BuenaVista Electric Cooperatie, Inc.

Right after Engineer Oscar Pascua finished his electrical engineering course at FEATI University in 1985, he was hired as an employee of the National Electrification Administration (NEA). He was assigned to handle jobs in the various units of NEA until his promotion to Chief Planning Officer in 1994. His main function was to supervise the planning activities of his unit. Three engineers and two other employees reported directly to him. His performance was rated very satisfactory. Engineer Pascua attended training sessions of various kinds including those for management. He finished his M.B.A. course in 1995. When the position of general manager of the Buenavista Electric Cooperative, Inc. (BECI) became vacant in January 1996, he was nominated by NEA. He got the post in March 1996. Aware of the many problems besting the cooperative, he immediately went to work. When Engineer Pascua called the key officers of the cooperative to a meeting, he was apprised of the following: 1. That the price of electricity charged to BECIs customers is the fifth highest in the country; 2. That 25 percent of the electricity service provided by BECI is lost every month and cannot be accounted for; 3. Requisitions for supplies and materials are served after delays of as long as three months; 4. Some employees of the cooperative do not report regularly for work; 5. The increasing amount of uncollected accounts. Three days after the meeting, he recommended to the board of directors the following: 1. The dismissal from the service of employees not regularly reporting to work; 2. Salary increases of up to 20$ for every employee on the payroll; 3. The hiring of eight additional employees 4. The formation of a team to investigate ant recommend measures to minimize system loss All his recommendations were approved by the board, after which Engineer Pascua signed all the necessary memoranda to implement his programs. He made regular inspection of the activities of the various units of the cooperative. During the first week of March 1997, he convened the key officers for an evaluation of the past years activities. The following points were made clear to him: 1. No reduction in the price of electricity could be extended to BECIs customers because no reduction in the overall cost of doing business was achieved. 2. Instead of reducing the 25% system loss, it even went up to 26%. 3. There was no improvement in the requisition of supplies and materials. Delays still reach three months. 4. There is a new set of employees who do not report regularly for work. 5. The amount of uncollected accounts increased from 3.8 million to 4.2 Million. Engineer Pascua concluded that in spite of the granting of salary increases requested by the rank and file, no subsequent improvement in service was registered. He is now considering more drastic measures but he is not sure if it is the right thing to do. In addition, he is also aware that there are some employees who are qualified and dedicated to their jobs. What do you think is the problem? What are the possible solutions that we can provide?