CASE STUDY 4.1 ROUGH SEAS ON THE LINK650 Profestor Suzanne Baxter was prepating for her first lass tf the semester when Shaun O'Neil knocked lightly on the fopen door and announced himself: "Hi, Profesor, I dont Suppose you remember met” Professor Baxter had large ‘lasses, but she did zemember that Shaun was a student in ther organizational behavior class a few years ago. Shaun. bad decided to worici the oil industry fora couple of years before returning to schoo! to complete his diploma, “Welcome back!” Baxter sid as she beckoned him into the office "I heard you were working on an ol rig in the ‘United Kingdom. How was i” "Well, Professor” Shaun begen, “Thad worked two sum ‘mers inthe Texan oll fields and my familys from Ireland, to L hoped to get a job on the LINK6SO. Its that new ‘WestOil deiling rig that arrived with so much fanfare in the North Sea fields a few years ago. The LINKS50 was built by LINK, Inc. in Texas. A standard practice inthis Industry is forthe rig manufacturer to manage its day-to- day operations, so employees on the LINKES0 are managed ‘completely by LINK managers with no iavolvement from ‘WestOil, We all know that ding rig jobs ace dangerous, bat they pay welland offer generous time off. A local news paper there said that nearly 1,000 people lined up to com- plete ob applications forthe $0 nontechnical positions. 1 ‘as lacky enough to get one of those jobs “Everyone hired on the LINK6S0 was enthusiastic and proud. We were one of the chosen few and were really ‘worse when the LINK650 was shut down twice to correct mechanical problems. These setbacks embarrassed LINK’s anegement end they put more pressure on the supervl- sors to get us back on schedule “rhe supervisors started to ignore equipment problems and pushed us to get jobs done more quickly without re- igrd to safety procedures. They routinely shouted obsceni- fies at employees in front of others. A couple of my work mates were Gired, and a couple of others quit their jobs. 1 almost lost my job one day just because my boss thought I ‘yas deliberately working slowiy. He didatt realize—or are—that the fitings I was connecting were damaged. Several people started finding ways to avotd the supervi sors and get as lite work done as possible. Many of my ‘coworkers developed back problems. We jokingly called it ‘the ‘riage backache’ because some employees faked their ailment to leave the rig with paid sick leave. “long with having lousy supervisors, we were always ‘kept in the dark about the problems on the rig Supervisors said that they didat know anything, which was partly true, but they said we shoulda be so interested in things that ida concern us. But the rigs problems, as well as its Fature ‘contract work, were a msjor concern to crew members who ‘werent ready to quit. Theis Job security depended on the rig’ production levels and whether WestOil woul sign Contacts to drill new holes, Given the ri’ problems, most fof us were concerned that we would be aid off at anytime. “Byerything came to-a head when Bob MacKenzie was Iailled because someone secured a holst improperly. Not sare fit was mentioned in the papers here, but it was big ‘news acound this time last year. A government inquicy pumped up about working on a new rig that had received so much media attention. I was quite impressed with the recruiters—so were several other hires—because they re Ally seemed to be concerned about our welfare out on the platform. (later discovered thatthe ecruiters came from a ‘consulting firm that specializes in hiring people. Come to think oft, we didn't meet a single LINK manager during, that process, Maybe things would have been different if some of those LINK supervisors had interviewed us “*Working on LINKS50 was a real shock, even thought most of us had some experience working inthe oil fields TH say that none ofthe 50 nontechnical people hired was quite prepare forthe brutal jobs on the oil ig, We i the ‘rise jobs inthe biting cold winds ofthe North See. Stil, during the fist few months most of us wanted to show the company that we were dedicated to getting the job done. A couple ofthe new hires quit witha afew weeks, bt most of the people hired with me really got along well—you know, just ke the ideas you mentioned in clas. We formed. spe- ‘Gal bond that helped us through the bad weather and gee dling work “The LINKSS0 supervisors were another matter. They ‘were mean taskmatters who had worked for many years on ‘lig in the Gulf of Mexico or North Sea They seemed to relish the idea of treating thelr employees the same way they had been tzeated before becoming managers. We put up with their abuse forthe et few months, but things got concluded that the person responsible wasn't properly trained and that employees were being pushed to finish jobs without safety precautions, Anyway, while the in- ‘guicy was going on, several employees decided to union- fhe the rig. Ir wasnit lang before most employees on LLINK650 hed signed union cards. That really shocked INK's management and the entire oil industry because it ‘was, I think, just the second time that rig had ever been unionized there. “Since then, management has been doing everything in its power to get rid of the union. It sent a safety officer’ to the rig, although we eventually ceolized that he was « con- tultant the company hired {o underraine union support. Several managers were sent to special seminars on how t0 ‘manage @ unionized work force, although one ofthe topics ‘was how to break the union *So you see, Profeicor, | joined LINK as an enthusiastic ‘employee and quit lst month with no desire tolifta finger for them. It really bothers me, because I was always told to o your best, no matter how tough the situation, 1fs been ‘quite an experience” Discussion Questions 1. Klentify the various ways that employees expressed ther ob diseatsfaction on the LINKESO. 2, Shaun O'Neills commitment to the LINK organization dvrindled over his two years of employment. Discuss the factors that affected his organizational commitment. sec © Copy Stren, MeStans.Thiecte based on ac eens Bough ne nd omeafoation ve been changeM0 para. rom paces 3. Companies have been slow and celuctant to adopt social media channels, online videos and sirilar forms of commurication f you were a senior manager how would you introduce thes communication technologies nto the workplace to share information 2nd knowledge more effective? Sows Mine X Use Gen Map Seven 1 Dems rss BT hr Wet des ata Comma Magnet e209} WHEN BEING THE BOSS ISN’T ENOUGH. ‘BY CARLENE BOUCHER, RMIT UNIVERSITY ‘Central Health Aged Care Service (CHAC) isa luge, governmant- ‘owned orgeristion that employs more than S00 staff including ruries, doctors, alled health staff and many types of heath ‘susstante and administrative tf. The organisation provides arange ‘ofn-patient and outpatient eehabiltation services to older people In the community Is funded by the government, based on the ‘umber ofpatiants thatthe organition tests, and thece a tit forma that controls how mich Funding It receves. The day-to- ‘dy operations of CHAC ae overscan by the chief executive cfficer {CEO}, wh eeports tos board made up ofa range of professions inclading medial doctors, accountants and lawyers. The chal ofthe ‘boards Dr Leis lark whe recently retired and was 2 local general practitioner for many yes Heharbeen chairfor only three mont ‘The CEO of CHACIs Mizca Chae, who has Worked in aged care ‘forever 20 year She became CEO early in 207, Her background Iso fnance and huran resources ranagerent and she managed «numberof smaller facilities very effectively before coming to CCHAC. The elinial services at CHAC ave overseen by Dr Ryan Goaling,« medical dactor who has worked at CHAC fot 20 years and became medical dirsctor in 2008. He sa very well-known and respected doctor specialising nthe eae and treatmant of elder people. He had applied unsuccessful forthe job of CEO when "Ms Chan was appoint. Recently there ve Been a number ofastances where Ms Chan snd Goallng have csagred and the staff have disobeyed Ms ‘Chalscrections and complied with Dr Gosling request. The most recent ofthe incidents wos about the transfer ofa veryill patient toanetherfacity. Ms Chan wanted to transfer the patient because she belived it would be too expensive For CHAC to provide the cae thatthe patient needed, she alo had some doubts sbout whether Dr Gorling had the medical expertise nasded to treat ‘the patient. She thought that the patent would be better off in DISCUSSION QUESTIONS «2 Facil where there was a range of specialists, rather than jos _eratucins. However Or Gosling believed that the patine should net be transferred becouse the long ambulance vip might harm he He tliobelievedthat he are the other medial staff were capable ‘resting the patiant He thought that Mz Chan was mare concern bout being sed i something went wrong than about what was ‘est for the patient The other medkel sta supported Or Gosting and Ms Chan was not prepared to cause conflict by insisting that ‘the patient be moved The patent stayed at CHAC and recovered, ‘but the cost ofthe intensive cae provided was considerable and ‘ranted a sigaticen nancial prablem for Me Chan, ‘Yesterday, Dr Gosling came to Ms Chan and told her that he ‘wanted one ofthe senior nurs dsmisied. He sai thatthe nurse ould not manage her staff was too concerned about haw much ‘money was beng spent on medical supplies and that she tied to save money atthe expense of patient cae: He told Ms Chan: "hat nurse will kl someone ene dey and you will be responsible. He aso sald thatthe nurse Ignored his orders and did nat dscpine ‘ere junior nursing staff when they wre rae to him. ‘Ms Chan considered what she had been told and declded that she would not sack the senior nurse. She tld Or Gosling thatthe ‘nurse was doing what wat bet forthe healtheare service and for the patients. she suid that she thought was a personality conflict ‘between himself and the nurse and that he needed to be more understanding of others responsbitie’ She sai It won't do any ‘of the patients any good if we ran out oF money becaure we just spend it on whatever we le “Today, Or Gosling eile the char of the board tendarng his resignation. nis eal tor Cask he sid that he could no longer continus in the coe of senior doctor wile Mr Chan challange hs lives judgments and didnt gve him the respect he deserved. “The char, De Clark, kre that there has been snmering dicontent between the two bu dd rot know ting ware hs bad He wants support Ms Chanstheboardthinkshahas done a very goodjob but ‘they donot want to lose Dr Galina he sa very good doctor and has strong support from the ther medial staf. Or Cla Fears that 1 Dr Gosing leaves, many of the snl macial staff wil bole. 1L_ What types of power and what influence tacts ara Ms Chan and Or Gosing using? 2. Dr larkhas ranged separate meetings with both Ms Chan andl Dr Gosling to dicus the situation, What advice shoulie give bath of them? The advice to exch of them may be efferent 3. If.after taking with the two staff involved things donot improve, what should Dr Cla do?THE POISONED CHALICE '5y MATTHEW MCOONALD, UNIVERSITY OF NEW SOUTH WALES Joseph had been eon eacer fortwo yt and felt wasready te tke the next step in is public servi carer He had bogun tis eaver asa gradvate trainee Inthe Dopartment of Agriculture after completing double degree in commerce ad environmental lence. After his tralesship he was offered permanency 25 & policy offer, eventually ing to the past of team leader. As & feam leader Joseph felt he had guined th tst and respect of his fur staf members and had learnt the basic sls oF being 2 manage. Joseph applied for various management positions within his ‘own department without succes. Undeterred, he applied for 2 position in ancther goverment department responsible for ‘environment and heritage ond was sucessful, The role involved taking orr the postion of manager of a ‘taskforce’ that had been set up five months previously. The taskforce was made up of 10 team members responsible for developing ard implementing a set of government pote and programs designed to asst primary producers to manage better the environmental threats to ther Tand. Joseph cult have been happier with his new promotion nde looked forwacd to applying what he had learned 2 team leader to the challenges of his new pot. “he taskforce tself was divided into two teams The fist teamethe policy tums respon for developing policies in conlstion wth the ministers oes that would underpin the progams io be eventaly rolled out al over the court. This tam was made up of highly experienced members The second teamthe “implementation team'—was responsible for implementing the policies developed by the policy team. The jab ofthe implementation tem was to deal wih the lgitis of implementing the progarms and working withthe numerous stalolders involved For Joseph everything started out wellin his new postion He _rdualy got to know each ofthe team members, who seemed Shlled and competert in each of thee roles. He aio began to Understand beter the job thatthe taskforce was required to do. However the day tured into weeks some meer eoblems in ‘he tishforce began to appes. “the fist major problem was talldher sections within the epartment were nbelpul ard dificult to deal with wien he nade requests of them or sought ointiat cllabortions, When teased hisstaff why this ws the ave, the mot commmentesponse vas thatthe departmant had ‘hd tn forthe taskforce frm {ay one because the department members saw the taforce as posing treat to their own postions. Thebad Hood between the {arkfore and the rest ofthe department made Josephs pstion End of Port Cose Studies PART ‘very iffcuttbecausehe ond his staff were heavily reliant on other areas of the department for their expertise, advice and assistance In order to menage the project successful. “The second major problem was the taskforce tel. Joseph 4 began to realize thit the two teams were highly antagonist ‘towards exch other. Thie war evident in taskforce meetings, where ‘there was an obvious hostility between them, Joseph alo discovered that vary litle had been achieved since the taskforce was setup, and found that was now wellbeing the governmant’ schedule, However the full Implications of Josepis predicament bocame apparent only after a revealing conversation ‘wth Alon, a jnlor member of the implementation team, while ‘working back ate one evening. ‘Alison told Joseph that the previous manager of the taskfocc, John had left the postion because ofthe problems associated with it Everything had started out well however, then the policy team had begon to treat the implementation team 3 inferior because the implemenation tar members were younger nage were les ciperiencad and had made a majr blunder in the frst feo weeks by getting «national farmers union offi, After this under the policy team had begun to refer tothe implementation tearnas the Ieiots. The policy tem ha also taken a superior attitude towards members of other sections within the department because of their close eelationship withthe misters office. TAs problem came to a head after 3 chan of emails had been looked to the testof the department by @member ofthe implementation team, ‘who had inadvertently received them. in the ema, members (ofthe policy team had made diparaing romarks about peopte fromm other sections with whom they had been working This hed crested a furore inthe department. Ata esl, numberof formal complaints about mambers ofthe policy tam had bean made Instead of esling with this sed the other problems associated with the taskforce, the previous manager, John, had closeted himself away in bis office, hoping they would go away. Realluing that events were starting to get out of contre Jim's manager, Max, Had stepped into try and sort out the situstion. He had done this by speaking with all of the taskforce members ‘both individually nd asa group. This had made a difference for 8 share times however, the antagonism between the two teams in the taskforce had eventually returned, and It had seemed that nothing could be done to repair the damage inflicted by the leaking of the emails Ie was at this point that John had resigned. Due to the tat that hung over the taskforce, no one jn the department had been willing to apply fr the now vacant positon of easkfore manager ‘After speaking with Alison Joseph realized he ad been handed 1 poisoned chalice’ that nobody elie wanted. He became vary ‘worted thatthe taskforce would not mect the departments and the goveroment’ objectives and timelines and that he would be blamed forts fallure, adversely affecting his long term career and future promotion prospects,Organisational Behaviou, Emerging Knowledge / Global Insights, Fourth AsiaPac Eon 412 PARTS Team Processes DISCUSSION QUESTIONS 1. Using the model of cofct processes, identify the sources of conflict between the policy team ed the implementation team, 2. Were Mas actions approprst in thi stustle? fo, why? f nt, what should he have done instead? 3. Whet actions should Joreph take to ensure thatthe taskforce moss the governments objectives and timelines? STAR ENTERPRISES— RITA'S ISSUES AT WORK* [BY NUZHATLOTIA, UNIVERSITY OF MELBOURNE Rita has been working for Star Enterprises forthe lst 1S years. Stor Enterprises is a madiomesized auto-parts manufacturer and supplies parts to one of the largest car manufacturing companies in Ausra, The company has 450 employees. Despite the recent financial eri, Star Enterprises has not suffered grat lssos. This is desta thele commitment to quality andrei. Rita started eut on the factory floor when she began working or Star Enterprises 9320 year old She has since then worked her way through to her current postion asthe senior supervisor Inthe {Quality Control Department, She hasbeen working inthis postion for the lst three years She hss moved up to mare savior positions In the company because she is recognised as a hard-working and dedicated worker who fakes great pride nthe wos that she does. Rite one ofthe most experienced wotkars in the saction and ‘he quality control manager elles heavily on her knowledge and ‘experience, Se knows almost everyone at the company and has ‘developed good relations with her co-workers, who ly on her or “support and expertise Recent, Rits hasbeen very vohappy with thasituation a work, all tated wher her boss, lake, the quality contrat manager, left for a serior postion in Star Enterprises’ sister company. ‘Affe he lef ite was aked bythe general maragar if she would ‘consider working as the acting quality control manager until the ‘peaition was ied Rita wa vary happy to take up the opportuity. ‘She had often taken on that postion informally inthe past when Mr Blake had been avay on leave or professional development. ‘She had slwaye felt that, being tha most experianced person inthe ‘department, it washer responsiblity to take on these eeltional ‘ates wha er boss was away She felt asense of pride in doing so. When the offer of becoming the acting quality contol manager ‘was made to her sx months ago, she was very excited and Fel that the company had acknowledged her contbutin, her experience ndher dedication toher work by giving hr this responsbilty. She ‘was also quite happy to take onthe poition as It meant pay ese 2 well and she could do with the adational Income as she had recently bought house and wes findngit dificult ro manage with her aster income. ita was really enjoying ts added responsibilty of managing the department. She had the opportunity to patcipate in senior ‘management meetings and found that she was abla to contribute the discussions. The general maneger was very supportiveand would ‘often drop by her ofce to make sure she was coping well wth the ‘wot, and was abvaye available for chet she needed help. While she fad settled ito ths new role quite well she was strggling ‘with manging the budget and finances of the department She had ‘never dealt with departmental frances or managed budgets inher pat roles, even when she was Informally acting on the managers behalf se fete that se needed zome fora trainngin the area to ‘enable ber to Function wall n this aspect of the ja, Sho looked up tama short courses being offered by professional development and ‘raining orgeistions and found one that she felt was perfect for herneeds The course was a bit expensive, but she fet thatit would be vary beneficial despite the cost. “The next day, she appreached the general manager with 2 request for fencing her to atend the 1-day trlnng. While the general manager chowed empathy for her situation he said that he could not approve tis expenditure as they ad already advertised forthe positon anc hey wouldbe hiring a manage soon at which pointshe would go back ther senier supervisor ale He explained that he could aot justy the expenditure on Rita’ professional development ‘lta could not believe what she had just heard. She had been ‘unaware thatthe manager poston was being advertised, She was ‘very uptet and this wat obvious from her face. she mumbled, “Tunderstand’ and quickly got up end lef the goneral manager’ ‘office The truth was that she dd not understand in fact, she Fel betrayed, She had inher heart hop that her acting role would eventual tum into a permanent position, as she felt that she had been doing her job really well except forthe budgetary side of things which she was quite willing to lear abost. ‘After coming out ofthe general managersaffc, she ran tober office, locked the dar and started eying, She fl very upset and ‘angry. She fle that sho ad always given her best to the company, but had been let down At that moment, she decided that f sho ‘was going tobe tested so badly then she would have nothing £0 do with the company. She would quit tomerrow. “That evening at home, she realised that she could not make uch a rath decison a she could not afford to lose the income. ‘So, she thought to herself! wll stay, but I wil show them what they av losing out an. She continued to workin the acting qualty ‘cues peprdy Nacht et, Denrmer of Maragement erase very of Meoure Ths cbt to beepoduced edad hoot| rgorizationst Behavior, Sth Eaton “0 Aaseiond Coe ‘mine, I still wouldm get the bonus. At least Il get one moze day’ pay this way” "That night, Packer was livid when Millar reported that hnehed completed five and a half lengths. Parker had done ten and a quarter lengths, and Talbot had completed eight. Boyce proudly announced that he finished seven and half lengths, but sheepishly added that Talbot had helped him swith some oft, All that remained were the two and a half Jengths that Milla hed not completed “The job was finished the nest morning end the crew de- ‘mobilized, Miler has never worked for Arctic Mining ‘Consultanis again, despite being offered work several tiraes by Parker, Boyce sometimes does staking for Arctic and ‘Talbot works full ve withthe company. opie Steve. MeStane an Tn Nel Thiscase ssl on ‘Slt eis bt ses nc ae farses ave bee hanged ‘sina soonynsy. CASE 2: BRIDGING THE TWO WORLDS—THE ORGANIZATIONAL DILEMMA By William Todorovic, Indiana-Purdue University, Fort Wayne 1 had been hired by Aluminum Elements Corp. (AEC), and twas my first day of work. I was 26 years old, and T was now the manager of AEC customer service group, which Tocked after customers, logistics, and some of the raw ma- terial porchasing, My superior, George, wes the vice presi dent of the company. AEC manufactured most of is products from aluminum, a majority of which wece des- fined for the construction industry. 'As I walked around the shop floor, the employees ap- peared to be concentrating on their jobs, barely noticing mre. Management held daly meetings, in which various ‘production issues were discussed. No one from the shop ‘oor was invited tothe meetings, unles there wasa specific problem. Later I also learned that management had sepa- fate washrooms, separate lanchrooms, as well as other perks that floor employees did not have. Most ofthe floor employees felt thet management, though polite on the sus~ Face, didnot realy fel they had anything to lean from the floor employees. Joli, who worked on the aluminum slitter—a crucial operation cequired before any other operations could commence—had a number of unpleasant encounters with ‘George. As a reelt, George usually sent writen memos to the floor to avoid a direct confrontation with John. Because the directions in the memos were complex, these memos ‘were offen more than two pages in length ‘One morning, as I wes walking around, I noticed that John was very upset. Feelin that perhaps there was some thing I could do, I approached John and asked him if T ‘could help, He indicated that everything was just fine. rom the looks ofthe situation, and Johns body language, I felt that he was willing to tall, but John knew that this wes not the way things were done et AEC. Tony, who worked at the machine next to John’, then cursed and sad that he office guys only cared about schedules, not bout the peo- ple down on the floor. {Just looked at him, and then said that only began working here Ist week, but I thought that I could address some of ther issues. Tony gave mes strange Took, shookthis head, and went back to his machine. {could ‘ear him stil sweering a8 Left, Later Treaized that mostof the office staff were algo offended by Tony’ language. ‘On the way back to my offic, Lesley, a recently hired engineer from Russa, approached me and pointed out that the employees were not accustomed to management tall ing to them, Management only issued orders and made demands, As we discussed the different perceptions be ‘pween office and floor sta, we were interrupted by avery oud lunch bell, which startled me. I was happy to join Lesley for luneh, but she asked me why I was not eating in the office lunchroom. I replied that if | was going to un- derstand hiow AEC worked, I had to get to know all the people beter. In addition, I realized that this wos not how things were done and wondered about the nature ofthis apparent division between the management and the floor. Inthe lunchroom, the other workers were amazed to see me there, commenting that I was just new and had not learned the ropes yet ‘After lunch, when F asked George, my supervisor, about his recent confrontation with John, George wes surprised that John got upset, and exclaimed, "T just wanted John to Iknow that he did a great job, and asa reslt, we wil beable to ship on time one large order tothe West Coast. In fact, I thought Iwas complimenting him” Earlier, Lesley had indicated that certain behavior was ‘expected from management, and therefore from me.I rea soned that [ did not think thot this behavior works, nd besides that, It wos not what I believed or how I cared to behave, For the nest couple of months, I simply walked stound the floor and took every opportunity to talk to the shop floor employees. Often, when the employees related specific information about their workplaces, I felt that it ‘went over my head, Frequent, Thad o write down the in- formation and revisit it ter. made a point of listening to them, identifying where they were coming from, and try ing to understand them. Ineeded to keep my mind open to new ideas. Because the shop employees expected me to make requests and demands, ! made a point of not doing. ‘any of that. Soon enough, the employees beceme friendly,‘Organizational Behavior Emerging Knowledge Global Rey: Sith Ett ‘Adee Csse and started to accept meas one oftheir own, or at east asa tiferent type of a management person. Dring my third month of work, the employees showed me how to improve the scheduling of jobs, especially those ‘on the alumintun litter bo fat, the greatest contribution ras made by John, who demonstrated better ways to com= bine the most common siting sizes and reduce waste by retaining some ofthe "coramon-sized” material for new or- ‘ers, Seeing the opportunity I programmed a spreadsheet to caleulate and track inventory. Ths, In addition to beter planning and forecasting, allowed us to reduce our new or- er turnarourels from four to five weeks to in by 10:00 a.m. ‘and out by 5:00 pm. on the same day. ‘BY the time I was employed for four months, I realized that members from other departments came fo me and asked me to relay messages tothe shop employees. When 1 Ssked wihy they were delegating tis task to me, they stated that [spoke the same language as the shop employees. I ‘creasingly, I became the messenger forthe ffice-to-shop ‘oor communication. (One morning, George called me into his office and ‘complimented men the levels of customer service andthe improvements that had been achleved. As we talked, 1 mentioned that we could nat have done it without Johns haelp, “He really knows his tulf, and he is good,’ said. suggested that we consider bim for some type of promo: tion, Also, {hoped that this would bea postive gesture that ‘would improve the communication between the office and shop floor. ‘George turned and pulled a flyer out of his desk, “Tere is a management skills seminar, Do you think we should fend John toi?” “That isa great idey" | exclaimed, "Perhaps it would be good if he were to receive the news from you directly, Geonge” George agreed, and after discussing some other iasues, we parted company. "That afternoon, John came into my office, upset and ready to quit “After all my effort and work, you guys are ending me for training eeminars. So, am 1 not good. ‘enough for you?"Organizational Behavior Sith Eltion we Aol cose, University of Western Australia ‘The Regency Grand Hotel is a five-star hotel in Bangkok, ‘Thailand, The hotel was established 15 yeas ago by alocal consortium of investors and has been operated by a Thai general manager throughout this tine, The hotel Is one of Bangkok’s most prestigious hotels, and its 700 employees enjoy the prestige being associated with it.The hotel pro Vides good welfare benefits, above-market-rate salaries, and job security In addition, employees received a year- end bonus amounting to four months salery, regardless of the hotels overall performance during the yar. Recently, the Regency was told to a large US. hotel chain that was very keen to expand its operations into ‘Thalland, When the acquisition was announced, the gen- eral manager decided to take early retirement when the hhotel changed ownership. The ULS. hotel chain kept al the Regency employees though afew were transferred to other positions John Becker, an American with 10 years of man- agement experience with the hotel chain, was appointed as the new general manager of Regency Palace Hotel, de to ‘is previous successes integrating newly acquired hotels in the United States. In most ofthe previous acquisitions, Becker took over operations with poor profitablty and low morale Becker i a strong believer in empowerment. He expects ‘employees to go beyond the guidelines and standards to consider guest needs on a case-to-case basis. He believes employees must be guestoriented at all mes to provide excellent customer service. From his US. experience, Becker has found thet empowerment increases employee ‘motivation, performance, and Job satisfaction, all of which contribute to the hotels profitability and customer service ratings. Soon after becoming general manager in Regency Palace, Becker introduced the practice of empowerment to replicate the successes tet be had achieved back home. ‘The Regency Grand Hotel has been very profitable ‘throughout its 15-year history. Employees have always worked according to management’ instructions. Tas sponsibility was to ensure that the instructions fcom their managers were caried out diligently and conscientiously. Tnnovetion and creativity were discouraged under the pr vious management, Indeed, employees were pualshed for their mistakes and discouraged from trying out ideas that hhad not been approved by management. As a result, em- ployees were afrald tobe innovative or take risks. Becker met with the Regent’s managers and depart ‘ment heads to explain that empowerment would be intro: duced in the hotel. He cold chem that employees must be ‘empowered with decision-making authority so that they CASE 7: THE REGENCY GRAND HOTEL By Elizabeth Ho, Gucci Group, under the supervision of Steven L. McShane, could use thei ive, creativity, and judgment to satisfy guest needs or handle problems effectively and ef. ficiently. However, he stressed that the more complex is ‘sues and decislons were to be refered to superiors, who were to coach and assist rather than provide direct orders, Furthermore, Becker stressed that mistakes were allowed. but he could not tolerate thatthe same mistakes be made more than twice. He advised managers and department heads not to discuss minor isues, problems, or decisions with him; however, they were to bring important and me- jor issues and decisions to him, He concluded the meeting by asking for feedback. Seversl managers and department Iheads tld him that they iked the idea and would support, it, while others simply nodded their heads. Becker was pleased with the response and eager to have his plan implemented. In the past, the Regency hed emphasized administrative control, resulting In many bureaucratic procedures ‘throughout the orgenization. For example, the front coun- ter employees needed to seek approval from their manager before they could upgrade guests to another category of room, The front counter manager would then write and submit a report to the general manager justifying the up grade. Soon after his meeting with managers, Becker ¢e- duced the number of bureaucratic rules at the Regency and allocated more decision-making authority to frontine em- ployees. This action upset those who previously had deci- sion-making power over these issues, Asa result several of these managers left he hotel Becker also began spending most of his time cbserving ‘and interacting withthe employees atthe front desk lobby, restaurants, and various departments. This dicectinterac- tion with Becker helped many employees understand what he wanted and expected of them. However, the employees iffculty trying to distinguish between major and ‘minor Issue of decision, More often than not{Zupervisors ‘would reverse employee decisions by stating that they were sajor issues requiring management approval. Employees ‘who displayed initiative and made good decisions in sati- fying the needs of the guests rarely received any positive feedback fom their supervisors. Eventually, mast ofthese employeelost confidence in making decisions and re verted back to relying on thelr superiors for decision making, Not ong ater the implementation ofthe practice of e- powermenf)Becker realized that his subordinates were consulting him more frequently than Before. Most of thera came to him with minor issues and consulted with him on.Organizational Behavior Emerging Knowledge, Global Realty, Sith Edition ost minor decison. Heidt spend most ofhis tine at teadngt hi subordnates Son he ep of gly fas ‘trated and exhausted, and often he would tell his secretary that Miles heh so ae don anyone dit me” Bester thought that the pracice of empowerment would benefit the overall performance ofthe hotel How: er contary to hs expectation, th busing overall pesfomanee ofthe hotel began to deteriora There had een at increasing numberof guest complaint In the past the hotel ad mlnial guest compat Now there were Epalfeant aumber of formal writen complaints every month Many otber guest oped thee dasaisaton ver Sally to hoe! employees, Tauber of mistakes rude by tmployees hed been on an incest, Becker was Very Up sera he vealed that two leal newspapers and an Srereas newspaper had publlded negative feedback a about the hott in tems of serie tundards, He was mos. Alnvewed when en international vel magsine ad voted ftone gaa ightmare ho “Thc eas ees ofthe employees were continuously inounting sine the introduction of enpovrermenig A Tener de ples as icening aan sling Sie Insdattor@npope turnover ates ad eaced an “tn hgheth good working lationship tht were SEanluhedunder old monoernent had been severly Stsined Th employes were no longer ated sn sup- port of one another nse, hey were quceto pot Rrget and bets when mistake were made or ro lee ote. ‘he This case based on te vet bathe nds and as have beer dsnged