Organizational behavior

Kateryna Turkot
Shenzhen Filtroil: Finding Balance

Shenzhen Filtroil is a small group that manufactures oil filtration systems with the use of
concepts the team developed. The group seemed to function well at first, but troubles started to
erupt as Liu and Qian developed conflicts. Liu felt that his contributions to the company were
significant and required higher rewards. He demanded an extra 15,000 yuan per month.
The core problem lies beyond compensation. The company has no solid foundation, no rules or
regulations in place. Employees are overworked; there is no mention of sick leave or vacation
time. As a manager, Qian is very controlling: if an employee is late for work, they are fired. This
creates an unhealthy work environment.
The first thing Jeremy Lehmann needs to do is to establish order. Clear, written rules should be
put in place. From that point on, there are two options. In one, Jeremy can discuss the issue with
Liu, explaining that the company cannot afford to pay him 15,000 yuan now, but can consider a
better compensation plan, depending on future revenue. In second, Jeremy can agree to raise
Lius compensation and hire an outsider who can learn Lius formula and techniques. One the
latter perfects his skills, Liu can be dismissed.

Discussion questions:
1. Is there are hierarchy in place? Does Qian hold higher status?
2. Did Filtroil Inc. make a good decision by outsourcing their factory to China?