quit and find another job
* Joe no longer has to deal with the resoundingly shaky ethical structure and poor communication at ConnectCo * Joe doesn’t become a “part of the problem” * Joe no longer has to deal with Gallagher’s lack of trust and consideration with their top clientele at his cost * Joe doesn’t become an accomplice to committing accounting fraud| * Leaving an organization after only one month doesn’t look good to future prospective employers * This would go against his newly engaged fiancée who wanted to see him “get off the road” * No severance package * No recommendation or verbal support from ConnectCo once he leaves| This alternative does not come recommended as it leaves Joe and ConnectCo with an uncertain future.
Should Joe decide to leave the company, he would not get a severance package and future employers will wonder why he lasted only a month at his previous job making it more difficult to find employment opportunities. Also, his fiancée did not want his moving around for work a lot and two jobs in less than two months will leave his situation at home stressful. Also, should prospective employers contact ConnectCo, they would have no reason to support Joe for his limited work. Although Joe does not have to deal with this poor corporate culture, running away from the situation does not help in any positive way.
Alternative #3: Try to resolve issue without Chad MacDonald or Charlie Gallagher Pros| Cons|
* Helps ease relationship between ConnectCo and Symbol * Steve Puhl does not have to deal with Chad (who he is getting nowhere with) * Joe can try to incorporate cultural changes to those he can * Has Carole Lam to help him fix the financial disparities of the comapny| * Leaving Chad and Charlie in the dark is risky * Steve Puhl may accidently contact Chad or Charlie and miscommunication may occur * Does not address how to fix the imminent turnover issues surrounding the IAE’s * Not reporting these changes with his superior could cost him his job| Because Joe handles the reporting side of the company, it would go against his responsibilities as an employee to bring up any new information regarding Symbol and can be subject to his employment being terminated if Gallagher was to find out.
This alternative is incredibly risky, but does see some rewards. These rewards include easing the relationship between ConnectCo and Symbol and slowly changing the culture in the corporation as best he can. Unfortunately, he is only just a manager and a new one, so it would be hard for him to get others to respond to his command when there hasn’t been enough relationship development between his other employees. With this in mind, it is best to look at other alternatives.
Our recommendation is based off of Alternative #1, in which we suggest brining the financial statements and issues to the attention of the President and CEO. This will allow us to ensure that all problems in relation to the Symbol account and the culture of the organization are addressed accordingly. This will also shed light on the ethical issues that need to be addressed, surrounding Gallagher and MacDonald. As well, it will prevent any consequences from occurring, resulting from accounting fraud. Once Joe Davis meets with the President and CEO to inform them of his findings, it will be up to the President to create and urgency for change within the organization. In order to implement this change we would recommend the use of Lewin’s Force Field Analysis Model. By implementing this model the President could unfreeze the current situation, change the organizational culture and ethics of the company, and then freeze the company in that state. By doing so the company would change into operating with a more socially responsible client first attitude. By creating urgency for change the President could use client satisfaction as a driving force to push the employees, in order to ensure each client receives the customer service they deserve.
By ensuring the client is always receiving social and ethical treatment, it will drive away any restraining forces, such as lack of integrity, which can be attributed to the accounting fraud. Now we can consider how the President could unfreeze and re-freeze the company in order to complete the change. The President should focus on creating an adaptive culture, in which the company will have an external focus. By creating an external focus the employees will realize that the organizations success depends on continuous change to be a more stakeholder and client oriented company. In this situation it means focusing on changing into a more socially and ethically aware organization to better serve the clients. There is also an internal focus that must be implemented as well. This includes employees working towards the organizational goals that are set.
In this situation the organizational goals would be to provide better customer service. As well by creating an adaptive culture, employees would have a stronger sense of ownership within the organization, and therefore take more responsibility for their performance and tasks. Therefore we believe that since a company’s culture often reflects the leader’s personality, it really is up to the President to make the steps necessary to change the organization. One final step we would recommend taking, is to fire Charlie Gallagher. The basis of firing Gallagher is the fact that he was trying to commit accounting fraud. Therefore the company would have just cause for his dismissal. By firing Gallagher, this would also be the first step towards creating a socially and ethically driven company; Gallagher is simply a restraining force that is preventing the organization from making that move towards a better organizational culture.
Our recommendation is often referred to as whistle blowing, which is when a company employee goes public or to his superiors with private information that could hurt the company. This technique is usually used when social and ethical responsibilities are being neglected or ignored. While it may seem simple enough, the process is far from smooth and the employee doing the whistle blowing is often made out to be a burnt out low level employee who is unhappy. So before Joe does anything of the sort he must be prepared for anything to happen. The best way to approach this alternative would be: 1. Collect all relevant information and be prepared to present your case and be able to answer any and all questions 2. No president of CEO wants to hear that their company’s values and ethics are being compromised, so he must prepare a plan B in order to protect himself from media and personal scrutiny. 3. Joe must schedule a face-to-face meeting with the CEO to ensure that there is no outside noise or misinterpretations with his information and language
4. When presenting his findings, Joe must deliver his message in a way that is not an attack or critique. He must not point out what is wrong but what needs to be improved and why. 5. As part of his presentation Joe needs to incorporate his own recommendations and action plan. Once he goes through with this meeting there is not turning back. The recommendation and action plan should follow a similar tone to what was mentioned above, it should not only identify the problems but what needs to be done to fix them and how to go about fixing them. 6. After the meeting is over all Joe can do is wait for the decisions by the CEO and board of governors. At this point in time a lot of different things can happen and Joe needs to be prepared for any outcome. The optimistic outcome would be to have your action plan ready to implement and begin fixing the company.
The pessimistic outcome would be that they reject his action plan and making his career a nightmare. If this were the case Joe should be prepared to look for another job, or be prepared to defend himself from public scrutiny. Joe is caught in the middle of a lose-lose situation, so his best alternative is the lesser of two evils. It is difficult being the new guy in a company, especially when you’re the one telling that what they are doing is wrong. However, sometimes it takes an outside perspective to identify the problems that have gone unnoticed for too long. If Joe can present a clear and strong case that does not personally offend the CEO, and present the opportunities for improvement, the process should run as smooth as possible.