MT - 63: GROUP DYNAMIC & MANAGING CHANGE

PART - A

Q1. 'Why might organizations choose a bottom up approach to cultural change?

Q2. What is broad banding? What may be some of the disadvantages of broad banding?

Q3. How communication as a process plays an important role in Reward Management?

Q4. Write a note on the difficulties you might can face in transiting production workers to team leaders.

Q5. What are the ways to evaluate learning?

PART - B

Q1. Why employee involvement can sometimes adversely affect organization's effectiveness?

Q2. How would you react to the redundancy of colleagues in the organization for which you have worked?

Q3. How would you differentiate between an action research approach and an evaluation research approach?

Q4. Why the organization should use a range of techniques to obtain data to evaluate change?

Q5. What are the different sources to implement the change process? Which one do you think is the best choice?

PART - C

Q1. Write short note on contingency approach to the design of organizational structure.

Q2. What are the key differences between classical universal and consistency approach to the design of organizational structure?

Q3. Using Schuler and Jackson's continua what role behaviours do you think are appropriate to quality enhancement and cost reduction strategies?

Q4. What are the characteristics of transformational leaders?

Q5. Why feedback is so important? What skills managers should have to provide accurate feedback?

CASE STUDY-1

MicroAge Undergoes Massive Structural Change

In April 2000, MicroAge Technology Services transformed itself to an e-Business infrastructure services company that operates as a virtual organization, with an agile and mobile sales force able to reach broader geographic markets. "The rapidly-changing climate of the technology industry, primarily due to the growth of the Internet and emphasis on reducing operating and technology costs through e-Business, has made it clear that we must make significant changes to our business to meet the demands of the new digital marketplace," said MicroAge Technology Services President, Jeff Swanson.

"As a virtual organization, our sales teams will no longer be tied to physical brick-and-mortar facilities. They will be able to cover broad geographic areas to meet the needs of clients wherever they do business. At the same time, we will continue migrating clients to MicroAgeDirect for product procurement so MicroAge Technology Services sales associates can focus their full attention on relationship management of their clients in fulfilling their infrastructure services needs."

Swanson continued, "As a client-centric organization the need for physical locations is minimized so that we can work more directly with clients to help them profit from technology in the Internet economy."

The company's strategic initiatives, aimed at transforming MicroAge Technology Services into a flexible and agile organization fully capable of providing the e-Business infrastructure services its clients require, included:

• Expansion of market coverage through the establishment of a field structure composed of thirteen broad geographic market areas, eliminating in three phases the costly network of thirty-five branch offices.

• Centralization of operations and processes to tower costs and increase efficiency as MicroAge Technology Services moved to a virtual field organization. Branch inside sales functions will transition to centralized sales support and client-site-based sales teams as appropriate.

• Completion of centralized service dispatch for all branches. MicroAge launched plans to centralize service dispatch in order to implement consistent quality standards and enhance overall client satisfaction.

• Migration of all clients to MicroAgeDirect for product procurement. Sales support for major clients will continue to be provided by existing client-site teams or by a centralized team operating from the company's Tempe offices.

MicroAge Inc., President Christopher Koziol noted that the restructuring of the procurement function allows the MicroAge Technology Services sales force to focus their full attention on serving the needs of clients and meet the demands of the new connected economy. "This strategy allows our associates to focus their full attention on managing client relationships and releases them from the burden of managing product transactions, which are more efficiently handled by automated procurement systems such as MicroAge Direct. We will also be able to reduce the costs of delivering services and products, significantly streamline operations and ensure consistent, high-quality service delivery to all clients. The most significant benefits of this new structure will be improved sales productivity and growth increased profitability, and client satisfaction," he said.

Questions

1. Do you think that the changes in organizational structure discussed in this case can achieve success?

Explain.

2. MicroAge made several organizational changes at the same time. What problems might be encountered by making so many changes at once? How can managers deal with this type of massive structural change?

1. The MicroAge sales force will work independently for much of their time with the elimination of the thirty-five field offices, How can managers at corporate headquarters keep track of sales activity? What technologies might be used to ensure that sales goals are being met?

CASE STUDY-2

Lorenzo and Texas Air

Frank Lorenzo battled to keep his airline safe in the air and financially viable. Lorenzo faced intense competition on most route systems and severe problems with Eastern's strong unions and poor image. Texas Air typified the upheaval and change that can occur in a firm as it battles to meet new challenges.

The now defunct Texas Air formed as a result of Frank Lorenzo taking a fairly small airline, Texas International, to the big time through a series of aggressive mergers and acquisitions during the mid-1980s. Lorenzo acquired Continental, Peoples Express, Eastern, and Jet Capital Corporation (a holding company) as a result of a deregulated environment for air transport. Fares and routes were deregulated and thrown open to competition. The result was drastic cuts in air fares, increases in air-passenger traffic and routes, intense competition among carriers, and the creation of many new airlines. In addition, large airlines have attempted to become larger in the marketplace in order to have the power to acquire terminal gates, agreements with travel agents, and stronger promotion. Aggressive promotion techniques, such as frequent flyer programmes, have proliferated throughout the industry.

Effect on Human Resources

The environmental changes have had a profound effect on HRM in the industry. The key to survival has been to cut costs, and HR costs were primary targets for cutting. Unions were busted where possible. For example, in 1983, Lorenzo placed Continental, his flagship carrier at the time, into bankruptcy, thus abrogating union contracts. He also adopted a two-tier wage system where employees hired after specified dates were paid significantly less on a job than those already holding the job. Flexibility also was a key watchword. Flexible assignment of employees to jobs, which was pioneered by Peoples Express, was adopted wholeheartedly by Texas Air. Baggage handlers collected tickets and vice versa, for example. Lorenzo was not as successful, however, with Eastern Air. Safety, image, and labour problems plagued the carrier until its death.

Finally, Texas Air, like all other airlines, tried to increase the productivity of its human resources by attempting to get more work and more hours of work out of each employee at little increase, if any, in salary. Pilots and flight attendants flew dangerously close to or even exceeded maximum federal flight-time standards. Maintenance employees rushed jobs and cut corners to save time, raising questions of safety.

A New Ball Game

Deregulation and the resultant intense competition completely changed the legal and competitive environment for air carriers. This provided a tremendous opportunity for aggressive companies such as Texas Air. It also caused massive changes in the way human resources were treated in the industry. Delta and Piedmont, carriers with no unions, adjusted easily. Texas Air, with unions at Continental and Eastern, had a more difficult time. Established work patterns and employment relationships change slowly. Often, the environment changes faster than a firm's ability to change human resource policy and practice. Sometimes it takes an aggressive CEO such as Lorenzo to be a catalyst for changes in HR strategy, even though such changes are likely to cause uncertainty and bitterness among some employees.

1. What parts of the external environment changes the most for Texas Air? How did they change?

2. Lorenzo had a reputation at Texas Air for being ruthless with employees in order to cut costs. When is such harsh treatment justified? Do you feel it was justified in the Texas Air case, given the change in the external environment for air transport? Discuss your answer.

3. How would you judge whether Texas Air's new HR policies under deregulation were effective? What criteria would you use and why?

4. Do you agree that it takes an aggressive CEO such as Lorenzo to bring about real change in a firm's HR policy or could this be done by the firm's HR unit? Explain