Learning Goal: I’m working on a management case study and need an explanation and answer to help me learn.
John James has worked at one of the world’s largest aerospace firms for more than 15 years. He was hired into the division during the Clinton years when many people were being brought onto the payroll. John had not completed his engineering degree, so he was hired as a drafter. Most of the other people in his department who were hired at the time had completed their degrees and therefore began careers as associate engineers. Over the years, John has progressed through the ranks to the classification of engineer. Many of the employees hired at the same time as John have advanced more rapidly because the corporation recognized their engineering degrees as prerequisites for advancement. Years of service can be substituted, but a substantial number of years is required to offset the lack of a degree. John began exhibiting signs of dissatisfaction with the corporation in general several years ago. He would openly vent his feelings against nearly everything the corporation was doing or trying to do. However, he did not complain about his specific situation. The complaining became progressively worse. John started to exhibit mood swings. He would be extremely productive at times (though still complaining) and then swing into periods of near zero productivity. During these times, John would openly surf the Internet for supplies for a new home repair project or for the most recent Dilbert comics. His fellow employees were hesitant to point out to management when these episodes occurred. Most of the team members had been working together for the entire 15 years and had become close friends. This is why these nonproductive episodes of John’s were such a problem; no one on the team felt comfortable pointing the problem out to higher management. As time progressed and John’s friends evolved into his managers while he remained at lower salary grades, John’s mood swings grew more dramatic and lasted longer. During the most recent performance appraisal review, John’s manager (a friend of his) included a paragraph concerning his “lack of concentration at times.” This was included because of numerous comments made by John’s peers. The issue could no longer be swept under the rug. John became irate at the review feedback and refused to acknowledge receipt of his performance appraisal. His attitude toward his teammates (continued) Case Study 4.4 149 executives chimed in too. VW America boss Michael Horn stated, ”We’ve totally screwed up.” With VW recalling millions of cars worldwide, it had to set aside $6.5 billion to cover costs. That resulted in the company posting its first quarterly loss for 15 years of nearly $3 billion in late October 2015. The company has reached an agreement with the U.S. government to pay $14.7 billion in fines for its role in the diesel emissions violations, with the likelihood of even more penalties to come. The EPA has the power to fine a company up to $37,500 for each vehicle that breaches standards—a maximum fine of about $18 billion. According to VW, “The costs of possible legal action by car owners and shareholders cannot be estimated at the current time.” Postscript It turns out that Volkswagen is not the only cheater. The scandals that plagued Volkswagen have broadened, as several Japanese firms are now admitting a systematic culture of cheating. In May 2016, Mitsubishi president Tetsuro Aikawa announced he would step down following his company’s admission to cheating fuel efficiency tests, something that dates back to 1991 when Japan introduced new regulations. Elsewhere, two other Japanese carmakers now have their names involved in the controversy. Suzuki has also announced “discrepancies” in fuel economy and emissions testing of 16 Japanese market models. Nissan, meanwhile, has faced accusations from South Korea that some of its UK-made Qashqais have defeat devices fitted to their engines. The South Korean government apparently plans to fine Nissan nearly $1 million, but the Japanese company firmly denies any wrongdoing. Investigations are still ongoing.41 Questions 1. How do you think Volkswagen executives could justify this behavior? How do you think the actions of the Japanese automakers influenced VW’s decision-making? 2. How would you personally respond if you were a member of a project team developing a device that was designed to cheat environmental testing? What if you were the sole support for a large family with three children in college? 3. Is there a “moral” to this story for you? What would that moral be? 150 Chapter 4 • Leadership and the Project Manager FIGURE 4.5 Salary Grade Classifications at This Corporation Vice President Director G 26 Engineering Manager G 24 Senior Staff Engineer G 22 Staff Engineer G 20 Senior Engineer G 18 Engineer G 16 Associate Engineer G 14 Senior Drafter G 12 Drafter G 10 Associate Drafter Small Salary Gap Large Salary Gap Salaried Employees Hourly Employees became extremely negative. He demanded to know who had spoken negatively about him, and his work output diminished to virtually nothing. Analysis of the Problem Clearly John has not been happy. To understand why, the history of his employment at this company needs to be looked at in greater detail. The group of coworkers that started together 15 years earlier all had similar backgrounds and capabilities. A group of eight people were all about 22 years old and had just left college; John was the only exception to this pattern as he still needed two years of schooling to finish his engineering degree. All were single and making good money at their jobs. The difference in salary levels between an associate engineer and a draftsman was quite small. Figure 4.5 shows the salary grade classifications at this corporation. This group played softball together every Wednesday, fished together on the weekends, and hunted elk for a week every winter. Lifelong bonds and friendships were formed. One by one, the group started to get married and begin families. They even took turns standing up for each other at the weddings. The wives and the children all became great friends, and the fishing trips were replaced with family backyard barbecues. Meanwhile, things at work were going great. All these friends and coworkers had very strong work ethics and above-average abilities. They all liked their work and did not mind working extra hours. This combination of effort and ability meant rewards and advancement for those involved. However, since John had not yet completed his degree as he had planned, his promotions were more difficult to achieve and did not occur as rapidly as those of his friends. The differences in salary and responsibility started to expand at a rapid rate. John started to become less satisfied. This large corporation was structured as a functional organization. All mechanical engineers reported to a functional department manager. This manager was aware of the situation and convinced John to go back for his degree during the evenings. Although John had good intentions, he never stayed with it long enough to complete his degree. As John’s friends advanced more quickly through the corporation, their cars and houses also became bigger and better. John’s wife pressured him to keep up with the others, and they also bought a bigger house. This move meant that John was living above his means and his financial security was threatened. Until this point, John had justified in his mind that the corporation’s policies and his functional manager were the source of all his problems. John would openly vent his anger about this manager. Then a drastic change took place in the corporation. The corporation switched over to a project team environment and eliminated the functional management. This meant that John was now reporting directly to his friends. Even though John now worked for his friends, company policy was still restrictive and the promotions did not come as fast as he hoped. The team leader gave John frequent cash spot awards and recognition in an attempt to motivate him. John’s ego would be soothed for a short time, but this did not address the real problem. John wanted money, power, and respect, and he was not satisfied because those around him had more. Although he was good at what he did, he was not great at it. He did not appear to have the innate capability to develop into a leader through expert knowledge or personality traits. Additionally, due to the lack of an engineering degree, he could not achieve power through time in grade. By now, John’s attitude had deteriorated to the point where it was disruptive to the team and something had to be done. The team leader had to help John, but he also had to look after the health of the team. This detailed history is relevant because it helps to explain how John’s attitude slowly deteriorated over a period of time. At the start of his career, John was able to feel on a par with his peers. When everyone was young and basically equal, he knew that he had the respect of his friends and coworkers. This allowed John to enjoy a sense of self-esteem. As time passed and he gave up in his attempt at the college degree, he lost some of his selfesteem. As the gap grew between his friends’ positions in the company and his position in the company, he perceived that he lost the esteem of others. Finally, when he became overextended with the larger home, even his basic security was threatened. It is difficult to maintain a level of satisfaction in this situation. The problem was now distracting the team and starting to diminish their efforts and results. Because of the friendships, undue pressure was being placed on the team as they tried to protect John from the consequences of his actions. The team leader had to try to resolve this problem. The challenge was significant: the leader had to attempt to satisfy the individual’s needs, the group’s needs, and the task needs. When John’s individual needs could not be met, the group atmosphere and task completion suffered. It was time for the team leader to act decisively and approach upper management with a solution to the problem. Possible Courses of Action The team leader put a lot of thought into his options. Because of the friendships and personal connections, he knew that he could not make this decision lightly. He decided to talk individually to the team members who were John’s close friends and then determine the best solution to present to upper management. After talking with the team members, the team leader decided on the following list of potential options: 1. Do nothing. 2. Bypass company policy and promote John. 3. Talk John into going back to college. 4. Relocate John to a different project team. 5. Terminate John’s employment. The option to do nothing would be the easiest way out for the team leader, but this would not solve any problems. This decision would be the equivalent of burying one’s head in the sand and hoping the problem would go away by itself. Surprisingly, this was a common suggestion from the team members. There appeared to be a hope that the problem could be overlooked, as it had been in the past, and John would just accept the situation. With this option, the only person who would have to compromise was John. The second option of bypassing company policy and promoting John to a higher level would be a very difficult sell to management. John was recently promoted to a salary grade 18 (his friends were now 24s and 26s). This promotion was achieved through the concerted efforts of his friends and the team leader. The chances of convincing management to approve another promotion so quickly were extremely low. Furthermore, if the team leader was successful at convincing management to promote John, what would the longterm benefits be? John would still not be at the same level as his friends and might not be satisfied for long. Chances were good that this would be only a temporary fix to the problem. After the shine wore off the promotion, John would again believe that his efforts exceeded his rewards. It would be nice to believe that this solution would eliminate the problem, but history seemed to indicate otherwise. The third option of trying to talk John into going back to college and finishing his engineering degree would be the best solution to the problem, but probably the least likely to occur. If John could complete his degree, there would be no company policies that could obstruct his path. He would then be competing on an even playing field. This would allow him to justifiably receive his advancement and recapture his selfesteem. If he did not receive the rewards that he felt he deserved, he would then have to look at his performance and improve on his weaknesses, not just fall back on the same old excuse. This solution would appear to put John back on the path to job satisfaction, but the problem with it was that it had been tried unsuccessfully several times before. Why would it be different this time? Should the corporation keep trying this approach knowing that failure would again lead to dissatisfaction and produce a severe negative effect on the team? Although this third solution could produce the happy ending that everyone wants to see in a movie, it did not have a very high probability of success. The fourth option of relocating John to a different team would be an attempt to break the ties of competition that John felt with his friends and teammates. If this option were followed, John could start with a clean slate with a completely different team, and he would be allowed to save face with his friends. He could tell them of his many accomplishments and the great job that he is doing, while complaining that his new boss is holding him back. Although this could be considered smoke and mirrors, it might allow John the opportunity to see himself in a new light. If he performs at his capabilities, he should be able to achieve the esteem of others and eventually his self-esteem. The team would consider this a victory because it would allow everyone to maintain the social relationships while washing their hands of the professional problems. This option offered the opportunity to make the situation impersonal. It should be clear, however, that this solution would do nothing to resolve the true problem. Although it would allow John to focus his dissatisfaction on someone other than his friends and give him a fresh start to impress his new coworkers, who is to say that the problem would not simply resurface? The fifth option, termination of employment, would be distasteful to all involved. Nothing to this (continued) Case Study 4.4 151 152 Chapter 4 • Leadership and the Project Manager point had indicated that John would deserve an action this severe. Also, since this option also would sever the social relationships for all involved and cause guilt for all the remaining team members, resulting in team output deteriorating even further, it would be exercised only if other options failed and the situation deteriorated to an unsafe condition for those involved.
1. As the team leader, you have weighed the pros and cons of the five options and prepared a presentation to management on how to address this problem. What do you suggest?
2. Consider each of the options, and develop an argument to defend your position for each option.
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