HUMAN BEHAVIOUR

IN ORGANISATION

HAUSSER FOODS
PRODUCT
 PROBLEMS OF HAUSSER FOOD PRODUCT COMPANY

• Declining Sales Growth

Hausser Food Product Company is experiencing declining sales growth. The recent financials
of the company showed a drop-in growth of sale to 3%.

• Declining Earnings
The decline in sales growth was also followed with a greater decline in earnings of the
company. Hausser Foods earnings in the most recent year has declined sharply due to unused
capacity within the organisation.

CAUSES OF HAUSSER FOOD PRODUCT COMPANY’S PROBLEM

• Decrease in Birth Rate

One of the reasons for the decline in sales growth of Hausser Foods Product is the sudden
decrease in birth rate in the country.

• Food Safety
Another cause of decline in sales growth was the concerns for food safety in the industry. The
inclusion of food additives such as; flavouring, dyes, and preservatives, therefore, affected
the baby-food market. This led consumer advocates to push for parent to make their own
baby food.

• Competition
Competition in the industry was another factor behind the decline in sales growth of Hausser
Food Product Company. A number of new competitors has arisen and they competed on the
basis of price against the industry giants.

• Unused Plant & Warehouse Capacity

Unused plant and warehouse capacities was a contributor to the decline in earnings of
Hausser Food’s. The additional costs involved in servicing and maintaining the unused plant

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and warehouse capacity is affecting the bottom line of Hausser Food Products, since it is
generating zero income to the company.

• Mature Product Line

The Management of Hausser Food Product (HFP) is also of the opinion that the company’s
product line is a mature one. That is the product life might is at the declining stage of its life
cycle and that is probably the reason for slow growth in sales.

PROPOSED SOLUTIONS TO HAUSSER FOOD’S PROBLEM

• New Ideas from the Field

In the short-term, the Top Management of Hausser Foods Product is expecting new ideas from
the various Sales Managers and Teams on the field. The Management has promised a reward
of $500 to anyone who comes up with the idea that could help improve sales.

• Diversification
The long-term solution that was proposed by the Management of Hausser Foods Product
Company was diversification. According to Brenda Cooper, “Top Management has begun to
see the critical need to diversify, in other words to hedge our bets with some other lines of
products which are not dependent upon a steadily increasing birth rate”.

REASONS JAY BOYARS TEAM REFUSED TO DISCLOSE THEIR SECRET

The reasons behind the refusal of Jay Boyar’s team to disclose the sources of their superior
sales could be answered using the “Congruence Model, by David Nadler and Michael
Tushman. The model is based on the principle that a team or organization can only succeed
when the work, the people who do it, the organizational structure, and the culture all "fit"
together or, in other words, when they are "congruent". The congruence between two
components is defined as “the degree to which the needs, demands, goals, objectives, and/
or structures of one component are consistent with the needs, demands, goals, objectives,
and/ or structures of another component. The higher the compatibility, or congruence, the

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greater the performance of the organization. If one element is out of balance,
underrepresented or over represented, it can have a negative effect on performance as seen
in Hausser Food Products Company.

• Individuals/Organization Fit

This relates to how individuals’ needs are met by the organizational arrangements, the
perception of individuals about the organization and the convergence of the individuals and
the organization.

The organisational arrangement and design at Hausser Food Product (HFP) has created a
feeling of distrust and disconnect for Florida sales team. This is evident in the case where the
researcher asked a member of the Florida sales team (Neil Portnow) to talk more about
Hausser Food Product (HFP) as a place to work. Neil informed him that the company is out to
screw the salesperson. Neil’s belief is that the headquarters (Atlanta) is only concerned with
the numbers. Other members of the Florida sales team also shares the same view as Neil.
Therefore, the organisational architecture of Hausser Food Products Company as created a
culture of distrust within the system. The lack of fit between the individuals and the
organization has led to a culture of distrust and as a consequence has encouraged the Florida
sales team to be secretive of their source of superior sales.

• Task/Organization Fit

This relates to the adequacy of organizational arrangements to meet the demands of the
task. Does the organizational arrangements motivate behaviour that’s consistent with task
demands?

Hausser Food Product organizational design and architecture is a demotivator for the Florida
sales team. The sales team does not perceive the organisational architecture and the reward
systems to be consistent with the task demand. Quite a number of the sales team had spent
over thirty years working with the organisation without any form of recognition or promotion.
The reward/compensation system at Hausser Food Product is also quite demotivating to the
sales team. The sales team receives relatively low base salary and therefore only relies on
the bonus pay from the company to augment the low base salary. Therefore, the only

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motivating factor that keeps the sales team on the job is the bonus they earn. Therefore, they
have little or no commitment to the overall organisational goal, except their individual goal
(bonus achievement). Also, the reward ($500) provided by the company for anyone who
comes up with the idea that could help improve the company sales is regarded as insult by
the Florida sales team. The lack of fit between task and organisation has created an
environment of disloyalty within Hausser Food Product where the team benefits from hiding
of critical success information required by the organisation to improve sales.

• Individual/Informal Organization Fit

This relates to how individual needs are met by the informal organisation. How does the
informal organization make use of individual resources consistent with informal goals?

From the case fact, it is evident that each sales team member’s needs are met by the informal
group. The need of the informal group (Florida Sales Team) is preservation of the team’s
yearly bonus. The Florida team sacrifices for each other to ensure that they come up with the
sales result (10 percent plus plan) that would guarantee their bonus. According to Neil
Portnow, “when I was sick last year, they all pitched in to cover my territory so that we could
make our plan plus 10 percent without reporting my illness to the company”. The fit between
the informal organization and individual has therefore created a unity of interest/purpose
among the Florida sales team, and a conflict of interest with those of Hausser Food Products.
This loyalty of the sales team to the informal organization has led to the general agreement
of non-disclosure of their secret to the organisation.

• Task/Informal Organization Fit

This relate to how the informal organisation structure facilitate task performance. Does it
hinder or help meet the demands of the task?

The informal organisation’s culture at Hausser Food Product was not helpful in improving sales
across the organisation. The atmosphere at Hausser Foods Product was that of fear. The
Florida sales team were sceptical of the Management of Hausser Foods, and therefore work
to hide the secret of their successes from the Management, for fear of increase in yearly
sales target. The culture within the organisation should have been that of openness and

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collaboration, had there been a proper cultural fit in place within the system, rather than one
that encouraged fear of increased work burden if one were to make significant contribution
to the company’s success.

• Organization/Informal Organization Fit

This relates to how consistent the goals, rewards, and structures of the informal organisation
is with those of the formal organisation.

The architectural structure within Hausser Foods is creating a culture of division within the
system. The Florida sales team seems to be loyal to Jay Boyar and considers him to be one
of them rather than one of the Management. The Florida sales team believes that Jay Boyar
serves their interest better by ensuring that they get their bonus yearly. According to Alby
Siegel, “He keeps the people in Atlanta from taking our bonus checks away from us. He’s not
management, he’s one of us.” The team believes that the Management of the organisation is
only to screw them and that they are only concerned with the numbers and not the welfare
of the sales team. Had there been a proper cultural fit between Hausser Food Product and
the sales teams, this could have fostered collaboration and openness.