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CASE STUDY 4.

1 ROUGH SEAS ON THE LINK650


Professor Suzanne Baxter was preparing for her first class pumped up about working on a new rig that had received
ofthe semester when Shaun O'Neill knocked lightly on the so much media attention. I was quite impressed with the
open door and announced himself: "Hi, Professor, I don't recruiters-so were several other hires-because they re-
suppose you remember me?" Professor Baxter had large ally seemed to be concerned about our welfare out on ·the
classes, but she did remember that Shaun was a student in platform. I later discovered that the recruiters came from a
her organizational behavior class a few years ago. Shaun consulting firm that specializes in hiring people. Come to
had decided to work in the oil industry for. a couple of years think of it, we didn't meet a single LINK manager during
before returning to school to complete his diploma. that process. Maybe things would have been different if
"Welcome back!" Baxter said as she beckoned him into some of those LINK supervisors had interviewed us.
the office. "I heard you were working on an oil rig in the "Working on LINK650 was a real shock, even though
United Kingdom. How was it?" most of us had some experience working in the oil fields.
"Well, Professor;' Shaun began, "I had worked two sum- I'd say that none of the SO nontechnical people hired was
mers in the Texan oil fields and my family's from Ireland, quite prepared for the brutal jobs on the oil rig. We did the
so I hoped to get a job on the LINK650. It's that new dirtiest jobs in the biting cold winds of the North Sea. Still,
WestOil drilling rig that arrived with so much fanfare in during the first few months most of us wanted to show the
the North Sea fields a few years ago. The LINK650 was company that we were dedicated to getting the job done. A
built by LINK, Inc., in Texas. A standard practice in this couple of the new hires quit within a few weeks, but most of
industry is for the rig manufacturer to manage its day-to- the people hired with me really got cilong well-you know,
day operations, so employees on the LINK6SO are managed just like the ideas you mentioned in class. We formed a spe-
completely by LINK managers with no involvement from cial bond that helped us through the bad weather and gru-
WestOil. We all knoW that drilling rig jobs are dangerous, eling work.
but they pay well and offer generous time off. A local news- "The LINK6SO supervisors were another matter. They
paper there said that nearly 1,000 people lined up to com- were mean taskmasters who had worked for many years on
plete job applications for the SO nontechnical positions. I oil rigs in the Gulf of Mexico or North Sea. They seemed to
was lucky enough to get one of those jobs. relish the idea of treating their employees the same way
"Everyone hired on the LINK6SO was enthusiastic and they had been treated before becoming managers. We put
proud. We were one of the chosen few and were really up with their abuse for the first few months, but things got

worse when the LINK6SO was shut down twice to correct concluded that the pers.on responsible wasn't properly
mechanical problems. These setbacks embarrassed LINK's trained and that employees were being pushed to finish
management and they put more pressure on the supervi- jobs without safety precautions. An}'W"ay, while the in-
sors to get us back on schedule. quiry was going on, several employees decided to union-
"The supervisors started to ignore equipment problems ize the rig. It wasn't long before most employees on
and pushed us to get jobs done more quickly \Vithout re- LINK6SO had signed union cards. That really shocked
gard to safety procedures. They routinely shouted obsceni- . LINK's management and the entire oil industry because it
ties at employees in front of others. A couple of my work was, I think, just the second time that a rig had ever been
mates were fired, and a couple of others quit their jobs. I unionized there.
almost lost my job one day just because my boss thought I "Since then, management has been doing everything in
was deliberately working slo'ivly. He didn't realize-or its power to get rid of the union. It sent a 'safety officer' to
care-that the fittings I \Vas connecting were damaged. the rig, although we eventually realized that he was a con-
Several people started finding ways to avoid the supervi- sultant the company hired to undermine union support.
sors and get as little work done as possible. Many of my Several managers were sent to special seminars on how to
coworkers developed back problems. We jokingly called it manage a unionized work force, although one of the topics
the 'rigger's backache; because some en1ployees faked their was how to break the union.
ailment to leave the rig with paid sick leave. "So you see, Professor, I joined LINK as an enthusiastic
''Along with having lousy supervisors, we were always employee and quit last month with no desire to lift a finger
kept in the dark about the problems on the rig. Supervisors for them. It really bothers me, because I was ahvays told to
said that they didn't know anything, which was partly true, do your best, no matter how tough the situation. It's been
but they said we shouldn't be so interested in things that quite an experience:'
didn't concern us. But the rig's problems, as well as its future
contract work, were a major concern to crew members who
Discussion Questions
weren't ready to quit. Their job security depended on the
rig's production levels and whether WestOil would sign 1. Identify the various ways that employees expressed
contracts to drill new holes. Given the rig's problems, most their job dissatisfaction on the LINK650.
of us were concerned that we would be laid off at any time. 2. Shaun O'Neill's commitment to the LINK organization
"Everything came to a head when Bob MacKenzie was dwindled over his two years of employment. Discuss the
killed because someone secured a hoist improperly. Not factors that affected his organizational commi~ent.
sure if it was mentioned in the papers here, but it was big Source:© Copyright Steven L McShane. This case is based on actual
news around this time last year. A government inquiry events, though names and some information have been changed.
I 410

3.
PART 3 Team Processes

Companies have been slow and reluctant to adopt social media channels, online videos and similar forms of communication. If you
were a senior manager, how would you introduce these communication technologies into the workplace to share information and
knowledge more effectively?
Sources: Mary Beth Matzek. 'RU on 2 Gen Y?' Marketplace, 4 September 2007.10; Richard Denniron, 'Encouraging BT's Authentic Vo ice of Leadership,' Strategic Communication Management 12,
no. 2{2008):12.

WHEN BEING THE BOSS a facility where there was a range of specialists, rather than just
geriatricians. However, Dr Gosling believed that the patient should
ISN'T ENOUGH
not be transferred because the long ambulance trip might harm her.
He also believed that he and the other medical staff were capable of
BY CARLENE BOUCHER, RMIT UNIVERSITY treating the patient. He thought that Ms Chan was more concerned
about being sued if something went wrong than about what was
Central Health Aged Care Service (CHAC) is a large, government-
owned organisation that employs more than 500 staff including best for the patient. The other medical staff supported Dr Gosling,
nurses, doctors, allied health staff and many types of health and Ms Chan was not prepared to cause conflict by insisting that
the patient be moved. The patient stayed at CHAC and recovered,
assistants and administrative staff. The organisation provides a range
but the cost of the intensive care provided was considerable and
of in-patient and out-patient rehabilitation services to older people
in the community. It is funded by the government, based on the created a significant financial problem for Ms Chan.
number of patients that the organisation treats, and there is a strict Yesterday, Dr Gosling came to Ms Chan and told her that he
wanted one of the senior nurses dismissed. He said that the nurse
formula that controls how much funding it receives. The day-to-
day operations of CHAC are overseen by the chief executive officer could not manage her staff, was too concerned about how much
{CEO), who reports to a board made up of a range of professionals money was being spent on medical supplies and that she tried to
including medical doctors, accountants and lawyers. The chair of the save money at the expense of patient care. He told Ms Chan: 'That
nurse will kill someone one day and you will be responsible'. He
board is Dr Lewis Clark, who recently retired and was a local general
practitioner for many years. He has been chair for only three months. also said that the nurse ignored his orders and did not discipline
The CEO of CHAC is Marcia Chan, who has worked in aged care more junior nursing staff when they were rude to him.
for over 20 years. She became CEO early in 2011. Her background Ms Chan considered what she had been told and decided that
she would iiot sack the senior nurse. She told Dr Gosling that the
is in finance and human resources management, and she managed
a number of smaller facilities very effectively before coming to nurse was doing what was best for the healthcare service and for
CHAC. The clinical services at CHAC are overseen by Dr Ryan the patients. She said that she thought it was a personality conflict
between himself and the nurse and that he needed to be 'more
Gosling, a medical doctor who has worked at CHAC for 20 years
understanding of others' responsibilities'. She said: 'It won't do any
and became medical director in 2009. He is a very well-known and
respected doctor, specialising in the care and treatment of older of the patients any good if we run out of money because we just
spend it on whatever we like'.
people. He had applied unsuccessfully for the job of CEO when
Today, Dr Gosling emailed the chair of the board tendering his
Ms Chan was appointed.
resignation. In his email to Dr Clark he said that he could no longer
Recently, there have been a number of instances where Ms Chan
and Dr Gosling have disagreed and the staff have disobeyed Ms continue in the role of senior doctor while Ms Chan challenged his
Chan's directions and complied with Dr Gosling's requests. The most clinical judgments and did not give him the respect he deserved.
The chair, Dr Clark, knew that there has been simmering discontent
recent of these incidents was about the transfer of a very ill patient
to another facility. Ms Chan wanted to transfer the patient because between the two but did not know things were this bad. He wants to
she believed it would be too expensive for CHAC to provide the support Ms Chan as the board thinks she has done a very good job, but
care that the patient needed. She also had some doubts about they do not want to lose Dr Gosling as he is a very good doctor and
whether Dr Gosling had the medical expertise needed to treat has strong support from the other medical staff. Dr Clark fears that
the patient. She thought that the patient would be better off in if Dr Gosling leaves, many of the senior medical staff will also leave.

DISCUSSION QUESTIONS
l What types of power and what influence tactics are Ms Chan and Dr Gosling using?
2. Dr Clark has arranged separate meetings with both Ms Chan and Dr Gosling to discuss the situation. What advice should he give both
of them? The advice to each of them may be different.
3. If, after talking with the two staff involved, things do not improve, what should Dr Clark do?
--.-1

End of Part-Case Studies PART 3

very difficult because he and his staff were heavily reliant on other~


THE POISONED CHALICE areas of the department for their expertise, advice and assistance:;_
in order to manage the project successfully. ._, _
The second major problem was _the taskforce itself. Joseph!,~
began to realise that the two teams were highly antagonistic:.
BY MATIHEW MCDONALD, UNIVERSITY OF NEW SOUTH WALES towards each other. This was evident in taskforce meetings, where ;~j
Joseph had been a team leader for two years and felt he was ready there was an obvious hostility between them. '
to take the next step in his public service career. He had begun Joseph also discovered that very little had been achieved since
his career as a graduate trainee in the Department of Agriculture the taskforce was set up, and found that it was now well behind the
after completing a double degree in commerce and environmental government's schedule. However, the full implications of Joseph's
science. After his traineeship he was offered permanency as a predicament became apparent only after a revealing conversation
policy officer, eventually rising to the post of team leader. As a with Alison, a junior member of the implementation team, while
team leader Joseph felt he had gained the trust and respect of working back late one evening.
his four staff members and had learnt the basic skills of being a Alison told Joseph that the previous manager of the taskforce,
manager. John, had left the position because of the problems associated with
Joseph applied for various management positions within his it. Everything had started out well; however, then the policy team
own department without success. Undeterred, he applied for had begun to treat the implementation team as inferior because
a position in another government department responsible for the implementation team members were younger in age, were less
environment and heritage and was .successful. The role involved experienced and had made a major blunder in the first few weeks
taking over the position of manager of a 'taskforce' that had been by getting a national farmers' union offside. After this blunder the
set up five months previously. The taskforce was made up of 10 policy team had begun to refer to the implementation team as 'the
team members responsible for developing and implementing a set idiots'. The policy team had also taken a superior attitude towards
of government policies and programs designed to assist primary members of other sections within the department because of
producers to manage better the environmental threats to their their close relationship with the minister's office. This problem
land. Joseph couldn't have been happier with his new promotion came to a head after a chain of emails had been leaked to the
and he looked forward to applying what he had learned as a team rest of the department by a member of the implementation team,
leader to the challenges of his new post. who had inadvertently received them. In the emails, members
The taskforce itself was divided into two teams. The first of the policy team had made disparaging remarks about people
team-the 'policy team'-was responsible for developing policies from other sections with whom they had been working. This had
in consultation with the minister's office that would underpin created a furore in the department. As a result, a number of formal
the programs to be eventually rolled out all over the country. complaints about members of the policy team had been made.
This team was made up of highly experienced members. The Instead of dealing with this and the other problems associated
second team-the 'implementation team'-was responsible for with the taskforce, the previous manager, John, had closeted
implementing the policies developed by the policy team. The himself away in his office, hoping they would go away.
job of the implementation team was to deal with the logistics Realising that events were starting to get out of control, John's
of implementing the programs and working with the numerous manager, Max, had stepped in to try and sort out the situation. 1?1'
stakeholders involved. He had done this by speaking with all of the taskforce members
For Joseph, everything started out well in his new position. He both individually and as a group. This had made a difference for
gradually got to know each of the team members, who seemed a short time; however, the antagonism between the two teams
skilled and competent in each of their roles. He also began to in the taskforce had eventually returned, and it had seemed
understand better the job that the taskforce was required to do. that nothing could be done to repair the damage inflicted
However, as the days turned into weeks some major problems in by the leaking of the emails. lt was at this point that John had
the taskforce began to appear. resigned. Due to the taint that hung over the taskforce, no one
The first major problem was thaillther sections within the in the department had been willing to apply for the now vacant
department were unhelpful and difficult to deal with when he position of taskforce manager. I
made requests of them or sought to initiate collaborations. When After speaking with Alison, Joseph realised he had been handed I
i
he asked his staff why this was the case, the most common response a 'poisoned chalice' that nobody else wanted. He became very
was that the department had 'had it in' for the taskforce from worried that the taskforce would not meet the department's and
day one because the department members saw the taskforce as the government's objectives and timelines, and that he would be
posing a threat to their own positions. The bad blood between the blamed for its failure, adversely affecting his long-term career and
taskforce and the rest of the department made Joseph's position future promotion prospects.
Organisational Behaviour, Emerging Knowledge I Global Insights, Fourth Asia-Pacific Edition

412 PART 3 Team Processes

DISCUSSION QUESTIONS
1. Using the 'model of conflict processes', identify the sources of conflict between the policy team and the implementation team.
2. Were Max's actions appropriate in this situation? lf so, why? lf not, what should he have done instead?
3. What actions should Joseph take to ensure that the taskforce meets the government's objectives and timelines?

0
Rita was really enjoying this added responsibility of managing
STAR ENTERPRISES- the department. She had the opportunity to participate in senior
RITA'S ISSUES AT WORK' management meetings <1;nd found that she was able to contribute to
the discussions. The general manager was very supportive and would
often drop by her office to make sure she was coping well with the
BY NUZHAT LOTIA, UNIVERSITY OF MELBOURNE work, and was always available for a chat if she needed help. While
Rita has been working for Star Enterprises for the last 13 years. she had settled into this new role quite well, she was struggling
Star Enterprises is a medium-sized auto-parts manufacturer and with managing the budget and finances of the department. She had
supplies parts to one of the largest car manufacturing companies never dealt with departmental finances or managed budgets in her
in Australia. The company has 450 employees. Despite the recent past roles, even when she was informally acting on the manager's
financial crisis, Star Enterprises has not suffered great losses. This is behalf. She felt that she needed some formal training in the area to
due to their commitment to quality and reliability. enable her to function well in this aspect of the job. She looked up
Rita started out on the factory floor when she began working some short courses being offered by professional development and
for Star Enterprises as a 20 year old. She has since then worked her training organisations and found one that she felt was perfect for
way through to her current position as the senior supervisor in the her needs. The course was a bit expensive, but she felt that it would
Quality Control Department. She has been working in this position be very beneficial despite the cost.
for the last three years. She has moved up to more senior positions The next day, she approached the. general manager with a
in the company because she is recognised as a hard-working and request for funding her to attend the 10-day training. While the
dedicated worker who takes great pride in the work that she does. gene·ral manager showed empathy for her situation, he said that he
Rita is one of the most experienced workers in the section and could not approve this expenditure as they had already advertised
the quality control manager relies heavily on her knowledge and for the position and they would be hiring a manager soon, at which
experience. She knows almost everyone at the company and has point she would go back to her senior supervisor role. He explained
developed good relations with her co-workers, who rely on her for that he could not justify the expenditure on Rita's professional
support and expertise. development.
Recently, Rita has been very unhappy with the situation at work. Rita could not believe what she had just heard. She had been
It all started when her boss, Mr Blake, the quality control manager, unaware that the manager position was being advertised. She was
left for a senior position in Star Enterprises' sister company. very upset and this was obvious from her face. She mumbled,
After he left, Rita was asked by the general manager if she would 'I understand' and quickly got up and left the general manager's
consider working as the acting quality control manager until the office. The truth was that she did not understand; in fact, she felt
position was filled. Rita was very happy to take up the opportunity. betrayed. She had in her heart hoped that her acting role would
She had often taken on that position informally in the past when eventually turn into a permanent position, as she felt that she had
Mr Blake had been away on leave or professional development. been doing her job really well except for the budgetary side of
She had always felt that, being the most experienced person in the things, which she was quite willing to learn about.
department, it was her responsibility to take on these additional After coming out of the general manager's office, she ran to her
duties while her boss was away. She felt a sense of pride in doing so. office, locked·the door and started crying. She felt very upset and
When the offer of becoming the acting quality contra I manager angry. She felt that she had always given her best to the company,
was made to her six months ago, she was very excited and felt that but had been let down. At that moment, she decided that if she
the company had acknowledged her contribution, her experience was going to be treated so badly then she would have nothing to
and her dedication to her work by giving her this responsibility. She do with the company. She would quit tomorrow.
was also quite happy to take on the position as it meant a pay rise That evening at home, she realised that she could not make
as well, and she could do with the additional income as she had such a rash decision as she could not afford to lose the income.
recently bought a house and was finding it difficult to manage with So, she thought to herself, I will stay, but I will show them what
her current income. they are losing out on. She continued to work in the acting quality

i Case study prepared by Nuzhat Lotia, Department of Management and Marketing, University of Melbourne. This case ls not to be reproduced or distributed without
permissiC'._n.
Organizational Behavior, Sixth Edition

460 Additional Cases

mine, I still wouldn't get the bonus. At least I'll get one The job was finished the next morning and the crew de-
more day's pay this way:' mobilized. Millar has never worked for Arctic Mining
That night, Parker was livid when Millar reported that Consultants again, despite being offered work several times
he had completed five and a half lengths. Parker had done by Parker. Boyce sometimes does staking for Arctic, and
ten and a quarter lengths, and Talbot had completed eight. Talbot works full time with the company.
Boyce proudly announced that he finished seven and a half
lengths, but sheepishly added that Talbot had helped him Copyright© Steven L. McShane and Tim Neale. This case is based on
with some of it. All that remained were the two and a half actual events, but names and some characteristics have been changed
lengths that Millar had not completed. to maintain anonymity.

CASE 2: BRIDGING THE TWO WORLDS-THE ORGANIZATIONAL DILEMMA


By William Todorovic, Indiana-Purdue University, Fort Wayne

I had been hired by Aluminum Elements Corp. (AEC), and hear him still S\Vearing as I left. Later I realized that most of
it was my first day of work. I was 26 years old, and I was the office staff were also offended by Tony's language.
now the manager of AEC's customer service group, which On the way back to my office, Lesley, a recently hired
looked after customers, logistics, and some of the raw ma- engineer fron1 Russia, approached me and pointed out that
terial purchasing. My superior, George, was the vice presi- the employees were not accustomed to management talk-
dent of the company. AEC manufactured most of its ing to then1. Management only issued orders and made
products from aluminun1, a majority of \Vhich were des- demands. As we discussed the different perceptions be-
tined for the construction industry. tween office and floor staff, \Ve were interrupted by a very
As I walked around the shop floor, the employees ap- loud lunch bell, which startled n1e. I was happy to join
peared to be concentrating on their jobs, barely noticing Lesley for lunch, but she asked n1e why I was not eating in
me. Management held daily meetings, in which various the office lunchroom. I replied that if I \Vas going to un-
production issues were discussed. No one from the shop derstand how AEC worked, I had to get to know all the
floor was invited to the meetings, unless there was a specific people better. In addition, I realized that this \Vas not how
problem. Later I also learned that management had sepa- things were done and \Vondered about the nature of this
rate washrooms, separate lunchroon1s, as well as other apparent division between the management and the floor.
perks that floor employees did not have. Most of the floor In the lunchroom, the other workers were amazed to see
employees felt that management, though polite on the sur- me there, commenting that I was just new and had not
face, did not really feel they had anything to learn from the learned the ropes yet.
floor employees. After lunch, when I asked George, my supervisor, about
John, who worked on the aluminum slitter-a crucial his recent confrontation with John, George \Vas surprised
operation required before any other operations could that John got upset, and exclaimed, "I just wanted John to
commence-had a number of unpleasant encounters with know that he did a great job, and as a result, we will be able
George. As a result, George usually sent written memos to to ship on time one large order to the West Coast In fact,
the floor to avoid a direct confrontation with John. Because I thought I was complimenting him:'
the directions in the memos were complex, these memos Earlier, Lesley had indicated that certain behavior was
were often more than two pages in length. expected from management, and therefore from me. I rea-
One morning, as I was walking around, I noticed that soned that I did not think that this behavior \Vorks, and
John was very upset. Feeling that perhaps there was some- besides that, it was not what I believed or how I cared to
thing I could do, I approached John and asked him if I behave. For the next couple of months, I simply walked
could help. He indicated that everything was just fine. around the floor and took every opportunity to talk to the
From the looks of the situation, and John's body language, I shop floor employees. Often, when the employees related
felt that he was willing to talk, but John knew that this was specific information about their workplaces, I felt that it
not the way things were done at AEC. Tony, who worked at went over my head. Frequently, I had to write down the in-
the machine next to John's, then cursed and said that the formation and revisit it later. I made a point of listening to
I office guys only cared about schedules, not about the peo-
ple down on the floor. I just looked at him, and then said
them, identifying where they were coming from, and try-
ing to understand them. I needed to keep my mind open to
I that I only began working here last week, but I thought that
I could address some of their issues. Tony gave me a strange
new ideas. Because the shop employees expected me to
make requests and demands, I made a point of not doing
i' look, shook his head, and went back to his machine. I could any of that. Soon enough, the employees became friendly,

f,
I,
ii
r'
ii
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Organizational Behavior: Emerging Knowledge, Global·Reali~;:SJ:d.h Editi.ort

Additional Cases 461

and started to accept me as one of their O\vn, or at least as a One morning, George called me into his office aild
'i. different type of a management person. complimented me on the levels of customer service and the
During my third month of work, the employees showed improvements that had been achieved. As \Ve talked, I
me how to improve the scheduling of jobs, especially those mentioned that we could not have done it without John's
on the aluminun1 slitter. In fact, the greatest contribution help. "He really knows his stuff, and he is good," I said. I
was made by John, who demonstrated better ways to com- suggested that we consider him for some type of promo-
bine the most common slitting sizes and reduce waste by tion. Also, I hoped that this would be a positive gesture that
retaining some of the "common-sized" material for new or- would improve the communication between the office and
ders. Seeing the opportunity, I programmed a spreadsheet shop floor.
to calculate and track inventory. This, in addition to better George turned and pulled a flyer out of his desk. "Here
planning and forecasting, allowed us to reduce our new or- is a management skills seminar. Do you think \Ve should
der turnarounds from four to five weeks to in by 10:00 a.m. send John to it?"
and out by 5:00 p.m. on the same day. "That is a great idea;' I exclaimed, "Perhaps it would be
By the time I was employed for four months, I realized good if he \Vere to receive the news from you directly,
that members from other departments came to me and George:' George agreed, and after discussing some other
asked me to relay messages to the shop employees. When I issues, we parted company.
asked why they were delegating this task to me, they stated That afternoon, John came into my office, upset and
that I spoke the same language as the shop employees. In- ready to quit. ''After all my effort and work, you guys are
creasingly, I became the n1essenger for the office-to-shop sending me for training seminars. So, am I not good
floor con1n1unication. enough for you?"

J
Organizational Behavior, Sixth Edition

468 Additional Cases

CASE 7: THE REGENCY GRAND HOTEL


By Elizabeth Ho, Gucci Group, under the supervision of Steven L. McShane,
University of Western Australia
The Regency Grand Hotel is a five-star hotel in Bangkok, could use their initiative, creativity, and judgment to
~! Thailand. The hotel was established 15 years ago by a local satisfy guest needs or handle problems effectively and ef-
consortium of investors and has been operated by a Thai ficiently. However, he stressed that the more complex is-
;.1 general manager throughout this time. The hotel is one of sues and decisions were to be referred to superiors, who
:;
:i Bangkok's most prestigious hotels, and its 700 employees were to coach and assist rather than provide direct orders.
I enjoy the prestige being associated with it. The hotel pro- Furthermore, Becker stressed that mistakes were allowed
rl vides good welfare benefits, above-market-rate salaries, but he could not tolerate that the same mistakes be made
I and job security. In addition, employees received a year- more than twice. He advised managers and department
I end bonus amounting to four months' salary, regardless of heads not to discuss minor issues, problems, or decisions
~'
the hotel's overall performance during the year. with him; however, they were to bring important and ma-
Recently, the Regency was sold to a large U.S. hotel jor issues and decisions to him. He concluded the meeting
chain that was very keen to expand its operations into by asking for feedback. Several managers and department
Thailand. When the acquisition was announced, the gen- heads told him that they liked the idea and \vould support
eral manager decided to take early retirement when the it, while others simply nodded their heads. Becker was
hotel changed ownership. The U.S. hotel chain kept all the pleased with the response and eager to have his plan
Regency employees, though a few were transferred to other implemented.
positions. John Becker, an American with 10 years of man- In the past, the Regency had emphasized administrative
agement experience with the hotel chain, was appointed as control, resulting in many bureaucratic procedures
the new general manager of Regency Palace Hotel, due to throughout the organization. For example, the front coun-
his previous successes integrating newly acquired hotels in ter employees needed to seek approval from their manager
the United States. In most of the previous acquisitions, before they could upgrade guests to another category of
Becker took over operations with poor profitability and low room. The front counter manager would then write and
morale. submit a report to the general manager justifying the up-
Becker is a strong believer in empowerment. He expects grade. Soon after his meeting with managers, Becker re-
employees to go beyond the guidelines and standards to duced the number of bureaucratic rules at the Regency and
: :
consider guest needs on a case-to-case basis. He believes allocated more decision-making authority to frontline em-
employees must be guest-oriented at all times to provide ployees. This action upset those who previously had deci-
excellent customer service. From his U.S. experience, sion-making power over these issues. As a result, several of
Becker has found that empowerment increases employee these managers left the hotel.
motivation, performance, and job satisfaction, all of which Becker also began spending most of his time observing
contribute to the hotel's profitability and customer service and interacting with the employees at the front desk, lobby,
ratings. Soon after becoming general manager in Regency restaurants, and various departments. This direct interac-
Palace, Becker introduced the practice of empowerment to tion with Becker helped many employees understand what
replicate the successes that he had achieved back home. he wanted and expected of them. However, the employees
The Regency Grand Hotel has been very profitable haJ!difficulty trying to distinguish between ~major and
throughout its 15-year history. Employees have always minor issue of decision. More often than not,Wupervisors
worked according to management's instructions. Their re- would reverse employee decisions by stating that they were
sponsibility was to ensure that the instructions from their major issues requiring management approval. Employees
managers were carried out diligently and conscientiously. who displayed initiative and made good decisions in satis-
Innovation and creativity were discouraged under the pre- fying the needs of the guests rarely received any positive
vious management. Indeed, employees were punished for feedback {r~om their supervisors. Eventually, most of these
their mistakes and discouraged from trying out ideas that employee~lost confidence in making decisions and re-
had not been approved by management. As a result, em- verted back to relying on their superiors for decision
ployees were afraid to be innovative or take risks. making.
Becker met with the Regent's managers and depart- Not long after the implementation of the practice of em-
ment heads to explain that empowerment would be intro- powermen@Becker realized that his subordinates ·were
duced in the hotel. He told them that employees must be consulting him more frequently than before. Most of them
empowered with decision-making authority so that they came to him with minor issues and consulted with him on
Organizational Behavior: Emerging Knowledge, Global Realify, Sixth Edition

Additional Cases 469

about minor decisions. He had to spend most of his time at- about the hotel in terms of service standards. He was most
tending to his subordinates. Soon he began to feel highly frus- distressed when an international travel magazine had voted
trated and exhausted, and often he would tell his secretary that it "one of Asia's nightmare hotels:'
"unless the hotel is on fire, don't let anyone disturb me:' TheEi?ress levels of the employees were continuously
Becker thought that the practice of empowerment mounting since the introduction of empowermen~.L\_b­
would benefit the overall performance of the hotel. How- senteeism due tR_..5llness was increasing at an alarn1ing
ever, contrary to his expectation, the busine~and overall rate. In addition%mployee turnover rates had reached an
performance of the hotel began to deterioral~There had all-time high1CI'he good working relationships that were
been an increasing number of guest complaints. In the past, established under the old management had been severely
the hotel had minimal guest complaints. Now there were a strained. The employees were no longer united and.sup-
significant number of formal written complaints every portive of one another; instead, they were quick to point
month. Many other guests voiced their dissatisfaction ver- fingers and backstab when mistakes were made or prob-
bally to hotel employees. Th~umber of mistakes made by lems arose.
employees had been on an increase. Becker was very up-
set when he realized that two local newspapers and an Note: This case is based on true events, but the industry and names have
overseas newspaper had published negative feedback been changed.